Agriculture Bill (Fourth sitting)

George Eustice Excerpts

Thursday 25th October 2018 Public Bill Committees

[The Chair]

We are very grateful to you for joining us.

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

Q 145 The premise behind the Bill and the future of direction of agriculture policy is to move away from arbitrary area-based subsidy payments to a system based on payment for public goods. What do you consider to be the main criteria or factors that we need to take into account as we design schemes under that principle, to make them successful?

Vicki Hird: We very much welcome that move—we have been calling for it for a long time. We would make sure that it enables payments that can deliver a truly sustainable farming and food system, so that it delivers good, healthy and affordable food to people as near as possible to where they are. We would look for a broadening of the payments to make sure that people can actually afford food locally in local markets. We think that the outcome has to be measurable and the payments have to be accessible.

We have talked about having some sort of way in which governance can be defined at local or even regional level, so that you are both covering landscape or catchment-scale outcomes where possible, and making sure that you are truly covering the environmental outcomes that we need to see, including on climate change. That means covering not just edge-of-field features that might be very visible, but also making sure to cover in-field farming systems. We would like to see an outcome that supports agro-ecological systems, such as organic and whole-farm systems that truly look in the field to tackle some of the worst pollution and environmental problems.

[The Chair]

Professor Millstone, you are nodding. Would you like to come in on that?

Professor Millstone: I think that the move away from area payments is entirely sound, but the current interpretation of the notion of a public good seems to me to be far too narrow. It certainly does include those things currently on the agenda of the Department for Environment, Food and Rural Affairs, but I think it ought to include, in particular, stability of supplies and prices. While there have been—and there remain—many problems with the common agricultural policy, it has at any rate ensured relative stability of supplies and prices. EU consumers have been paying a premium above world market prices, but they have been getting stability. World market prices are typically far more volatile than those in the European Union, and I think that there is a need for policy measures to ensure supply and price stability, as well as other things, including improved safety, improved nutrition and, when it comes to sustainability, greater clarity on what is to be sustained.

Professor Marsden: There is a real opportunity to set this in stone—it is almost a bipartisan, non-political issue—and build real consensus around integrated food, agriculture and environmental policy in the rural domain. The short bit of evidence I submitted suggests an amendment at the top of the Bill that would interlock what is already there, which is fine, with questions about food security, self-sufficiency and sustainable production. In 1947, we had principles of efficiency and stability, which are just as significant today, but they have changed their expression. Some key principles like that need to be embedded in the vision of the Bill from the start.

David Baldock: I had the pleasure of producing, with colleagues, a study for the Directorate-General for Agriculture and Rural Development—DG AGRI—in the Commission in 2010 on what public goods in agriculture were. It took two years, it was a highly political operation, and we had agricultural economists all over Europe working on it. It is not easy. Intrepid Members might want to look at it.

One of the things we learned was that we must have clear objectives and be clear about what public goods are. They are, by and large, above the regulatory baseline. It is not just about trees and hedges; it is to do with the whole resource base for agriculture and land management. We must be clear about what payments mean. They provide farmers with opportunity costs, as well as other costs. Farmers often perceive public goods as a very unprofitable sideline. Actually, they are much more to do with the holistic management of the farm and the resources beneath it. Maintaining your resources in the long term is important for public good provision.

If you want farmers to take this seriously, they need to know that there is money behind it. Perhaps we can come back to that. They need to know that this is a long-term policy direction, not just a short-term measure. Otherwise, it is difficult for them to have confidence in it.

You need some means of measuring the outcome. Clearly, that involves having a monitoring process and some confidence about the indicators you are talking about. At the end of the day, public goods need to be visible and understandable to people. They are just shorthand for policy makers; we need to make the benefits clear to the whole world.

[George Eustice]

Q Going back to Professor Millstone’s point about markets, I will put a few propositions to you and then invite your views on them. Part 4 of the Bill obviously has a sweeping section on intervention in agricultural markets. The Secretary of State can declare a crisis in the market and act accordingly. That is largely borrowed from the existing EU regime. Our most stable areas of production, where we have very competitive prices and compete internationally, are often the unsubsidised sectors, such as pigs, poultry and horticulture. Finally, the single farm payment is explicitly decoupled from production at the moment, so you do not really have to be producing food in any kind of productive way to qualify for it. Beyond part 4, which is about intervention, what other things do you think we need in order to provide stable food prices?

Professor Millstone: Part 4 strikes me as essentially being about therapeutic responses to crises that have already emerged, whereas I think it makes much more sense to have a more prophylactic, preventive approach, and to take measures in advance of crises to ensure stability. Although the area payments are decoupled, they none the less reduce total costs for producers, so they contribute to the maintenance of farm incomes and give incentives to remain actively producing food.

There have been mechanisms that have operated to stabilise prices in UK agricultural markets, which did not have the adverse effects characteristic of the common agricultural policy—the creation of large surpluses. The deficit payment system, which applied in the UK before we joined the European Economic Community, gave farmers a minimum price for commodities, but only for products that they produced and found a buyer for, so it stabilised prices and farm incomes but did not generate surpluses.

Vicki Hird: We want clause 1 to ensure that farms can continue. One of the ways it should do that is to ensure that the farming system is resilient and robust against the shocks that might hit it. That would include ensuring that the natural base is healthy—the soil, the water and the animals, as system-based resilience factors. It also should ensure that they are diversified if possible, ensuring that they are fulfilling the potential to have import substitution in areas such as horticulture.

We are keen to have a public health purpose in that section, which I do not think is strong enough yet. We are calling for a public health clause because we see a great benefit in boosting the sectors that are good for public health and changing the sectors that are not. That will mean diversifying and making the farming system more able to withstand shocks, because farmers will not be putting all their eggs—to use the wrong phrase—in one basket.

[George Eustice]

Q Professor Millstone, you are advocating something similar to the deficiency payments that used to be in the 1947 Act. Do you think that in a modern incarnation of a new agriculture policy it is the role of the taxpayer to do that? Or should Government, as we do in the Bill, improve the transparency of market information so that you can get the development of futures markets or margin insurance, so that there is a viable, accessible product that farmers can access to insure their own prices?

Professor Millstone: It is not just about stabilising farm incomes, but about ensuring adequate supplies for consumers. Futures markets, insurance and so on can create what is conceived of as virtual stocks, but you cannot eat virtual stocks—you can only eat real food. Therefore, you have to have mechanisms to ensure that there is an adequate supply of real food available, and not just financial instruments.

[Dr David Drew (Stroud) (Lab/Co-op)]

Q Notwithstanding what you said about clause 1, Vicki, if you had a crystal ball, how else would you improve the Bill?

Vicki Hird: We have suggested two additions to clause 1 to deliver a truly sustainable farming Act, which is what we want. We want to bring public health and agro-ecological whole farm systems, such as organic, to the fore.

One of the fundamental things that we think the Committee and MPs need to drive—I feel slightly emotional being here because you have such an incredible opportunity and a responsibility in your hands—is to make the Bill far more robust in terms of duties. One of its weaknesses is enabling; we all said it would be an enabling Bill and the Government do not want their hands tied. As a result, we are extremely concerned that after a few years when there are pressures on the Treasury, there will not be the money to do the kinds of things that we have identified externally as absolutely essential but that the Government have not.

These are things that we know need to happen: we know we need to tackle climate change, soil erosion, animal health and welfare, antibiotic use and obesity. They are all big crises that we need to deliver on, but there is no obligation in the Bill to tackle those things. Ministers want to, but it could all fall apart. It would be adding duties and the responsibility to do those things and the ability to draw down a budget against assessment of needs from all those things, so that the Bill delivers the truly sustainable, healthy, nature-friendly farming that we know we can deliver—a lot of farmers are doing it. The Bill could be truly great if it had those duties, rather than lots of enabling.

We would also like clause 25 on fair dealing to be strengthened. We are really pleased to see it there but we have some specific amendments to it, which we can provide the Committee, on ensuring that it provides the confidentiality for people who need to complain about bad treatment and that it covers all sectors. Again, the duty of the Secretary of State to deliver the new fair dealing measure is crucial, for the reasons that Mr Eustice described, to ensure that farmers can have confidence in the market.

Professor Marsden: To add another issue, on the question of how to improve the Bill, there is nothing in it about rural development, which is important. This is an opportunity to link multifunctional farming, which seems to be where we are heading, with rural development. I am suggesting not the development of a second pillar necessarily but, for example, for the recipients of financing and whatever funding there is not to be restricted to farmers alone. It could go to partnerships, place-based partnerships—some good pilots of which are going on in England and in Wales—and consortiums of landowners and stakeholders in rural areas to work together.

That is the other shift we need—in the mentality of funding for public goods. Rural development forms a gap in that. One might argue that that could be left to whatever comes out of the shared prosperity fund. I am, though, concerned about that, because it might lead to concentrated dollops of funding—to cities mainly—and we really need much more distributed, bottom-up and facilitative funding for things like a post-Brexit LEADER programme.

David Baldock: First, to follow up on that and to amplify what Vicki said about duties as well as powers, I noticed that the House of Lords Delegated Powers and Regulatory Reform Committee pointed out that 36 clauses in the Bill confer 26 powers on Ministers, but include hardly any duties. At the moment there is a duty on the Government to introduce and operate agri-environment schemes, but even that duty is going. We are actually moving backwards on duties.

Secondly, on the budget issue, I understand that the Treasury does not like to have its hands tied and so forth, but we are in a position here that there is no guarantee whatever of multi-annual funding for agriculture. Lots of sectors have special pleading here, but the fact is that farmers do not work on a CSR—corporate social responsibility—cycle; they are not investing on that timescale. Therefore, either in the Bill or through some parallel commitment, it is important—there is a lot of sectoral join-up here on the environment and farming sides—to have some kind of forward-looking structure. That is not just a five or 10-year agreement for an individual farmer, but some sense of where things are going for the industry and infrastructure, and how we are going to meet future Government objectives.

Thirdly—a point that has not come up yet—at the moment the Bill contains nothing about the regulatory baseline, the environmental baseline, for agriculture in future. I understand that that might come forward in separate legislation, such as the environment Bill, but it might not—that Bill might not happen. There is the possibility, which is slightly more than theoretical, that farmers take up the de-linking option, the payment option, under the scheme, therefore finding themselves outside cross-compliance and outside good agricultural environment condition, which means that the baseline in those circumstances—without having a position in law—will be weakened. In fact, we could go back from where we are now. Good agricultural environment condition is a very important part of cross-compliance. It was our major means of protecting soil, so it is the only means of protecting soil through the public sector at the moment. I want to emphasise—although we all know this—that it is a key area that should not be forgotten.

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[Deidre Brock]

Q Should some sort of distinctions be placed in the Bill specifying that? I did not quite hear what you said—are you saying that that would limit the Bill too much?

Vicki Hird: If it was only for the active farmer and food production; if that was the only basis on which you could get any support at all.

Professor Marsden: A key word here is “productivity”, isn’t it? That needs to be in the Bill, but we need a broader definition of what we mean by productivity. We can see—we have evidence—that we can get productivity out of small agri-ecological farms. You can create demand for labour out of those activities. You can create much more work. So we need to redefine the notion of productivity in a much broader way to cope with this variation across the agricultural landscape in the UK.

Vicki Hird: Yes, because they might be producing good carbon capture. There are other ways of measuring.

[George Eustice]

Q I will be brief, Sir Roger, because you want to keep us to time. Part 2 of the Bill creates the power—quite a large one—to modify and sort out existing schemes, to remove some of the bureaucracy, to simplify them and to sort out mapping. If you had one or two—perhaps this is for Mr Baldock because you have had some experience of them—what would you do to clean up and sort out the existing basic payment scheme?

David Baldock: The main difficulty with the current CAP regime is its bias towards control of very often the wrong thing—micromanagement of farm boundaries and of the way data is gathered and reported. Instead of getting the big picture of what is happening on a farm and how it is complying with its broad obligations, we have a highly burdensome system that, at the end of the day, does not really add a lot of value to the public purse or public transparency. It would be very welcome if the Government were able to shift that whole delivery system so that it focused on real outcomes and was more farmer friendly.

I was involved in the beginning of the cross-compliance discussion in Brussels. At that time, the whole idea was to take out the very worst farmers—to put under scrutiny people who committed large-scale abuse of livestock and so forth. It has become a micromanagement tool for worrying about individual farmers, with ear tags for livestock and a whole process around that. It has completely disappeared into a bureaucratic process. There is a great opportunity here to change that culture and delivery system.

[The Chair]

There is a lot of nodding going on, but Hansard cannot report nods, so I have to place them on the record for you. I am afraid we are out of time. Professor Millstone, David Baldock, Vicki Hird and Professor Marsden, thank you very much indeed for joining us. We are most grateful to you.

Examination of Witnesses

Diana Holland and Ed Hamer gave evidence.

--- Later in debate ---

[Dr Drew]

Q So where do you see opportunities to improve the Bill?

Diana Holland: We think a clause should be added that specifically recognises the need to protect standards for agricultural workers. Sustain is supporting an amendment, which we would be happy to be attached to, on the kind of protections that the former Agricultural Wages Board provided. We recognise that this is a framework Bill and there are different ways of expressing things, but in the absence of anything at all we would want something very specific to be added that would recognise that matter. This is meant to be dealing with Brexit, and the treaty of Rome specifically says in article 39 that there should be a fair standard of living for workers in agriculture.

We have seen with the abolition of the Agricultural Wages Board in England a deterioration in pay. You would expect us to say that; we are trade union representatives. We have collected evidence from our membership that in the year after the abolition, 56% of those surveyed had not had a pay rise. Of those who had had a pay rise, 82% had had it imposed, and of those who had not had a pay rise, one third had gone to their employer to ask for a pay rise and been refused. A series of people formerly covered by the Agricultural Wages Board in England have had their pay completely frozen until the national minimum wage catches up with it, whereas in Wales, Scotland and Northern Ireland that is not the case.

In fact, just this month, the estate agent and land management advisers Strutt & Parker said in Farmers Weekly:

“It is difficult to justify suggesting that English employers should pay their employees less than they would receive if working in Wales—particularly given the shortages in skilled labour the sector is facing.”

They have recommended pay rises of 2.5% to 3.5% to deal with what is happening in England. That is a very specific example, but the unintended consequence—or perhaps, given the estimates made at the time, a recognised consequence—of the abolition of the Agricultural Wages Board is that conditions on not just pay but sickness, holidays and all the other things that were protected are deteriorating. We are extremely concerned, and there is an opportunity in this Bill to look at what is happening. If we are going to deliver decent agricultural production for the future, we need workers who are recognised and remunerated effectively. Without that, we are in serious danger of not being able to deliver in the way we should.

Ed Hamer: We see a clear opportunity for improvement in clause 1(1), and we have tabled an amendment on agri-ecology. At the moment, the Bill replaces direct payments with environmental land management payments, which in their current form do not guarantee food production in addition to the delivery of public goods.

By contrast, the agri-ecology amendment would focus on holistic farming systems as opposed to set-aside or marginal conservation measures. To give you an example, the payment identified under ELM would pay farmers for income forgone on the field boundaries, whereas in the middle of the field they could continue to spray pesticides or cease farming altogether. With the agri-ecology amendment, the integration of whole farm agriculture and agri-ecological principles would incentivise farmers to produce food on the field in addition to introducing ecological focus areas or diversity around field edges. Under the agri-ecological amendment, it is the farming system itself that delivers the public good.

[George Eustice]

Agri-ecology and other whole-system disciplines such as agroforestry would be covered and empowered under clause 1. We are considering that, but I would be interested in your views on the key barriers to your members’ setting up and what type of support would be most useful.

Ed Hamer: The majority of our members are farming on smaller acreages, typically anywhere between 1 and 20 hectares. At the moment our biggest challenge is access to markets. Over the last 20 years or so there has been significant under-investment in the infrastructure needed to support small-scale enterprises such as ours; I am thinking of local abattoirs, local creameries, food processing infrastructure, seed networks and things like that. What would really help us is targeted support for local food funding, to recognise the networks and infrastructure required to get the food from the farm to the market.

To give you my example, I farm a community-supported agriculture scheme in Devon, which we started in 2010 without any money. We got a grant from the Big Lottery Fund and were able to invest in polytunnels and the infrastructure required to get our operation up and running, including the machinery that we needed and a delivery vehicle. With that small grant, we managed to build a business over a relatively short amount of time. We are now independent of grant funding.

Our experience teaches us that our members have had similar challenges, but not all have been fortunate enough to secure an initial capital grant. For local food grant funding, seed funding for SME agricultural start-ups would be a fantastic way of getting small enterprises up and running, to the point where they can be financially independent.

[George Eustice]

Q What about access to holdings—access to land?

Ed Hamer: Access to holdings has been significantly undermined by the BPS, which has, to a certain extent, consolidated land ownership in the UK over the past 10 years. Many of our members struggle to access land because land prices have gone up by about £2,500—depending on the area of the country—since the introduction of the BPS.

We hope that the end of the BPS and area payments will have some knock-on effect on land prices. If not, we see opportunities within the de-linking, if we could make a condition of it that land should be made available to new entrants. Using the county farms estate would be a fantastic opportunity to provide opportunities as the first step on the farming ladder.

[George Eustice]

Q Could you expand on that? We have said before that we are looking at refreshing the county farm model. What would you like to see?

Ed Hamer: For many new-entrant farmers, it is quite intimidating to take out a mortgage to buy their own holding and to then try to pay that money back through farming itself. With the county farms estate, there is still the opportunity to rent a small area to start on, even if it does not come with accommodation and is just the land itself, and to then build up a business and a local market for products, to the point where a farmer can start to invest in their own land or find somewhere else to move on to.

As a stepping-stone measure, the county farms estate is a fantastic resource that has so far been under-utilised. It has been very positive to see DEFRA’s soundings on reclaiming that estate for use by new entrants.

[Deidre Brock]

Q What concerns do you have about the possibility of standards being lowered for imported food? Witnesses have referred to that already quite a lot. Mr Hamer, your website makes it clear that there is a real shortage in the supply of domestic produce, and that, if new recommendations to eat more fruit and veg were actually followed, current production could not keep up. Would cheap imports fill that gap?

Ed Hamer: We like to think not. Horticulture is quite a unique example. At the moment, in the UK horticulture receives less than 1% of public funding. Since 2005, horticultural production has declined significantly—veg by 26% and fruit by 35%. At the moment, we import 42% of the vegetables and 89% of the fruit that we consume in the UK.

Post-Brexit there will clearly be an opportunity for renewal within the horticulture sector. We would like to see UK consumers prioritise the high standards that we have here in the UK, and to see a new generation of young farmers access some of that current import market. At the moment, we spend £7.8 billion a year on importing horticultural produce that could otherwise be grown here in the UK. We would like to see an opportunity for new entrants to access that market and use that revenue to generate jobs and employment within the sector. We are certainly worried about the risk of importing fruit and veg from countries with lower environmental and social standards, which would undermine production in the UK.

Diana Holland: We see food standards and safe, healthy food as going hand in hand with decent treatment and professional, high-skilled jobs. All the evidence that we have is that recent food scandals have gone alongside severe labour abuses and exploitation, because workers are fearful of speaking out about what is going on. We very much believe that the Bill needs to cover the race to the bottom in all aspects and build in incentives to treat workers properly and ensure that decent standards are followed. That could be reflected in certain parts of the Bill.

--- Later in debate ---

[The Chair]

We are now joined by NFU Scotland, the Ulster Farmers Union, Quality Meat Scotland and the Scottish Government. We have until no later than 4.30 pm. Gentlemen, thank you for joining us. Would you identify yourselves for the sake of the record?

Jonnie Hall: My name is Jonnie Hall. I am director of policy with NFU Scotland.

Alan Clarke: My name is Alan Clarke. I am chief executive of Quality Meat Scotland.

George Burgess: I am George Burgess. I am the deputy director in the Scottish Government responsible for trade policy, food and drink.

Ivor Ferguson: I am Ivor Ferguson, president of the Ulster Farmers Union.

Wesley Aston: I am Wesley Aston, chief executive of the Ulster Farmers Union.

[George Eustice]

Q The Bill sets out a clear plan for England, predominantly, and for how we design schemes. Schedule 3 deals with Wales, and schedule 4 sets out a plan for Northern Ireland. Mr Burgess, will you tell us what the plan is for Scotland?

George Burgess: Indeed. As I am sure the Minister is aware, the Scottish Government published earlier this year their proposals, “Stability and Simplicity”, for consultation. As the title suggests, those propose a period of stability and simplicity, with no significant changes in agricultural support for an initial period, followed by a period during which some relatively minor changes may be made. Those changes would be a matter for the Scottish Parliament to deliberate on in due course.

[George Eustice]

Q Just to be clear, we are at the stage in Committee of thinking about whether Scotland wants us to reserve an additional schedule to do some of that work or, as Northern Ireland has chosen to, not to change anything but to retain the current scheme for a period of time. Is it your position, though, that the Scottish Parliament will legislate and you do not want any inclusion in the Bill?

George Burgess: The choice between changing and retaining things through the Bill is perhaps not quite the right way to categorise it. Like DEFRA, we will use the withdrawal Act powers to repatriate into domestic law the existing European powers. As far as we are concerned, we have not identified anything in the agriculture space that needs anything beyond that in the initial phase to make existing schemes work. In due course, for the simplicity phase of our proposals, further powers would be required, but at this stage that is seen as a matter for the Scottish Parliament. Obviously, this is a devolved area. The whole thrust of devolution is that it will normally be for the Scottish Parliament to legislate in devolved areas.

[The Chair]

Does anybody else from Scotland wish to comment?

Jonnie Hall: We see an opportunity to have a schedule put in the Bill that covers the interests of Scotland in the longer term, beyond 2020. We see that as enabling Scottish Ministers, at some point in the future, to take clear decisions about how to develop and implement Scottish agricultural policy. Nevertheless, we also understand and appreciate some of the reservations the Scottish Government have about the process that that might lead us into.

From the Scottish farming perspective, the impasse between the Scottish Government and the UK Government over this is leading to a high degree of uncertainty and concern. At the moment, as Mr Burgess pointed out, the Scottish Government are very clear about what they want to do in the short term, but they have no clear plan or strategy for longer-term policy development. Although Wales, Northern Ireland and England have all set out their visions for the next five to seven years in that respect and consulted on those, that is lacking in the Scottish context at this moment in time.

[The Chair]

I have to be careful now not to invite disagreement from within the panel.

[George Eustice]

Q Is it the view of NFU Scotland, then, that ideally you would have a schedule similar to what Wales has or what Northern Ireland has?

Jonnie Hall: When the Bill was first published back in September—we knew this was going to come anyway—we were concerned that it was an enabling piece of legislation that could be a vehicle to allow Scottish Ministers to develop, implement and deliver a devolved agriculture policy for Scotland, but that the Scottish Government had not taken that opportunity. We understand that that opportunity remains. The offer is still on the table, if you like, for the Scottish Government to utilise this legislation.

The alternative would be that a Bill would go through the Scottish Parliament—a Scottish agriculture Bill—but that is, again, another unknown. It is a ticking clock, because as we all know, legislation of any sort takes time to go through any parliamentary process. As things stand, we have a degree of certainty for 2019-20, but thereafter, into 2020-21, we have no absolute certainty. Farming is a game that relies on a degree of confidence and certainty.

[George Eustice]

Q Obviously, we are at the Committee stage of the Bill, and the purpose of this session is to consider what, if any, amendments we should make. It would be quite a substantive amendment to add a whole new schedule to cover Scotland, but that offer remains open. I suppose, however, that it is open only for a period of time before the Bill moves on and we pass that point. Perhaps this is a question for Mr Burgess again, but is there a timescale in which you would definitely make the decision about whether you wanted to retain the option to use a schedule, or have you already passed that point and resolved to draft your own legislation?

George Burgess: I go back to the answer that I gave earlier. I am not sure that I recognise Mr Hall’s characterisation of the ticking clock on this. Assuming that our work with DEFRA proceeds, the powers will pass to the Scottish Ministers to implement the existing package of support. There will be no issue of agricultural support not being able to be paid. I do not personally recognise the 2020-21 deadline that has been suggested.

That gives time for any necessary legislation to be developed and taken through the Scottish Parliament. As a devolved matter, we see it as principally for the Scottish Parliament to do that. I am sure that our Welsh and Northern Irish colleagues have very good reasons for taking up DEFRA’s offer of including schedules in the Bill, which necessarily largely bypasses the legislative processes in those countries.

Jonnie Hall: May I come back on that? The clear thing is that, in terms of continuity, the Scottish Government could continue to utilise the existing common agricultural policy mechanisms and all that goes with that, but the UK Government and the other devolved Administrations are setting out an opportunity to move away from the CAP and to put in place a new policy that is more befitting and more bespoke to the needs of British and Scottish agricultural interests, so we can move away from the blunt approach of area-based payments and move on to more focused, targeted payments that underpin productivity in the environment and so on. Our concern is that, yes, things would continue as they are today, but there would be no ability to move away from the CAP, and that is what we all look at as the opportunity here.

[George Eustice]

Q Mr Aston, in the absence of an Administration in Northern Ireland, the Department of Agriculture, Environment and Rural Affairs took the view that it wanted a slimmed-down or abridged version of the powers, but that it definitely wanted the power to be able to strip out some of the bureaucracy and remove some of the unnecessary burdens in the current single farm payment scheme. Are you content with the approach that it has adopted? Does it do all the things you would like?

Wesley Aston: May I pass that across to my president, Mr Ferguson?

Ivor Ferguson: Certainly, we are quite happy with the approach that DAERA has taken. Of course, as the Ulster Farmers Union, we had a fair opportunity to feed into the framework document that is out for consultation. The other reason why we welcome the Agriculture Bill is that it gives us the ability to regionalise what we are doing in Northern Ireland. Another important point is that it gives us the opportunity for civil servants to take decisions in the absence of an Assembly.

[The Chair]

Q I am sorry, Mr Ferguson, but some of us are of a certain age. Could you speak up a bit?

Ivor Ferguson: Okay. Apart from being happy with the framework document, which we have had an opportunity to feed in to as the Ulster Farmers Union with DAERA in Northern Ireland, we are quite happy that we have the ability to regionalise what we are doing in Northern Ireland. We are also happy that the civil servants will be able to make decisions in the absence of an Assembly. We are quite happy with all those things.

[George Eustice]

Q What would your priorities be to de-bureaucratise the current scheme, the single farm payment scheme, which under the powers you have, you would be able to do from 2021?

Ivor Ferguson: The first thing I wanted to say is that we would not want to move away entirely from the current CAP scheme that we farm under. We would like the opportunity to have some area payments at a lower level. It would certainly take the volatility out of our farming system. Farming in Northern Ireland is somewhat different from farming on the mainland, because we have so many small family farms, and if we took the area payments away completely, that would have a devastating effect moving forward. We certainly have an opportunity to take some of the bureaucracy out of the scheme, and that is something that we would look forward to. That is what we have tried to address in this new framework document. We have just had this consultation period, and I think we have addressed that to a large extent.

[The Chair]

Q Mr Aston, you courteously deferred to your president. Is there anything you would like to add?

Wesley Aston: As far as we are concerned, the key issue in relation to this specific question is the ability to take our own decisions at a local level, and given the absence of the Northern Ireland Executive at the present time, we felt it was important to include that legislative power within the Bill. Going forward, as our colleagues from NFU Scotland have already said, there has to be scope within an overarching UK framework for the regions to tailor, within limits, the support to their individual circumstances—as we do under the CAP at the minute. That is critical going forward, and it is an opportunity for us all to try to address the three broad pillars of where we see support being essential.

From our point of view, that means sustainability and competitiveness, and particularly the whole issue of resilience. That goes back to my president’s point about having some sort of area-type payment as a resilience measure, but equally, the issue of the environment and how we take that forward. The Bill gives us more scope to do that, and we welcome the opportunity that it provides.

--- Later in debate ---

[Chris Davies]

Q I represent a constituency right on the border of England and Wales, and many of my farmers have land on both sides of the border. Currently, they have to abide by what one could say are two slightly different regimes. Mr Hall, regarding the farmers that you represent on the Scottish side of the border that also have land in England, so that they farm both sides, do you think the Scottish Government’s approach to this Bill has given them extra concern and worry?

Jonnie Hall: We do have members who farm in different parts of the United Kingdom under the same business and it has always been something of a challenge in terms of which Administration deals with which component—whether it is land inspections, the payment claims and so on. I suspect that the lack of a publicly clear strategy from the Scottish Government poses some doubt and questions in the minds of those farmers who straddle borders, but equally it probably poses a lot of uncertainty for any farmer in Scotland, not just those who straddle the border.

One thing that will be vital—it goes back to common regulation—is that when you have cross-border farmers, you have to apply the same regulatory approach in terms of pesticide use, animal traceability issues, food hygiene, feed rules and all the rest of it across the United Kingdom in a uniform fashion. That goes back to the statement that all farming unions have always agreed: we need a commonly agreed regulatory framework. We are playing to the same rulebook, but we are not necessarily supporting farmers in the same way; the support requirements for a hill farmer in Argyll are different from those of someone growing fruit and veg in Lincolnshire.

[George Eustice]

Q I want to come back to part 7 and the WTO clause, which I know you are concerned about—I think unnecessarily so, for reasons I will explain. Mr Burgess, who is currently responsible for ensuring that we abide by WTO rules and obligations, and who is responsible for reporting to the WTO to demonstrate that?

George Burgess: In terms of observing and implementing those regulations, it is all of the Administrations within the United Kingdom. That is a well-established legal fact. The Scottish Government understand that, within their areas of responsibility, they must ensure that their actions are compliant. In terms of reporting into the international field, there are mechanisms through the European Union and the Commission. Such obligations are common in many international mechanisms, some of which the United Kingdom is a signatory to, and it is well established that, where necessary, the devolved Administrations provide information, often through a central contact point within the United Kingdom Government, as part of our international obligations.

[George Eustice]

Q The reality is that the UK co-ordinating body, which marshals the various paying agencies in the UK, is responsible for marshalling the data to the EU. The EU then reports to the WTO. The simple reason for that is that the EU holds the WTO schedule on aggregate measurement of support. So the EU holds the schedule and does the reporting, and it requires that we report to it the information that enables it to demonstrate compliance. When we leave the EU, there will be a UK schedule and a UK AMS. All that clause 26 does is make provision for the Secretary of State to do what the EU currently does: to report and demonstrate compliance.

George Burgess: I think that is quite a narrow reading of clause 26, because only one of the subsections deals with that information provision and reporting. As has been already noted, we have considerable concerns about the other provisions in the clause. As I have said, we have nearly 20 years of experience of the devolved Administrations providing the necessary information to the United Kingdom Government for onward routing—whether through the European Commission or direct to the necessary international body—across a range of international obligations. There is absolutely no reason why we would stop providing that information now.

[George Eustice]

Q But you understand that the EU has a single AMS allocation, and through that it must facilitate schemes in 28 member states. Therefore, the EU can limit the amount of market-distorting support payments that any member state makes. If France were to bust the bank, as it were, and single-handedly try to spend all of that, the EU would forbid that from happening—it has powers to ensure that it complies with the schedule. While it is devolved, do you not accept that the UK Government, which will hold the schedule responsible for ensuring that we stay in our AMS envelope, have to be able to set some parameters, otherwise there is no way of being able to deliver that compliance?

George Burgess: My understanding is that it is the UK schedule, not the UK Government schedule. That there need to be mechanisms in the United Kingdom for co-operative working on this, to ensure that we meet our international obligations, is not at all in question. We have been working with DEFRA since the turn of the year on what a framework in this area should look like. It was therefore a bit of a surprise to us to be presented with a clause that puts all the power into the hands of the Secretary of State, acting alone.

We are looking for greater involvement for all the devolved Administrations in the setting of the limits, so that we can ensure and demonstrate to all parts of the United Kingdom that there is fairness all round in the way the international limit is being allocated.

[George Eustice]

Q Subsection 2(b) states that we can establish

“a process for the resolution of disputes between the appropriate authorities”.

There is a dispute resolution process in an instance where Scotland might say, “We want to spend even more on market-distorting support and we think it is unfair that you have constrained us from doing that.” There is a dispute resolution process.

George Burgess: That there should be a dispute resolution process we have no difficulty with. If we read further in that provision we will see that it says that the dispute resolution process

“may include provision making the Secretary of State the final arbiter on any decision on classification.”

That particular provision, which sounds a little “judge and jury” to us, does not feel like the best way forward.

[The Chair]

I do not think we will reach a conclusion on that this afternoon.

--- Later in debate ---

[Colin Clark]

Q Do you perceive a risk of divergence? Is that not fundamentally the point, whether it is on the frameworks or on the producer organisations?

George Burgess: If we look at the producer organisation provisions that we have here, and at the amendments that we have proposed, none of them would create that risk any more than it exists at the moment.

Jonnie Hall: I agree with Mr Burgess.

[George Eustice]

Q Mr Clarke, the Government are under pressure from the other Mr Clark around the table, my hon. Friend the Member for Gordon, and from my hon. Friend the Member for Brecon and Radnorshire, to give consideration to an amendment that would enable some transfers of levy payments between levy bodies, but only with the agreement of the relevant Governments or of the Secretary of State and the Scottish and Welsh Ministers. It is a bit problematic in the absence of a legislative consent motion, because it would explicitly affect something that Scottish Ministers could do. If that amendment were to get some support, should the Scottish Government bank that advantage and grant the LCM on the Bill?

Alan Clarke: I made the point earlier, when I was asked whether there was a particular vehicle that could be used, that I thought the amendment was a really good vehicle, because it is timely and it is opportune. The reality is that we need a solution.

We have shown that the three organisations can work really well together, but we are not maximising our potential. If we can get the full £1.5 million back to Scotland, and the same value back to Wales, using a mechanism that the three organisations would agree, we will have a real opportunity. If that amendment were made to the Bill, and a process was put in place to make it happen, that could happen very quickly. That would be a real benefit, particularly to us in Scotland, and to Wales. We can show evidence of what we have done working together over the last 18 months, and, as I said earlier, we would continue to do that.

George Burgess: The Scottish Government have been seeking an amendment to deal with the red meat levy issue, as Mr Clarke said earlier, and have been asking for the Agriculture Bill to be used for that. I prepared a detailed policy paper on the subject more than a year ago and I have been discussing it with DEFRA officials since.

We do not yet have a commitment from the United Kingdom Government to use the Bill as a vehicle to deal with the red meat levy, but we hope that that commitment will be forthcoming. I have heard that two amendments deal with the subject, and we will look at those with great interest. It is certainly something that the Scottish Government have been seeking.

Jonnie Hall: May I add the weight of NFU Scotland to that, to support the Scottish Government and Quality Meat Scotland? The Bill is a clear opportunity to resolve an issue that has been ongoing for several years. We have waited for the right legislative vehicle. This is a clear moment to get the right amendment in the Bill and make it happen.

[Deidre Brock]

Q I have a question about Northern Ireland for Mr Ferguson and Mr Aston. There is a geographical conundrum in your market, given that some production chains straddle what may be a UK border with the EU. What kind of support are farmers in Northern Ireland likely to require after Brexit? What impact might the different possible outcomes have?

Ivor Ferguson: The level of support we need in Northern Ireland will largely depend on our trade deals. That will be a big deciding factor. If the trade deals are against us in some way, we will certainly need more support. A lot of the support will depend on that. The difference in livestock between north and south does not really come into it. In Northern Ireland, we produce under the Red Tractor quality assurance scheme. As I said, we supply more than 80% of our product to the UK mainland market. That is not complicated by southern Irish livestock, because the standard is not the same as in Northern Ireland. I am not saying the standard is any lower than ours, but the Bord Bia standard is completely different from Red Tractor assurance.

Cattle Compensation (England) (Amendment) Order 2018

George Eustice Excerpts

Wednesday 24th October 2018 General Committees

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

It is great to have the opportunity to debate this order and to set out the Government’s position on these matters. I will turn later to some specific points made by the shadow Minister and by my hon. Friend the Member for North Herefordshire.

Bovine TB is the most pressing animal health problem in the UK today. Over the last 12 months, more than 33,000 TB-affected cattle have been slaughtered in England, which is an appalling waste. The disease is damaging our rural businesses and causing much distress for farmers and rural communities. The cost of controlling the disease is about £100 million a year and a big burden on the taxpayer. To protect industry and to reduce costs for the taxpayer, it is right that the Government should continue to take strong action to ensure that we have a successful and resilient cattle farming industry as the UK enters a new trading relationship with the world.

Our comprehensive strategy to eradicate TB includes commitments to strengthen cattle testing and movement controls; to cull badgers in areas where they are an important factor in spreading the disease to cattle; to support badger vaccination in the edge area of the high-risk TB area; and to improve biosecurity on farms and in trading. Adapting the way that compensation funding is used to incentivise the take-up of good biosecurity practices is an important element of the Government’s long-term TB eradication strategy. That is why we are amending the Cattle Compensation (England) Order 2012 to introduce small but important changes to the compensation regime in England. These changes will encourage more herd owners to take sensible and proportionate steps to improve their biosecurity, thereby reducing the disease threat to their own and neighbouring herds.

I recognise that, for business sustainability reasons, some TB-affected cattle farmers must be able to bring in new stock to replace the animals that they have lost, and there are no plans to stop this. However, paying full compensation for cattle brought into a herd with a known and ongoing disease problem could be a disincentive for some to take action to reduce their disease risks. That is why we have decided first to follow the example set by the Welsh Government in 2016 by paying reduced compensation for any individual animals that are brought into a herd under TB restrictions and that subsequently pick up the infection and are removed while the herd is still restricted. Cattle farmers who register their herds under the CHeCS TB accreditation scheme commit explicitly to take steps to reduce their TB risks. For that reason, I decided that we will continue to pay full compensation to farmers for herds that are accredited in that way, since they have demonstrated that they are already taking action to protect themselves and to improve their biosecurity.

Secondly, herd owners have the option of sending their TB-affected cattle to their choice of slaughterhouse and taking a payment from the slaughterhouse operator in place of DEFRA compensation, but currently they are sometimes reluctant to do so. Many tell me they would like to use their local abattoir because it is closer and it reduces the stress on the animal, but this option has been taken up rarely. Under the existing rules, the keeper suffers a financial loss if the animal’s carcase is condemned at the slaughterhouse, since they receive no compensation and no payment from the slaughterhouse. Incentivising keepers to take this option will enable some to negotiate better prices for their cattle with an abattoir that they know and reduce the cost to the Government of compensation. The order includes a new financial safety net provision so that those who opt to organise the slaughter of their TB-affected cattle locally receive compensation at the same rate as other keepers of TB-affected cattle if the animal’s carcase is condemned. We are therefore removing the risk that farmers currently face when they send their cattle to a local slaughterhouse. This measure has been welcomed by the industry.

[Dr Drew]

I very much welcome what the Minister has to say about that aspect of the order, but who makes that decision? Is it the vets in the abattoir, or does the farmer who brings in the animal have to put that to the abattoir as a compensation arrangement? I am a bit unclear about that.

[George Eustice]

The decision about whether a carcase is fully condemned because the disease is rampant and the animal has too many lesions will be made by the official veterinarian at the abattoir. Currently, a farmer who chooses to slaughter privately with a local abattoir will receive no compensation and no payment for the carcase. In the vast majority of cases, the disease is caught at an early enough stage that the number of lesions is very small, so the abattoirs are able to get salvage value from the carcase—they are able to salvage most of the meat and turn it into value. A number of farmers have told me that they would like to take that option with a local abattoir, but at the moment, the risk that they might get no payment at all is a barrier to their doing so. The decision about whether the animal is totally condemned is one for the official veterinarian. If it is totally condemned, the farmer will receive the full compensation payment.

The third and final change that the Government propose is to reduce compensation for TB-affected cattle that are so unclean that the slaughterhouse operator is unable to process them. The UK has some of the highest animal welfare standards in the world, and the Government are committed to raising them further. I believe that there is no excuse for sending unclean cattle to slaughter. Reducing compensation for cattle that cannot be processed for human consumption will send a clear message that the cleanliness of slaughter cattle, including TB-affected animals, is an important animal welfare consideration. Thankfully, the number of TB-affected cattle that have been rejected because they are too unclean to process is very low—we are talking in the region of about 20 per year.

The order targets bad practice. For example, when an animal is condemned, the farmer might not take care of it sufficiently in the 10 days or so that it might take for the lorry to pick it up and take it to slaughter. He might judge that there is no longer any interest or value to him in that animal and he will get compensation anyway. I want to discourage that sort of behaviour. My hon. Friend the Member for North Herefordshire is a breeder of Hereford cattle; my family are breeders of South Devon cattle. I, too, know what it is like to suffer TB breakdowns, and I know the trauma and distress that that causes. I can say this much: if animals are condemned, my brother takes care of them and ensures they have plenty of bedding in the week or so that it typically takes for the lorry to arrive. If the animals that arrive at an abattoir are so unclean that they cannot even be processed—if they are in the bracket of the 20 per year—it is likely that they have not been sufficiently cared for, and that other animal welfare issues pertain to that situation.

[Dr Drew]

The time that it takes to get cattle picked up is one of farmers’ biggest frustrations. I do not regularly get rung up about it, but when I do get rung up about a herd breakdown, the one thing I am always asked is, “Can you get these animals taken sooner rather than later?” That is the worry about this. I am not saying that neglect is in any way acceptable, but if someone has had a massive breakdown and they are told that their cattle may be taken some time over the next week to 10 days, that is not much of an incentive. Those people are really at their wit’s end. If there is one thing the Minister should take away from this, it is that we should speed up the process by which animals are taken—certainly, once they have a whole herd breakdown.

[George Eustice]

All I can say is that APHA does run certain programmes for that and picks up the animals as soon as it can. It usually happens within days; sometimes it can take a week.

I return to my initial point: typically, once an animal has become a reactor and tested positive to the disease, the farmer will keep it in isolation in a shed somewhere. Is it really too much to ask that farmers ensure there is full straw bedding in that shed for the week or so that it takes for the animal to be collected? My view is that it is not.

[Bill Wiggin]

I suspect it is because the Minister has such a kind heart that he is worried about the care shown to these poor condemned animals. However, it is an offence, which is properly legislated for, not to look after animals properly. The draft order is no substitute for proper animal welfare—it is misguided in that respect. Proper legislation is already in place. Will he think again about how he will handle the increased complaints that will inevitably follow when abattoirs work out that vets are under pressure to condemn more and more stock?

[George Eustice]

Vets have a very objective approach to condemning unclean animals. They do that already, whether it is for TB compensation or for commercial animals. It is worth noting that if a farmer sent a steer to an abattoir to be slaughtered for food consumption in the normal way and it was condemned as too unclean even to process, he would get no payment for that animal. Under this scheme, he would get 50% compensation.

It is important also to recognise that when an animal is condemned, it has no salvage value to the Government. At the moment, we pay full compensation to farmers for the value of their animals, and we try to recoup some of that cost through those animals’ salvage value. Where animals are condemned, there is no salvage value.

[Bill Wiggin]

I am sorry to interrupt the Minister, but the wording of the draft order is not “the meat is condemned” but

“the animal is not in a clean condition”.

That is why I think he is wrong.

--- Later in debate ---

[George Eustice]

As I said, at the moment the official veterinarians apply a clear, objective set of criteria. I am more than willing to share the full detail of those criteria with my hon. Friend, but they are applied very objectively by official veterinarians who work for the Food Standards Agency and have a great deal of experience of this work. As I said, we are talking about just 20 animals a year—a very small number.

[Luke Pollard]

The hon. Member for North Herefordshire raised a really interesting point about what happens in the event of a dispute about whether an animal is unclean. It does not look like the draft order provides for an appeal process. If there is concern that this measure will be used to reduce compensation for farmers, it seems logical that there should be an appeal process. Will the Minister deal with that?

[George Eustice]

The approach will be exactly as it is now. The official veterinarian makes the decision about whether to condemn an animal for being too unclean to process. We have just passed legislation to have CCTV in slaughterhouses, and the official veterinarian collects photographic evidence to demonstrate that an animal was unclean. The OVs have processes to manage this. Ultimately, the FSA is independent and the OVs on the ground will make the decision, as they do on many other such issues.

The shadow Minister asked why we are making these changes. My approach to changes to compensation is clear: I have always rejected such changes simply for the purpose of saving money. In my view, we should change compensation arrangements if that will change behaviour. He also asked about the legal implications. I point out that we are doing exactly what the Labour Administration in Wales did in 2016. We are simply bringing England into line with the approach that has already been adopted in Wales, which has been successful and has not led to legal challenges.

The shadow Minister asked how we would determine whether a breakdown was due to a disease that an animal contracted before it entered the herd or when it entered the herd. We do not intend to make that distinction, since we are trying to incentivise caution among farmers about the animals they buy in. We want to make clear that if farmers are trying to go clear, they should not buy in animals that are at high risk of having TB. If it is possible for farmers to delay re-stocking and be more cautious about the way they do that, they may choose to do that.

I was very clear—we changed the order from its original draft to reflect this—that I want to ensure that any farmer who signs up to the CHeCS-accredited scheme to demonstrate that they are taking biosecurity seriously and taking proactive action to reduce the exposure of their herd will still qualify for 100% compensation. Any farmer who might be affected by this 50% reduction by bringing animals into the herd when they have an ongoing breakdown can mitigate that immediately simply by signing up to the CHeCS accreditation scheme. Anyone can join CHeCS; they have that option.

The second option, which should be seen in the context of earlier points, is that if a farmer has a breakdown or an animal is brought on, he would now have the option to go for private slaughter and get the salvage value under one of the other provisions that we are introducing. Even if a farmer said, for entirely ideological reasons, “I refuse to do biosecurity because I believe badgers are to blame, and I am not going to do biosecurity; I won't sign up to checks,” he still has the option to get a salvage value by sending that animal to a local abattoir of his choosing.

My final point is on scale. About 1% of cattle herds bring animals on to their herds when they are under a restriction. They tend to be predominantly dairy herds. We suspect that around 250 herds might be potentially affected by this measure, but every single one has the option to join the CHeCS scheme and to immediately mitigate that risk. That would be a positive step forward.

[Dr Drew]

I know about the CHeCS scheme. How do farmers sign up and who checks the CHeCS scheme? I am a little bit concerned that this is not as clearcut as it sounds. Could the Minister elucidate on what that scheme is and how it works?

[George Eustice]

The CHeCS scheme is a United Kingdom Accreditation Service-accredited scheme that certifies that farmers are adopting proactive measures to improve their biosecurity. That could include, where necessary, putting additional fencing and protection on yards to stop badgers getting into contact with animals. It can involve adopting a particular risk-based approach to the way they trade. It can also involve investment in special drinking troughs so that badgers cannot get access to them, and so on and so forth.

I often hear from the hon. Gentleman and the Labour party that we should not be doing a badger cull and that we should be doing biosecurity, vaccination and other things. My answer is that we need to do all of those things. In the two areas where we first started the badger cull, we have seen a 50% reduction in the incidence of the disease, but that is not enough on its own. We also have to improve biosecurity and we have to continually refine our cattle movement controls. If the Opposition are serious about this, they must recognise that we must take biosecurity seriously too. That is what we are seeking to do.

[Bill Wiggin]

I am using this opportunity to check on the CHeCS. The Scottish Agricultural College does not appear on the CHeCS website, yet I believe it is a CHeCS-accredited scheme. The Department needs to have a little look at exactly how the scheme is working. I have been CHeCS-accredited from the beginning, and the tuberculosis bit does not really work. I hope that the Minister will have a little look at that. Could he also ensure that the 20 cattle that are condemned every year are photographed?

[George Eustice]

On the latter point, yes. I will ensure that that instruction is given to the OVs. I suspect that they would probably do that anyway for their own internal procedures.

On my hon. Friend’s first point, I do not think that is directly relevant to this set of regulations, but I am more than happy to have that discussion with him. The CHeCS system has worked well on other diseases, such as bovine viral diarrhoea. The TB version of it was launched in 2015 with the support of the National Farmers Union and others. It is something that we want to get behind and support.

Agriculture Bill (First sitting)

George Eustice Excerpts

Tuesday 23rd October 2018 Public Bill Committees

[The Chair]

Before we begin, I have a few preliminary points to make. Please switch electronic devices to silent. Tea and coffee are not allowed during the sittings.

We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and then a motion to allow us to deliberate in private about our questions before the oral evidence sessions. In view of the limited time available, I hope that we can take those matters without too much debate. I call the Minister to move the programme motion, which the programming sub-committee agreed yesterday.

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

I beg to move,

That—

(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 23 October) meet—

(a) at 2.00 pm on Tuesday 23 October;

(b) at 11.30 am and 2.00 pm on Thursday 25 October;

(c) at 9.25 am and 2.00 pm on Tuesday 30 October;

(d) at 11.30 am and 2.00 pm on Thursday 1 November;

(e) at 9.25 am and 2.00 pm on Tuesday 13 November;

(f) at 11.30 am and 2.00 pm on Thursday 15 November; and

(g) at 9.25 am and 2.00 pm on Tuesday 20 November;

(2) the Committee shall hear oral evidence in accordance with the following Table:

TABLE

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

I would like to make a point to the Minister about this. Regarding the witnesses, I was very disappointed to see that the National Farmers Union, Scotland had not been called in to give evidence. Given that the Bill is the subject of some dispute between the UK and Scottish Governments, it would have been appropriate at least to have Scottish Government officials down to explain some of the finer points of that.

[George Eustice]

The Scottish Government have not yet signalled that they wish to be part of the Bill. Indeed, our understanding is that they intend to pass their own Bill, which is why it was decided at the time that this Bill would not apply to Scotland. We now have a list of witnesses and a programme motion for the evidence sessions.

--- Later in debate ---

[Deidre Brock]

The point is that elements of the Bill affect devolved legislation and competencies, so it is appropriate that at least Scottish Government officials should be allowed to put those points across to us. As MPs, surely we want to get the full picture. The Bill is the subject of some dispute between the two Governments, so surely it is appropriate that we hear about that.

[George Eustice]

I do not really have anything further to add. The Bill is predominantly for English farmers and there is a schedule for Welsh farmers as well. There is a more limited schedule for Northern Irish farmers because the Northern Ireland Administration asked for a minimalist addition to enable them to continue to make payments.

As the Scottish Government have been clear that they do not intend, as things stand, to invite or ask us to add a schedule on their behalf, we have agreed the set of witnesses that we have. I have nothing further to add.

Question put and agreed to.

Resolved,

That at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(George Eustice.)

Resolved,

That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(George Eustice.)

[The Chair]

Copies of written evidence that the Committee receives will be made available in the Committee Room.

--- Later in debate ---

[Dr Drew]

Q I have one further question that follows up on that. Is it clear how the idea of public moneys for public goods is going to work in practice?

Thomas Lancaster: The Bill does not necessarily set out clearly how it works in practice as a framework Bill. We would like to see, for example, a clause that sets out much more clearly how public money will be provided for public goods in the long term. We think that the Bill needs to provide much more certainty about the funding cycle, how the quantum is arrived at, and how the funding is allocated between the four countries of the UK—that is a key area where we will look to improve the Bill.

In terms of how a public goods scheme could operate, we have in the UK 30 years’ experience with agri-environment schemes. The first schemes were developed in Norfolk and then rolled out throughout Europe through the common agricultural policy. We are world leaders at developing agri-environment schemes, which are the blueprint for the public goods scheme that the Bill proposes. There is a huge amount of debate to be had over the next two or three years about how best to design the scheme in a way that works for farmers, the environment and the taxpayer.

Martin Lines: We understand it to be a framework Bill: much of the detail about how it will be delivered to farmers will come later. We in entry level stewardship and higher level stewardship know that we can deliver great stewardship. Some of the reward for that is not great. There are a whole load of assets on our landscape that many farmers can actually get better rewarded for—it is not just about how we manage the food production side, but how we manage our landscapes. Some farmers can get rewarded more for the landscape side and then get the food production from that, because they have limited capacity within that landscape to get financial rewards. It is about having a joined-up approach.

Patrick Begg: Tom makes a good point about the mechanisms that need to underpin this, which are around multi-annual payments. It is about being able to see something that goes beyond the political cycle. That is one thing that the common agricultural policy has actually delivered—some certainty and confidence in the farming industry in what they need to invest in. That is one of the things that we really need.

If we think about duties rather than powers, duties to create those multi-annual systems seem to me critical. There is also another obvious question, because a lot of this does come back to money, in terms of the quantum. We have done research that has demonstrated that just to deliver the kind of public goods that we have listed here would take at least £3 billion a year across the UK, and that was just updating what the Land Use Policy Group did about 10 years ago. There is a strong evidence base for the quantum, so it would be very useful if the Bill gave a duty to produce an independently assessed sense of resources needed, and if those were linked into multi-annual contracts.

There is also something about targets. It is a truism across loads of corporates, and non-governmental organisations—anyone—that you manage what you measure. If we can see some way in which these can be quantified, and some really stretching targets that could tie resources to those, that would be incredibly helpful. That sends a very strong signal to farmers about the confidence that Governments have in the things that we are asking them to do. It is all about setting that sense of confidence and clarity about purpose.

Gilles Deprez: For me, the Bill and the law are not very clear, so my honest answer to your question is probably, no, I don’t know how it will work. I also do not have enough experience of the previous way of working with the common agricultural policy. What I do see from my limited experience is that we have different types of environment in the UK. For example, in west Cornwall, where I am, my average field site is about four acres. If I need to put, for example, buffer strips in my field around my hedges, I will not have any productive land left.

You cannot compare, for example, Cornwall with Lincolnshire or Scotland. It is very difficult to understand how it will work in practice. You are asking a lot more from a system than what it is used to in a certain way, to become more targeted and specific, so I think it will be a very big challenge to see how it will work in practice. That is my honest opinion.

[George Eustice]

Q The premise behind the Bill is that the long-term end stage should be that we move away from a system of arbitrary area-based subsidy payments to something where we first correct the causes of low profitability in farming, through things such as improvement in the way in which the supply chain operates, grants to invest in new technology, research and development, supporting structural change where necessary, but also properly rewarding farmers for the work they do for the environment. That is not necessarily on an income-forgone principle but on something that is genuinely rewarding that does not begrudge them making a margin in the way that the current pillar two schemes do.

I would like to know your views on whether you believe that is deliverable, if we rewarded the environmental outcomes properly to ensure that we had a viable model. What would that look like? What is your view on natural capital principles, in terms of pricing those options? Are there other things that you would like to do? Or do you believe that income forgone should be the basis on which we operate payments in future?

Martin Lines: It is a positive move forward. We know most farms have been doing some kind of stewardship and have had frustrations with the system, and that puts a lot of people off. What we have got to think about with this scheme is can we deliver it in nine or 10 years’ time, when it is fully rolled out, and add the focus of what we want in 10 years’ time, and how we have got time to adjust to it.

Payments at the moment are attached to land. As someone who rents land, I give payments straight to my landlord; it is included on top of my rent, so it stresses my business. I often pay it out 12 months before I receive it from Government, so giving it to the farmer for the work he does, such as my stewardship work, rewards the farmer for his best practice, and keeps it within the farming industry, which can then use it in local communities, with contractors and various other parts. It cycles it round the local community in a better way.

Patrick Begg: I am definitely a fan of moving it towards a more outcomes-based system. In fact, we have been working for a couple of years with a group of our farm tenants in Wharfedale in Yorkshire to understand exactly how we might establish an outcomes-type measure. It comes with a bit more risk, because some things are lag rather than lead, so it takes a while to mature your outcomes. We have to relax into that and understand that if people are doing the right thing, good things will flow at the end of it. That requires us to have a really good system of land management planning locally, but the critical thing we learned from our outcomes project in Wharfedale was about the quality of conversations and the sense of shared endeavour. If you set a destination, allow a farmer really to have agency over the route for getting there, and give them flexibility to do things differently, try things, and work with the skills and rhythms of their farming business, you get a much better sense of engagement.

It takes time and requires individuals who have trusted adviser status. For example, if ecologists talk to farmers, they learn about each other’s world and then they come up with a good answer, which makes a massive difference. That relationship has a huge gearing effect on the quality of the stuff you get at the end of it.

There are technical, mechanistic things that we have learned about what kind of measures work for pollinators, soil, etc. It is now perfectly possible to measure them and account for them. The trick, without this becoming massively bureaucratic, is for the people managing the land to have a sense of delegated agency. We use the farm tenants as our eyes, ears and monitors, and get them to report back. It really turns them on. We have had enthusiasm and a sense of joy creating the kind of things that we as a conservation organisation were looking for. It really worked within the framework of their developing businesses with extensive livestock in some quite sensitive upland areas. I am a great fan. I think it is perfectly possible, and we have got lots of evidence about how it can be done.

Thomas Lancaster: On the point about income forgone and payments, we regard income forgone and costs as a good starting point, but it is flawed in that it does not adequately incentivise the most profitable businesses, and it does not adequately reward the least profitable businesses, particularly in terms of farmers farming in places such as the uplands, which are inherently economically marginal. We encourage Department for Environment, Food and Rural Affairs to start there, then look at where we need to go in terms of building in that reward—that adequate incentive or fair return, which is how some officials talk about it.

On Wharfedale, the uplands and the public goods that those non-economic farming systems can provide, rather than just look at the cost of an individual intervention, such as managing a hay meadow or some other species-rich grassland, do you look at the whole- farm system as a cost? Rationally speaking, it is a loss-making business, and it would not necessarily be rational to run it without some form of public support. If we want to keep that sort of marginal farming going to secure outcomes for curlew, black grouse and other species that depend on it, we will need to look beyond income forgone, in terms of building an adequate and fair return for those environmental outcomes.

Like Patrick, we are big supporters of results-based and outcomes-based payment schemes where they can be shown to work and be proportionate. We think there is scope for continuing action-based payment schemes, where you pay based on the action. Similarly, we are big supporters of natural capital, particularly in assessing the benefits that a future policy based on public goods can provide. We know from previous economic studies—one looked at sites of special scientific interest—that for every pound spend on investing in SSSIs, you get £8.56 back. There is huge benefit to investing in the natural environment not just for society but for farmers, in the benefits you can get from pollinators, crop pest predators, arable systems and more resilient grassland management in lowland and wet grasslands. The places that were managed more extensively in Somerset after the floods recovered much more quickly than other more intensive systems. We are really evangelical about the benefits of a public goods approach, not just for society but for farmers, and a payment system that builds in a fair return will be a key part of that.

Gilles Deprez: The practicality will not be easy. It will be a long journey. It will depend on the people; every farmer, or land manager, has a different mentality on implementing it. To give an example of one of the things that we are trying to work on as an operation, because we are also a tenant, we are fortunate to have the Tregothnan estate, where we are working, as one of our landlords. One of the questions was, do you think that you should value natural capital? We are working on that. We are working on a tenant agreement, which is in place at the moment, where natural capital has a financial value.

It is a bit difficult to define it, because what is natural capital? You need to take a very holistic approach. At the same time, it needs to be very simple. We brought it back to soil, because it all starts with soil. We tried to value the difference between good and bad soil. We are still working on the exact parameters of what it means, but the moment that something has a financial value, people respect it. That was the idea that we had. We are still in a very early stage, but it is quite promising to see what is possible.

If something has a financial value you can create an asset with it. At the same time, you can create a liability for whoever is doing it. The whole principle is that the landowner has the asset of the land, but everything that we are trying to do in terms of increasing the natural capital on that farm is our property, because I, as the farmer, did it—I tried to increase it, or decreased it. It is a very difficult concept because of the competitiveness of farming. We need to ensure that that model is not breaking farmers, because farming is very competitive. You have to find a fine balance. With the Tregothnan estate, we tried to develop it further, but in a very down-to-earth way, so that we are not breaking the idea or the system. It is probably too early to implement it today, but there is potential.

It will require a lot of effort, and many farmers will need to be part of that transition. It is not something that you do overnight. If you take on a farm that is depleted, or where the soil has gone, it takes years, and a massive amount of capital, to rebuild it. That is very hard in a very competitive environment where you need to have a good crop again next year, and a margin to reinvest in your farming operation. It needs to be built over a longer period, and you need to have that long-term strategy as a farmer to do that, which is not always easy—far from it.

[George Eustice]

Q My second question is linked to that. It is about tenant farmers, and their ability to access the scheme. Obviously this is an agriculture Bill. Although the first clause is predominantly about payment for public goods in the environmental sense, the objective behind the Bill is to encourage more sustainable farming. We want to ensure that tenant farmers who may have shorter tenancies are able to access that.

I wondered what your thoughts were about the design of that. Mr Begg, obviously at the National Trust you are a big landlord. I know, Mr Lines, that you run schemes now on tenanted land. Mr Deprez, you are a very large agri business that rents lots of land. I wondered whether you had thoughts on how the schemes should be constructed to ensure that tenant farmers can access them.

Martin Lines: They have to be done in a way that works with the landlord. The landlord’s best asset is his soil and his fields. I entered into countryside stewardship, with my landlord’s permission, and explained to them the best ways of using the landscape. There are bits of the land that are unproductive in certain fields—awkward corners where machines do not fit. How can we get the best resource out of the land, by putting it into trust stewardship and using the landscape and those farmed fields in the best way possible? It is about working with landlords and tenants and having that vision forward, rather than having landlords just renting the land for the highest price. They have got to understand that it has got to come back to soil.

How to be rewarded has to come down to soil, so that when you are finished being a tenant you pass on your asset in better health. It is the same as a farm owner: when I hand it over to my children, if they want it, I want to hand it over in a better state than when we got it. Unfortunately, I have inherited it in a poor state, because past policy has encouraged environmental issues: hedges and things have been taken out and our soil has not been great because it has been overworked. Once you start realising what is happening, it is about having a strong, true asset that we can keep as a society for future generations.

Patrick Begg: I would make a couple of observations. First, it has always been the case with the National Trust—and we would support this more generally—that at least 10 years for a tenancy agreement is the right place to start, and possibly longer if we can do that. In fact, once you are in, it is like a good marriage; why would you break that up? These relationships need to endure. Our best relationships are the longest-term ones, for sure.

I am not sure that the Bill is the place where we can deliver a lot of that stuff. Clarity of purpose, and knowing what payments are available, is really vital. That would align closely with what we would wish to have from our agreements. We are very keen that our tenant farmers enter into agri-environment schemes, as now, and we would be very keen for them to enter into future ones. Certainly, for business viability and a thriving long-term tenancy relationship, that opportunity for tenants to get into the scheme is vital, so that is where we should be training our sights.

As to mechanisms in the Bill, I am not sure that there are any that could necessarily be put in. I suppose we ape things that might come out of the mechanics, around the design of things such as environmental land management schemes. We have whole-farm plans and produce documents—particularly when we let a farm, for example—about where exactly we think the outcomes might sit. Then we have a really good discussion with prospective or new tenants about exactly how they can deliver that. We are also very flexible about working with them and their business, to help them to be profitable within it. Tom has made the point a number of times that profitable farm businesses are critical for being able to deliver great environmental outcomes as well.

Gilles Deprez: I definitely agree with that last point. Where is the balance? That will depend from area to area and farmer to farmer; but having the right balance is very important in the short term, because at the end of the day we need to go through the seasons and be profitable. For example, what we have seen over the last year was incredibly tough for a lot of farmers, ourselves included.

You are confronted with weather events that are unreal. That is something very strange; I am a big believer that farmers are already paying the bill today of climate change. If we have a very bad season, a farmer needs to pay for that. Farmers already have a lot of pressure on them and climate change is part of that. Having a balance is very important, but difficult to define. We need to make sure that farmers are profitable in the short term but also work on the long-term goals. That balance is not always easy to find. I see it myself as a farmer. Sometimes I think, “I wish I could have done it like that,” but you know it is impossible. Step by step, you are building and trying to do things a little bit better than you did them yesterday.

[The Chair]

I have a long list of Members who want to ask questions. Could I ask that both questions and replies are pithy, so we can get as many people in as possible?

--- Later in debate ---

[Dr Drew]

Q Do you think that the Bill satisfactorily addresses either animal welfare or animal health issues?

David Bowles: It is a very good start. You have to put it in context. The CAP has allowed payments for animal welfare since 2003, so we have had two seven-year cycles. If you look at how many schemes there have been in the UK for animal welfare during that time, there has been one, in Scotland. That is not due to lack of enthusiasm from the devolved Administrations; that is due to lack of money, because pillar 2 has not given that money to open up those particular financial streams.

The RSPCA was delighted when the Bill came forward and acknowledged that animal welfare is a public good. Of course, we would like to see, as the previous presenters said, more clarity that there are duties to give money to animal welfare, because animal welfare has been squeezed out in the last 15 years under CAP and we do not want to see it squeezed out in future.

Yes, it is a good start. We would like to see some ring-fenced funding. We also crucially welcome the fact that the Department for Environment, Food and Rural Affairs has linked in animal health and animal welfare. Those two are crucial. If you are looking at things such as lameness and mastitis, if you are trying to improve one, you are improving the other. I think there is a huge opportunity for win-wins here on animal health and animal welfare.

ffinlo Costain: I agree entirely with what David just said but I think there is a real challenge. We would like to see a whole-farm approach to environmental land management schemes, so that you do not have progress on one public good on one part of the farm, but degradation of that same public good on a different part of the farm. Part of the challenge is around understanding the role that farm animal welfare plays, not only in and of itself to improve the lives of animals, but as an indicator of progress on environmental improvements as well. From that perspective—sorry, I am not sure what the second thing was that I was going to say, but that will do for now.

Simon Doherty: By way of an opening remark, I fully concur with what David and ffinlo have just said by way of introduction. Certainly, the BVA position would be that we feel that this is a really good start. It is a nice piece of legislation. There are sufficient powers contained within it, we feel, to give the Secretary of State the ability to make appropriate changes where necessary within the realm of animal health and animal welfare.

Our overall position is that health and welfare are inextricably linked, but although we feel that there is a lot to be gained by maintaining that link, there are times when we need to separate welfare and look at particular aspects that relate to welfare outcomes—good welfare on the farm is not just absence of disease. There are times when we appreciate that there is a very close link between health and welfare, but there are also times when we need to be able to measure each separately. For both to be public goods, there need to be appropriate measures across the board.

ffinlo Costain: I have remembered my final point. Our view is that climate change and biodiversity must be addressed together. You can get some quite perverse outcomes, particularly on farm animal welfare, if you simply focus hard on greenhouse gas emissions; you displace some of the environmental impact of the feed production, nitrous oxide production and carbon dioxide production that is associated with those more intensive systems. It is really important that farmers should not deliver some public goods at the expense of other public goods that are part of that. Improvements in climate change and biodiversity must be delivered together, and farm animal welfare is a great indicator of progress in both those areas.

[George Eustice]

Q The premise behind the Bill is that, as you said, animal welfare is a public good, just like environmental outcomes. That is quite a radical, new thing for the Bill to state explicitly. Just as we have environmental stewardship schemes now, we intend to design schemes that could support higher standards of animal welfare for farmers that go above and beyond a regulatory base. What is your view on the design of such schemes, given that this is quite new? Some countries have tried it. Should we emphasise investment in capital to get new housing that is more animal welfare-friendly? Should we incentivise people to join holistic higher welfare schemes? Should we pay farmers for delivering results, such as pigs arriving with intact curly tails at abattoirs? What is your sense of the balance between those, and what type of interventions do you think we ought to consider?

Simon Doherty: It is probably all of the above—it is the whole piece across the board. In measuring the outcomes, it is important that we do not just reward farmers for doing the minimum legal standard. It is actually about going above and beyond. The overall purpose has to be to raise the bar right across the board. It should not just be about rewarding the farmers who choose to do things above and beyond; it should be about bringing people who are a little bit behind the game on welfare to a point where they improve their end game. That will not just be through a purely financial reward—quite a bit of thought needs to be put into the individual schemes to make sure that we are bringing everybody along. It certainly needs to be right across the board.

David Bowles: I mentioned at the beginning that the UK has only ever had one animal welfare scheme, but in the EU there have been 50 different rural development programmes on animal welfare over the last two cycles since 2007. They provide a huge amount of rich experience that shows that you can get good welfare outcomes from inputs from financial incentives. The RSPCA would like to see a two-tier system that has both the incentives that the Minister mentioned. For instance, you would have capital costs for rewarding people who build larger lunging spaces for dairy cattle. You would have outcome-based measures—for instance, the number of tails on pigs going through abattoirs that show a lack of mutilation. As Simon said, you should aim for people to go to a higher welfare scheme, such as RSPCA Assured. We believe that if you do so, you will get the incentive to improve animal welfare and animal health, and you will get farmers using a much better farming system than they use at the moment. This gives us a real opportunity to break the mould on animal welfare and get much better animal welfare farming happening in the next 10 years or so.

ffinlo Costain: I agree with both the previous comments. It is essential to increase standards across the board. We should not only improve those standards as and when we leave the EU, but put in place a mechanism—and metrics are a really important part of this—to enable us to continually review the standards, based on what is being achieved by farmers, not just in the UK but around the world, to ensure that our standards continue improving. I think that at the moment, DEFRA want to provide financial assistance for farmers who are genuinely trying to improve their systems. We support that, and we think that sometimes, that assistance may need to be quite substantial. I think that DEFRA also want to reward particular excellence, and again, metrics are critical to measuring that progress. The best way for Government to achieve this is to work with existing—and possibly new-entrant—higher welfare schemes, schemes like RSPCA Assured, Soil Association and others, and then provide rewards based on particular metrics that the Government agree are critical.

In terms of metrics, we should not just be focusing on inputs. There is often a lot of focus on the inputs—the type of housing, the space allowance, the genetics of the animals, and that sort of thing—but we should also be looking at the outcomes: what is achieved. The inputs give us the key determinants in our ability to deliver improved farm animal welfare, but the outcomes tell us whether that improvement in welfare has been delivered. We need to see on-farm metrics that help farmers improve their day-to-day efficiency, the productivity of their businesses, and their ability to deliver better welfare and better sustainability in the round. There is also a huge opportunity across the nation at the moment that is underplayed, which is in the area of slaughter. That is where most livestock end up. There is potential to gather an enormous amount of helpful data that will help farmers, policy makers, and retailers’ assurance schemes deliver better welfare, and have a much more forensic understanding of where welfare sits across the board and whether attempts to improve welfare are being successful.

Simon Doherty: Minister, there is also a real opportunity to engage new technologies that are being validated to measure some of these objective welfare outcomes. A huge amount of work is going on, and the UK is very much ahead of the game on this. We have some fantastic research centres across all four regions of the UK that are doing brilliant work on things like thermography, video imaging, wearable devices and so on, which are helping to measure health outcomes, but are also being validated to measure welfare outcomes. We do not necessarily need to cover all of our farms in that technology, but incentivising the uptake of some of these new technologies that can be used to benchmark animal welfare will be increasingly important as we go forward.

We have had a huge amount of engagement recently. BVA produces an infographic on welfare related to farm quality assurance schemes, and there has been a huge amount of uptake right across the board on that, including—as was previously mentioned—RSPCA and Soil Association schemes. As I say, that is going to be really important to building public engagement about this being a public good.

[George Eustice]

Q Briefly, because I know we are tight on time, our understanding of farm animal welfare has developed somewhat over the past 15 years or so from the traditional five freedoms—freedom from hunger, pain, and so on—to much more of a notion of a life worth living and animal wellbeing. Do you share that view, and what are the implications for the types of schemes we should be incentivising, versus the types of approaches we should take to a regulatory baseline?

David Bowles: Absolutely. The uptake of the RSPCA Assured scheme, which the RSPCA sets standards for, is patchy. It covers about 55% of egg production in the UK, about 23% of pig production and about 30% of turkey production, but for the sheep, beef and dairy sectors, uptake is under 1%. However, as part of the scheme, the RSPCA has been doing welfare outcome assessments for the past 10 years or so, which started off with laying hens, dairy and pigs and is also now moving into chickens. We have got a lot more skilled in working out what the animal is thinking and what its welfare outcomes are. The RSPCA knows from its schemes—this is a commercial scheme—that those systems are easy to put in, that they are fairly easy to measure and inspect as part of the audit trail, and that they work. The farmers appreciate them because they need feedback in terms of how their animals are feeling as well.

We already have a lot of the science there to enable us to look at this. We would certainly welcome using those measures as part of any scheme going forward and, of course, welcome anybody coming to any of our farms to see how those welfare outcome assessments work in practice.

ffinlo Costain: A sustainable farm is, in our view, a happy and healthy farm. It is one where the animals and farmers are making progress and are both having a life worth living. It is not just about the animals; it is about the farmers as well.

I used to run a regional branch of the National Farmers Union. For many of the members that I represented, the main time that they came across metrics was when they sent an animal to the abattoir and were told that it did not quite achieve the grade that they expected it to. That was the feedback they got, and they got less money. That is really negative. We need to change that so that there is a much more positive relationship with metrics.

I take the example of my neighbour’s farm. He has big challenges with his lamb production. We would like to see an assurance scheme that measures his farm in the round—that there are what we might call iceberg metrics that are measured by the Government, partly on a farm and partly at slaughter, where we are looking at low levels of lameness, low levels of ailments such as liver fluke and low levels of antibiotic use, and measuring those things together.

My neighbour is putting in place some really interesting measures around hedgerow management, carbon sequestration and water management, which will improve sustainability at the same time as improving the health and the welfare of the sheep on that farm. If he was achieving against those three measurements together and improving year on year, he would be happier with the farming system that he has, would be earning more money and would have increasing yield at the same time as feeling good about his farm, being able to communicate that with his community and also earning additional money in relation to those public goods. That is the sort of progress that we would like to see, which is very much along the lines that the Minister is thinking of at the moment.

David Bowles: Of course it is a balance. You have to make sure that you do not make any scheme too complicated. You have to have measurements that are easy to measure and quick to measure as part of the audit scheme. It is a balance between getting that data out and making sure that the audit scheme works properly.

[Deidre Brock]

Q A lot of doubt has been expressed around the Government’s commitment to the maintenance, or indeed the improvement, of animal welfare standards in the face of future difficult trade deals. What concerns do you have about that? What commitments might you might like to see placed in the Bill?

David Bowles: The RSPCA, like the previous witnesses, has huge anxiety about future trade deals. Let us look at the number of countries that we are looking to do trade deals with. At the moment we are obviously looking to do a trade deal with the EU. We have broadly a level playing field with the EU, because we have had animal welfare standards since 1974 and they cover most of the species in the EU. Of course we would like to see them higher, but they are pretty good. The EU and the UK have probably some of the highest animal welfare standards in the world, so that means that anybody else that we are trying to do trade deals with has lower standards—the only exception is New Zealand. The USA has hugely lower standards. Not only is it still using methods that are illegal in the UK, such as beef hormones or ractopamine, but it is also using standards that are illegal in the UK, such as the conventional battery cage and sow stalls.

The RSPCA would like to see an amendment to the Bill that was rejected by the House of Commons on the Trade Bill—that any trade deals would allow in only products that are produced at least to the standards in the UK. If we do not have that, we have a race to the bottom; we are just exporting our good animal welfare standards to somewhere else and we do not want to see that. We want to see a vibrant, healthy farming community in the UK, producing at higher welfare standards and giving the consumers what they want, not the bringing in of products and food that are produced to illegal or worse standards than here.

ffinlo Costain: I echo what David said, but I would also say that, in my meetings with Ministers and officials at DEFRA, I think there was a genuine commitment to improving farm animal welfare. I have been really heartened by that as we have been going forward. At the same time, there are some really challenging balances, exactly as David said. However, at the heart of this is what is the market in the UK, not only for our farmers at home, but abroad, and it is about quality. If we have lower standards coming in, it undermines our marketplace and our rural economy. It is essential that we recognise that we are never going to win a race to the bottom; we cannot. We can win a race to the top. We already have good quality products that could be much better quality in terms of welfare and the environment that we can sell as a story, as a whole product, whether that is branding, as Tom was talking about before—Cumbrian lamb or whatever—or whether it is selling branding at home; whether it is building the business case through public goods to our local communities and to the taxpayer for additional assistance in terms of land management and public goods; or whether it is underpinning the British brand and selling and promoting that quality around the world.

In addition, if we are building a market based on quality and reviving our rural economy, whether it is small, medium or large farm businesses, we will be developing new technologies and new machinery that we can also export. We want to see not only a growth in improved welfare and environmental standards, but a revival in the countryside. The Bill is a fantastic step in the right direction, but it is just framework legislation. We need to see more work in the future—for example, the gold standard work that DEFRA is engaged in.

Simon Doherty: I agree with the two previous correspondents entirely. I will not repeat everything that they have said. We have had some very encouraging, strong lines from DEFRA. The disappointment has been that there have been weaker lines from the Department for International Trade. We need to make sure that there is a join-up across Government to make sure that we are all singing off the same hymn sheet in relation to welfare, so that we do not have one part of Government saying one thing and another part doing another. Obviously, I will say this as the president of the British Veterinary Association. We feel that we are absolutely at the juxtaposition of animal health and welfare. We are here today because the role of the BVA is to represent the veterinary profession to Government. We hope that one of the outcomes across the board will be a recognition of the role of vets in veterinary public health, in animal welfare, in animal health, and ultimately in food security for the country.

David Bowles: Of course, the other way to stop this, apart from in trade deals, is to give the consumer information. At the moment we only have one mandatory method of production label, which is on eggs, and we know that that has worked. It has driven the market up to 55% now for free range eggs, because the consumers wanted that. We hope that in the Bill we get some mandatory method of production labelling going into other areas. There is a chance of getting that. I know the Government share some of that enthusiasm, and that would be really good. The consumers always say they want higher animal welfare, but some of the time they are confused because the label does not show that.

ffinlo Costain: The evidence shows that, where method of production labelling exists, at least 50% of consumers choose the higher welfare option, which is often a little more expensive. Method of production labelling is not only important in terms of helping to drive that market, but is really about improving communication. There is a big disparity between, particularly, people who live in the city, but also often people who live in the countryside as well, and the way that food is produced; I do not know whether that is driven by CBeebies. I have a four and a six-year-old and they constantly see one model of farming that does not necessarily reflect the way that farming is. Labelling and communication in general builds the case for improved prices and for commitment to local farmers, or farmers at a British level, and across the board. I think it is really important.

Agriculture Bill (Second sitting)

George Eustice Excerpts

Tuesday 23rd October 2018 Public Bill Committees

[The Chair]

Thank you for taking the trouble to join us. We have until 2.30 pm for this line of questioning. I am sorry we are running slightly late, but there were some domestic issues that had to be discussed. The first question is from the Minister.

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

Q 25 Thank you, Mr Clark. Do you agree with the central premise of the Bill, which is that the end state should be that we phase out direct area subsidy payments, and instead support agriculture in a different way, helping it to invest in productivity and deliver environmental outcomes and other public benefits?

Andrew Clark: We certainly agree with the central premise that we should move to a new state. We believe that the transition period of seven years is probably the right timescale at the moment. However, we are concerned that it is difficult to predict the circumstances we will find ourselves in during that seven years—or even next week. During those seven years, while moving to a situation where public goods are the primary reward for farm businesses, there should be an opportunity for Ministers to pause, reflect and review that transition, and to vary payments.

[George Eustice]

Q So you support the power to extend the transition during the transition.

Andrew Clark: We would like to widen that power slightly to allow Ministers and future Governments to vary the transition according to economic circumstances and the ability of farm businesses to deliver on the public goods that you want to achieve.

[George Eustice]

Q You have talked about food security being an objective of policy. What do you deem to be the correct level of self-sufficiency?

Andrew Clark: It is a good question. For starters, we are very clear in our mind that food security is a public good. It is in the public interest to ensure that there is a sufficient level of food supply from domestic sources. One of the changes to the Bill that we would like is clarification that it is a particular objective of the Government to achieve food security. We believe this should be a direction of travel, rather than wanting a particular level. Clearly, for different crops, there are different levels of food security. In some crops, we could be 100% self-sufficient; in others, such as bananas and aubergines, we probably never will or should be. We believe food security should be an objective of the Bill and should be in there with public goods.

[George Eustice]

Q Finally on this point, do you think the fact that sectors such as poultry, pigs and soft fruit—the ones that have traditionally received no support—are the ones in which we are most self-sufficient slightly undermines the argument that direct payments of one sort or another are essential to deliver food self-sufficiency?

Andrew Clark: Our objective would be to ensure that there was intervention to assist all businesses, in whatever sector, in contributing towards food security and sustainable management of the land. Every sector has a contribution to make to that. Pigs and poultry indirectly benefit from the fact that they take feedstocks from other parts of the farm economy—notably cereal farmers—that receive direct payments.

[George Eustice]

Q Finally—I know we are short of time—part 2 of the Bill gives the Government powers to simplify and improve the legacy basic payment scheme system. What would your organisation most like to see changed during that transition period?

Andrew Clark: That is a good question. One of the things we would like to see is a simplification of the approach. The objective of simplifying and improving is laudable. One of the concerns about the transition relates to untangling the bureaucracy we find currently with greening—the detail of measurement and that type of thing. In terms of outcomes, however, some of those greening measures potentially have good benefits for farm businesses and the sustainable management of land and soils, and we would be disappointed if the existing benefits from agriculture production were lost during the transition period.

[Dr David Drew (Stroud) (Lab/Co-op)]

Q Very quickly, what other worries have you got about this Bill?

Andrew Clark: There are a number of worries. The Bill is fairly silent on three crucial areas that we think need to be addressed. Ministers have rightly made a lot of points about farmers’ proud record on caring for the environment and, in particular, animal welfare and health. It seems to us that the Bill should give greater provision to protecting and retaining farming standards, environmental standards and animal health and welfare standards, in the face of the new trading environment. We would like to see some measures, and perhaps some amendment, relating to that.

As the Minister has pointed out, the long-term commitment is for farming to continue to deliver a contract around environmental and land management. That is a multi-annual commitment, and we believe that there should be a multi-annual budget to go along with that, rather than just a year-to-year budget. We would like to see something that reflects the long-term nature of the farming community’s expectations in the Bill.

The final thing is that we feel that there is not quite enough agriculture in the Agriculture Bill. Although it sets out clearly what types of things can be done—perhaps not how they will be done—it does not say who will benefit from those payments. We think it is important that it is the active land manager, the farmer and the food producer. It should be seen through the prism of food production and the active management of land.

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[The Chair]

We start on the same basis. Minister, do you wish to open?

[George Eustice]

Q 43 We have both landlords and tenants being represented on this panel. One of the key things we want to ensure in the new Bill is that tenant farmers can access these schemes. How do you think that can best be delivered?

George Dunn: In relation to the eligibility for tenants to get into the schemes you are envisaging, we have already shared our personal concerns with you, which were that there was no section of this Bill bringing forward the Tenancy Reform Industry Group changes that were agreed last October, and have been extant for a year now. We are particularly concerned to ensure that tenants are not disenfranchised. Often there are provisions within a tenancy agreement that say that you must have agricultural use only of your land, and there may also be requirements to the effect that tenants must seek the consent of landlords for investment in fixed equipment on the holding, which may not always be forthcoming.

We would very much like to see an amendment to the Bill that provides assurance to tenant farmers that they can seek changes to tenancy agreements if they need to in order to get into new schemes. We also want a definition within the Bill that gives a clear view of what constitutes a potential beneficiary. That beneficiary has to be someone in active management of land of which they are in occupation, as well as taking on day-to-day management control of that land.

[The Chair]

Thank you, Mr Dunn. Do you wish to add to that, Mr Price?

Christopher Price: I would add to that and contradict some points. The Country Land and Business Association is very much behind the Bill. We have called for a shift to paying public money for public goods for the last 20 years or so. We fully support the core thrust of what the Government are trying to do. Our response to your question follows on from that.

Whoever is delivering the public goods should be the one that gets the money, and if that is the tenant, then so be it; if it is the landlord, then so be it. George Dunn mentioned including the Tenancy Reform Industry Group provisions. I would dispute that these provisions are agreed. They were not. There was still a lot to argue over, and we suggest that if the Government are minded to look at reforming agricultural tenancy legislation in further detail, they should do so through some other mechanism than this Bill. There is some important stuff that needs to be discussed in the context of this Bill, and we would not want time to be restricted, or the big picture to be lost, by talking about what we would regard as ancillary matters of tenancy reform.

[George Eustice]

That is it for now.

[Dr Drew]

Q 44 Will the Bill bring forward younger farmers, and if we have that as a central point—given the farming community’s present average age—how could it be further improved to bring forward even more younger farmers?

George Dunn: The important thing is to see that this Bill is a scaffold, not a building, so until we see the shape that the Government decides upon for building the building around the scaffold, then it is difficult to tell exactly what will happen. But we are certainly encouraged by the facility within the general framework to have both de-linking and consolidation of payments, which we believe could speed up retirement and restructuring within the sector, to make holdings available to new entrants.

Many of our tenants who let land under farm business tenancies, unlike those who let under the Agricultural Holdings Act 1986 with secure tenancies, would say to us that the basic payment scheme is a cost on their business, because they have to pay that in rent to the owners of the land, whom they want to take the land from. So long as we have a strong arm on the productivity side of this Bill, which focuses on the new entrants and the progression point, we think there is great hope.

Christopher Price: I would agree with a lot of that. Inevitably, if we shift away from basic payments to a more market-facing world, it will create some churn within the sector. Older farmers are likely to decide to move on. That is why it is so important that there is sufficient investment in productivity, so that those who want to start on the farming ladder can get the necessary skills, not just farming skills, but business and marketing skills, which are so important in this sector now.

--- Later in debate ---

[The Chair]

Minister, this may have to be the final line of questioning, because the Minister is on his feet in the Chamber and we might find ourselves interrupted.

[George Eustice]

Q One of the key premises behind the Bill is that, rather than subsidising farmers because there is a profitability problem in the industry, we should try to correct the causes of that poor profitability through grants and fairness in the supply chain. Can you give us some examples of the types of practices that undermine farmers’ position in the supply chain, whether it is hidden charges, hidden clawback costs from abattoirs and unfair contracting by dairy companies—the type of things that you would like to see addressed here and might make a difference to your members?

George Dunn: The overarching position is that we already have the Groceries Code Adjudicator, which looks at the direct contracts between suppliers and retailers. Our concern is that it is not looking below that at the relationships between farmers and first purchasers. The Bill seeks to correct that. We are concerned about the fact that the weight of responsibility on the retailers is not fully shared, because there is nobody looking at the bottom end of the supply chain. We see processors that want to retain their contracts and are willing to take more and more restrictions from retailers or even from food service, and are not pressured enough to get better terms that they can then share with the farmers and those who are supplying them. We want the eyes to be right across the supply chain so everybody acts fairly.

We have seen all sorts of things. If you want a specific example, I was speaking to a lettuce grower who had a contract for a certain number of heads of lettuce at a certain price the day before. He went out to cut them the next day, and then received a call to say that those lettuces were no longer required at the same price and in the same quantity, and yet he had already made the decision to cut.

We want to ensure that there are better and fairer contracts in the supply chain, but this needs to be looked at from farm to table, not in the piecemeal way in which the Bill seeks to do it. It leaves the Groceries Code Adjudicator looking at direct supply chain issues, and it provides another body—it suggests the RPA, which we disagree with—for the other stuff. We think that the adjudicator should have a role over the whole gamut.

[George Eustice]

Q On the concern about the RPA, at the moment it is responsible for things such as carcase classification. Although its brand may have been tarnished by trying to implement a very difficult and bureaucratic EU scheme, it has a breadth of knowledge about everything from school milk schemes right the way through to carcase classification. If the GCA were to do it, it would be funded by a levy, which would have to be funded by the industry itself. What is your concern about the RPA specifically?

George Dunn: You are right that the RPA runs certain supplier schemes, so we are not saying that it is completely unsighted on this stuff, but it has got no history or skill, in terms of contracts, so how do we see it playing a role within the contract environment? It has got no skill or expertise in looking at how supply chains operate from field to plate. Although it might have had a glimpse of certain aspects of it, we do not think it has got the expertise across the piece.

Christopher Price: In addition, the powers that the Secretary of State proposes to give himself under the Bill are really quite strong. I cannot think of many other areas in which a Minister has such powers as the Secretary of State will gain under the Bill. We were pleasantly surprised that the Government proposed taking them. It seems to us that the powers are so significant that it is unreasonable to say that they should be exercised by a non-departmental public body. I would have thought that they are so significant that they are the sort of thing that a Minister ought to be deciding, not someone further down the hierarchy.

[Deidre Brock]

Q We could talk about that for a long time—that is very interesting. You mentioned the drop in rents. Does that imply that you expect a big drop in rural land values?

George Dunn: No.

Christopher Price: No. A couple of per cent.

George Dunn: For the reasons that I stated earlier, the return on capital is only 2% from agriculture anyway, so there are other things driving the capital value of land.

Christopher Price: If you compare changes in the CAP with changes in land values over the last 30-odd years, there is very little correlation, which you would expect there to be. Also, the European Commission has done two reports on this topic in the last 15 years and both said it was impossible to show any direct link between the two.

--- Later in debate ---

[George Eustice]

Q This is obviously an Agriculture Bill and its primary focus is around schemes to replace the common agricultural policy. Can you confirm whether there are any clauses that you feel undermine your independent ability to do the independent job you have to do? Can you explain the other pieces of legislation from which you draw your authority to implement food standards independently?

Jason Feeney: There is nothing in the Bill that we feel impinges on our independence. Committee members may not be aware we are an independent Government Department, non-ministerial and directly accountable to Parliament. We do our parliamentary work either directly, like this, or through Health Ministers. There is nothing in the Bill that causes us to have any concerns. There are elements that we think are positive and helpful. As you know, Minister, we are very strong around the openness and transparency with which we conduct our business. Our board meetings are held in public. All the papers are published and they are transmitted live on the internet. The collection and more open aspects of data, and the sharing of data, to help to improve standards, quality and safety are things that we are very supportive of.

On the other part of your question, we were set up in the late ’90s in response to the BSE crisis. The Food Safety Act 1990 gives us our primary remit, role and authority.

[Tonia Antoniazzi (Gower) (Lab)]

Q Does the Bill fail to legislate to ensure that food imported into the UK post-Brexit is produced to the equivalent standards? Will the Food Standards Agency ensure that that happens?

Jason Feeney: In a post-exit world, it is helpful to think about food imports in three different categories. First, there is the food that we import from third countries—non-EU countries. For those high-risk products, which are mostly products of animal origin, but are also certain defined products not of animal origin, we are pre-notified of their arrival and an inspection regime applies. That is EU-driven, and post-exit we will continue, at the point at which we leave—

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[Dr Drew]

Q Does that worry you?

Dr Fenwick: Hugely. They are untried, untested and un-modelled. We have not had an impact assessment. From a legal point of view, I have grave concerns that they may contravene WTO rules. It was concerning to hear our own Cabinet Secretary—last week, I believe—read her response to a written question from the shadow agricultural spokesman for the Conservatives, Andrew R. T. Davies, in which she said that it was not appropriate to inquire whether what was being proposed is legal or not for the World Trade Organisation. That is a grave concern and we are well aware of the sort of problems that can crop up when it comes to the WTO. It is going on with regards to the USA, China and Europe at the moment, including with regard to agricultural goods.

[George Eustice]

Q As a point of clarity, agriculture policy is devolved, so perhaps I can clear up the mystery as to how the Welsh Government did it. They simply asked us to include a schedule in the Bill. Northern Ireland did the same and Scotland was the only part of the UK not to. There was no lobbying exercise or debate. It was a request that was duly accommodated.

I want to probe this point about the WTO. What is it in particular that concerns you? We obviously have an amber box allocation in which we could do market-distorting support if we wanted to, and it is largely accepted that the proposals would be green box. Just explain your concern about the WTO.

Dr Fenwick: Specifically, annex 2 of the agreement on agriculture sets out strict rules in relation to “Payments under environmental programmes”, which prohibit payments that are over and above costs incurred and income forgone. That is an explicit disallowance of such payments, superficially at least. I am not a barrister or a lawyer, but it certainly seems fairly black and white. That is a grave concern given that we have asked for clarification and have not received it as explicitly as we might have liked.

I do not want to imply that it is not legal, but there is an ambiguity around it— payment for public goods is effectively environmental payments, which is what annex 2, paragraph 12 of the agreement on agriculture deals with. It raises concerns that, even if it was legal, it could be used as a vehicle for other countries spuriously to raise barriers to trade and so on. That could trigger a lengthy dispute that goes on for years and has adverse impacts on us. We know from experience that countries tend to use such tools where they become available.

John Davies: A major part of the support for public goods is dependent on moving in that direction in terms of the boxes. That has never been done by any other country before and we are obviously concerned. We need to see some proof that that has been properly researched and is achievable.

Huw Thomas: I do not have anything to add to that.

[George Eustice]

Q Just a second point on the issue of fairness in the supply chain. Obviously the premise behind the Bill, which the Welsh Government seem to have also adopted through the schedule, is that we should, in the long term, have the objective to move away from an arbitrary, area-based subsidy payment and instead correct the causes of low profitability in farming by strengthening our position in the supply chain. Could you give us your thoughts on that section of the Bill?

John Davies: Obviously we are very keen to see a functioning marketplace. We are keen to see it moved in an orderly fashion. Dr Fenwick referred to our main competitors. Obviously, Europe is a fairly major competitor. It will reserve at least 70% of its budget into direct payments. We are keen to maintain some form of direct payments in Wales because that will allow us to invest in the environment and give us the confidence to invest in productivity and resilience schemes.

We need a balance and to have the opportunity in what is a very changeable marketplace at the present time. We have a great deal of uncertainty and believe there is a need for stability. When we have a functioning marketplace that pays a fair price for what we produce, we are very keen to take advantage of it but, at present, we are some distance from that.

Dr Fenwick: Anything that improves the supply chain has to be welcomed and there are certainly elements of the Bill, from that point of view, that we absolutely welcome, including issues such as farmers working in co-operation. That is a separate issue to the issue of support, which is a grave concern given that a shift even over what superficially appears to be a lengthy period of seven years could effectively just slow down something that has a huge adverse impact, not just for farmers but for those who rely on farms.

Average incomes over the last five or six years for Welsh farms would be maybe £24,000, and yet those farms have turnovers of around £80,000 or £90,000. That money is effectively going out to local businesses that are not themselves farmers but which are reliant on the agriculture supply chain. We have said for the past two years that any such radical changes to agricultural policy should be investigated thoroughly in terms of their impact on the wider, broader and longer supply chains. We live in areas where up to 28% of the working population is employed in agriculture. That is not the number of people who are farmers; that is the number of people employed in agriculture. Any disruption could have a catastrophic impact, which is why we have argued for that impact assessment to take place.

Huw Thomas: I do not have much to add to that other than to offer the comment that it is suggested that the Rural Payments Agency could be the agency overseeing the fairness in the supply chain issue. I am not sure whether NFU Cymru are sure that the RPA might be the best placed agency to do that. I also make the point that the existing principles around exempting producer organisations from competition law need to be rolled forward as well.

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[Simon Hoare]

Q Quite a lot of Wales is covered by a national park designation, so we have the national park, the Welsh Assembly and Westminster and the Department for Environment, Food and Rural Affairs. Do you see the national parks as being a useful string to the bow in terms of fostering and supporting agriculture, or are they a potential irritant? [Interruption.] I can tell by the whispering that I have hit a chord.

Dr Fenwick: I was asking Mr Davies whether he farms in the national park—I could not remember.

John Davies: I am adjoined with the military base, so we are just outside it. I think there is a need for best practice, which is in place in some national parks, to be replicated throughout Wales, because they must be a support for the communities in which they are based rather than a hindrance. There is a real need to get policy aligned throughout Wales and considerable improvement could be made in some of the national parks. I will not comment much further than that.

[George Eustice]

Q I want to ask specifically about the Bill and the difference between the schedule for Wales and the main Bill, which, when you boil it down, is paragraphs 1(2)(a) and 1(2)(c) of schedule 3. I do not need anyone to look it up—I can explain where it is. Broadly speaking, all that does is give Wales the power to support businesses or communities in rural areas and also to support persons involved in anything from the processing, marketing, or distribution of products derived from agricultural activity. Coming back to Dr Fenwick’s point, are you pleased with these additions or not? You talked about the importance of an active farmer test and making sure that the money goes to farmers, but the additional measures in the Welsh schedule open up the possibility to give money to post offices or any other type of rural community business. Do you support that or not?

Dr Fenwick: If that is the case, that is welcome. Those pieces that effectively reflect the English text appear to be, as John described it, one-dimensional in terms of facilitating a movement from the current system to a payment for public goods system. That is the main focus of the Welsh proposals that are currently being consulted on and, indeed, the English proposals that are now in the Bill. Obviously, we have concerns about that, because effectively it is revolution as opposed to evolution. It is not an evolution if it is a transition to something that is, effectively, revolutionary and has never been done before. As I say, I am not a barrister or a lawyer, but there are big questions about how much that ties the Welsh Government down, if they were to decide to take a different course and perhaps reflect what is happening at an EU level or what is happening in Scotland or Northern Ireland.

[George Eustice]

Q Have the Welsh Government given you an indication of how they intend to use those additional powers? It could mean giving direct payments to farmers, or giving grants and money to people who make jam or cider or other novelty food process products.

Dr Fenwick: In fairness to the Welsh Government, their focus is quite rightly on their consultation at the moment. That is the best indication we have of what they would like to do in Wales, which has an element of that type of direct support for businesses or economic resilience, as they call it. Clearly, the main focus is on moving away from support for farmers to a payment for public goods. On that issue I would highlight a major concern that we have, which is that Wales currently has a cap on its payments. As a union, we have supported capping agricultural payments since 2007, since the CAP Health Check.

At the moment it does not appear that capping is going to feature in England or Wales as regards public goods payments, whereas on the continent in the EU they are looking at bringing in lower caps to try and push money down to family farms. Our concern is that not having capping will move money away from family farms to private individuals, large companies, charities and so on, with no cap on how much money those businesses or charities—or whatever they are—can receive. We believe that it is absolutely the wrong direction of travel.

[George Eustice]

Q It is an interesting point. The additions in the Welsh schedule could be read both ways. If you are worried about an active farmer test, then arguably you would not want that.

Huw Thomas: They can be. The powers throughout the Bill are pretty broad, enabling powers. There is always an element of risk with such powers as to how they are utilised by Ministers. A lot of policy discretions are conferred upon Ministers, including financial discretions. The devil will be in the detail, as always, but there is not much detail in the Bill. It has to be read in conjunction with the consultation and the further policy statements from the Welsh Government next year, as well as the direction of travel they are wishing to take. It is difficult to say at the moment, but I do take your point.

[Ben Lake (Ceredigion) (PC)]

Q I have two questions, if I may. You have already mentioned the powers granted in the Bill to UK Ministers. Do you have any thoughts about the impacts that some of these powers might have on Welsh Government, and their ability to formulate agricultural policy? Are there any aspects that you welcome? Are there any aspects about which you have concerns?

Huw Thomas: I think the part 7 clause 26 powers around the WTO, for example, could be concerning, because potentially they will artificially constrain the type and level of support that a devolved Administration might be able to pay because of considerations around the WTO. That may be one issue where there is potentially something that risks becoming contestable or contested in the future between the UK and the devolved Administrations.

John Davies: Obviously a UK framework is vital, not by imposition but by agreement. We need to get to the dispute resolution part of that, and clearly work out how those issues might be resolved. At the present time there is not that much clarity.

Huw Thomas: It is a proposal to take powers into the centre. It is not the common consent common framework that we, as NFU Cymru, always envisaged and espoused. We always said that we recognised the need for common frameworks, and that limits needed to be set on certain things, but they need to be decided by common consent, not imposed from the centre. With respect to the WTO provisions in part 7, the UK Government and the devolved Governments need to get together and agree between them, rather than having this quite heavy-handed approach that involves proposing to take these powers into the centre, and accepting the Secretary of State for DEFRA as the ultimate arbiter of who gets to do what.

Environment and Rural Affairs (Miscellaneous Revocations) Order 2018

George Eustice Excerpts

Monday 22nd October 2018 General Committees

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

It is a real pleasure to serve under your chairmanship, Sir Christopher. The Environment and Rural Affairs (Miscellaneous Revocations) Order 2018 completes the various reforms and actions to simplify and clarify the statute book which have been identified through the red tape challenge initiative. On the point made by the shadow Minister, those reforms are not part of an EU withdrawal programme—as he said, we still have that to look forward to. They are the closing stages of the red tape challenge that took place between 2011 and 2015, which reviewed some 6,000 rules and regulations across Government. The Department for Environment, Food and Rural Affairs alone reviewed some 1,200 regulations, involving full public participation and external review. That led to recommendations to improve, simplify, merge or revoke 650 regulations.

The initiative was carried out against a clear objective: to ensure the maintenance of existing environmental and consumer standards. There was also a clear aim to remove needless red tape and bureaucracy and to support enterprise. Some of the reforms that were identified and implemented through the red tape challenge included the removal of outdated or redundant regulations to tidy up the statute book and the removal of overlapping or confusing guidance. Collectively, the reforms that were implemented by DEFRA under the red tape challenge were estimated to reduce business costs by around £300 million a year, as validated by the independent Regulatory Policy Committee.

It was in completing that work under the red tape challenge that the Environment and Rural Affairs (Miscellaneous Revocations) Order 2018 came into effect. It revoked a total of nine redundant SIs and came into effect on 11 July 2018. Turning to some of the key components that the shadow Minister raised, the order revoked a number of redundant provisions, including the Milk Quota (Calculation of Standard Quota) Order 1986, which was part of a redundant EU scheme that was first introduced in 1984, when EU production far outstripped demand. The quota regime was one of the tools that were introduced to overcome those structural surpluses. Successive reforms of the EU’s common agricultural policy have increased the market orientation of the sector, and in parallel provided a range of other, more targeted instruments to help support producers in vulnerable areas, such as mountain areas where the costs of production are higher.

Schedule 1 to the Agriculture Act 1986 provides for landlords to pay compensation to their tenants for milk quotas that are registered to them in relation to the land that makes up the holding, upon termination of tenancy of land in England and Wales. Those regulations ceased to have effect on 1 April 2015, following the final day of operation of the EU’s milk quota regime. Since the scheme ceased to have effect at that time, we believe that it is right to remove the redundant order, which serves no further purpose.

The Environment and Rural Affairs (Miscellaneous Revocations) Order 2018 also revokes the Importation of Hay and Straw Order 1979, which prohibited the landing in Great Britain of any hay or straw except under the authority of a licence. As the hon. Member for Stroud pointed out, that order was introduced to protect animal health by requiring all hay and straw to be licensed prior to importation into Great Britain, thereby allowing the Secretary of State to put in place the necessary conditions. Hay and straw are a potential source of the foot and mouth virus.

The Importation of Hay and Straw Order 1979 has long been superseded by EU legislation, which now provides conditions for the importation of hay and straw from third counties. As such, that order is redundant and has been superseded by the definition of hay and straw in the Trade in Animals and Related Products Regulations 2011, which allows England to set conditions for processed hay and straw that may still carry animal health risks. DEFRA takes our obligation to protect against animal disease outbreaks very seriously. As we leave the EU we will ensure that all relevant EU provisions relating to the importation of hay and straw are maintained in our domestic law through the European Union (Withdrawal) Act 2018, thereby ensuring continuity.

The order also revokes the Code of Practice on Environmental Procedure for Flood Defence Operating Authorities (Internal Drainage Boards and Local Authorities) Approval Order 1996. That rather long-titled order, granted approval in accordance with section 61E of the Land Drainage Act 1991, set out a code of conduct. As part of the red tape challenge, DEFRA consulted widely with a number of bodies, including the Association of Drainage Authorities and the Association of Directors of Environment, Economy, Planning and Transport regarding the revocation of the code of practice. No concerns were raised, since the principles of the code are now fully embedded in good practice in any event.

Finally, and by no means least, since I know that it was the main reason the Opposition chose to bring about today’s proceedings, the order revoked the remnants of the former agricultural wages legislation, which were no longer relevant and no longer in force following the coalition Government’s decision to abolish the Agricultural Wages Board in 2013 via the Enterprise and Regulatory Reform Act 2013.

The Agricultural Wages Committees (Transitional Provisions) Order 1974 simply dissolved the then agricultural wages committees in England and Wales, in order that they could be replaced by new committees in conformity with altered local government boundaries under the Local Government Act 1972. The Agricultural Wages Committees (Areas) Order 1974 then separately established, with effect from 1 April 1974, agricultural wages committees in line with the new altered local government boundaries. That order was repealed, in respect of England, by the 2013 Act, which abolished the Agricultural Wages Board and all the agricultural wages committees that existed at that time.

I simply say to the hon. Gentleman that the committees that existed in 2013 to support the Agricultural Wages Board have already been disbanded, and the legislation that established them has been revoked. Today’s order does no more than remove a redundant order from the early ’70s that simply pertained to local government boundary changes and the necessary reconfiguration of advisory committees that took place at that time, which was incidentally about the time that I was born. I hope that I have reassured him that, whatever his views about the need or otherwise for an agricultural wages board, the order we are revoking is neither here nor there, since it has ceased to have any effect since those local government boundary changes in the early 1970s.

I will touch briefly on the wider argument around the Agricultural Wages Board, since I have chosen to focus most of my comments on that particular order. As my right hon. Friend the Member for Forest of Dean pointed out, it is not necessary to regulate to increase wages in that way, when actually we have a very tight labour market, with close to full employment, and the market is driving higher wages.

The Agricultural Wages Board was conceived before the Labour party introduced the national minimum wage, which is now supported by Members on both sides of the House. More importantly, it was the current Government that introduced a new higher national living wage. The reality is that both the national minimum wage and the new national living wage have superseded the need for an old-style agricultural wages board, which had limitations. At best, it simply duplicated what was being done by the new national minimum wage. It also did not recognise the ability to pay certain staff a salary as it related all the time to an hourly rate of pay. That prevented some of the middle-tier management from being established on a proper footing with an annual salary, bonuses and the like. It was a restrictive system in that sense. It was built for a different era and I believe it has no place in the world in which we currently exist.

Oral Answers to Questions

George Eustice Excerpts

Thursday 18th October 2018 Commons Chamber

[Jeremy Lefroy (Stafford) (Con)]

9. What progress the Government have made on reintroducing a seasonal agricultural workers scheme.

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

The Government have announced that we will introduce a new pilot scheme for 2019-20 to enable up to 2,500 non-European economic area migrant workers to come into the UK to undertake seasonal employment in horticulture. On 18 September, DEFRA published further details on the pilot and opened the selection process for operators through a request for information. The industry had until 17 October to respond, and we will now be working with colleagues in the Home Office to develop the pilot.

[Jeremy Lefroy]

I thank the Minister very much for his reply. Recently I visited PDM Produce, which is in my constituency and that of my hon. Friend the Member for The Wrekin (Mark Pritchard). It produces millions of lettuces a month for the UK market and imports from Europe in the off-season. It is really concerned because while it welcomes the new pilot, that is not nearly enough to ensure that it can continue to produce for the UK market, which could have an impact on our balance of payments and the prices of lettuces and salad in the shops.

[George Eustice]

My hon. Friend raises an important point, but he should acknowledge that this is a pilot involving the small number of 2,500 people. Typically, when the previous SAW scheme ran from 1945 until 2013, in the region of 20,000 to 30,000 people came in under the scheme each year.

[Kerry McCarthy (Bristol East) (Lab)]

The charity Focus on Labour Exploitation—FLEX—has warned that the scheme to which the Minister referred involving temporary visas for non-EU workers to work on British farms could lead to a sharp rise in exploitation if there are ties to a particular employer. Later today, to mark Anti-Slavery Day, I will lead a debate on ending the exploitation and slavery of workers in the supermarket supply chain. Is the Minister aware of those concerns and will he follow this afternoon’s debate? This is one of the worst sectors for modern slavery and the exploitation of workers, so can he make sure that he is on the case?

[George Eustice]

The Gangmasters and Labour Abuse Authority regulates all labour providers, including by looking at issues such as accommodation and its costs. There was no evidence that this particular scheme was abused, but there are issues of the type of abuse that the hon. Lady talked about. The GLAA always takes strict action when it finds that is necessary.

[Mr Philip Hollobone (Kettering) (Con)]

Why on earth can we not find enough British workers to do these seasonal agricultural jobs?

[George Eustice]

We have full employment and the lowest unemployment since the early 1970s. It is a very scarce labour market, and it has always been the case that some sectors in horticulture have required overseas labour—seasonal labour—to support their needs.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Given the massive gap between how many seasonal agricultural workers are required and the numbers involved in the minuscule pilot, how will the Minister cherry-pick the minority of businesses that can work on the pilot and have their fruit and veg picked, while the majority will see the fruit and veg left to rot in the fields?

[George Eustice]

I disagree with the hon. Gentleman. We still have free movement from the European Union at the moment, and most businesses are able to meet their labour needs from the EU. The pilot will be for non-EEA countries, and if it is successful, we shall be able to roll out a broader scheme.

[Diana Johnson (Kingston upon Hull North) (Lab)]

10. When he plans to bring forward legislative proposals to increase the length of prison sentences for animal cruelty.

--- Later in debate ---

[David Duguid (Banff and Buchan) (Con)]

I welcome the Minister’s earlier comments about seasonal agricultural workers, but can he tell the House what discussions he has had with the Home Secretary on the future labour requirements of the seafood processing sector, and the food processing sector in general, particularly in areas of low unemployment such as the north-east of Scotland?

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

I am aware that the catching sector in Scotland has some particular issues around the maritime exemption and Filipino crews. That is something that colleagues in the Home Office are looking at. When it comes to the needs of the food industry more broadly, the report by the Migration Advisory Committee pointed out that existing EU citizens will be able to stay, and also that tier 5 youth mobility can be used in this case.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

On 20 March, at the Dispatch Box, the Secretary of State told us that

“in December 2020 we will be negotiating fishing opportunities as a third country and independent coastal state”.—[Official Report, 20 March 2018; Vol. 638, c. 163.]

Given this morning’s comments by the Prime Minister and the Minister for the Cabinet Office about extending the transitional period, how confident is the Secretary of State now that he will be able to meet that undertaking?

Agriculture and Fisheries Council

George Eustice Excerpts

Thursday 11th October 2018 Written Statements

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

The Agriculture and Fisheries Council will take place on 15 October in Luxembourg. As the provisional agenda stands, the main focus for fisheries will be a regulation on fixing the fishing opportunities in the Baltic sea for 2019, for which a political agreement is sought.

Council will then hold an exchange of views on the EU-Norway annual consultation for 2019. There will also be an exchange of views on the annual meeting of the International Commission for the Conservation of Atlantic Tunas (ICCAT).

For agriculture, the main item will be a progress report on the regulation on CAP strategic plans. The European Commission will also give a presentation on the G20 agriculture meeting.

[HCWS988]

Agriculture Bill

George Eustice Excerpts

Wednesday 10th October 2018 Commons Chamber

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

It is a real pleasure to close this debate, in part because, as the Secretary of State set out at the start, I worked in the farming industry for 10 years and my family have farmed in Cornwall for six generations, and in part because that time spent farming and my five years as Farming Minister have shown me that the common agricultural policy is dysfunctional, frankly, and that we can do far better. The Bill creates the framework to do things better and to set a more coherent course for our policy.

As power returns to Parliament as we leave the European Union, it has been genuinely encouraging this afternoon to hear so many hon. Members take part in the debate. It shows that Parliament is ready for the task. We have heard many powerful speeches from Members with farming experience, including my hon. Friends the Members for Tiverton and Honiton (Neil Parish), for York Outer (Julian Sturdy), for North Herefordshire (Bill Wiggin), for South Dorset (Richard Drax) and for Banbury (Victoria Prentis), my right hon. Friend the Member for Newbury (Richard Benyon) and my hon. Friend the Member for Gordon (Colin Clark)—apologies to any Members I have missed out. We have also heard many other passionate speeches from hon. Members in rural constituencies who work in close partnership with farmers in their constituencies and who have championed their interests today.

The shadow Secretary of State and many others said that they did not believe that there was enough about agriculture and food in the Bill. I want to address that point. Let us start from the top. The Bill is called the Agriculture Bill. The long title says that it is a Bill to

“Authorise new expenditure for certain agricultural and other purposes…to make provision about the acquisition and use of information connected with food supply chains; to confer power to respond to exceptional market conditions affecting agricultural markets,”

and

“to make provision for the recognition of associations of agricultural producers”.

I therefore do not agree that there is nothing about food or agriculture in the Bill. What is true is that part 1 is predominantly about delivering environmental goods, but parts 2, 3, 4, 5 and 6 are predominantly about other issues that will assist farmers in their key task of producing food for the nation.

What the Bill does not envisage, however—this is true—is a long-term place for old-style subsidies of the sort that we have seen in recent decades. There are a number of key points to recognise here. First, our current area-based system is not about food production either, but is an arbitrary area payment paid to farmers regardless of what they produce. Decoupling took place some 50 years ago. The current system is not about food production. We should also recognise that some of our most successful and vibrant food-producing sectors of agriculture have never been subsidised. Look at the poultry industry, the pig industry, the horticulture industry or fruit and veg producers. They have never had subsidies.

Our approach has therefore been to say that we should look at the underlying causes of why some farmers are dependent on the single farm payment and a subsidy. If there is a lack of fairness and transparency in the supply chain, let us bring forward provisions to address that, so that farmers can get a fair share in the value chain. If we need farmers to invest to become more competitive and reduce some of their costs, let us make available the powers to give them grants and financial support to invest in the future and in technology. If we should help new entrants into the industry and, as my right hon. Friend the Member for Newbury (Richard Benyon) pointed out, assist others who should retire to do so with dignity, let us make provision for that in the Bill, and we do.

There has been a lively discussion about the uplands. My hon. Friend the Member for Tiverton and Honiton and the hon. Member for Westmorland and Lonsdale (Tim Farron) both spoke about the precariousness of the uplands and raised questions about their financial viability. However, organisations such as the Uplands Alliance are telling us that they believe that they can create a viable and successful model based on the delivery of public goods and that if we are serious about what we say—that we want to reward farmers based on what they do for the environment—the uplands can help with flood mitigation, water quality, carbon sequestration, public access and tourism. They believe that they can do a great deal by way of public goods.

We have had a number of lively exchanges about provisions for Scotland and some powerful contributions from Scottish Conservative Members. The hon. Member for Edinburgh North and Leith (Deidre Brock) is in a slightly difficult position, because her colleagues in the Scottish Government currently have no plan. We are setting out a plan for England in this Bill. Wales has a plan, set out in schedule 3, and Northern Ireland has a plan, set out in schedule 4, and it does not even have an Administration. Scotland is alone in not having a plan. We have been clear with the Scottish Government that we will reserve a place in the Bill to add a schedule, should they want us to on their behalf, but if they do not want to do that, they must make time in their own Parliament to introduce their own legislation.

The shadow Secretary of State raised the issue of climate change. This is explicitly provided for in clause 1(1)(d), which recognises climate change as a purpose. She also complained that this was too much of a framework Bill and that there was not enough detail, but she went on to praise the Agriculture Act 1947. The 1947 Act was also a framework Bill, which made lots of provision for new orders. If she reads it, she will see that its sections are peppered with the words “the relevant Minister may”. I believe there is no difference. This is a framework Bill in much the same way as the 1947 Act was.

My right hon. Friend the Member for North Shropshire (Mr Paterson), who was the very first Secretary of State I had the pleasure of working with in the Department, raised two important issues. First, we agree on the need to invest in technology and agri-tech. Clause 1(2) provides for that to happen. Secondly, he raised the importance of soil. The very first purpose of managing land and water in a way that protects and improves the environment is intended to cover soil. I can also tell him that the policy statement we published alongside the Bill explicitly states that soil health is one of our key objectives. I would like to commend the great work my hon. Friend the Member for Taunton Deane (Rebecca Pow) has done in this area. We are working with a number of academic institutions, including Cranfield University, Rothamsted and others, to develop a soil health index. I believe that paying greater attention to soil health, as we design future policy, will be very important.

A number of hon. Members, including my hon. Friend the Member for Brecon and Radnorshire (Chris Davies), my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin) and my hon. Friend the Member for Berwick-upon-Tweed (Mrs Trevelyan), highlighted the difficulties of regulation. Some pointed out the current frustrations we have with the administration of existing EU schemes. Some perhaps pointed the finger at the Rural Payments Agency and Natural England. I would say to hon. Members that our agencies can only deal with the legislation they are given currently by the European Union. It is very dysfunctional. It is very onerous. We have an opportunity to sort it out, as this House takes back control. Clause 6 will provide a very clear power to give us the ability to modify retained EU law, knock off some of the rough edges and remove some of the unnecessary provisions and unnecessary audit requirements.

[Alan Brown]

Will the Minister give way?

[George Eustice]

I am not going to give way, because I am going to try to pick up on a few final points.

My hon. Friend the Member for Somerton and Frome (David Warburton) asked a question about clause 10, which is intended to modify the existing fruit and veg regime. The industry has some concerns with the regime. It does not work very well and often ends in litigation. We want to tidy it up and bring some clarity to it. He also asked about clause 7 and the transition. We have published our intention for year one of the transition. Smaller farms receiving under £30,000 a year would have a 5% cut. For larger farms, anything they receive over £150,000 would see a 25% reduction. We believe we have set out an approach that deals with that.

In conclusion, I believe we have had a very comprehensive debate. It has been a pleasure to close it. I am sorry that I have not been able to pick up on all the issues hon. Members have raised, but I am sure there will be opportunities to do so during the Bill’s later stages, or indeed before then should they wish to meet me. I commend the Bill to the House.

Question put, That the amendment be made.

Scallop Fishing: Bay of Seine

George Eustice Excerpts

Thursday 13th September 2018 Commons Chamber

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

I wish to take this opportunity to update the House on recent developments regarding the scallop fishery in the Bay of Seine following altercations that occurred on 27 August. Any violence taking place is unacceptable, and the safety of our fishing fleet is paramount. Subsequent negotiations to resolve the dispute have regrettably not resulted in an agreement.

The scallop fishery is not governed by the quota regime that pertains for most fin-fish species, but instead by the western waters regime, which places limitations on effort for larger vessels over 15 metres. Vessels over 15 metres in size are limited by the number of kilowatt-days they spend at sea, and these units of effort are tradeable between producer organisations in much the same way as quota. Vessels of under 15 metres in length are not subject to the western waters regime and do not require an effort allocation.

The background to the current dispute is that French domestic law requires that French vessels cannot trawl scallops between 15 May and 31 October, at the latest, partly to protect the species during their seeding season and partly to maximise the scallops’ economic value. Preserving the sustainability of our stocks is important, and between May and June, UK fishermen refrain from fishing in the area to avoid the scallop gestation period. Those domestic French rules do not apply to other EU member states.

The French have recognised the UK industry’s legal right to fish in the Bay of Seine. UK fishermen have a smaller allocation of scallop fishing effort under the western waters regime due to historical allocation methodologies, with UK fishermen allocated 3.3 million kilowatt-days and French fishermen allocated 7.4 million kilowatt-days. As a result, since 2013, the fishery in the Bay of Seine has been subject to an industry agreement. The UK 15 metre and over scallop fishing industry has agreed to voluntarily observe this non-trawling season in the English channel, including the Bay of Seine, in exchange for more fishing effort from France. The agreement has never applied to the under-15 metre fleet since it does not benefit from the inward transfer of effort.

The agreement that had been in place for five years broke down this year because the French industry insisted that the under-15 metre fleet be included in the voluntary agreement. The UK industry was unable to carry the under-15 metre fleet regarding such an agreement, since that fleet would receive nothing in return. As a result, no agreement was reached in 2018.

On 27 August, there were altercations between UK and French scallop fishers in the Bay of Seine. Some 35 French boats confronted a smaller number of UK vessels, with reports of rocks and smoke bombs being hurled at UK mariners. The incidents of 27 August occurred as a result of the French industry’s continued frustration at not being able to fish in the Bay of Seine while UK vessels were able to do so, following the failure to reach a voluntary agreement. It must be stressed that the UK vessels were not contravening any French or EU law by fishing in those waters at that time. The UK vessels were operating in an area where they were legally entitled to fish. The area is outside French territorial waters—that is, beyond 12 nautical miles.

Under the common fisheries policy, the vessels of EU member states have the right to fish in each other’s exclusive economic zones—the waters between 12 and 200 nautical miles offshore. It is then the responsibility of each country to control the activities taking place in its waters. We therefore look to the French authorities to protect our fishermen and their vessels if they choose to fish legally in French waters.

Our analysis of vessel monitoring information from 27 August showed that there were 16 vessels in the area from England, Scotland and Northern Ireland. Since the incidents took place, UK vessels have voluntarily chosen to stay away from the Bay of Seine while discussions to resolve the issue are ongoing. Vessels have tended instead to fish in grounds to the east. The Fishery Protection Squadron has been kept informed of developments. Fisheries protection vessel HMS Mersey has been in the waters off the south coast since the incident took place. Fisheries protection vessels operate within UK waters—that is, the area out to 200 nautical miles from the shore, or the median line. The vessels are unable to enter the waters of another country without invitation, except in very limited circumstances: the protection of life at sea in the event of there being a threat to life; or through the right of innocent passage to enable vessels to transit through an area without interference. As the Bay of Seine is in the French exclusive economic zone, the enforcement and safety of vessels in those waters is the responsibility of the French authorities.

The UK Government have been proactive in supporting the industry to try to secure an acceptable solution for both sides. Immediately after the incidents on 27 August, my officials convened a meeting in London. UK and French officials and UK and French industry representatives met in London on 5 September. There was initial success in the talks. It was decided to renew the previous agreement involving the UK 15 metre and over vessels, as long as the under-15 metre fleet could also be brought into a deal. That was agreed in principle, subject to further discussion about a reasonable compensation package. The agreement was that there could be an inward transfer of quota for other species from the French industry to the UK industry, which could then be leased to create financial compensation for the scallop vessels affected.

The details of that package were discussed, again between UK and French officials and the UK and French industries, in Paris on 7 September. Progress was made on the dates that the fishery could be open. However, the compensation sought by the UK industry for loss of earnings during the period that it was unable to fish in the Bay of Seine was significantly different from the proposal made by the French industry.

Minister Travert and I discussed the progress of the negotiations twice, including on the evening of 7 September. Since our call, UK and French officials have shared their analysis this week and held discussions on Tuesday. There was greater understanding of the UK’s evidence. However, the offer made by the French industry remained unchanged from that discussed in Paris on Friday. The UK industry does not believe that the compensation package proposed by the French fishing industry provides sufficient recompense for its projected loss of earnings and has rejected it on that basis. The French industry is currently unwilling to accept an offer to put back in place the agreement that has applied to the over-15 metre fleet for a number of years. As a result, the talks have broken down and there remains no agreement at all.

I have written today to Minister Stéphane Travert to express my disappointment at not reaching an agreement. The UK Government have offered to assist French enforcement authorities with Marine Management Organisation personnel should they want to consider joint operations, given the risk of further altercations. I have also asked the French Government to consider the alternative options available to them. First, it seems to me that putting back in place the agreement for the over-15 metre fleet, which has stood the test of time over the last five years, would be preferable to no agreement at all, and I hope that the French industry will reconsider its position. Secondly, it is open to the French Government to lift the domestic restrictions they have in place earlier than they normally would in order to address concerns that their industry has expressed about the lack of a level playing field.

The UK industry is legally allowed to fish in the Bay of Seine. It has shown commendable restraint during the negotiations, and I welcome its co-operation and understanding. It is for the industry to decide where it fishes, as long as that is done legally. In my letter to Minister Travert, I emphasised the absolute need for safety to remain paramount. I hope that a mutually beneficial outcome might still be agreed between the two industries but, in the meantime, we stand ready to offer what assistance the French Government may wish to consider.

[Sue Hayman (Workington) (Lab)]

I thank the Minister for his statement but, before I move on, may I say that I was very disappointed not to receive the statement until 15 minutes after I had arrived in the Chamber? This is a really important matter and the Opposition should be able to expect to receive information in a timely manner. I am sure that there has been a mix-up, but I would like assurances that I will receive information appropriately in the future.

Fishing is essential for coastal communities, and scallop fishing is an important part of that industry. About 60% of the catch is exported, with much of it being bought in France. During the negotiations with France, we know that the smaller boats volunteered in good faith to stay away from the disputed fishing grounds. However, every day that British boats are unable to go fishing, livelihoods and communities are hurt.

We all know that the French navy should have stopped this appalling violence. Now that the negotiations have broken down, what assurances have the French authorities given to make sure that this cannot happen again? We have heard that the Government are looking to the French authorities to protect our fishermen and their vessels, which are fishing quite legally within French waters. Will the Minister clarify what discussions he has had with the French Government to ensure that any future protests do not descend into violence? As we have heard, the UK vessels were not contravening any French or EU law at the time. Will the Minister clarify what progress is being made on compensation for British fishers who have suffered damage to their boats and now face restrictions being imposed on them?

As we await the publication of the fisheries Bill, the industry looks to the Government for some backbone, and to the Minister to fight for them, their livelihoods and their communities. This matters because fishing matters and fishing jobs matter—not just to the coastal communities that rely on fishing and the processing of the catch for employment, but because this tells us a story about how Ministers will stand up for the industry during and after Brexit.

Outside the CFP, we will rely on the same Ministers who have failed to find their voice over the scallop wars to seal an annual deal with the EU over quotas, science and access to waters. Just this week we have seen a damning report by the National Audit Office on the lack of Brexit preparedness in the Department for Environment, Food and Rural Affairs. Serious concerns were raised about marine control and enforcement. Will the Minister outline what urgent measures he is taking to address the concerns outlined in this week’s NAO report?

These conflicts over scallops raise serious questions about the approach that Ministers will take to manage conflicts and access to waters after Brexit. Ministers need to know that we in the Opposition will be following this closely. Should their defence of our fishing industry not be up to scratch, we will be holding them to account.

Our fishermen need defending. The French tested our lines over the scallop wars and now believe that they can get away with it. Our fishermen deserve better, and the Government need to step up.

[George Eustice]

I am sorry that the shadow Minister feels she did not receive a copy of the statement in a timely fashion. I can say that we got the statement to her as quickly as we could. I understand that it was sent to her by email at about 11 o’clock, with hard copies then brought to the House. I appreciate that she may have thought that proceedings on the statement were going to start slightly earlier, but if she feels that she did not receive it in time, I am sorry to hear that.

The hon. Lady asks for an update on what assurances we have sought from the French authorities. I can confirm that, immediately after the altercation on 27 August, I spoke to my opposite number, Minister Stéphane Travert, and the principal issue we discussed was enforcement. He gave a very clear undertaking at that point that he recognised that UK vessels were fishing legally, and he said that he had increased resourcing to ensure that the gendarmerie were able to deal with future issues by increasing the number in that particular area. I sought a similar assurance on the second occasion we spoke after the negotiations last Friday, and I have reiterated the importance of this in the letter that I have sent to him today.

We have made it clear that we stand ready to assist the French authorities if they wish. It is not unknown or unusual for officers from the Marine Management Organisation, for instance, to carry out joint work on board French vessels, and there are instances where such work is appropriate. The French authorities have not currently taken up that offer but, as I made clear in my statement, it remains on the table.

The hon. Lady asked about compensation, and we have been working hard to get an agreement. From the beginning, we have been consistently clear with the French Government that we have no legal basis to instruct or tell our fishing industry not to fish in that area, and neither have we ever done so. We were also clear with our fishing industry that we would not have told people not to fish in those areas, but the industry itself voluntarily chose not to fish there during the period of negotiation. That rightly recognised that, because negotiations were ongoing, it would be helpful to avoid further altercation. The industry took that choice, but now that talks have broken down, we must ensure that the French authorities enforce the industry’s right to fish in those waters.

The hon. Lady asked about our defence of fishing interests, and I say simply that I have done this job for five years and have a good rapport with our industry representatives. We have held discussions and worked closely with them on this issue, and representatives from the UK fishing industry have attended meetings that we have convened. We have used data from the Marine Management Organisation to support and underpin the evidence base behind requests made during those negotiations. We have very much stood up for the interests of our industry, and helped to support it and to find a resolution to the dispute. As we leave the European Union—this is a much broader topic—we will become an independent coastal state again, and we will conduct annual fisheries negotiations in a new UK-EU bilateral on some of these issues. As an independent costal state, we will have control of access to our waters, and we will negotiate the share of the total allowable catch.

The hon. Lady spoke of preparations for leaving the European Union. Although the National Audit Office report highlighted some concerns, it also recognised that DEFRA is dealing with a huge body of EU law. Indeed, it gave the Department a lot of credit for the progress we have made in many areas. We are already making preparations on fishing, including by holding meetings and discussions with countries such as Norway, Iceland and the Faroe Islands about future arrangements. The MMO is carrying out detailed work on issues such as fisheries enforcement and how needs may change, and to ensure that we have the capacity to deal with any increase in catch certificates that may be required. Many of those issues relate to the much broader topic of our leaving the common fisheries policy and becoming an independent coastal state again, but for the time being, the UK Government are doing everything they can to support our industry in this dispute over scallops.

[Dr Sarah Wollaston (Totnes) (Con)]

UK vessels have no access to scallops anywhere within French waters inside the 12-mile limit, which is very much in contrast to the position of French vessels that have access to waters within the six to 12-mile limit in the UK. Will the Minister reiterate—there has been some misunderstanding about this—that our vessels were fishing absolutely legally at the time of these disgraceful attacks? I welcome his assurance and talks with his opposite number, as well as his offer of assistance, but Brixham fishermen would like further reassurance that, when they fish in those waters, perfectly legally, measures will be in place to ensure their safety.

--- Later in debate ---

[George Eustice]

I entirely agree with and understand my hon. Friend’s point. Much of the scallop fishing industry is based in Brixham in her constituency. She is right to say that the contested grounds are outside the 12-nautical mile limit—they are approximately 20 miles off the French coast and therefore not in French territorial waters. She is also right to say that in some areas the French fishing industry is able to fish in the UK’s six to 12-mile zone. She will be aware that the Government have already given notice, under the terms of the London fisheries convention, to withdraw from that agreement and negotiate access arrangements afresh.

[Kirsty Blackman (Aberdeen North) (SNP)]

I thank the Minister for advance sight of his statement.

This is a very disappointing outcome. I urge the Minister to get back around the table. We cannot have the same situation occurring next year. It is really important that, despite there being no outcome from this round of negotiations, he does not give up but keeps trying to ensure that an agreement with France is found. The fishing industry is incredibly important to Scotland. Can the Minister assure us that the Scottish Government will be involved in any future negotiations, so that our voice can be heard and our interests protected? He talks about moving towards Brexit and the sovereignty that we will apparently have over our nautical area. On negotiations with the EU about fishing rights post Brexit, will he assure us that any bad feeling created over this situation will not spill over into those negotiations?

In previous years, Scotland’s voice has not been heard and the Scottish Government have not been given the right opportunity to have their voice heard in the negotiations, despite fishing being so important to Scotland. Will the Minister commit to ensuring that Scottish Government Ministers are involved in the negotiations?

[George Eustice]

There are a number of points that I would make. As I said in my statement, I still hope that, even at this late stage, the French industry will agree to take up the offer to put in place the agreement for the over-15 metre vessels that has stood the test of time for the last five years. It is not too late to do that. Indeed, the inward transfer of effort that they would make to enable this deal to happen is effort that would generally go unused, were they not to use it for this purpose.

I can also confirm that, when it comes to our annual fisheries negotiations, we go as a UK delegation. Alongside me in the trilateral meetings with the European Commission and the European presidency, I have representatives, including the Scottish, Welsh and Northern Ireland fisheries Ministers. We have a well-established convention that, on issues that affect Scotland specifically, it tends to be the Scottish Minister who leads on those elements of the negotiation.

The final point I would make about the negotiations on leaving the common fisheries policy is that this side of the House believes the decision to leave the European Union was right. We are going to respect that and implement it. That involves leaving the common fisheries policy, an issue on which I know the hon. Lady’s party has mixed views.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

The Minister will be aware that the bay of Seine is not the only potential flashpoint in the waters of European Union member states. What assessment has he made of the potential for other issues of this sort arising elsewhere? In particular, what is he doing about the Voisinage agreement between the Republic of Ireland and the United Kingdom, which, as I am sure he appreciates, has real potential to cause some difficulty in the not-too-distant future?

[George Eustice]

My hon. Friend is right that there are other areas where there is potential for this. Sometimes we wish to designate marine conservation zones and we require the support of other countries to do that. There is sometimes an issue around farmed deeps. None of them, however, has resulted in the strength of feeling that we have seen around the bay of Seine and that we saw in 2012.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

At the best of times, fishing is the most hazardous peacetime occupation. In the years since I left school, no fewer than five men who were with me at Islay High School have lost their lives while making their living at sea. That is why the sort of behaviour we witnessed on 27 August is simply unforgivable. When the Minister speaks to his opposite number in France, will he impress upon that Government that we expect them to ensure lawful behaviour by their fishermen, and that this Government will do everything to protect the right of our fishermen to make their living lawfully, as they were doing?

[George Eustice]

The right hon. Gentleman is right, and we have made that point to the French Government. It is worth noting that the French Government condemned the violence and acted quickly to increase the resources available for policing the area and enforcing lawful fishing activity.

[Mr Philip Hollobone (Kettering) (Con)]

As I understand it, it is crystal clear that the law and moral right are on the side of the British fishermen in this case. If the fishing is taking place outside French territorial waters, why can the Royal Navy not accompany our ships back into those fishing grounds? If we have fishery protection vessels and Type 23 frigates permanently positioned in the channel, surely the Royal Navy should be at sea with our fishermen to protect their livelihoods.

[George Eustice]

I understand the point that my hon. Friend is making, but these waters are outside French territorial waters but within the French exclusive economic zone. It is absolutely the responsibility of the French authorities to police and enforce fishing activity in their waters, just it is for our authorities to police fishing activity in our own exclusive economic zone.

[Melanie Onn (Great Grimsby) (Lab)]

To reassure the UK’s fishing sector of the Government’s commitment and responsibility to the industry, including in the event of further such disputes, we need the fisheries Bill. When can we expect to see it?

[George Eustice]

During the course of this Session.

[Mr Alister Jack (Dumfries and Galloway) (Con)]

Will my hon. Friend join me in praising the admirable and restrained way in which the UK fishing industry has acted under extreme provocation?

--- Later in debate ---

[George Eustice]

My hon. Friend makes an important point. As I made clear in my statement, I commend the way in which our industry has behaved and the constructive approach it has taken to these talks. It is regrettable that there is not an agreement yet, but I hope there might still be one.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I love a dish of scallops with some butter and garlic, but can I eat it with a clear conscience? I support the right of the British to fish if they are legally allowed to do so, but some of the news about the fishing method used in this case suggests that it may be deeply damaging to the marine environment. Is it not time that we not only started to get on better with the French—after all, they are our allies and fellow members of the European Union—but looked again at fishing methods that involve scraping the bottom of the ocean and destroying the marine environment? Will the Minister instigate a commission to look at such methods?

[George Eustice]

We already have restrictions on where certain types of gear can be used, as well as technical regulations and specifications regarding the required features for bottom-towed trawler gear used for scallops. There are some regulations in place, therefore, and we keep them under review. The hon. Gentleman is right to say that this method of fishing can be damaging, but it is also the main method that we use for species such as scallops.

[Ross Thomson (Aberdeen South) (Con)]

Can my hon. Friend confirm that the French recognise the UK’s legal right to fish in the bay of Seine, and that it is the duty of the French authorities to protect British boats that are legally fishing there?

[George Eustice]

I can absolutely confirm that. The French Government have confirmed to me that they recognise that English vessels have a legal right to fish in those areas, and that they recognise their responsibilities to enforce fishing activity in their economic zone.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I have to declare an interest, because my daughter and her partner operate a fishing vessel out of Porthdinllaen. Given how this violence augurs ill for future relationships with EU countries’ fishing fleets, what discussions has the Minister had with Welsh Government colleagues about the protection of scallop beds and other non-quota species in Welsh waters?

[George Eustice]

Many of the technical regulations that would be introduced in the inshore area are the responsibility of the Welsh Government, who already have the freedom to introduce such technical restrictions. With a devolved issue such as fisheries, we work very closely on all such matters. That includes reaching a shared approach to international discussions, as I mentioned earlier, with the Welsh and Scottish Governments and the Northern Ireland Administration.

[Chris Philp (Croydon South) (Con)]

The Minister has already said that the British boats were in those waters entirely lawfully, and that the French authorities should have prevented violence. I saw some reports suggesting that there was a French police boat on station in the vicinity when the incident occurred. The Minister said that he had put pressure on the French authorities to act. Are there any legal mechanisms, via either the European Court or any other institution of the European Union, that can require the French to take action to prevent outrages of this sort?

[George Eustice]

Within the European Union, there is the European Fisheries Control Agency, which has a co-ordinating role in respect of the enforcement functions of all member states. On those countries that are not in the EU and our future agreements, arrangements for mutual agreement on enforcement are a common feature of international fisheries negotiations.

[Kelvin Hopkins (Luton North) (Ind)]

This incident surely reinforces the case for the strictest regulation and monitoring of all sea fishing, so will the Minister assure us that such events will never be permitted to occur in Britain’s historic fishing waters when we have left the common fisheries policy?

[George Eustice]

When we have left the common fisheries policy—I know that the hon. Gentleman has campaigned for that, alongside a number of Conservative Members—we will become an independent coastal state, and there still will be annual negotiations on fisheries. Disputes of this nature probably will not go away, because we have them occasionally whether we are in the EU or outside it, but we must always strive under international law to resolve our differences and secure mutually acceptable regulations.

[Kevin Foster (Torbay) (Con)]

The sight of boats from Torbay being attacked while lawfully fishing on the open sea was as shocking as it was unacceptable. The sea is not a place where the law does not apply. It is right to be talking to the French authorities about securing peaceful outcomes and stopping confrontation on the sea, but has the Minister also spoken to his counterparts about the possibility of using the criminal law to deal with those who use violence against our people?

[George Eustice]

As I said earlier, decisions of that sort, including decisions to bring prosecutions, are very much a matter for the French enforcement authorities, and I know that they will be looking closely at some of these issues.

[Chris Elmore (Ogmore) (Lab)]

It is obviously right and proper that our fishermen are allowed to fish in safety and within the remit of the law, but what reassurances can the Minister give to fishermen—the Government are on this never-ending prism of having to Brexit no matter what—about the post-Brexit process for negotiating with the European Union? Can he also reassure the agriculture and farming industry? The National Audit Office is saying that the Department for Environment, Food and Rural Affairs is not ready for Brexit, so what is he going to do about it?

[George Eustice]

I can reassure the hon. Gentleman that we already have comprehensive arrangements for reaching agreements on fisheries with countries that are not in the EU—with the Faroe islands, with Iceland and with Norway—so we know the methodology. There is the North East Atlantic Fisheries Commission, which we will rejoin, there is the North Atlantic Fisheries Organisation, which we will also rejoin, and there are other international forums.

[Stephen Kerr (Stirling) (Con)]

It must have been terrifying to be rammed and pelted with rocks and smoke bombs. Will the Minister reassure the House that the safety of British fishermen will be paramount in the Government’s considerations and actions, and that aggressive and dangerous acts directed at the British fishing fleet will not be tolerated?

[George Eustice]

I can give my hon. Friend that assurance. As I said in my statement, we regard safety at sea to be paramount, and that has been our key message to the French authorities since this incident occurred. Indeed, I restated its importance in my letter to Stéphane Travert today.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for coming to the House to make his statement, and also for the meeting that we had on Monday to discuss this matter.

The safety of our fishermen is vital. Fishing vessels from Northern Ireland were present at the first incident, on 27 August, fishing in legal grounds. Fishermen in boats from Portavogie, in my constituency, are intending to go into those grounds before the end of this month, as they do each year. Will the Minister assure me that our boats will be given safe passage and that their security will be protected? Will he state clearly and unequivocally that their safety and security will be guaranteed?

[George Eustice]

Yes, I can give the hon. Gentleman that assurance. I have made it clear that this is the responsibility of the French authorities, the grounds being in the French exclusive economic zone, but we have underlined the importance of the matter to the French authorities, and they have agreed and recognised that and have condemned the violence.

[Tom Pursglove (Corby) (Con)]

It is fair to say that the whole country stands with our fishing industry, which acted entirely properly, and is appalled by the violence. The Minister talked a bit about his discussions with his French counterpart. Can he say anything about any discussions he might have had at EU level?

[George Eustice]

My hon. Friend will be aware that we envisage resolving such issues ourselves in the future without having to go to the EU to do so on our behalf. Enforcement is an issue for national enforcement authorities, so at this point it is not appropriate for the EU to get involved, but if there were a failure of some sort with the French enforcement procedures or authorities, that would be a matter for the European Fisheries Control Agency.

[Eddie Hughes (Walsall North) (Con)]

Does the Minister believe that one way to solve this impasse might be for the French to lift restrictions on their own smaller boats fishing in this region?

[George Eustice]

Yes, my hon. Friend is absolutely right; that is an option. In the absence of being able to put back together the agreement for the over-15 metre boats, we have suggested to the French Government that they consider ending the current restrictions earlier than normal.

Bovine TB

George Eustice Excerpts

Thursday 13th September 2018 Written Statements

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

I want to update the House on the implementation of the Government’s strategy to eradicate bovine TB in England by 2038.

Today the Animal and Plant Health Agency has published data showing there has been a drop in TB incidence in the first two cull areas, where the number of new confirmed breakdowns has dropped by around 50%. In Gloucestershire the incidence rate has dropped from 10.4% before culling began to 5.6% in the 12 months following the fourth cull, while in Somerset it has dropped from 24% to 12%.

Data on TB incidence in the next eight areas has also been published today although, as we anticipated, it is too early to see any impact on TB in those areas.

Bovine TB remains one of the greatest animal health threats to the UK and the Government are continuing to take strong action to eradicate the disease and protect the future of our dairy and beef industries. Today I am announcing further steps to enhance and strengthen our eradication strategy; opening a new round of applications to our badger vaccination grant scheme and issuing new licences for badger control in 2018.

Although it does not provide complete protection or cure infected animals (which continue to spread TB), badger vaccination has a role to play and three projects have received Government funding in 2018 to vaccinate badgers in the edge area of England. Therefore, applications for the “Badger Edge Vaccination Scheme” will be re-opened later this year, with grant funding available to private groups wishing to carry out badger vaccination in the edge area. Groups will receive at least 50% funding towards their eligible costs.

There is broad scientific consensus that badgers are implicated in the spread of TB to cattle. This year, following the effective licensed badger control operations in 2017, culling operations will take place across 39% of the high-risk area. This includes a further 10 new areas which have been licenced to undertake culling operations in 2018. Alongside our robust cattle movement and testing regime, this will allow us to achieve and maintain long-term reductions in the level of TB in cattle across the south-west and midlands, where the disease is widespread.

In order to eradicate a pocket of infection in both cattle and badgers in the low-risk area, we have also licensed an area within Cumbria to undertake culling operations in 2018. Along with six-monthly cattle testing, movement restrictions and good biosecurity on farms this approach offers the best opportunity to deal quickly with this real and serious threat in the low-risk area.

To ensure we have a successful and resilient industry as the UK enters a new trading relationship with the world, we are determined to implement all available measures necessary to eradicate this devastating disease as quickly as possible. To aid this, a review, led by Professor Sir Charles Godfray, is looking at options to take the bTB strategy to the next phase and will report to Ministers by the end of September 2018. The findings will be published in due course along with information on next steps.

[HCWS963]