Common Agricultural Policy

Debate between Huw Irranca-Davies and Mark Spencer

Monday 7th July 2014 Commons Chamber

[Huw Irranca-Davies (Ogmore) (Lab)]

I am delighted to take part in this very important debate.

I thank the hon. Member for Thirsk and Malton (Miss McIntosh) for providing a comprehensive analysis of her Committee’s report in relation to CAP. She took it a stage further with some detailed technical points to which I am sure the Minister will respond. She also raised issues relating to broadband access to the new IT system, which will in many ways be universally rolled out overnight. There are great concerns about that. The issue was picked up by other hon. Members, including former Ministers, was digital by default.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) also raised that issue and asked how people would be able to access the new IT system when it is the only game in town. She spoke with passion about the financial and IT challenges facing her hill farmers, pointing out that 40% of them have no access to rural broadband. She called for something that I think we can all agree on: a useable and farmer-friendly system of payments.

The right hon. Member for South East Cambridgeshire (Sir James Paice), with his expertise in the Department, bemoaned, rightly, the lack of progress on real reform. He supported the idea of moving payments uphill—I think that that has universal support across the Chamber, with many hon. Members speaking to that point—and described the three-crop rule, another matter raised by many hon. Members, as pointless and bureaucratic. It has received universal condemnation not only from farmers but from environmentalists too.

The hon. Member for Brecon and Radnorshire (Roger Williams) spoke up for direct payments to support hard-pressed farmers. I think that at one point he was talking against modulation of pillar two, but he then flipped it around and said that there could, and perhaps should, be common cause between environmental groups and farming organisations to argue for greater pillar two payments to support very hard-pressed farmers. That was an interesting twist at the end.

The hon. Member for Tiverton and Honiton (Neil Parish), in a very good contribution, said in response to an intervention that we are limited in how much we can decide. I will come on to that in a moment, but I think that even with this mish-mash, as it was described by the right hon. Member for South East Cambridgeshire, there is scope for some decisions within England and in the other nations and regions.

The hon. Member for Sherwood (Mr Spencer) praised the CAP, praised farmers and praised Ministers—it was a very praiseworthy speech. He spoke well for his constituents and farmers.

The hon. Member for York Outer (Julian Sturdy) opened his remarks by calling for a balance to be struck between the environment and farming and food security. That relates to the gist of what I want to talk about in a moment. It is fair to say that although there has been praise in various areas, there has also been a feeling of weary resignation among many of the contributions tonight. I think the phrase he used was “the best of a bad job”. I say to Members on all sides that in the next stage of reform we really have to do better, go further, take a lead and do a much better job.

This round of CAP reform has been criticised by all sides. Peter Kendall, the president of the National Farmers Union until February this year, complained last year that the Secretary of State had disadvantaged farmers with his stance on CAP negotiations. He complained that the Secretary of State had come back with

“less than he started with”

for British farmers. The NFU described the round last year as “disappointing” and as a “missed opportunity”.

The newly-elected NFU president, Meurig Raymond said more recently that we now have

“a CAP package which has huge practical hurdles for all concerned in agriculture. It’s not the promised simplification; policy measures distort farmers’ commercial decisions and do little to help us gear-up to the long-term food production and environmental challenges which we know are ahead.”

The criticisms from farming unions come from one perspective. Environmental organisations come from another viewpoint, but they have also derided CAP reform. In particular, they have derided the greening measures as so much “greenwash”. The greening proposals linked to direct payments are described as

“so vague as to be useless”

in a study by the authoritative journal Science, which estimates that as many as nine out of 10 farms would be exempt from key greening measures.

[Mr Spencer]

As the hon. Gentleman commented, I am an optimist and I was optimistic in my speech, but surely he must recognise the challenges of linking agricultural systems such as those in Greece, where it is so arid it is only possible to grow olives, and the large plains of East Anglia?

[Huw Irranca-Davies]

Yes, indeed. That is why it is essential that the framework works in respect of what CAP reform has always set out to do—to break the link between pure production subsidy and the targeting of the subsidy at public goods, increased innovation and productivity, and not just production. It cannot be a one-size-fits-all model. The framework has to be there at an EU level, but the implementation at the level of the nation state is critical. We should not be afraid to take the lead on that and to try to get our balance right as between the environment, farming and food security.

The conservation director of the Royal Society for the Protection of Birds, Martin Harper, observed that the proposals

“failed to maximise the amount of money that it could have invested in wildlife-friendly farming and now it has made the greening measure meaningless.”

So we have “meaningless” and “useless” from the perspective of environmental organisations; and “deeply disappointed” and “a missed opportunity” from the perspective of farming unions. A change is needed in Europe and in the UK on how CAP is done. We need to show real leadership and real direction on both farm productivity and sustainability—it is not happening.

The key question is whether the more than £15 billion annual subsidy payment to farming in the UK—and £11.5 billion in England specifically—provides the best value for taxpayers’ money. A study last year suggested that sensitively adjusting the focus of the subsidy in the UK to enhance environmental and public goods, including things like flood alleviation, rather than purely units of production, could produce annual additional benefits of over £18 billion in the UK. The study did not take into account the additional benefits of cleaner air and cleaner water, which would further improve the net gains.

The Secretary of State—one would think he would find favour with that sort of approach—said last year:

“I do believe there is a real role for taxpayer’s money in compensating farmers for the work they do in enhancing the environment and providing public goods for which there is no market mechanism.”

He also said specifically last year:

“I believe that transferring the maximum 15% from Pillar 1 to Pillar 2 would be the right thing to do where we can demonstrate it would deliver worthwhile and valuable outcomes for farming and society and contribute to rural economic growth and enhance the environment”.

He was quite specific on that. When the Secretary of State said that repeatedly, wildlife and environmental groups had every right to be optimistic at least on pillar two funding, even with their disappointment on the greening elements of direct payments. As the RSPB said in its response to the consultation earlier this year:

“We…welcome the Secretary of State’s assertion that Pillar II ‘unquestionably represents the better use of taxpayers money’”,

and it went on to urge the Government to

“follow through on their intention to maximise the benefits that Rural Development can deliver.”

The Secretary of State, then, was unequivocal, unyielding and unbowed all the way through—until he crumbled, U-turned and settled on 12%. I have to ask why he was outflanked and outgunned by other forces; what happened to his unequivocal stance?

The Government have signalled that they will review the situation in 2017, but I have to say that this looks like a smokescreen to cover the Secretary of State’s embarrassment at being forced to retreat from the repeatedly stated 15% modulation that he had repeatedly promised. That is not the only sign of weakness either, as the decisions on degression and capping of CAP are also spectacularly lacking in ambition and vision.

Groceries Code Adjudicator Bill [Lords]

Debate between Huw Irranca-Davies and Mark Spencer

Tuesday 26th February 2013 Commons Chamber

[Mr Spencer]

My hon. Friend makes an interesting point. We could make the same argument across government; if crime starts to fall in an area, do we withdraw the police because they are not necessary? We have to have a referee to make sure that the rules are being obeyed. The groceries code adjudicator will be a great referee and will have the teeth to make sure that the Goliath does not bully the David. That is something that the Government should be proud of and take forward to bring a little parity and common sense to the market.

[Huw Irranca-Davies]

I am pleased to speak in this debate and I welcome the speeches that have been made so far. I did not expect it to be as sparky as it has been, but I welcome that because it allows us to flush out the arguments about the amendments and new clauses, as well as the fundamental principles of what we are trying to achieve.

I did not intend to speak to new clauses 1, 2 and 3, but I wish to reiterate the comments made by the hon. Member for Sherwood (Mr Spencer), the right hon. Member for South East Cambridgeshire (Sir James Paice) and others. A great deal of discussion in Committee focused on the fact that the adjudicator’s office will intentionally be small, mean and lean. It will not be some behemoth, as the hon. Members who spoke to new clauses 1, 2 and 3 suggested it would be. It is supposed to be an intelligent organisation that does not go on fishing expeditions but responds to good intelligence. I suspect that if there are no cases to follow, the report will be very slim indeed. I suspect that the adjudicator will not respond to Procter & Gamble or anyone else if they are asked, “Please look at the power relationship within the supply chain and how we are being disgracefully abused.”

The hon. Member for Shipley (Philip Davies) spoke to new clauses 1, 2 and 3 at great length. New clause 3 gives the reality to the mission, which is at a set moment in time to get rid of the adjudicator, which would fly in the face of the advice that has come down over years from the Competition Commission and others that there is a need for such an adjudicator. Lean and mean, yes, but the hon. Member for Shipley should have some faith in the adjudicator and, having advertised the position and given her the power and set up the office on a lean, mean basis, he should allow her to decide where to investigate to achieve a good, efficient supply chain.

Groceries Code Adjudicator Bill [Lords]

Debate between Huw Irranca-Davies and Mark Spencer

Monday 19th November 2012 Commons Chamber

[Mr Spencer]

I shall be talking about possible improvements. I think that there is a fair amount of cross-party agreement on the way in which the Bill can be improved. However, I also want to talk about some of the good practice that we see out there. We have heard a great deal of criticism of supermarkets and the way in which things work, but there are plenty of examples of supermarkets and farmers working closely together to improve the supply chain, add wealth to both businesses, and bring employment to rural areas. I think we should recognise that there is more to be celebrated than there is to be criticised, although we need to ensure that when things go wrong, there is a way of stepping in to sort them out.

When I embarked on my business career, my grandfather told me that the definition of a good deal was “a bit for me, a bit for you, and then another deal”. I think that we have reached a stage at which the supermarket sometimes wields too much power in the relationship, to the extent that I almost feel obliged to make it absolutely clear that some of the practices that I intend to highlight bear no resemblance to the activities of any of my constituents. There is a genuine fear out there of blacklisting and being removed from the stocking lists of supermarkets, such is their power.

I think it worth examining the practices that have gone on in the agriculture industry and its relationship with supermarkets. The first that springs to mind, which no one has mentioned so far today, is the operation of payment terms, which the supermarkets have stretched to a point at which big business is being financed by little business. That applies not only to agriculture, but to many other UK industries in which little suppliers are delivering products to big suppliers. The big suppliers do not pay for more than 90 days, and the smaller producers are forced to borrow from their banks in order —in effect—to lend the money to them.

One of the most shocking practices, to which other Members have referred, is the practice of rejecting loads of products when the price of the market goes through the roof, when there is over-supply, or when the weather changes, as in the case of the strawberry industry. There is real abuse of the system when supermarkets are able to reject a load that is perishable and cannot be returned without giving any recompense to the primary producer.

I am told that when a contract is being negotiated with a supermarket, the first line of the negotiation relates not to the retail price, the production price or even the wholesale price, but to the margin that returns to the supermarket. The primary producer must guarantee that margin. That cannot possibly apply to any other relationship between supply and retail. Whether the product is cauliflowers, carrots, plimsolls or widgets, if the supermarket decides to arrange a promotion and reduce its retail value, the primary producer will lose out while the margin of the supermarket will be protected and never squeezed.

[Huw Irranca-Davies (Ogmore) (Lab)]

Does the hon. Gentleman agree that those margins are seen not only in the direct relationship between producers and major retailers, perhaps on contract terms, but throughout the supply chain? Sometimes a retailer will say “Well, it’s nothing to do with us, guv”, but somewhere along the line an intermediary will be saying, “We want those margins.”

[Mr Spencer]

That is a valuable point. There have been a number of references to the dairy industry, and to small dairy farmers all over the United Kingdom. It should be borne in mind that very few small dairy farmers deal directly with the supermarkets. They nearly always negotiate through a dairy producer, someone who is making cheese or yoghurt, or even a bottling plant. The hon. Gentleman has made an important point, and we shall probably need to consider it once we have sorted out the Bill.

Another important topic is that of promotions. Many consumers will no doubt think that “buy one, get one free” offers and other promotions show supermarkets’ generosity, as they must be shrinking their margins. The truth, however, is that it is the primary producers who pick up the tab for the reduced price of the product, and they are often also asked to increase the supply of that product.

Earlier in the year a series of adverts ran on TV promoting asparagus at half price. The weather had been so shocking that I do not think there can have been a single blade of English asparagus on the market at that time. I almost shuddered for our asparagus producers. Many of them had obviously signed a contract to supply a supermarket, and an advertising spot had been booked six months in advance, without regard to the weather. When that time slot in the calendar came, the adverts rolled out and asparagus producers were probably having to buy asparagus from Mexico or Spain to meet their contracts to supply that promotion. There is no flexibility in the system, or common sense from some supermarket buyers.

The worst practice, however, is backdating. A primary producer can supply a supermarket for two years, let us say, and then the supermarket can suddenly say to that producer, “By the way, we’re backdating the price of all that product you’ve supplied to us for the last 12 months, and you owe us £50,000.” That primary producer is then faced with the prospect of either finding that money from somewhere—borrowing it or taking it out of their bank account—or reneging on the contract and never being dealt with again. That truly is an abuse of power. I hope the grocery ombudsman will be able to stop such practices.

Key issues are what tools will be available to the ombudsman and how he will make sure the code of practice is adhered to. That brings us to schedule 3 and the subject that has been dominating the debate: if the adjudicator cannot fine supermarkets, will he have sharp enough teeth to ensure that the code is adhered to? I do not ask the Minister to commit to anything in his winding-up speech, but I ask him to assure us that he will have an open mind and will consider the Committee’s deliberations, and be willing to make an amendment if he feels that that is the right thing to do.

I reiterate that there is much more good than bad in this Bill and it represents a great step forward. With the will of the House and a fair wind, I think we can get to the right place for the primary producers, and also for our consumers, who want good quality food in our supermarkets at the right price, and, crucially, at a price that is sustainable.

Small dairy farmers begin the process of producing milk by choosing an animal to breed. They then breed that cow, which takes nine months, bring that heifer to full production, which takes two years, and then, finally, they get milk from that animal. It takes four years of hard work and investment to get to the point of supplying any milk, therefore. In that time, supermarkets can change their contract on an hourly basis. The whole of the risk is with the primary producer, and at present there are occasions when the whole of the reward is with the retailer. I sincerely hope that we can start to redress the balance in that relationship, to the benefit of supermarkets, primary producers and consumers.

Food Prices (Planning Policy)

Debate between Huw Irranca-Davies and Mark Spencer

Wednesday 17th October 2012 Westminster Hall

[Mr Spencer]

I agree with the hon. Gentleman. We have achieved that before, with Government-led campaigns to improve domestic food production, and there are examples from the recent past, when the previous Government encouraged farmers to diversify and to consider adding value to their products, to get more from their production. That, however, brings with it anomalies.

I will draw on my own experience as a farmer on the urban fringe. We considered diversifying into farm retail, so that we could sell not only our own farm products but those of our neighbours, but I was told by my local planning authority that, because of the legislation in place to protect the green belt from out-of-town development, it was not possible to retail where we wanted to. Companies such as Halfords and B and Q want to build large retail units in the urban fringe, and a farm shop is, in effect, retail. I was told that most of my produce had to be sold through the farm shop and most of the shop’s produce had to come from the farm—I understand the logic of that—but if I asked my neighbours who live close to the farm, “Would you rather my farm shop retail the pork of one of my near neighbours, so that I could support both their business and the retail business, or would you rather I put 1,000 pig arks behind your houses and produce my own pork?” they would reply, “I would rather you sold another farmer’s pork than have an impact on the green belt with all those pig arks.” That is just one anomaly; there is a clear difference between agricultural diversification and major retail companies putting large warehouses in the green belt.

What can we take from the current state of food prices? We have a problem, frankly, because food prices have been rising for some time and we can no longer regard the increases as an anomaly. Whether we pin the hikes on oil prices, climate change, population increases, bad harvests or other developing industries in the green belt, it is clear that the rises are here to stay. We remain a nation dependent on imports, increasingly from all over the world, and we leave ourselves vulnerable to the storm that is raging outside our borders. We need, therefore, to protect ourselves, just like we did in the 1940s. We need to look at domestic production and ensure that we are making the most efficient use of our domestic land.

The percentage of agricultural land dropped from 39% to 25% between 1989 and 2009—a stark decrease. England has 14 green belts around its major cities, covering nearly 13% of the country, and 72% of the Nottingham and Derby green belt—1 million hectares—is in agricultural use. Overall, 66% of the green belt is used for agricultural purposes. The conclusion that I draw is that the green belt is fundamental to our ability to produce food ourselves. In Nottinghamshire, the green belt is under enormous pressure from local authorities, as they consider sites for residential developments, and it causes me enormous frustration that some of those authorities are choosing green-belt development over using the available brownfield sites.

This debate comes down to one thing, and my one request of the Minister is that he assure us that his inspectors—these things undoubtedly end up in front of an inspector—will be completely rigorous in their scrutiny of local plans. One of my local authorities, Gedling borough, has available to it the possibility of developing a former colliery site, but has chosen, for whatever reason, to develop the green belt in the villages of Linby and Papplewick, and around Hucknall, instead. That causes me enormous frustration, because most people in the borough recognise that the Gedling colliery site should be developed. There is some debate about whether an access road would allow for more housing, but clearly there is the opportunity to put between 600 and 700 houses closer to the urban fringe, rather than to tear up the green belt in Nottinghamshire.

Another example is that the Department for Environment, Food and Rural Affairs has spent a lot of money on flood defences at a site called Teal close in Netherfield. I am led to believe that the site, which is close to the urban fringe and not within the green belt, is now protected from flooding, but it is not being developed, for whatever reason, and we are, again, pushing houses out into the rural areas. We need to look long and hard at that issue.

I cannot say often enough that brownfield before green-belt development is absolutely essential. I hope that that message seeps through and that at some point in the future, when we are all feeling much hungrier and cannot afford to import food, these things will come together. We will then wonder what on earth we were doing back in the early part of this century. We cannot go back. Once we have developed land and it has been taken out of agricultural production, it very rarely goes back. Probably the only examples of such land being returned to agricultural use are those involving open-cast sites that have had their topsoil removed and later put back, but even then it is very low-grade agricultural land that is probably used for grazing sheep rather than for arable production.

There are, nevertheless, some good examples of where we can get it right. Cemetery provision is a fairly contention issue, of course, because people do not really want cemeteries to be set up in the green belt, but natural cemeteries have been developed. There are no headstones and people are buried in a more natural state in a wicker coffin, so the cemetery can be used for grazing sheep and for livestock. That is a good example of things working together, and I encourage that sort of diversification.

One of my final points is that we do not want to throw the baby out with the bathwater—if Members will forgive the cliché. Farmers need to be able to diversify, to consider other ways to support their income.

[Huw Irranca-Davies (Ogmore) (Lab)]

The hon. Gentleman has tempted me into the debate by ranging widely from anaerobic digestion to burials—no connection, of course, between the two. There is a role for Government intervention and planning controls, but farmers make commercial choices about land use, as I am sure that the hon. Gentleman does. They choose between biofuels, food production and development of other sorts. What does he think is the right balance between Government intervention, or Government control and regulation, and the freedom of the individual farmer—landowner—to make their own choices?

[Mr Spencer]

I have great respect for the hon. Gentleman. He is very clever in his thinking. It is a difficult tightrope that he has put there for me, and I almost hesitate to tiptoe down it. It is easy to come across as a hypocrite. Farmers clearly want to make the largest possible profit, and as a member of the Conservative party, I believe that the Government should not be interventionist and poke their nose into people’s private business.

The answer to the hon. Gentleman’s question is to look at the carrot and not the stick. Within the Government’s delivery of subsidies and support for different sectors, farmers are adept at finding the schemes that work for them. We need to tempt farmers back into food production, but Government support will be needed because there are commercial decisions to be made between producing energy, which is fairly heavily subsidised through the EU, or food, which has also been subsidised in the past. The Government could consider the way in which farmers retail that food and support them in getting more value from it, and there are currently plans for a grocery ombudsman to protect farmers.

Seasonal Agricultural Workers Scheme

Debate between Huw Irranca-Davies and Mark Spencer

Wednesday 20th June 2012 Westminster Hall

[Huw Irranca-Davies]

The hon. Gentleman knows the area well, and an advantage of the devolution of administration and powers is that we can, and should, learn lessons about differential applications across the UK. We need to do more within the joint committees that bring the devolved Administrations together and in discussions between Ministers, so that those lessons can be learned. He makes a good point. We should not always try to work from a completely blank sheet of paper, but look at what works well elsewhere.

Will the Minister provide us with the timetable for changes to the GLA? His written statement of 24 May was not clear on the consultation timetable or process. Is he in a position to provide us with that now? Will he confirm that the GLA will have the necessary resources to tackle worker exploitation in the relevant sectors, even under the new approach? We all want the GLA, in its revised form, to be lean, mean and effective, but that requires resourcing, so I seek assurances on that. Will he also provide information on how he intends the GLA to work more collaboratively with other organisations, including the Serious Organised Crime Agency?

I want briefly to talk about the abolition of the Agricultural Wages Board, which I have discussed on several occasions with the Minister and other hon. Members. He knows how strongly I and the Labour party feel on the issue. That strength of feeling is shared by some of the farming unions, such as the Farmers Union of Wales, and by farm workers and the Welsh Government. The AWB protects 152,000 farm workers in England and Wales and has mirror effects on others in the sector. It ensures that people working in the countryside, from apprentices to farm managers, get a fair deal. In its 62-year history, it has provided basic pay and protection for fruit pickers, farm labourers and foresters. That covered wages, but also holidays, sick pay, overtime and bereavement leave.

The Minister will no doubt say—we have had this discussion many times—that many farmers pay well above the agreed wage rates; and I do not disagree. He may also say that there is a national minimum wage—so what is the fuss? However, the AWB does far more than set pay minimums, and when it is gone, the pay and other terms and conditions are threatened. The wages of 42,000 casual workers could drop as soon as those workers finish their next job, once the AWB is gone. It is probable that the wages of the remaining 110,000 will be eroded over time. Ministers have said in the past that farm workers will be protected by the minimum wage, but only 20% cent of farm workers are on grade 1 of the AWB. The rest earn considerably more than the minimum wage. The downward pressure on higher grades in economically difficult times will be high. Children who do summer jobs or part-time jobs currently receive just over £3 per hour, but they are not covered at all by the national minimum wage. They will have no wage protection—unless the Minister wants to correct me on that—when they do holiday work, as has been mentioned, or weekend work, after the board is abolished.

[Mr Spencer]

Does the shadow Minister recognise that agriculture has changed dramatically in the past 20 years? A combine harvester costs £250,000 and no farmer will put an unskilled member of staff in charge of machinery of that value. We have heard from my hon. Friend the Member for West Worcestershire (Harriett Baldwin) about laser machinery for measuring asparagus. The salaries that are now attracted in agriculture are far above those provided for under the Agricultural Wages Board. I wonder whether times have moved on and it is no longer necessary.

[Huw Irranca-Davies]

Time will tell if we abolish the board. However, not only has the Farmers Union of Wales welcomed its retention in Wales—and discussions are ongoing to see how that can take effect if the AWB is abolished in England; it has said it welcomes the clarity that the board gives on a range of conditions for agricultural workers. That is particularly true for small farmers who do not want to get into endless discussions about individual contracts, with different people on different wages for essentially the same job, and consequent disputes. The AWB provides a very good service for an industry that is often fragmented and disparate. The point that the hon. Member for Sherwood (Mr Spencer) makes about modern technology and food processing is valid for many parts of the industry, but things are not uniformly like that. That is why the Labour party sees the AWB as providing a safety blanket, to ensure that all workers’ terms and conditions are properly protected.

DEFRA’s own figures suggest that the abolition of the AWB will take £9 million a year out of the rural high street through holiday and sick pay alone—that will be £9 million coming out of the rural economy, because it is not going into people’s pockets in one way or another. That is not an insignificant figure, and it is worthy of further consideration. In the 18 months or so since the Government announced their intention to abolish the AWB, a lot has changed. The economy has gone into a double dip recession. The cost of living has risen dramatically. Food and fuel prices have risen well above inflation. Overall unemployment is up, and youth unemployment is chillingly high at more than 1 million. As we watch developments on the continent unfold day by day, it appears there will be no improvement in people’s circumstances for some time yet. A study commissioned by The Guardian and published this week showed that almost 7 million working-age adults are living in extreme financial stress, from pay cheque to pay cheque, one push from penury, despite being in employment and largely independent of state support. Many of those will be agricultural workers in rural communities.

I ask the Minister to think again. Why, against that backdrop, do the Government insist on pressing ahead with the policy, taking money out of the rural economy and the pockets of rural agricultural workers, and making things harder for people, many of whose wages will fall as a result? Those in rural areas already face significant challenges in housing, transport and access to schools. The abolition of the AWB may prove another difficult hurdle to overcome. However, if the Minister is determined to press ahead, I want to ask some additional questions. We are all awaiting an announcement on when the AWB will be abolished, but we have not had that clarity yet. Yesterday evening, I met with the farmers unions—and some farmers unions, of course, support the abolition. They were asking when there would be clarity and a timetable: when will it happen? When does the Minister intend to lay an order before the House abolishing the AWB? Farmers’ patience is being stretched. In the mean time, can he confirm that negotiations with the AWB for the year ahead have been concluded? Will the pending abolition affect those? Has he asked his Department to reassess the proposals in the light of current economic circumstances? If not, why not?

I recently submitted a freedom of information request to the Minister’s Department for the impact assessment of the abolition of the AWB. It was rejected. No doubt he will explain why, and give the normal Whitehall reasons, but his response implied that the assessment would be published soon, so when will we see it? We want to get behind the detail, to see what the effect will be on rural communities. In the absence of the impact assessment, will the Minister guarantee that, on the abolition of the AWB, children will not be paid below the minimum wage, that the wages of workers in AWB pay bands will not be depressed, that rents on farm cottages will not rapidly escalate to full market value, or tenants be turfed out because they cannot afford them, and that when new recruits are taken on it will not be on inferior terms, creating a two-tier work force for the same jobs?

If the Minister doubts that that might happen, and thinks it is only I who say it, I refer him to the Incomes Data Services report for the Low Pay Commission, “The implications for the National Minimum Wage of the abolition of the Agricultural Wages Board in England and Wales”. What does the change mean for the national minimum wage, where the Government’s defence lies— “Don’t worry, the NMW will take care of this”? The report states:

“Once abolished, many of the provisions of the Order will either be only partially covered by other statutory employment legislation, or not at all. Employment legislation does not make any provision for specific rates of pay linked to skills, specific rates of pay for overtime, a minimum rate of pay for workers of compulsory school age, rights to paid training, standby duty and night allowances, entitlement to paid bereavement leave, a birth or adoption grant”

and so on. It also states that

“abolition removes protection for young workers of compulsory school age”

and that

“the statutory minimum rates for both workers aged 16 to 20 and apprentices will be significantly less under the NMW than they currently are under the Agricultural Wages Order.”

Hon. Members have spoken passionately about the need to enhance skills and training in the agricultural sector, but the report states clearly that the wages of apprentices and those learning their skills will be depressed.

The report states:

“There may also be issues around the accommodation offset, whereby in some cases agricultural workers may be worse off under the NMW rules”,

and it explains why:

“There is no such threshold under the NMW”

for workers’ accommodation. It also states:

“The NMW rules on accommodation offset allow deductions to be made even if the worker could have lived elsewhere. This could mean that agricultural workers who are not currently subject to the accommodation offset…could be subject to it in future.”

It continues:

“On piece work, agricultural piece workers are currently guaranteed to get at least the minimum rate appropriate to their grade.”

That is more favourable than the national minimum wage approach,

“where slower workers can earn less than NMW if a properly assessed ‘fair’ piece rate is applied.”

It is not true to say that the abolition of the AWB is not a problem because the national minimum wage will deal with the issues. There is far more to the AWB’s terms and conditions than that, which is why I am asking the Minister to think again.

I thank the hon. Member for Sittingbourne and Sheppey for raising this important debate, and thank all hon. Members for some very good contributions. We want to see a rural economy that works for all working people. It should be fair across the board, as these are tough times for all those who work in agriculture. I look forward to the Minister’s response.

Welfare of Laying Hens Directive

Debate between Huw Irranca-Davies and Mark Spencer

Tuesday 13th December 2011 Westminster Hall

[Huw Irranca-Davies]

As we know, Council directive 1999/74/EC will make it illegal to have laying hens in conventional battery cages across the EU from 1 January 2012, after which date egg production will be allowed only in enriched colony or non-cage systems; for example, free range, barn or organic. We have heard today that Members on both sides of the House agree that that is appropriate, and there has been none of the discussion about gold-plating that we often have with EU regulations. The directive has been welcomed, both for animal welfare and for food production standards, and it might well benefit UK production and producers, if we can get it right. It is also good for the quality of the eggs and egg products that we eat every day. The significant problem is that not every EU nation will comply with the directive—13 of them will not—which poses enormous challenges for the UK egg industry. The industry’s response to the Minister’s written ministerial statement on 6 December 2011 was that it feels “totally let down” by Ministers on this important matter, and I want to look today at why it feels that way and at what must be done.

I compliment the UK egg industry on its responsible approach to the directive over a number of years, with investment in the region of £400 million to convert conventional cages to enriched ones. The capital cost of an enriched colony unit is between £20 and £24 per bird place, and the National Farmers Union has stated that for a producer with a medium-sized cage unit of about 100,000 birds the cost of erecting the new units is, on average, in excess of £2 million—not an insignificant amount. Free-range egg producers have also invested heavily in preparation for the directive, and that has been a draw on the industry, which, as has been mentioned, is a competitive market that does not receive EU support. The NFU has also stated that the majority of birds in the UK will be in enriched cages by January 2012, which is to be welcomed, and that all lion scheme producers will be converted in time.

A lot of work has been going on over recent years, with many people investing heavily to comply, but the problem is that the UK is not self-sufficient in eggs and egg products. We import 15% of our egg requirements, and valid concerns remain about whether imports from January 2012 onwards will come from EU nations that comply with the directive, and about the possible impact on the UK egg industry, including on prices. One of the industry’s fears is that prices will be driven down, with cheaper eggs and lower standards.

In a move that was openly welcomed by the UK egg industry, the Minister recently dangled the potential for a unilateral ban on eggs from EU nations that do not comply. However, in his statement last week, he decided that it was “not a realistic option”. Having raised that possibility, why can the Minister not now deliver it? It will leave many egg farmers feeling that he failed them.

What has the Minister delivered? He has given an unequivocal assurance that DEFRA and the devolved Administrations will enforce the conventional cage ban from 1 January 2012. I think that everybody in this debate will welcome that and how the industry, the devolved Administrations and DEFRA have risen to the challenge. He also stated that a risk-based surveillance scheme would be introduced to ensure that imported shell eggs from other member states produced in compliance with the cage ban would be in place from 1 January 2012. [Interruption.] He is nodding.

The Minister also said that Animal Health and Veterinary Laboratories Agency surveillance would be conducted on imports of shell eggs, using ultraviolet light analysis, to identify batches of caged eggs that are not from an enriched environment. However, he also acknowledged that due to the loophole in the egg marketing regulations, he could not prohibit the marketing of egg products from conventional cages sent for processing, nor could he prohibit the use of products made from such eggs. That is a significant loophole.

However, the Minister made the welcome announcement that retailers, food manufacturers, food service companies and processors have come out in public support of the UK egg industry. I do not make many puns in debates such as this, but those good eggs, reflecting earlier campaigns on the issue, are to be complimented on the steps that they have taken and will take. The British Retail Consortium, whose members include McDonald’s, Starbucks, the four major supermarkets and many other brand names, will ensure that they do not buy conventional caged eggs or use them in their products. Furthermore, he outlined that the Government would make necessary changes to the Government buying standards’ mandatory criteria to ensure that eggs produced in conventional cages are not used in any form, whether fresh, powdered or liquid.

After that seemingly wide-ranging set of measures, why does nobody in the industry seem happy? I suggest to the Minister that it may be a case of trying to look busy while failing to deliver the one thing that he strongly hinted was possible, a unilateral ban. The industry is now being overwhelmed with many different initiatives as a diversion. Perhaps they will forget the fact that they think they have been led up the garden path. It is a classic case of over-promising and under-delivering, which is never a good strategy.

[Sandra Osborne in the Chair]

The British Egg Industry Council says that the measures are not good enough and that the Government could have introduced a complete ban on all illegal products in the UK. Its chief executive, Mark Williams, said:

“The UK egg industry feels totally let down by the Government. Whilst we have received repeated platitudes of support from DEFRA, it has failed to back these up with any real action. Our legal advice has confirmed that the UK Government is able to enforce UK and EU law by banning illegal eggs and egg products, so why have they chickened out?”

That is his pun, not mine.

Although the National Farmers Union has welcomed the measures taken by Government, it has stated categorically that

“our members will certainly be bitterly disappointed that it has not been possible to take tougher action.”

One British egg farmer, Duncan Priestner, echoed the concerns of many, including the NFU, when he said this week that he feared some food producers would be tempted to buy eggs from illegal systems in Europe, because they will be cheaper. He said:

“It will drive down the prices that farmers get. Like the pig industry”,

which has been referred to,

“that will put us in a very difficult financial position."

[Mr Spencer]

The UK is clearly not the only country in the EU that will be compliant on 1 January. Does the shadow Minister know of any other Ministers in the European Union who will take unilateral action within their own country?

[Huw Irranca-Davies]

The hon. Gentleman raises a good point. I will come to that, if he will bear with me. There is a case, if not for unilateral action, then for doing what the Chair of the Environment, Food and Rural Affairs Committee suggested and considering the possibility that like-minded countries might take multilateral action to enforce the EU directive much more rigorously and aggressively and in a joined-up way. There are like-minded countries out there. With my limited experience of EU negotiations, I suggest to the Minister that that is a fruitful way forward. We should be sitting down with those of the same mind and discussing how to work within the EU directive after 1 January. Even if we cannot do it unilaterally—I will ask about the legal advice in a moment—we could do it in a joined-up way with like-minded countries. As I have given him that forewarning, I am sure that he will be able to tell me what discussions are occurring.

The good work of the NFU Poultry Board has been referred to. Its chairman, Charles Bournes, said:

“We are concerned that although the Government has repeatedly pledged its support for the industry, it cannot prohibit the use of illegal egg products and food manufactured from such products.”

On the back of those comments, I have a series of questions for the Minister.

Given that the British Egg Industry Council and others have stated that their legal advice is that a unilateral ban is possible, will the Minister publish the legal advice that he received on whether the Government would be able to enforce a unilateral ban on the import of conventional caged eggs? As he knows, we requested that advice in a written parliamentary question last week. We expect the Department’s reply any day now, if not today.

In response to the intervention by the hon. Member for Sherwood, will the Minister update us on whether he intends to work with like-minded countries to see whether a rigorous form of enforcement or a multilateral ban could be employed by other countries that have complied with the directive and are concerned for their own industries? It is not only about supporting British industry; it is also about supporting higher animal welfare standards. I am sure that those countries would be willing to work on that, with some good negotiation and persuasion from the Minister.

In the absence of full compliance from 1 January, will the Minister commit to making a quarterly statement to the House about the progress he is making within the EU on negotiations, particularly on getting the 13 other members to implement the directive fully, and on what additional work he as a Minister, his officials at DEFRA and UKRep are undertaking to level up the playing field promptly? Will he also update Parliament on the level of non-compliant imports? I think that we will all be extremely concerned if, as a result of the non-level playing field after 1 January, imports increase, particularly eggs and egg products from non-conventional and enriched cages.

We have all seen the recent furore under this Government over humans arriving in airports and ports and being waved through. What hope is there for eggs? What assurance can the Minister give people who are sceptical that imports can be checked for compliance with the EU directive? As an hon. Member said in the debate earlier, what specific additional resources will the Minister make available for policing the directive, and at what cost?

AHVLA surveillance of imports of shell eggs will use ultraviolet light analysis. I understand that the method has not been used specifically to identify different types of caged egg production, although it has been used to identify eggs from alternative systems. What assurance can the Minister give that that type of monitoring is 100% effective? If it is not 100% effective, what level of surety do we have that it is an effective way to monitor and police egg imports? His recent statement made little mention of powdered or liquefied egg. What assurance can he give that imported powdered or liquefied egg will not come from hens in conventional cages?

Will the Minister push the European Commission to take swift action with meaningful financial penalties against any country guilty of non-compliance on shell eggs or egg products after 1 January? Will he take a hard line in discussions with the European Commission on non-compliant countries? That would give some assurance to egg producers in this country that there was at least an attempt, in the way we know other countries do with us, to try and level up the playing field rapidly. What can the Minister do to ensure that the UK egg industry will not be undercut on price by eggs and egg products from conventional cages from any of those 13 non-compliant states? We welcome the Government’s commitment to introduce changes to the Government buying standards mandatory criteria, but why did it take so long to produce them? Why were they so late? Will he guarantee that the changes will be completed and enforced by 1 January 2012, and that all Departments, without fail, will not be using, in this context, conventionally caged eggs in any form—shell, liquid or powdered? It would be wholly inappropriate for the Government to fail to introduce these measures properly, and to fail their own standards, after asking much of the egg industry and many retailers—food manufacturers, food service companies and processors—to invest heavily in preparation for the ban.

Given that the UK’s enforcement strategy is to ensure that all those in the industry have stringent traceability tests in place to ensure that they are not using conventional cage eggs, what assistance is the Minister giving them—not policing, but giving the industry—to ensure that they are fully prepared? Are there additional costs that the industry will now have to take on to ensure compliance, and what assistance is the Minister giving if that is the case? Is he undertaking further action to assist our whole supply chain in the UK to prepare for this directive, or is that now it? They are ready, up and running, and it is a competitive market.

The Minister promised much, but the results have fallen short, as we have heard from the industry. In EU negotiations, there was a failure to level the playing field upwards in favour of higher animal welfare standards, and, I have to say, in favour of UK producers and jobs. However, he had a plan B, which was nothing to do with walking out on negotiations; it was actually to impose a UK unilateral ban. Despite the good promises and the fine words, I wonder whether he has been “Sir Humphried” by his officials on internal legal advice. We must now rely on voluntary enforcement—a sort of big society approach to welfare in UK food production. Perhaps I could suggest to him a reliance on the good and bad in business, highlighted by the Leader of the Opposition in recent contributions.

Finally, when all else has failed, will the Minister work with the industry, hon. Members here today and us to produce a definitive and up to date rolling register of all those who source shell, powder and liquefied eggs from enriched cages? Food processors, retailers, restaurants and others on the list would be demonstrably good eggs, and by implication everybody else would be bad eggs. We would support the Minister strongly in that, but anything else will be seen as a slap in the face for the UK egg industry.

I have already written to all those in the supply chain in the UK, asking in detail what they are doing to comply with the EU directive, both those on the list produced by the Minister and all other significant players. I guarantee our support if the Minister produces a live rolling register, because that seems to be the only tool left in the box at the moment. We have a lot of work to do, as I alluded to with the findings of the RSPCA, and we will do it. If the Minister does not, I am convinced that the industry will do it separately and alone, and we will work with them.

This is by no means a complete list of questions or of the concerns of many inside and outside the UK egg industry, but they are some of the key questions left to be answered by the Minister. I hope that he can provide the assurances that many are seeking—in the industry and in the Environment, Food and Rural Affairs Committee, which has done such good work on this—so that we can drive up animal welfare standards and the protection of the very best in UK food production, as I know he is convinced we must do.