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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Common Agricultural Policy

Andrew George Excerpts

Thursday 8th March 2012 Westminster Hall

[Miss McIntosh]

That is an excellent intervention. If the hon. Gentleman bears with me, I shall come on to those very concerns.

Under successive Governments, UK farmers have been expected to meet higher standards on animal welfare than farmers elsewhere. We have unilaterally applied the sow stalls and tether ban, which only comes into play in 2013 across the rest of the European Union. Those standards impose extra costs on our producers and make them less competitive globally. Direct payments provide a means to pay for those higher standards. Without them, society—the community—runs the risk of EU farmers going out of business while exporting the social and environmental impacts elsewhere. In the longer term, the European Union must argue more strongly for a recognition of production standards in trade agreements. We conclude that DEFRA must set out more clearly how it will reduce reliance on direct payments, including the policy tools needed.

[Andrew George (St Ives) (LD)]

On direct payments, the hon. Lady will know—I know that the Select Committee has considered this issue—the definition of what an active farmer is. The Government entirely support the principle of that. Does she not also agree with the Government’s approach, which is that the definition of what is and is not an active farmer surely must be decided at a member state level?

[Miss McIntosh]

I will come on to say a bit about that if time permits. I have personal reasons that relate to constituency interests—apologies for not mentioning it earlier but, as declared in the register, I farm two fields in partnership with my brother—for believing that tenant farmers in this country risk being in a very difficult position. I am very grateful to the Minister for having heard me out on my personal concerns in that regard.

During the course of compiling the report, the Minister told us that DEFRA would like direct payments to be phased out over the next financial period—in other words by 2020—and to end shortly thereafter. If DEFRA wishes to achieve that, we would like to see a plan to make farming in the European Union more competitive and less dependent on subsidy, otherwise the Department’s position does not seem credible and risks alienating farmers and weakening DEFRA’s influence in Brussels. From the evidence the Minister gave us, there seemed to be no new ideas on how to make UK farming more competitive. The Committee is not convinced by the Department’s arguments that rising prices for some commodities will necessarily deliver long-term improvements in farm incomes, for example, because of pressure from supermarkets on farmers.

Water Industry (Financial Assistance) Bill

Andrew George Excerpts

Tuesday 6th March 2012 Commons Chamber

[Andrew George (St Ives) (LD)]

How would the hon. Gentleman answer the questions that he has just put to the Government?

[Gavin Shuker]

We have been very clear about the measures that we believe the Government could take right now to make a real dent in water prices. We are not going to talk about the long term but do nothing in the short term, which, with the exception of the measures relating to the south-west, this Bill is the very definition of.

The Government must do what only they can do. Their White Paper talks about water for all, but merely offers affordability for some. We will not oppose the Bill this afternoon, but we will table amendments next Wednesday to improve it. Ministers should not deny the existence of the quiet cost of living crisis that is very real for many families across the country. Instinctively, we all feel that water should be affordable. As the Bill progresses, I hope that the Government will accept our amendments to improve it. In doing so, they could help to ensure that there is water for all.

Oral Answers to Questions

Andrew George Excerpts

Thursday 1st March 2012 Commons Chamber

[Mr Paice]

I cannot be precise on the timing of the legislation, partly for the reasons that my hon. Friend the Under-Secretary gave in answer to the previous question. It will take time, which is why we believe we must proceed with the licensing process. We are advised strongly that the hon. Lady’s proposal on new animals would almost certainly fail a judicial challenge, but importing animals is anyway covered by the convention on international trade in endangered species regulations.

[Andrew George (St Ives) (LD)]

Further to the question of the hon. Member for Belfast East (Naomi Long), I congratulate the Government on their announcement today, but will this welcome measure be implemented by the time of the next general election? When will it be implemented? It is important that we have a date.

[Mr Paice]

My hon. Friend knows full well that it is impossible to put an exact date on it, but I would be extremely surprised and disappointed if it was not implemented before the next election.

Water Industry (Financial Assistance) Bill

Andrew George Excerpts

Wednesday 29th February 2012 Commons Chamber

[Mrs Spelman]

I can give the hon. Gentleman the assurance that water companies are indeed tightening their belts like everybody else. The rise that he described is the one set out by the economic regulator Ofwat, as an indicator of the overall level of inflation, which has not a little to do with the economic mess that we inherited from the previous Administration. However, the important point for the hon. Gentleman is this. He and I share the use of Severn Trent Water’s services, and companies such as ours will be able to introduce a company social tariff, which would assist the most vulnerable in the water area where we reside. Indeed, it would be open to every company to do so, and we have published a consultation about the company social tariff.

[Andrew George (St Ives) (LD)]

Let me congratulate my right hon. Friend on bringing forward this measure and remind her of the cross-party nature of the origins of the Bill and the fact that we have been working towards it across all parties for many years, including under the previous Administration, and not only following the Anna Walker review, as there has clearly been every intention of addressing what has been a clear historic unfairness for South West Water customers.

[Mrs Spelman]

My hon. Friend is quite right. Indeed, I look across the Chamber to the right hon. Member for Exeter (Mr Bradshaw) as a demonstration of the cross-party consensus that existed, which I have acknowledged. The diligence with which south-west constituency Members raised awareness of this historic unfairness is the reason our Government have sought, finally, to do something about it and stop turning a deaf ear to families struggling with that historic legacy, which is what had happened for too long.

There are limits to the help that we can give, because of the vast economic deficit that we inherited. However, we believe that the Government should help to correct the historic inequity that has left water bills in the south-west so markedly out of kilter with those elsewhere in the country. We have therefore committed to funding South West Water to enable it to cut bills by £50 a year for all household customers. The payments will start in April next year and will be maintained to the end of the next spending review period. The £50 reduction will be transparent on customers’ bills and, contrary to the impression that might have been gained, will not provide any sort of benefit to South West Water. It will simply be passported straight through to the householder, who will receive that money in full.

We take pride in helping hard-pressed families in the south-west, but we recognise that the challenge of helping vulnerable customers with water affordability problems is a different and more general problem that can be felt in households anywhere in the country, as the hon. Member for Birmingham, Selly Oak (Steve McCabe) suggested. As constituency MPs, we all know the families that we are talking about. That is why our water White Paper has set out definitively the dual approach that we are taking to tackling affordability issues. First, we are taking measures now to enable water companies to introduce social tariffs and to tackle bad debt. Secondly, over the longer term, we are introducing a package of reforms to increase competition and innovation in the industry that will help to keep bills down and improve customer service.

We consulted recently on how water companies could design social tariffs to reduce the bills of those who would otherwise struggle to pay in full. We will publish final guidance in the spring to enable companies to bring forward social tariffs in their charging schemes from 2013. Water companies’ responses to the consultation have shown their commitment to addressing customers’ affordability problems. Many already have schemes in place, such as trust funds, matched payment schemes, referrals to benefits advice and some existing social tariffs, but we have to be realistic in acknowledging that bad debt is also a serious problem in the water industry.

Bad debt adds an average of £15 to all paying customers’ bills, and this Government are taking action to address that. We are consulting on measures to reduce bad debt, and we are considering two options. The first is a regulatory measure that would make landlords liable for the water charges for their tenants’ properties if they failed to supply details of those tenants to the water company. However, we are mindful that the measure has to be proportionate and easily administered, so we are also consulting on whether we should ask landlords to share their tenants’ details with water companies voluntarily.

--- Later in debate ---

[Mary Creagh]

I am sure that the Secretary of State will have digested that point from my right hon. Friend.

This is an orphan Bill, which is decoupled from the long-term reforms required to tackle climate change and keep water affordable. Why does the Bill, which affects two areas—the south-west and London—not mention those two areas? Is it because that would make it a hybrid Bill, which would require full and proper scrutiny in the other place? Is it because by not mentioning those two areas and drawing the Bill widely, the Secretary of State is able to define it as a money Bill, which means that it receives only a cursory one day’s scrutiny in the other place? What possible reason could she have to fear their lordships’ scrutiny of this worthy and timely Bill? We can surmise that she is keen to get her short Bill through Parliament—an endeavour that does not seem to have been properly communicated by the Whips to her own Back Benchers, if today’s sudden change of business is anything to go by.

[Andrew George]

I note that the hon. Lady described the Bill as worthy and timely. I am curious about her line. She says that £50 per household in the south-west is insufficient; I would like to know whether she and her party propose offering more to the south-west, and how that would be funded. Secondly, in view of the line that she is taking, is she suggesting that she and her party will vote against the Bill today?

[Mary Creagh]

I am happy to say that we will not vote against the Bill. If the hon. Gentleman waits, I will come on to some of the wider affordability issues and will, I hope, answer some of his questions on the wider issues.

The next unanswered question is: why are we debating the Bill now? We know that the Government ran out of meaningful new legislative business about two months ago, and the House has been surviving on thin rations—a meagre diet of one-line-Whip business and Back-Bench business debates, valuable though they are. There was no new Government legislation, but suddenly—boom!—out of the Department for Environment, Food and Rural Affairs, a Department whose Ministers are the embodiment of clout, grip and competence, spurted a sudden, short water Bill, born of the realisation that if the Department has lost its slot in May’s Queen’s Speech, it had better deliver on the Chancellor’s promises to the south-west and his coalition partners. That happened just six short weeks before the end of one of the longest parliamentary Sessions ever held. Clearly, such a masterstroke of parliamentary planning and timing could have been confected only by the Department that brought us the forest sell-off.

Labour in government corrected many of the injustices of water privatisation. As I said, in 2000 we banned water companies from cutting off the water supply of homes, schools and hospitals for non-payment. It is extraordinary to think that legislators would allow provisions that let hospitals—care givers and providers of sanitation—be cut off for non-payment of bills. We allowed for compulsory metering in areas of scarcity, and a more muscular Ofwat, holding the water companies to account, has emerged in recent years.

--- Later in debate ---

[Andrew George (St Ives) (LD)]

It is always a great pleasure to follow the hon. Member for Poplar and Limehouse (Jim Fitzpatrick). As a former fireman, he demonstrates his passion for and knowledge of that subject. The last two contributions have shown how wide-ranging this debate can be—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I have been thanked for my indulgence, but let us just say that a conversation went on about how relevant some of the contributions were. Please do not test my patience too much.

[Andrew George]

Thank you, Mr Deputy Speaker. I was in no way implying any criticism of your great office, or of the way in which you apply the rules to our debates. I have carefully cut out of my speech all the parts referring to swimming and surfing in the waters of the south-west, and any other matters that you might consider a further indulgence.

As a Member of Parliament from the south-west, it is my primary objective to address the two issues that represent the primary purpose of this three-clause Bill before us today. Having said that, the hon. Member for Poplar and Limehouse spoke about the associated issue of fire sprinklers, which I hope will be dealt with elsewhere. Similarly, I know that the hon. Member for Thirsk and Malton (Miss McIntosh) never misses the opportunity to address the important matter of flood defences in her constituency.

I come to this debate to congratulate the Government warmly on what they are achieving through this measure, particularly by the clause that is intended, although not by name, to benefit or at least address an unfairness to the water bill payers of South West Water that has gone on for 22 years. The unfairness has been identified across all parties and by the Anna Walker review, which was commissioned by the previous Government in August 2008 and concluded in December 2009—just before the last general election. It highlighted the need to address this significant and long-standing unfairness.

I welcomed the comments of the shadow Secretary of State, the hon. Member for Wakefield (Mary Creagh). She clearly enters into debates in a full-blooded manner in a debating Chamber that often becomes extremely tribal. At certain points in the debate, I was not sure whether Labour Members were going to be encouraged to vote against the Bill. Following my intervention on the hon. Lady, however, she made it clear that she and her hon. Friends would support the Bill. That will resonate through the House, following what is, after all, a cross-party consensus on this issue. She raised legitimate questions about problems of affordability—across the country generally, but particularly for the customers of South West Water—that need to be looked at further. I hope that my hon. Friend the Under-Secretary will deal with some of those issues in his response. I hope, too, that legislation will be forthcoming soon after the next Queen’s Speech so that we can further meet concerns about affordability issues.

Speaking about how South West Water operates itself, I have in the past called it an ethics-free and risk-free money extortion system. I know that is rather strong language; it goes back primarily to the days when Bill Fraser was the chief executive of South West Water. His management of the business in a rather belligerent and Thatcherite style has largely been remedied by both his successors, Bob Baty and Chris Loughlin. With Chris Loughlin and his board of directors addressing the legacy, it might no longer be appropriate to describe the company as ethics-free. Chris Loughlin has managed the company well and genuinely wants to address the concerns about water affordability. I take my hat off to him and his board members for their efforts.

That said, one thing we cannot escape from is the fact that all water companies—certainly including South West Water—have a monopoly within their areas. There is effectively no competition at all. Significant questions have been raised about the effectiveness of Ofwat as a regulator. It is supposed to establish the “K” factor every few years to restrain the levering up of water bills, but water companies are still able almost to predict the end-of-year dividends at the beginning of each financial year.

[Sheryll Murray]

Does my hon. Friend agree that about 20,000 households in the south-west could reduce their bills by about £350 to £400 if they took up the option of water meters, and that many of those households include the elderly and the most vulnerable?

[Andrew George]

I absolutely agree that there are still many customers of South West Water who could enjoy lower bills as a result of transferring to water meters. Ultimately, however, the unit charges are bound to have to increase once all households switch to water meters. Unmetered households are currently charged significantly more than metered households, so when companies plan for the future it will simply not be possible for them to maintain the same level of profitability and dividend to their shareholders if they continue to charge at the current rate.

The point that my hon. Friend makes is extremely valid, but I must also say that I have taken up issues with South West Water, as I know other hon. Members have done. One such issue relates to customers living in sheltered accommodation or in houses in multiple occupation where they have single unmetered bills but do not have the benefit of being able to convert their property on to a meter because of the circumstances in which they live. In those circumstances South West Water has to be asked for what is known as an “assessed charge”, which often results in those people—inevitably, they are vulnerable households—having their water bill halved or significantly reduced to below that level. So there is further work to do to address the problems of water affordability for those living in households that cannot convert from unmetered to metered properties. I have asked South West Water if they would, as a default, automatically offer the assessed charge to those living in such accommodation, rather than their having to trigger it by requesting it. That is an important point.

[Miss McIntosh]

May I return to the hon. Gentleman’s comment about almost being able to predict the dividend at the beginning of the year? Water companies do not rely solely on water bills for their income and investment. Given that they are now viewed as a fairly reliable investment for pension and insurance funds, is it not a good thing that their dividend is fairly stable?

[Andrew George]

I certainly would not wish to denigrate or diminish in any way the importance of successful British companies. Where a company provides a good basis for investors, I celebrate that, along with others. I am simply commenting on the reality of the situation of water companies in relation to all other private companies, which ply their trade in a much more risky environment. That is simply a matter of fact, not of debate.

[Simon Hughes]

There is a link between the experience of colleagues and constituents in the south-west and that of people in the Thames area, because Kemble used to own South West Water and it now owns Thames Water. When it owned South West Water the bills were significantly high and there were a lot of complaints. People are fearful that some of the practices it used then, which included paying out dividends greater than its income—that seems to be not about saving the capital—might be being applied at the moment.

[Andrew George]

I am grateful to my right hon. Friend for that intervention.

On the question of the high water bills in the south-west, let me put on record the fact that in 2010-11, bills for South West Water customers were, on average, £486, which is certainly higher than the average bills in the rest of the country, which were £339. Unmetered customers had much higher bills, of course, at a rate of £721, whereas bills for metered customers in the south-west were £394 on average. As I and others have said, that was the focus of the Anna Walker inquiry.

[Mr Offord]

Does the hon. Gentleman agree that this is about not only the cost of water bills in the south-west but the fact that the average weekly wage is about 30% lower than that in parts of the south-east and London?

[Andrew George]

My hon. Friend is absolutely right. Cornwall has been at the bottom of the earnings league table pretty much since records began. It has significantly higher water bills than anywhere else in the country, high levels of unemployment in some parts, as well as dependence on benefit, pensioner households and so on, and if we add to that the low average incomes across the households in the area, it is inevitable that in many households people will pay more than 3% of their income to meet their water bills.

As my right hon. Friend the Secretary of State said earlier, the problem is partly caused by a lower level of infrastructure at the time of privatisation in the early ’90s and by the fact that the south-west has been significantly more burdened by the costs of the bathing water directive than any other region in the country. I have drawn the same parallel as others. The bathing waters around the Cornish and south-west coast are a national asset yet only 3% of the population must pay for the cost of cleaning up. The cost is very high, because many outfalls must all be dealt with very expensively, which is the primary cause of the excessive bills across the south-west. The general populace enjoy other national assets, such as the museums and galleries of London, and it is the general taxpayer who pays for them. We do not ask just London taxpayers to pay for the National Gallery, the British Museum and the other museums—we, as a country, contribute and that is an important parallel.

There has been a long-standing campaign and the Anna Walker review was rather belated but at least welcome and took us a long way down that road. I congratulate the previous Government for that and pay tribute, as other hon. Members have, to Linda Gilroy, a former Member of this House who contributed a great deal towards advancing the case for fairness in the billing of water customers, particularly in the south-west. I also congratulate the hon. Member for Plymouth, Moor View (Alison Seabeck) for calling a debate on 14 June 2010, which can be found at column 710 of Hansard, and my hon. Friend the Member for Torbay (Mr Sanders) for doing so on 9 March 2011.

There are issues that need to be addressed. To sum up—I am aware that I have taken as much time as the previous speakers—I hope the Minister will address my questions. Clause 1(3) concerns the discretion of the Secretary of State in determining which customers within any particular water company area might benefit from the intervention of the Secretary of State to vary the bills or make a contribution, and my question, which relates back to the announcement of the payment of £50 per household in last year’s autumn statement, concerns how a household will be defined.

In my area, a large number of households run bed-and-breakfast facilities, guest houses and other businesses, and they are businesses for the purposes of South West Water’s billing structure. However, there are also many wealthy second home owners who have water meters and pay virtually nothing towards the very high costs of getting water to their properties, which are often very remote—on cliffs and so on—and taking away their sewage. Often, they let their properties at very high prices and make a lot of money, but they are not considered to be businesses and so they will get the benefit of the reduction of £50 per household. That clear and evident unfairness is one of many, but I shall not bore the House with a raft of examples regarding this issue of how households should be defined. If we are addressing issues of vulnerability and affordability amongst water rate payers, we need to be very careful how we define households.

The £50 per household reduction is a rather blunt instrument. Yes, it is efficient and it means that the administrative costs will, one hopes, be less than would have been the case with a more elegant and sophisticated measure for targeting vulnerable households. However, because of the problems with adopting a WaterSure system across the south-west and because of the evident unwillingness of water rate payers in the south-west to make any further contribution to a scheme that would benefit vulnerable households, it is unlikely that those households will be able to benefit from any application of a regionally based WaterSure system. I therefore urge my hon. Friend the Minister to look again at whether we can resurrect any form of a national WaterSure system. Clearly, we will go back to South West Water and talk to it again about how it might address the issue of particularly vulnerable households.

A number of matters need to be addressed and I am sorry that I have not addressed those concerning London, but I know they will be addressed by many other people. I look forward to hearing my hon. Friend’s reply and his responses to the questions that have been raised.

Gangmasters Licensing Authority

Andrew George Excerpts

Tuesday 21st February 2012 Westminster Hall

[Ian Murray]

I am grateful to my hon. Friend for raising that point. He has a private Member’s Bill on extending the GLA’s remit to construction workers, but because it is low down on the Order Paper, it will never be passed. I hope that the Minister will say in his response whether the Department for Environment, Food and Rural Affairs will examine the possibility of extending the GLA to cover other areas. The forestry and agricultural industries are becoming more regulated, gangmasters are becoming licensed, and the GLA has been successful, but there has been a migration of exploited labour into other parts of industry. I may mention that later.

[Andrew George (St Ives) (LD)]

The hon. Gentleman is making a very good case. I was co-sponsor of the Gangmasters (Licensing) Bill 2004 with the hon. Member for Paisley and Renfrewshire North (Jim Sheridan), who should be congratulated. Would he add to the many benefits he has listed as having resulted from the GLA’s introduction those relating to farmers? They feel much more reassured that they are dealing with gangmasters on a sound basis. Also, the many legitimate gangmaster operations in existence know that the GLA is driving the illegal trade out of business altogether.

[Ian Murray]

I am grateful for that intervention and I congratulate the hon. Gentleman on co-sponsoring the 2004 Bill. The point he makes is critical. This is not just about protecting vulnerable and exploited workers; it is about cleaning up supply chains. That feeds right into the argument about good business being rewarded for doing good things, and the need to support initiatives that get rid of businesses doing bad things. It is crucial to recognise that it is good for good businesses to be involved in initiatives such as the Gangmasters Licensing Authority. That emphasises the point made by my hon. Friend the Member for Midlothian (Mr Hamilton) about potentially extending the GLA to other areas, and clearing up the supply chains to which the hon. Member for St Ives (Andrew George) referred.

The GLA has discovered a number of cases where trafficking for financial benefit, linked directly or indirectly to labour exploitation, is to the fore. Some of the activity appears to have direct links to the targeting of vulnerable people in homeless refuges in the host country, and to persons of interest to the police in their host country. Workers are sometimes left in a no man’s land: they have no means of supporting themselves in the UK, but are unable or unwilling to go home. They are exploited; to work in a promised land, they pay up-front fees that they are never likely to be able to repay.

I have some examples that give the issues a human face. The GLA has discovered workers living in squalid accommodation; the rent is often high—above the market rate—and deducted at source. One person described 12 workers living in a caravan with no water, sanitation, lighting, heating or cooking facilities. Another talked about 30 workers who lived in a structurally dangerous two-bedroom house; they were subject to summary eviction by men wielding baseball bats if they complained.

Transport problems were an issue. Those problems included unreasonable wage deductions for transport, and unsafe vehicles. The GLA uncovered the case of a worker who lost a leg when an unroadworthy van was involved in an accident. The gangmaster’s licence was revoked, and he could no longer provide farm labourers, but two weeks later he was back in business, supplying builders’ labourers. That highlights the point made by my hon. Friend the Member for Midlothian.

An eastern European worker discovered on a farm in Cornwall was promised a job in Scotland, but was then sold to another gangmaster. Having worked all week for £5, they were told that they owed the gangmaster £6.17 in costs, which of course they did not have. They were obliged to keep working to pay the debt, which continued to accrue, resulting in bonded labour.

Those are just some of the human examples of what happens in an unregulated trade, but the GLA is identifying exploited workers in contemporary slavery and is able to do something about it. The question that people will ask is: are UK companies involved? The Joseph Rowntree Foundation found that some, possibly many, UK-based companies rely on supply chains that involve the use of slave labour, both in the UK and abroad. The complex chains of subcontracting through a variety of labour agency networks, both in the UK and abroad, mean that many companies are unaware of, or can deny knowledge of, the conditions under which their goods are produced.

The UK supply chain is inherently based on a low-cost, labour-intensive business model. The GLA identified that price pressures from competition have led to a culture where gangmasters and labour users will exploit the most vulnerable link in the chain—the worker—to protect their profits. They will often accept a charge rate that, realistically, does not allow the labour provider to meet legal requirements. Workers are being paid below the national minimum wage so that labour providers are able to make a meagre profit by charging an unrealistically low amount.

The GLA has sought to tackle this insidious problem by developing a protocol with supermarkets and suppliers—a point was made by the hon. Member for St Ives about clearing up supply chains—that allows for the exchange of information. It has garnered the support of the majority of key retailers in the food sector. By working in partnership with supermarkets—that is key—the GLA has been able to encourage them to deal with allegations of exploitation in their supply chain, and to establish an audit standard for labour supply; that allows them to clear up their supply chain. The protocol is supported by every major supermarket in the UK. It is welcomed by them as a way to allow them to monitor their supply chains.

What is the future of the GLA? I welcome Ministers’ announcement that they do not intend to abolish it. Nevertheless, the Government are considering limiting its role, and the role of licensing remains under review. The Minister needs to be crystal clear that there will be no watering down of the GLA and its powers. This is not about counting paper clips, but saving lives, preventing exploitation, promoting clean supply chains, exposing organised criminal activity and undermining human trafficking—there could be no greater cause. The GLA is especially important in difficult economic times when labour supply exceeds demand and the pressures on work increase.

[Ian Murray]

The Minister has heard that challenge on health and safety. The red tape challenge website, which I am sure every hon. Member has dipped into and had a look at, is wide-ranging. The first line of every category, including the Equality Act 2010 and health and safety legislation, poses the question: “Should this be scrapped?”. I appreciate that it is a consultation, and that the Government are looking for ideas and views on the current make-up of regulation, but there is no greater challenge than maintaining health and safety regulations to protect workers whose lives or safety may be at risk. I hope the Minister will tell us categorically that some of the questions in the red tape challenge are challenges to seek answers, rather than an overall strategy to diminish workers’ rights and health and safety regulation.

To date, the Government have been rhetorical about the dilution of workers’ rights, but a statutory instrument changing the unfair dismissal period has been laid before Parliament and will come into effect in the next few weeks. There have been leaked reports from No. 10 Downing street about making it easier to fire, rather than hire, people. There is anti-regulation sentiment and rhetoric coming out of the Department for Business, Innovation and Skills, with its “one in, one out” policy on regulation. There is real concern that some of the enforcement actions that are critical for protecting vulnerable workers and good businesses through such authorities as the GLA are being challenged.

The Macdonald report suggested an end to gangmaster licensing completely, and a move to a system of self-regulation combined with “earned recognition”. It also suggested that the GLA should change from being a heavy enforcement body to a light-touch advisory body. I am not sure that anyone would deny earned recognition to good businesses, supply chains and supermarkets who are working in partnership with the GLA, and to the good farmers who want supply chains cleaned up. The problem is that all earned recognition does is divert attention away from where gangmasters may infiltrate in the future.

There is significant confusion about the future, what with the red tape challenge and what has been termed the star chamber process. That was highlighted by the Under-Secretary of State, Department for Environment, Food and Rural Affairs, Lord Taylor of Holbeach, who said initially:

“I am pleased to say that the need for the GLA to enforce protections for vulnerable workers in its sectors”,

which is crucial,

“was endorsed by the red tape challenge ministerial star chamber, although it recognised that the GLA needed to better target non-compliant operators and reduce burdens on the compliant. The GLA will of course continue to be monitored under the Government’s ongoing reviews of public bodies and enforcement agencies.”

That is not particularly clear. In a later exchange on the same question, he says of the star chamber process and the red tape challenge:

“From my knowledge of star chambers…they are where conflicting views which may need to be resolved are discussed in an informal way. That is exactly how the star chamber has functioned in this way.”—[Official Report, House of Lords, 12 December 2011; Vol. 733, c. 993 and c. 995.]

I hope that the Minister will clear up some of the confusion this morning on the Government’s view of the GLA, and on the perceived and reported fight between the Department for Environment, Food and Rural Affairs and BIS on the where the GLA should sit. It is right that it sits with DEFRA in its current guise. It should not be transferred to a Department that is considering deregulation and stripping out the safeguards put in place by the GLA.

[Andrew George]

On that point, the hon. Gentleman appears to be contradicting himself. On the one hand, he is saying that the GLA should be extended to the construction trade and other trades. On the other hand, he is saying that it should remain in DEFRA. If it goes beyond the parameters of the operation of DEFRA, does he not agree that it would be appropriate to rest the body in another Government Department?

[Ian Murray]

I was about to come to that. I agree that that seems inherently contradictory, but the key fact about the Gangmasters Licensing Authority sitting in DEFRA is that it is there to do a particular job, which it is doing rather well. Moving the GLA from DEFRA to BIS would be putting it into a Department that is looking at deregulation and is running the red tape challenge. A previous Under-Secretary at BIS—now the Secretary of State for Energy and Climate Change—has made clear remarks about where the GLA should sit and what its function should be. Indeed, he initiated the Macdonald report, which recommended a light-touch regulatory approach. If the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon) commits the Department at least to examining the extension of the powers of the GLA, there might be an argument about which Department it would sit in, but my point is that in this particular confusion, DEFRA is the best place for the GLA to sit. Moving it to BIS would merely be an act of deregulation, rather than showing support for an organisation that is prone to be hugely successful.

Will the Minister at least examine the possibility of not diluting the GLA, but extending it to other areas? We have heard about similar problems of exploitation and unlawful practices in construction, the social care sector and hospitality. There is evidence that the limited GLA remit has led to the displacement of rogue operators from GLA sectors into other parts of the labour market—the point made by my hon. Friend the Member for Midlothian. The Trades Union Congress has identified a strong case for extending the GLA licensing scheme, a view shared by the Select Committee on Home Affairs in its report on “The Trade in Human Beings” back in 2009.

There is also support for an extension to the GLA’s remit in the business community; that is critical to where the GLA currently sits in the Government’s thinking. Nearly three quarters of the gangmasters who responded to the 2008 survey by Liverpool and Sheffield universities, which I mentioned, said that the GLA scheme should be extended to other sectors—either to all sectors, or especially to the construction and hospitality sectors. That is significant, because many gangmasters operate in other sectors that are not subject to GLA regulation, most notably non-food manufacturing, distribution, cleaning and construction. Good business wants a level playing field, which can be delivered only by dealing with this contemporary slavery.

Recently, controversy has surrounded areas that the GLA has looked at, such as dairy farming, but the courts have recognised that, again, it is clearing up the supply chains. There is also a strong view that forestry should be removed from the GLA remit, but does that not provide a reason to allow the GLA to follow the evidence of gangmasters into any industry? I pose that question to the Minister. That way, gangmasters, rather than the industry, become the issue. Let the evidence follow the crime, if the evidence is there to investigate.

Food Prices and Food Poverty

Andrew George Excerpts

Monday 23rd January 2012 Commons Chamber

[Mary Creagh]

Yes, it is slightly bizarre that that should be the case. I do not understand why, having battled so hard to secure minimum standards across the sector, the Secretary of State should think it acceptable to water them down, unless it is about saving money in pursuit of an ideological objective, but that could surely never be the Government’s intention.

I have mentioned “Richard Corrigan on Hunger” and the hospitalisation of children. People also talk in that programme about lunch boxes containing last night’s cold chips and ketchup. In government, we set up the School Food Trust, whose latest research shows that the average local authority-catered school dinner has gone up by 5p in the past year to £1.88 in primary schools, and by 4p to £1.98 in secondary schools. Councils are forced to charge more as their Government funding has been cut. We have heard today about councils that are doing their best to prioritise children’s nutrition. Those price rises could force parents to take their children out of school-meal provision and make do with a lunch box. If someone has three children who do not qualify for free school meals, £6 a day or £30 a week is an awful lot of money to find.

Food will be a defining issue for this century. The price spike in food commodities in 2008 showed that the era of cheap food may not be with us much longer. Increases in commodity prices—oil, fertiliser and pesticides—all contributed to year-on-year food price inflation of 6% last September: the second-highest increase in the EU, apart from Hungary. That 6% added £233 to the food bill of a family of two adults and two children. Food inflation, currently at 4%, remains higher than most pay rises that people will receive this year. As prices rise, people are eating less beef, lamb and fish, and more bacon. People are shopping around and trading down, and there is less supermarket loyalty. Figures from DEFRA reveal a 30% fall in the consumption of fresh fruit and veg by the poorest fifth of families since 2006. Those families are eating just 2.7 of their five-a-day fruit and veg.

We need a better understanding of what is driving up food prices, and how costs and risk are transferred across the supply chain. However, shopping is confusing and labels do not always show the true costs. Supermarkets are not required legally to show the unit cost on special offers, so they give the price pre-discount, which makes it impossible to compare prices on the shelf; or they give the price per unit of fruit, rather than by 100 grams, making comparisons impossible. We want supermarkets to be more transparent in their labelling to ensure that shoppers get the best deal. We want them to help people to eat healthily. Our traffic light system was rejected by significant players in the food industry, who have turned their back on what consumers want and need to make healthy choices.

We want a fair and competitive supply chain for growers, processors and retailers. The Competition Commission in 2008 found that there was an adverse effect on competition from unfair supply chain practices. It recommended that supermarkets with a turnover of more than £1 billion a year should be prevented from imposing retrospective discounts and from changing terms and conditions for suppliers. That leads to an unfair spread of risk and cost down the grocery supply chain, and to short-termism in relationships. [Interruption.] I thought I heard a phantom sedentary intervention, but that is not the case. We wanted a voluntary approach, but the supermarkets were unable to agree a way forward. That is why Labour in government secured cross-party agreement for a groceries code ombudsman to ensure a fair deal for farmers and producers. This Government’s delays and procrastination mean that the adjudicator will probably not be up and running until 2014-15.

[Andrew George (St Ives) (LD)]

I note that the motion expresses dismay at the Government’s delay, yet it asks for the groceries code adjudicator to be introduced in the next Parliament, rather than in the next parliamentary year, which I assume is a drafting error. Leaving that aside, given the fact that the first Competition Commission report was in 2000, and the Competition Commission report to which the hon. Lady refers was completed in 2008, what word other than “dismay” would she use to describe the Labour Government’s response to that report?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I remind everyone in the Chamber that the debate ends at 7 pm? There is already a time limit of eight minutes on Back-Bench speeches. Interventions should therefore be short, and I hope opening speeches will not be overly long.

--- Later in debate ---

[Mrs Spelman]

As I am sure Opposition Front Benchers are aware, the lead Department on the grocery code adjudicator, both for the Government and for the Opposition, is of course the Department for Business, Innovation and Skills, but we have been very clear as a Government that we are fully committed to introducing the adjudicator as soon as possible.

Free and fair competition is the key to a healthy market, and it is right that the adjudicator should make sure the market is working in the best long-term interests of consumers. In this Session, we published a draft Bill to allow pre-legislative scrutiny. It was a popular measure, welcomed on both sides of the House, and as the Leader of the House said on 15 December 2011:

“There will be a second Session of this Parliament, and the Groceries Code Adjudicator Bill is a strong candidate for consideration as part of it.”—[Official Report, 15 December 2011; Vol. 537, c. 937.]

So there is no delay, but it has to be done right.

It is important to bear it in mind that, overall, the Competition Commission found that retailers are providing a good deal for their customers, and they should not be prevented from securing the best deals and passing the benefits on to their customers, but, similarly, we are clear that they should be required to treat their suppliers lawfully and fairly.

During pre-legislative scrutiny, the Business, Innovation and Skills Committee suggested that third parties should be allowed to lodge complaints. Our position remains that it is more appropriate for complaints to be lodged directly or indirectly by suppliers, but we are open to considering further arguments on extending the range of those who can trigger an investigation. That is the benefit of pre-legislative scrutiny. We recognise that third parties, including trade associations, have a valuable role to play, so the adjudicator will be fully free to gather evidence from trade associations once an investigation has begun.

The draft Bill provides the adjudicator with the power to name and shame retailers that are in breach of the code, and we believe that, in a highly competitive market, retailers will not risk reputational damage from unacceptable behaviour towards suppliers. If negative publicity proves insufficient, however, the draft Bill contains a reserve power for the adjudicator to impose financial penalties, subject to an order made by the Business Secretary but without the need for primary legislation.

I hope the House agrees, therefore, that these measures represent significantly more progress than was made under the previous Government and should be generally welcomed.

[Andrew George]

It has been suggested, in particular during the intervention by the hon. Member for Shipley (Philip Davies), that the adjudicator would introduce inflation to the food market, but the Competition Commission itself, which is after all independent on the issue, made the situation quite clear, stating that

“if unchecked, these practices”—

the practices that the Secretary of State and others have described—

“would ultimately have a detrimental effect on consumers.”

It is quite clear that they would have a detrimental effect on prices for consumers.

[Mrs Spelman]

I thank my hon. Friend for his intervention. The Competition Commission clearly keeps the practices of retailers under scrutiny and sees a benefit in independent adjudication of fairness in the supply chain.

I shall turn to other points in the motion. The hon. Member for Wakefield espouses the virtues of the Healthy Start programme, which this Government have continued, and no one will argue with the role of food banks, which are an excellent example of the big society. They are not new, as Churches have been redistributing food in that way down the decades, and we are four-square behind organisations such as FareShare, which do excellent work in the field.

In making it easier for shoppers, this Government have wasted absolutely no time in working with the food industry to simplify food date labelling. Last autumn I made it clear that one date should appear on the label, so that there is no confusion between “use by”, “use before”, “display until” or “store until”. There should be one date: if the product is perishable, the label should state “use by”, for food safety; if it is not, the label should state “best before”. In that way, we can certainly help people to reduce the amount of food that goes to waste.

--- Later in debate ---

[Andrew George (St Ives) (LD)]

I shall do my very best, Mr Deputy Speaker. I am the first Liberal Democrat speaker, and I regret the fact that we have only six minutes. Of course, I am not criticising you, Mr Deputy Speaker.

[Bob Stewart (Beckenham) (Con)]

There are no more Liberals here.

[Andrew George]

The hon. Gentleman has only just arrived in the Chamber, so I advise him not to start.

I welcome the fact that the Opposition have introduced this important debate, the full title of which is, “Rising Food Prices and Food Poverty”. That is appropriate, although I notice that the motion is rather narrow, and refers primarily to the groceries code adjudicator. Following my intervention on the hon. Member for Wakefield (Mary Creagh), I urge the hon. Member for Ogmore (Huw Irranca-Davies), when he replies to the debate, to ensure that the Opposition reflect carefully on the drafting error in the motion, which sends an unhelpful message to those of us who believe that the primary message of today’s debate concerns the speed of the introduction of the groceries code adjudicator. I urge him to withdraw the motion when he has an opportunity to do so. It is vital that we send a strong, clear message through our debate.

I acknowledge the point that many Members have made about the impact of food poverty and the fact that people have to choose between paying their rent and eating, or between paying their heating bill and eating. Nowhere does that apply more than in my constituency, which has been at the bottom of the earnings league table for years, pretty much since records began. Tragically and regrettably, a food bank is required in Penzance, which is strictly managed by an excellent team of volunteers led by David Mann, Brenda Fox and others, who do very good work. They consider it a matter of enormous regret that such things are needed.

I welcome other topics raised by the hon. Member for Wakefield, including the importance of maintaining regulation by the Gangmasters Licensing Authority and ensuring that agricultural workers are properly remunerated for their work. She expressed dismay at the failure to introduce the grocery code adjudicator. I remind her of the dismay that many of us felt at the failure of the previous Government to act in this area. However, those who have followed the debate over many years recognise that this is a matter on which there is cross-party consensus.

The hon. Member for Ynys Môn (Albert Owen), who was mentioned earlier, the former Member for Stroud, David Drew, who did some excellent work in this area, the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), the hon. Member for South Holland and The Deepings (Mr Hayes), who is the Minister for Further Education, Skills and Lifelong Learning—Members across all parties—have recognised that the abuse of power by the supermarkets is unacceptable.

In its 2008 report the Competition Commission recognised that there was a climate of fear in the supply chain. That had been identified by the Office of Fair Trading report in 2004, when it reviewed the failure of the then supermarket code of practice and the urgent need for a grocery supply code of practice. As a result of the Competition Commission’s work, that has been in place since February 2010, but it is a little like a game of rugby without a referee. It is all very well having the rules in place, but if there is no one to enforce them, we do not know that rampant abuses of power are not occurring within the supermarket sector.

I declare an involvement as the chair of the Grocery Market Action Group, which includes representatives from the National Farmers Union, Friends of the Earth, the Association of Convenience Stores, the British Brands Group and other organisations. Since 2006 we have been providing evidence to the Competition Commission and pushing for an adjudicator. We have made the point that we need a supermarket watchdog that has proactive powers, can take information anonymously, can receive third-party and trade association evidence, and follow that through to an inquiry. Of course it is important that an adjudicator should not be able to go on fishing expeditions and waste the time and resources of supermarkets and their suppliers in undertaking pointless inquiries. That will sort itself out over time.

[Simon Wright (Norwich South) (LD)]

I know that my hon. Friend has been looking into the matter for some years. What does he consider to be the initial priorities of the adjudicator, once that office is established?

--- Later in debate ---

[Andrew George]

I am grateful to my hon. Friend. The objectives in the draft Bill are helpful. However, the importance of speed should be emphasised. Most of the framework is in the Bill, and I would be prepared to have it put in place early, even if we failed to achieve some of the elements that I have spoken about—proactivity, anonymity, third-party referral to the adjudicator, which is important, and the power to fine.

The Bill may well enable the Secretary of State to introduce regulations allowing the adjudicator to fine supermarkets that fall below the standards set in the Bill. To bring about reputational damage, which is the only way in which supermarkets will be made to change their practice, that additional power will be needed. It is important to recognise that not all the supermarkets and those who will be brought under the code object to the proposal. Supermarkets have been achieving record profits in the deepest recession, so to argue that they cannot afford it is rubbish.

I say to the hon. Member for Ogmore that speed is of the essence. The motion should be withdrawn so that we send a strong message to the outside world.

--- Later in debate ---

[Huw Irranca-Davies]

Charitable effort has indeed always been part of this country, before the phrase “big society” was invented, but never with the proliferation that we currently see. It is a tragedy.

Let me relate a direct story about one not unusual family of four in England today. One parent is out of work and the other is in a low-paid job. Before Christmas, they found themselves behind on their mortgage, with their council tax debt racking up and the gas and electricity meters running out of money. They receive working tax credit and child tax credit, both of which will soon be cut by the Government. Their home is increasingly cold and dark and the only things in their cupboards are food parcels from the local food bank. The right hon. Lady shakes her head, but they buy what fresh food they can when they can, but without the support and kindness of local people, they would simply go hungry. We would love that to be fiction, but such are now the facts of life for too many families.

Into that harsh reality stumbles a throwback to the 1980s—a former Conservative Minister who was then the hon. Member for South Derbyshire. When confronted recently with that dire social and economic regression, she boldly answered:

“Are you telling me people in this country are going hungry? Seriously? Seriously?”

Yes, seriously—former Conservative Ministers might not want to believe it, but it is a searing indictment of the Government that more and more people across England, Wales, Scotland and Northern Ireland find themselves relying on food banks, one of which was opening every week last year. Those people depend on the generosity of others to get by.

Last year, 60,000 people received help from a food bank, a figure that the Trussell Trust predicts will rise to 130,000 in the next year. For all those impoverished families who now need a voice in the Chamber, the words and sentiment of the former Member for Ebbw Vale echo down the years: this is their truth, our truth—tell me yours. What is true across the UK is true in my constituency and neighbouring constituencies. From Llanharan to Gilfach Goch, and Maesteg to Pontycymmer, and all points between, food banks proliferate.

We should pay tribute to the many volunteers and organisations involved, such as the Bridgend food bank and the Pontyclun food bank, but the issue is a terrible indictment of the economic misery inflicted on families under this failing coalition Government. I challenge the Minister and the Government to dispute that stark reality. The Government’s failing policies and inaction on the economy mean that families are finding it hard to make ends meet and struggling to cope with rising living costs, higher energy, housing and food bills, and the constant fear that they could lose their jobs—if they have them—at any time.

For too many, eating is losing out to heating and housing costs. Charities warn that having a job is now no protection; an estimated 10% of food bank recipients are middle earners whose salaries have been cut or frozen or who have recently lost their jobs. Food prices rose by more than 4% last year. Lower-income families are eating less fresh fruit and vegetables. They spend more than 15% of their income on food. In real terms, it comes down to a couple with two young children spending an extra £233 on their annual food bill.

When surveyed by Which? in the last year, more than half of consumers said that increasing prices made it difficult to eat healthily. Nearly 90% genuinely fear the increasing cost of food. Those are startling figures. However, when people need help, the Government seem torn between prevarication and paralysis when it comes to taking action that will go some way towards easing the pressure on people’s wallets—not least by assisting farmers and manufacturers of the food we eat with the retail and financial challenges that they face.

When in government, Labour took action after the hike in food prices in 2008 to address that challenge and to produce more food sustainably. In 2010, we published the first Government food strategy for 60 years and our priority was a sustainable, affordable competitive food sector. We gained cross-party support for the supermarket ombudsman—to ensure a fair deal for farmers and food producers, who still need a fair deal from major retailers—and for the implementation of the groceries supply code of practice in February 2010.

Yes, there was more to be done, but the creation of an ombudsman—the groceries adjudicator—to enforce and monitor the code of practice was a recommendation of the Competition Commission and is supported by the Environment, Food and Rural Affairs and Business, Innovation and Skills Committees. It would do a great deal for farmers, food manufacturers and the public. It was not just us asking for it.

[Andrew George]

I have to put the hon. Gentleman right. The Competition Commission was empowered and used its power to introduce the groceries supply code of practice; it was not the last Labour Government. Will he retract that claim?

[Huw Irranca-Davies]

I am happy to say that the code is in place, and that happened while the Labour party was in government. I agreed with the hon. Gentleman when he said last September:

“Every week the government fails to act, farmers are finding themselves in more difficulty.”

So let us get on with it.

We do not want bluff and bluster; we do need action. As my hon. Friend the Member for Wakefield (Mary Creagh) said, we ignore the perfect storm of rising prices, falling incomes and food poverty at our peril. I urge the House to support the motion.