Agriculture Bill (Tenth sitting)

Baroness Chapman of Darlington Excerpts

Committee Debate: 10th sitting: House of Commons
Tuesday 13th November 2018 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing the following:

Amendment 97, in clause 17, page 12, leave out lines 39 to 44 and insert—

“(2) In this Part ‘exceptional market conditions’ exist—

(a) where—

(i) there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and

(ii) the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products, or

(b) if, on the day after exit day, the United Kingdom has not entered, or secured an agreement to enter, into a customs union with the EU.”

Amendment 117, in clause 17, page 12, line 40, leave out paragraph (a) and insert—

“(a) there is or has been a significant disturbance in agricultural markets or a serious threat of a significant disturbance in agricultural markets, or”.

This amendment and Amendments 122 and 123 would allow a declaration of exceptional market conditions where there is, or there is a serious threat of, a significant disturbance in agricultural markets; and would allow a declaration to be made in respect of events in the past.

Amendment 122, in clause 17, page 12, line 44, after “achievable for” insert

“or costs incurred in the production of”.

See explanatory statement for Amendment 117.

Amendment 123, in clause 17, page 13, line 2, after “are” insert “or have been”.

See explanatory statement for Amendment 117.

Government amendment 6.

[Jenny Chapman (Darlington) (Lab)]

It is a pleasure to be back in Committee this afternoon. I look forward to hearing the hon. Member for North Dorset’s account of his lunch; he is not here—he is probably finishing his cheese and biscuits.

When you adjourned the Committee this morning at 25 minutes past 11, Sir Roger, I was about to speak to amendment 122. To give colleagues their bearings, we are on page 12 of the Bill and dealing with clause 17. The amendment would insert just a few words about exceptional market conditions. What we are asking for is difficult to explain without reading out a whole subsection of the clause, so please bear with me. Clause 17(2) states:

“In this Part ‘exceptional market conditions’ exist where—

there is a severe disturbance in agricultural markets or a serious threat of a severe disturbance in agricultural markets, and

the disturbance or threatened disturbance has, or is likely to have, a significant adverse effect on agricultural producers in England in terms of the prices achievable for one or more agricultural products.”

All we want to do is to include, in addition to the reference to an impact on the prices achievable, a reference to the costs incurred in the production of such products, because the issue is obviously not just the prices that can be obtained for them, but how much the costs of producing them may be affected.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

When the hon. Lady talks about events that may have a severe impact on British agriculture, could she by any chance be referring to the points made by the shadow Chancellor of the Exchequer yesterday, when he talked about the collective ownership of land? Surely that is a policy that, when enacted by Stalin, killed millions of people in the Soviet Union.

[Jenny Chapman]

I think that if that were the policy, it would indeed count as an exceptional market condition, and I expect that the Government might want to intervene in some way.

Let me move on. As drafted, the power to act applies only if there is an impact on prices, but obviously there could be a situation in the sector that resulted in excessive additional costs for farmers but did not necessarily have an impact on the price of the product. Examples would be the costs of taking emergency action, such as cleansing and disinfecting, or input costs such as those for fodder. If the clause included our wording, that would enable the Secretary of State to act, or would just make it clearer that he could act when there was an effect on not only the prices achievable but the costs incurred.

Widening the scope, subtly but importantly, beyond just the impact on agricultural product prices would make the measure more flexible and reflective of the nature of exceptional conditions. In an enabling Bill, it is better to have powers with the full scope to deal with the unexpected. For now, that concludes my remarks on this group of amendments.

[The Chair]

Amendment proposed, 97, in clause 17, page 12, leave out lines 39 to 44 and insert the words on the amendment paper. The question is that the amendment be made.

[The Minister for Agriculture, Fisheries and Food (George Eustice)]

Apologies, Sir Roger: there is quite a large number of amendments in this group, and I am just finding my way to amendment 46. This is another attempt to replace the word “may” with “must”. Again, the argument is that the use of the word “may” is wrong. The Agriculture Act 1947 has not been referred to at all today, and I know that the hon. Member for Stroud likes it a great deal, so let me try this quotation:

“Where…it appears to the appropriate Minister expedient so to do, or if it appears to him otherwise expedient so to do in the public interest, he may by order fix or vary any such price”.

Even provisions in the 1947 Act, in this case relating to deficiency payments or a price support mechanism, use “may”.

The important thing to note about all these sorts of powers is that, by definition, there is a wide element of discretion. We are talking about dealing with crisis scenarios. The aim is not to intervene routinely all the time but to intervene expeditiously and in a fleet-of-foot way when a crisis needs to be addressed. The wording we have used in the clause and in many other areas in this part of the Bill is largely borrowed from what currently sits in EU legislation. The European Union also has discretionary crisis powers for exceptional circumstances, and its wording and approach are similar to what we have here, and, indeed, what we have here is similar to what we had in the 1947 Act.

Amendment 97 would add an additional definition of “exceptional market conditions”: if, on the day the United Kingdom leaves the EU, it is not in a customs union, that, of itself, should be an exceptional market condition. The hon. Member for Darlington comprehensively set out her views on these matters. I do not want to drift too far into the debate about customs unions, because we will have hours and hours of fun in the months ahead debating the agreement that comes back before Parliament.

However, we do not have to be in a customs union with the EU to avert a so-called exceptional market circumstance. We have been clear that we want a comprehensive free trade agreement and, crucially, a customs agreement—although not a customs union. We also seek a transition period. We are clear, as a Government, about what we seek in this negotiation, which is in its closing stages.

[Jenny Chapman]

Can the Minister explain what a customs agreement is?

[George Eustice]

Yes, I can. If the hon. Lady reads the proposal that came out of Chequers, she will see that a customs agreement is one that allows us to strike trade deals with the rest of the world and in which we would collect and process, on behalf of the European Union, the duty due on goods destined for the EU.

[Jenny Chapman]

Will the Minister give way?

[George Eustice]

I will not, because, as I said, I want to deal with the substance of the clause.

The Government are clear about our approach to getting in place a new free trade agreement and a partnership. However, there are several other flaws with the amendment. First, we have to bear in mind that the impacts of a no-deal Brexit will vary from sector to sector; it is not possible to determine exactly what they will be. For instance, we know that the sheep and barley sectors export quite a lot of their goods to the European Union. However, we are net importers in virtually every other sector, so although there may be an impact on sheep, there would almost certainly not be on beef, because there will be less import competition.

I do not think it is wise to put this proviso into the Bill. The reality is that, if the terms on which we left the European Union—be that with no deal or any other circumstance that led to restrictions on trade—led to a severe disturbance in the agricultural market, and if that disturbance threatened to have a significant impact on agricultural producers, the power is already there to act. We do not need to artificially bring a current debate around the customs union into a Bill that is built to last for the long term.

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[George Eustice]

That is the case with a number of other things that we import from other countries, including Iceland, which we import a lot of fish products from. We have ways of dealing with these issues.

As I said, the approach that we have adopted with the common rule book and the customs agreement will address those issues.

[Jenny Chapman]

Will the Minister give way?

[George Eustice]

I will not give way. With these interventions, a number of Members are giving the impression that they would rather be in the main Chamber taking part in the EU debate than in a debate about future farming policy.

The purpose of this amendment is to define not being in a customs union as being a crisis in and of itself. That is absolutely wrong, because we can have a highly successful partnership and trade agreement that does not require us to be in a customs union with the European Union. Many nations in this world are not in a customs union with the European Union.

[Jenny Chapman]

Some of the contributions have been helpful in giving the lie to the idea that you cannot trade successfully and extensively with countries in other parts of the world while in a customs union, but that is not the point I wanted to make. The Minister says that not being in a customs union is not a crisis, but can he name any border anywhere on the planet where the kind of frictionless trade on which our industry depends is achieved without being in a customs union?

[George Eustice]

There are many successful economies in the world that are not in a customs union with the European Union.

I come back to my point: if as a consequence of the agreement—or indeed of there being no agreement—with the European Union, there are market disturbances that have an impact on agricultural producers, the power is there to act. There is no need to try to define additional powers in the way that this amendment does.

Amendments 117 and 123 seek to downgrade the test from a severe market disturbance to a significant market disturbance. It is wrong to lower the threshold in that way, for reasons I want to explain. We had evidence from one of the academics that suggested we needed something akin to the old deficiency payments system in that famous 1947 Act. The world has moved considerably since that point, and in many sectors we are seeing the development of viable futures markets to help farmers manage risk. In some countries—notably the US, in places such as Chicago—they put in place legislation to deliver the transparency needed to get a functioning futures market that enables farmers to defend themselves against price fluctuations.

We also have some interesting projects being developed in the UK. We are world leaders in issues such as agricultural insurance. There are some interesting projects on forming mutual funds—effectively, mutualised risk insurance models—that help farmers to insure their margin and protect a given quantity of milk, for instance, at a given price. Moving these powers away from just intervening where there is catastrophic risk, and away from a “severe” to some sort of “significant” disturbance, is the quickest way to snuff out the development of those private futures markets and risk management models.

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[Dr Drew]

I shall be very quick, because this is the same argument as I used earlier—we make no apology for bringing it back. Clause 20 may not seem to be the most important in the Bill, but the success of any farming operation nowadays depends on marketing. The measure will take effect in a number of different ways. Far too much discretion is allowed to the Secretary of State. These important responsibilities should be encompassed within duties not powers, which is why we make no apology for trying to make it a duty.

Amendment 47 is simple. We do not understand why the Minister has been reticent throughout the Bill to include duties so that successive Governments will know their responsibilities. This is a monumental clause that entails all manner of different requirements on the Minister: classifying different types of animal and plant variety, and how they are presented in terms of the way in which they are sold. Traceability is the issue that consumers feel most strongly about following the difficulties we went through with BSE and the cockle pickers. They want to know that what they are buying is produced in the manner best for animal welfare and that it is safe. They want to know where it comes from, and that the people who produced it have been paid fairly and are looked after.

This clause is important because it has all sorts of ramifications. We ask the Minister to consider when he will include duties if not in clause 20. This is about consumer protection as much as it is about the protection given to producers. My hon. Friend the Member for Darlington is going to follow up with other issues that are specified, relating to where we would be with our withdrawal from the EU, but this amendment is plain and simple. We are asking the Minister to put at least one duty in the Bill. That is crucial and would enable consumers to know the Minister is doing something because he has to do it for their benefit, and not doing something just because he wants to. I hope he considers clause 20 important and that he listens to us.

[Jenny Chapman]

I will speak to amendments 82 and 83. As my hon. Friend the Member for Stroud said, this argument is to some extent a rehash of the arguments we made earlier when we insisted that the Government should deprive themselves of the ability to amend regulations on the protection of the environment or consumer rights, which are so exceptionally important and valuable to the country that ideally they should not be watered down, dispensed with or altered by Ministers without the use of primary legislation—it should not be done by regulation.

In amendment 82, we seek to safeguard any part of retained EU law relating to the protection of the environment or consumer rights. Clause 20 allows the Secretary of State to amend regulations relating to marketing standards, including the power to amend or revoke standards set out in retained EU legislation. That is quite some power. Current EU legislation pertaining to marketing standards will become retained EU legislation in section 6 of the withdrawal Act. The Secretary of State obviously understands that this is a significant power because even the Government have said that they recognise that they will need to use the affirmative procedure. However, he wants to be able to change the legislation whenever he sees fit.

The Government ought to be aware of just how extensive that power is, and that Parliament will want to be involved and concerned about how the power will be exercised in future. It is welcome that the Government accept the need for the affirmative procedure, but we ask that they accept safeguards in the Bill so that we can be confident that, as a consequence, environmental protections and consumer rights cannot be watered down—or at least that it will be difficult to do so.

We have not debated those important issues as much as others such as support for farmers. We do not want these important measures to be diminished in any way through lack of insufficient debate during the progress of the Bill. The measures were the subject of considerable concern on the Floor of the House during debates on the withdrawal Act. Committee members may remember that many amendments were tabled along the lines of the ones we are discussing. There was great frustration and suspicion that future Governments would be able, through regulation, to make changes to these important safeguards, which have been copper-bottomed up until now because they have been part of EU law, much to the irritation of some Members.

I can see the argument that Members will be pleased when such safeguards can be changed by this Parliament, but that needs to be done in the right way. It is no good saying that things are protected just because power resides in Westminster with the UK Government or in a devolved Administration.

[Sandy Martin]

Is not the nub of the issue that the changes and decisions will not be made in this place but in Whitehall?

[Jenny Chapman]

A procedure would take place in Parliament but we have all sat on those Committees and seen just how thorough the examination of regulations can be.

The protection of the environment and consumers is very important. We would argue that, if anyone wants to change those important rules and the law of this country, they should introduce a Bill. We can then scrutinise it properly, with votes on the Floor of the House and the involvement of both Houses. Let us have the warranted scrutiny because these incredibly important issues affect how our country perceives itself and is perceived overseas, and the protection of the environment. The protections warrant the hard work that would need to be undertaken by Ministers, which is what people put their hands up for when they voted to leave—they wanted the ability to make their laws properly, as they saw it. To do that by regulation, through whatever procedure, is not what the public had in mind when they voted in 2016.

I am afraid that warm words from the Minister will not do this time, nor will assurances that Parliament can be involved when future regulations are proposed. We are very concerned. Subject to what the Minister says, we might want to test the opinion of the Committee on these amendments.

[George Eustice]

It is important to note that amendments 47 and 82 are to some extent antagonistic. On amendment 47, as the shadow Minister said, we have debated the issue of “may” or “must” on many clauses. I simply reiterate that having that power conveyed through the term “may” is how comparable legislation is drafted and is the approach we take. In addition, in this instance, there is another reason why “may” is absolutely the appropriate word to use rather than “must”.

The hon. Member for Stroud should read the clause in the context of the fact that all existing EU marketing standards will be brought across through the European Union (Withdrawal) Act 2018 and placed on a UK statutory footing. It is therefore not the case that, in the absence of immediate action by the Secretary of State, there will be no marketing standards. In the absence of any action under clause 20, the position would be that retained EU law on marketing standards endures and remains after we leave the EU as it was when we were in it. Paradoxically, if there were a requirement that he “must” introduce regulations in all areas, the Government might be forced to change retained EU law that they were perfectly content with and not in a hurry to change.

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It is wrong to regard amending or repealing retained EU law as watering down standards. As we leave the European Union, we must increase our confidence in our ability to judge such matters and take the steps necessary to protect consumers. The EU rulebook has not stood still. New challenges and issues will present themselves. We may want to change some measures relating to marketing standards and carcase classification, for example. It is wrong to put a lock on the retained EU law that we bring across. It is right that we retain the option to improve it or to repeal it and replace it with something better. We must not assume that all change is bad. Often, change is a good thing.

[Jenny Chapman]

Let me reassure the Minister. I am not saying that we should keep things as they are and never, ever change anything. I just think that, if he intends to change these things, he ought to introduce an environment Bill or a consumer protection Bill so that we can decide where the country is going, and not just leave it to the Secretary of State.

[George Eustice]

Of course, at the moment it is just left to the European Union, and we have no input at all. The hon. Lady will note that the set of regulations set out in clause 20 will be subject to the affirmative procedure. We recognise that these are important issues and that retained EU law may be replaced—there is the option to do that—so we have made them subject to the affirmative procedure. Parliament will have a role.

Amendment 83 is about the duty to consult, which we have covered on many occasions. I say again that DEFRA loves consultations. We have consultations on all sorts of matters. I can give the hon. Lady an undertaking that, before making any changes under clause 20, there will indeed be a consultation—not only because we always consult on matters of this sort anyway, but for another reason: as I explained, on issues of food standards, and food safety in particular, there is already a statutory requirement to consult. It is currently contained in article 9 of EU regulation 178/2002, which requires consultations on changes to food law. That EU regulation will come across in the retained EU law. In addition to my normal argument, there is an even stronger argument, which is that there is already a statutory requirement for changes in many of these areas, because they relate to food standards.

Having addressed hon. Members’ concerns and explained that retained EU law will be the starting point, and that we need not be in a hurry to change these things if we do not want to, I hope that the amendment will be withdrawn.

[The Chair]

Order. I am looking at you, Ms Chapman, in case you want to speak before Mr Drew winds up. I was not able to allow you to speak last time because he had wound up the debate.

[Jenny Chapman]

I am grateful, Sir Roger. We are all learning as we go. The teamwork that you see on the Opposition Front Bench is seamless, but it requires us to get up in the right order.

I accept what the Minister said. His undertaking on having a consultation is welcome, and I look forward to holding him to it. I remain concerned about the subject of amendment 82. I hear what he says, but we are at a turning point, and we must to start as we mean to go on. The point we are making to the Government is that we want these things to be done properly and as transparently as possible, with as much involvement of MPs as we can manage, because that is how we involve wider society in our deliberations. These are matters of intense importance and I would like to test the Committee’s opinion on amendment 82.

[Dr Drew]

We have had a number of votes on “must” and “may” so I will simplify this by withdrawing amendment 47, but we are happy to push amendment 82 to the vote.

Amendment, by leave, withdrawn.

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[Deidre Brock]

No, I do not in this instance. The hon. Gentleman is one of those who tried to table an amendment to schedule 3 last week. That demonstrates the vulnerability of inserting a schedule into the Bill. It would potentially allow a Member who is not even a member of the Government to alter something and control the Welsh Government’s ability to make payments to whoever they wish under that schedule. It is quite amusing, therefore, that he makes that contribution.

[Jenny Chapman]

I am trying to understand this. As I understand it, the Welsh Government put forward a schedule that one could call a power grab—they have helped themselves to some quite nice powers here—and the Government accepted it. I cannot see any attempt to amend the schedule getting anywhere, so I am not sure what lies behind the hon. Lady’s reluctance to submit a schedule.

[Deidre Brock]

We do not need a schedule inserted into the Bill. We do not need anyone to legislate for us on devolved matters. We have been producing our own legislation in such areas since 1999, when there was devolution to the Scottish Parliament. In terms of rushing into making legislation, I would have thought the hon. Lady would share my concerns about the views expressed by the Delegated Powers and Regulatory Reform Committee in the House of Lords on the Bill. It clearly demonstrates what happens when we rush into making legislation. The Scottish Government knows that it does not legally have to do it. They would much rather take their time, consult all the necessary organisations within the sector and arrive at stability and simplicity, which is of course the name of our document.

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[Jenny Chapman]

I will not say very much; I just want to echo some of my hon. Friend’s points. I was involved with the withdrawal Act, and today I have been reading the latest common frameworks document, which was released earlier today. A lot of it is about agriculture and the progress that has been made on agreeing frameworks for the UK after we leave the EU. It says:

“Further detail on the specific arrangements that are subject to ongoing discussion in relation to agricultural support is available online.”

Unfortunately, the detail is not in that document, so I have not had a chance to look at it. It is important for the Minister to indicate where the Government are at with this to inform how we proceed on these issues.

I have a few more questions about that. Our deliberations about devolution issues took place on the Floor of the House, so many hon. Members here might have taken part in them. Devolution is very contentious and important, and every now and again it is used to make points not directly related to the issues under consideration. I have a few questions about how the amendments might work and what the Minister thinks of them, because I have some concerns about them.

The Labour party is fairly relaxed about the approach set out in amendment 59. We can see the logic behind it, but we would like to ask the Minister and the hon. Member for Edinburgh North and Leith how they see it fitting with the ongoing negotiations about the establishment of common UK frameworks. That is the document that I have just referred to. Where are we? This is a moving thing, and the Minister is asking us to make decisions about a process that is still incomplete.

Amendment 60 works in conjunction with amendment 59, and seeks to remove the role of the Secretary of State and replace him with

“the appropriate authority to which an application is made under this section.”

I assume that it is consequential, given that amendment 59 seeks to redesign the process by which an application is made. Again, we are reasonably relaxed about that.

Amendments 60 and 61 seek to ensure that Scottish Ministers have the ability to grant consent to applications made to become a recognised producer organisation. What effect do the Minister and the hon. Member for Edinburgh North and Leith see that having in practice? How would it actually work? The Labour party is not stuck on this; we do not mind it. In truth, and I hope the hon. Lady does not take this the wrong way—I say this as a neutral observer representing a town in the north-east—these amendments look a little like politicking, rather than serving a true purpose. Can she assure me about what impact the amendments would have on the capacity of Scottish Ministers to process applications?

Amendment 64 is unfortunately a bit problematic, as it goes further than the devolution settlement currently allows. I am not trying to be provocative. I do not want to get into somebody else’s fight. The sticking point, if I have understood the amendment correctly, is that it seeks to ensure that the consent of Scottish Ministers is required for all regulations under sections 22 and 23, which extend to Scotland. As I understand it currently, the devolution settlement from the Scotland Act 2016 says that Westminster will not normally legislate in areas where the Scottish Parliament has competence. Admittedly, the Government have not shown great respect for that principle with the passage of the European Union (Withdrawal) Act 2018 and, as noted previously, this is not an area where the Scottish Parliament or Scottish Ministers currently exercise competence. If that is correct, the amendment would go further than the devolution settlement does at the moment.

The word “veto” has been overused in these debates in the past, but given the contentious relationship—if I can put it that way—between the UK Government and the Scottish Government at the moment, I am raising a concern and would be interested to hear what others feel about this. Were amendment 64 to be agreed, the Scottish Government could refuse to grant consent for provisions that relate to Scotland, which would be in the vast majority, given that the amendment covers the UK as a whole. Then we could be in a constitutional deadlock, which is not something that anybody wants to see. This process is all about avoiding that.

Officials in the Scottish Parliament are quite clear that they are committed to not diverging in ways that would cut across future frameworks and they agree that this is a necessary approach to take. I do not want to see anything that we might agree here interfering with other processes. The important people in all this are the Scottish farmers and producers, and I cannot help thinking that they would be looking at this and wondering where they stand.

I would like the hon. Member for Edinburgh North and Leith to clarify whether this amendment is seen as consequential to the others that she has tabled, as this is not an area where the Scottish Parliament or the Scottish Government have jurisdiction, and therefore consent would not currently be required when regulations are made. I am not trying to be provocative or to insert myself in the middle of an argument between the Government and the Scottish Government, but we need to be mindful of the potential impact that any row might have on the lack of support for producers in Scotland, because they need to come first.

[Martin Whitfield]

rose—