Beef Cattle and Sheep (Carbon Footprint)

George Eustice Excerpts

Wednesday 26th June 2013 Westminster Hall

[George Eustice (Camborne and Redruth) (Con)]

I am grateful to my hon. Friend for giving way. Like me, he was a farmer before first entering the House and as farmers we are used to getting the blame for a lot of things. There are certainly environmental consequences to certain farming practices, but does he share my disbelief that farmers are in the dock for—of all things—causing climate change and being responsible for it, given that we all know that the real problems with carbon come from the transport sector, energy generation and general industrialisation rather than from farming?

[Neil Parish]

My hon. Friend and I should probably both declare an interest; I should certainly do so as I am a farmer, and proud to be so. He is absolutely right, because what we have with methane gas from ruminants in particular is a very natural gas. It may come out perhaps too much for people’s liking, but it is very much there. We are taking lower-quality proteins—I had better be careful what I say—and developing them into high-quality meat. Therefore, the animal is doing a great deal of good, and I want to balance the amount of methane gas that the animals might produce compared with the amount of carbon that is kept in the land. I repeat the fact that if we do not keep that land as permanent pasture and plough it up, we will release an awful lot of carbon.

Farmers feel that the real basis of livestock farming is almost under threat. The whole idea of this report is perhaps to try to flag up in advance where the world might go to in a few years’ time, and that scenario is what I am particularly keen to avoid. People need to know the benefits of livestock farming.

I will move on to the next paragraph of the report. Food security is one of the most pressing issues for Governments across the world. By 2050, the global population is estimated to reach 9 billion, and food production will need to increase to meet growing demand. However, that has to be achieved using the existing agricultural land, while making more efficient use of water and mitigating the existing and future impact of farming on the environment.

The challenge is no less great on the home front, with the UK population set to increase by 10 million in the next quarter of a century alone and after the percentage of agricultural land in the UK fell from 39% in 1989 to some 25% in 2009. This means maximising the value of available land, by getting the best possible outcomes in terms of food production. British agricultural land comprises many different land types, and not all are suitable for the production of arable crops. This point was eloquently made by the food climate research network in its evidence to the all-party group:

“Not all land can support crop production and the question then arises—what should be done with this poorer quality, more marginal land? Traditionally the answer has been to graze ruminants which then provide us with meat, milk and other outputs. This represents a form of resource efficiency—the land is being used to produce food that would otherwise need to be produced elsewhere”

That is particularly important.

Almost 65% of UK farmland is only suitable for growing grass where sheep and cattle are grazed. We should be utilising this marginal land, which cannot be used for arable crops but can grow good grass and provide good biodiversity and environmental benefits. Beef cattle and sheep play a vital role in food production, because of their ability to turn non-human food into edible proteins and nutrients. Limiting the role of British livestock will reduce the efficiency with which we use our land for food production and will therefore reduce our ability to be self-sufficient.

These points are often neglected, or at least not adequately considered, by those who advocate meat-free diets. If, for argument’s sake, we were all to switch to a diet free of meat, much of our agricultural land would be unfarmed and we would see a considerable drop in the efficiency of our land to food conversion, in addition to the negative impacts on biodiversity, as outlined above.

When the developing world is eating more meat, and choosing to do so, there is a greater need to produce meat across the world. Therefore, Britain should do its fair share of meat production, and grazing both sheep and cattle on grassland is essential, in my view. Grazing cattle and sheep are often given disproportionate blame for carbon emissions from agriculture, and there is not enough recognition among some conservation groups of the role that livestock farming, particularly of grass-fed beef and lamb, plays in storing carbon, protecting biodiversity and utilising marginal land that cannot be used for arable crops.

I thank you for listening to this debate, Mrs Brooke, and open it to colleagues to join in.

Dog Control and Welfare

George Eustice Excerpts

Thursday 13th June 2013 Westminster Hall

[George Eustice (Camborne and Redruth) (Con)]

I am grateful for the opportunity to speak, Mr Turner, and I am sorry that I was a few minutes late.

I was keen for the Select Committee to look at this issue, because there has been a sharp increase in the number of problems associated with so-called status dogs. The number of people hospitalised as a result of dog attacks has doubled—it went from around 3,000 as recently as 1997 to well in excess of 6,000 in 2010. That is a real problem, and I welcome many of the measures that the Government have introduced to date, all of which have been referred to already.

The decision to have compulsory microchipping and the strengthening of that proposal have been important, and I welcome the decision to make an attack on an assistance dog an aggravated offence—I agree that that is an important step forward. It is also right to make a dog attack on someone an offence, whether on private or public property.

My only concern is the possible final unintended consequences of such legislation, which we need to think about. I hope that the courts will have wide discretion to take into account individual cases. For example, a couple of border collies could be working dogs on a remote farm, running loose most of the day, but they might nip someone who is not trespassing and who might even be delivering a political leaflet. The implication of that becoming a dreadful offence might be that dogs would have to be locked up all day because someone canvassing for a political party might come round once every couple of years. We must be careful and give some discretion to the courts.

I want to focus most of my comments on dog breeders. My one concern about community protection notices is that there is too much emphasis on irresponsible behaviour by dog owners and the dog is treated as though it were an accessory to antisocial behaviour and crime in the same way as a knife or baseball bat might be.

As the hon. Member for Bolton West (Julie Hilling) said and as I have stressed, the issue is not as simple as that. So much about how a dog behaves and whether it is unpredictable and likely to bite someone depends on whether it was socialised in the first few months when it was a puppy and whether it was cared for properly. If it was brutalised in those first few months, it will never be right, however responsible the current owner might be.

The evidence from dog charities, such as Battersea Dogs Home, was very clear. Many of the dogs they receive were bought as puppies from a disreputable breeder who did not raise them properly. It might be a mastiff, and a year down the line the buyer finds that they have a huge dog that they cannot control. They do not know what to do with it so they abandon it and leave it on the streets.

Many dogs that go to charities have been abandoned by people who bought puppies from disreputable breeders and then did not know what to do with them, so abandoned them. That is a real problem; so many of those dogs end up being destroyed because their experience as puppies means that they are completely unsuitable to be rehomed with families.

As hon. Members have said, we recommended that one way of dealing with the problem was to change legislation so that the maximum number of litters that a hobby breeder could breed before having to be licensed with a local authority was reduced from five a year to two. The Government rejected that, and I want to press the Minister on the current position. Our understanding was that a hobby breeder could breed up to five litters a year. That is a lot of dogs; an irresponsible hobby breeder could send 50 dogs into the outside world and cause problems.

In their response, the Government thanked the Committee

“for the opportunity to clarify the legislation on dog breeding”

and said:

“The Government would like to stress that anyone in the business of selling dogs, which is anyone that a local authority justly believes to be trading must be licensed”

and that is the case whether it is five litters or even one litter. I am interested in what the phrase

“in the business of selling dogs”

means. Does it mean anyone who sells a dog? Does it mean that if someone breeds one litter of puppies and gives five away to friends but sells three, they would have to register because they had sold a dog? Does it mean someone who earns their full-time income in that way, or a part-time income, and is there an income threshold? Does it mean that someone receiving more than £500 from puppy sales must be licensed, but not if they receive less than that? The figure is vague and I would like to know what the phrase means. If there was clarity and someone breeding fewer than two litters would be a hobby breeder and exempt, but those breeding more than two litters would automatically be caught, that would remove the vagueness. That is important, and I would welcome the Minister’s comments.

After the publication of the report, I met some dog wardens who raised various issues with me. They said that the most important one was that doing what I suggested and reducing the threshold from five to two litters would be for the birds because they did not have the resources or powers to carry out the necessary surveillance to pick up such breeders. When I pressed them on how much such work they do, the answer was, “Not a great deal.” We must not delude ourselves into thinking that this simple tweak in the legislation would solve the problem.

Those wardens said that one obstacle to their looking into such problems is the difficulty, bureaucracy and complexity of obtaining the relevant authorisation from the right authorities to carry out surveillance on people they suspect of running illegal puppy farms. They said that what usually happens is that the police or a local authority decide to conduct surveillance on a household for some other reason—suspected cannabis growing, selling of drugs or dealing illegally in something else—and only incidentally do they find out that dogs are being illegally bred and sold, and that there is a business in dogs that is not properly licensed.

An interesting area that we did not look at in our last inquiry, and which I hope the Government will take on board, is whether more should be done to ensure that local authorities have the necessary powers to hand to obtain such authorisation, so that they can carry out surveillance and catch people engaged in back-street puppy farms, which are causing so many problems, as other hon. Members, including the hon. Member for Bolton West, made so clear.

--- Later in debate ---

[Mr Heath]

I most certainly will. I have the unprecedented benefit of having rather longer than usual to reply to the debate. I hoped that I was making use of it to provide the answers that hon. Members wanted, so I apologise to my hon. Friend if I was taking too long to get to the issue he raised. I have one more thing to discuss first, if I may—dog breeding—because it was raised by a number of hon. Members.

It is absolutely right that breeding is a key element of education, apart from anything else, which is exactly the point made by the hon. Member for Ogmore. People must know, first of all, what is and is not appropriate, and the consequences of breeding puppies. Buyers also need to know whether they are buying a breed that needs a 5-mile run every morning, so they do not keep it in a flat on the 17th floor. They need to know—the hon. Gentleman will know—how adorable a Jack Russell might or might not be before they buy one, and what special requirements it might have.

A sort of ignorant cruelty can be involved when people buy the wrong breed of dog in the wrong circumstances and then find that they cannot manage it. That is sad, because they probably bought the dog for unimpeachable reasons—they love the look of the dog and its nature—but they simply cannot look after it. Education is important.

Another important point was raised by the Committee and my hon. Friend the Member for Camborne and Redruth about the threshold for needing a licence. I would love to be able to give him an absolutely explicit response, so that he could say, “Yes, that’s the answer.” It is not as simple as that, as is so often the case with licensing. Although there is a five-litter cut-off for what is, in any circumstances, considered a business, it is for the local authority to determine who is in the business of breeding and selling dogs when it comes to smaller numbers of litters a year.

There is no definitive term that has the sanction of statutory law behind it; it is for the courts to agree or not agree with the local authority. Actually, there are a variety of circumstances in which that sort of decision comes before the court: there is a degree of flexibility, and trading standards officials must satisfy the court that what they are dealing with is a business in the legislative sense. One litter produced in a 12-month period is unlikely to be considered a business; five litters almost certainly will be, but local authorities have a number of tests that they are asked to apply to determine whether somebody is trading. I will not go into them now, because that is for another Department to determine, but those are the criteria used, and they have the support of case law, if not statute law, in deciding whether somebody falls into that category.

I do not know whether I have satisfied my hon. Friend the Member for Camborne and Redruth; I suspect that I have not, because it is a vague response. If he is not satisfied, I ask him to talk to his local trading standards officials about whether they feel they have the right legal criteria in place to do their job.

[George Eustice]

The point I was making is that there would be clarity if the number was simply two litters. Local authorities could work to that. The situation that the Minister outlined means that if a local authority has concerns about a breeder producing three litters a year, it must then go through a legal process. The breeder could use as a defence the fact that there were fewer than five litters. Then there is an expensive, difficult legal process, which does not incentivise local authorities to enforce standards in those areas.

[Mr Heath]

I do not think that it would be a defence to say that there were fewer than five litters. It would be about the circumstances of the breeding programme and the puppies being put on sale. I hear what my hon. Friend says. I will take the matter back to my hon. Friends in Departments with responsibility for that area to see whether clarification is necessary.

My hon. Friend the Member for The Cotswolds set out clearly why he is concerned about the canine and feline sector council. Let me be absolutely clear that it is not a Government organisation; it is independent of Government. I hope that immediately sets some of his concerns to rest. However, as an independent sectoral body, it could be a useful vehicle that pulls together the views of the sector and feeds them into the Animal Health and Welfare Board for England, which again is not a regulatory body. It simply provides advice for Ministers from the perspective of the users of welfare legislation in the widest sense. Therefore, what we are talking about is not a regulatory or a policy formation body, but a conduit for information, hopefully with the benefit of proper discussion within the sector.

The Kennel Club is one of the bodies represented, and the Dog Advisory Council, which my hon. Friend mentioned, has been invited on to the sector council. I hope that Sheila Crispin will take part, because I would certainly like her views as well. The one thing I stress again is that this is not a regulatory body set up for the purposes of excluding anybody or indeed including one sector to the disbenefit of others. I hope that satisfies my hon. Friend.

Agricultural Wages Board

George Eustice Excerpts

Wednesday 24th April 2013 Commons Chamber

[Mary Creagh]

That was a good effort from the right hon. Lady. The HSE will clearly continue to exist, but I am citing a case that happened last year, not at some other point in time. I ask her whether she thinks that conditions will get worse or better when the AWB is abolished.

[George Eustice (Camborne and Redruth) (Con)]

The Agricultural Wages Board existed when that case came to light, so it clearly did not create the defence that the hon. Lady suggested it might.

[Mary Creagh]

The question for the hon. Gentleman is whether conditions will get worse or better when the provisions are removed. Will they be better or worse for a worker who does not have a bed guaranteed for their sole use? Opposition Members already know of conditions in which people are hot-bedding. Is that what we want to see in our farming industry? I certainly do not, and I am sure that the majority of farmers do not, but there will now be no legal requirement for an individual to have their own bed. I think that that is wrong; does the hon. Gentleman?

The AWB was set up by the Attlee Government in 1948. Even Mrs Thatcher did not abolish it. She understood that if someone’s home comes with their job, they are in a uniquely weak negotiating position with their employer. However, last week’s Bill ended nearly 100 years of protection for farm workers. In the Labour party, we believe that the people who pick the fruit should also be able to buy it in the shops, and not have to rely on food banks to feed themselves and their children. As many farmers themselves have said, in their responses to the consultation, this decision will not secure a stable and prosperous future for the food and farming industry or for those who work in it. The Prime Minister once said that we were all in it together, but time after time, ordinary working people are first in his firing line. If Members want a rural living wage, they should vote with the Labour party this afternoon. If they are happy with poverty pay for their constituents, they should vote with the Government.

--- Later in debate ---

[George Eustice (Camborne and Redruth) (Con)]

I worked in the farming industry for 10 years and was involved in this debate when the issue was last discussed some 20 years ago—I will come back to that in a moment. It is worth noting—this has been alluded to by some, including the Secretary of State—that in the early ’90s, all other remaining wage councils and wages boards were scrapped. There was no rationale for them. Some 26 remained in about 1993, and all were abolished. Many covered sectors such as hotels, catering, retail, hairdressing and clothing manufacturing, but as the Secretary of State said, there were also some rather odd-looking boards such as those for the ostrich and fancy feather industry, or rope and net manufacturers. One has only to read lists of some of the industries to which the boards applied to realise that the whole concept is anachronistic and out of date.

[Andrew George]

I should have said that, like my hon. Friend, I too was an agricultural worker and worked on our farm. He says that the agricultural sector is the one sector that has been left alone, but it is also the sector into which the Gangmasters Licensing Authority was introduced, which demonstrates that it requires some underpinning with regulation.

[George Eustice]

Equally, we could say that the introduction of the Gangmasters Licensing Authority deals with some of the working conditions problems that Opposition Members have highlighted in a way that makes the AWB ever more redundant.

To return to the 1993 debate, the then Minister for Agriculture, Fisheries and Food, Gillian Shephard, held a consultation. A small number of us in the farming industry said that the AWB should go; that it was out of date and anachronistic; that farming should not be treated as a special case; and that the AWB read like something from the 1950s. It tended to be the larger, more forward-thinking farmers who took that view, led by a large salads company, the G’s group, which was run by Guy Shropshire. It was not one of my most successful campaigns. The Government had some 3,500 responses to the consultation, of which only 11 were in favour of abolition. I was one of those 11. That highlights the massive swing in opinion. Opposition Members have highlighted the current consultation, but 40% of people who responded to it have said that abolition is the right thing to do.

[Mr Henry Bellingham (North West Norfolk) (Con)]

I want quickly to comment on a point before my hon. Friend moves on. Surely gangs now have that protection. They are totally different from the average farm worker in East Anglia, where very often someone is in charge of £500,000-worth of equipment and on a very high wage, on a farm that 40 years ago might have employed 40 people, but now employs two people who are highly skilled, very responsible and well paid.

[George Eustice]

My hon. Friend is right and underlines my point that the GLA has made the AWB ever more redundant. Those at the bottom on those low incomes have new protections.

One big thing in this debate compared with the last one—it is important to recognise this—is that the National Farmers Union is on the right side. For once, it is saying that we should get rid of the AWB because it is out of date. In 1993, the NFU let down its members. David Naish, the then president, supported the retention of the AWB, and he was wrong to do so. The NFU board of directors at the time was out of touch and behind the curve, but the NFU now recognises that things need to change and fully supports and endorses the abolition of the AWB. If even the NFU supports the abolition of the AWB, it is time to act. Another big change since 1993 is, as many hon. Members have said, the introduction of the minimum wage, which is yet another measure that makes the AWB out of date and no longer necessary.

How does the AWB frustrate rather than improve career development in the agricultural sector? The most important thing is the huge lack of flexibility. The board is based on old-style wage grade rates dating from the ’60s and ’70s, and completely ignores the fact that, in the most progressive farm businesses, many people are paid a salary and have management responsibilities. The best farm businesses have profit shares and payment by results. Piece rates are increasingly used when people earn far in excess of the minimum wage rates. Those modern day pay practices are completely ignored by the agricultural wages order, which can frustrate the development of more progressive pay policies in the farming industry and keep it trapped in a 1950s mindset.

[Grahame M. Morris (Easington) (Lab)]

I am following the hon. Gentleman’s argument closely, but cannot understand why anyone would want to do away with the minimum. He suggests that, in many sectors of the agriculture industry, people are highly skilled and receive higher remuneration than would be set as a minimum by the AWB, but why argue for its abolition if it does not affect those people? Surely the AWB protects a group of people who do not receive such higher remuneration.

[George Eustice]

The group of people the hon. Gentleman is concerned about are protected by the minimum wage. That is already there and is set at roughly the same level as a grade 1 agricultural worker, so I do not think that that is an argument at all. What I am saying is that being too rigid can actually frustrate the development of more progressive pay policies.

The other point, which the Secretary of State touched on earlier—we had this in our farm business where some of the work was in pack houses—is that someone could be running a conveyor belt packing strawberries one minute and working in the field the next, with totally different wages rates applying. We ran a farm shop, in which different rates applied, even though there were sometimes shared staff.

[Yasmin Qureshi]

The hon. Gentleman states that this is a progressive pay policy. In the past 30 years, have a Conservative Government ever passed any legislation that has helped the working person, whether in terms of payment, work and conditions, or equality? Conservative Governments have never, ever advocated and voted for the rights of the working person.

[George Eustice]

I do not want this debate to get distracted, but even in the current Parliament the coalition Government have changed tax thresholds that help all working people, especially those on the lowest income.

Another problem with the rigid pay structure is that, as currently structured, it can discourage training and career development in small farm businesses. I will explain why. A small farmer might have two or three employees. He might not be able to afford to employ someone on grade 2, grade 3 or grade 4. He might not really have a need for those staff to be trained to those grades, but might nevertheless take the view that to aid the career development of a new employee—perhaps someone who has just left school and joined their business—he will give them time off work and support them in proficiency tests and training. At the moment, if they do that, the next thing that happens is that they suddenly have to pay that person more money. Is it not better if that person can develop and train, and has a farmer who wants to facilitate that, so that maybe, when a neighbouring farm needs somebody who has the proficiency test skills and a different type of skill set, they are able to progress and take a job that is higher paid in that neighbouring farm? The farmer will want that to happen; he will be happy to encourage somebody and see a career develop. At the moment, however, we are in a situation where the rigid grade structure discourages farmers from wanting to have their employees seek further training.

We have heard a lot in this debate, both from my hon. Friend the Member for St Ives (Andrew George) from my neighbouring constituency—we take different views on this, as people will have noticed—and others, about how difficult it is for farmers to negotiate with their staff, as if it is something that is dreadfully embarrassing and they cannot possibly do it. I reject that idea completely. Farmers, if they are still in business today, have to do all sorts of challenging things: they have to negotiate with people day in, day out; they have huge amounts of paperwork to deal with; and they have to negotiate and fight over the costs of their feeds, fuel bills and all sorts of things. The idea that they cannot sit down with the people they work with every day and have an intelligent conversation about their pay review is, frankly, ludicrous.

Farm businesses are no different from any other businesses. Even if they do not have to have discussions with their employees about pay rates, one can guarantee that there will still be times when they have to have discussions about people turning up for work late and staff who have problems at home and need some time off—all those sorts of issues. There is nothing different about farming. I was in the young farmers club in Cornwall with many of the farmers in my hon. Friend’s constituency. I know many of them and I can tell him that they are perfectly capable of having those conversations with their employees.

[Neil Carmichael]

I endorse what my hon. Friend is saying. I, too, was a farmer in the 1990s, and know that farmers can easily negotiate. It is also important to recognise that agriculture today is a modern industry that is moving forward, with added value products, retail sectors and so on. All of that is happening to farms, so we cannot anchor them down to something as archaic as the AWB. It is not just a floor, but potentially a ceiling—something to which my hon. Friend has referred.

[George Eustice]

My hon. Friend makes an incredibly good point. Farming has changed.

The biggest farm employer in St Ives is a firm called Winchester Growers, which does not receive subsidies like the large farmers and tends to rent land and employ lots of people. Quite often, young men who would have had farms themselves become managers and supervisors within such businesses and have a proper career structure, with profit options, share options—all sorts of things. It is very important that we modernise and move on. The AWB is a relic of the past. It is full of “bosses versus workers” rhetoric that is frankly 40 years out of date. It is right that it should go.

Oral Answers to Questions

George Eustice Excerpts

Thursday 7th March 2013 Commons Chamber

[Richard Benyon]

My hon. Friend makes a very good point. This matter was discussed at yesterday’s EA board meeting and we are in close touch with the EA and other organisations. There is a degree of confusion. That was brought out in the Pitt review. Some effort has been put in, and some progress has been made in addressing the problem, but I absolutely concede we are not there yet and there is still confusion about who is responsible and what the priorities are. We want to make sure that the priorities are protecting people and their properties and the environment.

[George Eustice (Camborne and Redruth) (Con)]

4. What recent representations his Department has received on tackling the problem of backstreet puppy farms and breeders.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath)]

In addition to a recent Environment, Food and Rural Affairs Committee report on dog control and welfare, my noble Friend the Under-Secretary, Lord de Mauley, has received a number of letters on the subject of puppy farms, irresponsible breeders and the internet advertising of dogs. The Animal Welfare Act 2006 provides the necessary powers for local authorities to investigate allegations of poor welfare among all dog breeders.

[George Eustice]

I am grateful for that answer. In the Committee’s recent inquiry, we received evidence that a contributory factor in respect of the problem of status dogs is the number of backstreet puppy breeders, because dogs are more likely to become aggressive and unmanageable if they are not socialised and cared for properly in the first few months. The law currently allows people to breed up to five puppy litters a year without licensing, but we recommended that the figure should be reduced to two. Will the Minister look carefully at that proposal?

[Mr Heath]

I have every sympathy with the reasoning behind the hon. Gentleman’s proposal, and I certainly deplore the irresponsible breeding of dogs. I can assure him that it is already the case that if a local authority considers that someone is in the business of breeding and selling dogs but they have produced fewer than five litters in a year, a licence would still be needed, and any dog-breeding establishment that produces five or more litters in a 12-month period will also need a licence regardless of whether it is considered to be in the business of breeding and selling dogs. Guidance on that was given to local authorities back in 1999, explaining precisely where those responsibilities lie.

Groceries Code Adjudicator Bill [Lords]

George Eustice Excerpts

Tuesday 26th February 2013 Commons Chamber

[Mr Spencer]

I recognise that. I pay tribute to the hon. Gentleman, who has worked on this matter since before I became a Member. Perhaps that is something that the adjudicator could look at as we move forward. There is this ability to put a film between parties and cause an issue. That comes back to small suppliers, who supply the middlemen.

New clause 3 would cause the Bill to expire after seven years. It would be disappointing if it did so. Using the analogy of a football match, if we get to half time and the referee has not needed to issue a yellow card, no one suggests that we do not need a referee in the second half.

[George Eustice (Camborne and Redruth) (Con)]

We have had plenty of time to understand how supermarkets deal with their suppliers and it is precisely because of that that everyone who has looked seriously at this issue has concluded that we need an adjudicator.

[Mr Spencer]

I am happy to agree with my hon. Friend and I pay tribute to the work that he has done to bring the legislation to this point.

EU Fisheries Negotiations

George Eustice Excerpts

Tuesday 8th January 2013 Commons Chamber

[Richard Benyon]

My hon. Friend is absolutely right, and that is really important. I am not in the business of proposing restrictions for our vessels only to see vessels from other countries entering the restricted areas in our waters and fishing in a way that our fishermen cannot. We must have the matter agreed at European level, and I have already had discussions with my French counterpart on it. We will have further discussions to ensure that it is completely clear at every level that we are not imposing a restriction on ourselves that will not be recognised by other countries.

[George Eustice (Camborne and Redruth) (Con)]

I welcome the Minister’s success in getting the scientific evidence heard, particularly when it comes to haddock in the south-west. Why were the Commission’s original proposals so far wide of the mark, and why is it apparently so dysfunctional on the issue and so deaf to the evidence?

[Richard Benyon]

The issue of haddock in the south-west is a product of the situation that I mentioned earlier, whereby the International Council for the Exploration of the Sea simply examines one stock on its own. In most of the UK waters we have mixed fisheries, and there is a danger that we can—I have already used this expression in Committee today—make the perfect the enemy of the good. If we are tied to one species, in this case a “choke species”, it can result in more discards and worsen the sustainability of wider stocks. That was why we argued successfully for a reduction in the cut.

Groceries Code Adjudicator Bill [Lords]

George Eustice Excerpts

Monday 19th November 2012 Commons Chamber

[George Eustice (Camborne and Redruth) (Con)]

I welcome this Bill’s Second Reading. As Conservatives, we believe in free and fair markets, but we rigorously oppose the abuse of dominant market power, which is why the Bill is essential.

Before entering politics, I worked in the farming industry for 10 years. We were a major supplier of strawberries to a number of supermarkets, and I experienced first-hand some of the sharp practices that the Bill is designed to deal with. They ranged from forcing suppliers to use third party contractors, for things such as packaging and haulage, who would then charge suppliers more than the market rate. I experienced the retrospective clawing back of costs resulting from wastage on the shelf. Supermarkets would claw back not just what they paid, but the margin that they expected from a product. Growers were frequently forced to participate, often unwillingly, in supermarket promotions, and were expected to sell their produce for below the market rate.

I saw many instances of supermarkets rejecting stock when they had simply made an error in orders. That was a particular problem with the strawberry industry, because a supermarket buyer would place an order for a batch of strawberries, unaware that it would begin to pour with rain the following day. When it pours with rain, strawberry sales collapse and supermarkets are reluctant to take the orders that they have placed, so they do all that they can to find an excuse to reject batches of fruit that have been supplied to them.

I have been out of the industry for 10 years, and I thought that perhaps things had changed, but other practices have crept in. Only last year, I was talking to a supplier who explained that he was required to show his annual financial accounts to the supermarket as a condition of supply. Ostensibly, that is to check that the business is financially secure, but we all know that in reality it is to see what its profit margin is, and how much further supermarkets can drive it down into the ground without killing it altogether.

[Andrew Bingham (High Peak) (Con)]

The problem, as my hon. Friend sets out, is very serious—it is almost commercial bullying. Does he agree that that is why it is so important that the adjudicator can now receive referrals from third parties, such as trade associations and so on, to protect anonymity and stop future bullying?

[George Eustice]

I absolutely agree. One of the big improvements made to the Bill in the Lords was the extension of its scope so that that could happen—so that anonymous complaints could be made and so that whistleblowers and third party trade organisations could be involved in the process. The evidence we heard in the Environment, Food and Rural Affairs Committee made it very clear that many suppliers are incredibly fearful of the supermarkets they supply. They are conscious that it is easy for suppliers to be identified as there will sometimes be only a handful of them for a particular product line to a given supermarket. It is therefore very important that the Bill has that extra scope.

I also recently spoke to another supplier who told me about a problem that he had encountered with supermarkets putting him under huge pressure to fulfil the terms written into a contract and supply the volumes that he was no longer able to source due to bad weather or a crop failure. In negotiations, he was put under huge pressure by a supermarket to buy the product from abroad and sell it at a massive loss so that he could fulfil his contract. That is unacceptable behaviour. When prices change, supermarkets should also change their prices.

[Mark Tami (Alyn and Deeside) (Lab)]

Does the hon. Gentleman accept that it also happens the other way? I have come across cases in which supermarkets have turned around and said that they do not want an order any more at very short notice. The supermarkets have the power to say to smaller suppliers, “Take it or leave it, because we can go elsewhere and you cannot.”

[George Eustice]

I absolutely agree, and that is why the Bill is so important. Over the past 20 years, there has been huge growth in the power of a handful of very powerful retailers who have huge market clout and have, frankly, abused their power. If we want proper market conditions back, in which people are paid a fair market price for their goods, the Bill and the groceries code adjudicator will be vital.

Let me move on to the issue of the financial penalties, which have featured heavily in the debate so far. As my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, has said, our Committee concluded that there was a case for making those fines available to the groceries code adjudicator from the start rather than waiting for it to become necessary for another order to be introduced by the Secretary of State.

The question of fines is important and I agree with the Minister that naming and shaming might be adequate for some minor breaches, but I take issue with the claim that naming and shaming might be a more powerful deterrent than a fine. The British Retail Consortium might say that we should name and shame, because that is more powerful than a fine, but that is a bit of a clue. When the retailers say that what really scares them is naming and shaming, even though they do not want fines, the Minister ought to be a little more suspicious than she has been.

It is important to have an escalating scale of penalties. Why remove an important tool from the box? It would be possible for the Government to craft guidance on when a fine would be appropriate and what size that fine should be. It could stress that fines should be used sparingly and that other sanctions, such as naming and shaming, should be the preferred route. I think it is wrong, however, to rule fines out at this stage because of the question of what should happen if there is one persistent offender out of the 10 supermarkets caught by the groceries code adjudicator. What if that one offender, however many times they are named and shamed, sticks up two fingers to the adjudicator and says, “We really don’t care.”? That is unfair on the remaining nine, who might be abiding by the code, and it risks making the whole initiative unstable.

The groceries code adjudicator is more likely to succeed if the power to fine is there from the beginning and more likely to fail if it is not. For the adjudicator to work, we need to ensure that its introduction will change the behaviour of the supermarkets. It is not just about having investigations all over the place—we need people to be fearful of a fine, so that they moderate their behaviour.

There is a real problem in the serious mismatch between what a Minister might be told by the public affairs officers who work for the supermarkets and what she would experience if she was a carrot grower supplying supermarkets and dealing with buyers daily. The truth is that public affairs officers for the supermarkets will often strike a paternalistic pose and say, “It is not in our interest to upset our suppliers. We want happy suppliers,” and they will have pictures in their supermarkets of happy farmers’ children working out in the fields. It all sounds great, but the buyers have very different incentives that focus on margins, profit and exercising control over their suppliers. The Minister said that the market for supermarkets was fiercely competitive, and she is right. That is why my fear is that when Parliament’s back is turned, the incentives that motivate the buyers will prevail because it is ultimately their profit margins that they will seek to protect.

The possibility of third party complaints has been raised and is an important power. The industry has a part to play in this. Although it says that we need anonymity and that it is important for complaints to be made without the complainant being identified, the industry has to play its part in helping the supermarket adjudicator identify bad practices. One of the proposals that I have made to the NFU, which keeps telling me that it is under consideration, though I have not heard that it has been taken up fully yet, is the idea of what I have termed a farm-fair index. That would be based on a panel of 500 farmers and suppliers across a range of sectors. Each quarter they would be given a questionnaire asking a series of questions that measured the adherence of each of the 10 supermarkets to the groceries code. There would be a league table of the 10 supermarkets and they would be scored according to which of them abided by the code the most and which departed from it the most. If a particular supermarket was at the bottom of that league table for two consecutive quarters, an automatic investigation by the groceries code adjudicator would be triggered. That would be a good way of ensuring that vexatious complaints were filtered out. A broad panel—the same 500 farmers and suppliers each quarter—who could score the adherence of the supermarkets to their own code would provide an important tool to help the adjudicator identify bad practice.

In conclusion, I welcome the Bill. It is a positive step forward and will improve relations between farmers and their supermarket customers, but I wish the Government would take another look at the issue of financial penalties.

Common Agricultural Policy

George Eustice Excerpts

Thursday 1st November 2012 Westminster Hall

[Neil Parish]

I understand exactly where the hon. Lady is coming from, but looking at Scotland, dare I question whether the highlands and the bare rocks need the same payment as some land that can be farmed, such as grasslands? Averages of payment throughout Scotland are interesting. How I dare even suggest such things, I do not know—I do not want to get into a war with Scotland—but there are statistics and statistics.

We are at a crossroads, and at a place where Britain is well in advance of others, with regard to environment payments. We need to ensure that we can pay for those payments. I agree with my hon. Friend the Member for Thirsk and Malton that modulation is unfair to British farmers. However, I also know that the Treasury is not noted for its generosity, and if we do not modulate, we will not have enough money to pay for our stewardship schemes. If the Minister and the Secretary of State with responsibility for agriculture went cap in hand to the Treasury, saying, “We already receive £2 billion or £3 billion from the CAP, but we need more money from the Treasury to prop up stewardship schemes,” I suspect that they would be told in good Anglo-Saxon terms to go on their way. As we negotiate the new agricultural policy, we must ensure that those stewardship schemes are funded through it in some shape or form. We must be careful when we say that we will throw the modulation out with the bathwater, because that may not be the right way forward.

This debate is a great opportunity, and I wish Ministers well in their negotiations. The argument in Europe is always that we should have an agricultural policy for the whole of Europe and a budget to fit that policy, but in the real politics of the European Union, there is a budget for agriculture, and agricultural policy is then fitted to that budget. That is exactly what will happen this time.

We must get the best deal for our farmers and the environment. I wish our new Minister and the Secretary of State well in their negotiations with our European partners. We must be tough to ensure that we move our agriculture forward to competitive food production and a green agriculture policy, but we must not lose sight of the fact that in the end, much of the food that our farmers produce is also part of the green environment.

[George Eustice (Camborne and Redruth) (Con)]

Does my hon. Friend agree that a problem with a one-size-fits-all policy such as the CAP is that it is difficult to have policy innovation, because any such innovation is stifled by the need for negotiations between 27 member states? Does he think it might be better gradually to move to a system with a common agricultural policy with common objectives—safeguarding the environment, improving animal welfare, and food security—so that those policies are increasingly delivered on the ground by national Governments from their own budgets, and we do not recycle funds through the EU in the first place?

[Neil Parish]

Yes. My hon. Friend raises a good point. What needs to be brought in is not only a policy, but co-financing, because each member state would then pay for its own agricultural policy, and might not be quite so keen on throwing money away on strange projects, as some countries do. Olive oil is produced in Greece, and reindeer are supported in north Finland and Sweden. Wheat and barley are grown across much of Europe, and rice is grown in parts of Italy and Greece. It is difficult to support a policy and have one aim. It would be much better to ensure that member states had their own money. The downside of that is that we do not want the French throwing all its money into supporting suckler cows and beef production, and that highly subsidised beef then coming across the channel to compete with our beef, which may not be subsidised in the same way.

[George Eustice]

I completely accept that point, but does my hon. Friend agree that for any other goods, and in any other part of the single market, state aid rules, which the European Court of Justice enforces, prevent that from happening? It would be possible to have an agricultural policy with common objectives, but delivered nationally, with those state aid rules to prevent the sort of behaviour he mentioned.

[Neil Parish]

My hon. Friend has heard the phrase, “The law works for the law-abiding,” and we can be certain that the French would find every reason to distort the market in their favour, wait until that was challenged by the European Commission, and drag it through the European courts for years, so I am not as sure as he is that state aid rules will stop the French or anyone else distorting the market. We must be careful if we go down that route. State aid rules are a blunt weapon, and I believe the Anglo-Saxons in Europe conform to them more closely than those in other parts of the European Union. State aid rules alone will not be enough.

We must ensure that CAP reform is done in a way that does not distort the market further. We should green it, but have food production, and ensure that as we deal with farmers in this country, we have food production on the best land and increase it sustainably, but have conservation on our more marginal land. That is the way forward, and that is where we must be careful in our negotiations on the greening of the CAP. I look forward to Ministers doing a good job.

--- Later in debate ---

[George Eustice (Camborne and Redruth) (Con)]

Thank you for allowing me to speak, Mr Chope. I am conscious that I was not here for the opening of the debate. The title of the Select Committee’s report is “Greening the Common Agricultural Policy,” but more specifically the Commission’s proposals are about greening pillar one of the CAP. It is worth noting that supporting the greening of pillar one represents quite a significant departure from the long-standing British foreign policy position, which is that we should gradually phase out pillar one and direct payments all together and put our support into pillar two, so that we can have more tailored local and national support for environmental stewardship schemes.

My concern is that by going for the greening of pillar one, we will end up with what is already being called in some circles green taping—rather than red tape, we will have green tape. There will be quite bureaucratic and centralised diktats coming out about what farmers can and cannot do, which invariably will not have been thought through properly. We might lose the opportunity to achieve the more satisfactory long-term objective of removing pillar one altogether and having effective, well thought through countryside stewardship schemes. In recent decades, British Governments of all colours have led the way in developing some of the successful ones. The entry-level and higher-level stewardship schemes are held up as exemplars for others to follow. There is a danger that we will lose that momentum towards a more sensible CAP and end up reverting to and getting bogged down in, again, quite a bureaucratic process.

I shall highlight a few key problems that I see with some of the proposals. There is the idea that we should go back to set-aside. We moved away from set-aside 15 or 20 years ago because it was not working. The point was made by my hon. Friend the Member for Tiverton and Honiton (Neil Parish) that it is not always right to have just 7% of every farmholding set aside and not farmed intensively. The evidence is that if we really want to encourage wildlife, we should have wildlife corridors. Some parts of the country where the agricultural value of the land is lower might opt to do more of these environmental schemes—

[Neil Parish]

My hon. Friend is absolutely right about the set-aside argument. Do we get value for money in greening with set-aside, counterbalancing the fact that we are taking out a lot of land that could be used for food production? There is a moral duty to produce food as well as taking land out for so-called environmental set-aside.

[George Eustice]

That is right. The environmental stewardship schemes in pillar two are much more proactive about encouraging wildlife and improving biodiversity, whereas the problem with set-aside is that it becomes something that has to be done and everyone finds all sorts of ways around the rules so that, for instance, they can graze a particular type of goat on the land and get away with it. There is an issue with the bureaucratic system of set-aside.

My hon. Friend the Member for Tiverton and Honiton also alluded to the crop rotation requirement. Anyone who has been a farmer, as I once was, knows that crop rotation is a good thing. A farmer who farms without rotating their crops, particularly in the arable or vegetable sectors, will soon run into problems, such as crop disease, which causes a great deal more expense than any subsidy would have been worth. I question the value of insisting, in the latest proposals, that each farmholding must grow three crops. It proves that whoever came up with the idea is not a farmer; they are a bureaucrat. One could grow three brassicas—cabbage, oilseed rape and cauliflower—which would satisfy the three-crop rule, but the farmer would have clubroot disease in all those crops within two or three years.

I understand why some would regard the proposal to cap subsidies to individual farmholdings as superficially attractive; they think, “Why should we give a huge amount of money to very large farms?” However, no one has thought through the likely impact. Large farmholdings might break themselves into small farmholdings to get around the rules. There would be all sorts of avoidance problems, which would need a suite of anti-avoidance measures and people to ensure that farmers did not break up their holdings to circumvent the provisions. There would be major problems with that, so one must question what we are trying to achieve. If an objective of the CAP always has been and should be to promote food security and competitive farming, why would we want a policy designed to undermine the most productive and efficient farms in Europe and reward the least efficient? Although I understand why some would find the proposal superficially attractive, it is a mistake.

[Huw Irranca-Davies]

What are the hon. Gentleman’s thoughts on the proposal I floated earlier? Farms receiving the very high CAP payments are on the most productive land, but they need to be more productive because we face food security challenges. The very high CAP level should recognise additional investment in innovation, targeted farming, research and so on, so that it was based not purely on production volume, but on increased production.

[George Eustice]

That is an interesting proposal, which I would like to look at more closely. I have previously argued that we could develop a system in which environmental obligations became transferable in some regards. The lettuce grower on the Cambridgeshire fens, who has a model that getting the single farm payment is irrelevant to, might forgo the payment, which could instead go to a farmer on more marginal land in, let us say, Wales—I do not want to offend anyone with a Welsh background. Such schemes could therefore receive more investment.

A problem that we all recognise in the EU negotiating process, which I alluded to in my question to my hon. Friend the Member for Tiverton and Honiton, is that rather than going into negotiations saying, “What is the best possible agricultural policy we could design?” and “What is the optimum policy we could pursue?” we are always hamstrung by voices in DEFRA and the civil service that say, “You can’t do that because Denmark won’t agree. If you advance this idea France will reject it, and we will lose our allies in Poland and eastern Europe.” Everything about agricultural policy ends up being seen through the prism of an incredibly complicated 27-way negotiation, which frankly leads to a poverty of vision of what our agricultural policy could become. We instead plod along like a blinkered horse, trying to achieve what we can. It is all about the lowest common denominator, rather than genuinely successful and thoughtful policy. Pillar two is a classic case of that.

[Mr Dai Havard in the Chair]

In the last Parliament, our Committee, before I was on it, criticised the Labour Government for arguing that we should phase out pillar one and have pillar two only, because it was not achievable and undermined our negotiating position. If we do not even articulate what we believe because we are concerned that doing so will undermine our negotiating position, there is a problem.

I would like a much looser CAP in future: a common policy about common objectives. We could set common objectives for improving animal welfare, safeguarding the environment, enhancing biodiversity and promoting food security. There could be much looser policies and arrangements centrally and much more decision making and responsibility for implementation devolved to national Governments.

[Neil Parish]

This will tempt my hon. Friend further from the topic of debate, but would a looser common agricultural policy, or an agriculture policy, be part of a new relationship that we might negotiate with Europe?

[Mr Dai Havard (in the Chair)]

Do not be tempted too far, Mr Eustice.

[George Eustice]

It might be, if we get to that point, but I do not want to be distracted by that now.

There is potential and it is not unrealistic, because that is the direction of the common fisheries policy. The Commission, under Commissioner Damanaki, is buying into ideas that will effectively lead to a partial repatriation —of sorts—of the management of individual waters and fisheries only to those groups of countries that share that fishing water. That is a sensible plan.

[Huw Irranca-Davies]

The hon. Gentleman has graciously given way. He tempted me in because I was the Minister who oversaw the instigation of that regionalisation of the common fisheries policy. It is a good approach, but it must be balanced against the imperative to achieve sustainability of fisheries in sea areas. In the same way, we are talking about the long-term sustainability of agriculture and getting more out from less in. There cannot simply be devolved management and let-loose chaos; it must be well planned and managed by individuals and organisations on the ground or on the seas.

[George Eustice]

I absolutely agree. In fisheries, the developments and techniques on maximum sustainable yield and how they are calculated and measured, with all their complexities, have come a long way. That should be the guiding philosophy of the common agricultural policy. The US has a statute that states that there cannot be overfishing beyond the maximum sustainable yield, and we could look at something like that at a European level. I accept what the hon. Gentleman says, but I am talking more about the implementation to deliver maximum sustainable yield in fisheries, how we could devolve management of that and how we could do the same for the common agricultural policy. We could set clear objectives to enhance animal welfare, biodiversity and environmental protection, but give individual countries much more scope to work out how best to achieve them.

I am interested in another area that has always struck me as a missed opportunity. The Committee took evidence on the natural environment White Paper proposals, which the Government launched soon after the election. Some of that evidence made it clear that putting a value on biodiversity and the natural environment was a powerful idea that had a great deal of potential. There were interesting proposals in the White Paper, but the big thing that held them back was the lack of funding to make them a reality and to make such a market a reality. A huge amount of money—the best part of 40% of the EU budget—is tied up in the common agricultural policy, but there is no really thoughtful, innovative policy in it. There are interesting ideas in the White Paper, but no money for them. Could we somehow marry the two and use some of that CAP money to make a reality of the natural environment White Paper?

[Miss McIntosh]

Welcome to the proceedings, Mr Havard.

My hon. Friend did not hear my opening remarks when I highlighted the fact that funds under the CAP are going to the projects that he mentioned. Perhaps the Minister will clarify whether those will continue under the revised rural development programme for England and possibly the agricultural environment schemes as well. Does my hon. Friend the Member for Camborne and Redruth (George Eustice) agree that we heard powerful evidence that this could be achieved through private enterprises, such as water companies, which might be a better route and attract more investment?

[George Eustice]

There are a number of routes that we could pursue to bring this forward. My point is that there is a huge amount of money tied up in the CAP. There are funds, as my hon. Friend said, in pillar two. If we are serious about greening pillar one, we could try to transform it into a market, with state funds available to do that, to promote environmental schemes, so it could be almost a transferable obligation. The lettuce grower on the Cambridgeshire fens might choose not to participate. Another farmer might choose to participate in quite a big way, so we would get some critical mass. We would have wildlife corridors and make a genuine difference rather than making token gestures.

A lot of the proposals are probably beyond the scope of the CAP negotiations. It was ever thus. One of the big problems with the CAP is that it always tends to be about 10 years behind where it needs to be. It is now focusing on the environment when it probably ought to be paying, as my hon. Friend the Member for Tiverton and Honiton said, a little more attention to food security. However, I know there is room for negotiation and an understanding that greater flexibility needs to be included in some of the proposals. We should at least be arguing for them, and not be afraid of arguing for them just because we do not think that we have enough allies at this point.

Common Agricultural Policy

George Eustice Excerpts

Thursday 8th March 2012 Westminster Hall

[George Eustice (Camborne and Redruth) (Con)]

It is a pleasure to follow the previous speakers.

I am a member of the EFRA Committee, and I agree very much with many of the points made by its Chair, my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). In particular, I agree with her criticism of the current direction of the reforms. The Committee is a broad Church, however, and it would probably be fair to say that I am less critical of the stance the Government have adopted, for the simple reason that all British Governments face the same problem on the CAP: ultimately, the policy is not their decision.

There are complicated negotiations between 27 member states, so our negotiating stance constantly comes up against opposition from other countries. That makes it quite difficult to set out a clear view of what we want to do; indeed, the previous Select Committee criticised the Labour Government for wanting to see everything in the long term done in pillar two, and for wanting pillar one to be phased out. The Committee said that it was unrealistic to suggest that in negotiations and that it was wrong for the Government even to have a vision of where they wanted to end up.

I disagree, and farm policy is a good example of what happens when we stop making decisions at a national level and subject ourselves to the spirit-crushing process of endless negotiations with 26 other countries. We end up with a poverty of vision right across Europe about what a good agricultural policy should look like, and I will say more about that in a moment.

[Roger Williams]

I thank the hon. Gentleman for making that point, but does he not agree that if we are to have a common market and a trade in food between our nations, we need commonality and a common agricultural policy?

[George Eustice]

As I will say later, we need common objectives, but not necessarily a common policy. We also need clear state aid rules, as we have in other sectors. In that way, we can have a proper functioning single market and protect it, even though we do not have a common uniform policy across Europe.

The most important point about the proposals on the table is that they are a backward step for the CAP. The aim was to simplify it, and simplification has been the buzz word for many years, but the proposals will make it more complicated. As the Chair of the Committee said, we are effectively seeing a return to set-aside, with suggestions that 7% of people’s land should be set aside. At a time when food security, which should be a key objective of a common agricultural policy, is a growing issue, that is a step backwards.

I also object to the cap proposed on payments to farmers. If we want to encourage farmers to become less dependent on subsidies in the long term, we need to support consolidation and more efficient farms. A cap on payments would force farmers to break up holdings into collections of smaller holdings so that they still qualify for the subsidy, but that makes no sense. If we want a more efficient agricultural industry, why penalise the larger, more efficient farms?

There are some ludicrous things in the proposals. For instance, in an attempt to achieve crop rotation, there is some suggestion that farmers grow at least three crops to qualify for a subsidy. We can tell that the proposal was written by people who do not understand farming, because insisting on growing three separate crops will not necessarily bring the benefits we seek from crop rotation. For instance, somebody might grow cabbages, cauliflowers and oilseed rape to ensure they have their three crops, but those crops all come from the same brassica family, and are all subject to similar diseases, so a farmer who grew them would soon run into serious problems on their land.

What should a new CAP look like? We should start moving towards something that is about common objectives, rather than a unified common policy. The CAP should have key objectives, such as enhancing biodiversity, improving animal welfare and delivering food security. However, we should then give national Governments much more freedom to innovate, try new policies and adopt approaches that work in their countryside, rather than trying to have a uniform approach that works from Scotland all the way down to Greece, which is clearly difficult to achieve.

Allied to that, we would have a clear set of state aid rules that were specific to the agricultural sector, just as we have clear state aid rules for the single market in every other sector. Such rules would prevent, say, France from subsidising its farmers more than the UK Government and thereby putting our farmers at a disadvantage. Provided that we got those rules right, we could protect a single market in agricultural produce.

The key benefit of such an approach is that it would be more fluid. We would be able to hold the UK Government to account and say, “Why aren’t you trying this great new idea that is working so well in France? Surely, it would work here.” Instead, the best we can do now is to say, “How many meetings have you had with Poland to try to outmanoeuvre France?” That is not a good way forward.

When we make such proposals, people immediately think, “That’s a good idea, but it’s not realistic in the current time horizon.” I have heard that, too. Indeed, when I put these ideas to the Secretary of State last week, the answer was that they were ahead of their time, which is a flattering way of saying, “No, we’re not going to do that.”

[Huw Irranca-Davies (Ogmore) (Lab)]

The hon. Gentleman has great experience in the European Parliament, and I want to put one point to him. What he describes is already the direction of travel in the common fisheries policy, where there is a strong push from the UK Government, as there was under the previous Government, to move towards a more dynamic, regional-management approach, with much greater subsidiarity and local decision making, albeit in an overall framework. The hon. Gentleman may be ahead of his time on this issue, but practice in other areas is catching up with him.

[George Eustice]

The hon. Gentleman is right, except that I was not actually in the European Parliament. I was a candidate in the 1999 European elections, although unsuccessfully—and for a different party, I should add. However, I have followed these issues closely, and the hon. Gentleman is right. The EFRA Committee has, separately, been looking at the common fisheries policy, and there are proposals on the table not only to have a common framework and common objectives, but to give much more devolved power to groups of national Governments so that they can manage their own waters. It remains to be seen whether we get those reforms through, but the Government have been quite successful in getting the Commission to adopt them. That also shows the difference a different Commissioner can make. In Commissioner Damanaki, we have someone who is much more open to such proposals in relation to the common fisheries policy.

I want to question the idea that it is impossible to do what I am talking about. Alongside taking evidence on the CAP, the Committee has been looking at the natural environment White Paper. The striking thing about the CAP is that we hear people say, “We want to green pillar one in a flexible way. All this money is going into it; we need to get some public good out of it and green it.” However, they do not really know where to start, and the current proposals have run into a bit of a muddle.

On the other hand, we have the natural environment White Paper, which everybody says is very coherent and really well thought through, as well as having lots of interesting proposals about valuing natural capital and creating markets in which we can mitigate and offset environmental damage in some areas through improvements in others. The problem is that there is not enough money to bring life to those ideas.

Is it really beyond the wit of man to connect the two? Let us take some of the principles from the natural environment White Paper, link them to the funding in pillar one and see if we can make that work. What would that look like? It would mean replacing the single farm payment with some kind of market in transferable environmental obligations. A farmer on the fens who grows lettuces, and who does not really require the single farm payment for his business model to work, might say, “I don’t want to set aside 7% of my land. I don’t want to get into that. I just grow lettuces, and that’s my business model.”

In contrast, a farmer on marginal land in Wales, for instance—I have nothing against Wales, and there are patches of good soil there—may decide to opt into environmental obligations on a larger scale. That can bring benefit, with the establishment of wildlife corridors, and with critical mass in some areas for improved wildlife habitats. That might actually work, rather than a piecemeal approach with 7% of every farm’s land set aside.

Such a transferable obligations system could also be extended to issues such as animal welfare. For instance, in the case of livestock farmers who pursue less intensive systems that are better for animal welfare, rather than having to fight in the market for recognition for their extra work to improve animal welfare, they could be given that recognition by the Government; we could make them eligible for payments for which those who pursue intensive systems would not be eligible. There are lots of interesting things that could be done with such a system of transferable obligations.

As for pillar two, the Select Committee Chair mentioned the problem of its needing to be co-financed; sometimes the Government have been reluctant to buy into those things. To my mind, the answer is perhaps to bring back even greater control of pillar two, so that it does not become co-financed, but we do not send the money to the EU in the first place, and then have it come back with strings attached: in fact, we try to finance that as an agricultural fund that focuses on several key areas. Developing farm competitiveness is an important one that we should try for.

I also agree with the point that was made earlier about encouraging new entrants into farming. There was an interesting project, piloted in Cornwall, called the Fresh Start project, which aimed to encourage new entrants to the industry. The average age of farmers is incredibly high. I think that two thirds of farmers in Europe are over 60, which is a shocking figure. We need new entrants. The Welsh Government have also started interesting schemes to encourage new entrants to the industry. Pillar two could focus on improving competitiveness and encouraging new entrants, as well as keeping going with schemes such as the entry level and higher level stewardship schemes.

Those two policies, to return to what I said at the outset, prove the point that if a national Government are given the scope, freedom and head room to think through what a good policy looks like, they can get it right. The ELS and HLS are good examples of that. Britain is a trailblazer in that respect, because we have been able just to do the right thing. We have not had to go behind closed doors and haggle about it with 27 other countries. If we could do that in more areas of agricultural policy, our farming would be stronger.

[Ian Paisley (North Antrim) (DUP)]

At the outset, I thank the hon. Member for Thirsk and Malton (Miss McIntosh) for the way in which she introduced what is one of the most important subjects Parliament deals with—the production of food. It is one of the nation’s most important industries. It has been taken for granted too often, and for too long, and cast as a secondary issue, but it is crucial, and it is right and proper for the House to have the opportunity to debate it.

I think that we are all on a common page, if not a common agricultural policy, and that page is headed “The system doesn’t work.” As the Irishman said: “But you wouldn’t start from here”; but the trouble is, we are here. We are at this point after years of implementation of a policy that was initially flawed anyway, and which created huge butter mountains and a waste of food. There is virtually nothing we can do about where we are now. Those who suggest that we can suddenly end this, and everything will be all right for the industry, are just barmy. That is just silly. If anyone were to say that about any other sector of the economy, they would realise how daft it sounds. From time to time, people cry out, “What about New Zealand? It did it.” It took New Zealand nearly 20 years to get things right, and there was a lot of pain in the process. Those who advocate moving away from subsidised agricultural production need to get a grip, and to make comments relevant to the needs of the sector.

[George Eustice]

Does the hon. Gentleman recognise that when New Zealand abandoned its subsidies it substantially devalued its currency at the same time, so that farmers lost subsidies but gained a dramatic increase in price for their produce?

[Ian Paisley]

That is an interesting debate in its own right; there could be a good examination of what has happened in countries that have tried to reform their agri-food sector. The New Zealand question is not a debate for today, but we should always have it at the back of our mind.

No matter what we try to do, it will be pain for someone. Most importantly and obviously, it will be pain for the farming community. We must ask ourselves whether we want to put that community through pain. Let us put the matter in perspective: agri-food production in this nation is a £20 billion industry. Milk production alone represents more than £8 billion in the industry. Good, clean, traceable food, that the consumer wants to put into their body, is a positive and beneficial product. If we start to mess about with it and ruin the stability of the industry, we must be careful to understand the consequences. The production of food that the public do not feel comfortable with, or about whose production they do not feel confident, will destroy a positive and powerful economic factor for our nation. We always need to bear that in mind when we deal with agriculture; because it goes by the way, which sickens me. We need to get a grip on the fact that agri-food production is, as I said, one of the most important industries, if not the most important, in which this nation is involved.

In Northern Ireland, agriculture is a key driver in our economy. Indeed, the agri-food sector represents approximately 20% of the total private sector employment in Northern Ireland. The food and drink sector contributes £3.2 billion to our little country’s national turnover. At a time of economic difficulty, agri-food production is in a state of growth, whereas other sectors of the industry are either stagnant or in minus figures. The sector is positively growing. Agri-food production will be a crucial factor in rebalancing our local economy away from total reliance on the public sector. The key to achieving those goals is driving an export-led growth in the agri-food sector in Northern Ireland.

Given the importance of the common agricultural policy to the Northern Ireland economy, and its cross-cutting nature across the majority of Government Departments, including not only Agriculture and Rural and Development, but Enterprise, Trade and Investment, and Environment, a formal agreement should be reached at Northern Ireland Executive level on how the reformed common agricultural policy will be implemented in Northern Ireland. The implementation of the reformed policy must deliver the objectives of the draft Northern Ireland Executive programme for Government. In bringing that about, it is vital that our Minister, locally in Northern Ireland, should up the game and engage directly with the ministerial team here, nationally.

Let us face it, the Minister present today, and his team, will negotiate the CAP package, no matter what form it takes. I want him to be on my side, and to argue the case for Northern Ireland. He will know that case, and how it affects the part of the United Kingdom I come from, if our Minister in Northern Ireland ups the game and engages more directly with him. I hope that that happens. The challenge is a serious one, because time is against us. The clock is ticking. The Minister needs to know all the permutations and ramifications of each decision that he will take at the CAP reform meetings, and how they will affect my part of the United Kingdom. There is a duty on politicians now to lobby hard, and that is why I welcome the debate. It sets some pretty important touchstones, which need to be recognised, and I think are being recognised, to a greater or lesser degree.

We also need to ensure that Northern Ireland gets its fair share of the UK CAP budget. It is a point that we need to negotiate directly. I do not want to do that against Scotland’s interest. Scotland has every right to make its case too—as does, of course, the great Welsh Principality, which has to be saluted at every opportunity in this place. We must ensure that there is regional flexibility within the United Kingdom. I understand that there could be a degree of flexibility across the regions of Europe. I want flexibility in the UK, so that the Department can ensure that it shares—parcels out—the money fairly and appropriately, understanding the unique circumstances in all parts of the UK. As a politician, I believe that the draft reform proposals outlined by the European Commission are deeply flawed, because they fail to address those peculiar, necessary needs and could have a major negative impact on our major industry in Northern Ireland, which would be proportionately much more significant than in any other part of the UK.

People should stop for a moment, pinch themselves and imagine a United Kingdom economy that does not have an agri-sector. If they do that, they will realise that without that sector we would be bereft of a culture and a way of life for many people and bereft of a powerful, important industry which, as I have mentioned, contributes a £20 billion value. We need to do that to recognise what is at stake and to ensure that we go out there and campaign, lobby for and achieve a settlement under the CAP that is beneficial for the whole kingdom.

The Commission’s CAP proposals will cause a huge redistribution of moneys within Northern Ireland, from lowland to hill farmers—similar to the constituency of the hon. Member for Thirsk and Malton. That will impact greatly on those who are able to make food production sustain a community and sustain a way of life. Under those proposals, they will lose out and will be disincentivised from becoming competitive. We have to put the finger on that and recognise that the policy drivers that Europe is pursuing are upside down. The speed of transition is too fast and will not allow adequate time for the industry to adjust from a 30% flat-rate payment to a 40% transition in direct payments in one year. That is too much. A slow, proportionate transition period is ultimately required.

There should be regional flexibility within the 27 regions that comprise Europe, and internal flexibility. At regional level, it is important that Northern Ireland receives its fair percentage. I mentioned earlier fair distribution between pillar one and pillar two. It will be difficult for us to argue for fair distribution when the Government’s policy appears to be a reduction in CAP money anyway, but the money that we get must be fairly distributed, when we get it, between the two pillars. I will not go into detail in respect of my views on the active farmer, but I agree with the points made by the hon. Member for Banff and Buchan (Dr Whiteford), who made that case exceptionally well.

The 7% set-aside rule is nonsense in light of the increasing global population and the increase that we have witnessed in westernised eating habits. In that regard, I should like to reflect particularly on the dairy sector, which is worth more than £8 billion to the UK economy and employs more than 80,000. We are the third largest milk producer in the European Community and the ninth largest in the world. Our products can be found in 98% of UK households.

Jim Begg, the director general of Dairy UK, wrote a pamphlet that has been distributed called “Action for growth”, in which he deals with how the CAP should address the needs of the milk producers:

“A requirement for ecological set aside of 7% of arable land will reduce the area available to dairy farmers for feed crops. Maintenance of permanent grassland will also restrict the ability to increase the production of home grown feed. The termination of historic payment calculation method will disadvantage dairy farmers in particular.

It is imperative that the UK ensures the distribution of payments in the EU and the UK does not discriminate against UK farmers or undermine their productive potential.”

A hearty “Hear, hear!” to that. The milk industry needs that security of tenure. We should not be doing something that upsets an already difficult market, in which prices can be difficult.

I make my comments as a representative of my constituency, in which the single largest employer is the poultry sector. One factory alone employs 1,100 people. Unfortunately, today it announced 19 redundancies, but in the scale of things—in the current economic climate—that could, of course, have been an awful lot worse. Poultry production is incredibly successful in Northern Ireland, but the fact that it, too, is feeling the squeeze at present and is having to announce re-jigs and evaluate job-shares makes it clear that even the most successful parts of our industries face a crisis at present. Heaping CAP reforms on such businesses does not address their real, genuine needs and is a flawed way for us to proceed.

--- Later in debate ---

[Barry Gardiner (Brent North) (Lab)]

It is a pleasure to speak in the debate, Mr Weir, particularly under your knowledgeable chairmanship on this subject. I pay tribute to the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), for obtaining the debate.

I do not wish to go over ground already outlined by hon. Members this afternoon. They have made many serious and important points, most of which I agree with. I want to restate a few basic facts, however, and €57 billion is one of them—40% of the entire European Union budget. This is a fix such as no heroin junkie has ever been on, and it is difficult, in the words of the hon. Member for Tiverton and Honiton (Neil Parish), to wean farmers off it, sometimes for the good reasons that he outlined.

The CAP provides support in three distinct elements to agricultural producers and rural areas. We should not forget that we are talking about not just farmers, but other land managers and the whole rural community. The three elements are direct income support, market measures and the rural development programme. As we have found, the key point is that the RDP must be co-financed, and we will return to that bugbear.

Given the enormous subsidy, is it not appropriate to consider what the CAP’s objectives are? Our Committee heard five objectives, the first of which should be

“to maintain or enhance the EU capacity to produce safe and high-quality food.”

The second objective should be to enhance

“the competitiveness and viability of the EU agricultural sector”

because a

“competitive and viable EU agricultural sector is the key to producing more while having less impact”—

detrimental impact—

“on the environment and to reducing farmers’ reliance on income support from taxpayers in the long-term.”

The third objective should be

“to ensure the sustainable management of the EU’s natural resources, biodiversity and landscapes, recognising that farmers are the managers of over half of the…land area”

of Europe. The fourth objective

“should be to help to maintain agricultural activity in areas where it delivers significant public benefits, such as the maintenance of biodiversity and cultural landscapes”

such as those that were mentioned earlier. However,

“the CAP should not aim to deliver an acceptable standard of living to every farmer in the EU through income support alone”—

that was a key finding by the Committee and is in the report—and

“farmers should be encouraged to look to the market for their”

fundamental returns.

The aim of this CAP reform should be to enable farmers to achieve the sustainable intensification that is required to meet the global challenge of feeding a world population that will rise from the 7 billion that it reached just a month ago to the 9 billion that it will reach in 2050, but to do so without destroying the very things that it is predicated upon: our biodiversity and our natural landscapes. The Government’s position on CAP reform must be coherent in its strategy for ensuring food security, and DEFRA must decide—I am keen to hear from the Minister on this point—whether and, if so, how it intends to implement the previous Government’s “Food 2030” strategy, taking into account the recommendations from the Foresight report on “The Future of Food and Farming” by John Beddington and co. and the UK’s position on the future of the common agricultural policy.

In the interests of fair trade and the long term, the EU should argue more strongly for a recognition of standards of production in trade agreements, including animal welfare, the use of water and greenhouse gas emissions. That is essential to achieve the global shift towards sustainable intensification that “The Future of Food and Farming” report recommended.

The Commission’s proposals to green pillar one have been at the heart of the discussion throughout Europe and our debate today. There is a suspicion that that was a sop and a way to try to justify the subsidy and support. The proposals did not receive strong support from any of our witnesses. There was concern that they would make the CAP more complicated to administer, as other hon. Members have said, and that they would confuse the logic of the two-pillar structure.

[Jim Sheridan in the Chair]

Several witnesses expressed concern about expanding pillar two, and that is DEFRA’s alternative to the expansion of pillar one. The central issue seems to be the difficulty of achieving political support in Europe, and I want to tell a story about what happened when I was in Europe just last week. I had gone over there, as had the hon. Member for Thirsk and Malton, to join in the parliamentary debate that the Commissioner with responsibility for reform of the common fisheries policy had called. I spoke to several members from throughout Europe and tried to persuade them of the UK’s good ideas on CFP and CAP reform. I was told universally that although some of those ideas were good, for God’s sake, I should not let the British Government suggest them because they are the most toxic brand in Europe at the moment and suggestions will not garner political support if they come from the UK.

We must consider seriously how the Government have engaged in Europe, and how they have got themselves into a position when even good ideas will not be accepted because we suggest them. Perhaps we should get other people to suggest our good ideas, and then take a back seat.

[George Eustice]

If the UK is putting forward good ideas and they are ignored because they come from us, the failure is on the part of those countries that adopt that stance. Clearly, if an idea is good, they should adopt it.

[Barry Gardiner]

Of course, in principle, we should all work from a basis of fact, science and what is rational and reasonable. The hon. Gentleman and I are totally at one on that, but we are both politicians as well, and we know that alliances are important in politics. We know that sometimes the issue is not having the right idea or the best idea; it is stacking up the votes to get that idea not only on the table, but accepted. That is what the Government have singularly failed to do. They have singularly isolated themselves in Europe, and that is a real problem for our farmers, because many of the ideas are good.

Another aspect is how, as the hon. Member for Tiverton and Honiton said, we go about weaning farmers off the subsidies of pillar one. If we are to do that by 2020, or shortly thereafter—perhaps the Minister will clarify when—it sounds a bit like saying, “Make me virtuous Lord, but not yet.” In this round of CAP reform, we should try to get the Commission to set a date for when it will happen. Without a deadline, hon. Members know as well as I do what will happen. Come 2020, we will all be in the same position, saying, “Yes, make me virtuous Lord. Let us wean ourselves off the subsidy, but in 2027, or 2032.” We must bite the bullet. We cannot continue with this junkie habit, because it is damaging the prosperity of Europe as a whole.

It was interesting that one witness told us that the problem with shifting the policy to pillar two was that, when the opportunity was offered to member states with voluntary modulation, all but the UK ignored it, because they did not want to put additional money into match funding and co-financing. In principle, we may be in favour of co-finance in pillar two and putting more into it, but the political reality is that many do not have the money to do so. Another witness told us that expanding pillar two risked creating a very uncommon market. New member states cannot afford their share of the finance, so they cannot draw down European money.

I think we have the right nostrums. We should move away from pillar one and into pillar two, for all the reasons that hon. Members have outlined. However, regional flexibility is a problem. With pillar two, as Members have said, there is a problem of how to ensure, from Finland to Greece and Romania to Ireland, that the measures adopted are appropriate. Inevitably, as we all know, countries try to fix things in their own favour. If it is simply a smorgasbord created by an individual country, that smorgasbord will be arranged to give maximum benefit, advantage and subsidy to the country’s own farmers. Therefore, what is needed within Europe is recognition that although a regionalised, smorgasbord approach is the right one, parity must be ensured through something that we seem to have left out of this debate: sound science.

We believe in evidence-based and science-based policy. We must ensure that the benefits to the environment and the benefits that each country would bring to that regional smorgasbord are established on some sort of points system to show that they are equivalent to what other countries are offering, and therefore that the financial reward that follows from them is likewise rewarded. That is not new to DEFRA. It is already doing that in the UK national biodiversity strategy. It is considering different points for different elements of biodiversity. Why can we not propose that in Europe for adoption there? It is right to move towards a more regional approach and from pillar one to pillar two, but we must do so on the basis of sound science and public good, which must be assessed independently to ensure genuine parity.

Water Industry (Financial Assistance) Bill

George Eustice Excerpts

Tuesday 6th March 2012 Commons Chamber

[George Eustice (Camborne and Redruth) (Con)]

Let me begin by welcoming this Bill. We all know the historical causes of high water bills in the south-west. They go right back to the time of privatisation, when insufficient account was taken of the lack of sewerage infrastructure and the pressure that this would put on companies such as South West Water to provide such infrastructure in the future. In Cornwall and the south-west, we also have just 3% of the country’s population looking after some 33% of the coast.

I have always argued that we have spent way too long in recent years talking about the problems and not enough time talking about the solution. I am delighted that we now have a solution to the unfairness of high water bills in the south-west, through the measure in this Bill to deliver a £50 discount on all household bills. I pay credit to the Minister for all the work that he has done to make that a reality. He has managed to deliver a policy where the previous Government were unable to do so. I remember talking to Labour candidates even at the last general election who said that although there was a problem, nothing could really be done about it. We have proved that something can be done, and where there is the political will, there is a way. I hope that the Minister does not feel that Devon and Cornwall MPs have lobbied him too ferociously on this issue. I feel there were times when he saw a Devon or Cornwall MP approaching him that his face dropped somewhat, as he knew the subject that was up for discussion. I hope that has not put him off the counties of Devon and Cornwall, because this move is very much welcomed by everybody there.

There has been some discussion about whether the £50 rebate is enough. However, it is important to remember where we were just a year ago. There was not going to be a Government-funded discount; in fact, the discussion at that time was very much about what might be achievable through a national social tariff. That would effectively mean having a pot of money funded by all the water companies, at the expense of water bill payers across the country, with resources allocated on the basis of affordability. That would have disproportionately helped those in the south-west—it would have helped some in other parts of the country as well—but it would have been paid for by water bill payers across the country. The decision that the Government have finally come up with—to find public money to fund the discount, so that it does not cost water bill payers elsewhere in the country money—is a sensible solution. Importantly, it separates the historical unfairness of high water bills in the south-west from affordability, which it seeks to address through the company social tariff. That is the right approach, and we should welcome it. We in the south-west should not look a gift horse in the mouth and say, “This isn’t enough,” because I think that £50 is a significant discount, which we should all welcome.

I would like to pick up on what my hon. Friend the Member for Plymouth, Sutton and Devonport (Oliver Colvile) said about the projected rise in water bills from South West Water. This is an issue, because with the Government having done their bit and finding some money to create a genuine discount for people in the south-west, it would be a dreadful state of affairs if it was all swallowed up by water bills in the south-west being increased anyway. As my hon. Friend said, that could take up around half the discount. However, the Government have done their bit and found the money; we now need South West Water to do its bit by showing restraint in the bills it issues and by developing the social tariff. Most importantly, we need Ofwat to do its bit. I very much hope that the Minister—if he can do one last thing—will hold its feet to the fire, and keep the pressure on Ofwat to ensure that it keeps those bills under control.

Finally, I want to touch on how we might create downward pressure on water bills in the longer term. I am encouraged by what I have seen on that issue in the remainder of the White Paper, which deals with the development of proper competition on the retail side, particularly in the business sector. Businesses will not benefit from the £50 discount, but if we can increase competition at the retail end, we should be able to achieve downward pressure on their bills. I welcome these proposals.

--- Later in debate ---

[Dan Rogerson]

I think we can point to the time before the Labour Government, during the early days of the privatised industry, when, although there was a preponderance of MPs in the area from the Government party, we did not get anything. We have to recognise that there has been a problem and that it is being dealt with to some extent.

The company still has work to do, so we are not looking at a static position. We are looking at the fact that, as the hon. Member for Hendon (Mr Offord) said in his excellent contribution in our previous debate on this issue, raw sewage is still being washed out. That happens in London, as the hon. Member for Hammersmith has described, and in coastal locations such as Trevone, which I mentioned in an intervention. Water companies argue that that is a very rare event, happening two or three times a year, but the statistics show that it happens far more than that. Rainfall patterns are changing and development patterns have changed. We have, fortunately, got some affordable housing and market housing built in some of those communities, but that has added to the burden on the sewerage systems, which are just not up to the job. South West Water still has work to do and it also has to take responsibility for taking over the private sewerage systems. I welcome that change, but it will add to the costs going forward. The measures are long overdue and will, I hope, help to offset some of the burden on bill payers.

I have some concerns about the debt model that has been agreed between Ofwat and the water companies. The debt that has been taken on over previous decades to provide infrastructure is not being paid off to any significant degree. Under the debt model, those loans are repackaged periodically.

The water companies and Ofwat argue that that is a great deal because it keeps the cost of borrowing down—if we were to start to pay off these things now, we would put bills up even higher. I see that, but I am concerned that, essentially, we are saying that the Government’s sensible proposal will have to continue for ever, because we will never, ever pay off some of the significant debt that has been arrived at to put in the infrastructure. I hope that Ofwat will continue to look at the issue, because my constituents come to me and say, “At least we must have paid off a lot of this money by now and we must be getting to the point where the bills will start to go down.” No we are not, because the debt is constantly repackaged. That issue perhaps needs to be examined.

Hon. Members have talked about national WaterSure, or social tariffs. I know that the advice from the Treasury is that that effectively amounts to a tax—we need to examine that—but any scheme that seeks to help those who are struggling the most ought to do so regardless of where those people live. Even after the welcome investment in tackling inequality in bills across the country, people in my constituency and in other constituencies across Devon and Cornwall—because of low income, high housing costs, and high water and sewage costs—will still be worse off than people in other parts of the country.

I accept that other hon. Members will say, “Come on, you are getting this and surely you must be satisfied with it,” but I will be satisfied when I think there is a fair deal for people in my constituency and in neighbouring constituencies. As I said in a Westminster Hall debate earlier this year—or perhaps at the end of last year; memory fails me—I hope that we reconsider having some sort of national tariff. If measures are kept within region, the pressure on the other bill payers will be so high that those measures will not be allowed to be significant enough to meet the need.

We also need to keep a close eye on the profits of the water companies. In an excellent contribution to the first part of the Second Reading debate, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) mentioned the sometimes arcane business models and the layers of companies that manage to pass on significant dividends. Ofwat could do more to look at the profits there. As my hon. Friend the Member for St Ives said, the leadership at South West Water is far better than it was and those people have engaged hugely with the campaign to deliver on this issue. They are being open and realistic about what is achievable, but all water companies need to consider the contribution that they, too, could make to perhaps providing a more generous WaterSure or social tariff scheme. We need to be vigilant about that.

[George Eustice]

Does the hon. Gentleman agree that another shortcoming of the WaterSure tariff is the fact that it is available only to those who are on meters? That is good if it encourages people to go on to a meter, but there is a problem with blocks of flats where it is not practical for people to go on to a meter. Some of those people are in temporary rented accommodation, and it is not their call whether they go on to a meter.

[Dan Rogerson]

The hon. Gentleman is absolutely right, and we might be talking about some of the people who are worst off, because they live in smaller flats or houses in multiple occupation. I hope that as the Government move forward with their review of water policy they will consider whether any resource could be put into finding technological solutions to overcome those problems. At a time when we are considering smart metering and all sorts of things to do with energy, there must surely be a solution that allows metering for all water consumers, no matter where they are. A small investment, perhaps in that, or some encouragement to companies that might be coming up with such ideas, would help to deal with the issue. The sooner we can get everybody on to a meter, the sooner we will take the burden from those who, thus far, have been unable to take advantage of metering. The hon. Gentleman makes a strong point.

I should perhaps conclude by returning to the issue of fairness and who these measures are designed to help. South West Water feels strongly that it would like to see help for small businesses—it is concerned about that. I sympathise with that point of view, although we have to be realistic about how much money there is, and therefore about the support that will be available to residential customers if businesses are covered as well. It is difficult to distinguish between the smaller and the larger businesses, some of which are national and quite profitable. They would see a benefit that was nothing to them, but which would suck up money that could go to a residential customer down the road.

Second homes are an issue, as one might expect me to say. The Government’s proposals contain a careful appraisal to make sure that nobody gets £50 off their bill if they are currently paying less than £50, or we would be giving them money. I suspect that many in that category are people on water meters who are not using much water because the property is empty much of the time, as a second home. If, as the Bill moves beyond Second Reading, anything more could be done to examine the issue and make sure that it targets people who live in the area and pay higher water bills, I would welcome that.

I am delighted that the Government are moving on the matter at last. I hope they continue to examine ways in which we could help the very poorest consumers through social tariffs. I congratulate the Minister on tiptoeing through the various minefields surrounding the subject and coming up with the Bill that we are debating. I look forward to it making progress and becoming an Act.