Oral Answers to Questions

Andrew George Excerpts

Thursday 25th October 2012 Commons Chamber

[Mr Paterson]

I am not blaming anybody. I have been working very closely with the NFU since I took office. I have been studying this issue since I was the shadow spokesman and put down 600 questions, taking a serious, detailed interest in it. This is the right policy. It is the policy pursued by every other country, as I have said. Unlike with the vapid pronouncements we have had from the Opposition, this Government will take on a deadly disease, which is a zoonosis, so if we do not get a grip on it, it will prove a risk to human beings.

[Andrew George (St Ives) (LD)]

In view of that and of my right hon. Friend’s answer, it is important to base things on sound science. If he has read the science and understands the answers he has received to the 600 questions, he will know that the 12% to 16% reduction has to be viewed against a rise elsewhere. It will not rise as much as it would have done otherwise, but it is still a rise in bovine TB. Does he not accept that?

[Mr Paterson]

No, I dislike disagreeing with the hon. Gentleman, with whom I used to work closely on the EFRA Committee and when I was the shadow spokesman. The evidence is absolutely clear: there was a 28% reduction in disease after nine years in the cull area. That is why we are going ahead next year.

Bovine TB and Badger Control

Andrew George Excerpts

Tuesday 23rd October 2012 Commons Chamber

[Mr Paterson]

My right hon. Friend the Member for South East Cambridgeshire (Sir James Paice) started talking about the matter two and a half years ago, as soon as we came into government, and he has been in regular contact with European colleagues. I will work with them as closely as possible once we have a practical basis to work on. As I explained to the hon. Member for North Tyneside (Mrs Glindon), we are sadly just not there yet. That obviously has to be an absolute priority, because we have agreement about it not just right across the House but right across the country.

[Andrew George (St Ives) (LD)]

I welcome my right hon. Friend’s decision not to proceed in the current circumstances. Above all, the Government should not take action that risks making the situation worse. Given that he emphasises the importance of science, will he take the opportunity provided by the pause until next summer to review all the science, including that recently commissioned by the Department for Environment, Food and Rural Affairs itself, which may point to alternative ways of bearing down on this terrible disease?

[Mr Paterson]

I entirely endorse my hon. Friend’s comment, and during this time we will of course press on many fronts. We have a number of tools in the box, and we are using those that are currently available. As I have touched on, there are new ones coming down the track—PCR, the DIVA test, gamma interferon and others that I would like to investigate with real speed. We cannot just use the current tools, because we are not getting on top of the disease. It is getting worse.

Agricultural Wages Board

Andrew George Excerpts

Tuesday 16th October 2012 Westminster Hall

[Mr Reed]

I thank my hon. Friend for that intervention. It is absolutely the case that there was overwhelming opposition to the proposal of the then Thatcher Government to abolish the AWB. Thankfully, the arguments against abolishing the AWB were listened to then, and common sense prevailed. Sadly, like much of what this Government are trying to achieve, whether that is the dismantling of the NHS or the destruction of local government, the abolition of the AWB is unfinished Thatcherite business, as my hon. Friend has just implied.

In a report for the Low Pay Commission in December 2011, Incomes Data Services argued that

“the agricultural sector is distinct from other sectors in that it is comprised of small employment units but with the additional feature of seasonal or casual workers”.

The AWB may indeed be an anomaly in our economy, but the agricultural sector is so different from other sectors of our economy that it is a necessary anomaly. Small farmers, who make up the majority of the industry, do not have the time, the expertise or, frankly, the funds to negotiate with their workers time and time again in what is an increasingly pressurised working environment.

The standards of pay and conditions set by the AWB enable farmers to focus on running their businesses and producing the products that we all need—increasingly so, as this year’s poor harvest demonstrates in many ways. In abolishing the AWB, the Government are not freeing farms from unnecessary bureaucracy. Instead, they are making the lives of small farmers more difficult and creating an even more bureaucratic working environment than the one that currently exists. That is the last thing that small farmers could possibly need. Instead of having to deal only with the AWB, in the future farmers will need to work with myriad different organisations, each one governing a different area of employment regulation and each, in turn, exposing every small farm business to new and different liabilities and complexities.

In their report calling for the retention of the AWB, the Welsh Government correctly noted that if the board is abolished

“pay bargaining would become instantly fragmented”.

It is important to note that, although the leadership of the National Farmers Union backs the abolition of the Agricultural Wages Board, it might not, on this occasion, be speaking for every small farmer in England, or Britain—it is certainly not speaking for those in Wales. I greatly respect the NFU and its leadership, and have very good relationships with NFU leaders in my constituency who, for the most part, skilfully, adeptly and effectively represent their members’ interests, but I think that they have got it wrong on this one.

The farming union of Wales, the young farmers of Wales and many small farmers across the UK want to retain the Agricultural Wages Board. The Government claim to be on the side of farmers, but on this issue they are making farmers’ lives much more difficult, making their businesses much harder to run, and doing the exact opposite of what the Government should be doing—at all times but particularly in these straitened times—which is supporting our nation’s farmers and making it easier for their businesses to survive and grow.

The situation profoundly affects my constituency and my home county. Across the north of England there are 28,180 agricultural workers, with 12,260 in the north-west, 3,300 in Cumbria—my home county—and almost 600 in my constituency. Copeland is the constituency that is most dependent on public spending in England. It is also the English constituency that is hardest to reach from Westminster—yes, there is a link—and more than 50% of the local economy is based on public spending.

Throughout my time in this House, I have sought to rebalance my local economy through the growth of our local private sector, but it is difficult to do that, and is becoming more so. At a time when the majority of public spending cuts are yet to bite—perhaps the Minister could tell us if he supports the additional £10 billion cuts that the Chancellor has announced—and when the budgets and services of local authorities in my area are being decimated, the removal of a body that helps small businesses to do business and maintains minimum workplace standards and minimal rates of pay surely cannot be right. This is a detached policy, from an increasingly detached Government.

[Andrew George (St Ives) (LD)]

The hon. Gentleman makes a good point. On what is likely to be lost, there is also the unique problem that agricultural workers are exceptionally isolated in terms of their negotiating and bargaining power. On the abolition, and the consultation that has been announced today, does the hon. Gentleman not share my disappointment? We should not be obsessed with organisational structure—I am not going to die in a ditch defending the existence of the Agricultural Wages Board—but the board provides protections, and without it the only safety net that agricultural workers will be left with is the national minimum wage. A whole strand of negotiations is available through the existing regulations.

[Mr Reed]

I completely share the hon. Gentleman’s analysis. I must point out that I did my best for his economy over the summer when I holidayed in his area, but I am afraid that I did not write to him to let him know of my visit and I hope that that is forgivable. His points are absolutely correct.

In the written ministerial statement published this morning, it is claimed that the abolition of the AWB will help to achieve

“the Government’s objective of harmonising and simplifying employment law, and removing regulatory burdens from businesses”.

It goes on to say that it will

“contribute significantly to the Government’s programme of public body reform and support the Government’s growth agenda”,

but I think that the effect will be almost the opposite of what is intended. It is incredible and inexplicable that the analysis that is so simple and obvious for people who live in rural communities has not been brought to bear on what the Government aim to achieve.

Some 38% of all agricultural workers in England are seasonal or part-time employees—in Wales the figure is 56%—and statutory protections are woefully lacking. It is due only to the Agricultural Wages Board that seasonal and part-time farm workers enjoy the same rights as full-time workers. Without the board, young employees will have no set rates of pay, which will open them up to lower pay. Without the board, seasonal workers will not have secure contracts, which will open them up to exploitation. How often do we see stories of exploitation? Even now that we have the Gangmasters Licensing Authority, we still see egregious examples of exploitation in the agricultural industry and others around the country. How much easier are we about to make it for future incidents to occur?

Without the Agricultural Wages Board, part-time workers will not be guaranteed rest breaks, which will open them up to worsening conditions. In abolishing the board, the Government are giving bad employers the opportunity to cut pay and worsen conditions in a race to the bottom, and in whose interests is that? In the Low Pay Commission’s 2012 report, it was noted that the abolition of the Agricultural Wages Board could lead to an increase in rural poverty. Rural areas such as the eastern coast—my own constituency and across Cumbria—parts of Wales and rural areas of the south coast are already among the most deprived in the country. With the abolition of the Agricultural Wages Board, the Government—this Tory-led Government—are doing what most people already feared they would do: making life harder for the poorest.

I know that the Government and the National Farmers Union will say that farmers are not planning to reduce wages and conditions, and I have always rejected—and always will—the lazy, ignorant stereotyping of many in this House when it comes to understanding farmers and farming, but if this year’s dairy crisis has proved anything it is that farmers will continue to face downward pressures on farm-gate prices. Pay and conditions can be a soft target, even for the best farmers, when faced with rising cost pressures, such as the ones we saw this summer. The proposed abolition is bad for farmers—it will make their lives more difficult—and it is bad for employees, as it will make their jobs, pay and working conditions much less secure.

In addition, the AWB ensures housing for 30% of farm workers, provides bereavement payments and leave, ensures that new parents get child payments, gives suitable rest breaks for hard-working farm employees and provides a host of other employment benefits that as a result of abolition will be lost or greatly reduced. In his conference speech only last week, the Prime Minister said that his Government would always support those who worked hard. There are few people who work harder than farm employees; they work long hours, and many of them do literally back-breaking labour day in, day out, all of it to make products we all need and enjoy each and every day of our lives. Yet it appears that the Government insist on making their lives more difficult, reducing their protections and changing the agricultural industry from one often characterised by good working relationships to one in which wage negotiations are fragmented, and jobs, pay and conditions are no longer secure. After abolition, farmers who have for generations lived in secure homes will face possible eviction, and hard-working people will lose payments that make their lives just a little easier, as the economy gets worse and worse.

The Government’s decision to abolish the Agricultural Wages Board has not been followed by the Scottish or Northern Irish Governments, and the Welsh Government want to retain the board in Wales. Once again, it appears that this Government are pursuing a path of action with which very few people agree, and even fewer want to see. Even the NFU cannot claim to be speaking for every small farmer. Indeed, evidence suggests that only the biggest of farmers agree with the action; smaller farmers and farm workers do not want to see the AWB abolished. The board must be retained; it is not in the interests of farm employees, of farmers, of the agricultural industry, or of rural communities and economies to abolish it.

--- Later in debate ---

[Andrew George]

On my point about an obsession with organisational structure, I generally agree with the broad thrust of the Government’s approach, which is to abolish or amalgamate as many quangos as possible. We should always be bearing down on the proliferation of Government agencies and quangos. The important regulations and the six grades that are available, and the other protections for agricultural workers, could be transferred from the AWB to an existing body such as the Low Pay Commission. Does the hon. Gentleman agree that we should perhaps not be obsessed with the board itself but look at ways in which the regulations could be overseen or protected by an existing Government agency?

[Mr Reed]

Again, I am grateful to the hon. Gentleman, and I understand the point he tries to make. The issue, however, is whether the abolition meets the Government’s own criteria? Does it pass the Government’s own test, and will it cost more to undertake the functions that the hon. Gentleman outlines within other bodies than to retain the Agricultural Wages Board? Let us see the evidence—that is my request to the Government.

Finally, and in a way leading on from that intervention, in the event of abolition of the Agricultural Wages Board, what checks will the Government introduce to ensure that wage levels and working conditions do not collapse? How will the checks be undertaken, and how will they be paid for? Will the Government undertake an economic impact assessment of how the abolition will affect each English region, particularly those that depend heavily on public spending? If so, will the Minister undertake to publish such an assessment, and if not, can he tell us why not? I look forward to his reply.

--- Later in debate ---

[Chris Evans]

That is interesting. My hon. Friend will know of Hazel Spencer’s letter to the shadow ministerial team for the Department for Environment, Food and Rural Affairs:

“I have been in horticulture for nearly 25 years, working for the same nursery since 1987. During this time, as you can imagine, I have seen many changes. The work is sometimes hard, sometimes repetitive and often carried out in less-than-pleasant conditions.

I initially started as part-time staff, at a time when we had very little right to sick pay, holiday pay and certainly no Bank Holiday pay. Over the years and mainly due to the negotiations carried out by the AWB on behalf of us ordinary workers, conditions within our industry have improved. We have received wages in alignment with those recommended by the AWB: SSP has been supplemented by Agricultural Workers Sick Pay, to bring it in line with a weekly wage during illness, and we received a tax allowance towards providing suitable clothing to cope with the conditions of our workplace.

Basically, what sustains most of the people who work in this industry is the fact that we are earning a fair day’s pay for what we do.”

My concern is that we are asking small farmers to become employment specialists of some sort. Are they going to go to solicitors? Are they going to make mistakes? Are we going to see more people before tribunals? Those are real concerns that the Minister has to address.

If I might be mischievous for a moment, I draw attention to an early-day motion signed by the Minister in 2000 that called for the then Labour Government to

“retain the Agricultural Wages Board as it is currently constituted.”

Does he still think that should be the case?

Ultimately, everyone in the Farmers Union of Wales is opposed to the abolition of the AWB. They are concerned that the removal of the AWB will leave farmers exposed when having to negotiate pay and conditions. The AWB is a very good model that could be used by employers and unions across the board. The model has worked since 1924, and the Attlee Government established the AWB in 1945. Again, as often with the current Government, all we see is a drive for cuts in mythical red tape.

I say this whenever we talk about employees’ rights: happy workers are the best workers. The real issue that has to be addressed in society, whether in the countryside or in the urban world of banking and finance, is fear of job insecurity, which is the thing most people worry about. When employment rights are taken away, people are less secure, less productive and do not perform as they should.

I know we are going through a consultation process, but if the Government do not put something in place, we will start to drive wages to the bottom. Yes, as the written ministerial statement highlights, farming has massive opportunities because of the growing world population, but those opportunities will only be fulfilled with productive workers.

[Andrew George]

The hon. Member for Copeland (Mr Reed) and the hon. Gentleman have both quoted the farming unions. The hon. Gentleman has particularly emphasised the difficulties that abolition of the AWB might cause small farmers. My impression is that although, without question, the National Farmers Union is phenomenally good and very effective, one of its weaknesses is that it is primarily a large farmers’ union. I do not think that small farmers necessarily have their voices represented through the NFU as effectively as possible. If I had heard from farmers that the AWB needs to be abolished because it constrains them from being more progressive in their treatment of workers, I might have considered that a stronger case for the abolition of the regulations and the AWB.

[Chris Evans]

As we heard from the Minister this morning, it is important that small farmers are involved in the ongoing consultation. My concern is still for the small farmer. If he or she gets into bother with employment law and finds themselves in front of a tribunal simply because they do not know the law—they have done nothing wrong—or something like that, it would be an extra burden that they do not need. They also do not need the extra burden of negotiating things such as SSP, which we have talked about, wages and certain allowances. Those people do not need further burdens.

We have already heard from the Government and the Secretary of State for Business, Innovation and Skills that they do not want to burden employers further, but all I can see is the driving down of wages and the burdening of employers. The AWB takes away that burden, and I hope the Minister sees the sense of my argument: first, we do not want to drive down wages; and, secondly, we do not want small farmers to face further burdens by being tied up with red tape. If the small farmer has to negotiate and is concerned about employment rights, first, they are not going to employ more people and, secondly, they might exit the business altogether, which would be a tragedy.

I hope the Minister will say something about what will be put in place to ensure that wages stay at the higher standard, rather than falling. What is he going to do? If the Government go ahead with the abolition of the AWB, what support will be available for small farmers on things such as employment rights?

Dairy Industry

Andrew George Excerpts

Thursday 13th September 2012 Westminster Hall

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

I, too, pay tribute to the outgoing Minister with responsibility for farming, my right hon. Friend the Member for South East Cambridgeshire (Mr Paice). I had the immense privilege and honour of being his Parliamentary Private Secretary for a year and a half. With his experience and expertise, he was one of the best farming Ministers this country has ever had. His departure is a great loss to the Government.

I set up the all-party group on dairy farmers in 2006, in the previous Parliament, because of the terrible crisis my Shropshire dairy farmers were going through. An important statistic to remember is that in 1997, 47 cows were slaughtered in Shropshire as a result of bovine tuberculosis; last year, that figure was more than 2,000. I repeat those figures: from 47 to more than 2,000. The misery that that disease has caused many of my constituents is appalling. When I set up the all-party group, 170 MPs joined it. Uniquely, the then Leader of the Opposition, now the Prime Minister, joined the group. I believe that that was the only all-party group he joined in the previous Parliament.

Our group produced a report in which the two recommendations were that we needed a limited cull of badgers and a supermarket regulator. At the time, we were told that it would be impossible to get either. We pleaded with the Labour Government to introduce a regulator and to take action on bovine tuberculosis. Our pleas fell on deaf ears. I am therefore slightly bemused to hear Labour MPs calling for us to support their actions on an adjudicator, because we pleaded on bended knee for years and no action was taken. One reason why the situation is so perilous at the moment is the inactivity of the previous Labour Government.

[Andrew George (St Ives) (LD)]

On the point about a supermarket or groceries code adjudicator, I have been chair of the Grocery Market Action Group for the past six years. I am sure that my hon. Friend will agree that it was only just before the 2010 general election that we had agreement from all three main parties that an adjudicator or ombudsman should be put in place.

[Daniel Kawczynski]

Indeed. I pay tribute to my hon. Friend, who is one of the leading proponents of the Groceries Code Adjudicator Bill. I look forward to working with him to get that proposed legislation through Parliament.

I want other hon. Members to be able to speak, so I will just briefly say that I have sat with dairy farmers at their kitchen tables, and seen those grown men burst into tears. The emotion involved in seeing their herds slaughtered is profound. I hope to hear from the Minister what steps the Government will take to address this appalling issue.

I will write to the Minister specifically with regard to a constituent of mine, Mr Jones of Pontsbury, who recently lost a lot of his herd. He has been given new figures on compensation that are much lower than he thought. He is worried that he will not have enough money to replace the cows he has had to send to slaughter. I would be grateful if the Minister looked at that case.

I reiterate the comments of my hon. Friend the Member for Stone (Mr Cash) regarding exports. I feel passionately about exports to north Africa and the middle east. Libya, Egypt and Tunisia are full of Dutch and Danish cheeses, yoghurts and other dairy products, yet there are none from the United Kingdom. I hope that the Minister will work closely with his colleagues in the Department for Business, Innovation and Skills to try to help the dairy sector find new markets in those countries.

Finally, I would like to put on the record that we now have a new Waitrose supermarket in Shrewsbury—the first one has just opened. My daughter and I go every Saturday to Waitrose, because it is the supermarket that pays most to dairy farmers.

Oral Answers to Questions

Andrew George Excerpts

Thursday 5th July 2012 Commons Chamber

[Mrs Spelman]

I will convey the right hon. Gentleman’s encouragement to the Under-Secretary, because the negotiations are indeed tough when dealing with countries that still pursue whaling practices.

May I put the matter of marine conservation zones in context? The Under-Secretary made a statement to Parliament in November last year, making it clear that an independent scientific review had found the evidence base for the designation of those zones to be insufficiently robust. I am sure the House wants the decision to be based on evidence and led by science, so we will not be rushed into making a decision without that additional evidence. On the figures in reports, the right hon. Gentleman should take them with a pinch of salt.

[Andrew George (St Ives) (LD)]

I welcome the introduction of further marine conservation zones, but does my right hon. Friend agree that the intention is not to put out of business those fishermen who engage in low-impact fishing, particularly mackerel handlining on the Cape bank off the Cornish coast? Surely, in designating these zones the intention is to strike a balance and to ensure that we get things right.

[Mrs Spelman]

I thank my hon. Friend for that observation, which underlines the point about the need to ensure that the evidence is robust and to balance the needs of all those who require access to our marine and coastal waters, but who have at heart the health and welfare of our seas. We need to ensure that the evidence base is robust.

Flooding

Andrew George Excerpts

Monday 25th June 2012 Commons Chamber

[Mrs Spelman]

Yes, I am confident of that because we have reached an advanced stage of negotiation with the insurance industry to secure universal and affordable flood insurance. It is often misunderstood, but the statement of principles was no guarantee of the affordability of insurance. We understand how important that is, and will make a statement shortly.

[Andrew George (St Ives) (LD)]

It seems that the heavens are opening with distressingly increased regularity and intensity. Given that the science of forecasting is improving and the growing responsibility of the Environment Agency, what more can be done to ensure that that science is harnessed and that mobile defences are put in place to respond to it?

[Mrs Spelman]

My hon. Friend is right that the capacity to forecast has improved. The Department for Environment, Food and Rural Affairs gives the Flood Forecasting Centre £2.9 million per annum, which continues the funding position from before we came into government. The accuracy of the forecasting means that we can give communities vital hours in which to give advice to home owners on how to protect themselves and their possessions. I suggest that communities that face flooding regularly, which substantial parts of Cornwall do, consider technical provisions, such as text messaging, backed up by flood wardens who knock on doors personally. I saw people in Sussex resist moving even when all the advice had been given to them. There is no substitute for the human touch.

Fish Discards

Andrew George Excerpts

Thursday 14th June 2012 Commons Chamber

[Richard Benyon]

Britain has been policing illegal fishing, whether by UK or foreign vessels, and will continue to do so. I am pleased that we recently instigated a very heavy fine on an overseas vessel fishing in our waters. I can assure the hon. Gentleman that I want to ensure that fisheries are managed as close to member states as possible. There are some good words in the text that allow member states to take action when it is right for them to do so. Subsidiarity is supposed to underpin a lot of European legislation, and I ask him to look at the provisions we secured on regionalisation. Whether or not we had a CFP, we would still have to work with other countries because we are talking about an ecosystem, fish that swim in our waters and those of other countries, and the historical fishing rights that go way back beyond the European Union, so I think we have a good message and that it is something he can be pleased with.

[Andrew George (St Ives) (LD)]

I, too, congratulate my hon. Friend on the progress he has helped to secure in the negotiations. Does he agree that if the regional dimension of the common fisheries policy is to succeed it is critical that fishermen are engaged as key stakeholders in the management of those regions?

[Richard Benyon]

I am grateful to my hon. Friend, who is absolutely right. For too long fishermen have felt right at the bottom of the decision-making process, under layer upon layer of control. I hope that we can have a system that is simpler and closer to them. In December I sat up late into the night discussing with Commission officials where an eliminator panel should sit in a net that was to be used off the Shetlands. That is an absurd system. I hope that a more regionalised approach will mean that decisions are taken by fishermen and closer to where they fish.

Oral Answers to Questions

Andrew George Excerpts

Thursday 26th April 2012 Commons Chamber

[Richard Benyon]

My hon. Friend the Deputy Leader of the House says that he has one opening next month, and one opened in my constituency in recent weeks. Beyond that, I am afraid that I cannot tell the right hon. Gentleman the exact figure, but there is fervent support for the kind of initiatives that see community shops opening. We want to do our best, through big society support and other policies, to ensure that more happen.

[Andrew George (St Ives) (LD)]

Further to the point raised by my hon. Friend the Member for South East Cornwall (Sheryll Murray), the Minister knows that the so-called historic entitlement of foreign vessels within the 12-mile zone is widely abused. In the forthcoming negotiations, will he ensure that the legal basis on which that historic entitlement is claimed is properly reviewed and the integrity of the 12-mile zone restored?

[Richard Benyon]

I want my hon. Friend and the House to understand that we are considering very seriously the suggestions that I have received in recent weeks, not least from the Environment, Food and Rural Affairs Committee, about legal methods through which one could secure greater control. The most important thing is to get more regionalised and locally based management of our fisheries, and that is what I will discuss tomorrow in Luxembourg and will continue to discuss through the negotiations. I assure my hon. Friend that illegal activity in our 12-mile waters is something that I take very seriously and I want to ensure that enforcement is effective at every stage.

Common Fisheries Policy

Andrew George Excerpts

Thursday 15th March 2012 Commons Chamber

[Mr Doran]

No. The operation was much more systematic and organised, and on a much bigger scale, than that. This did not happen by accident; it was not by-catch.

[Andrew George (St Ives) (LD)]

The hon. Gentleman referred to the view that there are no victims in these cases. The sustainable mackerel hand-line fishery in Cornwall has one hundredth of the catch of the pelagic quota that is available to the purse seine industry in Scotland, and as a result of over-fishing in Scotland, people are losing quota in Cornwall.

[Mr Doran]

The hon. Gentleman is absolutely right. There are victims everywhere, and that is just another example.

Over the past few years, I have been involved in taking a large number of statements from people involved in the industry, and I will read out a selection of their comments. There are no police inquiries relating to this material. One fish processor with many years of experience told me:

“The system would work on a basis that a skipper would telephone the agent and declare his real catch, whilst at sea. If it was 1,000 boxes, the agent may find a buyer for 500 boxes and tell the skipper to fill in the log for 500 boxes after he had landed at the market. Before the market the 500 boxes would be unloaded from the vessel and transported to the buyer’s premises.”

In other words, the boxes would not go through the system. He continued:

“The agent would record the sale at the true value and alter the species if required to show the ‘black’ fish as non-pressurised stock. At the end of the quota year he would advise the skipper on which species to show in his catch records to ensure he retains his quota.”

So it is not just about volume but species. If coley were being landed, it might, in order to retain the quota, be recorded as some other fish—haddock was the most popular—and haddock might be shown as whiting. A fish merchant said:

“The situation with black fish started to get silly and I am aware that on one occasion a local fish merchant had 4000 boxes of fish in his yard—all black fish which had been transported from the boats to his yard. Meanwhile there were only 1900 boxes of fish in the market at Peterhead and about 1400 boxes in the market at Aberdeen.”

This wide-scale corruption of the system is a direct product of the introduction of the CFP and total allowable catch—and, I have to say, of the failure of Government and Government agencies properly to monitor the system. I want to discuss that with the Minister at length when we manage to get our evidence together.

To finish, I repeat that the Select Committee report is extremely important. I hope that the Minister will take note of the points that were made in the debate in November, which I know will be made again today, and the points that have been made by the hon. Member for Thirsk and Malton and her Committee, and take the argument to Brussels.

--- Later in debate ---

[Sheryll Murray]

I was at a meeting in Plymouth at the time, with DEFRA officials at the highest level. The Department was thrown into disarray and had no idea how to address the problem. On top of that, when the fixed quota allocations were introduced, a figure was put in place to underpin the catch of under-10 metre vessels. If the quota available to them in December fell below a certain level, those vessels were guaranteed to be able to catch that set amount. Again, however, it was set far too low. That was how the problem arose.

Because of the last Government’s inaction, our current Minister has been left in a complicated situation. I know that he is doing his best to sort things out. Evidence given to the Environment, Food and Rural Affairs Committee by the South West Fish Producers Organisation described the absence of a separate management system for small vessels as “lamentable”. I thank the Minister for at least looking for a solution to the under-10 metre quota, and I ask him to consider the economic implication of leasing quota for those small vessels. We do not want economic strain to compromise safety.

The second matter that I wish to raise is the 12-mile limit. Article 6, paragraph 2 of the new proposal states that the current access, which includes equal access to common resource as well as access to the area between the six and 12-mile limits, will continue. In a previous speech I have told the House how the UK is disadvantaged, with other member states having 28 rights of access to UK waters compared with just three for the UK in reciprocation. Members need only to have watched “The Fisherman’s Apprentice”, with Monty Halls, last night on BBC 2 to have seen the evidence.

[Andrew George]

The hon. Lady is making a very strong case. She will be aware that the historic entitlements between the six and 12-mile limits are often used by boats from France and other places that are not the ones that originally had those entitlements.

[Sheryll Murray]

That is my point precisely. That agreement was made based on historic rights 40 years ago, and none of the boats that were fishing then are now accessing the six to 12-mile limit area. There is a strong case for our Minister to go and argue that those entitlements should end. I know that some of the member states that have acceded in subsequent years do not have other member states’ vessels accessing their 12-mile limit, so I urge my hon. Friend the Minister to go and make that case very strongly.

Marine protected areas are different from the special areas of conservation introduced under the Natura 2000 programme. The latter cannot take account of socio-economic aspects to protect our coastal communities, but the former can, and indeed must, do so. Will my hon. Friend the Minister consider providing lifetime rights if a fishing method is excluded from a marine protected area? Those rights would be for the duration that the vessel was fishing or the skipper was operating, but it would allow fishermen to continue to earn a living using the very expensive gear in which they have invested.

I know my hon. Friend fully understands my closeness to the industry, which I have worked with for more than 20 years, and that he has fishermen’s interests in mind. Fishermen work hard in the most dangerous conditions, and I am sure the House will agree that they deserve the utmost respect for earning a living in such a precarious way. They keep Britain eating fish.

[Austin Mitchell (Great Grimsby) (Lab)]

It is a pleasure to follow the hon. Member for South East Cornwall (Sheryll Murray), with whom I agree almost totally. We should express our gratitude to the Backbench Business Committee for allowing this debate, and to the Environment, Food and Rural Affairs Committee for its excellent report. It is the best report on fishing since the report of the old Agriculture Committee, which I chaired. That was 20 years ago, and that long space goes to show how much importance such Committees attach to fishing.

I was sorry that the hon. Member for Thirsk and Malton (Miss McIntosh), the Chair of the Environment, Food and Rural Affairs Committee, eschewed the use of the slogan “Yorkshire Fish for Yorkshire Chip Oils”, because it would be a winning slogan in any campaign in Yorkshire. I shall certainly use it—not in Grimsby, but in Yorkshire—come the election.

The report is good, but the one quarrel I have with it is a substantial one. It says that the principle of relative stability should be looked at, which is a dangerous precedent. Just because fish that normally swim off the coast of Spain migrate north because of global warming does not mean that we should allow Spanish fishermen to disturb the principle of relative stability, which excludes them from our waters.

The debate is important because crunch time for the common fisheries policy is approaching. It is a very centralised policy—it is Gosplan, Soviet Union-style planning for fishing. It applies one-size-fits-all regulations for varied waters and fleets, and dictates to fishermen instead of working with them. It is also very political. There are increases in quota for political reasons, and when that leads to over-fishing, cuts are made by stopping fishermen fishing, either by limiting the number of days at sea or by reducing the catch. That is an insane way to carry on.

The common fisheries policy remains a folly that will not work, cannot be made to work and should be ended. The one thing I cheered when the Conservatives won the election—there was only one thing—was that they promised to repatriate powers from Europe. That, presumably, has been diluted by the coalition with the Liberal Democrats, who will probably smuggle those powers back across the channel in the boots of their cars. That promise was a good sign, because this is the time to repatriate powers, and power over fisheries is the power we should repatriate.

[Andrew George]

rose—

[Austin Mitchell]

I do not want to get into Liberal by-paths on this issue. Just because I get up and speak the European truth does not allow the Liberal party to interfere with my speech in the way that it interferes with the Government’s policy.

Having asserted the position and said what I would like to see, I will put my “moderate but non-new Labour” suit on. To deal with the situation as it is, we must take the approach of accepting the Committee’s recommendations. The preliminary proposals from the Commission, which are expanded in the so-called non-papers—a good European term—telling us what the Commission’s decision means, are unacceptable. They are particularly unacceptable on handing powers down to the regions, because we want regionalised decision making in fishing. That is essential, but the Commission proposes the bare minimum it could get away with—

--- Later in debate ---

[Amber Rudd]

My hon. Friend is well known for being incredibly knowledgeable about these issues, and she refers to one tool of the trade—changing the mesh size—that could be used to limit the quota and the type of fish stocks landed. She is also absolutely right in her final point. This is indeed a complicated issue, and there is no simple solution. Indeed, looking back on it, it seems that every time a Government or a Minister has tried to make a change for the better, the law of unintended consequences applies—we move a little bit this way and something happens on the other side. At the moment, the Minister is caught between trying to manage the divergent interests of the larger fishermen, in the POs, and those of the smaller fishing communities, in the under-10-metre fleet.

[Andrew George]

The hon. Lady says that there is no simple solution. As the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) suggested, either the quota system, which is a blunt instrument, could carry on in its present form, or we could get rid of it and base fishing policy on effort control. The problem with getting rid of it is that quota is marketable and has great value, and I do not think that any Government would want to compensate all those people who have valuable fishing—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Can we have shorter interventions? A lot of Members still want to speak, and I would say to anyone who tries to make a speech by means of an intervention that it is not going to happen.

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[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I begin by congratulating the hon. Member for Thirsk and Malton (Miss McIntosh) on securing the debate and particularly on the work she and her Select Committee have done on the reform process for the common fisheries policy. It is very important for this to get the scrutiny it needs. The CFP is of huge significance for the fishing communities in Banff and Buchan, but coastal communities all around the coastline have a real stake in the outcome of these negotiations.

The successful reform of the common fisheries policy is going to stand or fall on whether or not measures can be put in place to decentralise decision making. That is very much at the heart of the debate, and I welcome the focus that the Chair of the Environment, Food and Rural Affairs Committee placed on that issue in her remarks. I am concerned that, if we do not achieve that decentralisation, we will preside over the further demise of our fishing communities and the destruction of our marine environment.

I suspect that the commitment to decentralisation is shared across this House, and it is widely shared in many other fishing nations in the European Community. The problem is that the Commission’s proposals to date do not set out any workable mechanism for that to happen. There is no framework for regional co-operation among member states. Until we have that framework and that mechanism, I am afraid that our ambitions for decentralising the CFP will remain aspirational.

The part of the Committee’s report that was rightly the focus of its Chair’s remarks—and it has rightly attracted considerable attention outside this Chamber, too—is, of course, the suggestion that the exclusive competence of the Lisbon treaty could be interpreted to allow aspects of fisheries management to be devolved to member states. It goes without saying that I would like that to be the case and I hope that the treaty can be interpreted in that way. I am sure that many lawyers are rubbing their hands in glee at the prospect of a process of legal debate on the wording of the treaty to see whether it can be interpreted in that way.

It would be fair to say that, to date, the Commission has taken quite a restrictive view on how the treaty can be interpreted. In that sense, I do not want to be the party pooper, but I think we need to temper our expectations. I would love to be optimistic, but I want to hear from the Minister whether the Government have taken legal advice on this aspect of the Committee’s report. I would be very keen to know what progress we might be able to make at the European level from the proposals in the report. I look forward to hearing his remarks; I hope his legal advice will give us some cause for optimism. We also need to know from him what progress has been made in building support for decentralisation across the other member states, which will, of course, be crucial.

Decentralisation is also crucial to the sustainable management of our fish stocks and the sustainability of fishing communities and our fishing industry. If we look at the progress made since the introduction of the regional advisory councils and the industry’s involvement in fishing management, we can see that it is much better for the people affected by the decisions to be involved in the decision making. In those circumstances, we get much better outcomes.

What we have seen in Scotland with the conservation credit scheme—with increased use of selective gears, catch quotas and real-time closures—is that all its measures have contributed to significant improvements in sustainability. We have seen dramatic reductions in discards and dramatic increases in the number of stocks certified by the Marine Stewardship Council as being from sustainable sources. Crucially—this is the key point on the issue of discards—it prevented the need to discard fish by avoiding unwanted catches in the first place. That has to be the top priority.

If we are serious about tackling the causes of discarding, we need to do it fishery by fishery, and we need to take on board the challenges of our mixed fisheries. I will not repeat the remarks of the hon. Member for Great Grimsby (Austin Mitchell), but they were extremely salient. We must look in a practical way at how we do this, and be very clear that one size simply will not fit all.

[Andrew George]

The hon. Lady said that conservation measures had resulted in a drop in discards. A seasonal closure of the Trevose ground off the north Cornish coast has led to an abundance of cod, and as a consequence most fishermen are using their monthly cod quota on the first day of every month. There is a now great deal of discarding.

[Dr Whiteford]

The hon. Gentleman makes a valid point about what is happening in his constituency, and clearly there are similar stories all along our coastline. That is a prime illustration of the fact that—as I think Members in all parts of the House agree—the present system does not work, and is not fit for purpose.

A deep-seated and long-standing problem is the issue of compliance across the European Union. It is very frustrating for our fishermen to see the rules applied so inconsistently. The fact that quota restrictions are being flouted with impunity in other parts of the EU not only causes great resentment, but undermines confidence in the system and people’s sense of ownership of the system of fisheries management. We know from the experience of recent years that conservation measures that have been developed in co-operation with the fishermen have been the most effective in conserving fish stocks. The current problems are symptomatic of a top-down CFP, and of that lack of a sense of ownership.

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[Barry Gardiner]

Yes, Madam Deputy Speaker.

Of course ecosystems interact with each other, and in so far as the hon. Gentleman makes that point it is absolutely unexceptional. None the less, scientists and fishermen look at those ecosystems. Of course there are migratory stocks, straddling stocks, nurseries where fish spawn and spawning grounds that need to be protected, but the point is to look at this as part of the ecosystem and not simply to divide it up into national countries’ interests. We need a regionalised framework based around significant ecosystems so that we can manage those stocks more effectively.

At present, even detailed technical decisions are taken centrally in Europe. The Lisbon treaty provides that the EU has exclusive competence under the CFP. However, the Environment, Food and Rural Affairs Committee report makes an interesting case for a lawful way of qualifying the EU’s exclusive competence over the conservation of marine resources, thereby creating a framework for genuine regionalisation. It argues that exclusive competence does not apply where the CFP does not apply. Therefore, if the CFP regulations were amended to exclude certain marine conservation policies, the scope of the exclusive competence would be limited to the amended CFP.

The establishment of regional advisory councils is cited as a key success of the 2002 CFP reform because they have served as forums for stakeholders to inform policy implementation at a regional level. The trouble is that they have no decision-making powers. Although the draft basic regulation that sets out the main rules for the CFP would address centralised decision making through a combination of multi-annual plans and regionalisation of decision making, I think that a fully regionalised management system should include the following features: quotas allocated on the basis of ecosystem regions in order to manage fishing pressures according to the necessities of those different ecosystems; regular scientific assessment of all marine species, not just fish stocks, within a given eco-region in order to establish the impact of fishing on the ecosystem as a whole; and quota allocation on the basis of eco-regions with different licences used in different ecosystem regions and with no transfers between those regions.

Certain decision-making powers need to be devolved to regional management bodies in order to tailor the application of central policy objectives for EU fisheries to the specifics of each ecosystem. The main tool for fisheries management is the annual setting of total allowable catches. Currently, the European Commission requests scientific advice for the establishment of fisheries management plans on the basis of sustainability. However, the European Council is under no obligation to adhere to that advice when agreeing total annual quotas for stocks.

The result is that the European Fisheries Council sets total allowable catch limits that are on average 34% higher than scientifically recommended sustainable limits. In the period 1987 to 2011, European Fisheries Ministers set fishing quotas above scientific recommendations in 68% of their decisions. In the case of one hake stock, quotas were set 1,100% higher than scientists advised.

Over-fishing has made the fishing industry economically vulnerable, but over-fishing does not have just economic costs; it has social and environmental ones as well. At the Johannesburg world summit on sustainable development in 2002, the EU committed to achieving MSY—maximum sustainable yield—for all fish stocks by 2015 at the latest, but in 2010 it estimated that 72% of its fisheries remained over-fished, with 20% fished beyond safe biological limits, risking the wholesale collapse of those fisheries.

The zero draft for the forthcoming United Nations sustainable development conference in Rio calls on states to maintain or restore depleted fish stocks to sustainable levels, and further to commit to implementing science-based management plans to rebuild stocks by 2015.

The EU marine strategy framework directive requires that all EU fisheries achieve good environmental status by 2020, including the attainment of sustainable fishing levels for all stocks.

[Andrew George]

On the primary thesis that the hon. Gentleman seeks to advance, he claims that fishing communities are in decline because of over-fishing, but might it not also be because of inept policy, whereby fishermen have to catch far more fish but most are thrown back dead?

[Barry Gardiner]

Discards have been widely debated in this Chamber, and I shall try to come on to that issue, but time is limited, so I must press on. I acknowledge the force of the hon. Gentleman’s remarks, however.

MSY is the largest catch that can be sustained over the long term, but there is FMSY and BSMY, fishing maximum sustainable yield and biomass maximum sustainable yield. The argument that I made to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who speaks for the Scottish National party, was precisely to that point, because we can go on getting FMSY out of a small stock, but if we want to achieve the largest possible catch we need to build the biomass MSY to ensure that we then get a sustainable yield out of that much larger biomass.

That is why I absolutely urge the Minister to support Commissioner Damanaki in saying that we have to achieve FMSY by 2015, albeit that biomass MSY might not be achieved until sometime after that—I hope as soon as possible, but no later than 2020, as the stocks demand.

Achieving that aim by 2015 will necessitate the following key measures: first, rendering scientific advice binding, thus preventing quotas from exceeding biologically sustainable limits; and, secondly, introducing stock assessments and management plans for all fish and shellfish, including non-commercial species that are currently unmanaged, in order to establish sustainable limits for harvesting. Ensuring that all fish and shellfish are harvested at sustainable levels is an absolute prerequisite of the future profitability and survival of EU fisheries.

But we also need to think about the issue in terms of biomass—something that the Committee’s report does not address. A biomass MSY is the biomass that can support the harvest of that maximum sustainable yield. Achieving MSY as set out in the draft CFP means rebuilding fish populations to a level of biomass maximum sustainable yield in order to support the level of annual catches—and viable fishing communities, their economies and their social needs.

In an effort to limit fishing to sustainable levels, EU regulations under the common fisheries policy prohibit the landing of commercial species above a given annual quota. In practice, however, that often results in the discarding of thousands of tonnes of saleable fish—but just at the point when I am about to answer the question asked by the hon. Member for St Ives (Andrew George), I fear, Madam Deputy Speaker, that you are going to tell me that I have run out of time.

--- Later in debate ---

[Ms Ritchie]

I thank the hon. Gentleman, and I agree that the problems of sustainable yield, discards and the need for regionalisation all derive from the problems presented by the common fisheries policy. All the Members who have spoken have mentioned those problems. Any effective measure must respond to those who fish in our waters, because for a fisherman nothing goes against the grain more than wasting perfectly good fish. We must acknowledge the good work that has already been done.

[Andrew George]

Although of course I agree with the thrust of the hon. Lady’s argument about quotas and discards, does she accept that it is not possible to distinguish between intended and unintended by-catch?

[Ms Ritchie]

I suppose I could agree to a certain extent with that assertion. There is no doubt that our fishing industries in Britain and Northern Ireland face many similar problems, one of which is discards. To go back, however, that is one of the problems that is derived directly from the common fisheries policy.

On the need for decentralisation, at a broader level the common fisheries policy needs to be more regionally sensitive. There needs to be more regional input and representation in respect of the reforms and throughout EU fisheries negotiations. We also need meaningful and impactful regionalisation that delivers real change rather than talks about it. At the same time, we should recognise that such regionalisation needs to be enacted in a coherent, not disjointed, manner.

I urge the Minister to work closely with his ministerial counterparts in Dublin and the Northern Ireland Executive to develop an approach that makes the fishing industry economically productive and sustainable across these islands, and one that is operational for us on a north/south basis in Ireland. Measures enacted in the Irish sea have a clear impact on the movement of fish shoals to other areas. Fish do not recognise national identities. We must remember that fish shoals are not static and management of them can be successful only if it is done in a joined-up manner with clear regional input.

In summary and in conclusion, the reform of the common fisheries policy provides the British Government and the Department for Environment, Food and Rural Affairs with an opportunity to work with the EU to provide a framework whereby the fishing industry and the coastal communities that are pivotal to it are safeguarded, and whereby a clear, positive path is provided for the sustainability of the industry, both onshore and offshore. We in Northern Ireland—I represent a constituency that has the two fishing ports of Ardglass and Kilkeel—believe that one of the best approaches is through decentralisation from the common fisheries policy and some degree of control being devolved to the local area.

Water Industry (Financial Assistance) Bill

Andrew George Excerpts

Wednesday 14th March 2012 Commons Chamber

[Dan Rogerson]

The hon. Lady is referring to the money identified for the south-west, and the worry that it might, to use a watery phrase, be diluted and spread out across the country. I suspect that that could potentially happen, but I know that the coalition Government are absolutely committed to seeing this provision through for the people of Devon and Cornwall. Who knows what might happen under a future Government? I hope that they would take the plight of our water bill payers equally seriously and continue that level of support. The hon. Lady makes an interesting point.

As I understand it, the amendment seeks to ensure that if a Government wished to offer such support to further areas, a statutory instrument would have to be tabled and debated. I find it hard to believe that any Government would consider doing such a thing without a debate not only in this place but out in the country at large and, I am sure, a debate in the Treasury too, which would have to be conducted publicly as well as privately. I know that that has been the case with the programme we now have for Devon and Cornwall. Although I accept the logic of what the hon. Member for Luton South said, I will wait to hear what the Minister has to say in reply before I decide what approach to take. Naturally, I want to support the Government—as I would on every occasion, but particularly as regards the provisions in this Bill.

The new clause concerns social tariffs and the next steps that we might want to take to help people who are under water stress, which, as the hon. Gentleman pointed out, will still be a significant problem for people in the south-west after the support set out in the Bill is delivered. Of course, water stress is also a worsening problem in other parts of the country.

I am delighted to see that the hon. Member for Wakefield (Mary Creagh) is in her place. On Second Reading, when we debated this subject, I intervened on her and made the point that any social tariff within a water company area presents problems as well as opportunities. If there is to be a social tariff at a significant level for those experiencing the worst problems in an area such as the south-west, despite the fact that many people will benefit we must be aware that within an area with a small population, a huge amount of the funding for the tariff will be provided by people just above the qualification threshold. I am very worried that in-region social tariffs will be unable to deal with the problem. When the hon. Lady set out where she would like the Bill to be improved, she said that she would do something about national water tariffs. It is a shame that we do not have such a provision and Devon and Cornwall MPs have put the matter before the Government. I understand that there are issues with the Treasury’s response, as that might be regarded as a tax, but we must consider how we can address that situation.

I do not see how a league table will help, however. Indeed, it might mean that water companies were under pressure to introduce the tables in such a way that it might disadvantage those people about whom I was talking—those just above the threshold who will not benefit from the tariff but whose water bills will increase to pay for their hard-pressed neighbours.

[Andrew George (St Ives) (LD)]

My hon. Friend is making a very good point. At the risk of delaying the process of the Bill through the further elaboration on the amendments, does my hon. Friend agree that the best way of addressing the issue would be to seek the assurance of the Minister that the issue will be addressed in the forthcoming water Bill as quickly as possible after the Queen’s Speech?

[Dan Rogerson]

My hon. Friend makes an excellent point. The water Bill will be a further opportunity for us to revisit these issues and I welcome the fact that hon. Members across the House are still considering this matter as one that needs further exploration.

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[Simon Hughes]

I am not pretending that we are hugely disadvantaged in the Thames Water area at the moment. My colleagues in the south-west and their constituents have had hugely greater bills over very many years. I am not arguing that we should not have to pay more money as Thames Water ratepayers, but that if we are going to do so, we should be paying it for a project, if it is agreed, where we know that the taxpayer is not being fleeced and water rate payers are not paying more than they should be. This must not be seen as a method for allowing private sector companies—all the water companies are now, in effect, private sector companies—to export profits indefinitely, at a higher level than they ought to, when they should be putting that money into the project and making sure that bills are lower.

[Andrew George]

Bearing in mind that the probity or otherwise of Thames Water is outwith the purpose of the Bill, would my right hon. Friend care to comment on the fact that, as I understand it, Thames Water might not undertake this project and that the question then arises of what happens to the asset, which is the tunnel? Surely that is the key issue, and then there is the separate issue of the probity, management and proper regulation of Thames Water as a company.

[Simon Hughes]

My hon. Friend is right. Perhaps it would helpful if, rather than trying to go round the circuit twice, I quickly summarise my letter to the Secretary of State in which I set out my concerns and the history of the matter, summarise the key points of her response, which deal exactly with my hon. Friend’s point about the mechanism regarding the tunnel, and then raise the three specific issues that should be addressed before colleagues and the Minister speak.

The provisions could, of course, apply to any water company. I am talking about Thames Water because we know that the Thames tunnel is the big project that the Government have in mind. However, the Bill relates not just to Thames Water, but to financial assistance for major works by any water company throughout the country, so the issues could relate to any constituency across the United Kingdom.

I will give a brief history. Thames Water was previously owned by the German utility company RWE. As I well remember, at that time it had one of the worst records for leaks and failed to meet its agreed targets for remedying leaks for four consecutive years. Despite that, RWE raised the dividend that Thames Water paid out to the company by 52%, took £216 million from the company and simultaneously announced a rise in profits as it prepared to sell the company on. At that time, Thames Water had a debt to capital ratio of about 45% and an excellent credit rating with all the major rating agencies.

Thames Water was bought by Kemble Water in 2006 in a deal worth £8 billion. Kemble Water is a financial vehicle for a consortium of investors, primarily made up of private equity funds led by Macquarie, the Australian bank. The deal included £3.2 billion of debt, which was incorporated into the company through whole company securitisation. That was undertaken for a special purpose finance company that Thames Water set up in the Cayman Islands, presumably to allow the owners of Thames Water to avoid taxes on the income that they received from the interest raised. That increased the debt ratio sharply to 67.9% of regulated capital value. The company has continued to borrow heavily and the debt to capital ratio has now increased to 72.9%.

That has happened at a time when Thames Water has paid extremely high dividends, which have regularly exceeded its earnings. For example, in 2010, the ratio was 141.5%. In other words, it paid out in dividends nearly one and a half times as much as it received in earnings. By contrast, South East Water, to take another local example, had a payout ratio of 48%—just a third of that of Thames Water. That strategy has had a serious detrimental effect on Thames Water’s credit rating. It has fallen from a corporate credit rating of A plus on the Standard & Poor’s rating scale when the company was bought by RWE in 2000 to a position today in which some of Thames Water’s debts have been assigned a triple B rating, which is considered to be the lowest investment grade rating possible.

For 10 years, Thames Water has been owned by two companies that have sought to extract the maximum possible value from the company. It has prioritised that over the necessary prudential financial arrangements that would have allowed it to make the large, long-term capital investments that it knows it has to make. As a result, Thames Water no longer has the capacity to access the finance required to make large infrastructure investments. It is not as if this project is a new idea. It has been, excuse the pun, in the pipeline for a long time.

The company has therefore asked the Government to provide financial backing for its Thames tunnel scheme. It is not yet clear to me why our Government should help this company after its years of excessive and unjustified borrowing and extraordinary dividend payments, which have eroded the company’s capital position. At the end of the Second Reading debate, the Minister said that the financial arrangements of the company were a matter for the regulator, Ofwat. That is in part true, but Parliament certainly has an interest and the Government must have an interest. If Ofwat’s controls are not sufficient, we need to address that. That is why I have raised this matter in the amendments.

Before the sale of Thames Water by RWE, Ofwat made a clear statement warning potential investors not to follow the very strategy that Kemble Water has since followed. Ofwat said that potential bidders should preserve Thames Water’s investment grade credit rating, which would have meant keeping the company’s debt to capital ratio below 65%. That is the link between solvency, external financial respect for the company and the percentage ratio, which my hon. Friend the Member for Cities of London and Westminster raised with me earlier. Since then, the regulator has, in effect, stood by and done nothing to prevent Kemble Water from further saddling the company with debt. Ofwat has stated that that is acceptable because the company has kept its investment grade credit rating. In fact, the credit rating has deteriorated to the lowest investment grade possible. Ofwat appears to have neglected the need for the company to incur more debt in the future to pay for large capital investments.

I am troubled that, unless we amend the Bill, there will be nothing to prevent that behaviour from continuing. I am trying to make the Government address how we will prevent it. I do not propose to force the amendment to a vote, but I want to hear the input of Members, if they want to contribute, and the Minister’s response. I am keen to ensure that we do not let go of this matter. My constituents want me to raise it now and the constituents of many colleagues in London have an equally strong vested interest in it.

--- Later in debate ---

[Andrew George]

I congratulate all those Members, particularly those from the south-west, who have contributed and campaigned, in many cases for two decades, to achieve what is certainly a positive outcome—I will not describe it as a triumph—and one that is richly deserved and will certainly alleviate some of the pressure that many South West Water customers have had to endure for a very long time. When the Government bring forward this measure, it is important that they look at ensuring that South West Water delivers it efficiently and effectively and reflect on the impact it will have on water affordability for customers in the south-west.

The hon. Member for Wakefield (Mary Creagh), the shadow Secretary of State, following the words of the Minister on the issue, implied—I think, because this has been a fairly consensual Third Reading—that there was somehow a risk of some of the money benefiting the company itself. But I was reassured earlier in the debate by the Minister’s response, that not one penny should fall by accident or design into the pockets of the company or its shareholders. It should not touch the sides as it goes through to benefit customers, and it is really important that that—the Minister’s reassurance—is delivered after the Bill is enacted.

My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), through his amendments, raised some important concerns that I know my hon. Friend the Minister will take on board as the contracts for the tunnel are let. I recognise that issues of probity and the effectiveness of regulation, in ensuring that the taxpayers’ interest—the public interest—is protected by the way in which this essential project is rolled forward, will need to be taken account of.

I hope that the contribution of my right hon. Friend and others to today’s debate—it is reassuring having two learned Members watching what Thames Water will do—indicates the manner in which the company will be handled and the manner in which concerns, one could argue, might reasonably be raised about any benefit to its customers, because it is important that as this essential project is rolled out those central public and taxpayer interests are clearly protected. I know that my hon. Friend the Minister will be seized of the great importance of that.

Given the comments that have been made, certainly by the hon. Member for Wakefield and others, perhaps the Bill has been incorrectly titled now that we reflect on it. Instead of being called the Water Industry (Financial Assistance) Bill, it might have been called the water customer (financial alleviation)—or (financial protection)—Bill, because in effect that is how the Minister described the Bill’s purpose, and that is what the Bill attempts to do. I do not propose on Third Reading to introduce an amendment to the title of the Bill, but by making that point I hope simply to emphasise its importance in protecting customers and taxpayers. I certainly hope that that is taken forward.

Finally, I congratulate the Government, and especially the Minister, on the elegance, charm and good humour with which he has brought forward the Bill. It explains how the Bill was brought forward so quickly and effectively, with cross-party support and consensus. The debate has been very constructive, and I am sure that the Bill will not be held up in another place but will be enacted quickly and be to the benefit of customers in the south-west and in the Thames region.