Norfolk and Suffolk Broads

Debate between Richard Bacon and Keith Simpson

Wednesday 8th July 2015 Westminster Hall

[Mr Simpson]

My hon. Friend’s very good point leads me on to another. As I am sure that the Minister is aware, the broads are significant and different from the rest of the national parks. First, although the environment had a hand in their creation, they were largely created by man. We found out as late as 1963 that peat diggings in the middle ages produced what we now call the broads. Secondly, the broads must encapsulate a number of interest groups, including the people who live and work on the broads and in the surrounding area; the farming community; everyone involved in protecting the environment; and, not least, as my hon. Friend mentioned, some 4 million tourists who visit the broads and the rest of Norfolk each year. It is very important to get that balance right.

[Mr Richard Bacon (South Norfolk) (Con)]

There is a key distinction between the broads and other national parks. National parks take account of the Sandford principle, which balances the interests of conservation and natural beauty against enjoyment by the public, but if the two clash, conservation takes precedence. Since its inception, legislation governing the broads has been explicit about the fact that the interests of navigation must also be taken into account, so the broads can never be a national park in the same way as others are. Does my right hon. Friend agree that for the sake of tourism and the economy of Norfolk, that should remain the case?

[Mr Simpson]

My hon. Friend and I made that point in 2006-07 when another broads Bill was going through the Commons. He is quite right to say that the Sandford principle tries to balance the working side of national parks with the environment, but at the end of the day the environmental principle is more important. We have all been lobbied by people who are concerned that if the broads take the name of national park—which, it is argued, would not change the unique status of the broads—things would change. My hon. Friend is correct. The functions of the Broads Authority, which manages the broads, are:

“Conserving and enhancing the natural beauty, wildlife and cultural heritage of the Broads; Promoting opportunities for the understanding and enjoyment of the special qualities of the Broads by the public;”

and

“Protecting the interests of navigation”.

That balance must be maintained. Over the past 10 or 15 years, perhaps understandably, the Broads Authority and others have attempted to rebrand the broads as a national park. Indeed, many members of the public may think that it is a national park. There has been some confusion in the minds of many who live and work in the broads and elsewhere in Norfolk about the status of the broads as a member of the national parks family, and whether that has legally changed.

Lord de Mauley, when he was a Minister, explained in a letter that the Broads Authority could call itself a national park, but that that would not alter the legal status of the broads. That is a fine piece of sophistry worthy of Charles Dickens, whose great legal battle of Jarndyce v. Jarndyce will be familiar to many. It is not simply a debating point, however; it is a point of law. As my Norfolk and Suffolk colleagues know, two people are seeking a judicial review—I will not go into details—of the rebranding of the Norfolk broads as a national park. I want to press the Minister for a precise legal view from the Department, which is responsible for the overall governance of the broads, in relation to the rest of the national parks.

Group Lotus

Debate between Richard Bacon and Keith Simpson

Tuesday 24th April 2012 Commons Chamber

[Mr Bacon]

The hon. Gentleman is absolutely right. I have talked about Lotus’s heritage, which is of stunning historical importance, but it is the future we are concerned about. Lotus has demonstrated, with things such as the Tesla project, the tremendous contribution it can make to the future and its expertise in hybrid and electric vehicles.

Proton, the Malaysian car manufacturer that has owned Lotus since 1996 and invested considerably in it, was founded in the early 1980s under the stewardship of the then Malaysian Prime Minister, Tun Mahathir, who, it is fair to say, is something of a visionary who has probably done more than anyone else to create the Malaysia we know today—a modern country with a powerful economy and global connections. The Malaysian Government held a large stake in Proton for many years, but made it clear that they no longer wished to retain this stake. In early January, Tun Mahathir gave his public blessing to the sale of the stake to DRB-HICOM, a major industrial conglomerate with a wide variety of interests.

On 16 January, HICOM announced that it had bought the Malaysian Government’s stake in Proton and thus become the ultimate owners of Group Lotus. Incidentally, on the same date, Group Lotus announced the opening of a major brand store in London’s Regent Street. Only three days earlier, on 13 January 2012, a UK-registered company, Lotus Youngman UK Automotive Company Limited, company number 7909455, was incorporated at Companies House—that was just three days before HICOM bought Proton—with the chief executive officer of Group Lotus, Dany Bahar, as one of its directors. Curiously, that was not announced to the Malaysian stock exchange until several months later, on Thursday 12 April.

That is of particular concern because, as has been reported in the newspapers, the CEO of Group Lotus, Dany Bahar, has a financial incentive in his contract to sell the company, and because Group Lotus no longer owns the right to use the name “Lotus” on cars sold in China. That right is now owned by a small Taiwanese company, which licenses it to China Youngman, a potential buyer of Group Lotus that is already importing Lotus cars into China. That is an odd thing for any car company to do, particularly one whose brand and the heritage are so important. The brand is a central part of the company’s value, and it is hard to imagine selling it to others so that it could not use its own brand name in a territory without let or hindrance, but that appears to be what has happened.

By coincidence, my right hon. Friend the Prime Minister was in Malaysia recently, and he spoke to the head of Proton, Dato’ Sri Syed Zainal. Unfortunately, it appears that only hours after our Prime Minister had spoken to the head of Proton to emphasise the importance of British jobs at Group Lotus, Dato’ Sri Syed was in China seeking a buyer for Group Lotus. That has naturally caused immense worry and concern for the 1,200 employees at Group Lotus. It is also unnecessary, because there are well-capitalised potential buyers for Group Lotus with a credible plan to keep the business and the jobs in the UK.

When I raised the issue with the Prime Minister last week at Question Time, he emphasised the importance of Lotus, saying that he had raised the issue with the Malaysian Prime Minister and that the Government were monitoring the situation closely. My fear is that, even if an agreement is reached, any guarantees that might be provided about British jobs will later turn out to be worthless. The Kraft Foods takeover of Cadbury comes to mind in this respect.

One way of accomplishing a transfer to a Chinese owner against the wishes of many of the interested parties would be to reach an agreement in principle to sell Group Lotus but to present it as a joint venture rather than a sale, then to wait until after the Malaysian elections—Lotus is rightly valued by many in Malaysia as a jewel in Proton’s  crown and the issue could become politically divisive—and have a Chinese buyer such as China Youngman acquire 100% of the business after the Malaysian elections were safely out of the way,  transferring manufacturing to a new Chinese owner later. One could even have a private side agreement to that effect.

People in Norfolk, most notably the loyal and hard-working Lotus employees, want to ensure that that does not happen. I have asked HICOM to consider carefully its responsibilities to local employees and I hope that it will do so. However, I remain extremely concerned. The fact that KPMG has been appointed with a mandate to sell Group Lotus to the Chinese is not an encouraging sign. Nor is the fact that the Malaysian banks want their money back from Proton. I fear that Proton will say that it has decided to keep Lotus, while negotiating with the banks for as long as possible to write off or reduce debt, then either hand what is left of Group Lotus to the Chinese or liquidate it. The question for Proton in such circumstances would be: is it planning to pay the suppliers? That is relevant because there are tens of millions of pounds of accounts receivable outstanding, and many further jobs in the supply chain beyond those at Group Lotus itself are affected.

[Mr Keith Simpson (Broadland) (Con)]

Following my hon. Friend’s logic, what does he think our Government can actually do, apart from using persuasion and nudging the people who might be carrying out the actions about which he is rightly pessimistic?

[Mr Bacon]

The job of Her Majesty’s Government is to make it very clear to the Malaysian Government and to the company that is the ultimate owner—DRB-HICOM—that we take this matter very seriously, and that if it goes the wrong way, there will be serious consequences for our relationship with Malaysia.

To sum up the situation, the CEO of Proton Holdings—who is now in any case only a temporary figure—was in China seeking a buyer for Group Lotus only hours after our Prime Minister spoke to him in Malaysia recently. A UK-registered company, Lotus Youngman, was set up in January 2012, only three days before HICOM bought Proton, with Group Lotus CEO Dany Bahar as a director, but this was not announced to the Malaysian stock exchange until a fortnight ago. The CEO of Group Lotus is incentivised in his contract to sell Group Lotus and has recently been in China. Any letter of comfort guaranteeing jobs in Norfolk that might appear from a Chinese buyer is unlikely to be worth much, if anything at all, especially given that KPMG has a mandate to sell the business. However, there are well-capitalised would-be buyers of Group Lotus who would definitely keep the business and the jobs in Norfolk, and 1,200 jobs are at risk in my South Norfolk constituency if this goes the wrong way.

I would urge the Minister and all his colleagues, including the Secretary of State and the Prime Minister, to put all possible pressure on the Malaysian Government to ensure that DRB-HICOM permits the sale of Group Lotus only to a bidder who will provide credible guarantees for the future of the business as an ongoing concern in Norfolk. I would like the British Government to make very clear to the Malaysian Government, and to DRB-HICOM, that they consider the issue of local jobs in Norfolk to be of crucial importance and that a betrayal of the kind we have seen elsewhere in the corporate sector is unacceptable and would have far-reaching consequences.

Pig Farming

Debate between Richard Bacon and Keith Simpson

Wednesday 23rd March 2011 Westminster Hall

[Mr Bacon]

I agree. We all use supermarkets because in many ways they are efficient, but we love to hate them because they are very powerful. We are not discussing perfect competition. People sometimes speak of supermarkets as though they were speaking of the market for foreign exchange, but this is an oligopolistic arrangement. Supermarkets have large amounts of power that they do not always use in the right way, and sometimes they misuse that power. I welcome the Government’s proposals for an adjudicator.

[Mr Keith Simpson (Broadland) (Con)]

I congratulate my hon. Friend and neighbour on introducing the debate. If he will pardon the pun, this is like “Groundhog Day” for other hon. Members and for me, as we have been debating the pig industry for at least 10 years. Although I do not want to turn supermarkets into devils, it seems to me that they stand condemned in two ways. The first relates to driving down costs and forcing down farmers’ profits, and the second is the labelling itself. They are better now than they ever have been, but all too often, as my right hon. Friend the Member for East Yorkshire (Mr Knight) pointed out, they put the Union flag on something and it is only when one reads the small print that one realises that it is imported bacon or ham.

[Mr Bacon]

My hon. Friend is right. There have been some egregious examples involving some of the best known and highly admired supermarkets. Marks & Spencer, for example, was guilty of such practices, but I think that there are fewer of them now. The use of Union, English and Scottish—I was in Scotland for Christmas—flags in supermarket aisles is better and more appropriate, but we are not there yet and he is right that there is still work to do. Some supermarkets are leading the way on doing what I think would be the right thing, both for themselves in the long term and for the industry. I shall mention Morrisons in particular in a moment.

There is no doubt that supermarkets in general seem to be using their part of the supply chain to insulate themselves against the increasing costs of the production of pork and other pigmeat product, such as bacon, ham and sausages.

--- Later in debate ---

[Mr Bacon]

Of course, that is a common problem with very powerful retailers. We have seen it in the book trade—many book publishers have been driven under by that sort of practice by some book chains. We know that big factors in the marketplace mean that it is constantly dynamic—no static position, even if it holds for a while, will hold for ever—but that is another thing that the adjudicator needs to look at, because it is an exercise of market power that distorts in a way that could sometimes be thought of as anti-competitive.

Retailers have the power, if they choose to use it, to make a difference by using their stocking, labelling and pricing policies to promote the prominence of British produce and to ensure a fair return for British farmers, including British pig farmers. I pay particular tribute to Morrisons, which is the only one of the big four supermarkets to source 100% of its fresh pork from Britain. Morrisons has also committed to using British-only meat in its own-label sausages, and earlier this month the company’s chairman, Sir Ian Gibson—I am led to believe that he is no relation of the former Member for Norwich North—wrote to me about Morrisons’ backing for British farmers. He said:

“We recognise the pressure pig producers are under and will continue to be strong supporters of the sector. We are the only major supermarket to have such close control over the provenance of its meat, buying pigs directly from Britain’s farmers and processing the pork ourselves”.

He continued:

“This results in exceptional quality, freshness and value. It also enables us to offer industry-leading support to British farming. Our commitment to source 100% British fresh pork is unique among the major supermarkets and in 2011 we expect to reach the milestone of purchasing a million pigs a year from British farmers”.

That is extremely good news. Sir Ian added:

“This policy is popular with customers who we know show a preference for British produce if the price is right. Our combination of British provenance and quality at an affordable price sees us overtrade on pork—that is to say, our share of the pork market exceeds our overall market share”.

I think there is a lesson there for other supermarkets. Sir Ian continued by saying that not only are Morrisons

“major customers of British farming but we consistently pay over the market price for our pigs and we always have done. This was reflected in the results of an independent satisfaction survey of our pork farmers last year, with over 70% responding that they were happy at the price paid by Morrison”.

I salute Morrisons for backing British farmers so wholeheartedly and I wish them every success in their million pig milestone.

It would be remiss to not also mention supermarkets such as Waitrose, Marks & Spencer, Aldi, Lidl and the Co-op, which now all source 100% of the fresh pork that they stock from British pig farmers. All of that pork displays the red tractor mark, which is an independent logo that guarantees that the food it adorns was sourced from farms and food companies that meet Britain’s high standards of food safety and hygiene, animal welfare and environmental protection.

Such support, however, is not constant throughout the retail industry. On the day before the “Pigs are still worth it!” rally, Mr Andrew Opie, food director at the British Retail Consortium, commented in a press statement entitled “Pig farmers do have retailers’ support”:

“Retailers know some consumers prefer to buy British. They’re already doing what they need to to look after their supply chain and secure a sustainable UK pig industry”.

I am afraid that that will raise a hollow laugh from many pig farmers. Mr Opie goes on:

“Supermarkets do not generally pay farmers directly for their pork.”

Well, that will be news to Sir Ian Gibson, because that is exactly what Morrisons does. Mr Opie concludes by asserting that supermarkets have no direct relationship with farmers. Unsurprisingly, the BPEX chairman, Stewart Houston, described those comments as “complete rubbish”, before adding that supermarkets

“dictate prices to processors who pass those prices directly to producers. It is a very short supply chain and they have nowhere to hide. How much money there is in the supply chain is determined by the price supermarkets pay. It is as simple as that.”

[Mr Keith Simpson]

Am I right in thinking that supermarkets or their agents frequently inspect farms for hygiene, health and animal welfare?

[Mr Bacon]

They certainly do. They inspect or employ auditors independently to inspect British farms and say—Tesco has been saying this in correspondence with me over the past few days—that they do the same in relation to their foreign supply chain. I fear, however, that, when they have promotions at the discounted end of the market, that audit trail may run out and the provenance will not always be as clear as it should be.

Hon. Members may be disturbed to hear that there is evidence to suggest that British pork products are quietly being withdrawn from the shelves of our largest supermarkets and displaced by imports. Data from Kantar Worldpanel show that, over the past three years, the volume of pork on sale in British supermarkets that does not clearly identify a specific country of origin has increased, with a spike in sales of non-British pork having been recorded recently, in the past few months of this year and late last year.

Families in my constituency and across Britain who make their living from farming pigs may find their weekly shop at the local supermarket increasingly dispiriting. In-store observation by BPEX suggests that an overall increase in pork sales is being driven by promotional sales of imported pork that does not carry a quality mark. Imported pork has replaced British pork carrying either the quality standard or the red tractor. Where major supermarkets have run promotions on pig products that are multi-buy packs or are heavily discounted on price, it is mostly imported pork. According to BPEX, just one in five pork loins promoted by Sainsbury’s two weeks ago was British, Asda’s three for £10 promotion only included imported pork, and anecdotal evidence from BPEX members suggests that Tesco’s recent in-store promotion on the so-called gondola end—end of aisle—of three pork products for £10 also featured only Danish or Dutch meat.

That is borne out by Pork Watch, the bi-monthly survey of supermarkets conducted by representatives of the National Pig Association and by Ladies in Pigs. The most recent survey found that the overall number of pork facings—the shelf space allocated to a product line—has fallen from 80% in November last year to 77% in February, which is the lowest figure for the past 12 months. Facings of the red tractor or the quality standard mark for pork—both indicators that British welfare standards have been adhered to—have also fallen slightly from 75% to 73%, after making small gains last year. It is worth taking a particularly close look at Pork Watch’s findings on Tesco: it found that facings of “British” on Tesco pork had tumbled from 73% to 59% and red tractor facings had slumped from 63% to 55%—a fall of 14 percentage points in the British category, which is the largest decline of facings of “British” on pork in any British supermarket. About half of the pork on Tesco’s shelves does not bear the red tractor, which makes it unlikely that imported pork meets the UK’s welfare standards in all cases, despite Tesco’s claim that its overseas suppliers’ standards “broadly equate” to red tractor standards.

Let us be in no doubt that the situation facing British pig farmers is extremely serious. Of course, neither retailers, individual farmers, their industry bodies nor Members of Parliament can do much to influence world commodity prices. Feed is expensive because cereals are expensive, and that looks unlikely to change in the near future.