Managing Flood Risk

Roger Williams Excerpts

Monday 3rd March 2014 Commons Chamber

[Peter Aldous]

My hon. Friend raises a good point. The £5,000 grant is a good way for individuals to make their properties more resilient. In Bevan street east in Lowestoft the property with flood boards was the one that had very minimal flood damage. We should be building on this scheme where the flooding happened this time and also look at other areas that are vulnerable.

It is also important that local communities that have been affected by the floods are fully informed and advised as to what they should do. It is important to plan and rehearse flood plans so as to eliminate the need for frantic and ultimately useless activity once a flood has occurred.

[Roger Williams (Brecon and Radnorshire) (LD)]

The hon. Gentleman is making an important point about what householders can do to protect their own property. The Pitt report after the 2007 floods recommended that in flood risk areas insurance notices should include information on flood risk and the simple steps that can be taken to mitigate the effects. Does he agree that that would be a very good thing?

[Peter Aldous]

I agree entirely. One thing the Government need to be doing is making sure advice is provided through the local authorities on this £5,000. Support and advice must be given to local communities, in particular in streets where this problem is occurring, to enable them to put in place sound and practical arrangements as soon as possible.

Flooding (Somerset)

Roger Williams Excerpts

Monday 3rd February 2014 Commons Chamber

[Mr Paterson]

I am grateful to my hon. Friend for that question. He is absolutely right that there is merit in a lot of the smaller, low-risk schemes. What we have seen in the levels—it is a completely unique environment—is that the national guidelines were not appropriate for that artificial environment, and the same might apply in other parts of rural England.

[Roger Williams (Brecon and Radnorshire) (LD)]

If the pastures of the Somerset levels remain inundated for much longer, considerable damage will be done. Will the Secretary of State be able to give farmers advice and help to re-establish those pastures so that they can continue in business?

[Mr Paterson]

My hon. Friend is absolutely right to make that comment, because several of the farmers I have talked with were emphatic that, following the very wet summer we had last year, the grass could be permanently damaged. We are absolutely prepared to work very closely with organisations such as the National Farmers Union and the Country Land and Business Association to help those famers. I also pay tribute to the agricultural charities, which have also been very helpful on the matter.

Water Bill

Roger Williams Excerpts

Monday 6th January 2014 Commons Chamber

[Dan Rogerson]

The hon. Gentleman sets out his aspirations quite clearly by viewing the boundary between Wales and England in the same way as the sovereign state boundary between the Republic of Ireland and Northern Ireland, but I am addressing my remarks to the devolution settlement within the United Kingdom.

[Roger Williams (Brecon and Radnorshire) (LD)]

The Minister is well aware of the new clause’s implications for devolution. Does he agree that such a fundamental change would be better considered as part of devolution legislation, not as a new clause in a Bill on another matter?

[Dan Rogerson]

I thank my hon. Friend for his helpful intervention. He has somewhat pre-empted the remarks I was about to make, but I am happy that we speak as one on this issue.

Licensing of water suppliers is also not devolved. I recognise the deep, historical reverberations in Wales—we heard about them in the heartfelt speech by the hon. Member for Arfon—about the management of water, which is an essential natural resource. Much of the responsibility for water is, I am pleased to say, now devolved. However, further changes to the current devolution arrangements would have implications for customers and household bills on both sides of the border. They would also affect the companies, their assets and their operating rules, and possibly the people who work for them. Therefore, changes should not be undertaken without very serious consideration of all the implications.

The UK Government position is that we will not make changes to the devolution settlement in advance of the review and report by the Commission on Devolution in Wales—the Silk commission—which, as hon. Members will know, is led by Mr Paul Silk. The commission is currently working on part II of its remit and is expected to report in the spring. It is reviewing the powers of the National Assembly for Wales in the light of experience. The commission’s terms of reference make it clear that any changes it proposes must enable the UK Parliament and the National Assembly better to serve the people of Wales.

--- Later in debate ---

[Dan Rogerson]

I understand the hon. Gentleman’s views on social tariffs, which he feels have not been introduced in a speedy enough fashion. My point was rather about the issue of excess profits. I said that the hon. Gentleman was seeking to introduce a concept that is perhaps a subjective rather than an objective assessment of the profits made by water companies. The whole point of the price review process and price review period, however, is that a regulated process takes account of the need to attract investment and thus the need to make a reasonable return in profit.

[Roger Williams]

My understanding is that the water companies made larger profits because the period of very low interest rates benefited them to a great extent. However, basing an entire policy on windfall profits that might not occur in the future would certainly not be a very good idea.

[Dan Rogerson]

I thank my hon. Friend for his intervention. He is absolutely right to point out that what is proposed is a new bold national scheme built on profits that might or might not go up or down in accordance with the markets and through the price review process. Although I accept that the intention of the hon. Member for Dunfermline and West Fife is, as always, to be helpful, I feel that his scheme could use a little work and I therefore urge my hon. Friends to resist it should he seek to press it to a vote.

Let me move next to new clause 8, also tabled by the hon. Gentleman. It would place a legal requirement on water companies to include information in their bills about the WaterSure scheme, but, as I have said—I provided information to this effect to the Committee—all water companies already do so voluntarily. He made a point based on anecdotal evidence. I would be happy to see that evidence and I am sure that he will want to share it with us, but I think we should base our policy making on the evidence provided to us, and the Consumer Council for Water has been quite clear that companies provide such information to customers.

In addition, new clause 8 would place requirements on water companies to provide information about tariff structures and the lowest available tariff, a point picked up on by my hon. Friend the Member for Sherwood (Mr Spencer). The proposals simply fail to reflect the realities of the water sector as opposed, for example, to the energy sector. Water companies do not have complex tariff structures. The sole choice for the majority of household customers is whether to pay according to the amount of water they use through a metered tariff, which is particularly prevalent in areas such as my own, or according to the rateable value of their home through an unmetered tariff. The cheapest option for each household will therefore depend on the location of the property and the amount of water used by the household.

Many smaller households with low water use can benefit from a meter. Water companies are required to fit a water meter free of charge on request and they also advise customers on whether they might benefit financially from the installation of a water meter. A further point to bear in mind about the operation of WaterSure is that it caps the bills of eligible customers at the average of the metered and unmetered bill for the area. That could, in effect, put the bills of some eligible customers up and it is therefore not surprising that they have chosen not to apply for WaterSure.

There is no evidence, in my view, that further regulation is required in this area. As I have noted, all companies already include details of WaterSure in their household bills and they also all provide details of the support available to any customer struggling to pay their bill. Legislation to require the companies to do something that they are already doing voluntarily would be redundant.

The Consumer Council for Water works closely with the companies on the format of their bills. Its expert advice, as we discussed in Committee, is that one of the biggest risks in using water bills as a means of communication with customers is information overload. I do not, therefore, consider the new clause to be necessary.

Let me turn next to new clause 9, also tabled by the hon. Gentleman. We discussed an identical clause that he tabled in Committee. Section 45 of the Flood and Water Management Act 2010 already enables Ministers to introduce secondary legislation that would require landlords to provide water companies with personal details about their tenants or become liable for paying the bill. That was a point that the Chairman of the Environment, Food and Rural Affairs Committee was keen to emphasise, given her involvement with the passage of that Act.

Following extensive consultation with the industry and with landlords’ organisations the Government took the decision that a voluntary approach would be more suitable. During consultation, landlords argued that the additional regulatory burden would be disproportionate as they are not the source of the problem we are trying to tackle. At the same time, the evidence provided by the water sector to support the case for additional regulation was not sufficient to make the case for additional regulation of millions of small and micro-businesses.

The Government simply do not believe that more regulation is always the answer. As we discussed in Committee, good practice in tackling bad debt is not applied consistently across the water sector. The hon. Gentleman quite rightly took great pains to point that out. The significant variation in performance between companies tells us that the focus should be on driving better standards across the sector rather than regulating landlords.

One reason we do not propose to bring forward the bad debt regulations on landlords is that we do not wish to endorse the argument that performance on bad debt is not within the control of water companies. We think there is more that the companies can do to collect their debts and we want them to focus on that rather than look to the Government to solve the problem for them.

Of course, the real drivers of company performance are the incentives and penalties set by the regulator so I am pleased to be able to report that Ofwat has changed its approach to bad debt in the methodology it is using for the 2014 price review. The new approach will enable it more effectively to bear down on the costs of bad debt. It is doing so by insisting that the companies demonstrate that any increase in bad debt is genuinely beyond their control and that they have taken all available steps to control it. Unless they can prove that that is the case they will not be allowed to include it in customer charges. We are already seeing our focus on the industry’s taking responsibility for tackling bad debt bear fruit. As I mentioned in Committee, the industry is working with landlords’ organisations to establish a new voluntary scheme that will enable landlords to provide information about their tenants direct to water companies swiftly and easily.

--- Later in debate ---

[Miss McIntosh]

It is always a delight to be supported by the hon. Gentleman.

The current system for managing abstraction of water from rivers and aquifers was introduced in the 1960s, and does not effectively address the severity of pressures on water resources caused by increasing demand from a growing population and an increasingly varied climate. The current system does not help abstractors to trade water effectively or provide an incentive for them to manage water efficiently. The current weaknesses in the system mean that it could start to constrain economic growth, reduce the resilience of the water supply and lead to environmental damage.

I note that the reasons and need for abstraction reform are acknowledged and discussed in the Government consultation “Making the most of every drop”, which was published last December. When my hon. Friend the Minister replies, will he address the issue of why there was so much emphasis on abstraction and resilience in the water White Paper, and why we lost that emphasis in the draft Water Bill and, to a certain extent, in the Bill before us this evening?

The detail of a new abstraction regime will need to be developed following the end of the Government consultation, which was launched on 17 December. Following the conclusion of that consultation, which will not be until March, DEFRA will have to produce legislative proposals and secure space in the highly charged legislative programme before a new regime can be introduced. Once again, these amendments are intended to be entirely helpful and constructive.

During the Committee stage, the Opposition tabled a new clause to provide that upstream reform may not be implemented until new primary legislation on the licensing of abstraction has been passed, and five years has expired to allow for its implementation. Sadly, that proposal was voted down.

New clause 5 would require the Secretary of State to introduce a reformed abstraction regime within seven years of the Act being passed—by 2021. That was on the basis of the evidence that we received, and we believe that that is the most accurate and cost-effective timetable for all the parties involved.

The abstraction reform must be resilient to the challenges of climate change, or extreme weather conditions, and population growth and better protect the environment. Those high-level requirements are entirely in line with the key commitments regarding abstraction reform in the water White Paper.

Let me turn now to upstream and abstraction reform. In our pre-legislative scrutiny report on the draft Water Bill, the Select Committee called on the Government to make clear in the Bill the key principles that underpin the introduction of upstream reforms. Further work needs to be undertaken to establish how upstream reforms can be introduced in a way that will preserve investor confidence, ensure that customers do not face increased bills and maintain resilience in the sector. I was extremely pleased to see the emphasis on resilience in the water White Paper.

Upstream reform aims to encourage upstream competition. I am talking about the input of raw or treated water into a water company’s network or the removal of waste water or sewage for treatment. Clause 1 unbundles all the existing licensing structures so that new entrants can sell raw or treated water into an incumbent’s network. It also looks at the wholesale authorisation to input water into a part of the system. The Environment Agency’s statistics show that on average, between 2002 and 2011, only 45% of the annual total of water licensed for abstraction in England and Wales was actually abstracted. Therefore, if all of this unused but already licensed water was abstracted, there could be a significant deterioration of the environment. We hope that when the Government look at abstraction and upstream reform, they will bear these thoughts in mind.

One other aspect of upstream reform and abstraction that the Government should consider is, very topically, the role of water companies and other private sector companies in flood prevention and in protecting homes and businesses from floods. The Minister will be familiar with the work of his Department in the Natural Environment White Paper, which looked at a project known as ScaMP—Sustainable Catchment Management Programme—involving United Utilities in Cumbria. Surely there must be much more scope for the type of partnership approaches we have seen in Pickering where the first soil of the reservoir will be dug tomorrow.

I will conclude my remarks by looking at flood insurance. Amendments 5, 6, 7 and 8 seek to amend clauses 51 and 53. The Select Committee took a lot of evidence in relation to Flood Re and the potential for reinsurance companies. Given how deeply wedded the Government are to Flood Re, I hope that they have not closed the door completely on reinsurance. In summing up this debate, perhaps the Minister will inform us how the state aid application to the EU Commission in Brussels is going to enable Flood Re to come into effect according to the Government’s timetable.

Clause 51 and the amendments we propose to it would have the effect of bringing small businesses within the ambit of Flood Re. There is considerable doubt and anxiety that small businesses will not be covered under the new Flood Re proposals. The impact that flooding can have on small businesses is clear. In 2001 and 2005, a dental practice in my constituency was flooded twice and the dental chair and all the computer equipment had to be replaced each time.

[Roger Williams]

I am sure that many Members will have a deal of sympathy for my hon. Friend and her concern for small businesses. I guess that the difficulty in getting this into legislation will be how to define a small business. Perhaps she has some ideas on that.

[Miss McIntosh]

Like my hon. Friend, I merely shadow DEFRA so I do not have the definition to hand, but I am sure that the Federation of Small Businesses will have a definition. I think it is generally deemed to be a business that has fewer than 50 employees, though many small businesses employ five or fewer or are often a single employee. The example I cited was that of a small dental practice with two or three dentists. The knock-on effect on an independently run, stand-alone dental practice of fitting, for the second time, a new dental chair and computer equipment goes beyond what would normally be expected. The knock-on effect on the insurance premium and excess for that dental practice was considerable and, possibly, unaffordable.

Flooding

Roger Williams Excerpts

Monday 6th January 2014 Commons Chamber

[Roger Williams (Brecon and Radnorshire) (LD)]

I join the Secretary of State in praising the emergency services that helped and protected communities in the face of flood and storm damage. In Wales those were mostly coastal towns that depend on tourism for their living. He has already said that it is a devolved matter, but will he work with his ministerial counterparts to ensure that there is a Barnett consequential for the Bellwin formula so that local authorities can reinstate the infrastructure and the towns can be ready to welcome tourists later in the year?

[Mr Paterson]

I am grateful to my hon. Friend, who raises an important Welsh point that we heard earlier. Obviously the Welsh Government were represented in the meetings of Cobra, and I talked with my right hon. Friend the Secretary of State for Wales only this morning. I think that the appropriate route would be to write to him, because clearly consequentials have been cited in relation to the large Welsh coastline.

Fly-Grazing of Horses

Roger Williams Excerpts

Tuesday 26th November 2013 Westminster Hall

[Roger Williams (Brecon and Radnorshire) (LD)]

It is a pleasure, Mr Hollobone, to serve under your chairmanship this afternoon. I congratulate my hon. Friend the Member for East Hampshire (Damian Hinds) on securing this important debate.

I am secretary of the all-party group for the horse, which is well aware of the extent and depth of the equine crisis. It has been caused by the cost of keeping horses, which has increased at a time when many family incomes have come under pressure, with people finding themselves less able to look after their horses and ponies properly. The people involved in fly-grazing are many and varied. Some keep horses commercially and their incomes have decreased. Rather than disposing of their horses responsibly, they have tried to keep them irresponsibly. There was a terrible example in Wales of someone who kept many coloured horses and bred from them, but slaughtered every colt foal, keeping only filly foals. It was one of the worst examples of animal welfare abuse I have come across.

Some people who keep horses for personal or recreational purposes can no longer afford to keep them. However, because they cannot afford to put them down—doing so responsibly is quite an expensive affair nowadays—they let the horses out on any available ground. That ground is variable, as we have heard. Sometimes the land is owned for proper purposes by the local authority, on verges beside roads, and sometimes it is owned privately—we have heard examples of that. However, one example we have not heard about—although the hon. Member for Islwyn (Chris Evans) mentioned this—is that when people cannot afford to keep horses and ponies, it has sometimes been the practice in south Wales to turn them out on common land. That land is often extensive and remote. If a horse is turned out there, it is out of sight and out of mind, but it will suffer greatly, particularly as winter approaches.

Some commoners’ associations act responsibly, and at this time of year will gather all the horses and ponies from the common and establish who owns them and whether they are fit enough to go back on the common for the winter. Welsh mountain ponies are bred to survive difficult conditions and are fed only when conditions are extreme and there is snow on the ground. The commoners will bring in all the horses and dispose of them humanely if they cannot establish who an owner is. I congratulate commoners’ associations that act in that way—I have experience of one common, the rights of which are owned by the Duke of Beaufort, who acts responsibly.

The problem is not the fault of the horse or the pony, and dealing with the horses or ponies is not the way to ensure that such practices stop. Therefore, we must take action against the owners. I know the difficulty—many hon. Members have rightly emphasised the need for a proper identification process, so that we can establish who is responsible—but action must be taken against owners who have caused or are likely to cause harm to the horses.

My hon. Friend the Member for York Outer (Julian Sturdy) spoke about people who are already banned from keeping horses who are then found to have committed the offence again, but suffer very small penalties. As far as I am concerned, there is only one penalty for anyone who is banned from keeping animals but then found to be doing so without looking after their welfare properly and responsibly, and that is imprisonment. If that was the case, the message would go out that people cannot abuse horses or any animals in their care, and the situation would improve. However, only when magistrates courts understand the severity of such actions will such people be sent to jail.

Water Bill

Roger Williams Excerpts

Monday 25th November 2013 Commons Chamber

[Joan Walley]

I am grateful to the hon. Gentleman for his intervention, and that is exactly the point I am making: our water policy needs to take into account the whole issue of mitigation to prevent such situations, but it also needs to be adaptable. The adaptation that we need requires huge amounts of investment and a whole new, collaborative approach to planning. The Bill has been brought forward by DEFRA, but as the Energy and Climate Change Committee has pointed out, it is the problems associated with climate change that are bringing about flooding, and we have to find new ways of dealing with them urgently. It has taken much too long to deal with outstanding flooding insurance claims. Importantly, it is a question not just of how we deal with individual claims and of having an insurance system in place, but of how we deal with all the associated disruption.

As we approach the European elections—I am sure that many of us here will be thinking about what Europe has done for us—how do we ensure that water supply and management fits within the context of the European water framework directive? We have a fundamental disconnect at the heart of water policy which the Bill could actually put right. As my hon. Friend the Member for Garston and Halewood said, the Bill is a wasted opportunity. The water companies, regulated by Ofwat, supply water, but at a local level there is little meaningful collaboration, accountability, transparency or resource, as has been mentioned, to ensure that we have in place what is needed to meet the requirements of the water framework directive.

The directive has two key objectives: an environmental objective, based on the premise of preventing further deterioration and achieving “good status” in all waters; and a managerial objective aimed at creating integrated water management at the river basin level to ensure overall co-ordination of water policy. Here, I want to make a plea to the Government and to DEFRA on behalf of the Environment Agency. The agency needs to be fully resourced for its task of leading the framework directive, in order to enable it to identify significant water management issues, to develop measures to address these at the river basin district level, and to develop and publish the plans for implementing these measures, known as the river basin management plans.

Given the length of time it takes to get legislation on to the statute book, equipping the Environment Agency to work within the framework to carry out its responsibilities needs to be looked at in parallel with the Water Bill before us. Let me give an example of the current unsatisfactory position. When the Government set up the Canal & River Trust in 2012, they committed to a new structure for the canal network which included the navigational waters—some 2,000 miles of canals and river navigations in England and Wales. These rivers were to be handed over to the trust to ensure certainty and long-term funding through the trust arrangements. However, we now know that the Chancellor has reneged on this commitment, and the plans have been put on hold. I am grateful to the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson), for agreeing to meet me to discuss this issue, as I believe it is vital that this transfer take place and be fully funded.

There is a further concern, which was touched on in an intervention from my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller). Through clause 12, Ofwat is to be given the power to intervene in private supplier agreements with water undertakers, with the apparent intent of assisting smaller private water suppliers in their commercial relations with undertakers. Not surprisingly, the Canal & River Trust is alarmed that Ofwat will therefore be able to vary or terminate water sales agreements at the request of the undertaker and without the agreement of the trust. I heard the Secretary of State’s rather complacent reply to my hon. Friend’s intervention, and I hope that, when the Under-Secretary replies, he will tell us what specific, constructive discussions he will have with the trust on this issue, so that we can make amendments to the Bill that will safeguard delivery of the trust’s charitable objectives when the Bill’s legislative passage is completed.

There is uncertainty about other aspects of the Bill, as well. The Bill is all about the economics of, and very little about the environmental and social aspects of, water policy. It mirrors the assumptions that lay behind the changes to the water industry proposed back in 1987, rather than looking at the assumptions we need to make today for the future. Here, I would like to give credit to the former Environment Minister, the hon. Member for Newbury (Richard Benyon), who only last week in the press disclosed how close we were to drought just before the 2012 Olympics. There are also many other factors that point to the need for long-term planning.

We need to take account of the work of the Natural Capital Committee, which is looking to embed the value of natural capital in the national accounts and policy making as soon as possible. We must also recognise the need to look for a credible long-term plan to restore our natural capital, and recognise the work of the Committee on Climate Change. Reference was made earlier to the adaptation sub-committee report, which highlights the need to incentivise efficient water management and to have a price for water that better reflects its scarcity. Of course, there are also the risks associated with water flooding. All these factors point to the need for a much wider, all-encompassing approach to water than the one the Bill provides for.

We should also address the issue of Ofwat having a primary sustainability duty. Its role of granting new water supply licences and overseeing bulky supply agreements should include consideration of the sustainability of water sources. There is common agreement that, without such a duty, we will see over-abstraction, over-licensing and greater environmental damage to our already overstressed river systems. We have heard the Secretary of State’s response to concerns about fracking. He has stated that all the protection and regulation that we need is already in place. However, the proposal for financial guarantees in relation to pollution that my hon. Friend the Member for Garston and Halewood outlined will be vital, and I hope that they will be incorporated in the Bill as it completes its passage through both Houses. I know from the initial meeting that the Minister kindly organised recently that there is widespread concern among many organisations, including the WWF, the Royal Society for the Protection of Birds and the Angling Trust, about the need for a primary sustainability duty, not only on resilience, to be incorporated in the Bill. Will the Government table an amendment on sustainable development? Will the Minister tell us how he intends to deal with this issue?

I want briefly to broaden the debate. Following the discussions that I have had with many different experts in the industry, I do not believe that we should be carrying on with business as usual. Instead, we should be gearing up to a different set of policies designed for the 21st century. The confluence of the various factors I have mentioned means that we should be taking a more fundamental step change in how we invest in improving the environment and safeguarding our water supplies.

I would like to see far more local governance arrangements that would fit with the river basin concept, involving not just water companies but local councils, farmers and other organisations working together on a risk-based approach. I should mention that some water companies are starting to think outside the box. I refer the House to a recent document published by Severn Trent Water, “Changing Course through the sustainable implementation of the Water Framework Directive”. We need much more collaboration of that kind, but the Bill does not really give it to us.

I want to mention the work that I have been doing in my constituency to bring all the different partners together. This has culminated in an application for European funding under the Life Plus programme, which would enable us to implement measures that would prevent pollution in the River Trent. We need to see much more of that kind of approach. Water efficiency should also be promoted.

The Bill will promote greater competition, but what will it do to challenge traditional kinds of capital investment? We should be looking into different kinds of investment. Expensive engineering solutions are not always the way forward, even though the water companies depend on capital value for the returns that they make. If the Government can be persuaded to introduce an obligation for sustainability into Ofwat’s powers, Ofwat could look at a return on revenue expenditure, too. We need to look at the kind of investments involved. The Bill could enable Ofwat to take a much more proactive role in vetting companies’ proposals for investment.

I would also like to see the dividends paid out to water company shareholders managed differently. Yes, money is needed for investment in water management, but it would be so much better if the profits could stay in the business and be reinvested, rather than global private equity companies that do not necessarily have a long-term commitment to our river basins paying out massive returns—well above what we can earn in interest from our bank account—to shareholders.

[Roger Williams (Brecon and Radnorshire) (LD)]

The hon. Lady is describing the model used by Welsh Water, a not-for-profit company that is responsible to its customers, rather than to shareholders.

[Joan Walley]

Indeed. One difficulty is that we are looking at the provision of water for the whole of the United Kingdom, despite the different administrative arrangements that have been put in place by the Parliaments in the different Administrations. The way in which the money is reinvested in Wales is hugely beneficial. As I have said, we should be thinking outside the box in regard to how we incentivise the necessary investment in our water industry.

--- Later in debate ---

[Hywel Williams]

Indeed. I was aware of that. He is a friend of mine and I think highly of him.

My party’s stance has always been that it is up to the people of Wales to decide on the sustainable use of its natural resources. As scarcity bites, the economic case for Wales exporting water is growing. If so, Wales should be compensated fairly and the benefits should go to the people of Wales.

There is a point which has not yet been made— the territorial significance for Wales of the current water companies. Labour in government, through the Government of Wales Act 2006, failed to act on that. Much of mid-Wales is served by Severn Trent Water. Part of north-east Wales is served by Dee Valley Water. As a consequence, perhaps, part of Herefordshire is served by Dwr Cymru Welsh Water. One of the aims of my party is to regularise that situation. The lines should be redrawn. That is something that I will talk about in Committee if I am fortunate enough to be appointed to it.

As for the current arrangements in Wales, to paraphrase L P Hartley, Wales is another country: they do things differently there. That is a slightly over-used phrase, but in Wales we have a different situation. We have a water company, Dwr Cymru Welsh Water, which is a third sector company, as I mentioned earlier, with a non-distributable profits model. The previous company, Hyder —or Hi-dere, as the BBC used to insist on calling it —was run on conventional commercial lines. Glas Cymru reinvests its profits in a better system and in lower prices. As I said, its current price rises are below inflation.

[Roger Williams]

The hon. Gentleman will know that price rises since Glas Cymru was formed in 2001 and up to the present day are below the rate of inflation. It is the long-term situation.

[Hywel Williams]

The hon. Gentleman makes a good point. Provision of water in Wales is a difficult matter. The geography is against us, but Glas Cymru has done a fine job.

There have been concerns about large profits in the industry, overcharging and a lack of investment, alongside high gearing and a low tax take. I read a report to that effect in the Financial Times on 27 October. Hence the need for greater competition. A water industry insider put it to me thus: some water companies are over-geared, they are over-reliant on cheap finance, which is not going to be there for ever, and they are run as cash cows. This is not a sustainable model. Dwr Cymru has the lowest gearing in the industry and, as I said, all its profits are ploughed back. Unsurprisingly, this third sector company has reported customer satisfaction levels of well over 90%.

Another way in which things are different in Wales is the Welsh Government’s stance on competition, which essentially is against it. Under the Bill, businesses and non-householder customers will be able to switch their water and sewerage suppliers, but the Bill’s provisions on competition are confined to England. I refer the House to the report by the Welsh Assembly Environment and Sustainability Committee chaired by Lord Dafydd Elis-Thomas. When questioned, 113 large-scale users—using over 50 megalitres per annum—said that a price differential of 10% to 15% would be required to tempt them to switch. By the way, that was also the stance of small and medium-sized enterprises.

A price differential of 10% to 15% is substantial, and it is significant that none of the large users that have the ability to switch in Wales have done so. Customer service is important and that is a central element of the water service that we have in Wales. Either Dwr Cymru is doing a cracking job, or switching is unlikely to hold much appeal other than, perhaps in theory, to Ministers.

Competition could be extended to Wales if the Welsh Government so wished. Dee Valley Water’s evidence to the Welsh Assembly Committee noted that competition in the non-domestic sector might be cross-subsidised by the domestic sector—that is, the public would be paying. That point was made earlier, and the answer, I think, is transparency. I understand that the Government in Cardiff do not wish competition to be extended to Wales. Can the Minister, when he winds up the debate or later in writing, clarify whether under the 2006 Act the Government in London have a veto on Welsh decisions on water? Will that continue to be the case, or is the Cardiff Government’s right to choose not to introduce competition an absolute right? I would be grateful to hear from him on that matter.

Other Members have posed the question of how we can incentivise companies to alter the way they manage their systems and water and sewerage networks to improve efficiency and to encourage the development and deployment of innovative technologies that can cut costs and lower the sector’s electricity usage and its carbon footprint. The point has not yet been made that water companies are heavy users of electricity. I am not sure whether competition and the price instrument will achieve all these aims. I hope we will able to discuss this further in Committee.

Lastly, on affordability, the question is how the bottom 1% of the population pays for its utilities. Overall, the Bill is a missed opportunity. It has no specifics on sustainability or the decarbonisation of the water sector. The point about fracking has already been made. There is no legal obligation on people to pay their bills. In other countries, there is a voucher system for vulnerable groups. The Bill is also lacking in specifics on water management. The current UK system is luxurious in that there is no separation of clean and grey water, which could be achieved in the future. That is a formidable list and I hope we will have the opportunity to address these matters in Committee.

--- Later in debate ---

[Roger Williams (Brecon and Radnorshire) (LD)]

It is a great pleasure to follow my hon. Friend the Member for Cardiff North (Jonathan Evans). In a different incarnation, he was my Member of Parliament, and indeed my tenant, so our relationship goes back a long way. His expertise in insurance, which he brings to this debate, is well known. We have heard many other contributions tonight, including from the hon. Member for Newbury (Richard Benyon), who has great experience and knowledge of these matters. Had he been introducing the Bill, he would have had three years to prepare, whereas my hon. Friend the Minister, whom I am pleased to see here, has had about three weeks. Nevertheless, he was a member of the Environment, Food and Rural Affairs Committee that scrutinised the draft Bill and will be aware of the detail and some of our concerns about things that are not in the Bill.

I broadly welcome the Bill. One of the vital challenges facing the UK is the need to protect the health of our rivers and lakes, while keeping water available and affordable. Water resources are currently under considerable pressure, and it is predicted that water constraints will become more severe in the future. There is limited competition in the current system, so I welcome the competition clauses, which will open the sector up to more competition and encourage the construction of more connections between water company areas. The introduction of retail competition among water companies could support greater water efficiency in the non-domestic sector.

Although I welcome the idea that businesses and local authorities can switch water suppliers, I recognise that individual consumers will not have that opportunity. The regulator must ensure that bills remain affordable, while expecting water companies to have the ability to invest in the infrastructure. We need consumer bills to be affordable now, but we must also recognise that water supplies are needed for the future, so I hope that we can amend the Bill in Committee to make it better for consumers and for the environment. There has been concern that, as companies compete for customers in the commercial sector, domestic customers may carry more of the costs of supply. We will need to hear from the Minister in Committee how that will be prevented.

The system for abstraction licences is not fit for purpose and is long overdue for reform. The Government have said that the work will have to wait until the mid-2020s, but it is important to address it much earlier than that. We need a system of licensing abstraction that balances resilience with the state of the environment.

One of Ofwat’s secondary duties is to promote sustainable development. Liberal Democrats would like to see that duty elevated to a primary level. For that reason, I intend to table an amendment in Committee to give Ofwat a primary duty to promote sustainability. I agreed with the comments of my noble Friend Baroness Parminter, in a debate on the Gracious Address in the other place, that a thorough examination is needed of the effect of the water industry on the environment now and in the longer term.

Ofwat seems to have a rather confused approach to sustainability. Let me quote from the supplementary written evidence submitted by Ofwat to the EFRA Committee in respect of the draft Water Bill:

“I provide further written evidence on specifically why we consider that our duty to contribute to sustainable development should not be elevated to a primary duty”,

yet it also said:

“Indeed, the core vision of our strategy is: ‘A sustainable water cycle in which we are able to meet the needs of water and sewerage services while enabling future generations to meet their own needs”,

It calls this “sustainable water”—it seems to me that its thinking is rather confused. My understanding of sustainability is that it is about balance, not conflict, and Ofwat should be well aware that its decision making can affect the environment as well as economic and social matters. I believe that Ofwat has accepted the need for sustainability as a primary duty and that the Government should legislate to establish it.

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

The hon. Gentleman, who represents a constituency not far away from mine, makes some very good points. Does he agree that in his opening remarks the Secretary of State seemed to be arguing for that duty of sustainability and, indeed, that his rhetoric fitted exactly what the hon. Gentleman suggests should be on the face of the Bill?

[Roger Williams]

I thank the hon. Gentleman for those comments. There is widespread acceptance that sustainability should be a core feature of Ofwat’s work, yet it seems that some people are setting their face against having that on the face of the Bill.

The UK has been faced with an increase in the number and severity of flood events, and it is vital for the Government to provide widespread and affordable household insurance in at-risk areas. I thus welcome the proposed new legal framework that seeks to establish Flood Re—a levy-funded reinsurance pool for high-risk individuals. If that is introduced, insurance companies must make their customers aware of the scheme and the opportunities it provides. A number of my constituents in Llangammarch Wells were really frightened by some press releases put out by the Environment Agency in Wales—now called Natural Resources Wales—about restricted insurance. After further consultation with Natural Resources Wales, we have been able to sort that matter out.

Water bills set a particular challenge for low-income families. There are no specific benefits such as housing benefit or council tax benefit to help with these costs, but the Government have stated that they will continue to support the WaterSure initiative, even though take-up has been rather poor. Other water companies can bring forward their own schemes, and Welsh Water provides a good example of how that can be done in practice.

The water industry is responsible for the most essential public services. Few things are more important for public health—or indeed for normal day-to-day living—than a safe and reliable supply of drinking water, and the efficient collection and treatment of waste water. More than 90% of health improvements over the last two centuries have resulted from the provision of safe-to-drink tap water and proper sanitation.

The water industry everywhere is very capital-intensive. Many of its assets—reservoirs, treatment works, water pipes and sewers—have very long lives, but, even when we allow for that and for the fact that investment doubled after privatisation in 1989, the average age of water company networks is increasing every day. The rate of renewal of sewers, for example, gives an average assumed age of more than 600 years. Investment levels are agreed with regulators every five years, and investment decisions are based on the priorities for the years ahead.

The water industry invests and spends more than it receives from its customers through bills. It finances its expenditure by raising money from investors in the capital markets, and so far that money has come almost entirely from bonds and other borrowing. In other words, the industry is cash-flow negative, and that will persist, partly because of the backlog of asset renewal but mainly because of the new standards that must be met. As a result of that cash-flow negativity and continuing high and necessary levels of investment, the cost of capital and funds raised from the capital markets is key, and will become more and more important. The cost of capital on money raised since privatisation already absorbs a third of the bill, and relatively small changes in the allowed or achieved cost of funding. Every 1% saving on the cost of financing the industry’s “regulated capital value” reduces customer bills by 5%.

Given that so much of the value chain is represented by the network of assets, both the raw material and the retail element represent a very small part of the overall bill. The Water Bill proposes that business customers in England should be allowed to choose their water retailers, but the Welsh Government have decided not to go down that route. As Professor Dieter Helm has said, large business customers will argue that they should pay only marginal costs, and if water companies succumb to the pressure, it will mean higher bills for household customers.

The true cost per customer varies enormously, and the rural customer costs many times more than the urban customer. Averaging the cost in that way is good public policy. “De-averaging” poses a real risk by giving business customers choice, thus causing water companies to reduce their tariffs locally to satisfy demands from big customers and to recover the lost income from household customers who cannot exert the same pressure.

The water industry should be owned, managed and operated in the interests of customers. I do not believe that it should be re-nationalised, but this long-term industry provides us all with the most essential of public services. Few things are more important to public health, and indeed to modern life, than a safe and reliable supply of tap water.

[Huw Irranca-Davies]

At the risk of being slightly parochial, may I ask whether the hon. Gentleman finds it odd, given the rush to privatisation all those aeons ago, that we have only one mutual water company? In a week in which we have heard bad news about co-operative movements and so on, we should bear it in mind that that one mutual company has achieved very high levels of customer satisfaction, has invested massively over the last couple of decades, and manages to keep its bills pretty low despite having no profits, no shareholders and no dividends.

[Roger Williams]

I think that it will come as no surprise to the hon. Gentleman that I am not only a customer of Welsh Water, but a great fan of the model. Welsh Water is just about the only public utility company which receives letters of support that outnumber its letters of complaint, and its credit rating is higher than those of all the other water companies. It can borrow at almost the same rate as the Government.

The water company that serves Wales, and much of Herefordshire and Deeside, is owned, financed and managed on behalf of its customers. Glas Cymru has a strong board with a majority of non-executive directors, all of whom are individuals of high standing. It complies with corporate governance best practice, although it has no shares listed on the Stock Exchange. It accounts for its performance to its members and other stakeholders and measures its performance against things that really matter to customers: drinking water, reliability of service, protecting our rivers and coastal waters from pollution, and customer satisfaction. The pay of everybody who works for Glas Cymru is linked to performance against those measures, and because Glas Cymru is one of 10 large water and sewerage companies in England and Wales everyone can judge whether it has done a good, bad or middling job on the measures that matter to customers and the environment. Welsh Water is unique in the water industry. Its employees are rewarded on the basis of customer satisfaction rather than shareholder value. The Bill does not address the structure of the water industry—that may be for another day—but I welcome its broad thrust and look forward to working on the Bill Committee with my hon. Friend the Minister.

Oral Answers to Questions

Roger Williams Excerpts

Thursday 21st November 2013 Commons Chamber

[Dan Rogerson]

We want to focus our efforts on reducing air pollution, and we are confident that we will have enough information coming back from monitoring to ensure that we can update the position. As I said in answer to a previous question, this issue remains a Government priority and we will take action on it at European, national and local levels.

[Roger Williams (Brecon and Radnorshire) (LD)]

There is conclusive scientific evidence that sheep as a species is not infected with a prion that causes new vCJD. Nevertheless, certain regulations relating to sheep, such as the compulsory splitting of carcases over 1 year old and the ban on on-farm burial, are based on the belief that sheep are so infected. What will the Minister do to take forward an investigation to ensure that these costly regulations can be brought to an end?

Natural Capital (England and Wales)

Roger Williams Excerpts

Monday 21st October 2013 Commons Chamber

[Roger Williams (Brecon and Radnorshire) (LD)]

I, too, congratulate my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on securing this evening’s debate. I thank the right hon. Member for Meriden (Mrs Spelman) for speaking so knowledgeably about this issue; she was responsible for seeing much of what we are discussing tonight come to fruition.

The coalition agreement stated:

“The Government believes that we need to protect the environment for future generations, make our economy more environmentally sustainable, and improve our quality of life and well-being.”

Following on from that, the Government published the White Paper, “The Natural Choice: securing the value of nature”, a recommendation from which led to the setting up of the natural capital committee to provide independent advice to the Government on these important matters.

It was done against the background of a previous century in which the world population had increased by 50%; there was a fortyfold increase in industrial output; and an increase of 16 times in the amount of energy used, greatly increasing emissions from sulphur and carbon. The natural capital was obviously put at risk by such a great increase in activity, and no policies were in place to ensure that it could be sustained and maintained.

Let me draw a comparison between us getting to grips with the concept of natural capital now and what happened at the first Rio conference when the issue of sustainability was first put forward. It was difficult at that time to get people to understand what was really meant by that concept, and I think we are still wrestling a little with it at the moment. Sometimes the interpretation of sustainability is used to promote a particular argument or project that we might wish to advance.

I was in a little chapel in Bryn Pont in Pontfaen in my constituency last night, where the Breconshire young farmers were having their harvest festival. They took the service themselves, being wonderfully able people. As I listened, I was thinking that, because of their role in land management and land ownership, they will be the people on whom much of this responsibility will fall. I wondered how they would grasp this concept of natural capital.

I am sure that the people in the committee who wrote the report are very able and that they followed fully the academic rigour and, indeed, the financial accuracy necessary for such reports. However, I think that the committee has a little way to go when it comes to explaining the subject to other people. It will be advising the Government on policy, but unless people understand and can align themselves with that policy, it will be extraordinarily difficult for them to deal with it. For example, the report offers the following:

“Definition of natural capital asset: Define the component of natural capital under consideration, the temporal and spatial scales being considered and the relationship between the natural capital asset and the services it provides, directly or in conjunction with other assets”.

I am not sure how that can be translated into user-friendly language. What I am sure of is that a great deal of work will be required to enable people to associate themselves with the project.

We have been given an example of the way in which natural capital can be used to assess the effect of a particular development, and then to offset it by replicating an environment or ecosystem that may have been damaged by that development. I think that the concept has a great deal to offer. I know that the Secretary of State for Environment, Food and Rural Affairs is particularly interested in using offsetting to allow economic development to take place in areas where it has been problematic in the past, and I attended a debate in Westminster Hall during which the Under-Secretary of State for Communities and Local Government, the hon. Member for Grantham and Stamford (Nick Boles)—who is responsible for planning—spoke about developments in national parks and how they could be facilitated. However, I think that we must approach the process with considerable caution, because it is sometimes almost impossible to replicate ecosystems that have been damaged by development. It may work in some instances, but in others the environment will be so pristine that it will be impossible to replicate it elsewhere.

Mention has been made of the value of children and young people who have experience of the countryside and take part in activities there. On Saturday night I attended the first showing in Wales of a film called “Project Wild Thing”, which explained how we could encourage young people and give them opportunities to make the most of their experience in the countryside. There is also a National Trust programme entitled “50 things to do before you are 11¾”. I shall be sending a copy to my grandson, who has already undertaken one or two of the recommended activities. If we ensure that our natural capital can be maintained, it will greatly benefit the development and health of our children.

[Joan Walley]

Does the hon. Gentleman agree that it is important for all Members to do their utmost to arrange screenings of “Project Wild Thing”, which was launched by the Royal Society for the Protection of Birds in the House of Commons last week?

[Roger Williams]

I certainly do. It is a very inspiring film. People will interpret it in many different ways, but I am sure that every way in which it is interpreted, and implemented, will enable children to benefit from it.

I think that the development of the concept of natural capital will be of considerable use to the Government when they are setting policy. However, one Member said that while it was some use if implemented nationally, it would be of greater use if implemented internationally.

Some 12 of the 13 recommendations in the Committee’s first report are process recommendations—they are about the way this should be approached—but the 13th recommendation is about agriculture. It recommends that the common agricultural policy should be radically reformed and that as much of the pillar 1 money as possible should be moved to pillar 2. I think that many of us would agree with that, but it depends on what the pillar 2 projects are. Also, it would be entirely inappropriate for policies to be implemented in this country while we have a single market that would put our farmers at a disadvantage to those on the continent.

There is a graph in the report showing the wheat yields in this country. They have increased from about 1 tonne an acre to about 3 tonnes or more. Sadly, however— and chillingly in some respects—there have been reductions in wheat yields in this country in the last two years. For those two years we will be net importers of wheat, whereas we have been a wheat exporter in the past.

We talk about farmers delivering public services. I think the greatest service the farming community can deliver is a sustainable supply of food at an affordable price. There is therefore a balance to be struck between food being produced by farming and the protection of the environment.

This concept will be very useful and very informative for the Government in delivering their policies, but we need to show that the public understand the concept as well, and are able to engage with it.

Food Contamination

Roger Williams Excerpts

Thursday 17th October 2013 Westminster Hall

[Roger Williams (Brecon and Radnorshire) (LD)]

It is a great pleasure to serve under your chairmanship, Mrs Osborne, at this late hour on a Thursday afternoon. I should begin by declaring an interest. I am still involved in a farming business that produces red meat: beef and lamb. I commend the Chairman of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), and the members of the Committee for the work that they have done on this very important matter. I also commend the NAO report that has recently been published.

The sound and fury has gone out of this matter for now, but that does not mean that it is not extraordinarily important. It is extraordinarily important for our farming communities that their product should not be contaminated again in the future and extraordinarily important for consumers that they should have the ability to choose what they want to eat, knowing that it is as described on the label. Sadly, however, the history of food is full of examples of contamination and adulteration. The watering down of beer is a heinous crime, but it has been perpetrated everywhere. It is not the only one, unfortunately.

I would like to draw a distinction between contamination and adulteration. As far as I am concerned, contamination is when a small quantity of extraneous material finds its ways into foodstuffs. That usually occurs because of negligence or carelessness in the preparation or processing of food, in relation either to buildings or to equipment. Sometimes contamination may not be serious. It may involve inert material. But sometimes, of course, it can be very serious indeed. One example is the poisonous material ergot in rye bread; I can think of other examples. It is also very serious when infective material gets into foodstuffs. Sadly, there are outbreaks of E. coli from time to time in this country. Of course, the Chairman of the Select Committee mentioned the presence of pork in food that is supposed to have been processed to an halal standard, which is grossly offensive to the Muslim community. That is particularly serious as well.

I define contamination as something that does not take place deliberately, but it quickly became apparent to me during the so-called horsemeat scandal that what was happening was not happening through carelessness. In the main, it was a deliberate attempt to make money out of fraud, and we should see it in that light. People from time to time do see the opportunity to do that. If they can introduce something into a foodstuff that does not necessarily alter its appearance, taste or consistency, they can get away with it for a short time before more sophisticated tests can be done on that foodstuff. The Chairman of the Committee mentioned the changes in the way in which certain foodstuffs, including meat, could be included in other foodstuffs.

Adulteration also occurs when we have high commodity prices for meat or for any foodstuff, and of course the price of meat has risen quite considerably. If it rises quickly, there are opportunities for the less scrupulous to introduce a cheaper product into what is a fairly expensive product. My criticism of the supermarket and meat processors still stands: rather than accepting that the price of the commodity had gone up, they were scouring the European markets and probably the world markets to find a cheaper product. That gave an opportunity for less scrupulous people to get involved and make money.

[Huw Irranca-Davies]

The hon. Gentleman makes a good contribution. He has a great background in this area. Does he agree that a signal change of the past few decades has made good governance necessary, as the hon. Member for Thirsk and Malton said? Whereas a previous outbreak to do with either food providence or safety may have been relatively isolated in a region—I have had them in my area—nowadays the potential danger and risk are much greater, because they are transnational and affect the plates of far more consumers, potentially in many different countries? That is why governance is important.

[Roger Williams]

I agree. My hon. Friend—he is a Welsh MP with me, so I will call him that—reiterates the words of the Chair of the Select Committee. That was a conclusion the Committee came to.

I was going to say that part of the complexity with the process was that the contamination was not happening in only Britain or one region of Britain. Very long and complex food chains were undoubtedly involved, and part of the problem is that we do not know where some of the products originated. For me, one of the key things to come out of the NAO report is on page 5:

“Six months on, inquiries are still ongoing and the original source of the adulteration has not been identified.”

It goes on to say that some people have been arrested. For all that our Government have done and for all that Governments on the continent have done, we still do not know where the horsemeat entered the food chain. Until we can establish that, we will not have done a good job and we will not have deterred other people from trying to make opportunistic profits.

If we do not know where the meat came into the food chain, we have no idea what its provenance was. We do not know whether the animal was slaughtered in a registered slaughterhouse or the back shed of a farm somewhere. We have no idea about the safety of the meat. It appears to many of us that the crisis did not involve any human illness, but if we do not know the provenance of the meat, we do not know if that was by luck alone. It is key that we continue our work and work with our European partners on a governmental as well as a police level to identify where the horsemeat entered the food chain.

[Huw Irranca-Davies]

What are the hon. Gentleman’s views on the need for deep intelligence across Departments in analysing what is going on? There could have been a moment when the contamination could have been picked up. It is all very well saying that in hindsight, but it could have been detected. We had massive shipments of horses from Ireland and Northern Ireland into Britain for transport out of the UK, but they were not transported. They were disappearing. There were numbers in, but no numbers out. At some point, a good intelligence operation would have spotted that and flagged up the fact that those horses were going somewhere.

--- Later in debate ---

[Roger Williams]

The hon. Gentleman raises another good point. We must use intelligence. When I was doing work on illegal imports of meat products from Africa, it became apparent that the people involved in that were also involved in other criminal activities, such as drug smuggling and people smuggling. The penalties for drug smuggling and smuggling individuals across borders were high, but the penalties for smuggling meat were low and yet profits were high. There was a huge incentive to get involved, because the smugglers would not end up in prison for very long, but would probably get a paltry little fine having made a lot of money. The hon. Gentleman gets the point: we must put pressure on our European partners to work with us to share intelligence, which is so important.

I believe that a single market is hugely important for British agriculture, but to have a single market, we must have the same standards in Europe that we expect in Britain. Only when we can rely on our European partners to deliver that famous level playing field can we have confidence in the single market. I want to say a few words about why a single market is important for British agriculture: 90% of Welsh lamb is consumed outside Wales and 40% of UK lamb is exported, mostly to continental Europe. Those of us in the farming business remember when that market could be open one day and shut another. We do not want things to be that way now; we want it to be as it is at the moment, with the market available to us every day of the year. We cannot be certain that we will have continuous access to the market if the conditions, processes and inspection regimes on the continent are not the same as those we have in Britain.

I call on the Minister to continue the work. The job of examining what went on is not finished. It has only just begun in terms of working with our European partners to ensure that processes are in place to ensure that such contamination does not happen in the future.

--- Later in debate ---

[Neil Parish]

I thank the hon. Gentleman for his intervention. It leads me neatly on to the fact that, as I said, horse meat must be traceable. It is not only a case of what is imported into this country. In America, there are many racehorses and other sorts of horse that are more likely to have been treated with all sorts of drugs throughout their lives. We must be careful of that.

We in this country must also be careful to ensure that we know where the horses that we slaughter have come from. At the moment, under the passport system, many horses have one, two or several passports, one of which is clean and says that the horse has not been injected with anything, and another one of which may have been used when the horse has been injected with various drugs throughout its life. We need a better passport system and a central database, so that we know where horses come from, to ensure that when they are slaughtered, we know that they are healthy. Although we may not eat the meat, it will be exported for someone else to eat. It is essential.

I believe that some good things will come out of this situation. As other Members have said, it would have been terrible if the contamination had led to a public health issue, but fortunately it did not. One or two horses slaughtered were found to have levels of phenylbutazone, but not enough to hurt anybody eating the meat. We must learn to ensure that horse meat is traceable in future, not because it should be mixed with beef and sold fraudulently but because the meat should be safe.

The other great lesson to be learned concerns the traceability of our own meat. People like farm-assured schemes, such as the red tractor promoted by the National Farmers Union and many others. As soon as horsegate—the problem with horse meat in beef burgers—occurred, people wanted meat from this country. I do not wish to be churlish, but Tesco did not decide to source all its meat from the British Isles out of the goodness of its heart; it decided that that was a good way to make consumers buy at Tesco.

[Roger Williams]

Was my hon. Friend amazed, like me, to hear that Tesco has said that British lamb is now out of season? I find that extraordinary, given that the UK produces lamb in season all year round.

[Neil Parish]

The fact is that for most grass-fed lamb from Wales, the west country and other parts of the country, the height of the season is exactly now, from September onwards. When I used to produce lambs, I did not feed them a lot of concentrates; I fattened them on grass, and they came out in September, October and November. Whoever put out that particular press release probably got it slightly wrong.

That takes me back to the fact that although Tesco wants to source British meat, which I welcome, it does so from a commercial point of view. Therefore, having systems in place to ensure the traceability of that meat is important. However, there is also a knock-on effect. At a certain conference in Manchester—I will not mention which one it was—I was talking to the poultry industry. Again, Tesco has decided to source all its poultry meat from the UK, which is great, but the problem is that it is absorbing all the poultry meat that we produce, so we need to produce more. To produce more poultry meat, of course, we need more poultry units, and to build more poultry units we need planning permission. All those things have a knock-on effect.

It is the same with the pig industry. We need more pigs and pork so, again, we need planning permission. Those Members who represent rural constituents will find that when a piggery or a poultry house must be built next door, individuals do not always welcome it with open arms. I understand that the Minister is not responsible for planning, but the Department for Environment, Food and Rural Affairs should make the case if we are to have more British meat. I am a great supporter of it; we are only 52% self-sufficient in meat, so there is much more that we could do. Production of poultry and pigs in particular can be built up quickly, but again, we must ensure that we have enough premises where they can be produced.

Many more people now ensure that they buy locally produced and British food, which is a great asset, but I also want them to be sure—again, this is a lesson to be learned—that when they go into a big retailer or other shop, they can pick up a product, especially a processed product, and be absolutely certain where it has come from. Sometimes my wife comes back with a product that she presents to me and says, “Where does that come from?” I read the label and it is more confusing than enlightening about where it has come from. I urge the Minister, newly in post, to realise that labelling of country of origin—knowing where a product is from—is fundamentally important. If it has been imported, so be it, but say so. If products are from all over the world, fine, but say so, so that people have a choice. I do not like the old system that states “product of the EU” and “processed in the UK”, and displays a Union Jack. Everybody picks it up, convinced that it is entirely a British product, when it is not. It is perfectly legal to do that, and that is what happens.

With the reports that we have had and what we have heard, we would all accept, to a degree, that we got away with it. It was not perfect, but we got away with it, despite the fact that it was a fraud and we were eating horse when we should have been eating beef. However, nobody was injured. We need to wake up to the fact that horse meat and slaughter need to be much more traceable. When people pick up products, particularly processed foods, they need to know exactly where they have come from. We want to ensure that the supermarkets that genuinely want to have British products are stocking them and that they have not come from somewhere else in the world. We expect our Minister, newly in post, to guarantee that all that will happen.

We can learn positive lessons. The fact that people now want to eat more home-produced meat is a good thing. Let us be absolutely certain in future that that is exactly what we are eating. Although Government have a responsibility, so do the large retailers and the processors that manufacture and process the products. They are the ones that acted illegally. Let us not forget that, whoever was at fault, it was illegal. It was fraud.

Finally, although I agree with the other hon. Members who have spoken, I fear that in the end we will find one or two small processors here and there who will be hung out to dry, and the rest of the larger processors and others will largely be left untouched. Certainly the Irish Government have been rather reticent about prosecuting anybody. I think that that is the tactful way of putting it. Also—the point was made earlier—when a member state of the European Union is having a problem, it should be brought to the notice of our authorities and others much more quickly, so that we can take action. There was definitely a slowness in the whole process. I look forward to the new Minister sorting it all out, and I again welcome him to his new post.

Oral Answers to Questions

Roger Williams Excerpts

Thursday 10th October 2013 Commons Chamber

[Mr Paterson]

Emphatically yes, because any random cull would worsen the disease. If the hon. Member has such evidence, he should take it to the police.

[Roger Williams (Brecon and Radnorshire) (LD)]

I congratulate my hon. Friends on their new positions and I look forward to working with them. Sadly, bovine TB is well established and endemic in various parts of England, but other parts are free of the disease. What action is the Department taking to ensure that the disease does not spread from the highly infected areas to the less infected areas?

[Mr Paterson]

My hon. Friend is absolutely right to raise this issue. The danger is that unless we get a grip on the disease in high risk areas it will work its way across to other areas—I cited the figures for Oxfordshire in response to my hon. Friend the Member for Banbury (Sir Tony Baldry). Our TB strategy is clear about containing the disease in high-risk areas and not letting it spread. We must be emphatic about that.