Oral Answers to Questions
Thomas Docherty Excerpts(10 years, 1 month ago)
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Mr Paterson
I am very happy to join my hon. Friend in congratulating South West Water on what it has done. A reduction in bills is in marked contrast to what happened under the previous Government, when bills went up by 20%.
Thomas Docherty (Dunfermline and West Fife) (Lab)
We welcome the Secretary of State back to his place after his recent appointments.
On Tuesday, Conservative and Liberal Democrat peers blocked Labour’s proposals to help households that are facing growing water bills at a time when their incomes are being squeezed more and more. As we have already heard, one in 10 households are now paying more than 5% of their income to the water companies, yet as the Secretary of State has admitted, the Government are refusing to lift a finger to help them. Will he tell us the specific reasons why this Government have opposed Labour’s proposals for a national affordability scheme?
Mr Paterson
I am grateful to the hon. Gentleman for his kind comments.
We are continuing the policy left by the previous Government that this should be voluntary—that is how they legislated as recently as 2010. We are clear that this is an issue that should be decided locally, because if there is a reduction for some customers, it has to be paid for by the remaining customers in that area. We are very pleased that we are seeing progress. We now have a robust Ofwat, unlike under the previous Government, and we are going to see significant changes in prices. We must also remember that we have to keep investment coming in from domestic and foreign sources, because every 1% increase in interest adds £20 to a water bill—there is a balance here.
Oral Answers to Questions
Thomas Docherty Excerpts(10 years, 4 months ago)
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Dan Rogerson
As I made absolutely clear to the hon. Gentleman in my previous answer, many water companies are now taking such action, but there are other things we can do to help people who are struggling with their water bills. The biggest thing we can do is to ensure that we bear down on charges for everybody. My right hon. Friend the Secretary of State has been clear in his expectations, Ofwat has been clear in the way it has entered into the price review period and companies are now responding. We will see, in the vast majority of cases, bills going with inflation or even perhaps, in some cases, going below inflation. That is a real improvement on the last price review period, given the opportunities companies have had with low borrowing.
Thomas Docherty (Dunfermline and West Fife) (Lab)
Water bills have increased by almost 50% in real terms since privatisation, yet in the past financial year the regional water companies made £1.9 billion in pre-tax profits and paid out a staggering £1.8 billion to shareholders. Will the Minister explain why on Monday his Government rejected Labour’s proposed amendment to the Water Bill for a national affordability scheme with clear and standardised criteria set by the Secretary of State to replace the Government’s failed voluntary approach?
Dan Rogerson
I am happy to reiterate to the hon. Gentleman what I said on Report on Monday. His proposal to fund some sort of national affordability scheme out of excess profits relies on the regulator allowing excess profits in the first place. This Government’s robust price review period will press down. Under the previous Government, when the previous spending review took place, there was a lack of guidance. It is a very different situation now.
Water Bill
Thomas Docherty Excerpts(10 years, 4 months ago)
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Thomas Docherty (Dunfermline and West Fife) (Lab)
May I take this opportunity, Madam Deputy Speaker, to wish you and all hon. Members a happy new year? I hope that all hon. Members have had a peaceful and enjoyable break and have returned refreshed and looking forward to this busy year.
Unfortunately, the festive period was not a happy experience for many households up and down the country. Many hon. Members spent a great deal of their recess dealing with the impacts of the recent weather events on their constituents. It is therefore appropriate that later we will discuss a series of amendments on the clauses that will help to provide support to many of those affected households. I look forward to having that debate in more detail, but for the moment I want to focus on the new clauses in the first group of amendments.
Last year, in his now infamous letter to water companies, the Secretary of State trumpeted water privatisation as
“one of the greatest success stories of privatisation.”
If one measures success by the payouts made to investors, it is without doubt a great success story. Let me echo the thoughtful remarks by my hon. Friend the Member for Hayes and Harlington (John McDonnell) and pick out a few examples of the dividends paid out since 1989. Severn Trent Water has paid out £6.2 billion in dividends, Thames Water has paid out £6.3 billion, the north-west’s United Utilities has paid out £7.3 billion, and Anglian Water investors have recouped some £6 billion. Overall, a staggering £40 billion has flowed into the pockets of investors. It is fair to say that many customers would not share the Secretary of State’s appreciation for his wonderful friends the chaps running the water companies.
Indeed, their view is shared by many of the coalition’s own MPs. I am disappointed that the hon. Member for Skipton and Ripon (Julian Smith) is not present. In last year’s excellent debate on the water industry he said that
“Yorkshire Water…is exploiting my constituents and people across Yorkshire.”—[Official Report, 5 November 2013; Vol. 570, c. 213.]
I do not know whether the Chair of the Environment, Food and Rural Affairs Committee shares that view of Yorkshire Water.
Miss McIntosh
Any company that is prepared to invest £1 million in improving the provision of water to Filey has to be congratulated, so I congratulate Yorkshire Water on that. Does the hon. Gentleman agree that this Government’s arrangements leave Yorkshire Water and other companies free to raise money on the markets in a way that otherwise would not be possible?
Thomas Docherty
I do not want to get sidetracked by a debate about the merits of privatisation—I think you would pull me back in line if I did so, Madam Deputy Speaker—but I will just point out to the hon. Lady that Scottish Water, which is owned by the state, has invested more per connected property, I think, than any of the English water companies, with the exception of South West Water, so I am not entirely convinced by her argument.
To go back to the comments made by the hon. Member for Skipton and Ripon, despite paying out hundreds of millions of pounds to investors, Yorkshire Water has paid next to nothing in corporation tax over the past few years. I am not singling out Yorkshire Water in particular—it is clear that its behaviour is no better or worse than that of any of its competitors. The problem lies with the culture of water companies themselves. They have behaved in an unacceptable manner towards their customers for too many years. It is clear that they have come to regard customers as nothing more than cash cows, and many have paid little or no attention to customer complaints. That is why we believe it is in the interests of hard-pressed customers that the industry be subjected to greater scrutiny.
New clause 11 in particular shines a light on the opaque world of the companies’ financial and business practices. This is not an unreasonable or overly bureaucratic requirement. For many years, water companies voluntarily produced reports such as those that the new clause would require of them; yet, strangely, in recent years they seem to have got out of the habit of providing that information to customers, the regulator and the Department.
It is also worth noting, before the Minister replies, that Ofwat’s Scottish counterpart, the Water Industry Commission for Scotland, requires Scottish Water to produce the relevant information on an annual basis. Therefore, we believe that this is not an onerous or bureaucratic requirement.
New clause 12 would require Ofwat to pay far more attention to the problem of affordability of bills. I am conscious that we will have a wider debate about affordability when we discuss the second group of amendments, but Ofwat’s current interpretation of its role as an economic regulator is far too narrow. Both household and business customers feel that they are an afterthought, and the new clause makes it clear that Ofwat must have due regard to the cost of bills when setting the prices in future review periods. Labour believes that during a time of unprecedented squeezes on household budgets, much more must be done to help hard-pressed customers. Our two new clauses are important measures that would ensure that water companies served their customers’ interests, not the other way around.
We will, unsurprisingly, support the Select Committee’s new clause 2 on retail exit if it is pressed to a vote. We welcome the fact that the hon. Member for Brecon and Radnorshire (Roger Williams) appears to have had a change of heart over the festive break. During the Bill’s Committee stage he did not vote in favour of Labour’s proposal, but we very much welcome his change of heart. If we do not get an opportunity to discuss the proposal today, we hope that the other place will note that even members of the Bill Committee have signalled that they believe, on reflection, that it is a sensible and worthwhile measure. I will not repeat the discussion we had in Committee, but I think it is fair to say that, based on the signatories to the new clause, the proposal has cross-party support, which we welcome.
We will also support the Government’s amendments. I am slightly surprised that they felt the need to table a series of amendments, but not as surprised, I suspect, as the Minister when he was informed by his civil servants. The Minister has told us many times that he is lucky enough to be half Welsh, so one would have thought that he would have noticed the impact on Wales of the new clauses tabled by the Government in Committee. I hope he will explain how that slightly embarrassing oversight occurred.
We hope we will have an opportunity later this evening to press our new clauses to a Division. We welcome the spirit in which this first part of the debate has been conducted and I do not wish to detain the House any further at this point.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)
I start by echoing the remarks of the Opposition spokesman, the hon. Member for Dunfermline and West Fife (Thomas Docherty), with regard to the earlier statement made by my right hon. Friend the Secretary of State. Our thoughts are with those who have been affected by the storms and flooding over the Christmas and new year period, and I pay tribute to all those who have worked incredibly hard, including the Environment Agency, local authorities, the emergency services and, of course, those volunteers and community representatives who have supported their neighbourhoods and neighbours.
This discussion has covered a number of new clauses and amendments in relation to the regulation of water and sewerage undertakers and licensees, particularly those provisions designed to extend competition in the sector. The new clause tabled by the hon. Member for Arfon (Hywel Williams) would alter the devolution settlement by devolving further powers to the National Assembly, and he has set out his appetite for doing so. Generally, the Government of Wales Act 2006 devolves its issues down the national border, but the situation is not so straightforward for water supply. Water catchment areas and water supply management infrastructure cross the national boundary. The appointment and regulation of any incumbent water company whose area is not wholly or mainly in Wales is not devolved. That means that the legislative competence of the Assembly does not cover the parts of Severn Trent Water’s area in Wales.
Thomas Docherty
I wish you a happy new year, Mr Deputy Speaker. Given that new clause 2 specifies that the process can take place only with the Secretary of State’s consent, will the Minister tell the House how such an unintended consequence might happen?
Dan Rogerson
We are very clear that we look at such issues strategically across the whole market, rather than picking them case by case. The issue is that we want to make reforms based on the principles that we set out during discussions in Committee and elsewhere.
Were a company to exit and to leave household customers on their own—without the non-household element—customers would not only be left with a company that had limited incentives to focus on improving customer service, but would be at risk of having higher bills, because providing, as new clause 2 does, for forced legal separation of the companies’ retail businesses would reduce regulatory stability and risk increasing the cost of capital.
Let me be clear: we want to see a successful retail market. The Bill sets a framework for new entrant retailers to enter the market on an equal footing with the retailers of the incumbent water companies. Our opposition to a provision about retail exit has nothing to do with supporting the position of incumbent water companies; we expect Ofwat to use its regulatory powers to make sure that new entrants can be confident that they are competing on a level playing field.
However, retail exit is not about delivering a level playing field. For example, in written evidence to the Public Bill Committee, the Water Industry Commission for Scotland argued that a provision about retail exit was needed so that new entrants had other options for increasing their market share than
“to acquire customers by winning them one contract at a time.”
However, that is exactly how entrants to the market in Scotland have had to win business unless an existing licensee surrenders its licence or has it withdrawn. In that case, the customers of the exiting licensee are shared out among other licensees, but otherwise all business customers stay with the incumbent retailer, Business Stream, until they actively decide to switch.
Some commentators have painted a picture of an incumbent water company being left without any customers, because all of them are lost to their customers once our retail reforms are in place. We feel that that is a very unlikely scenario, given that non-household customers represent only some 10% of the total retail market, and that 90% of customers—in other words, households—will not be able to switch suppliers.
It is quite an assertion to say that 100% of an incumbent’s non-household customers will switch suppliers. Some 60% of non-household customers in Scotland have put their water services out to tender, but most customers have elected to stay with Business Stream. We understand that only about 5% to 10% of customers have switched since 2008. The customers who stayed with Business Stream have benefited from improved services, without having to switch, by renegotiating their terms. We might expect a more active market in England from 2017.
Thomas Docherty
I fear that the Minister is confusing two different issues. Undoubtedly, competition in itself has brought huge savings and has made Business Stream—or Scottish Water—change its whole ethos, but like does not follow like: simply because customers have stayed with Business Stream does not mean that the market is not working. Given that only 10% of customers have switched, as he says, does he not accept it is quite likely that some smaller water companies will not be able to compete with big retail providers?
Dan Rogerson
I certainly was not seeking to suggest that the market is not working in Scotland. My point was that some people have chosen to stay with their incumbent, and they may wish to do so rather than to have an incumbent abandon them and walk away.
An Oxera report commissioned by WICS and published in November 2012 predicted that incumbents would lose some 40% of their non-household customers in the first year of the opening of the retail market, with a 5% loss of profit. However, arguments that make an economic case for exits seem to be based on incumbents losing all their public sector and multi-site customers in the first year of market opening. The Oxera view is bolder than that of the rating agency Moody’s which, in February 2012, said that a worst-case scenario would be incumbents losing 25% of their non-household customers in the short to medium term, with a much smaller loss of 0.69% of profit. Although no doubt all incumbents will lose some customers, we can suppose incumbents will take steps, such as those that Business Stream has taken, to retain customers.
Anecdotal evidence from business customers suggests that incumbents are already upping their game, even though retail competition reform is some years away. Large business customers have suddenly discovered that they have a named customer service contact, and some have been offered improved metering services. The idea of incumbents sitting around while customers disappear is therefore, in our view, an unlikely scenario. In addition, water-only companies will be able to apply to Ofwat for a sewerage licence, which will allow them to compete with licensees and other incumbent sewerage companies by offering both water and sewerage services to their customers.
My point is that this is evolution, not revolution. Many non-household customers may choose to stick with the incumbent supplier because the incumbent supplier will improve its services to them as a result of the reforms. The benefits of that may in turn be passed on to household customers. Forcing or even allowing retail exit ignores such points. Where customers choose to switch, we anticipate a growth market in which innovation and competition lead to benefits, both environmentally and in customers’ bills. Allowing partial retail exit would open the door to forced separation if individual cases of discrimination were discovered, and we have made clear our position on that.
As I have said, any decision on separation should be made by Ministers and Parliament. We are not prepared to take the risk of forced restructuring, or even the potential for it as provided for in new clause 2, destabilising investment or increasing costs to customers. The new clause envisages the Secretary of State permitting exits, but that may not reduce the risk of a competition authority forcing an incumbent water company to make an application to exit. I therefore urge hon. Members who tabled new clause 2 and amendment 12—led by the Chair of the Select Committee, the hon. Member for Thirsk and Malton (Miss McIntosh)—not to press them to a Division.
The hon. Lady raised other issues about the industry in general, particularly in relation to upstream reform. We know from experience that setting out how markets should work in primary legislation is very inflexible and can stifle innovation. I know that she is keen for us to do more in that regard, but our view is that that was one clear lesson from the last attempt to extend competition through legislation in 2003. That is why the framework in the Bill sets the scope and direction of reform, without being overly prescriptive. We are working closely with Ofwat, customers and the industry—through the high-level group and the Open Water programme—to ensure that new markets work effectively, and we know that the industry does not want to constrain the market unnecessarily with too much detail in primary legislation, any more than the Government want to do that.
On new clauses 11 and 14, the hon. Members for Dunfermline and West Fife and for Hayes and Harlington (John McDonnell) have raised important issues about how the sector is run. As the hon. Member for Dunfermline and West Fife pointed out, we had a previous debate on this set of issues in which hon. Members from all parties were keen to put on the record their concerns about the past operation of the industry. I fear, however, that we have been talking about things as they were, not as they are and will be. Ofwat is already taking action to improve standards of corporate governance across the sector. It recently consulted on principles relating to board leadership, transparency and corporate governance, and it is putting pressure on water companies to strengthen audit arrangements, board member appointments and governance. The response from water companies has been positive and I welcome that. I do not want to belittle the issues that the hon. Member for Hayes and Harlington set out, but Ofwat has listened and is providing leadership to deal with them.
Dan Rogerson
My hon. Friend is an astute and fearless challenger of all authorities, whether they be in the private or public sector. I am sure that he is well aware of the routes that he can take to challenge the company on that matter publicly and privately. The new clauses that we are debating would not assist him in that aspiration.
Thomas Docherty
The Minister probably has first-day-back blues. I refer him to Opposition new clause 11, which would allow the hon. Member for Broxbourne (Mr Walker) to check the performance of his water company.
Dan Rogerson
The hon. Gentleman hopes that his new clause would require further reports to be made to the Secretary of State. However, that information is already in the public domain. That is why supporting new clause 11 would not be helpful. I understand and respect his desire to ensure that the industry is as transparent as possible. I understand the ambition behind the new clause, but I do not share his enthusiasm for the wording that he has chosen.
The privatisation of the water industry has been a success story in terms of investment. Helpfully, the hon. Member for Hayes and Harlington pointed out that I represent a constituency in the South West Water area. The coalition Government have recognised that there were a few flaws in the privatisation process, so there is now extra money to support bill payers in the south-west, who paid for the clean-up of the beaches around the south-west peninsula.
As was pointed out by my predecessor, my hon. Friend the Member for Newbury (Richard Benyon), there has been huge investment in infrastructure since privatisation. That is one of the key successes that we want to build on and not jeopardise. The stable regulatory framework for the water sector has enabled companies to attract more than £111 billion of low-cost investment to upgrade water and sewerage infrastructure and to improve customer service and environmental standards.
I agree that we should be putting pressure on the water sector to act as transparently and responsibly as possible. Ofwat is already doing excellent work on the issues that have been raised by hon. Members. I do not believe that duplicating the reporting requirements would help. For that reason, I believe that new clauses 11 and 14 should be resisted.
New clause 12, for which the hon. Member for Dunfermline and West Fife argued, would place a duty on Ofwat to have regard to the charges to household and non-household customers. That would simply duplicate Ofwat’s existing duty.
I turn to a number of technical amendments, which the hon. Member for Dunfermline and West Fife charitably referred to. I will move amendments 13 to 50, 52 to 54 and 60 to 87 formally at the appropriate time. They will mainly make changes to schedules 5 and 7. Schedule 7 makes consequential changes to the Water Industry Act 1991 and other primary legislation as a result of our reforms, and schedule 5 makes further changes should the Welsh Ministers decide to adopt the reforms being introduced in England. Amendment 59 and new schedule 1 will provide the Secretary of State with the power to produce transitional orders that allow us to deliver retail and upstream reform separately.
Taken together, our amendments will provide Ministers with the maximum flexibility to commence the different market reform provisions transparently and in stages, as per our commitment to stagger the implementation of our retail and upstream reforms. They will enable the current arrangements to continue without diverting attention from the immediate priority of preparing for the opening of the reformed retail market in April 2017.
Hywel Williams
We have had an interesting debate, and I was glad to hear the contributions of the Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), and the hon. Member for Hayes and Harlington (John McDonnell), with whom I yet again agreed entirely. I was also glad to see the hon. Member for Newbury (Richard Benyon) taking an interest in his former beat, and to see the hon. Member for Brecon and Radnorshire (Roger Williams) in his place, although essentially in a non-speaking role.
I was disappointed by the lack of contributions from Welsh Members, and disappointed that the hon. Member for Dunfermline and West Fife (Thomas Docherty) did not make any reference to my new clause 1. Pretending it is not there does not mean it will go away.
Thomas Docherty
The hon. Gentleman should have intervened on me if he was concerned that I had not covered his new clause. I echo the point that the Minister made—the Silk commission is examining the issue and will report in the spring. [Interruption.] We think that will be the right time to consider the matter properly.
Hywel Williams
My hon. Friend the Member for Perth and North Perthshire (Pete Wishart) asks from a sedentary position, “What do you think?” The Minister might choose to enlighten us, but possibly not—he would prefer to listen to the Silk commission.
My hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) made a point about legislative competences and borders. In Northern Ireland the matter is not considered problematic, because the national or state boundaries are followed; nor is it considered problematic for legislative competences to cross the border in the case of Wales. Legislative competence seems to become a problem only when proposed by Plaid Cymru. Of course, it is also proposed by the Labour Welsh Government, but they are not here to make that point. That does not seem particularly fair dealing.
The Minister said that the status quo is the status quo, and that the matter is not devolved because it is not devolved, and presumably it will not be. He gave us no indication of what the Government would eventually propose following Silk. We look forward to that with interest.
On a personal note, I missed many of the sittings of the Public Bill Committee—
Hywel Williams
The shadow Minister is very kind. I was disappointed to have missed those sittings, and I apologise to Members of the Committee. Unfortunately, it was unavoidable.
It is my pleasure to press new clause 1 to a Division.
Question put, That the clause be read a Second time.
Thomas Docherty
I wish you a merry Christmas and a happy new year, Mr Deputy Speaker.
I welcome the thoughtful remarks by the hon. Member for Thirsk and Malton (Miss McIntosh). As she rightly said, the Minister and I had the pleasure of serving on the Select Committee under her chairmanship. She was an excellent tutor to both of us, although I suggest, looking at the debates today and in the Bill Committee, that I remember more of what the Select Committee agreed than the Minister. I am sure he will eloquently explain his position.
Dan Rogerson
The hon. Gentleman is always kind enough to remind me repeatedly, so I fear I can never forget any of our deliberations.
Thomas Docherty
It is always a good thing to be a charitable and giving soul, so I do my best to try to accommodate the Minister.
I would like to speak to the new clauses that stand in my name. As I said earlier, much attention has been paid to households that faced a difficult Christmas and new year because of the climatic conditions that battered the United Kingdom. Much less, however, has been written on households that faced a stressful period because of the economic conditions that have battered the United Kingdom, not just in the past three weeks but in the past three years. Hundreds of thousands of households did not enjoy the Christmas that all of us here in the House of Commons did, in warm and secure homes with plenty to eat and with presents given and received. Too many families were left unable to enjoy the Christmas joys that we take for granted.
The cost of living crisis cannot be dismissed as a soundbite, as many Government Members try to do. The cases of hardship regularly brought to the attention of Members of Parliament cannot simply be batted away. At a time when household incomes are continuously being squeezed, it is not acceptable to Opposition Members for most water companies to continue to do so little to help their struggling customers.
The size of water bills may not have reached the obscene level of their gas and electricity counterparts, but there is no disputing their cumulative impact. Citizens Advice reported to MPs in November that it had received almost as many inquiries from people worried about their water bills as they had about the other two utilities. DEFRA’s own statistics state that some 2.5 million households now find themselves in what the Department itself defines as water poverty, while in the past year water companies reported pre-tax profits of £1.9 billion and paid out, in dividends, a staggering £1.8 billion to their shareholders.
You might have expected the water companies to rush forward with schemes to assist their hardest-pressed customers, Mr Deputy Speaker. After all, the previous Labour Government put in place legislation to allow each company to introduce a tailor-made scheme for its own region. The water companies told the then Government and Parliament that that was all that was needed: a voluntary system of social tariffs that each and every water company would then set and implement quickly. Four years later, what progress has been made? So far, only three water companies have got around to implementing social tariffs, helping a grand total of 25,000 households across the country. Even by the end of the price review period, more than a third of water companies will still have not bothered to lift a finger and introduce such a scheme. When the water companies gave evidence to the Bill Committee, did they acknowledge that they had let down their customers and Parliament? Did they acknowledge that the rate of progress was not good enough? Did they say sorry, even once? Of course not. They blamed everyone but themselves: they blamed the regulator, they blamed the Government and they blamed the customers.
What has been the response of the Secretary of State, and his Minister with responsibility for water, to the crisis facing households? The Secretary of State sent a letter to the companies in October begging them not to raise prices further. It was not, we note, an instruction or a warning that if they did not take heed, the Government would step in. It was not even a rebuke; it was just a weak letter. That is why the Opposition have tabled four new clauses that will each help hard-pressed households. Taken together, they would make a tangible difference to those struggling with the cost of living crisis. With your permission, Mr Deputy Speaker, I will briefly take each new clause in turn, explaining the existing problems and how our proposals would address them.
First, on bad debt, I will build on the excellent remarks by the Chair of the Select Committee. Ofwat estimates that on average bad debt adds £15 to every customer’s annual bill. Note, of course, that that is just the average amount; in some cases, it is significantly more than that. As the hon. Lady said, water companies are, rightly, not allowed to cut off those who cannot afford to pay their bills, but they are allowed to pass the cost of non-payment on to their other customers. In effect, the sector already has cross-subsidisation.
Richard Benyon
Average figures are exactly that—average. There are, of course, water companies that underperform and their debt is much higher than average, but the corollary is that other water companies perform considerably better. Does the hon. Gentleman not think that there is much work to be done to learn best practice from water companies such as Yorkshire Water, which serves the constituency of the Chair of the Select Committee, my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) and is outperforming the others extremely well? We should learn from such companies about bad debt.
Thomas Docherty
I know that you are a fan of all things Yorkshire, Mr Deputy Speaker, and I will come on to Yorkshire Water in a moment, if the former Minister will bear with me.
As the hon. Lady said, among those who do not pay there are those who can pay. That is unfair on decent customers who meet their obligations and we believe the time has come for more robust action to be taken. Some 80% of those who do not pay are in rented accommodation. One of the challenges facing water companies is tracking down those who refuse to pay because they move homes far more often than the average person. The only way to track them down effectively is to require landlords to provide water companies with a list of tenants. Individuals moving property would not then disappear from the system and evade paying their debts.
The measure would be a simple step and it would not require a disproportionate amount of new bureaucracy to implement. It is estimated that approximately half of total bad debt falls into the category of “can pay, won’t pay”. The Select Committee, of which the Minister was previously a member, has unanimously backed the measure throughout this Parliament, so why the opposition from the Government?
Mr Mark Spencer (Sherwood) (Con)
I understand, and sympathise with, the point the hon. Gentleman is making, but there is no legal way to force a tenant to inform their former landlord of a forwarding address. How can a landlord know what information to supply to the water companies, so they are able to track former tenants?
Thomas Docherty
I am grateful to the hon. Gentleman, who I think is a recent addition to the Select Committee. I do not think he was a member of the Committee when we had this discussion, so for his benefit I will say that it is quite simple. As the water companies have said, they would be supplied with names and addresses. The onus would then be on them to carry out the necessary activity to match up the appropriate individual, and there would be no significant burden on the landlord, the local authority or social housing provider. The burden for that work would fall on the water company. He will recall from our time in Committee that I was not always the water industry’s biggest fan, but on this the Select Committee, the water industry and the Opposition are united, so again I come back to this question of why the Government are so opposed to the proposal.
Mr Redwood
I fully agree with what the hon. Gentleman is trying to do, but I share the concern of my hon. Friend the Member for Sherwood (Mr Spencer). How would it help to know the name of the tenant who has done a bunk, moved somewhere else and not given a forwarding address and who has no intention of paying the bill? Would the water companies not need investigatory powers to track down the tenant?
Thomas Docherty
I have huge respect for the right hon. Gentleman and his knowledge, but we are clear that, as they themselves accept, it is the water companies who would have to do the legwork; no additional burden would be placed on the landlord, as it would be for the water companies to contact householders, and obviously they would have a list of new tenants. I will use the example of the electoral roll: candidates, parliamentarians and political parties receive a list of those who are new on the register, and we then contact them to welcome them to the area. When the name of somebody who disappears from one property appears at a different property, it would not be beyond the wit of a water company to work out who they were. In Committee, the Government’s key objection seemed to be that it would place an unfair burden on landlords, so we are keen to stress that, as the Minister will recall from his time on the Select Committee, it would place an additional burden not on the landlord, but on the water companies. The companies themselves want this power. To reiterate, we are absolutely clear that those who can pay should pay, so why the opposition from the Government?
Dan Rogerson
The hon. Gentleman has set out how the burden of pursuit would fall on the water companies, but of course the burden of providing that information to them would fall on the landlords, so there would be a burden.
Thomas Docherty
I congratulate the Minister on stating the blindingly obvious. Of course, the landlord would have to provide that information, but it is not the longest list in the world, and it is information that landlords have anyway, so the Opposition, like the Select Committee, find it difficult to comprehend why it would be so onerous for landlords to provide a list of their tenants by property. If he has specific examples of hard-pressed landlords who have made representations to him, I am sure he will refer to them when he responds.
For the fourth time, I ask myself the question: why the opposition from the Government? The Secretary of State has had his usual Pavlovian reaction to a suggestion that the Government should take action. It appears once again that when Parliament, the Select Committee and the water industry ask DEFRA to do something, its knee-jerk response is to think of spurious reasons why it should not or cannot do it. Our new clause would be a pragmatic and efficient measure that would help to drive down costs on all decent households, help water companies to do their job and ensure that all customers meet their responsibilities.
Our second new clause—new clause 10—recognises that not all water companies have done all they can to tackle the problem of bad debt. As I mentioned earlier, although the average bad debt figure is about £15, there are wide variations across the country. As the hon. Member for Newbury (Richard Benyon) pointed out, that is because some, such as Yorkshire Water, have worked with customers and debt advice groups, such as Citizens Advice, to put in place measures to help customers genuinely struggling to access payment packages and programmes, but unfortunately that is not the case across the country. Too many water companies have come to the unsurprising conclusion that, because they can pass the cost of bad debt on to their other customers, they need not bother to do anything about it themselves.
That is why we have tabled new clause 10. We want to give Ofwat and water companies a clear and unambiguous signal that hard-pressed customers should no longer be treated as a cash cow by companies that cannot be bothered to meet their own responsibilities. Where the regulator and the Department are satisfied that water companies are not doing enough to pursue bad debtors, the cost should no longer be passed on to other customers. Taken together, not only would our two new clauses be practical measures, but they would send a clear signal that while we will do more to help those who are struggling, we expect all customers and water companies to do their fair share.
Our third new clause—new clause 8—would help to ensure that customers know about the help for which they are eligible. In 1999, the last Labour Government introduced WaterSure to help low-income metered households with high essential water use. WaterSure caps the bills of metered households in receipt of a qualifying benefit or tax credit at the average bill for that water company’s operating area. It applies to households with three or more children under the age of 19 living at home or where someone in the household has a medical condition that necessitates high water use. It is an important measure that at the time received cross-party support and which, according to the latest figures that the Minister gave us in Committee, has helped 70,500 households in England—I think a similar scheme has helped approximately 20,000 households in Wales. Although that is welcome, we believe that that level is unacceptable. Given that, as the Consumer Council for Water has said, only one third of eligible households are in receipt of the benefit to which they are entitled, the Government have been guilty of complacency.
The Minister previously claimed there was no need for the new clause because all the water companies already provided this information. For the benefit of Members who have not had a chance to look at the amendment paper, we are proposing that information about the eligibility criteria and how to apply should be included in all water bills. He believes that all water companies already provide this information, but unfortunately for him the reality does not match his statement. Not only do his own figures show that the current approach is not working, but our own anecdotal research shows that customers are not even aware that WaterSure exists. We want to make it clear to water companies that they must do much more to promote the scheme, and we want Ofwat and the Government to hold them to account if they do not. I hope he has reflected not only on the evidence we presented in Committee, but on his own figures and the evidence from the CCW, and will listen to common sense.
Finally, our fourth new clause—new clause 7—deals with the central problem of the failure of the voluntary approach to social tariffs. As we have set out, too few water companies are helping too few customers through social tariffs, and it is clear that left to their own devices many water companies, by their own admission, will never introduce such schemes. That is why we are proposing a national affordability scheme to end the postcode lottery and ensure national standards for eligibility. We would expect schemes to be funded by the excess profits of the water companies, not by other water bill payers. As I have said, last year these companies made an eye-watering £1.9 billion in pre-tax profits and paid out £1.8 billion to investors. The idea, for example, that Yorkshire Water, which paid out £240 million, cannot afford to provide support through social tariffs is clearly nonsense.
Enough is enough. Hard-pressed households need real help now, and these new clauses are four practical and simple measures that would ensure they get it. It is time for the coalition to match our commitments.
Mr Spencer
I want to make some brief comments that were too long for an intervention, particularly about new clause 3, tabled by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh). I sincerely hope that, in summing up, the Minister will reflect on today’s debate, which has shown recognition across the House that consumers and our constituents are finding it very difficult to pay their household bills because of pressure on the household budget. It is worth saying that the Government recognise that challenge and are doing their best to assist, not least by turning around the failing economy that they inherited. Needless to say, a section of society will find it very challenging to pay their utility bills, and the Government have an obligation to try to assist and support them.
There is another group of people who are unwilling to pay, as a result of a frankly malicious intent to avoid paying the bill that is due to be paid. It is vital that the water companies have the power to decide which cases fit into which categories. Those who are clearly unable to pay should be able to receive assistance, support and sympathy from the water companies. New clause 3 goes some way towards assisting the water companies to identify people within the benefit and welfare support system, who may be in need of extra assistance.
I am somewhat sympathetic to new clause 8, too, which was tabled by the hon. Member for Dunfermline and West Fife (Thomas Docherty) and is designed to ensure that water companies put the neediest customers on “the lowest possible tariff”. Those who find themselves under pressure in the most challenging of circumstances are often those least able to identify from their bills which is the correct tariff for them to be on and least able to challenge the water companies to put them on a better tariff, allowing them to afford to pay their household bills. I hope that the Minister will give further consideration to that, if he is minded to do so.
Finally, I support those who have said it is difficult to understand why the Department for Work and Pensions or the Department for Environment, Food and Rural Affairs are unable or unwilling to supply the necessary data to the water companies. I hope that when the Minister sums up, he will be able to shed some light on those thoughts.
Mr Redwood
I hope that the Government will look at the issue of unpaid bills. Colleagues of all parties are right to draw attention to the problem—one of the many sources of excess cost in the water industry, which it would be good to reduce or eliminate. It is undoubtedly the case that we pay dearly for our main utility provision in this country, and I fear that the main reason why water bills are high and will stay high is that there is no competition. It is a great pity that this Bill will not introduce proper competition into water as into other areas, as it would make a lot of difference. The amendments are designed to deal with the situation of having regional monopolies that are in many cases unresponsive and have high cost structures. Then there is the particular problem of customers deciding—quite wilfully, when some of them are perfectly capable of paying—not to pay their bills. Clearly, more needs to be done on that.
There is some good in all the amendments before us this evening, but I am not persuaded that they take the trick. It might be helpful to know who the tenant was, but if the tenant cannot be traced to where they have gone, it will be impossible to get them to pay. It might be useful to know something more about the benefits and financial circumstances of individuals, although there are issues of privacy and the handling of data that could cause difficulties, but that then fails to enable us to come down hard enough on the people who can afford to pay, which is the real issue.
Thomas Docherty
Given that it is the water industry itself that is pressing for this power relating to landlord information and given that it is prepared to bear the burden of tracking people down, does the right hon. Gentleman not accept that such a scheme is clearly workable?
Mr Redwood
It may or may not be. I do not have a very high opinion of the success of the water industry in these areas, and it may not be the best judge, but I accept that this is one of the best points in the hon. Gentleman’s case, and I look forward to hearing the Minister’s reply to it.
As I say, the amendments and new clauses are all well intentioned and, if passed, they might not make the situation worse and in some cases might even make it a little better. I hope, however, that the Minister, working with the water industry, can come up with something better because there is a serious issue here. A lot of money is owed to the water industry that people could afford to pay, but the matter is not being pressed.
Dan Rogerson
The hon. Member for Dunfermline and West Fife (Thomas Docherty) has proposed a number of new clauses, which I shall address before dealing with the lead new clause 3, tabled by the Select Committee Chairman.
New clause 7 would place a requirement on the Government to introduce through secondary legislation what is described as “a National Affordability Scheme”. The details of the scheme are not entirely clear. We debated in Committee an identical clause tabled by the hon. Gentleman, but at that point, the funding was not made clear. He said today that it would be funded specifically from the profits of the water companies rather than from other bill payers in a cross-subsidy approach.
Thomas Docherty
I refer the Minister to the evidence session during the eighth sitting of the Public Bill Committee, where I specifically said that the scheme would be funded from excess profits. Perhaps the civil servants should pay more attention in future.
Dan Rogerson
The hon. Gentleman is, as always, keen to assist. What I said comes entirely from my recollection of his introduction of the measure in Committee and if it is faulty, it is certainly not on account of any information briefed to me by others. I am grateful to the hon. Gentleman for highlighting the issue of excess profits. However, this does not address the point that we have a regulated system under which the profits are allowed for under the price review process. I appreciate that he was not a Member when his party was most recently in government, but it was quite happy to move forward with the pricing process. What he is saying now is that he has no confidence in the regulator—in other words, that the regulator would set a level of profit that it thinks reasonable for the price review period, but that this would now somehow be unpicked as being in excess in some cases in order to fund the scheme. I am happy to give way again, in case he wants to correct this.
Thomas Docherty
I am grateful, but on this occasion it is perhaps the Minister who should have paid more attention to my remarks a few moments ago. I clearly said that the last Government gave the water companies time to introduce the voluntary schemes, but that they have now failed to honour their commitment, so the Government should step in and do what the companies failed to do themselves.
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.
Dan Rogerson
The Chair of the Select Committee is quite right that I have yet to respond to that aspect of her argument and I will seek to do so, I hope to her satisfaction, once I have made my closing remarks on new clause 9.
The industry is working with landlords’ organisations to establish the new voluntary scheme that will enable landlords to provide information about their tenants direct to water companies swiftly and easily and that approach has the support of Water UK and the main landlords’ organisations. The new database will launch in March next year and I believe that it should be given time to work. For those reasons, I believe that new clause 9 is not necessary.
Thomas Docherty
I am grateful to the Minister and am listening carefully to what he says. He will, I am sure, come on to his justifications as regards new clause 10 in a second. Before he finishes dealing with new clause 9, however, can he say what he defines as “time to work”?
Dan Rogerson
We should at least allow the database to be set up and give it a chance to operate. That would seem to be a fair approach and it is certainly the one I seek to take. I understand the hon. Gentleman’s keenness to see progress but I believe that the voluntary approach will have some effect and we should give it time to do so.
Let me turn now, as the hon. Gentleman uncannily predicts, to new clause 10, which he has tabled in his efforts to make some changes to the Bill, and in Committee we discussed a similar clause that he tabled. The new clause will provide a new power for Ministers and Ofwat to disallow companies from recovering the cost of unpaid bills from their paying customers. The hon. Gentleman has argued that there is no incentive for companies to collect bad debt. During our previous discussions, I made it clear that Ofwat has the power to decide which costs may be recovered through the price review. Ofwat is already using the price review process to bear down on the costs of bad debt and requiring companies to demonstrate high performance in debt collection and to show that any increase in bad debt is beyond their control before they are allowed to include it in customer charges. The price review will challenge poor performers to raise their game.
The new clause proposes a power for a future Secretary of State to intervene in the setting and recovery of charges. That is exactly the kind of political interference that concerns the investors who are critical to the water industry. I have stated before that the stability of the regulatory regime is vital to keeping the cost of borrowing low. An increase in that cost will have the direct result of putting up customers’ bills and I am firmly of the view that it is for the regulator and not the Government to make detailed decisions about charges. New clauses 9 and 10 intend to incentivise companies to improve their debt collection performance and I absolutely support that objective. I cannot, however, support the approach that has been proposed and I am sorry to disappoint the hon. Gentleman—and, I am sure, to surprise him.
Let me turn finally to new clause 3, tabled by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), the hon. Members for Poplar and Limehouse (Jim Fitzpatrick) and for North Tyneside (Mrs Glindon) and my hon. Friend the Member for Brecon and Radnorshire (Roger Williams). The proposed clause targets a number of points that we have already discussed in some detail, including bad debt and social tariffs.
The practical effect of the new clause would be to require the Department for Work and Pensions to supply water companies with personal information about their customers. The clause focuses solely on the subset of customers that are both in receipt of benefits and living in rented accommodation. Amendment 9 would simply include the proposed new clause in the list of measures to be commenced two months following Royal Assent.
I am grateful to my hon. Friend the Member for Thirsk and Malton for her clarification that the clause is intended both to help water companies to collect their debts and to target social tariffs at customers in rented accommodation who are also in receipt of benefits. However, I am afraid that I do not believe that the clause is likely to achieve either objective effectively.
As I have already set out, the Government’s position on bad debt among water customers is that there is a great deal more that the industry can do for itself. We think, therefore, that there is more companies can do to collect their debts and we want them to focus on that rather than to look to the Government to solve the problem for them.
I am pleased, as I have said, that the industry is already taking more responsibility, by working on a voluntary approach to sharing information on customers in rented accommodation, using the landlord database, as we have discussed in response to new clause 9, tabled by the hon. Member for Dunfermline and West Fife.
Thomas Docherty
I remind the Minister that our scheme would not involve cross-subsidisation. I am surprised that he is so against the use of benefit systems for social tariffs, because the Liberal Democrats in Scotland actively supported the introduction of social tariffs based on council tax benefit. What is the difference?
Dan Rogerson
I am seeking to point out that there are a range of benefits and a range of circumstances for people. The hon. Gentleman highlights one benefit. Of course council tax benefit no longer exists in this country in the format that it does in Scotland, as we have now moved over to local council tax forms of support, so there is a different system, which would not necessarily translate across. The hon. Gentleman is keen always to learn the lessons of Scotland, but some of these things do not apply simply, given the different frameworks following the devolution settlement.
We place emphasis on locally designed social tariffs developed in close consultation with the customers who will ultimately foot the bill, as opposed to crude, centrally imposed eligibility criteria. Although I very much thank hon. Members for their new clauses and understand their aspirations in tabling them, I would urge my hon. Friends to resist them.
Miss McIntosh
I shall try to keep my remarks brief, but this is the first occasion that I can remember when there has not been a parliamentary week between the completion of the business of the Public Bill Committee and consideration on Report and Third Reading. I should therefore like to pass on my thanks not only to the Committee staff who have accommodated our being able to table amendments in a timely fashion, but to all those involved in the House service who have enabled us to have amendments before us to debate this evening.
I shall go through the new clauses and amendments first and then give the reasons for them. I, along with a number of members of the EFRA Committee, have thought it fit to assist the Government yet again, and I hope that we have more success with this round. Anyone who knows me even remotely will know that I am becoming a compulsive obsessive on sustainable draining systems and that I will never pass over an opportunity to discuss SUDS. So, under new clause 4, we seek to introduce the sustainable draining system, which is woefully late. It was already given statutory powers under the Flood and Water Management Act 2010, and in new clause 4 I link that to the end of the automatic right to connect.
I should like to pay tribute to a great Yorkshireman, Sir Michael Pitt, who after the surface water flooding of 2007 attempted to get on to the statute book under the 2010 Act—the then Government’s legislation—the end of the automatic right to connect. I would go further with substantial developments than I have had the opportunity to do here. I should personally like Yorkshire Water and other water companies, as well as drainage boards, to be given the right to be statutory consultees on major new developments on the same basis as that enjoyed by the Environment Agency following the 2010 Act.
Thomas Docherty
It is worth pointing out that local authorities in Scotland place great emphasis on the opinion of Scottish Water, which is, indeed, treated as a major statutory consultee when local authorities are making decisions about developments.
Miss McIntosh
As a non-practising Scottish advocate, I would always say that the Scottish legal system has a great deal to commend it, but Scotland needs to remain part of the United Kingdom to allow us to benefit from that.
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.
Joan Walley
I am fortunate to follow the hon. Member for Thirsk and Malton (Miss McIntosh), who speaks with the greatest authority on these subjects, as I am sure everyone in the Chamber would agree. I particularly share her concern about drainage and surface water, and I agree with the points she made earlier about the need to ensure that highways authorities also have statutory duties, so that we can deal with this issue in a joined-up way. The debate on this group of provisions is important because we have had pre-legislative scrutiny by the Environment, Food and Rural Affairs Committee of the draft Water Bill and subsequent debate in that Committee. When the Minister addresses the various comments that have been made, we will see the extent to which the Government are listening to what Parliament is saying about the amendments. There may not necessarily be agreement on all of them; I am talking about the amendments that seek genuinely to try to improve matters on the whole issue of water. We have an opportunity to put in place legislation that is fit for purpose, so I hope that improvements will be made.
Thomas Docherty
It will probably not cheer my hon. Friend to hear that every single amendment tabled in Committee by Opposition Members, and indeed by coalition Members, was rejected, even though the Minister had previously agreed with them in the Select Committee.
Joan Walley
I am grateful to my hon. Friend for pointing that out. As I have said, the proof of the pudding will be in the eating, so we will wait to hear what the Minister says in response. Given that the Bill has further stages to go through before Royal Assent—I am glad to see the hon. Member for Brecon and Radnorshire (Roger Williams) nodding—I think that it is the Opposition’s duty to press the Government as much as possible, because it is important that Parliament does the right thing. Even if the Government do not make concessions at this stage, there will be an opportunity in the other place to put more flesh on the Bill and to make it much more fit for purpose. We will wait to see what further progress we can make.
I will speak briefly to new clause 6, which stands in my name, because I realise that many Members wish to speak. I want to introduce my comments by considering the issue of contaminated land. It is clear to me from the work I have done recently that there is a problem with how we deal with contaminated land. The current regime and the funding for it, particularly that which involves local authorities, is not fit for purpose, and it needs to be. We are dealing with a huge amount of legacy problems. I do not want the Government to set up a whole new regime without giving due consideration to the preventive measures that would need to be put in place in relation to fracking and shale gas extraction.
Madam Deputy Speaker, I am sure you would rule me out of order if I were to speak this evening on whether we should have fracking or shale gas extraction. The point I want to make is that if it is to go ahead, with the enormous tax concessions it currently has, there needs to be a proper regime in place that relates to water, water quality and concerns about contamination. It is for that reason that I have tabled new clause 6. I acknowledge that, were the Government to act on the concerns I am raising, there would need to be consequential amendments to paragraph 9 of schedule 20 to the Environmental Permitting (England and Wales) Regulations 2010, so I do not want the Minister simply to claim on a technical point that the new clause is unworkable because it is not thorough in that regard.
My understanding is that the principles that the polluter should pay and that prevention is much better than an end-of-pipe solution mean that we should be dealing at this stage with the procedures that need to be put in place to prevent contamination of water as a result of fracking. I point out that the new clause is supported by many non-governmental organisations working on the front line to deal with that, including the Royal Society for the Protection of Birds, the Angling Trust, the World Wide Fund for Nature and the Salmon & Trout Association.
New clause 6 would amend the Environmental Permitting (England and Wales) Regulations 2010 to introduce a liability guarantee to ensure that fracking companies have the funds available to pay the clean-up costs should an accident occur during the fracking process. I think that is eminently sensible. A similar amendment was tabled in Committee and briefly debated, as my hon. Friend the Member for Dunfermline and West Fife (Thomas Docherty) just pointed out, but it got nowhere. I believe that it was important to table it again for further consideration, mainly because the Minister’s response in Committee did not offer adequate assurances that the public purse would not be hit should an accident occur.
As I understand it, the Minister’s main argument was that the existing regulations on the statute book already ensure that operators are technically and financially competent to carry out fracking activities. However, a financial competence check is carried out only in specific circumstances, and competence is not the same as securing a form of financial provision or guarantee for long-term environmental liabilities. In other words, it does not guarantee that a company has put in place funding or insurance for dealing with an accident; it only provides a snapshot in time of its financial situation. I am reminded of the complex discussions there have been about the ownership of football clubs and where due diligence should lie.
Thomas Docherty
May I wish you a warm and happy new year, Madam Deputy Speaker?
We have had a thoughtful and knowledgeable debate over the past hour and a half or so. I commend two Select Committee Chairmen and a former Minister for their remarks, even if we did not agree with every part of the former Minister’s interpretation of the past three and a half years.
Time is limited, so I hope the House will understand if I restrict my remarks to some of the new clauses. Unsurprisingly, the Opposition agree with the Environment, Food and Rural Affairs Committee about SUDS. I am sure that, as a former member of that Committee, the Minister will agree with himself on the issue. The hon. Member for Thirsk and Malton (Miss McIntosh), who chairs the Committee, was right to highlight the increasing burden being placed on a network that, in many cases, is struggling to cope. We have heard that the ability to cope with additional development is not always given the consideration that it needs. I hope that the Minister will reflect on the cross-party support on that point that the hon. Lady demonstrated.
There is a broad coalition of opinion on abstraction reform, to which the hon. Member for Newbury (Richard Benyon) alluded, but it is not just made up of what he might describe as the usual suspects—the non-governmental organisations involved. That well known environmental organisation the Food and Drink Federation made a submission to the Public Bill Committee. We welcomed the Minister’s announcement in the Committee. It was disappointing that his colleagues chose to make it to the media before it was made to Parliament, but of course I assign no responsibility for that to him. We welcome the consultation, but we agree with the Environment, Food and Rural Affairs Committee that it is long overdue.
I say to the hon. Member for Newbury that the Government certainly could not be accused of legislating in haste, because after almost four years we simply have not seen sufficient progress on abstraction reform. My hon. Friend the Member for Garston and Halewood (Maria Eagle) and I look forward as Ministers in the next Parliament to taking such legislation through with due speed, and we look forward to the support of Conservative Members.
My hon. Friend the Member for Stoke-on-Trent North (Joan Walley), the Chair of the Environmental Audit Committee, made an incredibly thoughtful and logical speech, and we support her new clause 6. We are clear that, as she said, this is not a debate about the merits and demerits of fracking technology. It is about trying to ensure that there are safeguards in place. Her constituency is still suffering the fallout from open-cast mining not having had sufficient guarantees in place, so I understand exactly where she is coming from.
Given that time is incredibly short I will bring my remarks to a conclusion, but it is clear that the other place will have an important job to do in the weeks ahead. A number of issues in this group of amendments—and indeed elsewhere—have not been addressed, and my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) is right to say that we must consider Flood Re in some detail. With the greatest respect, the Opposition will not simply go along with the Government because they have come to a deal and say that that is good enough; we need more detail from Ministers. We look forward to the Bill making progress but we will, as I have suggested, press some amendments to a vote.
Dan Rogerson
In the time available I shall seek to respond to as many points as I can. The Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), has been a strong advocate of and campaigner for sustainable drainage over many years, and the Government are pressing ahead and implementing the requirement to secure approval for sustainable drainage systems for new developments under schedule 3 to the Flood and Water Management Act 2010. Regrettably, it is looking increasingly unlikely that we will be in a position to ensure that the scheme comes into force this April, which was our preferred date for implementation as stated previously. I accept that that will be a great disappointment for the hon. Lady and other hon. Members, but I remain committed to introducing the legislation at the earliest opportunity. I plan to lay the relevant affirmative regulations by April, to underline the Government’s commitment to addressing flood risk.
I share the hon. Lady’s frustration that the process has been so protracted, but we are working with developers and local government to develop the processes, standards and guidance that are an integral part of a new SUDS approvals and adoption regime, rather than just imposing them. That takes time, but it is time well spent if the end result is an approach that is fair to all parties and successful from the outset because local government and developers are fully prepared to take on their respective new responsibilities.
Amendments 1, 2 and 3 address flooding on highways or that caused by the run-off from highways. The causes of flooding can be complex and it is difficult to make a general statement about them. There are already legislative powers to ensure that highway surface water drainage does not pollute or flood, and section 100 of the Highways Act 1980 enables the local highway authority to take action related to the drainage of highways—for example, it can construct drains or erect barriers on the highway or adjoining land to divert surface water into an existing drain.
The majority of new road drainage systems are not connected to the public sewerage system. Typically, they discharge under designated conditions, either to a watercourse or a storage pond with controlled exits to a watercourse, or alternatively soak into the ground in a designed manner. A decision to connect new highway surface water to a combined or foul public sewer can be made only subject to an agreement with the receiving water authority. There is no automatic right to connect new highway drainage to the public sewerage system. We recognise, however, that in some cases local flooding may be exacerbated by drainage from existing highways, and as I have said, the 2010 Act places a duty on lead local flood authorities to develop a local flood risk management strategy for their area. I hope hon. Members will be reassured by that.
Let me seek to address the points raised by the Chair of the Environment, Food and Rural Affairs Committee about flood insurance, and amendments 5, 6 and 7, which relate to small businesses. Flood Re has been specifically designed to recreate the current cross-subsidy in the domestic home insurance market. There is little evidence that the same type of cross-subsidy applies in the commercial insurance market, and the majority of business insurance policies are already priced to risk. A recent English business survey of more than 9,000 businesses in England found that fewer than 1% of businesses had experienced difficulty getting property insurance in the last year due to the risk of flooding, and that no businesses had been refused insurance cover due to such a risk.
As outlined by the Association of British Insurers in its evidence session, businesses tend not to face the systematic issues that householders experience. We must also remember that Flood Re is funded through a levy on all household insurance policies. We have deliberately set that at £10.50, which the ABI estimates is the same as the current cross-subsidy. Widening Flood Re to include small businesses would significantly increase costs. We do not want someone living in a council tax band A property, for example, to subsidise the cost of insuring a private company that potentially earns up to £1 million a year. I am also mindful of the need to comply with state aid rules. Government intervention to support business would be carefully scrutinised and at greater risk of rejection—I know the hon. Lady is familiar with that issue.
On flood insurance and amendment 8, which was tabled by the same group of hon. Members, we are clear that we are talking about a one-in-200-year annual loss, not a one-in-200-year flood event. If Flood Re is legally responsible for claims above a one-in-200-year level, the cost of the liability could be prohibitive. Likewise, if the Government took on a liability beyond a one-in-200-year level, we could expose the taxpayer to extremely large and unpredictable costs. In such a catastrophic situation, many more homes than would be insured by Flood Re are likely to be affected. That is why the memorandum of understanding says that the Government of the day would work with Flood Re and representatives of the insurance industry to decide how any available resources should be distributed to Flood Re customers if flooding exceeds such a level.
Government amendment 58 is a technical one. On the issues raised by the hon. Member for Stoke-on-Trent North (Joan Walley), the Chair of the Environmental Audit Committee—we discussed them in Committee—the Government remain convinced that the existing provisions would be helpful enough in terms of the checks on companies’ financial probity and their technical ability. However, she rightly raised issues that could be addressed following Lord Krebs’s intervention in his letter. I am pleased to hear her calling for things such as betterment, meaning better quality reinstatement, and more information to customers, for which Lord Krebs has also called. Many hon. Members would like to include that in discussions with the ABI.
On misconnections, the hon. Member for Edmonton (Mr Love) is aware that local authorities currently have the power. We are not convinced that giving the power to companies would be helpful. His points are on the record and it is right that the Government take account of what he has said. I am happy to talk to him in future to see that we get the right response.
There is only a very little time for me to respond to all the points hon. Members have made on abstraction. My predecessor as Minister, my hon. Friend the Member for Newbury (Richard Benyon), has rightly said that there is agreement in the House that we want progress. Action is taking place under the existing regime—the Environment Agency has changed 77 licences since 2008, returning around 75 billion litres of water per year—but we need to go much further. That is why we are consulting. The process is under way and will lead to legislation, hopefully with the support of all parties, to reform that complicated system. However, we need to do that properly. I do not believe it is appropriate to do it in the way suggested in the new clause.
Finally, Government amendments 55 to 57, which I have tabled, seek to clarify the resilience duty. We want to make it absolutely clear to hon. Members that we are covering environmental sustainability. I hope the changes we are making to the resilience duty will reassure hon. Members who believe that we need to elevate the sustainable development duty that we are looking at environmental resilience as well as social and economic resilience.
Water Bill
Thomas Docherty Excerpts(10 years, 5 months ago)
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Stephen Gilbert (St Austell and Newquay) (LD)
It may please you, Madam Deputy Speaker, and the rest of the House to know that I do not intend to take 10 minutes for my remarks, let alone an extended period of time. Other colleagues will, I hope, be able to get in and make valid points on this important Bill.
I begin by continuing a theme established by the hon. Member for Arfon (Hywel Williams)—extending competition. He was talking, of course, about extending competition in Wales. Although the extension of competition in the water industry allowed for in the Bill is welcome, it is a missed opportunity because it could go further. It is welcome that businesses, charities and public sector organisations will be able to switch suppliers in pursuit of the best deal, but it is regrettable that that does not extend to household residential supplies and consumers.
I note what the Secretary of State said about the need to increase metering before such a transition can be put in place. It strikes me that offering the ability to switch to those households that already have meters would be a driver for greater take-up of metering. As we know from our experience in the south-west and in Cornwall, where we have particularly high levels of metering, that can help households to bear down on water use and improve affordability. The incentive of being able to shop around for the best deal if the household has a meter may produce a double whammy. Consumers would shop around for better water tariffs and metering would increase, enabling households better to control their water usage and its affordability. It is a thought that I leave with my hon. Friend the Minister.
However, it is clear that the introduction of competition into the market is long overdue. The fact that the previous Conservative Government essentially created a number of monopolies across the country has been a key failing of that privatisation. I have always felt that it was a privatisation too far, and precisely because it did not allow choice in the way that other privatisations of state industries did. There was no competition in the market and therefore no real driver for improved conditions. We see that in my constituency, much to our pain, as we still suffer from the highest water bills in the country. I am therefore pleased that the coalition Government have taken a step towards tackling that through the £50-a-year rebate.
I must say to Opposition Front Benchers, in relation to the earlier comments from the hon. Member for Garston and Halewood (Maria Eagle) about this being part of a cost of living crisis, that in Labour’s 13 years in office there were three reviews and one Act of Parliament, but not a penny came off water bills in Cornwall as a result.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I am sure that the hon. Gentleman has misled the House inadvertently, because he will know that Labour’s first price review led to a real-terms cut in water bills.
Stephen Gilbert
And the hon. Gentleman will know that the coalition Government acted to take £50 off bills in the south-west, which has made a real difference to affordability for my constituents and others who have suffered for a very long time.
Thomas Docherty (Dunfermline and West Fife) (Lab)
It is a pleasure to respond to this debate on behalf of the Opposition. We have had a good and lively discussion this evening, with a number of thoughtful and knowledgeable contributions. I hope to address in turn each issue raised by Members.
I am disappointed that in about five hours of debate we heard little from Government Members about how they propose to deal with the cost of living crisis. Some of them scoffed when Labour Members talked about the pressures facing households up and down the country. The cold, hard reality is that families are struggling today. My hon. Friend the Member for South Shields (Mrs Lewell-Buck), who serves with such distinction on the Environment, Food and Rural Affairs Committee, made an excellent and thoughtful speech about the pressures on household budgets.
Mel Stride
The hon. Gentleman is right to focus on cost of living issues. We also accept that they are important. Does he not accept that, if we look at the increase in average water and sewerage costs, we saw the greatest spike from about 2005 to the end of the period in which the Labour Government were in office?
Thomas Docherty
I will come on to that point in just one moment. As my hon. Friend the Member for South Shields mentioned, the latest figures show that more than 80,000 households have sought advice from citizens advice bureaux about water bill debts in the past year, which is almost exactly the same as the figure for how many sought help because they could not pay their energy bills.
The hon. Gentleman asks what the previous Government did. As we have heard today, we took decisive action to help families. We were the only Government to have forced a real-terms cut in a price review. He joined the House in 2005, which is interesting because it was the previous price review in which there was a real-term cut. The previous Government introduced WaterSure—the first social tariff scheme.
Sheryll Murray
Will the hon. Gentleman enlighten us on his proposals? We have heard an awful lot about the problems but not much about his or his party’s solution.
Thomas Docherty
If the hon. Lady shows a bit of patience, she might hear more detail from us than we heard today from the Secretary of State.
The previous Labour Government passed legislation that allowed the water companies to introduce their own schemes. Those companies had assured the country that they were keen to do so, yet almost four years after that legislation was passed, how many of them have kept their promises? How many water companies have developed a scheme within their region? How many of those fat-cat boards have put even a fraction of their obscene profits into the pockets of the hardest hit households? Just three out of 20 of the most successful and profitable companies in the country have lifted a finger to help their customers. It is no wonder that the most charitable description of the system, as offered by Citizens Advice, is “ad hoc”.
What did we hear from the Secretary of State today? What was his response to corporate failure and what was his proposal to help customers? He has written a second letter to his friends, the water bosses, not to demand real action but to make a helpful suggestion. He does not believe in Government intervention. No matter how much the market fails and the companies drag their feet and how many customers cannot afford the inflation-busting prices, this is a Government who do not believe that they should act. We on the Labour Benches do not share that belief. We believe that when fat-cat bosses will not act, the Government must.
As my hon. Friend the Member for Garston and Halewood (Maria Eagle) said, we will introduce a national affordability scheme. I welcome the points made by my hon. Friend the Member for Plymouth, Moor View (Alison Seabeck), who has been a constant champion of hard-pressed customers in the south-west region. Along with other Members, she raised the subject of flooding and flood insurance, which is an important issue. We share the concerns of many Members from across the House about both flood defences and how households can secure affordable insurance. The latest figures from the Environment Agency put the cost of damage to property in the past year at £277 million, almost £200 million of which was household damage.
We heard an excellent speech from the Chair of the Environmental Audit Committee, my hon. Friend the Member for Stoke-on-Trent North (Joan Walley), who highlighted the problem eloquently. The Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Thirsk and Malton (Miss McIntosh), highlighted the important and often overlooked issue of surface water run-off. The Opposition welcome the principle behind the proposed new scheme, Flood Re, but like the Select Committee we have serious and legitimate concerns about the fact that the Bill contains only one clause on that matter.
My hon. Friend the Member for Kingston upon Hull North (Diana Johnson) spoke from the heart about the problem of flooding. I am sure that the House would acknowledge that she has been a champion for her city, and I hope the Minister will provide real answers to the important issues that she raised.
I understand that Ministers are hastily drafting new clauses even now, but they must be adequately scrutinised. The issue has been raised by Members on both sides of the House, so will the Minister give a firm undertaking that the new clauses will be tabled in time to be reviewed adequately in Committee? Will he assure the House that such crucial amendments will not be rushed out at the last minute without due scrutiny?
We also heard from Members on both sides of the House about the tax paid by the water companies. As my hon. Friend the shadow Secretary of State has already said, it is simply unacceptable for water companies to make £1.9 billion in pre-tax profits and pay out £1.8 billion to shareholders. That is why we need to give the regulator broader powers to step in to protect customers and to ensure that fat-cat companies play by the same rules as other businesses. We want to ensure that excess profits, rather than heading to shareholders’ pockets, are used responsibly to reduce bills and improve infrastructure such as the Thames tunnel.
The hon. Member for Broxbourne (Mr Walker) mentioned abstraction. Not for the first time, he raised his concerns about the damage to chalk streams and asked whether I would set out our party’s position on the environmental impact issue. I am always keen to oblige him, so let me set out clearly our view of the crucial need for environmental mitigation. Even when the Government have tried to introduce reform, they have failed to follow through. As the Environment, Food and Rural Affairs Committee has warned repeatedly, a half-baked proposal to introduce upstream competition without proper abstract reform is worse than the status quo. As the WWF warned today,
“The licence system is completely broken, unsustainable and out of date”.
Why have the Government ended up in that mess? As in so many other cases where the Government have decided that something is difficult, tricky or requires them to act, they have just pushed this off. It should be no surprise that the Secretary of State ideologically opposes any Government action, but I wonder why the Minister responsible for water, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for North Cornwall (Dan Rogerson), has simply gone along with his boss’s laissez-faire attitude to our natural environment. Simply to promise, as Ministers apparently have, that the Department will do something in the next Parliament shows a lack of credibility.
Let me be clear: if Ministers have found thinking of solutions too hard, they should postpone all upstream reform until we have Ministers and officials who will stand up to the vested interests who are damaging our rivers.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)
I am grateful to the hon. Gentleman for giving way, and I look forward to debating many of these issues with him in Committee over the coming weeks. I am struggling to follow his argument. He says that there is an issue with abstraction reform and that we should press ahead and do something now, but his solution otherwise is to delay the whole process and not to consider any kind of reform of the industry. That seems to be his argument.
Thomas Docherty
Oh dear me; the Minister has obviously forgotten his own position. He will still be a member of the Environment, Food and Rural Affairs Committee for a little longer, so perhaps he can set out which side of the argument he agrees with—that expressed by the Select Committee of which he is a member or that in his new role as a Minister.
The hon. Members for Arfon (Hywel Williams) and for Newbury (Richard Benyon) mentioned retail competition, and the Opposition support non-domestic competition. It has been a success in Scotland, and like the Select Committee of which the Minister is still a member, we believe that, implemented properly, it will work in England. Like the Committee, however, we think there are technical improvements that we intend to explore further in Committee.
Hywel Williams
Has the hon. Gentleman any estimate of the cost of introducing competition in Scotland, where it is already under way, or in England? How much does he reckon that it will cost?
Thomas Docherty
The hon. Gentleman indicated that he is looking forward to serving on the Bill Committee, so we can discuss the matter further there. I refer him to the Select Committee’s report. The estimate of the first decade of competition in Scotland is that it will save the public sector £100 million. I think that the Department has produced figures for the savings in England, but the key point is that competition must be introduced properly.
Clearly, a range of important issues will require greater scrutiny and debate in Committee. The Bill is contentious not because of what it proposes—after all, the coalition has taken three and a half years to introduce measures that Labour developed in government—but because of what it does not deal with. It contains nothing on helping households struggling to pay their bills, nothing to make water companies pay their fair share of taxes, nothing to give the regulator real teeth to take on the fat cats, and nothing on reforming water abstraction.
I can assure the House that we will table amendments in Committee that will help households, give the regulators new powers, tackle tax avoidance and protect our natural environment. In conclusion, we will work constructively with the Government, and in that spirit, we will vote the Bill on Second Reading.
Dan Rogerson
Very little, I think is the answer. I thank the hon. Gentleman for his intervention.
Dealing with abstraction gives me an opportunity to welcome the contribution by my predecessor, the hon. Member for Newbury (Richard Benyon), not only because of all the work that he put in and how he has informed our debate, but because by seemingly being very popular across the House he will make it much harder for anyone to oppose what is in the Bill, as it was his work that got us to this stage. I am sure that that will help to develop the consensus, because everyone agrees with the conclusions he drew and the position we are in. The Government are clear that any moves on abstraction and upstream reform must work together, so what we are establishing in the Bill will come into effect alongside the abstraction reform that we are moving towards. We have to get this right because it is crucial that we have the water resources to deliver the growth and environmental outcomes that we want to see.
Many Members covered flood insurance. I am all too aware of the devastation caused by flooding and its financial and emotional impact. I recall the destruction in Boscastle in my constituency. I became the Member of Parliament for North Cornwall a year after that tragedy, where fortunately no lives were lost. It also affected other nearby communities such as Crackington and Canworthy Water. The problem was that flood insurance companies were not up to the task. Fortunately, the Association of British Insurers was able to step in to offer advice and to help resolve the issues. As we have heard, other Members have similar recollections from their constituencies.
Flood risk management remains a top priority for this Government. We have committed record levels of capital spend and more than quadrupled contributions from other sources. As a result, we will have improved defences for 165,000 households by March 2015 and an extra 300,000 by 2021. I recently visited South Zeal in Devon, where residents shared with me their harrowing experiences of flooding. They also showed me the actions the community is taking to become more resilient to flooding, to keep down their insurance premiums in the long term. This Government are committed to providing access to affordable insurance for households at high risk.
We will table new clauses in Committee. Draft clauses have been available for some time and much of our work in Committee will be based on them. Were we to delay the Bill after this Second Reading debate, we would not be able to deliver our programme in a timely fashion. That is our objective. Yes, it is regrettable that those clauses are not in the Bill as drafted, but these are very complicated negotiations to ensure that an industry-led solution works not only for the industry, but fundamentally for communities and residents who need support.
Thomas Docherty
The Minister has given an undertaking that those new clauses will be available for scrutiny by the Bill Committee next week. Will he say, once and for all, whether those 20-odd clauses will be available in time for the Committee adequately to review them next week?
Dan Rogerson
It is my intention that they will be available for the Committee to look at as soon as possible, but we have to get them right and make sure that they deliver what the Government and my predecessor agreed with the industry, so that we deliver effectively.
Dan Rogerson
My hon. Friend is absolutely right. House building has not been at its fastest recently, so the vast majority of properties in this country were built before the cut-off date, which ensures that there is affordable coverage for those who need it.
The Chair of the Select Committee made a point about sharing benefits data with water companies, as did the hon. Member for Plymouth, Moor View. We have to be careful because those data are very sensitive, and sharing them with the industry would currently be illegal. We can look at that, and the Select Committee has made recommendations, but we must get it right.
Thomas Docherty
The Minister is obviously talking about bits of the Bill that do not yet exist and which the House has not seen. A few moments ago, he said that capital expenditure had gone up. It might help him if I point out that there has been a drop of £96 million this year compared with the situation that the Government inherited in 2010. We want to place on the record the accurate figures, rather than those given to him by his civil servants.
Dan Rogerson
Over the spending review period as a whole, the investment will be bigger, and we will see the numbers climbing over the coming spending review period as well, by up to £400 million a year by 2021.
Several hon. Members raised the issue of bad debt, and rightly pointed out that some companies are better than others. We of course want all companies to aspire to do better. To return to the points made by my right hon. Friend the Secretary of State, we now have a far more vocal and effective regulator than we have had for some time. On issues of bad debt, affordability and company transparency, which matters to many right hon. and hon. Members, the expectation on companies to deliver is now much greater. I want to make it clear that many companies are doing a good job, investing money and delivering for customers, but where there are problems, the regulator will tackle them. My right hon. Friend set out absolutely clearly in his letter to the companies his expectations for the industry. The Government are supporting the regulator to carry out the work that is necessary.
Water Industry
Thomas Docherty Excerpts(10 years, 6 months ago)
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Richard Benyon
My hon. Friend makes a good point. The Government are right to deal with the connection to private sewers, where many leakages have occurred. They, and the water companies, are also taking action in other areas to ensure that they are playing their part. Sometimes just a small investment can make a big difference to the flood risk in an entire street, for example. It is vital to ensure that the water companies are sitting down and talking to the flood forums and the local flood authorities to make sure that these issues are being addressed, but perhaps that is a wider issue for another debate.
The Water Bill will play a key part in addressing the challenges. The question of building new infrastructure and new reservoirs was raised earlier. The key reform to ensure that that happens, to secure the long-term sustainability of the industry and long-term benefits for our constituents, will involve enabling new entrants to come into the industry and provide new competition. The competition that will exist in the non-household sector must, in time, be introduced in the household sector as well, and I hope that that will be the long-term ambition in a forward-thinking political agenda. That would result in the kind of benefits for households that businesses will soon be able to achieve by switching supplier. The Bill should be seen only as work in progress, however.
One of this Government’s achievements of which I am most proud is the water White Paper. It might sound rather prosaic to say that I am proud of a document, but it set out some important provisions. It demonstrated that the Government were getting a grip on water policy. In the past, water policy had been created by all kinds of different organisations and bodies, not least the water companies themselves. In the White Paper, we demonstrated our determination that the Government should own the policy and that the regulators should regulate. We stated that, in a regulated sector, if the water companies functioned within meaningful regulation by the three regulators, we would have an industry of which we could be proud. The water White Paper was welcomed by customers’ groups, the industry, investors, green NGOs and all parts of the House, although I do not know whether that makes it a unique document, as the natural environment White Paper achieved much of the same.
Thomas Docherty (Dunfermline and West Fife) (Lab)
I seem to recall that the Select Committee, of which the former water Minister was a member, criticised the Government for not being ambitious enough. Is that not a fair recollection?
Richard Benyon
The Select Committee produced many good things with which I agree. If that is what it said at the time—I am afraid that many of my memories of the last three and a half years merge into one—I would probably not agree, because there was bold ambition in the water White Paper, which was reflected in many of the comments made about it by many different people.
Mr Buckland
I am grateful to my right hon. Friend for that, and his role in all this back in the late 1980s must not be underestimated. As he rightly says, now is the time for us to draw an analogy with other industries such as telecoms, where infrastructure and supply are dealt with separately. Giving consumers the right to switch suppliers is essential if we are to drive through an improvement in service.
Thomas Docherty
I heard the hon. Gentleman making this argument earlier on the BBC. For the interest of the House, will he clarify whether he also believes that the water companies should be able to disconnect a customer who refuses to pay?
Mr Buckland
Disconnection is very much a last resort. We need to make sure that we do not put consumers off from switching for fear of disconnection that may be unjustified. Not only is water a resource for the country, but it has huge and essential social utility. It is one of the essentials of life, so I quite accept that we must have a social dimension to all this. That is why moving towards a system where we have more social tariffs to help the more vulnerable members of society would be a good thing.
Thomas Docherty
I am most grateful for that half-explanation. Does the hon. Gentleman accept that unless there is disconnection, the market simply cannot work? If we are going to have competition for households, we would have to have disconnection.
Mr Buckland
I do not follow that argument; it does not apply in other sectors and I do not see why it needs to apply in this one. Disconnection would not assist consumers when making that switch because they may well be deterred by the fear of disconnection, so I do not accept that argument.
Gavin Shuker
Why not start with the three reviews that led to the water White Paper? The Pitt, Walker and Cave reviews looked directly at competition and were conducted in the five years before we exited government and this Administration came in. They laid the groundwork and contained radical ideas that would have resulted in better provisions for water affordability. They would have put in place a framework to deal with the issue in its entirety. The water White Paper, which resulted from those reviews, was quite good, but that has left many of us asking: why is the Water Bill so washed out?
Thomas Docherty
My hon. Friend is making an excellent speech. I think I am right in saying that it was only under the Labour Government that water bills actually fell. Is that correct?
Thomas Docherty (Dunfermline and West Fife) (Lab)
I am grateful for the opportunity to respond to the debate on behalf of the Opposition, Madam Deputy Speaker, and I apologise for my slight tardiness at the start. I meant no disrespect to the Chair.
I congratulate the hon. Gentlemen on securing this excellent debate, although I suspect that their ministerial colleagues in the Department will be less keen to thank them after hearing some of the issues that they have brought to the House today.
Three and a half years into the life of the Parliament, and with the regulator expected to have completed its price review by the end of next year, it is well worth reviewing the track record of the coalition Government. It is regrettable that, having by general consensus inherited a substantial body of work from the previous Labour Government on how to reform the water industry, the coalition has frittered away so much of the past 40 months. I am at a loss to understand what, if anything, was done in the first year and a half of this Government. When they came to office in 2010, the new ministerial team inherited not one but two reports on the water industry from Anna Walker and Martin Cave. Both reports had been favourably received by consumer groups, customers, regulators, industry commentators and Parliament. The reports, which complemented each other, provided a clear framework for reform. In fact, the only organisations that did not welcome their recommendations were some of the water companies.
It is not surprising that those who were found to have let down their customers—whether domestic, in the public sector or in private business—were the ones who were less than enamoured of the possibility of reform. The stories of poor customer service are legendary—we have heard many such cases today—as are the dividend returns paid out by many of the water companies. The arrogance of the companies has been astonishing. The tax avoidance measures, coupled with a refusal to plough excess profits back into either infrastructure improvements or a lowering of bills, are simply unacceptable.
Even now, when household budgets are continuously squeezed by inflation-busting utility bill increases, many of the water companies show a breathtaking arrogance by refusing to pass back any of their profits to consumers. For example, Thames Water, having recorded eye-watering returns for its investment, now expects hard-pressed customers to foot the cost of the Thames tunnel.
Water companies are some of the most profitable in the utilities sector, earning even more than energy companies. Energy companies make operating profits of approximately 9% whereas water companies make operating profits of approximately 30%. While shareholders have seen their dividends increase, families across the country have suffered. Last year, regional water companies made a pre-tax profit of £1.9 billion, paying out dividends totalling £1.8 billion to shareholders, yet they have not seen the need to pay their fair share in taxes. As The Sunday Times revealed, in 2012-13 Thames Water, which, as we have already discussed, has asked to increase bills by a further 8%, made £127 million of pre-tax profit and paid zero corporation tax.
There are further examples, as we have heard from the hon. Member for Skipton and Ripon (Julian Smith) and others. Yorkshire Water made £184 million and paid no tax, and Southern Water paid just £6.5 million tax on profits of £172 million.
Water companies have been able to reduce their tax liabilities to such tiny levels by substantially increasing their levels of debt. Some water companies have reduced their tax bills by offsetting the interest payments on debt, often inter-company and involving tax havens, while claiming allowances for spending on infrastructure. Shareholders and bosses, as we have heard, have benefited from that aggressive tax avoidance, with eye-watering salaries going to those at the top. Peter Simpson, chief executive of Anglian Water, received a package worth £1.27 million in the last year, up from a mere £1.06 million the year before. The complex nature of tax governance and the growth in debt has been recognised by Jonson Cox, the chairman of Ofwat, who described the ownership of these companies as complex and “opaque” structures.
Thomas Docherty
I will not, because there were so many speakers and we have very little time for the Minister to speak.
Ofwat has highlighted that the overall proportion of equity has diminished from 42.5% in 2006 to 30% of regulatory capital today, with some companies obtaining only one fifth of their financing from equity.
So why the delay in reform? Why has the coalition dragged its feet? Why have the coalition parties seemed so unwilling to champion the household customer, small businesses and the taxpayer? It is because this coalition Government serve the vested interests, not the interests of ordinary Britons. Ministers have done nothing to help hard-pressed small and medium-sized enterprises because they are too busy cosying up to their friends in the City. Labour understands that when small businesses are struggling to survive thanks to the failed economic policies of the Chancellor, the Government should be standing up for them, not their fat cat friends.
After three wasted years, we have no progress on social tariffs for those who are struggling the most and can afford to pay the least; no pressure brought to bear on water companies to adopt permanent solutions to flood insurance, without which hundreds of thousands of families up and down the country face uncertainty; and, as we heard earlier, no substantial progress on water competition—a series of measures that would help our cash-strapped businesses grow our economy.
It has been four months; 16 weeks; one hundred and sixteen days since the Secretary of State met the water companies. Last week, we had the unseemly spectacle of the Prime Minister briefing against his own Ministers and officials as panic set in on the Downing street spin operation, which reacted to the pressure placed on it by my right hon. Friend the Leader of the Opposition, and the Labour party, to stand up to the water companies. We had days of Downing street briefing that action would be taken, either through regulation or by instructing Ofwat to take action on water bills.
In short, we were all anticipating a big announcement from the coalition parties. And in the end, what did we get? A letter. One thousand words. A missive to the water companies from a Mr Paterson, of North Shropshire, which said, in effect: “Dear chief executive, Thanks for coming along in July for cream tea; our last discussion was so riveting that I clean forgot to write about it until now! I know that times are awfully hard for you at the moment, with your offshore investors demanding an even greater return on their money than last year, but it would be awfully splendid, as we’re all such good chaps, if you could not put your bills up by quite as much next year as you were thinking about doing. It would really help me out of this political pickle the Prime Minister has put me in, and I know that you’re all such good eggs. Best wishes, Mr Paterson.”
The Secretary of State’s letter is clear evidence that the Government do not understand the cost of living crisis here in Britain today. For 39 out of 40 months under this coalition, prices have risen faster than salaries. Until this weekend, water bills were not a priority for the Prime Minister or the Department. After three and a half squandered years, a hastily cobbled together statement of vague promises of future action is simply not enough. It is clear that the Prime Minister is unwilling or unable to stand up to the vested interests that have placed the needs of offshore tax haven investors ahead of those of hard-pressed householders and businesses.
Families deserve better than this; small businesses deserve better than this; Britain deserves better than this. Since privatisation in 1989, water bills have increased by almost 50% in real terms. The Secretary of State has the guile to call the water industry one of the great successes of privatisation. Madam Deputy Speaker, it is only a success story if you are fortunate enough to own shares in one of those companies.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Dan Rogerson)
This has been a fascinating debate. Contrary to what the hon. Member for Dunfermline and West Fife (Thomas Docherty) just said about my attitude, I welcome the debate. It is a foretaste of the discussions that we will have on Second Reading of the Water Bill and in Committee and subsequent stages.
Today’s debate has been a useful opportunity for hon. Members to raise a range of issues such as affordability and the practices of water companies, and also local issues such as flooding, development and the history of water supply going back to the locally owned water provision that the right hon. Member for Holborn and St Pancras (Frank Dobson) spoke about. I will come back to some of the comments of the hon. Member for Dunfermline and West Fife. It is a great shame that he finished off his speech as he did. He knows quite a bit about these issues and enjoyed dealing with them in the Select Committee. He should have written the speech himself, instead of giving a speech that was written for him. He could have done much better himself.
Dan Rogerson
The hon. Gentleman did not take interventions, so I shall follow his lead and try to respond to some of the issues raised in the debate. We will have plenty of opportunity to come back to his comments.
I congratulate the hon. Member for Dover (Charlie Elphicke) on leading the charge to secure the debate. He wanted to send a clear message to Ofwat and particularly to the water companies that consumers expect more now. They want a fairer deal to cope with the cost of living and to reflect the fact that the water companies have had some good years. They have had much lower borrowing costs in recent years than was predicted when those prices were set. The hon. Gentleman is looking for some flexibility during the current price review period for those issues to be taken on board.
Clearly, that is a matter for the regulator. Ofwat is being far more assertive in the message that it is sending to the water companies. It has the power to revisit the current price settlement, but in particular circumstances. Ofwat’s discussions with water companies are obviously focused on the coming price review period. It will want to see whether water companies come forward with any suggestions. As my right hon. Friend the Secretary of State pointed out in his letter to the water companies, they are in far better circumstances than were predicted at the beginning of the current period. As a Government, we are supporting Ofwat and providing political cover. If Ofwat is looking for a deal from water companies that more accurately reflects current circumstances, it has the political back-up to do that. I welcome the signs that Ofwat is indeed doing that.
The issues surrounding investment are crucial. The right hon. Member for Holborn and St Pancras spoke about the simple business of a couple of pipes in the ground catching the rain water and sending it on. That was the case once upon a time. There are also the issues of what happens—how can I put this delicately?—after the water has been consumed by the consumer. What used to happen is that a pipe would be installed, as I know all too well, representing a coastal constituency, and the waste would drift out into the Atlantic ocean. That is not acceptable now and we expect a far better standard of treatment for sewage and better solutions to deal with the problems. That is why we have much better bathing water quality than we used to have.
Dan Rogerson
I will not give way. I accept what the right hon. Gentleman says about what he considers simple problems. Yes, we want the water companies to do better on price, but we also want them to continue investing and improving. We have a responsibility to deliver better environmental quality. We have seen improvement in that but we want it to go much further, so we want the investment to continue. We will have the opportunity to consider some of these issues on Second Reading of the Bill, so perhaps we can come back to the more technical issues at that point. I know that hon. Members on both sides of the House will want to engage with me in the run-up to that and I look forward to some informal discussions, as well as the discussions on Second Reading.
I pay tribute to my ministerial predecessor, my hon. Friend the Member for Newbury (Richard Benyon)—he is not currently in his place—who did a huge amount of work to get us where we are. Some Opposition Members claimed that nothing has happened over the past three years, but nothing happened over the 13 years they were in office, other than reviews. Her Majesty’s Opposition seem to stake their reputation on a number of reviews, but they did nothing on the back of them. This Government will look at that work and the evidence provided and do something, such as dealing with the inequality in the south-west and the problems people there face, which Anna Walker looked at, and the issue raised by the Cave review, which looked at the water industry as a whole. This Government are taking action.
The Government are also looking at flood insurance, because the previous Government left the clock ticking on an agreement that was about to evaporate. We have negotiated something that will now be delivered in a Bill. I pay tribute to my hon. Friend the Member for Newbury for being at the forefront of delivering that settlement. We look forward to debating that as we take the Bill through the House.
The hon. Member for South Swindon (Mr Buckland) talked about leakages. He said that although water companies have improved, they could do much better and there is still a long way to go. I absolutely agree. The important point is that we still see companies investing in the infrastructure to put it right and get a better solution to the problems. That is why in all our discussions on price we must ensure that we get the balance right so that we can continue to see that investment.
We heard an interesting exchange between the hon. Member for South Swindon and the hon. Member for Dunfermline and West Fife on household disconnections. It was not clear to me whether the hon. Member for Dunfermline and West Fife was recommending that water companies should have that power. I hope that that was not the case, because it is certainly not something the Government want to reopen.
Dan Rogerson
I am pleased to see that is not something the hon. Gentleman wants, because we certainly do not.
We hope to see some benefits through retail competition, but we want to do that carefully. This is a huge area of reform and a big change. That might slightly disappoint the right hon. Member for Wokingham (Mr Redwood), who looks forward to a time when there will be an ample supply of water for everybody to enjoy in all sorts of ways and when we will not have such nasty things as metering and restrictions. There are other reasons for metering which relate to energy use and environmental concerns, because whatever we do to reform the retail side will not suddenly and hugely increase the amount of water. We will work on abstraction reform and encouraging new people into supply, but that does not necessarily mean we want to abandon our commitment to using the water we have efficiently and managing our resources effectively.
However, I accept what the right hon. Gentleman said about the challenges monopolies present, which is why we want first to move towards allowing businesses, charities and so on to have the benefit of competition. We also want them to look at how they can simplify, so that businesses with many sites across the country, for example, can have one unified bill. That would be a huge saving for them and would allow far more transparency, rather than having separate bills for every site.
A number of hon. Members mentioned the tax situation and financing. Some of those points are for the Treasury, rather than me, but they have had the chance to put them firmly on the record. Many of them have been campaigning on that outside this place, which I know they will continue. I know that Ofwat is listening to that carefully. One of the things it is keen to do with water companies is look at how it regulates to encourage transparency and overcome opaqueness, which relates to what Jonson Cox has said. The companies that take a more responsible attitude to engaging with consumers, feeding back their information and being open about what they do can be regulated in a way that reflects that, and those that refuse to engage with that progress will be the ones that Ofwat will want to investigate much more closely and have close conversations with in future. That is the sort of approach that I very much welcome. Having mentioned Ofwat a number of times, I should also pay tribute to the Consumer Council for Water for its work as the voice of the consumer, which has not been mentioned in the debate so far.
Several hon. Members raised the issue of bad debt, and I am pleased about that. We have been very clear that we want the companies that have done less well on that to look to the examples of those that have done much better in offering a better deal, and to try to build on that work.
The hon. Member for Elmet and Rothwell (Alec Shelbrooke) talked about development issues. Water companies have the opportunity to have an input into that process, but so does the Environment Agency in relation to flooding, and that is important. We want to see housing growth in the economy and investment in housing for people who are desperate to get on to the housing ladder or, indeed, to rent. We have to get the right balance in that process.
My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) posed a number of challenges and raised detailed issues that I am happy to discuss with him as we move towards the Second Reading of the Water Bill and its progress into Committee.
The hon. Member for Brigg and Goole (Andrew Percy) raised issues about flooding and infrastructure investment. It is important that we encourage companies to continue to invest to overcome these problems at the same time as bearing down on price. The hon. Member for Skipton and Ripon (Julian Smith) talked about transparency and the tax framework. He also noted that some consumers feel that they have very little voice in what is being done with the money that they hand over to the water companies in their bills. Ofwat is taking a much tougher line on this, and I welcome that.
Our approach in the Water Bill is to look to update the structure of the industry to deal with some of the problems we have heard about, but not to try to step in and do what Ofwat is there to do. It is the regulator, and, as my hon. Friend the Member for Newbury said, it will regulate. We will therefore make sure that there are opportunities for it to make any proposals that it thinks will improve the Bill. If there are things we are not doing in primary legislation or it wishes to see change, it will be able to get involved in and develop those things without having to come back to this House or the other place.
The Government’s approach to this issue is a responsible one. Knee-jerk reactions that undermine the strengths of the regulatory system could be immensely damaging. A stable, independent regulatory system is vital in keeping bills affordable. Small changes to the industry’s financing costs can have a significant impact on customers’ bills. In that context, I reiterate my strong support for Ofwat’s drive to secure efficiencies and improvements through the price review and other measures that will allow us to keep customers’ bills as low as possible while ensuring that we can continue to attract significant, low-cost investment in the sector.
I thank hon. Members for bringing this issue to the attention of the House. The interest and passion expressed by Members displayed the importance that we all place on the matter, and I assure them that it continues to receive the highest level of attention from the Government. We will return to many of these important aspects of the industry as we move towards the Second Reading of the Water Bill in due course.
Oral Answers to Questions
Thomas Docherty Excerpts(10 years, 7 months ago)
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Dan Rogerson
I thought for a moment that my hon. Friend, who chairs the Select Committee, was petitioning the Prime Minister to summon us back to it, and that our tenure on the Front Benches might be very brief.
The timing of the Bill is, of course, a matter for those who manage our business. I look forward to debating the issues with colleagues in the House and, subsequently, in Committee.
What my hon. Friend has said about investment in the sector is crucial. We have already managed, through our regime, to deliver huge investment in water infrastructure. We now want to establish a regime which, while being fair to customers, also attracts further investment, so that we can have an industry that is fit for the future.
Thomas Docherty (Dunfermline and West Fife) (Lab)
May I begin by paying tribute to the previous Minister who worked in a bipartisan manner throughout his term in office and welcoming both new members of the Government Front-Bench team? I should also thank the chairlady of the Select Committee for her tutelage of us all over the past three and a half years.
Does the Minister understand that when households are struggling with inflation-busting water bills, it is simply unacceptable for water companies to try to avoid paying corporation tax? If he does, will he work with Opposition Members to make the necessary improvements to the forthcoming Water Bill?
Dan Rogerson
I welcome the hon. Gentleman to his post and look forward to debating these issues with him. As we look at the regime the Bill is seeking to bring in, we can discuss some of these issues, although there are probably other key areas we will want to focus on. The issue of corporation tax is crucial across many industries and I look forward to hearing what the hon. Gentleman has to say on the subject as we move forward.
Wild Animals in Circuses Bill
Thomas Docherty Excerpts(11 years, 4 months ago)
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Thomas Docherty (Dunfermline and West Fife) (Lab)
I beg to move, That the Bill be now read a Second time.
I am sure many people are disappointed that we have not had the chance to debate energy tariffs or financial literacy. I hope that those Members who are now slinking out of the Chamber, such as the hon. Members for Shipley (Philip Davies), for Plymouth, Sutton and Devonport (Oliver Colvile) and for Rossendale and Darwen (Jake Berry), will reflect, particularly in this weather, on the fact that we did not have the opportunity to discuss a measure that would help thousands of their constituents because they filibustered. I hope that their voters are made aware of that. On a more positive note, I thank the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), for the productive way in which his Department has engaged with this Bill.
The House is familiar with this issue. Some 16 months ago, the House had a productive and constructive Backbench Business debate and resolved, without Division, that wild animals in circuses should be prohibited. In the interest of saving time, I do not intend to rehearse those arguments today. Instead, I shall explain what my Bill would do that the Government have yet to achieve. I hope that, through my eloquence, I shall be able to persuade the Minister to make a positive announcement when he responds to the debate.
There is currently a licensing arrangement in place. A rather robust statutory instrument debate took place last year, led by the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath), and my hon. Friend the Member for Glasgow South (Mr Harris). It was one of those debates in which there was a lot of heat but not very much fire. However, we welcome the licensing as a step in the right direction, and we hope today that we can—to use a word that the Prime Minister is rather fond of—nudge the Department into finally upholding the promise that it made to the House 16 months ago to ban outright the use of wild animals in travelling circuses.
The number of circuses that use wild animals has decreased substantially in recent years. According to the latest figures, only about three dozen wild animals remain in travelling circuses. The Bill does not cover the use of wild animals in television and film. There is a recognition that they form an important part of our creative industries, and that there are already strict controls in place covering the use of wild animals in those circumstances. Nor does the Bill cover the use of wild animals in zoos or aquariums. Again, rigorous standards cover those establishments.
It is fair to say that the country has grown to dislike the idea of wild animals being dragged around the country for the purpose of entertaining people. A YouGov poll showed that nine out of 10 of the people surveyed supported an outright ban. The Back-Bench debate and the early-day motion showed that more than half of all Back-Benchers in this House support such a ban.
Thomas Docherty
I will, because the hon. Gentleman has had the courtesy to stay in the Chamber.
Mr Nuttall
I am listening to closely to the hon. Gentleman. Will he explain why, if the need for a ban on wild animals in circuses is so pressing, the Labour Government took no action at all on the matter during their 13 years in office?
Thomas Docherty
We took a number of steps to improve animal welfare, and the number of wild animals in circuses decreased during that period.
I often try to be helpful to the Minister, and I have indicated that I would have been happy, had he and his colleagues been so minded, to use the Bill as a vehicle for taking the necessary legislation through. Perhaps he will tell the House when he responds to the debate what path the Government intend to take towards introducing a ban. There is cross-party agreement on this matter. No one in the House who is in their right mind believes that wild animals in circuses should not be banned. As I have said, nine out of 10 members of the population support a ban, and more than half the Back Benchers in this place signed the early-day motion in support of one.
I have been in contact with a number of charities involved in this area—there are too many to list—and I have received more than 1,000 e-mails in the past seven days from supporters of a ban who have also contacted their constituency MPs. I know that there are many Members here today, possibly including the Minister, who have received e-mails urging them to vote for a ban.
This is a relatively straightforward measure. It is also useful that the charities involved have found homes for all the wild animals if the circuses do not wish to keep them. As I have said, there is a role for them in the creative industries, and they will not be put down or kept in poor conditions. I am conscious that my hon. Friend the Member for Wakefield (Mary Creagh) wishes to speak in the debate, and that I need to allow the Minister adequate time to explain how he has been so moved by my eloquence. So, with those brief remarks, I commend the Bill to the House.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)
I thank the hon. Member for Wakefield (Mary Creagh), who has the ability to work something acerbic into any conversation and sometimes—to put it in the context of this debate—to play the clown when it comes to what has actually happened and to what our commitment in DEFRA is.
I fully appreciate how important the issue of the use of wild animals in circuses is, not only to this House, as has been said, but to the wider public. I congratulate the hon. Member for Dunfermline and West Fife (Thomas Docherty) on bringing the issue to the fore once again. The protection of the welfare of performing wild animals in circuses is a matter that the Government take very seriously and we have pledged to take tough, prompt action to address it. The Government have already announced that they will be seeking to introduce primary legislation to ban the use of wild animals in travelling circuses. The Government’s policy in this area was set out in two written ministerial statements, on 1 March 2012 and 12 July 2012. We further announced on 12 July that we would seek to publish draft legislation this Session for pre-legislative scrutiny that would outline our proposals for a ban. That position has not changed. I am happy to assure the hon. Gentleman that DEFRA is working on a draft Bill and we firmly intend to publish it for parliamentary scrutiny in this Session.
Thomas Docherty
Just so I know that my ears did not deceive me—as he is a Conservative Minister, I have a great deal of trust in his word—will the Minister confirm that his Department will introduce the draft Bill for scrutiny in this Session, rather than just “seeking” to introduce it?
Richard Benyon
I will repeat what I said: I am happy to assure the hon. Gentleman that we firmly intend to publish the draft Bill for parliamentary scrutiny in the current Session. The final timetable for legislation will be for Parliament to decide. It inevitably takes some time to reach a position where we can present a draft Bill that does the intended job and is robust against potential legal challenge.
Richard Benyon
No, I think this will become law in the next Session, subject to the vagaries of the House’s opinions on the wording of the Bill—another reason why we want pre-legislative scrutiny. The hon. Lady can be absolutely assured that we want to get this measure on the statute book as early as possible; we do not want the issue continuing into future Parliaments. We want to make sure that it gets Royal Assent as soon as possible.
Thomas Docherty
Further to the point made by my hon. Friend the Member for Wakefield (Mary Creagh), let me give the Minister this guarantee. If the Department publishes the Bill prior to the end of February, the EFRA Select Committee will make every effort possible to scrutinise it this Session. If the Minister can use his generosity and commitment to make that happen, we will do our bit in the Select Committee.
Horsemeat (Supermarket Products)
Thomas Docherty Excerpts(11 years, 4 months ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Thomas Docherty (Dunfermline and West Fife) (Lab)
Mr Jeff Rooker, the chairman of the FSA, is due to stand down in just a few months’ time. Will the Minister ensure that the Department of Health fills the post before June? [Interruption.]
Mr Speaker
Order. There is a lot of noise in the Chamber. I understand people’s consternation on this matter, but let us hear Mr Docherty’s question and then the Minister can answer it.
Thomas Docherty
I am most grateful, Mr Speaker. Mr Jeff Rooker, who is the chairman of the FSA, is due to stand down in just a few months’ time. Will the Minister of State ensure that the Department of Health fills that important role before June?
Mr Heath
He is actually Lord Rooker—and somebody who in the past has filled the position that I currently occupy. He is standing down—that is absolutely right. Of course the post will be filled, because it is an extremely important one, and I have no doubt that the timetable will be consonant with the time of his departure.
EU Fisheries Negotiations
Thomas Docherty Excerpts(11 years, 4 months ago)
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Richard Benyon
I visited my hon. Friend’s region not long before Christmas and that point was made very clear to me. I recognise that we have a very valuable processing industry that we want to protect. In large part, it is dependent on fish from Iceland. If sanctions are brought in against Iceland, we want to ensure that they are proportionate. We think we can exert some influence in this area and get Iceland back to the table, so that we can start seeing proper management of a stock that swims across a vast area that is the responsibility of many countries.
Thomas Docherty (Dunfermline and West Fife) (Lab)
On behalf of the Scottish and UK fishing industries, may I congratulate the Minister on a job well done? Will he give the House an assessment of whether Scotland’s fishermen would have benefited from having a separate delegation or whether we are better together?
Richard Benyon
My view is that Scotland’s fishermen are best represented as part of a large, 29-vote member of the European Union. That is true of a lot of other interests. I cannot do the maths off the top of my head to work out how many votes Scotland would have as an independent state, but I think that it is best served by being part of the United Kingdom in these negotiations.
Animal Welfare (Exports)
Thomas Docherty Excerpts(11 years, 5 months ago)
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Thomas Docherty (Dunfermline and West Fife) (Lab)
I am grateful, Mr Deputy Speaker, to have caught your eye. It has been an excellent consensual debate so far. I have the privilege of serving on the Environment, Food and Rural Affairs Committee. I also serve on the Defence Committee and I hope that the Backbench Business Committee will in future consider the timings of some of these debates. I suspect that this debate may not go the whole five hours. There might have been an opportunity for a second debate later, although I am conscious that my hon. Friend the Member for Ogmore (Huw Irranca-Davies) is still to share his huge wisdom with us, which may take some time.
As a Member representing a Scottish constituency, I am cognisant of the issues facing the farming industry. It has been a measured debate, and I congratulate my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) and the hon. Member for South Thanet (Laura Sandys) on securing it and on being present to open it and then to hear the very good exchanges that have taken place. I received a number of e-mails from constituents asking me to attend and I was happy to do so. I shall tackle a couple of issues that particularly affect Scotland. Also, I am conscious of the request from my hon. Friend the Member for Ogmore for a Select Committee inquiry. I shall return to that.
On the subject of transportation, the hon. Member for Brecon and Radnorshire (Roger Williams) mentioned the importance of the export of live animals to British farmers, particularly those in the sheep industry. I understand that around 400,000 live animals a year are exported, more than 90% of which are sheep.
We all recognise the challenges facing the sheep industry across the United Kingdom, particularly in upland areas. Were we to ban live exports, not only would we fall foul of European law—article 34, I think, but I might be wrong—but there would be serious consequences for our farmers. However, that is not to say that we should not require the highest standards of animal welfare in the process, and I welcome the constructive comments made by the hon. Member for South Thanet and my hon. Friend the Member for Poplar and Limehouse on the way forward.
It would be helpful if the Minister could set out the Government’s thoughts on some things. For example, does he agree that using regular services on large, cross-channel freight ferries from Dover might be more advantageous than the less than ideal conditions in which they are sailing from Ramsgate, as the hon. Lady said? Not only are journey times significantly shorter, but there are more frequent sailing opportunities for ferries. Also, there are probably—I hope she takes no offence—better and more appropriate port facilities for live animals at Dover than there are at Ramsgate.
Caroline Lucas (Brighton, Pavilion) (Green)
Opting for an all-out ban right now would be against EU law, but does the hon. Gentleman agree that it would be helpful if the Minister did everything he could to advocate such a ban at European level, because we are often told that things are against EU law, but when member states really start to push they can get breakthroughs?
Thomas Docherty
No, I do not agree that we should have an outright ban. If the hon. Lady had been here since the start of the debate, she would have heard the reasons why. We have a fragile farming industry and banning the trade would be ludicrous. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil), who is sitting beside her, will probably wish to point out to her that banning the use of ferries would effectively end sheep farming on the Western Isles, the Isle of Arran and other islands around the United Kingdom. I am sorry that she has not had the opportunity to go across the country and listen to farmers, because otherwise she would understand the fragile state of their industry and the damage an outright ban would do. If she had been here for the whole debate, rather than coming in at the last minute, she would have had an opportunity to hear the eloquent speeches made by Members on both sides of the House.
Another consideration is that there are larger, faster and more stable boats sailing each day from Dover. As the hon. Member for South Thanet set out clearly, we are dealing with a very dubious character when it comes to the gentleman running the trade out of Ramsgate. It is obvious that animal welfare is not his priority and that he is not interested in local public opinion or in what DEFRA has to say. For him, it is all about the bottom buck. It would help if the Minister set out what powers DEFRA has to ensure that a fast buck is not the most important consideration for exporters and that animal welfare is crucial.
Over the past few years we have seen that having an export market for livestock helps even those farmers who sell within the UK because it takes some of the surplus supply overseas. About six weeks ago the hon. Member for Tiverton and Honiton (Neil Parish) and I had a very good debate in Westminster Hall on the dairy industry. We pointed out, along with another Select Committee colleague, that what farmers need is a fair price for their produce, whether it is milk, mutton, lamb or beef. Doing all we can to encourage exports will not only bring additional revenue into the UK and help the balance of payments—I do not intend to give the House a lecture on economics—but help to secure a fairer price for farmers and a vibrant farming industry. Perhaps the Minister will also set out what DEFRA intends to do to encourage exports to other parts of the European Union, because Labour Members, with perhaps one exception, recognise that a vibrant farming industry is a good thing for the British economy.
Caroline Lucas
I am sorry, but the condescension coming from the hon. Gentleman is hard to bear. He is implying that the UK farming industry is all of one view on this, but I know UK farmers who are absolutely against the export of live animals precisely because of the cruelty involved. To suppose that those of us who are, for strong ethical reasons, against the trade are somehow also against UK farming is a gross simplification of the issue.
Thomas Docherty
Obviously I speak regularly with the National Farmers Union of Scotland, and I know that colleagues speak regularly with the National Farmers Union in Wales, Northern Ireland and England. If she can point to which of those four organisations, which are the voice of farmers, shares her rather extreme views, I would be delighted to meet it.
Mr MacNeil
As I said, I strongly disagree with the implicit assumption that cruelty is involved. I produce lambs between March and April and sell them in August, so I know that they have to be cared for for those four months and that the last thing a farmer wants to see is them going away in any kind of cruel circumstances, not least because that affects their value, but also because they have raised them from birth. To send them away in any sort of cruel circumstances would, I think, turn the stomachs of many crofters and farmers.
Thomas Docherty
It is fair to say that the hon. Gentleman and I do not agree on every issue, so the fact that we are on the same side of the argument today, as are Liberal Democrat and Conservative colleagues and, indeed, Members on my own Front Bench—always a pleasant treat—shows clearly that the House supports a vibrant but, as the hon. Member for Brecon and Radnorshire said, ethical and humane export policy. That is the nub of the debate. It is not about the principle of exports; it is about how we treat the animals. That is why we need more rigorous enforcement. I would be grateful if the Minister set out how he thinks DEFRA, with its existing powers, could better ensure that that happens.
The House will be aware that yesterday the European Parliament debated a motion, similar to those we often have in this place, to approve a report by its agriculture committee. It contained much to be welcomed on the issue of animal transportation. It recognised, as we have done today—those of us who have been here throughout the debate—that we should seek to have higher standards and that it is a question of how we ensure compliance across all member states.
However, there is one issue that I and the National Farmers Union of Scotland disagree with, and it was mentioned by the hon. Member for Brecon and Radnorshire: an obsession with the eight-hour rule. There is no credible scientific advice demonstrating that exceeding the arbitrary limit of eight hours leads to a drop in animal welfare. As the hon. Members for Na h-Eileanan an Iar and for Brecon and Radnorshire, my hon. Friend the Member for Ogmore and other Members from elsewhere in the great parts of the Celtic kingdoms would point out, getting to abattoirs even within the United Kingdom can take more than eight hours. I am thinking, in particular, of the pig industry and the difficult circumstances Vion is currently going through. For example, if Vion is sold and its Scottish abattoir is closed, the nearest abattoir for pig farmers from north-east Scotland will probably be in Yorkshire. If we were allowed to head down the path of the eight-hour rule, it is difficult to see how farmers in Morayshire and across north-east Scotland, never mind those in the highlands, could survive. I would like the Minister to confirm that the Government have no plans to introduce, and do not support, an eight-hour rule.
I hope that the Minister, who is no doubt busy taking notes in his head, will also tell us what discussions he has had with the devolved Administrations. It is vital that DEFRA work with Mr Lochhead in the Scottish Parliament, our Labour colleague in Wales and our Democratic Unionist party colleague in the Northern Ireland Assembly so that we are all working together on this issue, on which, overwhelmingly, all the grown-up, sensible parties are united in wanting a vibrant farming industry.
Caroline Lucas
Does the hon. Gentleman suppose that the entire membership of the RSPCA are not sensible people? I find his—what is the word?—patronage towards people who do not agree with him to be absolutely unacceptable.
Thomas Docherty
I think that the word the hon. Lady wants is “patronising” rather than “patronage”, but I accept that she was grasping for it and missed. Obviously, the RSPCA is entitled to its view, but it has not—dare I say it?—looked at the bigger picture. It is surely the job of parliamentarians to take a step back and look at the bigger picture. We have to follow the evidence, and the reality is that there is no evidence to say that an eight-hour rule would lead to a rise in animal welfare standards. In fact, it would only damage the farming industries in Scotland, parts of Wales, and Northern Ireland.
Let me move on to what more we could do. I am conscious that my hon. Friend the Member for Ogmore has written to the Select Committee about this. One issue that we have not talked about is what more supermarkets can do. I would be interested to hear the Minister’s view on whether we could encourage them to introduce labelling that says that they have introduced their own voluntary codes about humane standards and clearly states what they are. We all know of the great success that the British egg industry has had with the introduction of the red lion symbol on packets of eggs. There are also fair trade labels for overseas goods. In the debate on the dairy industry a few weeks ago, an eloquent point was made by an hon. Member who said that we rightly talk about fair trade for overseas farmers but do not talk enough about fair trade for British farmers. I want to extend that principle. We should have clearer labelling from the supermarkets and the food producers that says that all their products have been produced in a humane way that complies with the highest possible standards of animal welfare.
On the request for a Select Committee inquiry, I am not in a position to divulge the thinking of colleagues, but the hon. Member for Tiverton and Honiton and I have listened sympathetically to the arguments made today. We have been talking about the need for an inquiry into how EU regulations as a whole are implemented. I hope that we will have an opportunity in the near future to carry out such an inquiry, which might be a useful tool. Perhaps when my hon. Friend the Member for Ogmore responds to the debate he could set out in a little more detail what he thinks the terms of reference might be.
Huw Irranca-Davies (Ogmore) (Lab)
I will indeed do that. One of my reasons for calling for a wide-ranging review is not only to focus on the animal welfare considerations but to give the industry, which is a good industry, an opportunity to show where it is implementing good practice and to highlight the areas that might need improvement and amendment. It is very much an opportunity to salvage the reputation of the industry and to put things right where that is needed.
Thomas Docherty
That is a good point. I would like three major players in the industry to give evidence—the farmers themselves, those involved in transportation, and the supermarkets. Perhaps my hon. Friend can expand on that. I hope that the animal welfare charities will also come to the table and add their voice, because that is important. That will enable us to take counsel from all interested parties.
This has been an excellent debate, and I commend my hon. Friend the Member for Poplar and Limehouse and the hon. Member for South Thanet on securing it. I look forward to hearing from my hon. Friend the Member for Ogmore and the Minister.
Roger Williams
My hon. Friend and I met the English Beef and Lamb Executive this morning, and I pay tribute to it for its wonderful work in promoting English lamb, particularly Agneau St George, and to Hybu Cig Cymru for promoting Welsh lamb.
Roger Williams
There must be similar organisations in Scotland and Northern Ireland. These organisations do wonderful work in promoting the sale of meat and in getting it to be accepted and appreciated in other countries.
Neil Parish
Parts of the west country are in England, but I will not enter into that debate this afternoon.
It is essential for us to deal with the issue in a grown-up manner. I thank the Minister for the steps he has already taken and look forward to hearing his winding-up speech. As the hon. Member for Dunfermline and West Fife has said, perhaps there is now a case for the Environment, Food and Rural Affairs Committee to look at the issue, in order to see exactly how the trade is being conducted, to make sure that the rules are in place and to double-check whether the lorries, other vehicles and all those involved are operating it correctly.
If sheep or cattle that are not lame or ill, which is exactly as they should be, are loaded on to and transported in the right type of lorry, they should get to their destination in France, Ireland or wherever it be—that is a Somerset expression—in good condition, and that is what the industry wants. I reinforce the point that it is not in the interests of the farming community or those carrying out the trade to take an animal across in poor condition.
Thomas Docherty
Does the hon. Gentleman agree that it would be appropriate for our Committee to look at the conditions, such as handling facilities, when the animals arrive at their destination? Given the growth of super-abattoirs as the industry consolidates, we need to look carefully at that part of the journey.
Neil Parish
I agree with the hon. Gentleman—we could look at all of that. One of the issues that I have spent a lot of time on, although it is probably not on the agenda for this debate, is the way in which the animals are slaughtered. That is a slightly more controversial issue, but it needs to be dealt with so that they are properly stunned when it comes to slaughter.
The hon. Gentleman proposes a good idea. There are European regulations and, having experienced the work of all the other 27—now to be 28—member states, I can assure Members that, on the whole, Britain’s methods and inspections of transport are good. That is not to say that we always get everything right but, compared with many member states, our methods are good. We should not beat ourselves up on this issue, but we need to get it right. I know that my hon. Friend the Member for South Thanet is concerned, and rightly so, about what happened with the Ramsgate shipment and the slaughter of animals on the quayside. There will be a proper inquiry into that and the situation needs to be put right. As I have said, I am certain, in hindsight, that the same action would not be taken again.
I welcome this debate and reinforce points that have been made by Members of all parties. I do not believe that this is a party political matter. It is a matter of trading properly through the single market and under good conditions, including for welfare, so that the public are assured that our farming community and those involved in the export trade are operating it properly and that the animals get to their destination in good condition.
Caroline Lucas
That is a helpful intervention. I would much prefer to see many more small, local abattoirs around the country so that even within this country we do not have long journey times. I take the hon. Gentleman’s point. Although one can argue that more stress factors are involved in transporting animals overseas, such as animals being decanted into different vehicles, even if animals are transported within the UK for eight hours or more, it is not necessarily in their best interests.
Thomas Docherty
The hon. Lady seems to be missing the point that was made earlier about some of our smaller communities, such as Arran, the Western Isles and some parts of Wales and the highlands of Scotland, which simply could not have a local abattoir. Is she saying that she opposes the movement of sheep, cattle and pigs from the Western Isles or Arran by boat?
Caroline Lucas
No, because I want to make some progress, if I may.
Calf exports have been declining amid concerns in some important countries about bovine tuberculosis. However, as Members know, countries such as Spain are still major destinations for British calves. Journeys to Spain can take more than 90 hours and young calves are poorly equipped to withstand the rigours of such a journey. Dr Claire Weeks, the senior research fellow in animal welfare at Bristol university has concluded:
“Scientific evidence indicates that young calves are not well adapted to cope with transport… Therefore transport should be avoided where possible, particularly as morbidity and mortality following transport can be high.”
On arrival in Europe, calves are typically kept on concrete or slatted floors without any straw or other bedding. Such barren systems have been outlawed in the UK. There is a real question about the ethical acceptability of calves being sent for rearing abroad in conditions that have been prohibited on welfare grounds here at home.
With calf exports declining, the industry has been considering alternatives, for example through the work of the Beyond Calf Exports Stakeholders Forum. That initiative involves beef and dairy industry bodies, Compassion in World Farming, the RSPCA, Government, retailers and academics. The forum is starting to overturn the assumption that male dairy calves produce low-quality beef and hence should be exported for veal production or shot in the head soon after birth. As a result of its work, male dairy calves are increasingly being reared in Britain to high welfare standards, with a resultant fall in the number of calves shot at birth or exported for veal production. I am confident that more dairy farmers would abandon the trade if the Government engaged with the industry more proactively and gave them more help to do so. The carcass-only trade is already widespread and I want to see an end to the remaining exports of live calves.
The export of sheep is in many ways no better. It, too, entails significant suffering and long, stressful journeys. In addition, British animals may experience poor welfare in European abattoirs. In 2007-08, a French animal welfare organisation carried out an investigation into 25 French slaughterhouses and found many breaches of EU legislation that is meant to protect the welfare of animals at slaughter. Earlier this year, a report by the EU’s food and veterinary office identified a number of serious animal welfare problems in Dutch slaughterhouses. The Netherlands is the destination for many sheep that are exported from Britain. Once animals leave our shores, we are powerless to ensure that they are treated properly. All the evidence suggests that they are not necessarily being treated with standards comparable to our own welfare expectations.
For sheep, as for calves, I believe that the trade should be meat and carcass only. Slaughtering a higher proportion of animals in the UK for domestic consumption or meat exports could create jobs and increase profits here. Indeed, the economic case for the live export of sheep seems negligible. In 2011, just 0.5% of the sheep reared in the UK were slaughtered abroad. That is 72,458 sheep, compared with the 14.5 million that were slaughtered in the UK. It is difficult to believe that transporting such a relatively small number of animals abroad for slaughter makes a significant contribution to the sheep sector’s earnings, or that that contribution justifies the suffering that the sheep undergo during the long journey from the UK. The UK economy would probably benefit much more from the added value derived from processing animals at home, rather than exporting the raw material for the benefit of processors abroad.
Much of this debate has focused on the disaster at the port of Ramsgate. Animal welfare conditions are questionable during the process of live transport, as well as on arrival. Other Members have spoken strongly about the Russian tanker, the Joline, which had to turn back en route to Calais because of adverse weather conditions. The ship’s design means that it is particularly sensitive to poor conditions. On this occasion, the sea was breaking over the vessel. Its design also means that there is little leeway between the time that it takes to cross the channel and the maximum journey time for calves of nine hours after a one hour rest at port. On another occasion, the vessel was held at Ramsgate for two hours because of adverse weather warnings and the lorries on board were in danger of exceeding the journey limit.
In a six-month period when the RSPCA was inspecting every vehicle involved in the trade through Ramsgate for infractions, it issued six warning notices. In September 2012, one lorry was stopped because of faults with the vehicle. The animals were unloaded and two sheep, one with a broken leg, were put down. Another 41 lame sheep were euthanised. Six sheep fell into the water after they were loaded into an area where a drain became exposed. Four of them were rescued by RSPCA officers, but two drowned. It appears that a proportion of the lame sheep were injured during the journey owing to a defect in the vehicle, but others were apparently lame before the start of the journey. By law, an official veterinarian must, before an export journey begins, certify that the animals are fit to travel.
That case raises serious questions. If some sheep were lame before the journey, why did the vet who inspected them certify them as being fit to travel? Are the checks and balances that are meant to be in place fit for purpose? Given those failures, can DEFRA’s ordering more inspections give us confidence? It is not even clear whether it intends to increase the number of inspections that are taking place or simply to meet its current legal obligations.
I agree with those who have said that the facilities are Ramsgate are not suitable for ensuring the welfare of animals if they need to be offloaded in an emergency. Despite the Minister of State, Department for Environment, Food and Rural Affairs, the hon. Member for Somerton and Frome (Mr Heath), saying that he intends to pursue a zero-tolerance approach to animal welfare and live exports, I think that the contingency plans that DEFRA has announced are inadequate. A temporary ban on live animal exports out of Ramsgate was lifted last month, but legal action is still under way. It is vital that far more is done to safeguard the welfare of animals that are shipped through the port, especially as access for the RSPCA to inspect conditions has been denied.
In the 1990s, the European Court of Justice twice ruled that the UK cannot ban live exports. Such action has to be taken at EU level. That does not let the Government off the hook. There is much more that they could be doing to bring this trade to an end. They could go to Brussels and press for a change in EU law to allow individual member states to ban live exports.
Since the two European Court cases, article 13 of the treaty on the functioning of the European Union has recognised animals as “sentient beings”. It requires the EU and member states, in formulating and implementing EU policies on agriculture, transport and the single market, to
“pay full regard to the welfare requirements of animals”.
That article creates a new legislative landscape in which, with the right political will, the UK would be justified in pressing for the right to lawfully end this trade.
Earlier this week, MEPs voted for improvements to the conditions in which live animals are exported, but they failed to reduce the maximum journey time. How different might the result of that vote have been if the UK had actively lobbied for an eight-hour limit? The Government must take the lead in pressing the EU to place a maximum limit of eight hours on journeys to slaughter or for further fattening.
Thomas Docherty
I am puzzled. Does the hon. Lady not recognise that, given the current location of abattoirs, an eight-hour limit would have serious repercussions for the Scottish agriculture industry?
Caroline Lucas
I thank the hon. Gentleman for his intervention, but we need to look for solutions to that problem. The suggestion is that a trade can carry on despite a wealth of evidence. He asked earlier about my evidence for the cruelty of the trade and I could read out a whole set of scientific studies. I appreciate that difficult discussions and debates must be had about how to safeguard the livelihoods of farmers, about which I care deeply, but to say simply that we should carry on with business as usual is not an adequate response.
As colleagues will know, I am a former MEP and I have worked extensively on this issue. As I have said, ideally I want a complete ban on the trade of live exports, but imposing a maximum journey time of eight hours would at least help reduce the current suffering. That should also be backed up with sufficient resources to ensure that minimum welfare standards are met.
For example, DEFRA could carry out more rigorous checks to ensure that the mandatory rest breaks required by EU Council regulation 1/2005 are provided. At present, that seems to be verified primarily via returned journey logs, which are often open to abuse and inaccuracy. Instead, DEFRA should ask the appropriate authority of the member state in which the rest break was due to confirm that it was provided, or check the data on which the vehicle’s tachograph or satellite navigation scheme depends. That would show when animals were rested, and for how long.
The sheep and dairy sectors receive generous subsidies from the taxpayer and we should consider whether they should carry the costs of regulating the trade, particularly the cost of pre-export inspections at the place of departure and the port. The Government could also amend the Harbours, Docks and Piers Clauses Act 1847 to enable ports to refuse to allow live export consignments to use their harbours. I understand that Ramsgate would welcome such a move, as would other UK ports.
As I said, my constituents have been lobbying me in support of a ban on live exports, and the issue has growing public support. A petition on the No. 10 website has more than 31,000 signatures. That number is growing rapidly every day and I hope that when it reaches 100,000, we can have a further debate and—crucially—MPs can vote on whether to take a stand against the trade. I regret that so few Members are in the Chamber this afternoon but I do not think that that reflects the strength of feeling on the issue. If we had a votable motion, far more colleagues would have attended and contributed strongly to the debate. I thank the Backbench Business Committee for allowing this debate, and I conclude with one simple request for the Government to make every effort to end what is a cruel, outdated and unnecessary trade in live animals.
John McDonnell (Hayes and Harlington) (Lab)
I, too, apologise for arriving late to the debate. I do not have the same excuse as the hon. Member for Brighton, Pavilion (Caroline Lucas) of being the sole representative of my party—although on some issues it feels like it—but I have been dealing with a serious matter in my constituency that may come to the surface in the next few weeks. I am sure that hon. Members will understand.
I thank the hon. Member for South Thanet (Laura Sandys) for securing this debate and for her consistency in raising this issue in recent months. Live exports have become a regular problem. We have had debates in the past, and bans have been introduced at individual ports, but the issue has recurred and there has been more than one incident similar to what happened with the Joline. Time and again I remember hearing reports in this House in which we felt that the appropriate regulatory system had been put in place, only to hear similar reports of problems with animal welfare within months. That is not incompetence; it is an almost blatant disregard of animal welfare by some of those involved in such transactions, and of the legality of some of the cases dealt with. None of the systems that we put in place seemed to have worked, and such cases returned time and again. I therefore came to the conclusion—after receiving briefing from the National Farmers Union as well as the Royal Society for the Prevention of Cruelty to Animals—that the system was not working and that a ban would be the appropriate approach.
As my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) said, there are two issues. One is a matter of principle—do we support the export of live animals in this way?—and the other is about pragmatic practicality and regulation. Are the Government going to continue allowing live exports? I do not believe that European legislation should hold us back because, as the hon. Member for Brighton, Pavilion said, representations can be made and we can use other legislation to enforce the ban if necessary. However, if a ban is not introduced and we seek a pragmatic inspection regime—this is the point raised by the hon. Member for South Thanet—the work done by Thanet district council has been superb. It has set out a number of recommendations, working with the Animal Health and Veterinary Laboratories Agency and delegating some of those functions to the RSPCA, to gain maximum confidence in the implementation and rigorous nature of those inspections. Those recommendations, if taken on board by the Government, would at least provide a practical way to address effectively some of the abuses of the past.
Thomas Docherty
My hon. Friend has been an absolute champion of agricultural workers during his time in Parliament—often, I dare say, a lone voice. Does he accept that a ban on live exports would be a huge hit to the agricultural industry and hurt the very workers he has worked so hard to champion?
John McDonnell
My hon. Friend always knows the point of vulnerability in a debate. I have never been convinced about the economic necessity of live exports, which is why the idea of an inquiry is important. The Environment, Food and Rural Affairs Committee is looking at a wide-ranging inquiry into the practical nature of how the industry operates.
As the hon. Member for Brighton, Pavilion said, we need to address the location of abattoirs and how they operate. By locating, promoting and developing local abattoirs we can overcome the problem of the lengthy journeys that animals take, and particularly any necessity to export live animals.
Mr Amess
I have been a Member of Parliament since 1983 and I absolutely agree with everything you have said, Madam Deputy Speaker.
Throughout my time in Parliament, I have supported sensible animal welfare measures. Indeed, if anyone had time on their hands, they could look in Hansard and see that my views on animal welfare have been pretty consistent.
Thomas Docherty
I understand the hon. Gentleman’s reasons for being late. Does he agree that doing television is a poorer excuse for not being here?
Madam Deputy Speaker
Order. We are really not going to follow that route. We are considering a serious subject, and I expect Members to continue to behave seriously. So, Mr Docherty, thank you, but we will not have that answered, and Mr Amess, you may continue with your remarks and ignore the intervention.
Mr Amess
I recognise that hon. Members rightly represent all sorts of interests. I have said that I support responsible animal welfare measures. I would not want to use the debate that my hon. Friend the Member for South Thanet has introduced to bash farmers and the farming community. I therefore understand the points that the hon. Gentleman and others have made.
Thomas Docherty
Like me, the hon. Gentleman supports banning the use of wild animals in circuses. One of the solutions is to export those wild animals to new homes. If I understand the matter correctly, an unintended consequence of a blanket ban would be that we could not find new homes for those wild animals.
Mr Amess
I cannot believe for a moment that that would be the result if the motion was supported. I want to stick to my script. I was not present when other issues have been discussed in the Chamber, so I would like to stick to the specific issue that you, Madam Deputy Speaker, said that we should talk about.
I want to see an end to the long-distance transport of live animals. There is a clear case for the ending of the transport of live animals altogether. It is a cruel practice that regularly leads to the distress—or worse, the death—of animals. Indeed, recently we saw terrible pictures of little puppies who were dead, and rare, exotic fish dead in their containers. For example, inspectors, when they were able to investigate, found one animal with a ripped horn that had to be euthanised. In another incident, a vehicle had to offload all its sheep and 46—yes, 46—had to be euthanised for various reasons. Any practice that regularly inflicts such pain on living creatures, and, worse, regularly leads to their deaths, should be ended as soon as possible.
This is not an impossible dream. More often than not, animals are now slaughtered in their country of origin and then transported to whichever country they are going to. That is a much more humane way to approach the transportation of animals. Another reason why it is right to pursue the end of this practice is that even if we manage to transport live animals effectively and safely, we cannot ensure that the countries the animals arrive in live up to our high standards.
Compassion in World Farming has issued a report that shows that many member states do not provide penalties that are “effective, proportionate and dissuasive”. While some countries have shown recent signs of improvement, namely the Czech Republic, Italy and Romania, the European Union Food and Veterinary Office indicates that they, and other countries, still need substantial improvements in enforcement levels. Those two reasons—the cruel nature of transportation and the worrying lack of enforcement in other EU member states—are reason enough for wanting the practice of live transportation to be stopped altogether. That said, until that aim is fulfilled, there are other curbs that could be applied to the industry to protect transported animals. For example, there should be a maximum eight-hour journey time. Journeys for calves can be up to 19 hours, and for horses and pigs up to 24 hours. For horses and pigs, 29 hours can be an incredibly long time before a 24-hour rest. That is cruel—to make any creature travel for 29 hours before having a rest is very cruel indeed. At the very least, a middle ground should be found that enforces shorter breaks after eight hours, and then a longer 24-hour rest at the current limit.
On ports, the Department for Environment, Food and Rural Affairs states on its website that when dealing with animals it is important that vehicle loading and unloading facilities are designed and constructed to avoid injury and suffering. While that may be the case for road vehicles, I have concerns about the UK ports that animals leave from and about the ships that transport them. According to the RSPCA, the Joline, an old Russian tanker, currently transports animals from Ramsgate. It is too slow, and is overly exposed to poor weather conditions. I urge the House not to accept such poor conditions for animals who deserve to be treated with dignity and respect.
It appears that the ports of Ramsgate, Ipswich and Newhaven do not all currently live up to the standards set out in section 23 of the Animal Welfare Act 2006. Ports have no choice but to opt out of the transportation of live animals due to the Harbours, Docks and Piers Clauses Act 1847. I believe strongly in choice. Ports that currently do not have the right facilities to transport animals to a high standard must be able to choose whether they wish to partake in this practice.
On veterinary costs, the economy is going through tough times at the moment. There are a lot of elderly people in Southend West, the area I represent, and animals are their lives. Animals are everything to them and we should not trivialise how important they are to them. Veterinary bills can be very high. The taxpayer foots the bill for veterinary checks on animals in live transportation. If that cost was shifted to those involved in the industry—I know that hon. Members with farming interests will say that that would be yet another burden passed on to them—not only would the taxpayer save money during these hard times, but the industry would be incentivised to look after its animals well, as the cost of veterinary bills could otherwise be very high.
The last topic I wish to touch on is labelling. It has come to my attention that a sheep or cow can be born, raised and fed here in England, transported to France and, once slaughtered, labelled, “produce of France”. If, as I hope, the EU agrees to stop this practice, surely the incidence of live transportation will fall as the pressure to have and eat home-grown food in each European member state will grow. I therefore urge hon. Members to support any such law on labelling.
In my brief speech I hope that I have highlighted a number of issues I feel strongly about that have not already been covered concerning the suffering of animals. Maximum journey times must come down if at all possible. Ports must be able to opt out if they do not feel that they have the resources to adequately look after animals. Veterinary costs should not be met at the expense of the public purse. Labelling issues need to be addressed.
We must look after animals to the best of our ability. The fact that we need this debate at all sadly reminds me of the quote attributed to Frederick the Great:
“The more I see of men, the more I like my dog.”
I then think of the quote from Ghandi:
“The greatness of a nation and its moral progress can be judged by the way its animals are treated.”
I said that I entered this place 30 years ago. We are hardly pressed for time in this place. We used to sit until 3 o’clock or 4 o’clock in the morning. We used to sit for five days a week—we certainly put the hours in. Hon. Members no doubt love to pat dogs and like to see cats in their constituencies. They are concerned about their constituents, who feel that their animals are important. They should demonstrate their support for animals by supporting the motion introduced by my hon. Friend the Member for South Thanet. I would hope that most hon. Members feel that transporting live animals in horrendous conditions is totally unacceptable. We live in an era where we no longer write letters to each other. MPs respond to e-mails, blogging, Facebook and so on. There is not the amount of personal contact that there used to be.
I was privileged recently to attend two carol services for animals. I feel very strongly that the quality of our nation should increasingly be judged by how we treat the animal kingdom.
Huw Irranca-Davies (Ogmore) (Lab)
It is a privilege to follow such a commendable contribution. I understand that a few weeks ago one of my Labour colleagues made a contribution of one word, before time ran out, so the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) does not get the record, but it was quite a contribution none the less.
People watching will have seen a well balanced, diverse range of well considered contributions and interventions putting forward a variety of views on animal welfare and the live transportation of animals. It has been a good day for the House, and I hope that I and the Minister will continue in that frame of mind. I thank the hon. Member for South Thanet (Laura Sandys) and other Members, not only for calling the debate and enabling us to air our concerns, but for maintaining and arguing in favour of their long-standing, if sometimes differing, views. I will deal with the contributions first, because some of them pre-empt my own comments.
The hon. Lady spoke eloquently on behalf of herself, her constituents and—I suspect—her local authority, given that its views are very much aligned with hers, and said that DEFRA had been a bit too “meek and mild” and might need to go further. I will try to draw that out in my comments too. She said that DEFRA might need to focus more on this intriguing idea of fit and proper operators—a leitmotif in several contributions. We are talking not always about individual instances, but about operators that have had constant warnings—mention was made of six warnings in a short period in Ramsgate—and those patterns of behaviour draw out an interesting theme for the Minister. What does zero tolerance actually mean? When should we intervene to stop something that is a genuine animal welfare concern?
On another interesting theme, the hon. Lady talked about cost-sharing. Like other Members, including those who have farmed for many years, I sometimes wonder how the economics of this trade stack up. But they do stack up. The live export of lamb from south Wales, the moors of Ramsgate or Scotland maintains not just a premium price but a remarkably high premium price—there is huge demand for it. It would be interesting to know what would happen to the economics of the model if the additional costs of inspection, licensing and the adequate enforcement of animal welfare considerations—so that we can have real confidence in the integrity of the process, particularly of the long-distance travel—were loaded on to the transporters.
My hon. Friend the Member for Bristol East (Kerry McCarthy), who has been a consistent campaigner on animal welfare issues, rightly recognised the differing standards of animal welfare applied in many parts of the continent—another issue that I will return to—and its impact on the UK export trade. Even if all our domestic arrangements for animal exports are of the highest standards—what the hon. Member for South Thanet called the “gold standard” that we should be proud of aspiring to—what happens if the animals pass through or reach a part of the continent where the standards fall well below what we would expect? I ask the Minister to focus on that.
This has to be about the end-to-end journey, not simply about what we are doing. The hon. Members for Brecon and Radnorshire (Roger Williams) and for Montgomeryshire (Glyn Davies) would be appalled if any animals they were trading in—having done all the right things, such as loading the animals in good condition and ready for market, in the belief that they would be transported in good condition and get rested, fed, watered and given emergency treatment when needed—were ending up somewhere on the continent, such as Spain or even Brussels, where the same rigorous standards of animal welfare were not being applied. My hon. Friend the Member for Bristol East put to the Minister the valid question of what discussions he has had with his EU counterparts on this issue, particularly on the topical issue in Europe at the moment—it is being debated as we speak and has been debated all week—which is the consistency of those standards across the EU. I am sure that the Minister will address those concerns.
The hon. Member for Montgomeryshire spoke with great personal insight and expertise—given his farming background—and spoke proudly in favour of the gold-plating of animal welfare. He said we should be doing that and that he would want to be doing that as a farmer. He took pride in driving towards those standards. We are talking, of course, in part about a sector—sheep exporting—that is for farmers who are not prosperous or massive landowners. These people are often farming on less favoured agricultural land where the only option is sheep farming. Only a few years back, the price of those carcasses was half or a third of what they are now. They have always struggled, but they have always focused on the highest standards, and the Government need to help them to do that.
Thomas Docherty
My hon. Friend is making an eloquent case. He just mentioned personal experience. Will he say a bit more about his own personal experiences in this industry, and will he set out what terms of reference he thinks the Select Committee should consider, if we do indeed do a report?
Huw Irranca-Davies
I shall return later to the specific things that the inquiry should consider—it will not be an exhaustive list, but I will give some good pointers. On my own personal experience, I have not been a sheep farmer, but my friendly and well loved father-in-law was a sheep farmer for many years on the uplands of the Brecon Beacons.
Huw Irranca-Davies
I am not in a position to make a completely evidence-based judgment on that. I can only say that we buy directly from our local abattoir in Maesteg, and the produce is absolutely fantastic.
Thomas Docherty
Perhaps I can help my hon. Friend out. The answer is that it depends on the stress that the animal goes through in the build-up. The point is—it is a point he has made before—that although at first glance a local abattoir might be preferable, if standards of hygiene and humane treatment are not met, that leads to a poorer outcome. I suspect that the key thing in this debate is the standards of humane treatment that we all want to see.
Huw Irranca-Davies
My hon. Friend makes a perfectly formed point.
I shall proceed at a rate of knots now, because I want to touch on the points that have been raised. The hon. Member for Montgomeryshire talked about the Spanish diet given to exported sheep. I am intrigued to know what it consists of; I suspect that it is not tapas. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) spoke with the benefit of his experience as a well loved and well respected food and farming Minister, although he was not quite so well respected by publications such as Horse & Hound. He made a considered and well balanced contribution, in which he rightly praised the higher standards generally to be found in the UK. He also echoed other Members’ call for a wider review, in the interests of animal welfare and of the industry. He made detailed points about the Ramsgate incident, as did others, and I hope that the Minister will be able to respond to them.
The hon. Member for Brecon and Radnorshire also has huge experience in this area. I do not think that my father-in-law’s sheep ever mingled with his; there was a little obstacle in the way, known as the Brecon Beacons. He focused on animal welfare considerations and raised the issue of zero tolerance. I am looking forward to hearing the Minister define that concept. What does it mean, particularly in the context of repeat offending by individuals, companies or organisations? Are we going to step in and take action much more rapidly in those circumstances? I hope that the answer will be yes.
Mr Heath
I think we need to do two things. I agree with the hon. Gentleman and I shall discuss the circumstances over recent months that were, let us be clear, totally unacceptable. We certainly need regulation and law that are fit for purpose and satisfy the requirements, but we need to enforce them rigorously. My view is that in areas of animal welfare, there should not be ifs and buts—we simply need rigorous enforcement. People need to understand that.
People need to understand that if they are looking after animals, they have a duty that is set out in law and we will hold them to it. If they fail in that duty, there will be consequences. That is the message I want to express and I think it would be supported by every good stockman, male or female, in the country who understands that the care of the animals in their protection is of paramount importance.
Thomas Docherty
We all seem to be on the same side of the argument. Does the Minister agree that if we went for a blanket ban on exports, it would affect not just slaughter and circuses, but the racehorse industry and its involvement with the great French races? Our colleagues in Ireland would also suffer immensely.
Mr Heath
The hon. Gentleman is right. We must be careful what we wish for because there are sometimes unforeseen consequences. Coming from an area where we have lots of excellent stables producing first-class racehorses, I have to say that the way racehorses are transported is very different from the way the average sheep is transported. Let us understand that as a basic rule of thumb. However, it is not unreasonable to expect every animal that is transported to be transported in proper and appropriate transport. That is what I am determined to ensure.
Mr Heath
No, I do not agree with the hon. Gentleman. Yes, he is right to read out that article. The legal requirements that the EU sets down for transport have to be in compliance with it. I believe—I will always look to see whether we are right in this belief—that if the legal requirements laid down in the EU welfare and transport legislation are observed, there is a satisfactory level of protection for the animals being transported. It is a highly regulated trade, subject to multiple levels of official controls. There are significant and specific, but I think justified, requirements on the farming and haulage industries. The EU Commission estimates that on average it costs nearly €12,000 to upgrade a vehicle for long journeys, and there are other significant costs.
There is already a regulatory framework. My task is to make sure that movements within this country comply with those regulations, and that we have the framework to make sure that that is the case each and every time. Where it is not the case, as it would appear may have happened recently—I have to couch what I say in careful terms—we take the appropriate actions.
Those controls include the need for all commercial transporters of animals to be authorised. For long journeys, vehicles must be inspected and approved. Drivers must pass a competency test. For long journeys of more than eight hours between member states, transporters must apply for a journey log providing details of the proposed route from point of departure to point of destination. The timings of the journey must be realistic and in line with the maximum journey times and with the compulsory rest periods laid down in the legislation. Once the journey has been completed, the journey log has to be returned and the Animal Health and Veterinary Laboratories Agency, which has been mentioned many times in the debate, checks to make sure that there have been no infringements of the legislation during the course of the completed journey. If there have been infringements, AHVLA will take the appropriate enforcement action.
Somebody—I am afraid I do not remember who—suggested that that was a passive arrangement. It is not. I do not have the power to order my inspectors to inspect French vehicles on French roads or Spanish vehicles on Spanish roads. What I can do is make sure that the UK legislation, which is consistent with European legislation, is enforced rigorously. It must be observed.
One of the first situations I faced after taking up this post was the regrettable events of 12 September at the port of Ramsgate. There were serious consequences, as has been well reported, with 40 animals having to be humanely killed. That led me to look very closely at what could be done to ensure the most rigorous and robust enforcement of the existing legislation in this country, and I am absolutely committed to doing that.
The first thing I did was ask AHVLA to undertake a review of its existing procedures with a view to making the necessary improvements to ensure that, as far as possible—I was asked earlier to give this commitment—the events of 12 September would not be repeated. I have been given the review and accepted its conclusions, the vast majority of which, I am pleased to say, have already been implemented. As I have made plain publicly, and as other Members have said today, essentially I am asking for zero tolerance of lapses in animal welfare standards and rigorous checks on all journeys where there is a risk that we can identify.
The hon. Member for Bristol East (Kerry McCarthy) asked about a fit and proper person test—[Interruption.] She is looking dubious, so obviously I have misrepresented her. I apologise and will let her have the credit anyway, even though it was my hon. Friend the Member for South Thanet who raised the matter. I think that it is crucial to our understanding of what is and is not within the powers. There is no test in those precise terms, but article 10 of the regulation sets out the circumstances in which the competent authority can refuse to grant authorisation. Basically, that is when the applicant has a recent record of serious infringements of laws relating to the protection of animals, and that includes proving that the applicant has appropriate facilities.
If, after authorisation, a transporter authorised in the UK commits offences, we can withdraw their authorisation. With regard to transporters authorised in other member states, we can report them to the equivalent competent authority and it should take action. Independently of that, we can prevent a transporter authorised by another competent authority operating here, but we obviously cannot stop them operating elsewhere. Those are important provisions that will come into effect, and I will use them when someone has been convicted of animal welfare infringements, but I make the point that they have to be convicted in a court of law; I cannot do it on the basis of suspicion or anecdotal evidence.
Thomas Docherty
I would like to take the Minister back to the report he has received. He will be aware that the NFU, the RSPCA and indeed this House are keen to see the contents of the report, so can he confirm when he will place a copy in the Library and whether he will sent one to the Environment, Food and Rural Affairs Committee?
Mr Heath
I was just about to come to that. The hon. Gentleman raises an important matter. Nothing would have pleased me more than to have immediately published the report, which I was keen should be made public. However, on advice from lawyers in the Department, and having received a specific request from Kent trading standards department, which is pursuing criminal investigations, I reluctantly had to agree to withhold publication until those investigations and possible prosecution actions have been completed. There is a view that release of the document might prejudice those proceedings, which I am simply not prepared to do.
Following Thanet district council’s decision on 29 November unilaterally to lift its temporary ban on the movement of live animal exports out of the port of Ramsgate, and the High Court hearing on Tuesday this week, I can explain the changes made to existing procedures by the AHVLA to help to prevent a recurrence of the events of 12 September. That is why I made a statement yesterday, at the earliest opportunity, so that the House was at least aware of the changes that we have made.
Let me focus on the most important of those changes. The AHVLA has always undertaken a proportion of its inspections at the point of loading based on an assessment of risk. On the basis of the risk that I perceive following the Ramsgate incident, I have asked it to inspect 100% of loadings at the point of loading in order to make sure that the risk at that point is properly assessed. Those inspections are much better, in some ways, than inspections undertaken at the roadside or at points of rest or transfer such as ports. They enable the AHVLA inspectors to undertake over 30 different checks—there is a list—on the welfare of the animals and the facilities on board the vehicle. I want to make it plain that I will maintain that 100% inspection regime for transporters using Ramsgate for as long as I believe that the risk is high. I hope that it is helpful for the House to understand the approach taken.
Earlier we heard reference to inspecting at the port itself. There is a good reason not to offload animals at the port if it can be avoided—doing so distresses the animals. It is better to have a visual inspection on-vehicle following the loading inspection, with veterinary controls at the point of loading. In everything we do, we are trying to make sure that we reduce the stress and improve the welfare of the animals as far as possible.
There is a particular issue at the port of Ramsgate, which, it is fair to say, is not the ideal port for this purpose. I understand exactly why Thanet district council has concerns, as there are other ports that might be better equipped. Having said that, there are problems associated with trying to undertake this very difficult work with live animals when a substantial protest is going on. The hon. Member for Poplar and Limehouse touched on this when he referred to perverse consequences. The protesters are people who care passionately about the welfare of animals, and I ask them to think about whether they are enhancing their welfare by exacerbating the job of the inspectors employed by the Department, who are already doing a very difficult job in very difficult circumstances; I thank them for the care that they take in protecting these animals. People will have to search their consciences in this regard, but I make that plea to them.
I will not go into the other changes to the existing procedures because all those details are in the DEFRA press release and Members can look at them for themselves.
Let me move on to the enforcement of the legislation by the AHVLA. The number of statutory notices served by the AHVLA on transporters using Ramsgate is clearly unacceptably high. Approximately 95% of transporters using Ramsgate are not authorised in Great Britain. All 30 statutory notices served by the AHVLA have been served on transporters who are authorised in other member states and whose vehicles are inspected and approved there or elsewhere. This is a significant issue. It is not about British livestock transporters using vehicles that have been licensed in this country; it is about overseas operators. When we make complaints about conduct, they go back to the authorising authority. In the case of one major operator registered in the Netherlands, we can send reports to the Dutch authorities, and I have been in touch with them. In fact, however, he does not operate in the Netherlands but is merely authorised by the Dutch Government, and that poses problems in terms of enforcement.
Mr Heath
The hon. Lady makes a very important point. The EU Commission itself notes that the level of enforcement varies significantly between member states. Taking regulatory or enforcement action against transporters based abroad presents legal and technical challenges that do not exist in relation to British-based transporters.
I do not like picking fights with those who argue strongly for animal welfare, but it is wrong for some welfare activists to claim that my Department and the AHVLA have been reluctant to take action against transporters when necessary. Since exports of livestock commenced from the port of Ramsgate, the AHVLA has inspected 113 vehicles at the port and supervised the loading of a further 68 vehicles at its premises of departure and three vehicles at control posts—that is 60% of the total number of vehicles presented for export via the ship, Joline—carrying more than 41,000 farm animals out of a total of 120,471 animals exported from Ramsgate.
As a result of those inspections, the AHVLA has taken regulatory action on 41 occasions, serving 30 statutory notices and issuing 11 verbal warnings. Regulatory action by the AHVLA has resulted in four vehicles being prohibited from continuing their journeys. In addition, 10 vehicles approved and certified in another member state have been temporarily suspended from operating in Great Britain until the necessary modifications have been made to them. Three incidents have been referred to a local authority for investigation with a view to possible prosecution.
I repeat and make clear that I will not tolerate the use of sub-standard or faulty vehicles that, in the view of the AHVLA, are not fit for purpose. I am confident that the AHVLA will continue to take robust action against any transporter using poorly equipped or designed vehicles in the future.
I, the hon. Member for Ogmore and others have mentioned the EU Commission’s recent report on the impact of transport legislation. The EU has competence in the area of animal welfare during transport, so we cannot take any unilateral action. That would be contrary to the requirements of Council regulation 1/2005, which has been mentioned many times. This is an important legal point and it is essential that people understand it. Although article 1 of the legislation permits member states to take stricter national measures, they can only apply to transport taking place entirely in their own territory or during sea transport involving trade outside the EU. Stricter national measures do not apply to intra-Community trade, so we are not in a position take unilateral action.
A point that has not been raised much today, but that has been raised outside the Chamber, is lairage at Ramsgate port. It has been claimed that Ramsgate port requires lairage facilities at or close to the port so that the requirements of the EU welfare in transport legislation can be properly enforced. That is not correct on two counts. First, there is no legal requirement for such facilities at a port that operates a roll-on/roll-off ferry service, such as the MV Joline. Those who claim that such facilities are needed at the port appear to have confused the legal requirements for livestock vessels, which animals are physically loaded on and off, with those for roll-on/roll-off vessels that do not require the loading or unloading of animals at a port.
It must be remembered that the EU legislation places a legal responsibility on transporters to minimise the length of the journey. There is also a requirement that the competent authority must not detain animals in transport, unless it is strictly necessary for the welfare of the animals or for reasons of public safety. I have touched on the point that the routine unloading of animals is also wrong from the animal welfare perspective. The EU legislation acknowledges that the unloading of livestock during transport is stressful for the animals, can lead to injury and increases the risk of animal diseases.
As a result, the AHVLA will unload animals only when it is absolutely necessary. Should it need to do so, because other options are not practical in the circumstances or because it is in the best interests of the welfare of the consignment as a whole, two farm-based facilities are available within one hour’s drive of the port. Those facilities have been used by the AHVLA on four occasions in the recent past. We believe that their existence continues to fulfil the legal obligations on DEFRA as the competent authority under the EU welfare and transport legislation.
Some Members have pointed to the fact that the last audit inspection by the food and veterinary office, which is part of the European Commission, engendered exchanges concerning emergency unloading facilities close to the port of Dover. The facilities that we now have were not available when that report was written, so it is not directly relevant.
The issues that the Commission has identified in the enforcement of the EU welfare and transport legislation are crucial to our understanding of this subject. This is where we all share common ground, even those who feel that we should not be exporting animals beyond our shores. The welfare of animals in transit is what we all want to achieve.
Sadly, there are still cases in which severe animal welfare issues persist. The Commission has identified key areas of concern, not within the UK, but across the EU. Those are the transport of unfit animals, the overstocking of vehicles, the transport of animals in vehicles in which the internal height of the compartments is inappropriate, animals not receiving enough water during the journey, and animals being transported for longer than the maximum permitted journey time. Having identified those issues, I am disappointed that the Commission is not taking decisive action to address them. We will push hard for it to do so.
This matter has not been raised when I have attended the Agriculture Council, but it was raised at the Council in June. My predecessor, the right hon. Member for South East Cambridgeshire (Sir James Paice), while supporting the Commission’s desire for better enforcement, recorded his desire to see improvements to the legislation, particularly through a review of the journey time rules in the light of more recent scientific evidence. That point has been raised by several Members in this debate. The right hon. Gentleman also said that the Government could not support the demand for a maximum limit of eight hours on all journeys involving livestock because the scientific evidence does not support such a limit for all major species of livestock.
The committee on agriculture and rural development of the European Parliament appears to support that view in its recent report on the protection of animals during transport. The report recognises, among other things, that such a demand alone has no scientific basis, and considers that animal welfare during transport in some instances depends more on proper vehicle facilities and on the proper handling of animals, as documented in the opinion of the European Food Safety Authority of December 2010, than on the overall length of the journey.
Although we will continue to press the EU Commission to update EU legislation on welfare in transport in line with available scientific evidence, it has decided to take a more strategic approach by tying the rules on transport more closely to requirements in the official food and feed controls legislation—regulation 882/2004—which is currently being re-written. Although it is possible that such a move could help to solve some of the problems with enforcement mentioned by the EU Commission in its report, it is too early to form a judgment on whether that is the most appropriate method of doing so.
Thomas Docherty
The Minister is doing an excellent job of setting out a complex set of arguments. He will recall that my hon. Friend the Member for Ogmore (Huw Irranca-Davies) suggested that the Environment, Food and Rural Affairs Committee look at this issue, given its complexity. I know that the Minister has covered a lot of topics, but before he concludes his remarks will he tell the House his observations on the merits of that suggestion, and say what issues could be looked at? Would he welcome an opportunity to give evidence to that Committee?
Mr Heath
I am grateful to the hon. Gentleman for raising that and this is probably an appropriate place to begin drawing my comments to a close. Some of what I have said has been a little complex and dry, but it is important to set out the legal background to some of the issues and I hope that I have answered in main the points raised by hon. Members.
I want to thank all hon. Members who took part in the debate, including the hon. Members for South Thanet, for Bristol East, for Montgomeryshire (Glyn Davies), for Tiverton and Honiton (Neil Parish) and my hon. Friend the Member for Brecon and Radnorshire (Roger Williams). Although the speech by the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) was brief, it was beautifully formed in a pre-Christmas spirit that somehow seemed so appropriate. All those Members have practical experience in this area.
I also thank those Members with a genuine interest, concern and expertise in this area such as the hon. Member for Poplar and Limehouse, for whom I have a great deal of respect, as well as the hon. Members for Dunfermline and West Fife (Thomas Docherty), for Brighton, Pavilion (Caroline Lucas), for Hayes and Harlington (John McDonnell) and for Southend West (Mr Amess).
Mr Heath
I have mentioned the hon. Member for Ogmore many times and covered what he said almost word for word. It is unnecessary for me to say again that he and I agree on this issue to a large extent, and that is as it should be because this matter ought to transcend party labels.
I said that I do not want a formal review on this issue, and I do not see any great attraction for one in the Department at the moment. I will, however, continue to consider whether I should change my view on that. However, I want to review all our animal welfare issues, and live exports is just one among many. Whatever we do, I want to ensure that this country has the highest levels of animal welfare and protection—I hope I have given a flavour of that to the House—and that regulations and laws are enforced rigorously. I want an environment in which people understand that they must carry out that duty if they look after animals, whether a domestic pet, flock of sheep, herd of cows or killer whale. Whatever animal people look after, they must do so properly as it is their responsibility and we will enforce that.
If the Committee wants to undertake a review—it is not for me to tell it whether it should or not—I would be delighted for it to do so and happy to provide any evidence and support it needs to do its work properly. That is a matter for the Committee to decide. The Government welcome this debate and the opportunity to put on the record some of the things we have done and will do to ensure that what happened at Ramsgate on 12 September does not happen again. Wherever possible we must maintain the highest possible levels of animal protection in this country, which is what the House wants us to do.