Water (Special Measures) Bill [HL]

Lord Douglas-Miller Excerpts

2nd reading
Wednesday 9th October 2024 Lords Chamber

[Lord Douglas-Miller (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Whitty. I congratulate the Government and the Minister on making such a prompt start in addressing some of the long-standing issues associated with pollution emanating from the water sector. However, for a sector that is in dire need of significant long-term investment, strong management and increased financial stability, the overall impression the Bill gives is that the Government are anti-business, with far too much stick and not nearly enough carrot.

I completely agree that the water companies collectively need to improve both their performance and their financial resilience—areas in which they have let themselves down over the last years. The level of financial gymnastics that has so exercised the noble Lord, Lord Sikka, and the noble Baroness, Lady Jones, over the years has left the industry in a poor state to invest in the necessary infrastructure improvements and to reduce pollution incidents. Regrettably, the vast majority of those associated with this have long since departed the scene, and this Government’s desire to punish the sector through increased regulation and interference with market forces risks pushing the water companies further down the wrong road and making them less able to respond to the investment that is so desperately required.

It is not, as is often portrayed, a universally poor picture across all fronts in the water sector. In fact, on value, what customers get at the moment is really pretty good. Most get all the clean water that they can consume, and all their wastewater taken away, for little over £1 a day. What they do not get, and what they want to see, is their wastewater being managed responsibly and not illegally poured into our rivers and seas without due process. Crucially, customers do not want to see—although I fear the Bill will deliver it—increased costs and volatility in the sector.

One of the great challenges in this space is that the illegal dumping of sewage is often conflated with the legal process of sewage being released in high-rainfall events, which has been a feature of our system since it was designed by our Victorian forebears. Of course, both these outcomes are highly undesirable. Illegal dumping of sewage should rightly be penalised by strong measures, such as significant fines and bonus reductions, to prevent this happening. However, the reality is that the infrastructure requirements needed to reduce the legal release of sewage in high-rainfall events will take significant investment of time and resources.

Care should be taken by this Government to ensure that we do not create an environment where no good, top-quality executives want to go near this industry because of the draconian penalties and the random way in which government and its agencies run roughshod over the sector. Moving from where we are now to where we want to get to is a far from simple task. It will require capable and hard-working individuals to drive change through. In essence, I am saying: do not frighten the horses in a mad rush to punish an industry where those who have created the problems have long gone and those who are needed to sort it out are in short supply.

This begs the question: how was it allowed to get into this state? The answer, I am afraid, comes back to the inadequacies of the regulators. This is a serious cause for concern, as the Bill gives a whole range of new powers to the regulators, which have not shown a high level of competence to date. I ask the Minister to reflect on whether it is appropriate to give the regulators additional powers that interfere with the running of a large-scale business that they clearly do not understand.

In conclusion—to avoid repetition and in the interests of time—I support the comments made by my noble friends Lord Blencathra and Lord Remnant. In particular, I question the fit-and-proper-person test and the need to have consumer representation on water company boards. This, in my experience, will lead to conflict and paralysis in the boardroom, the inevitable slowing-down of decision-making, increased volatility and, worst of all, increased costs for the consumer.

Wild Atlantic Salmon

Lord Douglas-Miller Excerpts

Thursday 12th September 2024 Grand Committee

[Lord Douglas-Miller (Con)]

My Lords, I start by putting on record my congratulations to the Minister on her appointment. I wish her all the best in navigating her way through an interesting, diverse and sometimes thorny portfolio. I declare my interests, as set out in the register, as the owner of two salmon rivers in Scotland and as a past chairman of the Atlantic Salmon Trust.

I am most grateful to my noble friend Lord Forsyth of Drumlean for raising this important issue. It is regrettable that we have so little time, both individually and collectively, to explore it. To add a little context to this debate, I will offer a few statistics to help noble Lords visualise the extent of the demise of wild Atlantic salmon. In 1800, the population of wild Atlantic salmon was estimated at 100 million. By 1950, this number had dropped to approximately 10 million—a reduction of 90%. Today, the population sits at around 2.5 million, so, in statistical terms, we have lost 97.5% of the population in a little over 200 years. For a species that has been swimming in our rivers and oceans for more than 6 million years, that is a truly terrible result. They are now classified as endangered, and it would not be an exaggeration to say that they are on the brink of extinction.

Depressingly, the cause of this disaster is almost entirely man-made. There are, however, many ways in which the fortunes of this incredible pioneer, traveller and survivor could be reversed. Today, we will hear from many noble Lords about some of the key ways to improve salmon numbers. Essentially, as my noble friend Lord Forsyth mentioned, there are only two things that salmon need: cold water and clean water. I totally endorse my noble friend’s comments on salmon farming. I encourage all Members of this House to refrain from eating the smoked salmon on the menus here and instead to look at smoked trout, which is a much healthier and kinder alternative to smoked salmon.

Official Controls (Location of Border Control Posts) (England) Regulations 2024

Lord Douglas-Miller Excerpts

Wednesday 22nd May 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, I thank my noble friend Lord Berkeley for bringing his regret Motion for debate this evening.

Speakers have raised concerns about how operating the inland BCPs will potentially make it more difficult to manage biosecurity and food safety risks. The noble Baroness, Lady Bennett of Manor Castle, went into some detail around specific concerns. The Secondary Legislation Scrutiny Committee discussed these risks with Defra, and in its response Defra acknowledged that there was a small risk because of this approach. In its report, the SLSC said:

“We agree that the use of inland BCPs does not make it more likely that harmful goods are not detected. It is a concern, however, that transporting goods and live animals from a port to be checked at an inland BCP, especially where this is located at some distance away, makes it more difficult to contain potential biosecurity risks than carrying out these checks within the compounds of a port”.


As other noble Lords have said, I would like to press the Minister on how the Government plan to manage these risks effectively, as Defra has acknowledged that there is a small risk.

As my noble friend’s regret Motion is mainly around drivers, I will concentrate on that. We know that lorries must drive 22 miles from Dover to the border control post at Sevington. Anyone found to be carrying unsafe or contaminated food could then be asked to turn around and drive back again. As we have heard, there is not enough information or instruction on what drivers are supposed to do. The Government have not explained how lorries will be monitored between the port and the control post or how they will ensure that goods which have been identified as unsafe leave the country.

I was interested in the comments from Nan Jones, the policy technical manager at the British Meat Processors Association. She has asked how we will ensure that those products get back on the ferry. With that gap, how do we know that they have not unloaded a load of products when they have been rejected? Returning a large consignment of high-value product such as meat would constitute a big loss for a business. Relabelling a product and finding an alternative market such as a wholesaler or restaurant could be tempting. She added that, once it is in the country, if you are that way inclined there are many ways in which you can disguise it.

We know that drivers need a lot of support through the changes because the impact of new border controls on drivers can be pretty significant. We know that there is increased documentation and checks, a lot of additional paperwork, that safety and security declarations, customs forms and other documentation will be required. While you need documentation to ensure compliance with regulations to prevent illegal activities, it is a lot of extra work for drivers to ensure that they are compliant with.

We also know that you could end up with longer waiting times at border crossings. All of this we have discussed at length. However, it does put a lot of extra pressure on drivers. Efficient planning and understanding of any new requirements will be crucial for drivers to deliver on time and in a manner that they should be doing. We also know that fuel costs could rise because of longer waiting times at border check points. Various businesses have raised concerns about that with us.

Drivers need to understand what is happening. These relations are evolving. How do they ensure that they adapt their processes in a way that is compliant with all the biosecurity and safety measures that are coming in? If they are not careful, quite accidentally they could end up with penalties. It is important that proper information is available for drivers.

I want to mention a letter that the Cold Chain Federation trade group wrote to Steve Barclay, the Environment Secretary. The group was concerned that volumes of illegal meat seized at Dover were a demonstration of the determination of criminals to bring in and trade in illicit goods and that

“the 22-mile corridor now open to them (or indeed, other criminals to intercept high value goods) adds further risk to the UK food chain in that it provides numerous routes to exit from the inspection process”.

The noble Baroness, Lady Randerson, went into some detail about concerns about illegal behaviour. She also mentioned the short straits routes. I will not go into that, as we discussed it at length in the last debate, but these are real concerns for industry.

There have also been concerns that the Government’s plans to manage the risks effectively and enforce the arrangements in practice are not necessarily laid out and that there is not enough understanding about how that will work. That includes whether the authorities will be able to monitor properly whether the lorries are carrying out the checks that they are being instructed to do. How is that all being managed?

What plans are there to ensure that drivers who do not speak English properly understand the information and what they are supposed to be doing? I am sure that the Government will have something in place, but it would be good to have confirmation of that.

I would like to raise one final thing. Another potential problem is that UK government computer systems used to identify potentially risky consignments are prone to errors, which could send thousands of trucks for physical inspection. According to the Financial Times, people who attended a meeting on border management with Defra said that officials admitted the error rate was currently 33%. I am not sure if the Minister was at that meeting, but it would be interesting to know if that is correct.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

It is absolutely a delight to be here this evening and to get such a warm and thoroughly lovely reception from everybody. I start by thanking the noble Lord, Lord Berkeley, for the privilege of standing at the Dispatch Box in this important debate, and all of those who have spoken for their thoughtful and constructive comments.

The legislation that is the subject of this debate has been instrumental in implementing the second phase of the border target operating model. New controls under the model began on 30 April, and I am pleased to report that, contrary to some of the press speculation and some of the comments made this evening quoting the press, checks have been introduced successfully at border control posts throughout the country. Defra will continue to monitor the controls and the impacts, and their effectiveness.

The noble Lord, Lord Berkeley, and the noble Baroness, Lady Hayman, asked how the Government intend to ensure that drivers of vehicles subject to controls attend the inland border control posts. Drivers will be instructed, if their goods have been called for an inspection at a border control post, by a port official at the point of entry or at the short straits through a digital system. That system comes up on their telephone, and their telephone number has to be inserted into the system for the electronic IPAFFS to actually pass; they cannot get in without that information being on the system. It cannot fail and so far has not failed.

Where a physical check is required, goods cannot be legally placed on the UK market until the load has been taken to a border control post, inspected and cleared. An instruction to attend a border control post for an inspection constitutes a legal requirement. Should a vehicle fail to attend a border control post, officials can require the return or destruction of the goods for the relevant local authority to carry out controls, such as identity or physical check. There is no evidence so far of traders taking advantage of Sevington’s inland location to circumvent checks.

The noble Lord, Lord Berkeley, also asked what a consignment is. It is a range of goods covered by the same certificate, which is pre-filled to enter the country through any of the border control posts.

The noble Baroness, Lady Bennett, took some delight in telling me that that we were failing on pretty much every single front in the system that we have implemented. She gave me a few examples, which I did not recognise. I am sure she would understand that this is a very significant change to what has gone on before. We have not ever done checks at our borders, or at least not for a very long time. The imposition on businesses importing into this country is significant, and the Government are well aware of the cost and the time and trouble this will cause. At the same time, I think that she would agree with me that it is extremely important that we do this for our own biosecurity. There are multiple reasons, which I think we would collectively agree on, for why we are doing this.

For many years, we have done nothing. We are now starting to build up our new border controls and biosecurity controls. To go from nothing to everything in one go would undoubtedly have created the scenarios the noble Baronesses, Lady Randerson, Lady Bennett, and others keep telling are happening at the moment. They simply are not, and I gave a clear instruction at the beginning of the process that we want a pragmatic approach. We are not in the business of closing down UK business, but we have an imperative to check and to build up those checks over a period of time, taking a risk-based approach. It is not helpful to be told that we are not doing everything we should be doing. Of course we are not: we are in week two. We may be doing everything in a few months’ time, and perhaps somebody else will be standing here at the Dispatch Box answering questions on that. I think and hope that they will see the benefit of taking a pragmatic approach, because we do not want to stop trade in this country.

The noble Baroness, Lady Bennett, said that she felt that there were not adequate staff at Sevington—it is not “Severington”, just for information. I am not sure whether the noble Baroness has been there, but I have. I have spoken to the staff and seen them operating there, and I can tell her that it is working very well and is fully staffed, so I do not recognise the comments that were made.

There were comments too about getting from Dover to Sevington, which is 21.7 miles away, and the risk that might constitute. Of the goods coming in to Sevington, 99.9% are from organisations we trust and know; it is a formality to check that there has not been a mistake, and that we are not inadvertently bringing in some pest or disease. The people coming to Sevington are not looking to import things illegally into the UK; they are following our rules. They have export health certificates, have followed the whole system all the way through and have loaded everything up on to the system; we are simply checking that all those formalities have been done correctly.

We should not conflate that with the illegal importation of meat that comes in primarily, but not exclusively, through Dover, which is brought in by a van and a driver from Poland, Romania or somewhere else. Those people will never go to Sevington: they are not on our system and we do not even know they are coming. It is really important to avoid conflating those two things. If you do, you get very confused about what Sevington and every other border control post in the UK is trying to do. Stopping illegal imports is the job of Border Force at the border. Checking goods that are coming in through our prearranged system is the job of our border control posts. They are fully manned and fully operational across the entire country.

The noble Baroness, Lady Hayman, asked me about an error rate of 33%. That number is not familiar to me—I have never heard of it—so I will go away and check. If the rate is anywhere near that, I will certainly write to the noble Baroness.

With that, I will conclude. Once again, I thank all those who have spoken this evening for their thoughtful and valuable comments.

[Lord Berkeley (Lab)]

My Lords, I am very grateful to all noble Lords who have spoken in this short debate. It has been very interesting; so many examples from different parts of the importing world and cargoes have been cited. I am grateful to the Minister for his response, because he clearly disagrees with many of the issues that have been raised. He may be right that it is short-term.

I will make a couple of points. First, I think he said it in the previous debate, but the Minister mentioned again drivers in white vans from Romania. I used to live in Romania, about 50 years ago; I was working there. It is a member of the European Union, like so many other member states, and has just as much right to being treated with dignity and respect, and speed, as people from other member states. A lot of people criticise meat from Poland—

[Lord Douglas-Miller (Con)]

I wonder if I might comment. I absolutely agree that anybody from Romania or Poland, or indeed any other country in the world, has the right to be treated in a dignified way. But the fact of the matter is that, in Romania, African swine fever is running riot. It might be in Europe, but it could be any other part of the world. The point is that we do not want African swine fever. If you import illegal pork into this country, you will bring African swine fever with you at some point.

[Lord Berkeley (Lab)]

I am grateful to the Minister. We will have to see. Where I live in Cornwall, there is a boatyard next to me that builds fishing boats, and it has about 15 Romanian welders—legally, I should say —and they are bloody good welders. The fact remains that we are importing most of these goods from the European Union, and I am sure the Minister agrees that everybody will be treated equally.

My main concern, which several noble Lords have raised, is when things go wrong. Whether or not there are enough staff we can go on debating until the cows come home, but government IT systems have a habit of not always being 100% successful. This is probably something for the next Government, but the Minister can keep on thinking about this for the next few days: what is the fallback situation when it goes wrong? In other words, is there a manual system that will keep the goods moving while somebody sorts out the computers?

We will have several months when there will be a lot of press about this, and there will be no Ministers to answer questions, so we will all watch it with interest. Somebody or other in this Chamber will be on the other side of the fence at that stage, and will be able to answer criticism. If it is the present Minister, then in Opposition, I am sure he will enjoy that.

It has been a very useful debate. I am grateful to all noble Lords who have spoken and to the Minister for his very comprehensive reply. I beg leave to withdraw the Motion.

South West Water: Brixham Contamination

Lord Douglas-Miller Excerpts

Wednesday 22nd May 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, recent events in the Brixham area have once again highlighted the sorry state of the water sector, yet just this week water companies in England and Wales have asked the regulator for permission to increase bills by up to 91%. They say that this is necessary to improve the water network, something that Professor Chris Whitty says is a public health priority as well as an environmental one. This pressing need has not prevented United Utilities increasing its dividend payments by nearly 10% while at the same time polluting Lake Windermere. Other firms are increasing payouts to investors despite their poor performance. Is it not time for the Government to call time on the current system by putting water companies into special measures and ensuring that law-breaking bosses face criminal charges rather than receiving bumper pay packets?

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

I thank the noble Baroness for her question. We have debated a number of times the issue of special measures, and I think I have been clear in the House every time I have stood at the Dispatch Box that the Government will use special measures when the criteria for them are met. I accept that that is quite a high bar, but there are a number of other options for all those water companies that they should fully explore before the Government will consider putting them into special measures.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, the first television news on the Brixham infection indicated that contamination was contained to those already infected. The next day’s bulletin retracted that statement, telling viewers that the area of contamination had widened. Bottled water was available to some, but not all, living in that area. As the source was known to be a reservoir contaminated by animal faeces, why was action not taken sooner to alert people to the dangers of drinking their tap water and to provide everyone with bottled water?

[Lord Douglas-Miller (Con)]

I am always nervous of taking as fact what I read in the papers or listen to on the news. I have spent the morning speaking to the chief inspector of the Drinking Water Inspectorate and he is not able to tell me what the noble Baroness has told me. I am just guessing that he might have slightly better access to that information. It is dangerous to say with that level of assertion that that is what has happened, because it is not what I am hearing. It is a live investigation and I cannot go into the details of what I have been told. I can say that South West Water has been handing out bottled water and in many cases over the last week it has been prioritising priority service customers and vulnerable sites. It has opened three bottled water stations, at Broadsands car park, Freshwater Quarry car park and Churston car boot field. It is supporting both vulnerable areas and local residents with bottled water.

[Lord Deben (Con)]

My Lords, I remind the House of my previous interests—no longer—as chairman of a small water company; therefore, I know a bit about it. I hope that my noble friend will insist that the water companies behave properly, of course, but will he please remind the Opposition that when it was run by the state and municipalities, we had no investment at all? That was why it was privatised, and not for any other reason. In the years after privatisation, a great deal of investment has taken place. The problem was that both Governments—Tory and Labour—told the control, which started off with Mr Byatt, that he was to keep prices down instead of allowing the kind of investment that we need. You do not get water free, and we have to have proper investment.

[Lord Douglas-Miller (Con)]

My noble friend must have the same pack as I have in front of me because he has virtually said word for word what is in mine. We have discussed the issue of privatisation many times both in this House and in other debates and that is not a route that this Government are going to go down. I completely concur with what my noble friend has said.

[Lord Boateng (Lab)]

My Lords, in Scotland, real bills are still the same as they were 17 years ago, while English bills have increased by over 16% in real terms over the same period. The publicly owned Scottish Water invests over one-third more per capita in its water industry and supplies than any private English company. That is £282 per household over the last 17 years compared to only £210 per household in England. Does not one conclude from that that publicly owned companies are doing better than privately owned ones? If that is not the Minister’s conclusion, how does he explain the differential?

[Lord Douglas-Miller (Con)]

The noble Lord has some very impressive statistics on Scottish Water. I happen to be the beneficiary of Scottish Water because I live up there. It is not quite as rosy as he tells us, because one area on which we have made great progress in England has been storm overflows and monitoring and understanding exactly what is going into our river systems. If the noble Lord was to look at that area in Scotland, he would find it very deficient.

[Baroness McIntosh of Pickering (Con)]

My Lords, does my noble friend agree that the water companies play an important role as owners of agricultural land? It is extremely important that we get to the bottom of what caused this incident to ensure that tenant farmers know exactly what their position is concerning South West Water and the Brixham contamination, as well as other landowners.

[Lord Douglas-Miller (Con)]

I completely concur with my noble friend that it is critical that we get to the bottom of what has happened to have generated this outbreak of cryptosporidium. It is currently far too early to know the exact cause of the outbreak. South West Water is continuing its investigations to confirm the source of the contamination. The Drinking Water Inspectorate has initiated its investigation into the cause, extent and actions of the company and begun collecting evidence on site. I should point out that it is the Drinking Water Inspectorate which is taking the lead on this investigation.

[Lord Whitty (Lab)]

My Lords, is not this instance a failure of the central role of the water companies to deliver clean and healthy water to every household? In the days before privatisation, we used to pride ourselves on our water and decry foreign water. Whether that was true or not, this is a central failure of regulation. There are three regulators of the water industry. We need to have a new start on regulation of water, with a single regulator for it, if we are not to have renationalisation. On the point of renationalisation, I know that my Front Bench, as well as the Government, are not in favour of it, but I note that the largest shareholder in Thames Water wrote down its shareholding to nil. If the rest of the shareholders, which are very guilty in this, did the same then the cost of nationalisation would be pretty small.

[Lord Douglas-Miller (Con)]

The noble Lord is quite right that the Canadian pension fund’s owners wrote down the value of its shareholding in Thames Water to zero, but that of course does not mean that it is zero. I am not sure that would help him in terms of its privatisation.

[Lord Redesdale (LD)]

My Lords, there is quite justifiable anger at the way that some companies, including Macquarie, have dealt with taking money away from water companies. The problem highlighted in the south-west is that there is an enormous amount of anger in the country towards water companies. However, this has led to an increase in the amount of abuse and actual physical assault that workers in the water companies are facing at the moment, as has been highlighted by some of the work of the GMB. Could the Minister make sure that, when MPs or others discuss this issue, they should commend the work of those people on the ground rather than the higher issues that are causing problems?

--- Later in debate ---

[Lord Douglas-Miller (Con)]

I completely concur with those statements, because it is absolutely unacceptable that those who are sent out to sort a problem end up being abused and given a tough time for something which cannot conceivably be their fault. I totally accept that and will ensure that we take that message back.

Water Companies: Failure

Lord Douglas-Miller Excerpts

Tuesday 21st May 2024 Lords Chamber

[Baroness Jones of Moulsecoomb]

To ask His Majesty’s Government whether they have a plan for Thames Water and other water companies if they fail.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my interests as in the register. As set out in statute, if a water company became insolvent or were in serious breach of its principal statutory duties or an enforcement order, it would enter special administration. The statutory purpose of special administration is to ensure that the company continues to operate and that customers continue to receive their water and wastewater services.

[Baroness Jones of Moulsecoomb (GP)]

I thank the Minister for his Answer, but it does not sound like much of a plan—there is not much detail there. I declare an interest as a member of the advisory board of River Action. I will put a plan forward; I am happy to share it with the Government because it is better than that one. The plan is that, as soon as any water company fails—and several are looking as if they are on that path now—we take it back into public ownership. We do not make taxpayers and bill payers pay extortionate amounts—we would keep it very cheap; I can explain how—and we stop the pollution as soon as possible, because we have all had enough.

[Lord Douglas-Miller (Con)]

I thank the noble Baroness for her very comprehensive plan and look forward to talking to her in detail. In the meantime, I assure her that the Government and Ofwat, the financial regulator of the water sector, carefully monitor the situation. Ofwat continues to engage with Thames Water to support it in improving its resilience within the context of its licence and broader statutory obligations. Fundamentally, it is the companies’ responsibility to continue to raise capital, and they should continue to explore this while fulfilling their statutory obligations of providing water and wastewater services to their customers.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, the noble Lord referred to the statutory instrument that sets out the action to be taken when water companies are teetering on the verge of bankruptcy, which was debated on 19 February and subsequently passed in the Chamber. The mechanisms are there, so why are the Government havering over implementation and allowing inadequate management of this vital asset to degenerate on a daily basis?

[Lord Douglas-Miller (Con)]

My Lords, there is a high bar for the imposition of a special administration regime. A variety of options remain available to Thames Water in securing additional finance and it is vital that all of them are fully explored. The Government are prepared for a range of scenarios across our regulated sectors. If it becomes clear that any company will become insolvent or can no longer fulfil its statutory duties, we will not hesitate to use our powers to request the court to place it into special administration.

[Lord Dubs (Lab)]

My Lords, the wording of the Question is “if they fail”. Does the Minister agree that on seeing on our television sets the excrement coming into our streams and rivers so frequently, most people in the country would say that the water companies had already failed?

[Lord Douglas-Miller (Con)]

I do not actually agree with the noble Lord fully. I accept that a number of the water companies are not performing to the right standard. The Government have been very clear that what is going on is unacceptable, but there is a huge legacy issue here. Simply renationalising water companies or stopping their chief executives from getting their pay, bonuses and all the other things—as is now in place—is not going to solve that problem straightaway. It is a long-term legacy issue which the Government have a fully funded plan to address.

[Lord Sikka (Lab)]

My Lords, in 1990, Thames Water had net assets of £1,329 million. By 2023, they had increased to £1,435 million, which is a paltry increase of 8%, or a total of £106 million, mostly due to accounting abuses. This means that, over 33 years, Thames Water shareholders have provided little or no new equity at all, which is a major reason for its financial instability. Everyone knows that Ofwat is negligent and incompetent; what is the Government’s excuse?

[Lord Douglas-Miller (Con)]

The noble Lord cited a number of very detailed figures, which I know he is prone to doing, so forgive me if I do not know the detail on that. Since privatisation, the private water sector model has unlocked about £215 billion of investment. This is the equivalent of around £6 billion annually in investment—almost double the pre-privatisation level. This has delivered a range of benefits. Our bathing waters continue to improve—in 2023, almost 90% were classified as good or excellent. Water companies have invested £25 billion to reduce pollution from sewage and water company investment in environmental improvements has been scaled up to over £7 billion since 2020.

[The Lord Bishop of St Albans]

My Lords, could the Minister reassure the House that should any of the water companies fail, the ongoing monitoring of, for example, run-off from agricultural land—which is devastating many of our rivers, including the important chalk streams in Hertfordshire in my diocese—will continue, that we will continue to seek to find improvements, and that no momentum will be lost?

[Lord Douglas-Miller (Con)]

I absolutely assure the right reverend Prelate that this would be the case. If a water company were to go into administration, the special administrator would take control of the company and it would be regulated in exactly the same way as any other water company and subject to all the same environmental rules and regulations.

[Lord Grade of Yarmouth (Non-Afl)]

My Lords, we have reached the end of a long period of very low interest rates, during which the regulated utilities have taken on a great deal of debt. That was not a problem when interest rates were so low but, now that interest rates have risen, does the Minister think it time that the regulators of those industries took a keener interest in the balance sheets of the regulated utilities?

[Lord Douglas-Miller (Con)]

The noble Lord raises a very good point. Undoubtedly, mistakes were made in how water companies reacted over the past 10 or so years, when interest rates were very low. Now that interest rates have risen, so have the costs of the borrowings, which have created a number of difficult financial implications for them. However, we all hope that interest rates are falling.

[Baroness Hayman of Ullock (Lab)]

My Lords, my noble friend Lord Dubs mentioned contaminated water, and there is now evidence that faeces-contaminated water has been detected in 10 areas of England and Wales. Is the Minister absolutely certain that nobody here today has drunk contaminated water?

[Lord Douglas-Miller (Con)]

I will just drink this glass of water—bottled water. I assure the noble Baroness that it is very good.

[Noble Lords]

Oh!

[Lord Douglas-Miller (Con)]

The noble Baroness raises a very serious point, despite all the laughter. One recent example of contaminated water has been extremely challenging, but the water company has responded pretty well. The Defra team went down there, and we have been in constant contact with South West Water. As noble Lords might expect, we have launched an investigation into the cause, and I hope that we will have the answers soon.

[Lord Fox (LD)]

My Lords, the Minister cited a number of figures, but one he did not cite is that, since privatisation, the shareholders of 10 water companies have withdrawn £85 billion that could and should have been invested in the water industry. Whatever happens, can he undertake that those shareholders will not benefit further from the catastrophe happening to our waterways across the country?

--- Later in debate ---

[Lord Douglas-Miller (Con)]

The noble Lord makes a very good point, which was touched on by the noble Lord, Lord Grade, on the behaviour of some of the previous shareholders and owners of water companies. I apologise for their behaviour—as do the Government—because I wholly agree with the noble Lord, Lord Fox, that it was not well done. I very much hope that the controls put in place since then, and the lessons learned, will satisfy him going forward.

Agriculture (Delinked Payments) (Reductions) (England) Regulations 2024

Lord Douglas-Miller Excerpts

Tuesday 21st May 2024 Lords Chamber

Moved by

[Lord Douglas-Miller]

That the draft Regulations laid before the House on 16 April be approved.

Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 20 May.

Motions agreed.

Management of Hedgerows (England) Regulations 2024

Lord Douglas-Miller Excerpts

Monday 20th May 2024 Grand Committee

Moved by

[Lord Douglas-Miller]

That the Grand Committee do consider the Management of Hedgerows (England) Regulations 2024.

Relevant document: 23rd Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my interests as set out in the register.

I am sure that many noble Lords will agree that hedgerows are precious features of our landscape, enriching our environment and wildlife. Many of our wild birds depend on them, including red-listed birds such as the linnet and the yellowhammer. Hedgerows also help food production by supporting pollinators, providing windbreaks and shelter, and protecting the soil. I am therefore pleased to bring before this Committee this statutory instrument, which proposes further to protect our hedgerows. The instrument establishes by legislation a common approach to managing hedgerows on agricultural land in England. It builds on the existing legal protections for some hedgerows, which will remain in place.

In proposing this legislation, we have listened to the views of many who cherish our hedgerows, including many farmers. I thank those who responded to our consultation on protecting hedgerows; their insights have enriched our understanding. We received almost 9,000 responses, which we have considered carefully. The responses showed how much hedgerows are valued. There was strong consensus from environmental and farming stakeholders alike that hedgerows should be protected in domestic law in a similar way to the previous hedgerow management rules provided by cross-compliance.

That is what this statutory instrument does. It aims to provide a familiar baseline for hedgerow management. We want to make sure that everyone knows what is expected and is supported to follow good practice. As a safeguard, we are also making sure that there are clear, proportionate consequences for the small minority who might choose to ignore it.

I know that these rules are simply a reasonable minimum which most farmers have been practising for many years. Farmers are the guardians of our hedgerows, protecting, planting and maintaining them for generations. I thank them for their continued efforts to help wildlife thrive on their farms, alongside food production. We trust them to continue to do the right thing. In fact, many are already going further than required by these regulations. We have seen strong uptake of options to manage and further improve hedgerows under our agri-environment schemes. I am delighted to report that there are already more than 20,000 agreements or applications in place, contributing to the management of over 60,000 miles of hedgerow in England. We look forward to working in partnership with many more farmers to manage and improve their hedgerows in future.

The purpose of these regulations is to protect hedgerows in order to support biodiversity, benefit the environment and enrich the landscape. They will make sure that all farmers are treated fairly by upholding common rules for managing hedgerows, and they will provide clarity on what is expected. The regulations govern the management of “important” hedgerows on agricultural land. Broadly, this means hedgerows which have a continuous length of at least 20 metres or which, if shorter, meet another hedgerow at each end. They do not apply to hedgerows within or forming the boundary of a dwelling house. Because the regulations apply to all important hedgerows growing on agricultural land, they will bring into scope some people who were not subject to cross-compliance, such as those who chose not to claim any direct payments or who have farms under five hectares in size.

There are two main requirements under these regulations. First, cutting or trimming hedges will be prohibited between 1 March and 31 August inclusive. This is to protect hedge-nesting birds and their habitats during the breeding season. There are some exceptions to this rule to give farmers and others flexibility where needed. The second requirement is to establish and maintain a two-metre-wide buffer strip alongside the hedgerow. This will protect the hedgerow and its root system from the effects of cultivation and the application of fertilisers or pesticides. Subject to certain exemptions, these activities will not be allowed within the buffer strip. The requirement for a buffer strip will not apply to fields which are two hectares or smaller.

We recognise that people may need time to establish their buffer strips where they do not already have them in place. We therefore propose that, in cases where a field has no buffer strip and is in crop production on 1 July 2024, the requirements will not come into force until that crop has been harvested. In all cases, the exemptions are needed to accommodate the practicalities of farming, or for health and safety-related reasons. They are largely the same as under cross-compliance. They are in place to ensure that we have the right balance between hedgerow protections and effective farming.

The regulations will be enforced on behalf of the Secretary of State by the Rural Payments Agency. Although the rules themselves will be familiar to many farmers, there will be a different approach to enforcement, with the emphasis being on being fair and proportionate. The Rural Payments Agency will take a primarily advice-led approach to enforcement. This has been shown to be the best approach for bringing farmers into compliance in other regulatory areas. However, the Rural Payments Agency will also be able to use a range of civil sanctions and criminal proceedings for the worst-case scenarios. Such action will be proportionate to the damage caused.

Subject to parliamentary approval, detailed information on how the regulations will operate will be provided once the statutory instrument has been made. The Rural Payments Agency will also hold a public consultation on its proposed enforcement policy. I know that it is committed to taking a modern, pragmatic and proportionate approach, with advice and guidance at the forefront.

Although these regulations govern the management of hedgerows on agricultural land, we recognise the value of hedgerows in other locations. Officials are therefore working separately with stakeholders to consider how to support the sustainable management and protection of hedgerows more widely in future.

In conclusion, this statutory instrument will afford fuller protection to one of our countryside’s greatest assets, the hedgerow. That will, I hope, be widely welcomed. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I have only one small question for my noble friend the Minister, as we do not have too many hedgerows in north Yorkshire; we mostly have stone walls, which we could have a separate debate on another time.

I am intrigued by the Government’s response to questions posed by the Secondary Legislation Scrutiny Committee in its report. It transpires that the Government are now bringing within the remit of cross-compliance farms of less than five hectares but larger than two hectares. For what reason are we going down that path? Obviously, these are quite small farms. The fields that we used to claim on when we owned a couple of fields would have fallen into this category, I think. I no longer have such an interest, but I wonder why we have gone down the path of including farms of between two and five hectares. Does my noble friend the Minister not agree that this seems like a lot of administration for such small farms?

--- Later in debate ---

Finally, I wish to raise one particular issue. In his introduction, the Minister talked about Defra looking at how further to manage hedgerows sustainably in future. That is incredibly important but I have one concern. The noble Baroness, Lady McIntosh of Pickering, talked about the fact that they have drystone walls in Yorkshire. We have them in Cumbria but we also have a lot of farm hedgerows along the roads—that is, a lot of roadside hedgerows. Something that has become appallingly obvious recently is the number of ash trees in those hedgerows; we have a lot of ash trees in Cumbria. They have all had to be cut down because they are dying and there are concerns that they are going to fall into the road. Those hedgerows just look devastated. If we are looking at having sustainably managed hedgerows in future, in the same way that we look at how to manage trees, can we also look at how we can support hedgerows through disease and the loss of such an important part of those hedgerows, when we have diseases such as ash dieback?

[Lord Douglas-Miller (Con)]

Again, I thank all those who contributed because, from my perspective, this has been a really interesting debate to listen to.

I start by picking up on the issue of ash trees, disease and stuff like that. Like the noble Baroness, I take the train—up to and down from Scotland most weeks. If you look out, you see that things are really horrifying right now. All the leaves are out, and there is dead tree after dead tree. It illustrates the importance of our wider biosecurity. I know that the BTOM has not been to everybody’s approval. Frankly, as we all know, if you are in government, you cannot get this right whichever way you go because some people think that you have not done enough and others say that you have done too much. However, this is a really important issue; on ash trees, it is just a horror.

Keeping some of the pests and diseases that affect our flora and fauna out of the UK is absolutely key. If noble Lords get a chance to go to the Chelsea Flower Show, I recommend that they go to the APHA site. It is based on Asian hornets and is absolutely incredible. It just shows you what we are up against every day of every week. At this time of year, everything is coming alive, and it is all on its way over here. The Defra team and the wider Defra family do an unbelievable amount of work to stop a lot of this stuff coming in. I forget exactly what the cost of ash dieback across the country will be, but it is in the tens of billions; it is going to leave great holes in our hedges and in our woods. The noble Baroness, Lady Hayman, makes a great point: what are we going to do to fill that gap? Perhaps we need to start thinking about that more.

I was really interested in the debate started, I think, by the noble Baroness, Lady Young, on this conflict between farmers and environmentalists—if I may phrase it as crudely as that. Several speakers implied that, because we have had a few months without these regulations, somehow we will be ripping out hedgerows two to the dozen, because we could do that without the regulations. I do not understand that mindset at all; I have never come across it anywhere. I do not know whether the noble Earl, Lord Russell, has; we could perhaps have a conversation afterwards it that is happening, but I have never come across it anywhere and I think most farmers would take proper exception to it being implied. Again, I would be delighted to have a wider conversation.

To answer the specific point, I have heard nothing to suggest that any farmer would remove any hedgerow. On the contrary, there has been a huge increase in people wanting to do better, which is where the farming community comes from.

However, the debate was interesting, because it touched on a few other issues about exemptions, exceptions and so on. There was talk about why we are not protecting young hedges, as if not applying the buffer zone would have a negative impact on young hedges. I do not know if your Lordships have ever planted and looked after a hedge, but it takes quite a long time to get settled in and a lot of careful work each year to keep it there. Buffer zones would overwhelm a young hedge; the weeds would overwhelm it and you would get a properly scrawny hedge with high leaf cover because the understorey would have been taken out completely. I appreciate that some of the exceptions may be counterintuitive, but it is important to do the homework and understand the reasons for some of these things before suggesting that they are somehow improper or not correct. People put a lot of effort and energy into this sort of stuff, so it is perhaps good to appreciate that more widely.

Soil erosion and water body buffers were other issues that the noble Baroness, Lady Young, and others raised. Perhaps I could take them both away, come back with some more information and write to her.

There were quite a lot of questions on people cutting hedges in their gardens. Why can they do that when farmers have to obey the rules? How does that extend to golf courses, public authorities and all the rest of it? Again, this is a pretty challenging area. We do not live in a police state; we are trying to do our best. Education, not enforcement, is the best way of solving this problem. We are consulting on wider issues with hedges. We are just about to start that consultation, which will be an interesting exercise, because the practicalities of enforcing against someone cutting their garden hedge are pretty challenging and I am not sure that we want to get into that space.

A number of noble Lords raised specific issues with the timing of when you can cut a hedge and when you cannot. It is a trade-off between farming and the wider environment. Farmers have other things to do and, by the time we are into September, they are planning for next year and have a lot of other tasks. Sometimes there is a little gap when this can be done. I do not have information on the specific example of a dormouse, but 99% of species have fledged and gone by early September.

[Baroness Young of Old Scone (Lab)]

I think the noble Lord needs to look at the latest information about the impact that climate change is having on extending breeding seasons. It is notable; I will send him some.

[Lord Douglas-Miller (Con)]

I have not looked at that and I appreciate that these dates are moving, but we have to start somewhere and those dates have been chosen for the moment.

The noble Baroness, Lady McIntosh, quizzed me on two-acre fields or less, and why they might be exempt. I hope everybody can understand that, if you have a smaller field, taking up a two-metre buffer zone around the edge of it will have a disproportionate impact. The Government recognise that and it came through pretty clearly in the consultation.

[Baroness McIntosh of Pickering (Con)]

Just to clarify, the question was why under five hectares was being brought in under the de minimis rule.

[Lord Douglas-Miller (Con)]

That was to try to include as many of our precious hedges as we can; that is still quite a big space. Again, through the consultation, it did not seem to cause a great deal of alarm, so it seemed perfectly sensible to include it.

The noble Lord, Lord Teverson, asked a number of questions about who is accountable, who is the regulator and who is the enforcer. The regulations will be enforced by the Rural Payments Agency on behalf of the Secretary of State. The Rural Payments Agency has a history of enforcing the hedgerow maintenance requirements under cross-compliance rules. It is well placed to develop and implement the new enforcement regime for all these regulations. The RPA will be taking an advice and guidance-led approach to enforcement.

On his supplementary question of who you should ring if you are driving along and you see someone doing damage to a hedgerow, I guess that question has always been there. Presumably, people will ring the police in the first instance if they see something going wrong, and they will guided by them to the appropriate agency. In this case, it is the RPA.

The noble Earl, Lord Russell, enquired about the definition of “important” hedgerows. The definition used for these regulations is designed to allow them to replicate as closely as possible the requirements for hedgerow management under cross compliance. For this reason, it was not practicable to use the same definition as is used in the Hedgerows Regulations 1997.

There were a number of slightly more detailed supplementary questions on which I will write to the noble Earl.

I am grateful for the thoughts and questions raised in today’s debate. They underline the value that so many of us place—

[Lord Teverson (LD)]

Forgive me—I do not want to take up the time of the Grand Committee or the Minister; we have taken up a fair bit of time. However, I would value a clarification on Cornish hedges, which are very specific, at some point.

[Lord Douglas-Miller (Con)]

My apologies—I think I can answer that question. Those are not covered by these regulations but they are being consulted on under the new ELMs model, so they will be included there.

In conclusion, I hope your Lordships will support these important regulations. I commend them to the Committee.

Motion agreed.

Agriculture (Delinked Payments) (Reductions) (England) Regulations 2024

Lord Douglas-Miller Excerpts

Monday 20th May 2024 Grand Committee

Moved by

[Lord Douglas-Miller]

That the Grand Committee do consider the Agriculture (Delinked Payments) (Reductions) (England) Regulations 2024.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my interests as set out in the register.

This instrument continues the important agricultural reforms we are making in England. Through these reforms, we are investing in the long-term prosperity of the sector and the future of our precious environment—things which I know many in this House care deeply about. The instrument applies progressive reductions to delinked payments for 2024. Delinked payments were introduced on 1 January 2024 in place of payments to farmers under the basic payment scheme in England. We are phasing out untargeted subsidy payments, as they have held the industry back and done little to improve food production or the environment. We are doing this gradually, over our seven-year agricultural transition period in England. That period began in 2021, so we are now in the fourth year of the transition.

The Government first announced the reductions in this instrument in the agricultural transition plan, published in November 2020. We are applying the reductions to delinked payments in a fair way. Higher percentage reductions are applied to amounts in higher payment bands. We plan to make delinked payments in two instalments each year, which will help farmers with their cash flow.

By continuing gradually to reduce these subsidy payments as planned, we are freeing up money so that farmers can access a wide range of environmental land management schemes and grants to suit all farm types. At this year’s National Farmers’ Union conference, the Prime Minister reiterated our commitment to maintain total farm support at an average of £2.4 billion per year across this Parliament. Therefore, the money that is no longer being spent on untargeted subsidies is not lost to farmers; instead, it is being put to better use. It is being redirected to the sustainable farming incentive and other farming support, which help boost agricultural productivity and resilience, increase food security and deliver for the environment. Our new schemes are investing in the foundations of food security and profitable farm businesses—from healthy soils to clean water.

Earlier this year we updated payment rates in our environmental land management schemes, the average uplift being 10%. Some payment rates went up by significantly more: for example, species-rich grassland has risen from £182 to £646 per hectare.

This summer, we will launch up to 50 new actions, which will allow farmers to access scheme funding for things such as precision farming and agroforestry for the first time. The new actions give farmers even more choice about what they can do, especially those on moorlands and grasslands.

Nearly half of all farmers are now in one of our environmental land management schemes. So far, there have been around 22,000 applications for the sustainable farming incentive under our 2023 offer, and more than 21,000 agreement offers have been issued. There are now over 35,000 live Countryside Stewardship agreements—more than double the number since 2020.

The sustainable farming incentive can help to reduce costs and waste on farms, to make them more resilient and to improve food production by, for example, funding farmers to plant companion crops to help manage pests and nutrients, to assess and improve the health of their soil, and to grow cover crops to protect the soil between the main crops. We are designing our schemes so that they work for smaller farms. We have doubled the management payment for the sustainable farming incentive, which is now worth up to £2,000 for the first year of an agreement. This will help to attract even more smaller farms into the scheme.

Smaller farmers potentially have access to more income than they did before. Under the basic payment scheme, half the money went to 10% of the largest farms. Under the sustainable farming incentive, payments are based on the actions that farmers take, rather than simply the amount of land they have. This means that SFI agreements can produce more income than the basic payment for a typical farm.

Farmers taking part in the sustainable farming incentive are typically more than making up their lost basic payments so far. The value per hectare of applications so far is £148. This, alongside delinked payments for small farms this year—equivalent to £117 per hectare—adds up to more than the value of the basic payment scheme per hectare before the start of the agricultural transition. That is £233 per hectare under the basic payment scheme, versus a total of £263 under delinked payments and the sustainable farming incentive.

This year, we will make it even easier for farmers to access the funding by allowing them to apply for actions previously in Countryside Stewardship mid-tier and the sustainable farming incentive through one application process. In February, we announced the largest-ever grant offer for the agricultural sector, totalling £427 million. This includes a doubling of the investment in productivity and innovation in farming to £220 million this year. This provides support for farmers to invest in automation and robotics, as well as solar installations to build on-farm energy security. It also includes £116 million for slurry infrastructure grants and £91 million for grants to improve the health and welfare of our farmed animals.

We are providing a range of other support for farmers and land managers. This includes a third round of our landscape recovery scheme later this year. The farming resilience fund continues to provide free business support to help farmers plan and adapt their businesses. To date, more than 20,000 farmers have received this support.

In conclusion, the Government continue to back our farmers. We are investing in our new schemes and grants, which are helping farms and food production become more resilient. They also deliver better outcomes for animals, plants and the environment. We must press ahead with these reforms as planned. As ever, I am happy to take any questions. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for setting out the regulations, which, as he explained, follow on from the earlier regulations to delink payments. I congratulate Defra on the second Farm to Fork summit, which seemed to be well received last week, particularly the inaugural publication of a food security index and the commitment to introduce a five-year seasonal workers scheme, which will be extremely well received by fruit and vegetable farmers across the country.

On farms and food security, the summit recognises the unprecedented challenges all farmers have faced this year. This has been the wettest 18-month period—not just a 12-month or six-month period—since 1836. Also, unprecedented imports have led to competition on very unfavourable terms. For example, given that battery-cage production of poultry has been banned in this country—I do not disagree with that—it is unfair that our farmers face unprecedented levels of imports of battery cage-produced eggs and poultry from EU and third countries.

I would like to press my noble friend to explain how he expects small farms, which he mentioned specifically, to benefit from the provisions of these regulations. We in North Yorkshire are fairly unique in that 48% of our farms are tenanted; that is possibly replicated in County Durham, Cumbria, Northumbria and other parts of the north, and perhaps in the south-west. How does my noble friend expect tenant farmers to benefit, not just under the provisions in the regulations before us but under other provisions that have been announced this year?

I would argue that tenant farms are the backbone of the country. I mentioned the wet weather that we have had, which has had an impact not just on crop production. The AHDB’s figures find that the planting of oilseed rape is down 28% this year, while the planting of wheat is down by 15% and winter barley by 22%, but my noble friend will also be only too aware that livestock farmers have endured an incredibly difficult lambing period. Many have been unable to turn their stock out and have had to rely on feeding livestock, particularly sheep, at a much earlier stage in the year than they would have done otherwise. Cattle have been stuck in sheds with feed running low. I understand that this year straw will be like gold dust.

We all know that, because of the war in Ukraine and other factors, energy and other input prices remain volatile. This is an extremely difficult time, with farmers facing high input costs and very challenging sales prices. Against that backdrop, can my noble friend imagine anything else that the Government can do to extend help to tenant farmers? How does he imagine that small farms, family farms and tenant farms in particular will benefit from the provisions before us today?

--- Later in debate ---

[Lord Douglas-Miller (Con)]

I thank all noble Lords who have contributed to this debate and I welcome the strong level of support across the House, largely, for these measures.

I start by addressing one or two of the issues raised by the noble Baroness, Lady Hayman. She touches on a common theme that comes up when I am out and about. I was at the Chelsea Flower Show this morning and there were a few farmers there—not many, but a few. The issues are about what is going on and where the money is going. The same amount of money is available today as there was yesterday and will be tomorrow. It is £2.4 billion each year over the course of the Parliament, so there is not less money available.

To anyone who has been in receipt of the basic payment scheme as—full disclosure—I have been for probably 40 years, it is a pretty blunt instrument. You get your cheque. There is a little bit of cross-compliance. I received mine in Scotland. It came in two tranches: one at the year end and one about six months after the year end. For anybody who feels that transitioning away from the BPS is somehow bad for cash flow or bad because there is less money in the pot, they have misunderstood what is going on .

The issue of confidence is critical. For sixty-something years—I cannot remember the exact number—if you have been a farmer, you have been used to one system. You farm, you get your BPS payment. If you were interested in other stuff, you could get into an agri-environment scheme, but they were pretty challenging to get into and pretty expensive to join; they really only suited the larger landholdings.

This is a significant shift away from that, but I get that any shift is challenging. Looking at my own farm arrangements, I find myself wondering how we are going to make all this work. Instead of just getting the money, you have to think about what you are going to do. It is public money for public good, so it is a proper shift in mindset. When you get that big shift, it does knock confidence. I am acutely aware of that. It means that people have to think totally differently about their farming operation.

If I am absolutely blunt, that is exactly what ELMS is designed to do and should do. The way that we have been farming has not been overly helpful to productivity or to innovation and—as I think all of us in this Room would collectively agree—it has been deeply unhelpful for the environment. To me, this change is absolutely welcome and necessary but I know that it causes a bit of stress and strain. That is one reason why it has been spread out over a seven-year period.

Farmers are amazing; they are incredibly resilient, but they are also incredibly resilient to listening. It is not as if this has come as a shock to anyone. We have been advertising it on the front page for a number of years now but, of course, this year is the year when it starts to really bite. If you have not been paying attention, you are going to feel some financial pain. We cannot hold everybody’s hand in this space. A huge amount of effort and energy has gone into consultations and into all the prototypes for the SFI modules. A huge amount of consultation has been done with the industry. Defra teams and Ministers have gone to agricultural shows; they have gone around the block telling everybody, “You have to pay attention; there is change coming”. But, as with all things in life, sometimes you start to pay attention only when it starts to hurt the wallet.

I know that there is a degree of concern and a degree of change but, as I think everybody recognises, this transition is long overdue. We really need to get on with it, so I am grateful for the overwhelming support. This is something that we should plug on with.

I will try to answer a few specific questions now. I was asked about financial support for farmers in the event of a crisis or financial emergency. In the event of an exceptional market disruption, the Government have powers to act to support farmers by making a declaration under Section 20 of the Agriculture Act 2020. These powers are intended to deal with unforeseen short-term shocks to agricultural markets where there is an adverse effect on the price achievable for one or more agricultural products. We have seen some pretty big shocks over the past few years, some caused by the weather and some caused by world events. The Government continue to keep this measure as a backdrop. I know that we look at it and think about it, but we have not got round to using it yet. I hope that it is a rainy day one that never has to come out.

Quite a lot of questions were asked about the rationale for delinking. I hope that I covered a lot of this in my opening comments but, broadly speaking, it is vital that we continue gradually to move away from untargeted subsidies as planned because these payments have inhibited productivity improvements and are, I believe, fundamentally unjust. The scheme that we have now delivers a much better outcome and will deliver a much better outcome in the long term.

The noble Earl, Lord Russell, and my noble friend Lady McIntosh asked whether this is the right time to go through a reduction in the BPS, given the weather and other activities. The Government recognise that many farmers are facing challenging conditions—not least the extreme wet weather, which was referenced several times during the debate and has affected enormous parts of the country—but cancelling the planned reductions to delinked payments is not an effective way of addressing these challenges or setting businesses up for a successful future. The longer we hang on to this, the longer we hold everybody back. These payments are untargeted, so increasing them does not direct support to those who most need them. In fact, you do not have to be a farmer to be in receipt of delinked payments now; if you have retired from farming, you will still get what you were due. Perpetuating that is not a helpful way of addressing either today’s issues or the issues that will undoubtedly come in future.

The noble Baroness, Lady Hayman, and my noble friend Lady McIntosh asked a couple of questions about tenant farmers and small farms. This is a challenging area but, on the basis that the basic payment scheme paid you for the chunk of land that you owned, the smaller the chunk of land, the less money you get. This transition allows you to earn more money on a smaller farm, by picking up the delinked payments and engaging with the SFI options. Again, I appreciate that this is challenging because you have to think about what you are doing and you will probably have to make some adjustments to your farming model but, as I have said, this has been signalled to the farming community—small farmers, tenant farmers and large farmers—for a long time. It will take a little time for it to bed in. The money is available; you just have to work out how to go and get it. The money is there. Noble Lords look as though they do not believe me, but it is. The options and choices are there. You have to go out and engage with that.

The noble Earl, Lord Russell, asked what had been done about an impact assessment. One has not been prepared for this instrument because it is not a regulatory provision. However, the Government have already published evidence providing in-depth assessments of the impact of removing direct payments. This includes the 2018 and 2019 farming evidence compendiums, our 2018 assessment of the impact of removing direct payments, and the 2021 and 2022 Agriculture in the United Kingdom evidence packs. If the noble Earl wants more information on that that I can supply, I would again be delighted to do so.

[Earl Russell (LD)]

No evidence has been published on the implementation of the transition to date. There was no evidence in this pack on the impact of these changes. From my point of view, it made it quite hard to assess the changes.

[Lord Douglas-Miller (Con)]

It is pretty early days in this transition, so I am not anticipating that we would have that evidence. We do a lot of consultation directly with farmers and with the industry through organisations such as the NFU, and we have developed a new food index to look at how that might be impacting food security, so quite a lot of measures are evolving and coming through. I would suggest that it is a little early to try to measure impacts at this stage.

I think the noble Lord, Lord Teverson was keen to understand what consultation we are doing with industry and how we are working with it. Have I got that right?

[Lord Teverson (LD)]

I thank the Minister for asking. What I am really trying to say is that we have here a unique instrument that can use various elements of the SFI to get the sort of environmental improvement goals we all want. How are we assessing them so, that over time, we make sure that this state aid, in effect, that we are giving to farmers is used effectively to achieve what we want to achieve? How does that assessment work—not now, but as we start to move through the implementation?

[Lord Douglas-Miller (Con)]

I thank the noble Lord for that helpful clarification. There is a lot in that, and if I may I will write to him with the details rather than go through them all now.

Unless anybody has anything further they would like to ask, I think I have covered most of the questions. I believe—and the Government are right behind this too—that this instrument is essential for our agricultural reforms. We must press ahead as planned so that we can fund our schemes that support farmers to be resilient and sustainable over the long term.

Motion agreed.

Fly-tipping

Lord Douglas-Miller Excerpts

Tuesday 14th May 2024 Lords Chamber

[Earl Russell]

To ask His Majesty’s Government what steps they are taking to reduce fly-tipping and its impacts on natural environments.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Douglas-Miller) (Con)]

My Lords, I declare my interests as set out in the register. Fly-tipping and illegal dumping of waste blight our local communities and damage the environment. The Government have given the Environment Agency an extra £10 million a year to tackle waste crime, including illegal waste sites and large-scale illegal dumping, which is often perpetrated by organised crime syndicates. We are also helping councils to take tougher action on local fly-tipping by more than doubling the maximum on-the-spot fine and providing £1.2 million in grants, with a further £1 million to follow later this summer.

[Earl Russell (LD)]

My Lords, large-scale criminal enterprise fly-tipping is out of control and increased by 13% between 2021 and 2022. In areas such as Hoads Wood it was reported that up to 30 trucks of illegal waste were dumped every day between July last year and January this year, with no effective action taken. Campaign groups estimate that it will now cost £10 million to clear up the waste. Will the Government commit to meeting the full costs of this clean-up and undertake a review into this specific case, to assess the resources and effectiveness of enforcement action against large-scale fly-tipping?

[Lord Douglas-Miller (Con)]

I completely agree with the noble Earl that the illegal dumping of waste at Hoads Wood is appalling, and a full criminal investigation is under way. I am unable to comment further on the details of that live investigation as I do not wish to prejudice potential enforcement action. However, I assure the House that the Government are determined to bring those responsible to account. Specifically on Hoads Wood, the Secretary of State has written to the chief executive of the Environment Agency, asking him to draw up delivery plans to ensure that appropriate action is taken to resolve this wholly unacceptable situation. As part of that, we will consider how best to support the clearance of waste from the site. The Environment Agency has powers to recover the cost of action to clear the waste from those responsible. The Secretary of State has also asked the chief executive of the Environment Agency to review the agency’s actions in relation to the site, including what lessons it and other agencies involved in the local partnership tackling this can learn.

[Baroness McIntosh of Pickering (Con)]

My Lords, will my noble friend commit to ensuring that prosecutions are indeed brought? Does he accept that, if matters are taken into the landowner’s own hands, this could be a very retrograde step? What conversations has he had with the Home Office and his department in this regard to ensure that prosecutions are brought and perpetrators brought to book?

[Lord Douglas-Miller (Con)]

The Government have put in a series of plans recently to assist councils with preparing the evidence to assist with prosecutions. Fly-tipping and illegal dumping is a serious crime and offenders can face a significant fine or a prison sentence. While sentencing is a matter for the independent courts, we have worked with the National Fly-tipping Prevention Group to produce a guide on how councils and others can build a robust case for prosecutions.

[Lord Wigley (PC)]

My Lords, does the Minister accept that one of the important factors that influences the degree of fly-tipping is the availability of regular, transparent and dependable systems for the collection of waste? Will he have a look at the high figures in Wales for recycling and see whether some lessons can be learnt for elsewhere?

[Lord Douglas-Miller (Con)]

I would be delighted to do that and undertake to do it.

[Baroness Lampard (Con)]

My Lords, I declare my interest in a family farm business that bears an ever-increasing burden of having to clear up fly-tipped waste, particularly building waste—which recently included a most attractive bathroom suite left in an open meadow. Can the Minister say whether any consideration has been given to requiring waste carrier licensees to display some form of licence on their vehicles? Does the Minister agree that fly-tippers might be deterred from carrying and dumping waste if they and their illegal purpose were more easily identifiable because of the absence of a visible licence on their vehicle?

[Lord Douglas-Miller (Con)]

My noble friend makes an extremely good point and, under the new regulations that we are just about to bring out, we are looking at exactly how those permitted to use these regulations have to display the relevant permit, where they display it and how they advertise it, to make it much more clear to those using these facilities whether they are acting legally.

[Lord Sikka (Lab)]

My Lords, fly-tipping has increased because many councils do not have weekly refuse collection and charge people for taking items to the local refuse collection centres. A major reason behind this is that council spending power as funded by the Government fell in real terms by more than 50% between 2010-11 and 2020-21, and this has not been restored. What responsibility does the Minister accept for creating an environment for fly-tipping?

[Lord Douglas-Miller (Con)]

No, I do not recognise that at all. Defra grants have helped over 30 councils across the country to tackle fly-tipping at hotspots, such as by installing CCTV and putting up fencing. Further grants to support even more councils are due this summer. Furthermore, councils retain all income from fixed-penalty notices, the upper limit for which has recently been increased to £1,000, and this is ring- fenced for local enforcement and clean-up.

[Lord Berkeley (Lab)]

My Lords, will the Government encourage those who have building waste to tip to put it into filling the potholes in the road? That would kill two birds with one stone.

[Lord Douglas-Miller (Con)]

That is a novel idea. I am certainly happy to take it away and consider it extremely carefully.

[Lord Cromwell (CB)]

My Lords, the Minister told us earlier that the Government were going to tackle waste sites. I would love to know what that actually means. If it means clearing them up, it simply creates the space for more waste to be tipped. He also talked about on-the-spot fines. The essence of fly-tipping is that there is no one on the spot when you tip it.

[Lord Cromwell (CB)]

That is not personal experience. I came across one fly-tipping incident where the offender had actually thrown down the parking ticket that was previously attached to their vehicle and had their number on it. When the police found this, they told me they were not going to take any action because the person whose vehicle it was would simply deny they were driving it.

[Lord Douglas-Miller (Con)]

The noble Lord raises a series of extremely good points. By the very nature of fly-tipping, as he rightly points out, it is extremely difficult to be in the right place at the right time when someone is doing it. I completely accept that there are limitations around this. However, the Government have introduced a number of new initiatives, such as the use of cameras, to help councils on this issue. It is very difficult to deal with it. To be honest, my personal view is that it is an education issue rather than an enforcement issue, but we are probably getting a little off topic.

[Baroness Hayman of Ullock (Lab)]

My Lords, the Minister has outlined some of the initiatives that the Government are bringing in to help combat this, which is clearly welcome, but recent figures show the number of fixed-penalty notices issued decreased by 19% and the number of court fines decreased by 17%. There is no point in bringing in new initiatives and increasing penalties if they are not used. Is the Minister satisfied that sufficient resources are supplied to local authorities and the police to ensure that fly-tippers are caught and properly punished?

[Lord Douglas-Miller (Con)]

The noble Baroness raises the issue that the previous noble Lord also raised. It is extremely difficult, by the very nature of the activity, to police it 100%. In his Anti-Social Behaviour Action Plan, the Prime Minister made it clear that councils should take a tougher approach to enforcement and make greater use of the fixed penalties available to them. We have also taken steps to encourage councils to issue more of these penalties by increasing transparency on their use, through the publication of annual enforcement league tables. Councils must also now invest the income from this in enforcement activity and clean-up.

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, there has been discussion around the introduction of digital waste tracking by April 2025. This would make a huge difference to the amount of waste produced and dumped, and help to keep the countryside clear of waste pollutants. When is the SI covering digital waste tracking likely to be brought forward?

[Lord Douglas-Miller (Con)]

The noble Baroness is absolutely right about digital waste tracking, because it will reduce the ability of waste criminals to hide evidence of the mishandling of waste and will make it easier for authorities to identify waste dropping out of the system, which might indicate illegal activity, such as fly-tipping. Digital waste tracking records will be required when private waste management companies collect household waste. This should enable householders to check whether their waste has been disposed of properly. We are working towards the digital waste tracking service becoming mandatory from April 2025. Prior to the service being mandatory, there will be a period of public use when the service will be available for all to use on a voluntary basis.

Sea Fisheries (International Commission for the Conservation of Atlantic Tunas) (Amendment) (No. 2) Regulations 2024

Lord Douglas-Miller Excerpts

Tuesday 14th May 2024 Lords Chamber

Moved by

[Lord Douglas-Miller]

That the draft Regulations laid before the House on 14 March be approved. Considered in Grand Committee on 7 May.

Motion agreed.