Agriculture Bill (Tenth sitting)

Daniel Zeichner Excerpts

Committee stage & Committee Debate: 10th sitting: House of Commons
Tuesday 3rd March 2020 Public Bill Committees

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Victoria Prentis)]

What a pleasure it is to have you back with us, Sir David! I thank the hon. Lady for the amendments, which reflect an obvious desire to ensure that all farmers and producers are spared from unfair trading practices. We absolutely share that goal; our only disagreement is the means proposed to achieve it.

Essentially, we believe in the principle of a targeted solution for a specific problem, and we are keen to take the time to get the solution right. No two agricultural sectors are the same, and neither are the contractual issues that they face. Certain sectors, such as the poultry and grain sectors, may, as my right hon. Friend the Member for Scarborough and Whitby reminded us, be so well integrated that contractual problems do not often arise.

We should have targeted solutions where they are needed, but we need to avoid burdensome new requirements where they are not. To ensure that, the specific detail of each code will be developed in consultation with industry and set out in secondary legislation. Enforcing a time limit on the creation of fair-dealing obligations would prevent regulations accounting for the complex nature of our agricultural market.

Turning to amendment 78, I assure the hon. Member for Newport West that all types of agreement to purchase agricultural products can already be protected by the clause, and the position of farmers in the supply chain will be protected under the current drafting. The clause allows us to regulate for the purposes of fair contractual dealing. That goes beyond a formal, written contract. As the hon. Lady no doubt knows, a contract constitutes any agreement of sale, whether it is formally written down or not. In the dairy sector, it is commonplace to write things down; in other sectors, there are more informal, word-of-mouth arrangements, particularly in the red meat world and parts of the arable world. However, the clause covers all agreements, written or otherwise.

On amendment 79, we deliberately designed the clause to be as flexible as possible. That is a change since the previous iteration of the Bill. Having listened to comments made at the time, we severed the link to the list of sectors in schedule 1 so that future regulations are no longer bound by it. It remains very much our belief that each sector is different and requires a tailored approach. We intend to be forensic in establishing what the needs of each sector are. That will include detailed engagement with industry.

[Daniel Zeichner (Cambridge) (Lab)]

I am thinking back to our earlier discussion on data throughout the entire system. Why do some sectors need to be treated differently here, but did not when it came to the collection of data?

[Victoria Prentis]

During our earlier conversation, it was clear that we will have to be forensic and tailored in our approach to data collection. This is very much part of the same theme. We do not want to treat all sectors the same when they raise different issues and come to us with very different current practices.

If issues that are consistent across multiple sectors are revealed, and if they could be addressed under new, comprehensive regulation, we absolutely have the power to deliver that. I therefore ask the hon. Member for Newport West to withdraw the amendment.

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[Victoria Prentis]

I thank the hon. Lady for her thoughtful desire to progress with these amendments, to ensure that Scottish farmers are effectively and appropriately supported. We are committed to ensuring that the provisions are applied effectively in all the nations of the United Kingdom.

Recognition as a producer organisation, association of producer organisations or inter-branch organisation automatically activates exemptions from competition law. That has been the case under the EU regime since the omnibus regulation, which amended several CAP instruments at the beginning of 2018.

That approach will continue under the new domestic PO regime. The act of granting recognition therefore relates directly to competition law, which, as I said earlier, is reserved to the UK Parliament. However, I will take this opportunity to assure both the hon. Lady and Scottish Ministers that this merely reflects the status of competition law as an area reserved to the UK Parliament. The PO regime will continue to operate as it always has. We have no intention of introducing jarring changes that will undermine its functioning. It will continue to be administered by the RPA, as is currently the case. We will consult thoroughly, both with the devolved Administrations and with farmers, in every part of the UK, during the development of our bespoke UK regime. I ask the hon. Lady to withdraw the amendment.

[Daniel Zeichner]

A number of these amendments relate to wider devolution issues; my comments are applicable to a number of them, in particular those that we are discussing at the moment.

We are going to need clarity on how we will work together in the future, because the structures being set up are quite complicated. For some, it would be entirely reasonable for the powers to be passed to the devolved organisations, but there needs to be a detailed discussion about the merits in each case. At the moment, I am not convinced in this instance. I was actually persuaded by the Minister’s arguments about whether, as we stand, passing these matters down to the devolved nations would be the right way to go. Although I certainly would not rule out considering doing that further in future, because we want to ensure that we devolve as much power as possible, there are issues around competition law—we will come to further amendments where is some interaction with World Trade Organisation rules, general agreement on tariffs and trade rules and so on, which make it difficult to do that. While supporting the Government on this occasion, I want to put down a marker to say that in future we would want to devolve where possible.

[Deidre Brock]

I am very interested to hear the hon. Gentleman’s comments. Clearly, there are discussions to be had—before Report, perhaps—on this and many other issues. However, I am afraid this still comes back to the point that, in our view, these decisions are more properly reserved to Scottish Ministers, and so we will be pushing the amendment to a vote.

Question put, That the amendment be made.

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[Victoria Prentis]

I am grateful to the hon. Member for raising the issue of the red meat levy with her amendment. I recognise that there is an inequality arising from the current system of producing the red meat levy. Indeed, our Parliamentary Private Secretary has been assiduous in bringing that to our attention.

The clause is designed to provide a permanent solution to this long-standing issue. In the meantime, the three levy bodies—the Agriculture and Horticulture Development Board, Quality Meat Scotland and the HCC, which I will not even begin to pronounce—[Interruption.] The hon. Member for Newport West must bear it in mind that I have a vast number of Welsh relations who would not appreciate it if I did not get my pronunciation perfect. The three levy bodies are working collaboratively, using the interim fund, to benefit the red meat industry across the whole of Great Britain. Adequate time must be allowed for the full and careful development of a redistribution scheme, allowing for due consideration and consultation in order to provide a workable solution.

The amendment moved by the hon. Member for Edinburgh North and Leith would provide a short timeframe in which to create a new scheme. Imposing such a deadline is not appropriate, because it is important that we consult properly on how the redistribution of the red meat levy is delivered, and the Administrations must have time to agree the scheme. The interim fund continues to be available in the meantime. I therefore apologise that I cannot give her every assurance she seeks at this point, but she knows that we have worked hard to put right this wrong, and will continue to do so. In that spirit, I ask that she withdraw the amendment.

[Daniel Zeichner]

I will be brief, but the clause is something that we can all welcome. There has been a long-running difficulty and it reflects changes in the availability of local abattoirs in particular. Many of us would like to see measures elsewhere to try to redress that. In the absence of that, the world has changed and it is welcome that the Government are responding positively. If it is pressed to a vote, we will be happy to support the SNP’s position.

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[Victoria Prentis]

I receive all the hon. Lady’s amendments warmly. She has again raised an important issue. Farm business tenancies are a vital part of our farming industry. They provide a flexible way for established farmers to expand their business, by renting additional parcels of land. Crucially, they also open the way for new entrants, with no family connection to the land, to get a foothold in the sector.

As I have already stated, I want a thriving tenant farming sector. That is why we have included provisions in the Bill to modernise agricultural tenancy legislation. Although I recognise concerns that the new dispute conditions do not include farm business tenancy agreements, there are very important reasons for that.

[Daniel Zeichner]

Will the Minister give way?

[Victoria Prentis]

Shall I set out some of my reasons first? Then, if necessary, I will give way to the hon. Gentleman. First, evidence from the public consultation on this issue in England does not support extending the provision to include farm business tenancies. That is because, as the hon. Member for Newport West said, they are more modern, commercial agreements, negotiated more recently than agreements under the 1986 Act. They are shorter term and reviewed more regularly, so that tenants have the opportunity to renegotiate and vary the terms to fit changing commercial conditions, and ensure that they can access future financial assistance schemes.

Secondly, the legal framework governing farm business tenancies already provides for enabling the parties to agree terms, so that the tenant can continue to deliver diversified activities, such as environmental schemes, alongside farming. Thirdly, extending the provisions to include farm business tenancies risks undermining landlord confidence in tenancy agreements that had been freely and relatively recently entered into by both parties. That could lead to landlords withdrawing from the let sector in favour of contracting or farming in hand, which would reduce opportunity for tenant farmers.

The aim of the provisions is to provide a dispute mechanism specifically for tenants of 1986 Act agreements, because those are lifetime agreements that were negotiated 30 to 40 years ago in a very different world. They often contain outdated restrictions that could act as a barrier to tenants meeting modern statutory requirements and, in England, accessing future farming schemes that we are setting out.

[Daniel Zeichner]

This is a complicated set of issues, and I seek clarification. Some lack of clarity about post-1995 holdings has been raised with me. The question is, going back to the financial assistance schemes, who would make the decision to de-link? Who would get the lump sum? Is it the tenant in post-1995 cases?

[Victoria Prentis]

The hon. Gentleman and I have undertaken to have a specific conversation later about de-linking and lump sum payments. I tried to set out the position this morning. Once a decision has been made to de-link payments, they may continue to be paid to the tenant. Indeed, the person farming the land—so the tenant—would apply for any lump sum. However, the two are separate, as I set out this morning. I hope that answers his question.

The provisions in schedule 3 had broad support in the public consultations in England and Wales. They have been shaped to ensure that the interests of tenants and landlords are considered. We will continue to consult industry widely, including members of the Tenancy Reform Industry Group, as we develop future regulations. I therefore ask the hon. Member for Newport West to withdraw her amendment.

[Ruth Jones]

I welcome the Minister’s commitment to a thriving tenancy sector—that is great news. I thank her for the explanation and for her commitment to have an ongoing dialogue with my hon. Friend the Member for Cambridge. I look forward to the outcome of those discussions. We still have reservations about this important area, but we will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 3, as amended, agreed to.

Clause 35

Marketing standards

[Daniel Zeichner]

I beg to move amendment 84, in clause 35, page 31, line 38, leave out “may” and insert “must”.

This amendment would make it a duty for the Secretary of State to make regulations as to labelling as to method of production.

We welcome the fact that subsection (2)(g) enables the Secretary of State to make regulations on marketing standards regarding farming methods. We believe that it opens the door to looking properly at the labelling of farmed products. Under the clause, however, the Secretary of State once again has a power rather than a duty and so has no actual obligation to take the matter forward. That bothers us.

We therefore believe that the Bill should be strengthened to require the Secretary of State to make labelling regulations requiring meat, milk and dairy products, including those produced intensively, to be labelled as to farming method. That would be an important development and helpful to consumers. A great step forward for consumers would be to know what they are purchasing across the board in terms of animal products. Consumers could then make decisions based on those higher animal welfare and environmental considerations.

I am reaching back to find my favourite document, or this week’s favourite document—never to hand when I want it, of course—[Interruption.] I am delighted—the Minister obviously loves the document too.

[Victoria Prentis]

I love it too.

[Daniel Zeichner]

Of course. Last week, we had an interesting discussion about labelling. I take Members back to that because on page 16 of the document is a theoretical discussion of the effect of labelling. The Government tell us:

“Tapping into the consumer willingness to pay begins with understanding the value-action gap”—

which I am sure is being discussed on every omnibus around the country—and that

“it is possible for someone to derive positive value from the fact that animals are being well cared for as a result of another’s purchasing decision. Those not buying animal products should be included in any assessment of public value, one person’s holding of this value does not detract from another’s.”

I find that a puzzling suggestion. I tried it out on my partner—I will not say what she said, but she was not convinced that, basically, other people buying poorly produced food somehow does not detract from the wider public good. That is a theoretical discussion the Government may want to go back to. The following page states:

“Addressing consumer understanding, and understanding how purchasing decisions are made in practice in the retail environment and online, are also key elements…It is important to note that improved transparency alone can only address information asymmetry, and does not capture the public value held by non-consumers.”

I am not sure what any of that means, and I am sure that the public have little idea of what it means. I think it shows that labelling is not simple; there is a big discussion to be had. Is it enough to use labelling? The right hon. Member for Scarborough and Whitby and I had an exchange on that last week; there are sincerely held differences of opinion about it.

Back in the simpler, empirical world, we have seen the positive impact that labelling can have on eggs. Since 2004, when EU law began to require eggs and egg packs to be labelled to highlight production method, there has been a considerable move in the market towards free-range eggs and away from caged egg sales. I am told that around 52% of all UK eggs come from cage-free systems, which is welcome.

It is not the same in other sectors. Consumers are still very much in the dark about the production of meat and milk. It is hard to find meat or dairy products that have a labelled method of production. For meat, there is some labelling of free range and organic, but not much else. There is even less information about the farming methods of milk. Most milk is pooled together, making it difficult to distinguish between pasture-based and intensively produced milk. From personal experience perusing the supermarket shelves, it seems the world is becoming more complicated these days; there is a greater range, but we need to go further. I find it confusing. It is confusing for consumers and it does a disservice to farmers who are already producing to higher standards but do not have any means of distinguishing their products because of labelling ambiguities.

A lot of marketing and packaging borders on the misleading. Intensively produced meat and dairy products, where animals may have seen very little of the outside world, are packaged in pretty green packets featuring rolling hills and what looks like a welfare-friendly world. That does not help consumers make informed choices, and it does not help producers extract the higher value that they deserve from their products. Proper labelling would work in everyone’s interests.

The production methods highlighted would differ for different products, but mandatory labelling could be used to indicate on the packet whether the product has been produced intensively indoors or extensively outdoors, with the full range of production methods in between, so that consumers can make a decision in the shop about what they want. That is something that the Environment, Food and Rural Affairs Committee recommended twice to the Government in 2018, and it makes a lot of sense.

At the moment, any consumer demand for less intensively produced meat and dairy is impeded by the lack of clear information at the point of sale about how the products have been produced. Informing consumers about methods of production allows them to make that choice. We could see important shifts in the market towards the production of food that is less intensive, more environmentally sustainable and based on higher animal welfare.

A good labelling system could also play an important role in further incentivising farmers to take up environmental land management schemes and deliver the public goods that we discussed last week under clause 1, particularly those who seek to promote higher animal welfare measures, by giving them the recognition they deserve for using less intensive production methods. If the consumer has no idea what farmers are doing, it stands to reason that farmers will see the benefits of making positive changes only in the direct payments they receive, rather than in any changes in consumer demand. There needs to be a way for farmers to demonstrate that they are delivering food in a way that consumers may choose to pay for.

International debate is moving quickly in this area. We heard evidence of the number of schemes that are being looked into across Europe. The Government have talked big talk about using the new opportunity post Brexit to improve our animal welfare standards and modernise our farming processes. It is important that we do not miss key opportunities to adopt mechanisms that can help support that. A relatively simple change of wording would give this clause the strength it needs to deliver the Government’s aim of achieving an impact we all support.

[Mr Goodwill]

I note that the amendment would substitute “must” for “may” in subsection (1), but all the other subsections contain the word “may” too. Has not the hon. Gentleman made an omission by not seeking to insert “must” in all the others? Surely having “must” in subsection (1) would be completely counteracted by all the “may”s in the rest of the clause.

[Daniel Zeichner]

I am grateful to the right hon. Gentleman, who unfortunately was out of the room this morning during one of my earlier attempts to bait him. He never fails to please. His deft and diligent examination of the wording may well have identified a minor drafting error from our point of view, but I am sure he gets the thrust of the argument. On that basis, I very much hope he supports us on this occasion.

[Victoria Prentis]

Again, we broadly share the same values and principles, but—I am sorry to be tedious about the law and the drafting, not that I would ever accuse my right hon. Friend the Member for Scarborough and Whitby of being tedious—it is important that we look at what the amendment would actually do.

I welcome this opportunity to further clarify the purpose of the clause. The proposed amendment seeks to change the wording of the clause to include “must” instead of “may”. We have been through this many times in the past week and I do not propose to do so again. There is no need to add a duty here, as regulations concerning the marketing standards already exist in EU law. Using powers in the withdrawal Act, we will retain the current EU marketing standards and roll them over into UK law, ensuring continuity for farmers and the farming industry.

The power in subsection (1) will provide an opportunity for the current standards to be amended when it is appropriate to do so, to ensure that they deliver domestic standards. It will also allow us to introduce new standards should that be deemed necessary. We anticipate that the power will be used to respond to developments in production. The amendment could create a situation in which new marketing standards regulations must be made, regardless of whether they were needed.

I should add that marketing standards do not apply to all food products and so would not be the appropriate vehicle for any general changes to food labelling rules, such as those about stating allergens on labels. That is already covered by existing food information and food safety laws.

I hope I have given some explanation of why the clause is drafted in the way it is. I ask the hon. Gentleman to withdraw the amendment.

[Daniel Zeichner]

That is so disappointing. The Government should have more ambition to do these things. That is why we are pressing and encouraging them. This is such an opportunity; to us, it seems like a win-win.

I fully accept that there may be some points of drafting or direction—I do not blame the people who drafted the amendment—on which we could improve, but it would be wonderful if the Government accepted the thrust of the argument. This is a bit like hustings events during a general election campaign: by the time we come to the end, we all know one another’s lines. What the Minister said was not a surprise to me, and it will be no surprise to her to hear me say the same thing again.

This is partly a question of trust, I am afraid. It is also a question of wanting to move quickly to take up these opportunities. I think there is real desire out there among consumers to make informed choices, despite the slight difference of opinion expressed by the right hon. Member for Scarborough and Whitby last week about the role of labelling in making the changes we want. If we are going to go down the labelling route as the driver for change, for goodness’ sake push on with it. Do it soon. The Government should tie themselves to it. If they accepted our amendment, they would be bound to do it and there would be no backsliding. My guess is that we will be discussing this in many months’ time and we will find it has not moved as quickly as many of us would have hoped. On that basis, I am not prepared to withdraw the amendment; we will press it to a vote.

Question put, That the amendment be made.