Sheep Farming: No-deal EU Exit

Baroness Chapman of Darlington Excerpts

Tuesday 3rd September 2019 Commons Chamber

[Jenny Chapman (Darlington) (Lab)]

When I was first elected to this place in 2010, I never thought I would find myself standing up to challenge the Government about the decimation of the UK’s sheep industry. The ancient practice of shepherding is as old as the hills, but it is now facing an unprecedented challenge brought by the threat of a no-deal Brexit. The threat of no deal brings with it a man-made, Boris-built disaster that could harm so many sectors from chemicals to cars, food to pharmaceuticals, and steel to services—virtually every area of economic activity in this country would be hit, and that includes the sheep industry. The idea that the rearing of lambs could be so comprehensively, cruelly and deliberately threatened by our own Government’s decision is beyond belief.

Keeping sheep is already a vulnerable business and a no-deal Brexit will just add to the problems. The unprecedented loss of markets and the imposition of tariffs and barriers will severely harm this industry.

[Susan Elan Jones (Clwyd South) (Lab)]

Does my hon. Friend agree that this is yet another example of privileged, idle old Etonians who could not care less about the lives and livelihoods of our working hill farmers in Wales and across the UK?

[Jenny Chapman]

My hon. Friend is absolutely right. I represent an urban constituency, but even in urban Darlington there are agricultural workers whose jobs would be affected by the effect of a no-deal Brexit on the sheep industry.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Lady for bringing this matter to the House for consideration. I spoke to her earlier today and perhaps her opinion on Brexit is very different from mine, but the Conservative Government have indicated that as long as they have the power to do so, they will maintain the grants that are available for farmers, and for sheep farmers in particular. Does she agree that the problems and the deficits there might be in lamb prices could be offset by the Government’s commitment to give what the EU gives now?

[Jenny Chapman]

If it was that simple, we would not need to have this debate. This is not just about farm payments; it is about loss of markets. That is something that has not been properly understood, and the Government have not given a decent account of what they intend to do to address it.

[Brendan O’Hara (Argyll and Bute) (SNP)]

The hon. Lady will know that Scotland is home to one fifth of the entire UK sheep flock and that much of that work is being done by farmers and crofters in less favoured areas such as my own constituency. Leaving the European Union with no deal would have a devastating effect on farmers and crofters, so will she join me in urging the Government to listen to the words of Andrew McCornick of the Scottish National Farmers Union, who has said unequivocally that a no deal must be avoided because our farmers need security and fair access to European markets?

[Jenny Chapman]

I agree with that. One of the specific problems faced by the farmers the hon. Gentleman describes is the fact that those flocks possess unique characteristics and that once they are gone they may never be able to be bred back into our national flock.

[Wayne David (Caerphilly) (Lab)]

Is not the heart of the problem the fact that lamb would not be competitive if it had a 48% tariff placed on it? That would be an absolutely ridiculous situation. The Government might talk about short-term subsidies to help the immediate situation, but that is no way to save the industry as a whole.

[Jenny Chapman]

That is absolutely right.

[Dr Sarah Wollaston (Totnes) (LD)]

This will certainly devastate the hill farmers in my constituency, but we must also consider the impact that it would have on the landscape. Many people do not realise that our landscapes are the way they are because of grazing.

[Jenny Chapman]

The hon. Lady makes an excellent point, and that is why even my constituents in urban Darlington care about what happens to our national flock and to the livelihoods of the tens of thousands of people who work so hard to keep our landscape the way that it is.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

I wonder whether the hon. Lady was as disturbed as I was to hear the Leader of the House speak so casually earlier this evening of trading purely under WTO rules, given that analysis from the Agriculture and Horticulture Development Board suggests that WTO tariffs could add anything from 38% to 91% to the price of sheepmeat for EU buyers, which would be catastrophic for the sector.

[Jenny Chapman]

I agree with the hon. Lady, and I will refer later in my speech to the report that she has mentioned.

[Helen Goodman (Bishop Auckland) (Lab)]

Last week, I went to the Upper Teesdale Agricultural Support Service. Its concern is that because the Government have failed to bring forward the Agriculture Bill, it is not clear whether the Government have the legal powers to make payments in the event of no-deal Brexit. Does my hon. Friend agree that the Minister must answer that point this evening?

[Jenny Chapman]

That is the first time I have heard that point made in the House; it is one that my hon. Friend and I discussed earlier today. She is absolutely right: farmers need to hear from the Minister what he intends to do about their payments, and we need to ensure that he has the power to make those payments. The principal problem for the sheep sector is that, according to the report the hon. Member for Edinburgh North and Leith (Deidre Brock) mentioned, under no deal the export of sheepmeat to the EU27 would be almost entirely wiped out, with the only exports being those via a tariff rate quota of less than 400 tonnes. Of course non-EU exports could increase over time, although the possible rise of around 5% would not be anywhere near enough to offset the loss of EU trade. Reduced trade with the EU would leave around one third of UK meat without a market.

[Ruth Jones (Newport West) (Lab)]

I congratulate my hon. Friend. She is absolutely correct to raise concerns about the impact of a no-deal Brexit on the sheep industry in Britain, and nowhere will that impact be felt more than in Wales. In acknowledging the work that the NFU Cymru and the Farmers Union of Wales do on behalf of Welsh farmers, may I point out that 96% of all the Welsh lamb sent out of the UK goes to the 27 other nations in the EU? If we do not get this right, sheep farmers in Wales will be pushed to breaking point, and we cannot allow that.

[Jenny Chapman]

This affects every region of the country, from the Lakeland fells, to Exmoor, to Teesdale, where I live. People are saying, “Why does this matter? Surely this just means that there will be more lamb for the UK market, the price will be cut, and we can all enjoy more lamb this Christmas,” but the problem is that we just do not have the facilities to safely slaughter, store and freeze that volume of lamb in the UK. If the Minister plans to introduce such facilities, he needs to say so tonight, because knowing that this year’s yield of around 15 million lambs can be safely stored and enjoyed by consumers, and therefore paid for, would be of huge benefit to the 34,000 people currently employed in the industry. If that meat cannot be stored and sold—even at a knock-down price—the sector will be decimated.

The Government have said that they are aware of the special circumstances that would lead to a substantial negative effect on the income of UK sheep farmers and that they would compensate farmers. To their credit, the Government have pledged to continue to commit the same cash total in funds for farm support until the end of this Parliament—although obviously that might be coming sooner than was anticipated. Financial support is already included in farmers’ business plans, but it does not compensate farmers for a sudden loss of market or for feed costs for animals that they cannot now slaughter. It does not ensure that sufficient feed is available to keep lambs bred for slaughter alive. It does not create abattoir or cold-storage capacity. It certainly does not create new export markets or offset tariffs, because that would be against WTO rules.

In answer to one of my written parliamentary questions on 18 July, the then Minister, the right hon. Member for Scarborough and Whitby (Mr Goodwill), said:

“We are doing all we can to mitigate the challenges our farmers will face and we have contingency plans in place to minimise disruption.”

But Ministers have not explained, and continue to refuse to explain, what those contingency plans are. The Minister’s predecessor offered from the Dispatch Box to meet me, but the current Minister then declined that invitation and has refused to discuss the issue. If a wasteful cull of millions of lambs and breeding ewes is to be avoided, measures need to be put in place now. If the slaughter and storage facilities are not in place and no deal happens, farmers will have little option but to cull their flocks. The meat will not be eaten, and the waste will be shameful.

The lack of new trading arrangements and an implementation period would mean that farmers will set about drastically reducing the size of their flocks. Chillingly, the AHDB says:

“Culling rates would record significant uplift driving the increase in adult sheep slaughterings. Quarter one of year two”—

of a no-deal Brexit—

“records a year-on-year uplift in slaughterings as the remainder of the year-one lamb crop are slaughtered.”

The estimate of 3 million lambs is at the lower end of the estimates.

[Matt Western (Warwick and Leamington) (Lab)]

My hon. Friend is making an important speech. Perhaps she can enlighten us or confirm this, but my understanding is that the breeding season is probably just about to start, because sheep gestation is typically around 150 days, if I well recall, so farmers must be planning now exactly what their programmes will be.

[Jenny Chapman]

That is exactly right. I think the phrase is “In with a bang and out like fools,” because sheep breed at the end of October or the beginning of November, and the lambs arrive in the spring. As the Minister well knows, farmers make their arrangements and plan such things a long way in advance, which is why, according to farming bodies, we need at least a two to three-year transitional period. The AHDB report I was referring to goes on to say that

“under a rapid response scenario, the national flock would be culled to reduce size”.

[Kerry McCarthy (Bristol East) (Lab)]

Does my hon. Friend share my astonishment that the Welsh Secretary said over the summer that we could start exporting to Japan and that that market has opened up? They do not eat lamb in Japan at the moment, and they are certainly not going to start eating it on 1 November just to oblige us.

[Jenny Chapman]

My hon. Friend makes an important point. Yes, in theory and given enough time, it may be possible to find new markets, but it will be too late by then, because our flock will have been decimated and will take decades to rebuild. Should the situation improve in future years, with new markets, it might just be possible to re-establish the flock, but it really is not likely. Once the breeding ewes have gone and their special characteristics have been lost, it will take years to recreate the unique features of our national flock. Tens of thousands of jobs and our treasured landscape would be lost, and this is all so preventable.

A minimum of a two to three-year transitional deal is needed, and we need agreements that recognise the safety and quality of our produce. Critically, we must increase the capacity of essential cold storage facilities now. When Ministers reassure me and try to reassure farmers, they need to explain what precisely they intend to do.

[Tonia Antoniazzi (Gower) (Lab)]

This is an important debate, particularly for my Gower constituency, where the lamb industry is very vibrant. Does my hon. Friend share my concern about the amount of cold storage that will be needed and about the Government’s plans to meet that need? Does this country have enough cold storage for medicines post Brexit?

--- Later in debate ---

[Jenny Chapman]

If any of us were in the business of cold storage or large-scale fridges, we would be doing quite well at the moment. My understanding from the trade body that represents such businesses is that there is no additional capacity, so should we suddenly need to store this volume of meat, those facilities will not be there and the safe consumption of that meat will not be a possible solution to this issue.

I did not believe it when I first heard about the mass culling of millions of lambs that would be rendered inedible, but then I read the reports, listened to the National Farmers Union and spoke to agricultural workers and farmers across the country. It is very clear that this is not “Project Fear”.

I ask the Minister to get out from behind his ministerial desk and deal with this now, before it is too late.

--- Later in debate ---

[George Eustice]

I can absolutely give my hon. Friend that reassurance. He will be aware that the Government are seeking a free trade agreement with the European Union in the medium to long term and, if we can get it, in the short term. In the short term, the Prime Minister has already made it clear that in the event of a no-deal exit we will show solidarity with the sheep industry and make interventions, where necessary, to support farmers’ incomes.

[Jenny Chapman]

rose—

[George Eustice]

I am going to conclude because we are running out of time.

The hon. Member for Bishop Auckland (Helen Goodman) raised the important issue of whether we have the legal vires to make those interventions, and I can confirm that we do. The Government have a number of legislative vehicles with which to do so, including elements of retained EU law, and the Natural Environment and Rural Communities Act 2006 also includes general grant-making powers that give us the ability to do so. We are considering two possible options. One is a headage payment on breeding ewes, should that be necessary. That would be important in the event that farmers producing lambs are the ones who have the shock to their income. The second option would be something called a slaughterhouse premium, which would in effect involve a supplementary top-up payment for lambs at the point of slaughter. We could use a combination of those options but, broadly speaking, a headage payment and income-support approach would be the right approach to adopt.