Dairy Industry

Baroness McIntosh of Pickering Excerpts

Thursday 13th September 2012 Westminster Hall

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a pleasure to follow the hon. Member for South Down (Ms Ritchie), and to see so many colleagues from the Select Committee here. I welcome you to the Chair, Mr Walker, and I give heartfelt congratulations to the hon. Members who secured the debate, the hon. Member for Dunfermline and West Fife (Thomas Docherty), and my hon. Friend the Member for Tiverton and Honiton (Neil Parish). They have thereby given the issue an audience wider than just those of us who have the honour of serving on the Select Committee.

I draw your attention, Mr Walker, to my entry in the Register of Members’ Financial Interests. May I also mention, hesitantly, another interest: I am half Danish, although I shudder to declare it before this afternoon’s audience. Perhaps I can use my language skills to make representations beyond these four walls.

I welcome the new Minister to his place. It is a pleasure to see him there. I know that he will build on the excellent work done by the outgoing Minister, my right hon. Friend the Member for South East Cambridgeshire (Mr Paice). It is poignant that the ink was hardly dry on the dairy industry voluntary code before my right hon. Friend was moved.

Many hon. Members have already described the problem: the volatility of the market and the imbalance in the supply chain, which the voluntary code is intended to address, between producers and purchasers of milk. I yield to no one in my admiration of those who work in the dairy sector—not least those in the hills and uplands of the UK, especially in the inclement weather that we often suffer in North Yorkshire. The hon. Member for South Down alluded to the poor weather pushing the cost of feedstuffs up dramatically, and the cost of keeping cattle indoors for longer this year has increased production costs. We are all aware of the other debate today, on fuel prices and the general cost of living. I acknowledge that production in the uplands has been reduced to the bare bones, and those now working on farms, particularly in the uplands, are strictly family members.

I draw hon. Members’ attention to the Select Committee report of July 2011, on what should be included in the EU proposals for the dairy sector contract. We noted that, despite having one of the most efficient production systems in the world, UK dairy farmers are unable to recover their costs, and dairy producers are out-competed by imported products. We recommended that

“raw milk contracts should include the four elements specified by the Commission—price, volume, timing of deliveries, and duration.”

I am delighted that under the voluntary code, contracts between producers and purchasers must set out either a clear price or a clear pricing mechanism.

It is unacceptable that every time we deal with the issue, the purchasers add another 2p, and, when our backs are turned, or we take our eyes off the ball, prices are reduced. Even at 29p per litre, the price of producing the milk is not being covered. What is the result? As recently as the Farndale show at the end of August, I met yet another dairy producer who was selling his dairy and his sheep, for that reason.

The elephant in the room, to which I hope the Minister will turn his attention early, is the push for large units. The Government should say what their view is on large dairy units. They should acknowledge the public concern. There are welfare issues about dairy cattle being kept indoors with no access to fresh air and no room for exercise; and there are large-scale environmental issues concerning how to dispose of the slurry. That is a separate debate, which must happen. However, it is unacceptable and unsustainable that purchasers of milk continue to offer dairy producers less per litre than the cost of production. That cannot continue.

A cheese producer has brought to my attention a worrying development in North Yorkshire, which is that local suppliers are threatening not to provide cheese producers and others with the milk they need. The Government must tackle that.

I congratulate the outgoing Minister on securing the dairy package. We must recognise the fact that many dairy farmers are being pressed to abandon milk production, because they cannot secure a break-even price. That must be tackled. I urge the Government to respond to our earlier report on upland farming. We welcomed the rural statement this week, but in addition to that I want the Government to present an uplands action plan, setting out the policy area and retaining farming as the primary activity in the UK’s uplands.

We need to know where the £5 million that the Government are allocating to producers will be sent. We want contracts awarded to dairy farmers that cover their production costs. I hope that the Select Committee recommendations on the groceries code adjudicator will ensure that the adjudicator has the power to investigate on his or her own initiative, and to impose fines.

Let the message go out today that we will not accept the behaviour that has been shown towards dairy producers. I welcome this debate in that spirit.

department for Environment, Food and Rural Affairs

Baroness McIntosh of Pickering Excerpts

Tuesday 17th July 2012 Commons Chamber

[Mr Paice]

My hon. Friend’s point is properly made and is an important one.

I will concentrate on the issues that need to be addressed. I fully recognise that what matters to the dairy farmer is the price that they are paid. However, as several hon. Members on both sides of the Chamber have said, it is not simply a matter of reversing the price cuts, although that is what the producers want. We need something more substantial and more permanent than that.

As I say frequently outside this place, we have an obsession in this country with the liquid market and with the desire of our processors to gain bottling contracts for supermarkets. They keep undercutting each other to keep their bottling plants at full capacity. When, as has happened on this occasion, cream prices collapse and they face major problems, the only way in which they can recoup any income is by cutting the price for their producers to below the cost of production. That is a direct consequence of the obsession with bottling for supermarkets.

As several hon. Members have said, and as is abundantly clear, there are ample other opportunities for investment. Some 20% of our total dairy consumption is imported. The hon. Member for Bishop Auckland (Helen Goodman) talked about imports. We do not import liquid milk. All the imports are dairy products, but they nevertheless make up a significant part of our total consumption.

What are our processors doing to combat that? One or two are trying to do something. Dairy Crest has gained back some of the cheese market with one of its products and it should be congratulated on that, but there is still much to do. Where do the supermarkets with aligned dairy groups, which pay a premium for their liquid milk, get their own-label brands? Where are their other dairy products, such as their yoghurt, produced? Do they use British milk? In many cases, they do not. There is therefore a great opportunity for import substitution.

There is an even greater opportunity for exports. The world is crying out for increased dairy products. Yes, global prices have fallen back and that is part of the immediate problem that we face. However, I say to my hon. Friend the Member for Ceredigion (Mr Williams) that if I was asked whether I would encourage a young person to go into dairy farming, my unequivocal answer would be yes, because I am convinced that there is a long-term future beyond today’s crisis.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Will my right hon. Friend give way?

[Mr Paice]

No, I am sorry, I need to press on.

Hon. Members also raised the issue of supermarket power. As has been said, we are introducing the groceries code adjudicator. I have always tried to be honest with farmers and say that on its own it will not increase the price of milk, but that it should increase fairness and transparency.

The big problem that we face, which has been mentioned this afternoon, is what I view as the absurd level of price cutting by some retailers, particularly those in what is known as the middle ground. One retailer is openly selling milk at 99p for four pints.

Oral Answers to Questions

Baroness McIntosh of Pickering Excerpts

Thursday 5th July 2012 Commons Chamber

[Mrs Spelman]

As the hon. Gentleman will know, DEFRA Ministers have visited each part of the country severely affected in the sequence of heavy rain that we have had. I went to Gateshead last Saturday. A number of Government Departments can be engaged in providing help. Most importantly, the Department for Communities and Local Government has a formula—the Bellwin formula—that I urge local authorities to apply to for funds. Before the recess, I shall give hon. Members the opportunity for a briefing on how we can provide further assistance.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

May I commend the report on the water White Paper published today by the departmental Select Committee? We stand ready to assist the Secretary of State in reaching a deal. Will she give the House an assurance that the cohort of tenants on low incomes will be granted affordable insurance where they are at risk of flooding?

[Mrs Spelman]

Yes, I can give that assurance, which is very important. The deal that we are in the process of negotiating with the insurance industry tackles for the first time the question of affordability, which the statement of principles—the previous scheme—did not.

--- Later in debate ---

[Sir Tony Baldry]

We are at cross purposes. The answer that I gave to the hon. Gentleman was very clear: I am not aware of any redundant or former churches having been turned into a bar or a casino. If he has details of any such instances, will he please let me have them so that I can investigate?

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

2. What the average number of parishes is per Church of England priest in rural areas; and if he will make a statement.

[Sir Tony Baldry]

The Church does not calculate an average figure for the number of parishes per priest in rural areas, because different dioceses take varying approaches to pastoral organisation.

[Miss McIntosh]

I thank my hon. Friend for that answer. I wonder whether we could urge the Church Commissioners to undertake such an exercise. I should like to praise the work of rural priests. In North Yorkshire, they are being asked to spread themselves extremely thinly, and any support that they could be given would be most welcome.

[Sir Tony Baldry]

My hon. Friend is quite correct to draw our attention to the fantastic work being done by priests in rural areas. We will collect statistics on rural priests, and I will ensure that they are shared with her.

Fish Discards

Baroness McIntosh of Pickering Excerpts

Thursday 14th June 2012 Commons Chamber

[Mr Speaker]

Order. If I am to accommodate colleagues, I need short questions and short answers.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I congratulate my hon. Friend on what he has delivered and the progress that was made, particularly on regionalisation, which is music to the Environment, Food and Rural Affairs Committee’s ears. Will he update the House on the question of a register for UK fishermen so that we can tackle the problem of slipper skippers, which will also help with discards? Will he confirm that it will be fish caught against quota on which we will proceed, not just fish landed, as that is one of the main issues with discards? Will he confirm that there will be support for fishermen to invest in the selective gear that has been successful in Denmark and Sweden?

[Richard Benyon]

I am grateful to my hon. Friend for her support. It is a priority quickly to overcome the absurd position that we do not know who holds quota in this country. We want to work with devolved Governments to make sure that we have that register as quickly possible to ensure that we know and perhaps to slay some of the urban myths that football clubs and celebrities own quota. I have never managed to find out the facts about this.

The important point on discards is that we know how to make this work. We begin with a really good experience of working with the fishing industry. Catch quota schemes will result in 0.2% of discards of cod for vessels in those schemes. We want to incentivise fishermen not to catch fish that they would otherwise discard. We want to make sure, too, that where there is a land-all obligation there are supply chains that ensure that those fish are eaten or go into other systems. We should not just transfer a problem out at sea to landfill. The most important thing is that we have time and a clear direction to ensure that we can use all the work that we have done with the industry to make this effective and to stop the problem in a practical sense.

Oral Answers to Questions

Baroness McIntosh of Pickering Excerpts

Thursday 26th April 2012 Commons Chamber

[Mrs Spelman]

Organisations such as Battersea Dogs Home have a terrible problem on their hands. Dogs homes are full to capacity with dogs that have had to be taken from the streets—100,000 strays a year and, tragically, 6,000 of those have to be put down. I am sure Battersea Dogs Home would agree that the measures that we have put in place, giving discretion to the police in relation to impounding a dog, and measures to educate irresponsible owners, as well as the resources that I have given the Battersea Dogs Home to help us tackle this problem, will all be welcomed.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I welcome the review and consultation. Will the Secretary of State extend the review to the Local Government Act 2010 to see whether the number of stray dogs has gone up since control passed to local authorities? Will she take the opportunity to close the current loophole with respect to attacks by dogs on other dogs and other animals, and extend the livestock provisions on worrying dogs to these other categories?

[Mrs Spelman]

My hon. Friend, who chairs the Select Committee, makes some excellent points. Perhaps they are topics that the Select Committee might be interested in. The worrying of sheep, which is an understatement—it is often the death of sheep as a result of lack of control by the owners of dogs—is a very serious problem. I undertake to look at those issues.

National Policy Statement (Waste Water)

Baroness McIntosh of Pickering Excerpts

Monday 19th March 2012 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a pleasure to follow the hon. Member for Luton South (Gavin Shuker). I, too, welcome the debate this evening and the waste water national policy statement. In these debates, I feel as though I have died and gone to heaven when the Minister and the Opposition spokesman both say what a good piece of work the Environment, Food and Rural Affairs Committee has done. It was a privilege to carry out such a substantial body of work on the national policy statement, and we took our responsibilities seriously. I am grateful to the Committee, to those who advised us and to those who gave evidence.

I shall give the House some background information. In April 2011, the Committee published the report on our inquiry into the Department’s draft waste water national policy statement, in which we made a number of recommendations for what we viewed as the improvement of the NPS. Some time later, on 9 February this year, the Government published their response to the Committee’s report and laid a revised version of the NPS before the House. I am delighted that the Government have been able to find time for this debate tonight.

The hon. Member for Luton South mentioned the fact that we had to comply with, among other things, the European urban waste water treatment directive. May I just say, as a personal comment, that I hope that we can learn from this whole exercise—and from the essence of the Macdonald review of regulations from Europe—and that we must engage at the earliest possible stage and in the most constructive, positive manner? It will be a great step forward if we can learn from this exercise.

As the Minister said earlier, the national policy statement is critical to the new planning system. It will help developers to bring forward waste water projects of national significance without facing unnecessary delays, while ensuring that local people have an opportunity to have their say about how their communities are developed and about how the decisions are made in an accountable way by elected Ministers.

Following on from the Minister’s comments, I would be interested to know whether at this stage he has had sight of the final version of the national planning policy framework, which I understand may be revealed to the world at large later this week. Is he in a position to tell us this evening, given that this issue was raised in our evidence sessions, what the impact will be on the waste water national policy statement and the two projects falling under it?

The Minister referred to the application for planning consents. He may be interested to know that some time, regrettably, after we had taken evidence and reported, we were still receiving representations from those who had not realised that the scrutiny was taking place in the EFRA Committee. The matter of how to bring such scrutiny to the attention of the wider community is important if this were to arise again, as I understand it might if the Minister proceeds with his review. I shall return to that later.

The Committee was pleased to have the opportunity to scrutinise the draft water national policy statement last year, and we welcome the Government’s response. Although, as I alluded, it took the Department some time to publish the revised version, we were pleased that the time was used well to improve the national policy statement by incorporating many of our recommended changes. We believe that the now revised PPS broadly does a good job in setting out the framework for decision makers. Given the importance of the issue, however, we welcome the Government’s debate on it today.

Many other hon. Members will have issues to raise, particularly those whose constituencies are in the catchment area for the billing of the project, such as my hon. Friend the Minister, and perhaps also those whose constituencies lie along its route. I shall focus my remarks both on areas where the Government have incorporated our comments and on those where they did not.

The Government’s response sets out a number of areas in respect of which DEFRA has accepted the recommendations in the Committee’s report and amended the NPS consequentially. On the definition of need, I welcome the fact that in the revised NPS, the inclusion of a project in Ofwat’s asset management plan has been removed, in line with the Committee’s recommendation, as a criterion of proof of a project’s need. It was not logical to use that as a basis of proof, because its inclusion did not in itself mean that Ofwat had approved the individual plan for how it should be carried out. Indeed, Ofwat’s evidence on how it would review and consider each plan was quite compelling, so the removal of the asset management plan is a sensible approach, with retention of inclusion in the Environment Agency’s national environment plan as proof of a project’s need providing a workable criterion. I thus welcome the Minister’s comments this evening.

Some of the site-specific material in the NPS has been moved to an annexe, which is part of the document that is not to be relied on by the decision maker in reaching a decision on a project. That meets to some extent the Committee’s criticism about the inclusion of weak material on the Thames tunnel and Deephams sewage treatment works in the main NPS. In our view, the remaining site-specific sections have been improved, and the Committee welcomes these amendments because the focus of the NPS should be on establishing generic criteria that are applicable to any project falling within the threshold of a nationally significant infrastructure project set out in the Planning Act 2008, as amended.

As regards the inclusion of the Thames tunnel in the nationally significant infrastructure project planning regime, may I say that the Government have also moved to change the Planning Act definitions, as recommended by the Committee, to include sewage transfers and storage projects such as the Thames tunnel within the process for deciding applications of nationally significant infrastructure projects? We welcome that move, which is in the intended spirit of the Planning Act regime and reflects the inclusion of the Thames tunnel in the Government’s major infrastructure plans. The inclusion of sewage transfer and storage projects of a significant size, such as the Thames tunnel project, is clearly both logical and pragmatic.

Recommendation 9 deals with the approval of costs. The hon. Member for Edmonton (Mr Love) mentioned the importance of keeping the costs of the Thames tunnel under scrutiny, and it is vital for Ofwat to be rigorous in scrutinising those costs, which, according to the evidence given to our Committee, are escalating. The Water Industry (Financial Assistance) Bill, which we debated last week, contains necessary provisions enabling Thames Water to ensure that it can finance the project in the most cost-effective manner, but I should welcome an assurance from the Minister about the intended use of those powers, and a reassurance for Thames Water customers that the costs will not continue to increase. It would be helpful if he also told us how Ofwat has strengthened its in-house capacity to focus on the Thames tunnel, and what advice the company is receiving on how to limit the cost of the projects referred to in the Government’s response to our report.

I am sure that Members will not be disappointed if I now turn to my personal pet subject, sustainable drainage. In recommendation 6, we

“recommend that Defra undertakes within 12 months a full assessment of the potential national impact of widespread adoption of SUDs”

—sustainable drainage systems—

“and water efficiency programmes for existing as well as new housing stock on future waste water infrastructure needs and that this be taken into account in any future revisions of the Waste Water NPS.”

I realise that there are a number of strands in DEFRA’s work on sustainable drainage, but it is disappointing that the water White Paper does not focus more on SUDS, and that more progress has not been made towards an agreement on funding for them. According to the Government’s response,

“The Planning Act allows for the partial or full review of an NPS. We aim to review the Waste Water NPS in five years time”

—perhaps the Minister will confirm that that is the case—

“or before that time should there be a significant need to do so.”

Obviously, my question is what would constitute a significant need. The Government’s response continues:

“This will take account of any changes to appropriate policy since the development of the original Waste Water NPS.”

I am not disagreeing with the Minister, but we need more information this evening.

The Government’s response also refers to schedule 3 to the Flood and Water Management Act 2010, a large part of which has still to come into effect. They say

“We intend to implement Schedule 3 as soon as possible and dates are being explored”

—this is exciting stuff, Mr Deputy Speaker—

“in the consultation on implementation of Schedule 3 which we launched on 20 December. The Act also requires local authorities to adopt those sustainable drainage systems which serve more than one property. In the short term”

—it must be quite a short term, Mr Deputy Speaker—

“Defra will fund the maintenance of adopted sustainable drainage systems whilst we explore long-term funding options.”

Will the Minister tell us what the procedure and timetable will be for the adoption—finally—of sustainable drainage systems? The last Government could have done that before the general election, but they chose not to. We are now approaching the anniversary of that election, and I think that the House is growing impatient. I certainly am. When will we have the SUDs? They are important. The House wants to be able to establish whether the Government have explored all the alternatives.

I hope the Minister will respond—in his usual, inimitable, charming way—to the points raised. In respect of the national policy statement, if we are truly signed up to sustainable development, the environment and the needs of local communities must not be sacrificed. The Committee commends the national policy statement and is glad that the Government welcome some of its proposals. However, we are disappointed that they disagree with certain measures.

--- Later in debate ---

[Mark Field (Cities of London and Westminster) (Con)]

I am one of 144 Members of Parliament in the Thames Water area directly affected by the issue of the Thames tunnel, and I hope that both the Minister and the hon. Member for Luton South (Gavin Shuker) will forgive me if I restrict my comments to the area that is close to my heart.

It is good to have consensus at times in politics and to be able to discuss issues in a measured way. One of the difficulties with the Thames tunnel is that there will be one hell of an outcry from many Thames Water customers in the years to come when they recognise the sheer cost implied by what is being put into place through this national policy statement for waste water, as it affects not only the London area, but the Thames Water area. Those living in the centre of London will see the tunnel being constructed, as I am sure it will be in the years to come, and will recognise that that does not come entirely cost free. I suspect that Thames Water customers in the Oxfordshires and Gloucestershires of this world will put a lot more pressure on. It is, therefore, all the more important that I use this opportunity to put certain concerns about this policy statement on the record, although I do not wish to break away too far from elements of the happy consensus that we have seen tonight.

I think we all acknowledge that if the Thames tunnel goes ahead, as I confidently predict it will, it will be a nationally significant infrastructure project. It is therefore sensible to make it one in the formal sense, both in relation to the Planning Act and, as the framework suggests is needed with such projects, with the sort of national policy statement we are debating tonight. I agree with other Members that although this debate has been relatively short, this opportunity to debate such a crucial issue is welcome. The Select Committee on Environment, Food and Rural Affairs certainly thought so when it examined this draft national policy statement last year, as we gathered from my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) earlier.

The Committee also signalled some concerns about the way that the document appeared to pre-empt elements of the planning process. The waste water NPS is the key document against which the planning application for the Thames tunnel will be judged. For that reason, the Committee said that it should be “a purely generic document” to prevent the justification for the Thames tunnel project from being removed from scrutiny. It also warned that although reference to specific schemes could be put in an annex to the national policy statement,

“it should be made clear that it does not constitute information to which decision makers must have regard when considering project applications.”

I fear that the Government have rejected that element of the advice. Instead, the NPS makes it clear, on page 21, that the tunnel is the “only option” and that what would be left to the Planning Inspectorate would merely be the “specific design and route”. In its response to the Select Committee report, DEFRA said the Government want to provide a “degree of certainty” to Thames Water. I do not think there is any doubt that they have been able to achieve that result.

Let us be quite clear about what the national policy statement means in practice. It means there will be no independent analysis of the very case for a tunnel. The document we are debating removes the case for the tunnel from the planning process. I think the Minister will argue that that is reasonable because the arguments have already been heard in detail—perhaps privately in his office and the offices of his predecessors—that the evidence is overwhelming and that the final NPS makes an unarguable case. If that were true, he would have a point, but the NPS is far from entirely convincing, not least because there are a number of things that one would never learn just from reading the document. In my brief contribution tonight I shall list the ones that seem the most significant, and I join the Select Committee in asking whether there really is no need for an independent assessment.

First, the tunnel will not collect 39 million tonnes of sewage. Like Thames Water, the NPS mentions 39 million cubic metres of discharge into the Thames each year. It then states that the Thames tunnel is the preferred way to address this issue. The casual reader of the document will assume that the tunnel collects 39 million tonnes of discharge, but that figure will be more than halved without the tunnel being built. The construction of the Lee tunnel and the upgrades to the sewage treatment works will prevent 21 million tonnes from entering the tidal Thames, and improvements to Mogden sewage treatment works will tackle several million more upstream.

Rather than celebrating the huge strides already being made to clean up the Thames—I am not entirely complacent about that; there should be huge strides and we should always be looking to improve the quality of water in the Thames—the NPS makes only oblique references and never entirely quantifies them in the way that I have tried to do tonight. It is worth repeating that the amount of sewage entering the Thames will fall dramatically without the Thames tunnel project. Only 18 million tonnes of discharge will be addressed by the tunnel, by no means all of which would be stopped as there would still be three large discharge events in an average year.

Unlike the publicity we have seen from Thames Water the NPS does at least describe the discharges as a mixture of “untreated sewage and rain water”, but it does not explain that the rain water accounts for more than 95% of the total. That somewhat disingenuous use of statistics has understandably misled countless members of the public and even Members of this House. In last week’s debate on the Water Industry (Financial Assistance) Bill, my hon. Friend the Member for Hendon (Mr Offord) talked about tackling the

“39 million tonnes of effluent”—[Official Report, 14 March 2012; Vol. 542, c. 306.]

but the reality is that there are just 18 million tonnes of discharge, of which not even 1 million tonnes are effluent. Any discharge of sewage is regrettable but we should deal in facts.

[Miss McIntosh]

When the Committee put questions on the national policy statement to the Department, we asked particularly about the potential impact of SUDS and other rainfall harvesting. If, as my hon. Friend says, we are talking about mostly rainfall, that impact would be quite substantial.

[Mark Field]

I accept that there would be an impact, but the use of the word “effluent” in relation to the 39 million cubic metres gives the public and many Members of this House a somewhat misleading impression of the sheer urgency of the need to undertake the project at this time.

It has been asserted that the river has been getting better and will continue to do so, and there is no doubt about that, but a feature of debates on the Water Industry (Financial Assistance) Bill last week and less recently was the number of hon. Members who suggested that the Thames had been getting worse, and will continue to get worse without the tunnel. The hon. Members for Hammersmith (Mr Slaughter) and for Islington North (Jeremy Corbyn) made that statement in part. That claim is not supported by the facts, as regards the immediate future; it is also probably not entirely true as regards the past and present.

I note that the Environment Agency’s website no longer hosts a press release that it issued only 17 months ago, but at that time, it went so far as to describe the Thames as

“the beauty queen of the planet’s waterways.”

That perhaps goes a little too far, even for those who have no desire whatever for a Thames tunnel-type project, but what prompted the comment was real enough: the sustained and continuing improvement of the Thames, which saw it win the international Theiss river prize for outstanding achievement in river management and restoration.

Common Fisheries Policy

Baroness McIntosh of Pickering Excerpts

Thursday 15th March 2012 Commons Chamber

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

I beg to move,

That this House considers that the Common Fisheries Policy has failed to conserve fish stocks and failed fishermen and consumers; welcomes the Environment, Food and Rural Affairs Committee’s report, EU proposals for reform of the Common Fisheries Policy; and calls on the Government to use the current round of Common Fisheries Policy reform to argue for a reduction in micro-management from Brussels, greater devolution of fishing policy to Member States, the introduction of greater regional ecosystem-based management and more scientific research to underpin decision-making in order to secure the future of coastal communities and the health of the marine ecosystem.

It gives me great pleasure to have the opportunity to move this motion. I thank the Backbench Business Committee for allowing us to debate the issue, and I thank my fellow Environment, Food and Rural Affairs Committee members—from all parties—for the excellent work they did in drafting the report on this topic. I also thank the witnesses, both those who appeared before us and gave so generously of their time and those who submitted written evidence.

In my local area, I visited the coble fishermen in Filey, who are some of the heroes of the smaller—under-10 metre—fishing fleet in this country. The Committee visited Hastings, accompanied by my hon. Friend the Member for Hastings and Rye (Amber Rudd), and we were very warmly received. It was a highly productive visit—once we had negotiated the London tube network—and I thank everyone who shared that day with us for the warm welcome we received and the evidence they shared with us.

It was a particular pleasure for me to take the Committee to Denmark and to meet the Danish President of the Council of Ministers, the Danish Minister for fisheries, farming and food. We also met the local fishermen in Gilleleje. I have to confess that I had not visited that little fishing port for some 15 or 20 years, but we were impressed by the work and co-operation of its fishermen, and persuaded by the science we saw there. We were allowed to partake in a non-live auction mart, buying and selling some of the fish, which expanded our knowledge of the live internet auction mart that they use. We were interested to see the selective gear those Danish fishermen use, a detail that is particularly relevant to the motion.

This debate is timely. The Danish presidency is expected to reach a political decision in the European Council in June—in the well-known coastal resort of Luxembourg! Seriously however, Luxembourg does have a genuine interest in freshwater fish and aquaculture—the Minister can correct that term, if it is wrong. We are expecting a political decision in the EC in June. For the first time, it will be a co-decision. The European Parliament is seeking to reach an agreement on the financial regulation in January 2013, and we will have co-decision on all the fisheries reforms. A final agreement is not expected until June 2013.

I commend the motion. I think we can all confirm that the common fisheries policy—particularly the last round of reform—has failed everybody. It has failed to conserve fish stocks, and to help fishermen or consumers. I want to dwell for a moment on what I believe is the most exciting part of the motion and of our report, and I am grateful to the very senior lawyers in this place and elsewhere who have advised us on the report. We have a once-in-a-decade opportunity. We have a one-off opportunity to end the centralised micro-management by Brussels, which I think we can all agree has failed to deliver. We want to support the commissioner, who agrees that, as an essential first step, we must look at the possibility of handing power back to member states to enable them to work together to find a local solution.

I applaud the openness of the commissioner, and the immediate past chairman of the Brussels Committee on fisheries, Carmen Fraga, who is a personal friend of mine and who is affectionately known in the European Parliament as “madam fish.” The commissioner was especially open in the meeting we had in Brussels, during our evidence session of some 18 months ago, and more especially when the commissioner gave evidence on the record. I am delighted that there is now a picture on the commissioner’s website of the commissioner and me handing over the report we are debating this afternoon.

I believe we have given the Department, the Commission and the European Union the opportunity—which we were all looking for—to drive decision making down to the most local and regional level. Our proposals are truly groundbreaking. I believe the fault has been that there has been too much micro-management from Brussels and a lack of overarching objectives, which we would like the Commission to remain in charge of.

The Commission should have a strategic high-reaching overview, but the day-to-day decisions on how fisheries are managed in local waters should be decided among the various coastal states on the basis of scientific evidence, which is missing at present, and through working much more closely with the fishermen. We will talk shortly about giving the advisory councils more power.

[Mr John Redwood (Wokingham) (Con)]

I support the motion, but will my hon. Friend make this point clear to me: presumably, she would want the British Government to be able to get rid of the much-hated and stupid discards policy and be free to decide ourselves how to conserve stock?

[Miss McIntosh]

I am going to be very methodical and discuss discards later, as we have some interesting things to say about them and I hope that hon. Members from all parts of the House will elaborate on the matter.

On the treaty base, I hope that the Minister has now had the opportunity to analyse what we are proposing. This is the first time anyone has identified what is staring us in the face—that all we have to do is amend the regulations, which form the whole context of this round of the common fisheries policy reform. The feedback we have had from the fishermen we have consulted, as well as from the Danes and others, has been very positive.

It is important to recognise that the little fish do not swim around with a Union Jack on them. Much as I would like to say that the fish outside Filey have a Yorkshire flag on them and the fish in the Scottish waters have the saltire on them, they do not; they swim across the various waters. So it is absolutely right that the Commission should retain some competence in this area, and I, for one, do not wish to reopen the treaty base that gives exclusive competence on the resources to the Commission. By allowing the coastal states that neighbour the individual fisheries to take the day-to-day management decisions, we will save a lot of the Minister’s time every December, as things will be managed on a more regular basis. The approach will be much more local, it will be based on science and it will be about working more closely with the fishermen.

[Mr Redwood]

Nor do the fish swim around with an EU flag on them. We should accept that it is our fishing resource if it is in our wider waters—we have to pay the bills, so we should be responsible for it.

[Miss McIntosh]

My right hon. Friend has put his finger, possibly inadvertently, on the nub of the issue. This is a shared resource and we need to conserve it. The Committee has gone through things and we have identified many ways in which we believe we can do that.

[Amber Rudd (Hastings and Rye) (Con)]

Does my hon. Friend agree that the best outcome for our country’s relationship with the common fisheries policy would be what was described to us as a “toolbox”? We would operate our own toolbox, given our certain allocation, and that would perhaps give us the best option in terms of the European balance and the UK fishing balance.

[Miss McIntosh]

I am most grateful to my hon. Friend for putting it so eloquently and so well. This approach would, indeed, be part of the toolbox, and it would give the Department for Environment, Food and Rural Affairs, negotiating for the UK, a much greater say and devolve decision making right down to the regional level, with a tremendous positive impact on fishermen and on coastal communities.

[Jim Shannon (Strangford) (DUP)]

The hon. Lady has outlined the need for regionalisation, and that is the approach I would seek for Northern Ireland on this issue. Does she feel that regionalisation would mean that the days at sea, which have been reduced, would be increased to reflect the number of fish in the sea? Would the cod in the Irish sea be included in such an arrangement? Would the quotas also reflect that? What would happen with the discards? Does she agree that the approach to discards should be following the direction of the fisherman’s initiative? Does she agree that it should not be about bureaucrats in Europe, but about local people making decisions?

[Miss McIntosh]

Yes, and I will discuss discards momentarily. Our approach has to be taken on the basis of science, and that is what is missing at the moment. We need to set clear boundaries and give direction to the role of the Commission, and we have to give member states the power to act not only independently, but together in each of the individual fisheries. We will, thus, give them genuine freedom and responsibility.

[Dr Sarah Wollaston (Totnes) (Con)]

Does my hon. Friend agree that extending the limit to 12 miles is crucial? People in Brixham, in the area I represent, have done a great deal to conserve stocks, but they see Dutch vessels coming in to fish inside the 12-mile limit and that causes great resentment.

--- Later in debate ---

[Miss McIntosh]

I am sure that the Minister will be more knowledgeable than I am on matters relating to the high water mark and the 12-mile limit. What I hope we can achieve, in principle, is agreement on each fishery—those in the Baltic sea and the North sea, as well as the Irish fisheries. These are a shared resource, and I hope that they can genuinely be determined by those coastal member states.

[Sheryll Murray (South East Cornwall) (Con)]

Will my hon. Friend explain how, under a system of qualified majority voting, and given that the basic regulation contains the principle of equal access to a common resource, she is going to be able to achieve what she wants? A lot of member states, albeit that they have a blocking minority, will oppose her proposals, so how will she get them through the Council of Ministers?

[Miss McIntosh]

Happily for me, I will not be arguing the case, and I hope that today’s debate will convince the Minister. I am pleased that the European Parliament has reached out to the national Parliaments and I hope that ours is the first leading report in that regard. We should amend the regulations—we should not accept them. My hon. Friend the Member for South East Cornwall (Sheryll Murray) looks baffled, but it is blindingly obvious that that is where we have gone wrong in the past. We should grasp the bull by its horns and amend the regulations for the duration of the piece, recognising them as a shared resource. That is key.

The television campaign against discards by Hugh Fearnley-Whittingstall captured the public imagination last year. Discards are deeply unpopular and unsustainable and they are failing to conserve our fish. The conclusion we reached was that we agree there should be a discard ban, but it is very clear that there is no scientific evidence on the survival rates for each species for which the ban is proposed. We believe that we should proceed with caution on the basis of the scientific evidence. Rather than having an end date of 2014 or 2015, we should start gradually. We do not want a discard at sea being substituted by a discard on land, with the fish going to landfill. That would not meet the wishes of the great British public.

[Fiona O'Donnell (East Lothian) (Lab)]

First, let me apologise profusely to the hon. Lady for not being in my seat when she began her speech. Does she agree that part of the problem with discards is that in mixed fisheries fishermen do not have a quota for catch that they cannot avoid catching, which they then have no alternative but to discard at sea?

[Miss McIntosh]

I shall share the comments I made earlier with the hon. Lady, but we do have a recommendation along those lines on mixed fisheries. There is simply insufficient information. When we launched our report, The Guardian had a website that entirely distorted our proposals so, for the sake of clarity, we are saying that there should be a ban on discards but we need to proceed on the basis of scientific evidence. If that is available in 2014, we will be the first to welcome it and to proceed on that basis. I believe that it would put my hon. Friend the Minister, who would be negotiating such a ban, in a very difficult position if we were just to substitute a discard ban. We believe that it should switch to catch, but it should do so gradually. Let us have an end date of 2020 but proceed with caution on the basis of scientific evidence.

[Jim Shannon]

The Minister is aware of this issue, because we spoke about it last November and he has followed through on it. Scientific evidence for the Irish sea shows that the stocks of cod and whitefish are increasing. The hon. Lady is saying, I think, that we need to have time for the scientific evidence to be in place. If that is the case, it will be too late for our whitefish fleet in Northern Ireland, as the crews have already been cut dramatically. Does she not feel that there are perhaps occasions—this is one of them—when urgency is of the utmost importance and that we must respond immediately to the scientific evidence that shows that there are more cod and more whitefish in the Irish sea than there have ever been before? That would sustain the cod and whitefish industry in Northern Ireland.

[Miss McIntosh]

I hope that if we can amend the regulations on how we will proceed, the reformed common fisheries policy will go forward. I understand the hon. Gentleman’s sense of urgency and I am sure that my hon. Friend the Minister, who takes part in the annual negotiations, will see this as welcome relief, but it will happen after the regulations are amended.

The Committee was persuaded that there are other means of conserving fish stocks—the tools in the box, as my hon. Friend the Member for Hastings and Rye said. We were hugely impressed by the work on selective gear being done by the Danish fishermen and by the agreement that the Danish and Swedish fishermen and their Governments had reached about fishing in their waters. We believe that that model could be used.

We applaud the work done under successive Governments off the Devon coast to reduce discards. We want to hear more of it and to see such schemes rolled out. As we said in our earlier domestic fisheries report, we believe there is a role for celebrity chefs and supermarkets to persuade the public to eat species that are not widely eaten at the moment. That would also help to conserve fish stocks going forward.

The Commission mandated member states to introduce a system of long-term fishing rights; it is looking to introduce transferable fishing concessions. In our earlier report on domestic fisheries, which we reported to the House on 3 June 2011, we highlighted the problem of slipper skippers and those who trade fishing quotas who are not actively involved in fishing. My local fishermen are absolutely convinced that there are football clubs trading in this way. We have not established that as a fact, but equally no one has denied it, which makes me believe that it is probably happening. May I challenge the Minister on this? We asked for a register to be introduced and I would like him to report where we are with that when he sums up. Local fishermen in Filey and across the Yorkshire area would warmly welcome that.

[Sheryll Murray]

Did my hon. Friend establish that a fishing quota can be attached only to a vessel that is held by a fish producer organisation? So either a dummy vessel that has been invented in a producer organisation or a real vessel has to be owned by a football club before a quota can be attached to it.

[Miss McIntosh]

We have not always established whether football clubs or others are involved, but my hon. Friend raises a very telling point. We believe that transferable fishing concessions would make the situation worse and would not necessarily reduce over-capacity. What we propose is a siphon mechanism to reallocate fishing rights away from potential slipper skippers. I hope this addresses her point. Under our proposal, if an operator chooses to lease his fishing rights, a percentage of that allocation would be returned to the national envelope. That could then be reallocated to active fishermen so as to maintain traditional fishing activities in coastal communities. We urge the Minister to recognise the role of active fishermen, who are the lifeblood of coastal communities such as those in Filey, Hastings and elsewhere. We also emphasise the need to protect small-scale fishermen, such as those in our under-10 metre fleets, by keeping them outside any market-based system of fishing rights.

[Fiona O'Donnell]

The hon. Lady makes a very interesting suggestion. Does she agree that that envelope could be used to incentivise sustainable fishing?

[Miss McIntosh]

The whole thrust of the motion is very much about sustainable fishing. We mention in particular

“the introduction of greater regional ecosystem-based management and more scientific research to underpin decision-making”.

The whole thrust is about how we define what is sustainable; we clearly do not have sustainable fishing at the moment. I hope the Minister will go down the path of avoiding excessive fleet consolidation and I make a personal plea that we could give more quota to our inshore fishermen. I ask the Minister please not to go near a quota for shellfish for inshore fishermen.

[Dr Wollaston]

Does my hon. Friend agree that there is a great discrepancy in the way that the EU and the UK define these vessels, with the EU using the under-12 metre definition and the UK using the under-10 metre definition? Would we not be better using a definition based on the extent to which vessels are high catching? There is sometimes an assumption that all under-10 metre vessels have to be low-catching, sustainable vessels, whereas some of them catch large amounts of fish.

[Miss McIntosh]

My hon. Friend reminds me of the evidence we took in Hastings. I thought we should perhaps pursue an amendment along the under-10 metre/under-12 metre line, but this is more about the fact that such vessels do not have access to the quota under the current system and that they could be disadvantaged if there is over-consolidation—a point that was raised earlier. We were not persuaded that the under-10/under-12 issue was so significant.

I urge the Minister and his Department, when negotiating for the whole of the United Kingdom and all its constituent parts, which are well represented in the Chamber this afternoon, to press for an additional general objective for the common fisheries policy: contributing to the socio-economic development of coastal communities. By all means let us look at the new European maritime and fisheries fund to see how that can be done, particularly to help fishermen purchase and use more selective gear. I reiterate our desire to see more scientific research underpin decision making. I underline the fact that the Commission proposes a general objective of restoring stocks to levels above those that can produce maximum sustainable yield by 2015, which we believe will be extremely difficult to achieve. We suggest that the marine strategy framework directive, which aims to restore commercial stocks to within safe biological limits by 2020, is a more realistic and achievable aim.

In conclusion, we greatly welcome this opportunity and urge the Minister to grasp it and to get to Brussels or Luxemburg to make friends and use his charm to persuade our allies to introduce this groundbreaking change. We applaud his efforts and are 100% behind him in that regard.

[Several hon. Members]

rose—

--- Later in debate ---

[Miss McIntosh]

We have had an excellent debate, summed up brilliantly by my hon. Friend the Minister. I thank everyone for their kind words and warm welcome, both for the motion and the actual report. I wish to draw the Minister’s attention to the fact that he has a suite of opportunities and a menu on which to draw. It is indeed our first call that he should seek to devolve decision making to the regions, but if that attempt were to fail, it would not be the wish of the Select Committee—or indeed the House—to allow the Commission more discretion in taking delegated powers.

The way is open for DEFRA to persuade the Commission to pursue our recommendation or press it to produce a clear road map for regionalisation—or, at the very least, legally binding regional agreements. We cannot proceed with a situation in which we have reliable scientific advice for only 30% of all EU fish stocks—for just 21 out of 60 in the Mediterranean.

The Committee would love to travel to Iceland, as I am sure would others, so perhaps that is a bid that may be looked on favourably. In any case, it gives me great pleasure to ask the House to support the motion.

Question put and agreed to.

Resolved,

That this House considers that the Common Fisheries Policy has failed to conserve fish stocks and failed fishermen and consumers; welcomes the Environment, Food and Rural Affairs Committee’s report, EU proposals for reform of the Common Fisheries Policy; and calls on the Government to use the current round of Common Fisheries Policy reform to argue for a reduction in micro-management from Brussels, greater devolution of fishing policy to Member States, the introduction of greater regional ecosystem-based management and more scientific research to underpin decision-making in order to secure the future of coastal communities and the health of the marine ecosystem.

Water Industry (Financial Assistance) Bill

Baroness McIntosh of Pickering Excerpts

Wednesday 14th March 2012 Commons Chamber

We therefore know that the south and east of our country in particular will require additional investment, putting strain on household budgets. What is a future Secretary of State to do now that the principle in respect of giving taxpayer assistance to regions that are struggling to pay their water bills has been breached and after the power in this Bill has been enacted? We are pondering what might happen under a benevolent dictator, but let us suppose for a few moments—I am sure it will be hard for you to conceive of this, Mr Hoyle—that a successor Secretary of State, or even the current one, decided to use the power to reduce bills in an election year. Indeed, this year’s mayoral election in London might serve as a good example in this regard. We believe that the least the Secretary of State can do is come to a Committee Room of this House and demonstrate that she has worked through the pertinent issues.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

The amendment is defective in that there would be regulatory implications in respect of Ofwat, but they have not been considered. Indeed, I am struggling to understand why we need this amendment at all, given the current text of clause 1.

[Gavin Shuker]

The purpose of the amendment is to ensure that when the power under clause 1 is triggered, there is proper parliamentary accountability and oversight at the time of making any reductions. The hon. Lady mentions the regulatory regime. It would not be particularly affected under clause 1 as it currently stands. Ofwat’s role will be to see the money coming in and the money going out. This amendment would not change that situation at all, except that we in this House would have the opportunity to examine any scheme that is to be established and to have answers to any questions we might have: namely, how long, for which customers and for what duration.

As I have said, we agree with the proposals to give financial relief to the south-west from April 2013. Indeed, we examined this issue when in government and laid the groundwork for helping 700,000 households in the region. We therefore accept the argument that the south-west requires additional help to keep water affordable, but stopping there misses the point.

The south-west has the highest bills in the country and about 200,000 people are under water stress. In the Thames region, that number is 1.1 million, however. Our new clause 1 therefore starts with the simple proposition that by April 2013—the month when financial assistance will start flowing to Devon and Cornwall—the Secretary of State should bring forward minimum standards for a company social tariff. We think that is not too much to ask.

The numbers speak for themselves. As I established on Second Reading, 400,000 households in Wales, 460,000 households in Yorkshire, 780,000 households in the Severn Trent region and 1.1 million households in the Thames region pay more than 3% of their disposable income on water. The squeeze on living standards is real. This Government’s actions are contributing to high inflation and pressure on family budgets. The rise in VAT has pushed up the price of petrol, and the cost of child care is going up at twice the rate of wages, just as the Government cut that element of the working tax credit. Families with children who cannot raise their working hours from 16 to 24 could find themselves almost £3,000 worse off from next month. Energy prices have risen, while for many people pay has been frozen.

The crunch will be felt first and worst by low and middle-income families, particularly those with children. A single-earner couple household with kids that is earning £44,000 might sound well-off—and, indeed, in comparison to many, it is—but it will be hit hard by the £1,750 a year that it will lose overnight when child benefit is scrapped.

[Gavin Shuker]

I will not test your patience, Mr Hoyle, by continuing that debate. The hon. Gentleman puts his case on the record, but one of the key arguments in respect of new clause 1 is the squeeze on family living standards. We believe it would be wrong to park that argument in a different silo from the rising costs of water bills.

People are facing falling living standards, frozen wages and rising water bills. Our amendment would ensure that the power to introduce a company social tariff—a power that we legislated for when in government—is followed by Government action to ensure that these schemes are effective at making water affordable for those who are struggling to pay. Under the current Government’s plans, the design of any social tariff is entirely in the hands of each of our 20 or so water companies. Apart from WaterSure, there will be no national tariff, and there will be no national branding of water affordability schemes. Outside the south-west, there will be no new Government money to help those who cannot pay.

Under this Government’s plans, it is even down to the individual companies to decide whether to introduce a social tariff scheme at all. Although we believe the industry and Government should be working towards a national affordability solution, the first part of new clause 1 would require the Secretary of State to bring forward plans for minimum standards for water company social tariffs.

The second part is just as important. We know that if we cannot measure it, we cannot manage it. Therefore, water companies should be held to account by ensuring a league table is published each and every year reporting on the performance of company social tariffs. In the energy sector, Ofgem sets parameters for what can be included by suppliers as part of their spend on social initiatives, and it annually monitors suppliers’ progress against the voluntary commitment. A handful of water companies already have good social tariff schemes, but we want to raise the bar for all companies to the standards of the rest of the industry, both by requiring the Secretary of State to have minimum standards approved by Parliament, and by the monitoring and reporting of all companies, shaming those poor performers into action. By also requiring the number of households spending more than 3% and 5% of their disposable income on water to be published, we can monitor the scale of the affordability problem and make meaningful comparisons between companies.

Our amendment 1 and new clause 1 are attempts to improve the Bill. We welcome the money for the south-west, but stopping there misses the point. People’s ability to pay for something as basic as water should not be subject to a postcode lottery. This issue is at the heart of shaping a socially responsible water industry in the years to come. I hope the Minister will accept the amendments.

[Miss McIntosh]

I followed the arguments of the hon. Member for Luton South (Gavin Shuker) very closely, and I went along with a great deal of what he had to say, particularly his congratulations to the Minister and the Government on introducing what is a very timely Bill. I think I understand the spirit in which the Opposition amendments have been tabled. The Front-Bench colleague of the hon. Member for Luton South, the hon. Member for Ogmore (Huw Irranca-Davies), is present, and he will recall that we spent many—happy—hours scrutinising the provisions that were to become the Flood and Water Management Act 2010. That Bill was fairly good, but it was improved as we went along—although we did not have sufficient time to address many of its measures, of course.

That Act gives enormous order-making powers to the Secretary of State, and I would be interested to learn from the Minister why the Government have chosen not to draft a parliamentary order in respect of interested parties on this occasion. For the record, a number of hon. Friends—I hope I may call them that—on both sides of the House would normally be discussing the business of the Select Committee on Environment, Food and Rural Affairs, but we deem this debate so important that we thought it was our priority to be here to discuss the Bill and these amendments. Obviously, I am entirely at one with the Government, given that we have worked so hard under successive Governments to come up with a novel means of helping people with water bills in the south-west, but it would be helpful to know why clause 1 made no provision for parliamentary scrutiny. I, therefore, have some sympathy with what the hon. Member for Luton South and his colleagues have proposed.

Amendment 1 and, even more so, new clause 1, on social tariffs, raise the question of why the hon. Member for Ogmore and the previous Labour Administration did not introduce social tariffs as part of the 2010 Act. In addition, why were they not minded to introduce amendments at this stage to deal with bad debt, an issue that is exercising water companies? The Select Committee took evidence just last week on the water bills that the average household is having to pay because of the position on bad debt.

[Gavin Shuker]

The hon. Lady is making her points clearly, and I welcome the spirit in which she makes them. We have accepted the timetabling for this short Bill, which will go through quickly. We have been promised a comprehensive water Bill and if we had more time, we would have much to say about bad debt and we would look favourably on any amendments seeking to deal with it. Unfortunately, such amendments have not been tabled for today.

[Miss McIntosh]

I am grateful to the hon. Gentleman for those remarks. I hope that the Minister will confirm that the draft water Bill will contain provisions on social tariffs and tackling bad debt—I do not know whether there is any more recent news as to when it may be published.

The hon. Gentleman also referred to the Anna Walker report and water efficiency measures. Again, I wonder why he did not include any more detailed provisions on water efficiency measures in his amendment. I also wonder what the Minister and the Government are thinking on such measures, given that we are on the brink of the worst drought for at least 40 years. Anna Walker proposed some imaginative measures that households and businesses could take, and it is disappointing that they were not elaborated upon to a greater extent in the natural environment White Paper or the water White Paper. It would be helpful to know the Minister’s thinking on that. A lot of unfinished business on the 2010 Act could have found its way into this small Bill, but we await confirmation that such things will be dealt with in the wider and more comprehensive draft water Bill.

On new clause 1, I am not sure that I entirely followed the hon. Gentleman’s thinking on minimum standards for water company social tariffs. In what regard are these to be “minimum standards”? Are they to be minimum standards for comparative purposes or will they govern how the social tariffs would apply?

[Gavin Shuker]

I understand the hon. Lady’s confusion on this point. A number of options are available to us in terms of amending the Bill. We felt that the most appropriate route to go down was to allow companies discretion on whether or not to introduce a company social tariff, but to ensure that, at the very least, any such tariff met minimum standards set by the Secretary of State and approved by this House. At the moment, we are at the lowest rung of all the possible interventions and we simply seek to move things up one, in the hope of getting towards a national affordability solution.

[Miss McIntosh]

I am most grateful for that clarification. It would be interesting to know the background to the amendment and, in particular, to new clause 1. It would be helpful to know what discussions took place and what level of support the hon. Gentleman has from water companies and from Ofwat.

I did not have the opportunity to discuss this matter on Second Reading. It is appropriate to examine new clause 1 and amendment 1, as I have a concern and I am trying to help the Minister. A helpful Library note spells out clearly:

“The Government intends that bills be reduced from April 2013. The funding will come from the HM Treasury Reserve until the end of the spending review period in 2014-15. After that time funding will come from the Department for Environment, Food and Rural Affairs…budget.”

I understand that that was confirmed in a House of Commons debate in January.

“The payment will continue until ‘at least the end of the next spending review period’.”

So my question is: from which part of the Department’s budget is this funding going to come from 2014-15 until, presumably, 2019-20?

I must make a general remark about departmental budgets, and I do not think that the Department for Environment, Food and Rural Affairs is any different in this regard. We had the opportunity to question the Secretary of State on the annual report, in its new revised format, and the annual accounts. I think that there is a lack of transparency and clarity in all the departmental accounts—I do not single DEFRA out. I am deeply concerned about the position for those in the south-west whose water bills will or could benefit from this Bill, and for those in other areas who could benefit subsequently, as highlighted in amendment 1 and new clause 1. My real concern relates to how this will be funded in the next spending review period, given that we have not yet worked through all the savings in the budgets of the Department and other agencies, such as the Environment Agency. I am prepared to give any assistance I can in arguing with the Treasury that this money should be ring-fenced. Obviously, there is real concern that if it is not ring-fenced or if additional money cannot be found, other parts of the budget currently being spent on farming or flood defence will simply be hijacked for this purpose.

With those remarks, I welcome the opportunity to have this debate and to understand a little more about the thinking behind these proposals. However, I shall have to disappoint the hon. Member for Luton South by telling him that I will not be following him into the Lobby.

[Dan Rogerson]

It is a pleasure to serve under your chairmanship, Mr Hoyle. I follow the hon. Member for Thirsk and Malton (Miss McIntosh), whom I customarily refer to as “Madam Chairman” in the Select Committee. Obviously, it is a delight still to be considering this Bill. We are doing so rapidly, in order to make progress and get it on the statute book, so that it can start delivering fairness for my constituents and those of other Members across Devon and Cornwall, and so that we can start putting in place the framework for the necessary works here in our capital.

Although the amendment and the new clause proposed by the hon. Member for Luton South (Gavin Shuker) present a number of opportunities for discussion, they will not necessarily take us that much further forward. The amendment makes a reasonable point: if in future the Secretary of State or any other Secretary of State wishes to use the enabling powers of the Bill to make a difference to another part of the country that seems to have been disadvantaged, that should be explained to the House. I would have thought that it would be extraordinary, however, for such a thing to happen without a great deal of public debate or decades of campaigning, such as that which we have experienced in Devon and Cornwall. Perhaps other parts of the country might have such a keen hold on the Secretary of State or any future Secretary of State that they could get it all pushed through within a matter of weeks, but I suspect that that would not be the case. The Treasury would want to know very plainly and in great detail why the money was required and why it was felt to be a priority.

--- Later in debate ---

[Dan Rogerson]

The hon. Lady is very generous in ascribing the idea to Ofwat. I suspect that Ofwat could probably do that anyway and would not need legislation; if it wanted to publish a league table, it could get the information. Ofwat would have information from companies about where the money was coming from and where it was going and could publish it without that needing to be on the face of the Bill.

[Miss McIntosh]

I remind my hon. Friend that, as those on the Opposition Front Bench might not be aware, the Select Committee had some very compelling evidence from the water companies about social tariffs paid for by charitable trusts from each water company.

--- Later in debate ---

[Rory Stewart]

The hon. Member for Luton South (Gavin Shuker) has made a powerful case for apprentices and for better scrutiny of financial mechanisms. I stand, with enormous modesty, not as someone representing the Thames, but as someone representing a large body of water in Cumbria. However, my disagreement with the amendments, and I suspect my party’s disagreement, is based on profound Tory principles. It is a disagreement not on the nature of scrutiny or the importance of apprenticeships, but on the basis of law, the way statutes should be created, the way administration should be driven through and the importance of the issue. We begin in agreement: apprenticeships are important, as is scrutiny. But Parliament is not the way to do this.

This is an elegant and unencumbered piece of legislation. What we have seen in infrastructure investment over the past 50 years is a complete misunderstanding in this country about the importance of Parliament in infrastructure and where Parliament should not be involved. We have been a catastrophe— not just the Labour Government, but the previous Conservative Government—when it comes to making the right infrastructure investments for this country. Why? It is because, unlike Denmark and Germany, we have never developed a proper attitude towards infrastructure or investment. We have never developed a national investment bank. We continue to believe that highly technical matters, such as those relating to the deployment of water or the details of the financing of infrastructure, can be resolved by Parliament, rather than the kinds of specialists in the World Bank who deliver these projects effectively around the world. We see that in water and, just as powerfully, in broadband.

If the Government are pushing ahead with this legislation, and if we are pushing back against the Opposition, it is because the failings over the past 13 years in delivering infrastructure are reflected in the comments of the hon. Member for Luton South. There are better ways of looking at the financing; there are better ways of looking at apprenticeships.

We have in place flexible apprenticeship mechanisms that are currently delivering more than 100,000 apprentices. Encumbering this legislation or, indeed, any future infrastructure legislation with that degree of detail would not only, as my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) pointed out, prove generally ineffective, as it has in the past owing to a lack of monitoring, but take away from civil servants—which is where it should lie—the real responsibility and accountability for delivering good, imaginative infrastructure projects, well financed and with apprentices in place.

Given the importance of this issue, given that water matters so much to us, given that the drop in public sector demand means that we should make more infrastructure investment, given that we need to be much more creative about how we bring financial mechanisms to bear, given that it is so cheap at the moment to borrow money, and given that it should be possible to make not just this but many more profitable investments on the basis of public sector insurance or financing, I beg the hon. Member for Luton South to withdraw the amendment. It would tie the hands of the Government at a very important moment, when we need exactly this kind of infrastructure and exactly this kind of investment in water not just for apprentices but for economic growth.

The way to proceed is with a serious, responsible approach to infrastructure investment, which will not be delivered through the kind of statutory commitments that the hon. Gentleman proposes.

[Miss McIntosh]

I shall limit my remarks and take a slightly different view from that of my hon. Friend the Member for Penrith and The Border (Rory Stewart), because I believe that there is some merit in parliamentary scrutiny and that, often, we have better laws as a result. Given that there is all-party and, indeed, consumer support for what the measure and, in particular clause 2(6), is trying to achieve, I am sure that in moving amendment 2 the hon. Member for Luton South (Gavin Shuker) is not seeking to delay matters through parliamentary scrutiny.

Will the hon. Gentleman consider this approach, however, which I have shared with the Leader of the House? When we have—as was mentioned in the debate about the first group of amendments—parliamentary scrutiny of draft orders under the Flood and Water Management Act 2010, for example, is it not unsatisfactory that all we are required to do is to vote for or against the statutory instrument? Would there not be some merit in being able to amend it?

I have chaired and served on Statutory Instrument Committees, as all of us have been privileged to do from time to time—although I hope that the Whips do not take that as a bid to serve on any in the future. As a humble Back Bencher, however, I believe—and this is where I part company with my hon. Friend the Member for Penrith and The Border—that if we are going to have scrutiny we should be able to amend statutory instruments. I find it unsatisfactory that we may have an amendable motion but not the power to amend a statutory instrument. I just plant that thought in the minds of the hon. Gentleman and of other hon. Members.

[Gavin Shuker]

I am grateful to the hon. Lady for her warm approach to our amendments and for her suggestion. To be clear, we would not necessarily have chosen the process that we are engaged in with this Bill, which is a money Bill. A hybrid Bill might have provided an opportunity really to scrutinise the two projects that, as the Minister has already said, the Bill is about.

[Miss McIntosh]

Bearing in mind the history of hybrid Bills in this House, and the length of time and the amount of dissent that they can involve, I am not sure that that is the path the hon. Gentleman really, truly wishes to go down.

[Richard Benyon]

I am grateful to the hon. Member for Luton South (Gavin Shuker) and his colleagues for tabling the amendments, because that allows me to explain—and, I hope, to reassure the House—about the use and the powers of the clause.

First, I will address a couple of the points that the hon. Gentleman made. I assure him that I am happy to discuss the process with him and for him to meet my officials to see how it is progressing. He is a very honourable individual and he will respect the fact that because some aspects of what we are dealing with are extremely sensitive and are being watched closely by a number of organisations and, not least, the markets, we have to be extremely careful. I am pleased about how things are going. He also has the opportunity to meet representatives of Thames Water, Ofwat and others to express his concerns on this and related issues, and I know that he has already done so.

The hon. Gentleman asked which Ministers will make the final decision on such matters. The Secretaries of State for Environment, Food and Rural Affairs and for Communities and Local Government will jointly take decisions on water and waste water applications. The Secretary of State for Communities and Local Government will take the lead on considering the Planning Inspectorate’s recommendations. My officials are due to meet his officials shortly to agree the process, and I am happy to keep the hon. Gentleman informed as that develops.

I should like to outline the practical problems associated with accepting the amendments. Together with advisers, the Treasury, Infrastructure UK and Ofwat, we are engaged in discussions with Thames Water over the financing of the Thames tunnel project. Those discussions are focused on reaching the right balance between protecting bill payers and taxpayers and ensuring that the project can be financed and delivered by the private sector. By necessity, a project of such scale and complexity as the Thames tunnel involves a complicated and lengthy negotiating process. I can foresee a host of practical problems in stopping that process at the point at which we feel that a reasonable package has been reached, which balances the risks and enables the project to be delivered, publishing a report on apprenticeships and a further cost-benefit appraisal, and then translating the agreement reached into a statutory instrument for debate in both Houses. Even if we can find a way around addressing potentially commercially confidential material in a published draft order, that additional regulatory process would prolong the completion of the project and add cost that is ultimately paid for by the customer. It would also create an extra layer of risk, with likely implications for securing and retaining the interest of investors in the project.

--- Later in debate ---

[Miss McIntosh]

It is a pleasure and a privilege to follow the hon. Member for Wakefield (Mary Creagh). We have had a good debate and I warmly congratulate my hon. Friend the Minister on delivering this Bill and the official Opposition on their constructive approach. I understand their request for greater parliamentary scrutiny and their case was well argued, sincere and well meant. In relation to clause 1, the explanatory notes state in paragraph 12:

“The power is discretionary and may be exercised for such reasons as the Secretary of State feels desirable.”

Any parliamentarian will relish the opportunity of scrutinising such orders and it need not take long. Unfortunately, the Opposition failed in their quest.

The Bill covers a number of important matters. On the affordability of South West Water bills and funding, I take this opportunity to thank my hon. Friend for his remarks and the clarification. I understand that the commitment is there to fund the South West Water bill until the end of the next spending round. I personally will pledge—I am sure others will do so, too—to give him any support we can in his discussions about the funding with the Treasury.

[Neil Parish (Tiverton and Honiton) (Con)]

I endorse what my hon. Friend says about the Treasury, because the situation in the south-west will not go away. We have 3% of the population and 30% of the beaches, and the beaches must be kept clean, which costs a lot of money. We will need help in the future, so if the Treasury could find that money we would be most obliged.

[Miss McIntosh]

I am grateful to my hon. Friend for his support and I want to record how well represented the Select Committee on Environment, Food and Rural Affairs has been in the debate. He obviously has a particular interest in the south-west, and if the money is available only until the end of this spending round, we will then have to find the money for South West Water at the beginning of the next spending round. The powers are there and the Secretary of State has the discretion to extend the scheme to other areas, but, given the economic turmoil in which the country still finds itself, such a result seems highly unlikely. I shall watch this space with interest.

I know that we will continue the discussion on the Thames tunnel on Monday when we debate the waste water national policy statement, but although it is an extremely exciting project, we must not lose sight of the fact that it is a giant project. Londoners and those of us who spend our working week in London should be under no illusion about the fact that there will be a degree of disruption during its construction. I warmly welcome what my hon. Friend the Minister said about the local work force. That is very good news for the Thames tunnel and, obviously, if we have relevant expertise in Thirsk, Malton and Filey, I hope we can provide some of the work force for it.

The Committee has recently heard evidence on other issues, including the White Paper “Water for Life”, the current drought, water efficiency, regulation and introducing competition. As my hon. Friend knows, I have an interest in implementing all the outstanding recommendations of the Michael Pitt report. There is some argument that this Bill should rightly have formed part of the broader Bill that we are still waiting for, but this Bill will enable the Government to meet the commitment given in the water White Paper and confirmed in the Chancellor’s autumn statement.

The Committee stands ready, willing and enthusiastic and is looking forward to pre-legislative scrutiny of the draft water Bill. It is a matter of some regret that that Bill will be delayed, particularly as regards affordability. The water White Paper proposes that companies should be encouraged to introduce company social tariffs to help poorer customers, funded by a cross-subsidy from the water company’s other customers. The Minister said that there are many tools at the disposal of water companies, but it is appropriate that we should consider the suggestions made in the Anna Walker review.

Water affordability is increasingly becoming an issue. Ofwat figures show that 11% of households spend more than 5% of their income on their water and sewerage bill, and we now hear about water poverty as well as about fuel poverty. Company social tariffs can be introduced only where they have the broad support of the company’s customer base. Alternative approaches would be to provide Government funding for social tariffs or to operate customer cross-subsidy at a national level. I am sure we will have the opportunity to explore those ideas in the wider Bill.

Water companies have called on the Government to make available to them information regarding the customers who are most likely to be struggling with their bills—for example, from Department for Work and Pensions data on benefits—to allow them better to target their social tariffs. I listened carefully to what the Minister said and I am not sure that he was able to respond on this point, but the sooner we can make that information available the sooner we can extend these tariffs. I am delighted that the Consumer Council for Water supported this idea in the evidence that it recently gave to our Committee, and the Government have said they are considering this suggestion. I hope we will not be hampered by data protection provisions.

It was shocking to learn in a Select Committee evidence session that bad debt in the water sector costs every paying customer approximately £15 a year. A large part of the problem is the fact that there is no obligation on landlords to provide details of their tenants, which means that water companies do not know who to bill for their services. I welcome my hon. Friend’s comments. It is entirely appropriate to place a statutory obligation on landlords to provide details of their tenants or else be held liable for water bills at their properties. There is an urgent need for such measures, as were included in the Flood and Water Management Act 2010. Those provisions have not yet been implemented and the Government have consulted on using a voluntary approach, which is welcome, to encourage landlords to provide information rather than implementing the provisions in the 2010 Act. Clearly, that was a source of disappointment to water companies. In their evidence to the Select Committee, they said that was a rather retrograde step and argued that the Government should implement the provisions on landlord liability as soon as possible. I am delighted to make that case to the Minister today.

The Minister is aware of my interest in and passion for SUDS—sustainable drainage systems—and I hope that we will have early implementation of those. I pay tribute to the work of Gray and the regulatory aspects of the Gray review, to the work of Anna Walker in her review and to the work of Cave in his review. I hope that the Government will give some teeth to the recommendations not only on affordability, in the measures before the House today and in the wider Bill, but also on water efficiency. This is precisely the time when we should be considering those measures because of the imminent drought. I know that the hon. Member for Wakefield will be as concerned as I am that it is reaching parts of Yorkshire, including my area. That is something on which we need to proceed apace.

I shall be delighted if we do not proceed to bring in the provisions of the 2010 Act to reduce the 25,000 cubic metre limit in reservoirs to a 10,000 cubic metre limit. My hon. Friend knows that I have been extremely patient—or not—in waiting for the provisions on reservoir safety. I hope they will come forward sooner rather than later. We are going to need more reservoirs to be built. Increasingly, engineers have a safety issue and I am sure that there would be a benefit from bringing forward that safety review.

I believe this Bill is a great success. It allows water and sewerage companies to raise the finances and investment they need, particularly in relation to the south-west. We very much look forward to the wider draft Bill, but I commend this Bill and wish it a speedy and fair passage through the other place.

Common Agricultural Policy

Baroness McIntosh of Pickering Excerpts

Thursday 8th March 2012 Westminster Hall

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

It is a great privilege to serve under your chairmanship this afternoon, Mr Weir. The Select Committee on Environment, Food and Rural Affairs is delighted to have secured this debate, which is welcome and timely.

The common agricultural policy has been on a long journey since it was first established, moving from a time of rationing through a time of plenty to a time of increasing fluctuation. Previously, the CAP took the lion’s share of the European Union budget. Now it accounts for approximately 40% of total EU spending. We are mindful of the fact that negotiations on the CAP reforms are continuing in parallel with the negotiations on the financial framework 2014-2020 for the European Union.

The CAP is at a crossroads. Decisions made now will determine our future food prices and availability and shape Europe’s countryside and rural communities. I want to thank all those who participated in the preparation of this report. I am also grateful to those who have contributed to our subsequent inquiry into the greening proposals contained in the communication. We have not yet had the opportunity to agree that and publish a report. I pay tribute to those who farm not only in Thirsk, Malton, Filey and the rest of north Yorkshire, but across the United Kingdom. They have the perils of the landscape and also the elements to contend with. They are not just feeding the nation, but are increasingly being called on to feed a hungry world.

The current round of CAP reform is being played out against a very different background to farm reforms. Food security is rising up the political agenda, placing a renewed emphasis on agricultural policy. I submit that there is a potential inconsistency at the heart of Government policy between food production and sustainability. We await the Minister’s response to hear where exactly the Department for Environment, Food and Rural Affairs is taking us in its negotiations.

We should not underestimate the challenge facing agriculture globally. We need to increase production significantly, but we cannot do that simply by using more land, more chemicals and more water. We already have problems in the UK food system. Prices are rising. We have food inflation running at about 4%, but farm incomes are falling for many farms. Grazing and livestock income is predicted to fall nearly 50% over the coming year.

[Paul Flynn (Newport West) (Lab)]

In view of the change in farmers’ prosperity—there have been better times recently, particularly in the value of agricultural land—does the hon. Lady think it might be a good time to call on the farming community to take their share of the cutbacks suffered by the rest of the country? Would she suggest that a cap of £26,000 be placed on subsidies?

[Miss McIntosh]

I am sure the Minister will have heard that. That proposition was not put before the Committee and we have not reached a conclusion on that. The farmers are making a huge effort—unpaid—in areas such as retaining and storing water, for which it may be possible to use funds from the CAP in future.

The CAP needs to provide a clear plan for growth and sustainability. As a Committee, we were not convinced that either the European Commission or indeed the Department have faced up to the challenges ahead. In our approach in the report before us this afternoon, we are perhaps less reformist than DEFRA. We express some reservations about the prospect of capping. The hon. Member for Newport West made an interesting intervention, but we will resist any attempt—it would not be the first attempt—to seek to discriminate against some of the larger units that we have. Farming units tend to be larger in the UK. That is partly historic and partly because they are more productive. We would resist any attempt to discriminate on the grounds of size, and we would also resist the greening of pillar one through compulsory measures.

We recognise that our farmers are already subscribing in larger part to agri-environmental measures than many other farmers in the EU. We believe that successive Governments have done absolutely the right thing in pursuing that policy. We do not want to see our farmers, who are in agri-environmental agreements, discriminated against by having to go possibly at short notice down a different path, or be discriminated against by facing a penalty when they leave agri-environmental agreements to look at new agreements. We want reassurance on that from the Minister today.

[Glyn Davies (Montgomeryshire) (Con)]

Even though I am making an intervention, I should declare an interest as a farmer. Does the hon. Lady agree that we must resist the principle of greening the CAP, which, I must admit, most people in this country support? It must not happen in a way that increases bureaucracy and the difficulty of operating within it to the extent that it discriminates against the British farmer.

[Miss McIntosh]

For the sake of clarity, I am addressing the House as Chair of the Environment, Food and Rural Affairs Committee. I will leave it to my right hon. Friend the Minister to respond to the debate, and I commend the work that he does. Having been a shadow Minister, I am delighted to participate in this debate.

I will deal some of the points that my hon. Friend has made. On food security, the EU must have a significant degree of self-sufficiency. Speaking personally, I am concerned that we are less self-sufficient in this country than we have been historically. That is a comparatively recent development over the past five years. I hope that we can stop such a development in its tracks and that we can become not only increasingly self-sufficient but a major exporter, following the Foresight report in particular and some of the invitations to farmers in that report.

[Julian Sturdy (York Outer) (Con)]

I refer to my entry in the Register of Members’ Financial Interests. My hon. Friend is making a key point about food security and the importance that it will have not only in the UK but across the world, and also to the impact on food prices. Does she therefore agree that it would be dangerous to take all arable land out of production in the name of greening?

[Miss McIntosh]

We will return to greening measures in our further report. The greening measures are the most controversial part of the reform. We believe that the CAP should enhance food production capacity—not necessarily increasing production now—by keeping land in agricultural use and in good environmental condition so that the land is usable when we need it. We need a competitive and viable agricultural sector. We need to redress the imbalances, because farmers cannot get a fair return from the market.

[Kelvin Hopkins (Luton North) (Lab)]

The hon. Lady makes a point about the importance of food security for the long-term future and for maximising our self-sufficiency, with which I totally agree. Does she agree that the logic of such an argument is that agricultural policy and agricultural subsidy should be managed nationally, not internationally?

[Miss McIntosh]

The evidence we received was very clear in that regard: as long as there is a level of farm support across the European Union—and in other parts of the international community—farmers subscribe to decisions being taken within the European Union, so that there is a proverbial level playing field. That is something I have sought most of my professional life. I do not know if we have reached it yet.

I want to say a few words about direct payments. In the Committee’s view, direct payments should be retained—the evidence was very powerful in this regard—up to 2020. They should not be abolished until business conditions in agriculture improve, because UK farms are highly dependent on direct payments—currently the single farm payment as introduced in 2005. Without them, more than 50% of farmers would be unprofitable. I dare say that many of those would probably be in my uplands in Thirsk, Malton and Filey. The evidence we received indicated that UK livestock production would fall significantly as a result of such an approach although, interestingly, it would have only a negligible effect on crop production. The Committee is concerned about the implications for food security and for landscapes, and the rural livelihoods that depend on farming.

[Ian Paisley (North Antrim) (DUP)]

I thank the hon. Lady for giving way in this very important debate. Does she accept—and has the Committee reflected on—the issue regarding the fair distribution of the amounts between pillar one and pillar two? Does the Committee recognise that there must be a fair distribution, which should not be at the expense of one pillar over the other?

--- Later in debate ---

[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.

[Barry Gardiner (Brent North) (Lab)]

I am grateful to the hon. Lady for setting out the Committee’s report so clearly and for initiating the debate. She will have heard the Minister say from a sedentary position, “That’s nonsense. It’s piffle.” It is important that she sets out how the Committee arrived at that conclusion and the basis of the witness statements that we took from the Minister and others.

[Miss McIntosh]

I am grateful to the hon. Gentleman and distinguished member of the Select Committee for those remarks. I could go through the witness statements at some length, but the record speaks for itself. For the record, the Government response states:

“The UK Government accepts that there is more for us to do in this area and are continuing to develop our ideas for reform. A UK Government priority will be to continue the good work undertaken in previous reforms, such as phasing out the remaining coupled subsidies and continuing the market orientation of the CAP.”

I am sure that the Minister would like to stand by the evidence that he gave to the Committee in an oral session.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

I need to point out to my hon. Friend and, indeed, to the hon. Member for Brent North (Barry Gardiner) that if she read her speech as I believe she did, she said that I had stated in witness evidence that the policy was to phase out the single farm payment over the next seven years and end it shortly thereafter. That in itself is a contradiction. That is not our policy. Our policy is, yes, to seek a phasing out of the single farm payment. However, she implied that I had said that it was to be extinguished by the end of that seven year period. That is not the policy.

[Miss McIntosh]

I am grateful for that clarification because the Committee was led to believe that that was the desire of the Department and the Minister. Certainly, that was the understanding of the witnesses—both the witness statements—from the farming community as well. I am sure that hon. Members will want to return to that matter.

We have already moved away from the historic basis of payments, and it would be anachronistic to continue to pay farmers on the basis of what they produced a decade ago. However, a flat rate per area would result in considerable redistribution within the UK, suggesting that national flexibility will be needed.

Turning to greening the CAP, the Committee agrees with the principle that the future CAP should reward and encourage sustainable farming. The Foresight report, “The Future of Food and Farming: Challenges and choices for global sustainability”, says that we will need to produce more food but use fewer inputs. We conclude that greening measures should not come at the expense of productive successful agriculture, but we need to find win-wins for sustainability and competitiveness. I repeat: we applaud the fact that, in this country, our farmers are already greening through agri-environmental schemes to a much greater extent than elsewhere in the European Union.

[Paul Flynn]

Moving away from the principle of subsidising food production to subsidising the ownership of land, a recent claim was made that nearly 1,000 landowners in this country, some of whom are not farming their land at all, receive very large grants of more than £250,000. Does the hon. Lady think that the pubic will accept not only that such farmers should receive those large amounts, but that those large amounts should increase at a time when cuts are being made everywhere else in the economy?

[Miss McIntosh]

With the greatest respect, I have addressed capping, having a CAP and the historic reasons why we are more productive and have larger units. I personally oppose any move to discriminate against our productive farmers on those bases.

The European Commission seems to be proposing a return to compulsory set-aside. We on the Committee think that that runs counter to the prevailing message that we should produce more food. The Commission needs to focus on ways to help farmers to produce more using fewer inputs for the reasons that I have given.

The Commission’s proposals to add more conditions into pillar one would tie farmers up in environmental red tape without delivering tangible environmental benefits. The Committee was persuaded that we need more simplification and less complication, which is why we are hesitant about the proposals. Also, farmers need to be involved in the process, so voluntary measures and incentives are preferable to more regulation.

The evidence that we have received shows that UK agri-environmental schemes are a European success story. CAP reform should build on that success by encouraging a broader uptake of agri-environmental schemes across Europe, not by creating a whole new system that requires more auditing and more expensive computer systems.

We reject DEFRA’s alternative proposal, which, as we understand it, would shift most of the CAP budget into pillar two and make it more flexible with fewer controls over how much member states spend on different objectives, because pillar two is co-financed—both the EU and the member state contribute funds. The Committee is concerned that cash-strapped member states, not least our own, will not want to take up more co-financed measures, and UK farmers will end up being disadvantaged. A common approach and common funding are needed across the EU.

The briefing prepared by the National Farmers Union for today’s debate contains a useful graph that shows that we are at the absolute bottom: the UK receives the lowest per hectare allocation of pillar two funds of all member states. That is reflected in the fact that pillar two payments for England are low, owing to the reluctance of successive Governments to draw down discretionary European funds. It would therefore be nonsensical to pile more funds into pillar two away from pillar one.

On the idea of ceilings and capping, the Committee disagrees with a payment ceiling, whereby the maximum direct payment cannot go above a certain level—probably €300,000—irrespective of the size of the farm. Direct payments should mostly reward farmers for their provision of a public good, so larger farmers deserve larger payments. The evidence that we have received suggests that capping direct payments would discourage farm rationalisation and generate more business costs.

Regarding tenants and landowners, we invite DEFRA to ensure that a new definition of an active farmer will not disadvantage UK tenant farmers and commoners, some of whom are found in my constituency. The UK has a unique system of tenanted and common land, of which I am extremely proud. The Commission proposes a new definition for eligible CAP recipients, and it is essential to ensure that tenants and commoners are not left out.

Tenant farmers can currently claim direct payments, provided that they meet the usual scheme rules. We agree that it is important that they continue not only to do so following CAP reform, but to be eligible, where they meet the rules, for agri-environmental schemes. We are working with representative commoners and other interests in the management and protection of common land to identify options for the delivery of direct payments on common land. I warmly welcome the fact that that is the Government’s response, and I pay tribute to the Minister for his personal involvement. We concluded that there is a need to look at European rules to protect tenant farmers, and we urge the Minister to lead, as he is doing, in that regard.

In our view, the CAP should in the future include optional coupled payments within strict limits. The Committee agrees that most payments should be decoupled from production, as with the single farm payment, because that allows farmers to respond to the market, is less distorting to world trade and does not lead to over-production. However, in the uplands, keeping livestock is central to the delivery of other public benefits, such as landscapes, but it is unprofitable. Payments per head within strict limits would be a fair and transparent way to reward farmers for the public benefits that they provide. We recognise that DEFRA opposes such payments, but we hope that the Minister is open to persuasion.

We have not taken a strong position on the budget. We agree that some savings need to be made, but they should be balanced against their effect on farmers’ incomes and the ability to fund agri-environmental schemes. EU money is the main funding for the agricultural environment and the environment in the UK, and the Department should be mindful of the consequences that will follow in stripping it away.

The evidence that we received did not support a return to greater price support, but said that measures such as intervention buying would be needed in the future to prevent a collapse in production if prices fall.

Our bottom line is that simplification of administering the CAP is desirable and that elements of the Commission’s proposals risk making the CAP more complicated—for example, by using a new definition of an active farmer that might have heavy audit requirements, a more complex new system of allocating direct payments or more green conditions.

Today’s debate is timely; the negotiations are at an early stage. We believe that the Commission’s proposals lack both vision and detail on how to increase the competitiveness of UK agriculture. Elements of the Commission’s proposals, such as payment ceilings and additional support for small farmers, risk making UK businesses less supported. The proposals should give greater consideration to rectifying imbalances in the food supply chain and strengthening farm extension services. Any new definition of an eligible recipient of CAP payments must not, as I said earlier, disadvantage the UK’s tenant farmers and commoners. Currently, the CAP is in a fairly good place in this country, but there is some way to go before we can best deliver a food policy that meets all requirements and delivers for the environment in this country and beyond, in the wider European Union.

--- Later in debate ---

[Mr Paice]

I was going to come to that point. The hon. Lady referred in her speech to the fact that I was in Scotland yesterday. I met the Scottish NFU, and I gave evidence to the Rural Affairs, Climate Change and Environment Committee in the Scottish Parliament. I was asked the same question. I cannot give clear commitments, because we do not know what the outcome will be. We do not know what the total CAP budget will be. We know what the Commission is proposing. We certainly do not know how much there will be in pillar one or pillar two. We do not know what the convergence debate will lead to and whether that will be reflected in how we divide up the UK’s share of the cake, whatever it may be.

I will make the point that I made yesterday. It is a blunt instrument simply to take the total payment—to Scotland in this case—and divide it by the number of acres, because the acres are not all equal. As the hon. Lady rightly said, 85% of Scotland is in less favoured areas. Some of the land in the highlands is of little, if any, agricultural use. That bald statistic is a blunt way to compare resources. In any case, as she will be aware, the resources are simply based on the historical payments before the advent of the single farm payment. That is fact. As for the future, I made it clear yesterday that we will sit down with all the devolved legislatures to consider how to split the cake once we know how it has been arrived at and how big it is. We cannot prejudge the outcome.

I will say, because the hon. Lady intervened, that the point about the less favoured areas is crucial. The British Government fully support the need for Scotland, Wales, Northern Ireland and England to target support at such areas, which will be renamed under the CAP. I have forgotten the phrase, but it will come back to me. Those areas will get a new title, but little else will change. I am told that they will be called areas of natural constraint. In an ideal world—I will come back to the wider aspects—the targeted payment is best made from pillar two. The hon. Member for Ogmore referred to the uplands entry level scheme, which is what we have in England. Pillar two targeted payments for those areas with natural constraints could be just as effective as a blanket per acre, or per hectare, payment.

[Miss McIntosh]

rose—

[Huw Irranca-Davies]

rose—

--- Later in debate ---

[Miss McIntosh]

We are benefiting from the fact that the Government’s thinking has moved on. If the Government are eventually moving away from direct payments, what tools does the Minister hope to use to make UK farming more competitive? I do not think that agri-environment schemes make British farming more competitive. They deliver sustainable farming, but we are looking to develop more competitiveness across the EU.

[Mr Paice]

I have never suggested that agri-environment schemes will make the industry more competitive. I will come to that point later.

--- Later in debate ---

[Miss McIntosh]

I thank everyone for contributing to the debate. I thank the Minister for being so generous in updating the Chamber this afternoon. I particularly thank my colleagues on the Select Committee—we work very hard. The saying is, “You wait for a bus and then they all come along at once.” We, as has the Department, have been occupying ourselves with reform both to the common agricultural policy and to the common fisheries policy.

The hon. Member for Banff and Buchan (Dr Whiteford) brought with her the experience north of the border. I am sure there are many similarities between her constituency and mine. I am sure she will have received some comfort from the Minister’s remarks this afternoon.

My hon. Friend the Member for Camborne and Redruth (George Eustice) came through with some novel ideas about dismantling the CAP in its existing format. The difficulty always is that if we move away from direct payments, or, eventually, any support for farming, it will be too attractive for whichever party is in power to dismantle support, for the reasons given by the Minister. The farmers in my constituency would like to be less dependent on farm subsidies, and be allowed to go out there and do the job. Whether state aid rules on their own would be sufficient to achieve a level playing field, I am not sure.

We have benefited greatly from the contribution by the shadow Minister, the hon. Member for Ogmore (Huw Irranca-Davies), who has had the opportunity to participate in previous debates as a Minister. I hope that the Minister of State welcomed the opportunity—he was gracious enough to say so this afternoon—to participate. It is some time since he has responded to a debate, but this afternoon he has had the opportunity to reach a wider audience.

A lot of ideas have coalesced around the need to simplify and reduce regulation. I add my congratulations to those that have been expressed. I think the Department is the first to have embarked on something on the scale of the MacDonald report. That is very welcome indeed and I hope that other Departments will take courage from the work that the Department has done in that regard. I hope that we will perhaps be a little more ambitious. While we welcome the “one in, one out” rule that seems to apply at the moment, where there are opportunities to dismantle more than one regulation, I hope that we will seize the opportunity to do so.

The arguments for subsidiarity and regionalisation are well made, for both CAP and common fisheries reform. I hope that we have given the Minister some arguments to deploy. The previous Committee had the opportunity to consider the Food 2030 report, which was published right at the end of the previous Parliament and the tenure of the outgoing Government. I applaud and welcome many of the announcements and policies that the present Government have rolled out. I particularly welcome the announcement from the Minister this afternoon—I do not know if it is new or recycled. He graciously met some of those who have benefited from the previous rural grants and funding. My own area will welcome the announcement of the investment of the additional money in training and skills. He will be aware of the ONE scheme in my constituency, which gained support from the Churches, as well as others in the wider community. I hope that there will not be any loss of continuity. I thank all of those who have participated in the debate, and all of those who have contributed to the report and helped to put it together.

Question put and agreed to.

Water Industry (Financial Assistance) Bill

Baroness McIntosh of Pickering Excerpts

Tuesday 6th March 2012 Commons Chamber

[Richard Benyon]

I am sorry, but I am a bit short of time, and I may be about to answer the point. Despite the concerns raised by my right hon. Friend the Member for Bermondsey and Old Southwark, Ofwat regulates the ring-fenced regulated businesses and ensures that customers receive value for money from them. Who ultimately owns that ring-fenced business makes no difference to customers; the licence conditions attached to the ring fence provide the necessary protections. Thames Water’s structure is similar to that of several other water companies.

We heard eloquent and passionate speeches from the right hon. Member for Lewisham, Deptford (Dame Joan Ruddock) and from the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), reminding us of the potential impacts of the tunnel’s construction on their constituents. I remain ready to work with them to try to minimise the impacts in any way I can. I am very conscious of the effect that it can have on communities.

My hon. Friend the Member for Thirsk and Malton (Miss McIntosh), my right hon. Friend the Member for Bermondsey and Old Southwark and the hon. Member for Edmonton (Mr Love) asked for an opportunity to amend the waste water national policy statement. We are, of course, happy to have a debate on the policy statement, and, like other debates in the House on national policy statements, it would be a yes or no debate. Best endeavours are being made to ensure that it is held before the Easter recess, and I hope that that provides the necessary reassurance. As for the other project to which the policy statement refers, the Deephams sewage treatment works, Thames Water intends to begin the phase 1 consultation in about June this year. It is still working on a preferred option, and aims to submit a planning application in late 2013 or early 2014.

The hon. Member for Wakefield (Mary Creagh), the shadow Secretary of State, sometimes reminds me of someone having a fight in a pub when the lights have been turned out. She flails around in all directions, and causes as much damage to her mates as to anyone else. She had to intervene later in the debate to tell us that she was, in fact, supporting the Bill, which is a great relief. That was underlined by the hon. Member for Luton South (Gavin Shuker), and we are grateful for his support as well.

Despite the concerns raised by the shadow Secretary of State, the powers in the Bill are appropriately drafted. Although we currently have no plans to use those powers other than to assist South West Water customers and in relation to the Thames tunnel, we heard many calls today—including, again, calls from Opposition Members—for us to legislate to help reduce the problems of water affordability around the country, and to invest in new infrastructure to help make the country more resilient to droughts in future. As the water White Paper made clear, given our growing population and changing climate, our need for infrastructure investment will not diminish. We should leave ourselves the flexibility to offer similar Government support to future projects if the case is strong. However, it is inconceivable that any nationally significant infrastructure project would proceed with Government backing unless the case had been fully debated, as the Thames tunnel project is at present.

Let me repeat the Secretary of State’s commitment: we will publish a draft Water Bill for pre-legislative scrutiny in the coming months, and it will cover the remaining legislative commitments set out in the water White Paper. The market reform proposals in the White Paper will be a key part of the Bill, and are a direct response to Martin Cave’s invaluable report.

In the few seconds that I have left, I want to talk about affordability. One of the necessary provisions is the ability for us to issue guidance on water company social tariffs, so we can address the issue of water affordability nationally. The reduction in South West Water bills to which we are committed addresses an exceptional historic unfairness, but we recognise that many people in the south-west and elsewhere are struggling to pay their water bills. We are encouraging all water companies to introduce social tariffs to reduce those bills in order to help people who would otherwise struggle to pay them, and we will publish final guidance on the design of the tariffs in the spring.

My hon. Friends the Members for St Ives (Andrew George) and for Newton Abbot (Anne Marie Morris) were keen for us to expand the existing reach of the WaterSure scheme. I assure the House that we have considered that carefully, but, as Members will appreciate, we have to make tough decisions about the use of limited public funds.

[Miss Anne McIntosh (Thirsk and Malton) (Con)]

Will my hon. Friend give way?

[Richard Benyon]

I am sorry, but I cannot.

My hon. Friend the Member for Newton Abbot expressed the fear that not all household customers would receive assistance. We know that in some cases the bill payer is the landlord or manager, for example in a park home, a block of flats or sheltered accommodation. I assure my hon. Friend that we are working with South West Water to ensure that the money reaches the people, in whatever residence they live.

As the water White Paper explained, keeping water affordable is vital, but it is also vital for us to use water more efficiently. While there are many uncertainties in connection with the weather, the one thing of which we can be certain is that it will become more unpredictable. That is why we are taking action now, and why we are responsible for ensuring that we use water wisely so that we can retain a secure water supply in the months and years ahead.

I am grateful for the support of Members in all parts of the Chamber, and I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Water Industry (financial assistance) Bill (programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Water Industry (Financial Assistance) Bill:

Committal

1. The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on consideration and on Third Reading

2. Proceedings in Committee, any proceedings on consideration and proceedings on Third Reading shall be completed at one day’s sitting.

3. On that day, proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption.

4. On that day, proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption.

5. Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, any proceedings on consideration or proceedings on Third Reading.

Other proceedings

6. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Mr Vara.)

Question agreed to.

Water Industry (financial assistance) Bill (Money)

Queen’s Recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a),

That, for the purposes of any Act resulting from the Water Industry (Financial Assistance) Bill, it is expedient to authorise-

(1) the payment out of money provided by Parliament of any expenditure incurred by the Secretary of State by virtue of the Act, and

(2) the payment of sums into the Consolidated Fund.—(Mr Vara.)

Question agreed to.