The Committee consisted of the following Members:
Sarah Davies, Mark Etherton, Committee Clerks
† attended the Committee
I start by making a political comment about the former Secretary of State, the right hon. Member for Neath, who I know enjoys being shameless on such occasions. In his absence, I will say that he has been even more shameless than usual today. Sadly, his sudden love for the Welsh countryside and its agriculture does not seem to extend to after lunch. Had he been here, however, I wanted to tell him that I remember the occasion in Carmarthen that he referred to, when adoring crowds turned up to listen to the former Minister, Ron Davies, including friends of mine and members of my family. The crowds were not as adoring as the right hon. Gentleman might have made out. Indeed, on the next occasion when they had a serious opportunity to vote for a different party, they took it enthusiastically. The former Secretary of State ought to remember that when he pontificates about a subject on which Labour had a poor record when in office in Wales.
Huw Irranca-Davies (Ogmore) (Lab): I simply point out that contrary to that point, as I think the hon. Member for Brecon and Radnorshire will know, for a long time the chairman of the Farmers Union of Wales in Brecon was not only a Labour supporter but a Labour Member. The post-war Labour Government have always been regarded by farmers as the Government who put farming on its feet after the second world war. I could go on and on. Lord Morris of Aberavon was, of course, the legal instigator of the Farmers’ Union of Wales. I will stop there.
Simon Hart: The hon. Gentleman makes an interesting point, but he of course overlooks the fact that the Farmers Union of Wales—great union though it is—is not the only representative of farming in Wales, and plenty of farmers are represented admirably by other organisations.
Might I also, in the former Secretary of State’s absence, mention the Minister who was here this morning, the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire (Mr Paice)? I have spent a lot of time with the Minister in Wales, and last time he visited south and west Wales he had a broken leg and
I suppose I should start, although I do not think that I am obliged to, by declaring some sort of an interest. My father and uncle were dairy farmers, as is my brother-in-law, and my wife is the daughter of a dairy farmer. I am steeped in dairy farming in Wales and elsewhere, and during 28 of the 30 years that I have been employed I have been involved in the rural sector in one form or another. Whether that gives me any qualification to talk in this debate, I do not know. Some might say that it almost makes me too close. I think that it gives me an insight into the trials and tribulations and the pleasures and delights of rural Britain, and of rural Wales in particular. I want to touch, as have other Members, on what, to me, makes farming and agriculture in the rural community so special. Of course, I can speak only for Carmarthen West and South Pembrokeshire, but I think that what I say will resonate with Members around the room and beyond.
There can be few people making a more significant contribution to rural employment than those in our farming and agriculture industries and their related offshoots. Few people can be so central to tourism, particularly in south and west Wales, and I say that knowing how many farmers, partly through desire and partly through purely economic circumstances, have been forced to get involved in other diversification industries—tourism in particular. And don’t they do it well? Sometimes we hear, as we did this morning from the former Secretary of State, the right hon. Member for Neath, a rather gloomy assessment of agriculture, food production and farming in Wales, but there are plenty of examples that are far from gloomy. The enthusiasm, professionalism and entrepreneurship shown by farmers in embracing new skills and industries, particularly tourism, in south-west Wales, should be cherished and recognised, and the former Secretary of State ignores it at his peril.
All of us also ignore at our peril the contribution that our farmers have made in terms of environmental stewardship. For so many people, environmental stewardship is an expression invented by the European Union, or by politicians. In fact, environmental stewardship, with a small “e” and a small “s”, has been part and parcel of farming, and in the DNA of farmers in Wales, for hundreds if not thousands of years. The idea that we suddenly have to tell people that they have to become environmental stewards is a mystery to those who view the management of their farms as an absolute responsibility, notwithstanding the economic and legal pressures. They see it as an absolute, fundamental responsibility to steward the land, not only for their own benefit and the benefit of their families, but for the wider benefit of anybody lucky enough to visit our country. Once in a while, I suspect it would do the House no harm to recognise that contribution, which is made largely at no cost whatever to the taxpayer.
Purely and simply, the important contribution of food production in Wales is all too frequently overlooked. There is a bumper sticker in the US that says simply: “No farmers, no food.” That is a clear indication of the
Lastly on this point is the social and cultural value that we should attach to farming, food production, environmental stewardship and communities that are often bound together by the great sense of history and tradition that is afforded by our farmers and landowners, large or small. There is not a rural community represented by anybody in this room, or indeed by anybody in Parliament, which is not enhanced and glued together by the contribution of our agricultural sector.
Are we actually helping our farmers, landowners and food producers with the policies of the UK Government and of Governments from further afield, or are we hindering them? I want to echo the comment—sadly, I cannot remember which hon. Member made it—about the spirit of co-operation that exists between our colleagues in the Welsh Government, the Wales Office and the Department for Environment, Food and Rural Affairs, which was represented by the Minister of State, my right hon. Friend the Member for South East Cambridgeshire, this morning. There is a sense of positive co-operation.
I hope that the Committee will forgive me if I touch on just one small, detailed part of common agricultural policy reform. In Wales, the idea that a one-size-fits-all European solution might apply positively and fairly to our farmers is met with a rather quizzical look, particularly the proposal for permanent pastures. I can point to a number of farmers in west Wales who, as part of their farming regime, look to replace their grassland approximately every seven or eight years, which they would be unable to do under proposals that would render it as permanent pasture after five years. I can see no argument to justify that. It will impose an unnecessary and non-evidence-based regime on farmers who already conduct their crop rotation or grassland management in a perfectly sensible, sustainable and creative way.
There is also the proposal that a farmer who owns or occupies in excess of three hectares may have to have three different crops. I will not quote the exact statistic, but the idea that small producers in parts of west Wales will be required to grow crops, when they are capable of assessing for themselves whether it would be effective, is nonsense. The idea that they will have to alter their entire farming practice, often introducing practice that is simply not suitable for some of the topography and geography of west Wales, is one of the suggestions that I hope the Wales Office and the Government collectively can argue with our colleagues in the Welsh Government to alter.
Almost finally, there is the question of the grocery adjudicator, which has been raised by a number of hon. Members on both sides of the House. We need to be careful about being accused of inactivity in that regard because it was, of course, an election pledge that we made with great clarity in the run-up to May 2010. Although these things always take longer to implement than we think, we need to recognise the fact that time is ticking on and that very clear commitment has not yet
I mentioned my interest in the dairy industry, for which I gain no financial reward. However one considers the Welsh dairy industry, one inevitably recognises that despite the enthusiastic defence supermarkets make of their marketing, Welsh farmers producing milk or other dairy products are significantly disadvantaged as a result of the current regime. Unless we change that, even more good producers with great potential will decide that it is simply not worth the candle.
Looking around the two counties with which I am familiar, it is a tragedy to see that people who want to stay in farming, who have the skills to stay in farming and the desire to produce good quality products for the nation simply cannot do it because they are being slowly strangled. They may not be strangled today, but they simply cannot obtain the finance necessary to invest the amount of money that they need to bring their businesses to the environmental and hygiene standards necessary in the 21st century. Those people will go out of farming, and it will be a loss to farming and Wales.
Mr Mark Williams (Ceredigion) (LD): My hon. Friend talks about the difficulties faced by existing farmers. Will he also expand on the concerns of potential new young entrants to the industry? Farming unions are always telling me about the age profile of the farming sector. If we do not get these issues right, we will deter the next generation of farmers.
Simon Hart: My hon. Friend makes a good point. I read only this morning that the average age of farmers—I think in Wales, but it may be in the UK—is 59. I know that some measures to encourage young people to go into farming or, in some cases, to stay in farming are already in the minds of Ministers. Again, I know of too many examples where enthusiastic sons and daughters of farmers, who always saw their future on the family farm, are wondering if it is a sustainable way forward. Other issues exacerbate the problem. I hope my comments will create a basis for discussion about how we can keep people in farming and encourage youngsters to stay in the industry, as well as come into it if it takes their fancy.
I shall move to my penultimate point, which is about communications. Broadband has been mentioned a few times; indeed, I was delighted that mobile phone coverage was discussed because it often gets lost in debates. In a debate in the main Chamber about mobile phone coverage, I said rather flippantly that the problem even affects my ability to get babysitters to come to my house, because they are unable to text their friends from the depths of Llanmill. I considered that in itself that was a big enough argument to justify another visit to the issue of broadband and mobile coverage.
There is, of course, much good news about broadband roll-out, which I am sure the Minister will alert us to when he sums up. We have to be pragmatic. There is always talk of 90%, 95% or 98% coverage, but it is almost inevitable that the 2%, 5% or the 10% who do not fall into that category will be within the agricultural industry—by its very nature and definition, we will fall into that smaller category.
Although it is great to see rural communities benefiting from the broadband roll-out and therefore being able to keep up with competitors on a global basis, the potential downside of not having 100% coverage is the fact that the gap between those who have and those who have not gets wider. That, of course, puts farmers at a big disadvantage, because they are now required by law to undertake certain functions online. Hon. Members might say there is nothing wrong with that, but if the technology simply does not reach the 2% or the 5%—those who are desperately struggling to comply with those regulations—we are not doing a proper job in government.
No discussion on agriculture, food production, farming or rural communities in Wales and in the context of UK Government policy would be complete without just a little reference to affordable housing. My hon. Friend the Member for Ceredigion mentioned young people in farming. It is not necessarily a question of young people owning or occupying their own farms but of wanting to work on farms, and one of the deterrents at the moment is whether they can afford to buy properties in areas where work is available. This is an ongoing issue for rural Britain as a whole. It is partially addressed by different planning regimes, but it needs to be addressed by the Welsh and UK Governments.
I never seem to get to my feet in the House without mentioning planning, and planning in national parks is an additionally challenging scenario. Nevertheless, I shall say it again. If we want our rural communities and farming to flourish, we have to ensure that people who are born and bred in the areas and who want to contribute something through that industry can afford to do so through the housing system. We are not there yet, and it needs a co-operative approach between central and local government and the Welsh Government.
Lastly, there is the thorny old topic of tuberculosis in cattle, which has not yet come up in the debate. I thought it was going to come up when the leader of Plaid Cymru tabled a question that I do not think was reached this morning. All the things I have mentioned—agricultural economics, the social and cultural contribution that farming makes to the community, tourism and tourism-related industries—are in some way related to the need for the two Governments who have an interest in the subject to crack the nut once and for all. It is not about being nice or nasty to badgers, but about dealing with a problem that has huge social, cultural and economic consequences if we do not deal with it.
I argue that it is in the interests not only of farmers, cattle and taxpayers, but of the biodiversity of the countryside that where there are debilitating diseases we do what we have to do to eliminate them. Sometimes the decisions are unpopular or at least unedifying. There is no sense of joy at having to address the problem, but unless we do so all the things that glue together the agricultural and rural community, all the things that make it what it is in Wales—
Jonathan Evans: I am grateful because I want some balance in the arrangements. Surely what one should do to tackle TB is to act in accordance with what the scientific evidence tells us? Perhaps my hon. Friend could say whether he agrees with that proposition.
Simon Hart: My hon. Friend made a good point in the nick of time. Yes, of course he is right. Occasionally we are terrified of trying to strike a balance between science-based policy and the possible political consequences. There is never a bad time to do the right thing. The right thing in this instance is to follow the science. I suspect that the British Veterinary Association concluded with great sadness that the policy recommended by the Government was about right. It was ironic that during our strange debate on circus animals, people recommended the BVA as the science base upon which we should depend, yet when it applies to a different activity, of the sort we are discussing now, people tend to drift away from it. Science is either science or it is not. In this case it is, and I absolutely acknowledge my hon. Friend’s comment.
I wanted to put TB on the table so that we did not complete a debate on farming in Wales without referring to it. It has huge consequences that extend well beyond the simple and rather tricky subject of bovine tuberculosis in itself. It has far wider implications, which each and every one of us in this room and beyond is duty bound to address in a sensible and evidence-based manner.
Huw Irranca-Davies: It is good to serve again under your stewardship, Mr Caton, for the second time in two weeks on agricultural matters—it is becoming a habit. May I first find the point of agreement with the hon. Member for Carmarthen West and South Pembrokeshire? It is a great pleasure to follow on from his remarks, because I certainly agree with what he said about tenant farmers, and I do not need to repeat it. It is good that an adjudicator is to be appointed, but the hon. Gentleman will be as aware as I am of the concerns that the adjudicator will end up without sufficient teeth—that the teeth will be pulled—because of the fear of being over-regulatory. That would be a crying shame, because there was cross-party support for the appointment of a regulator—an adjudicator or ombudsman—who could go out and deal with the real issues identified by that office, as well as those raised by anonymous tips from the industry and so on.
Many farmers have been calling out for an adjudicator because they know that there is a problem. They are worried about the relationship with the big suppliers and the supply chains. That relationship is not always a direct one with supermarkets; sometimes it is conducted through intermediaries, who themselves are all-powerful, because they control the complete sourcing of a particular product within a region. I agree with the hon. Gentleman that it is good that an adjudicator is to be appointed given that we introduced the code, with cross-party support, while in Government. We just want the code to have real teeth, although we do not want it to be over-burdensome on supermarkets or anybody else. However, if the adjudicator has clear evidence that something is going wrong—independent evidence that no one else has provided to them—they should be able to do something about it. I agree with the hon. Gentleman that that appointment is good news.
The hon. Gentleman mentioned new farmers, and Government and Opposition Front-Benchers welcome the new CAP reform proposals to encourage new farmers. There is plenty to disagree with, and plenty to criticise in terms of lack of ambition, but the proposals to encourage new farmers are welcome and can probably be built on in the further stages of negotiation.
Guto Bebb (Aberconwy) (Con): The hon. Gentleman makes an interesting point about the CAP reforms attracting new farmers into the system. While the CAP is clearly moving towards that target, is it not the case that the payment entitlement will militate against young farmers getting into the industry?
Huw Irranca-Davies: Yes, indeed. That has been raised by all the farming unions and by tenant farmers as well. I have spoken, as I am sure the Minister with responsibility for agriculture has, directly with the Commissioner and his staff and they are aware of that possibility, which is encouraging. They are minded to try to find a way through it. However, the problem is that we have before us quite a complex and potentially burdensome set of proposals that a lot of people will have to spend a great deal of time working their way through to interpret it effectively for Wales or the UK.
Within UK farming, Wales has its own particular dimension, with much farming consisting of small, family farms that do not have great expertise behind them that they can simply draw upon to sort things out. In the remaining months of negotiation, we will have to find a simple way through the CAP reform, both in terms of new entrants and any obstacles to that, as well as a range of other issues that I will come to in a moment.
Earlier on, much of the debate focused on food security and the environment, both of which farmers deliver on, although no one recognises that. However, the other dimension that is extremely pertinent today and in any future discussion of farming is the its economic importance. It is not simply a matter of the coal face end of food production, just as that is not the case with fisheries either. It is the whole supply chain—the whole manufacturing and food production base and the end product. I was in middle England yesterday looking at one of the largest shell egg producers in the UK. They are not simply producers; they package it, brand it, market it, put it in different formats on the shelves, and they also use the by-products to produce desserts and so on. I have to say that I did not come away with any samples, Mr Caton, otherwise I would have brought them to the Committee and shared them round. They make Gü—other lovely desserts are available, but Gü is in my fridge at home.
Huw Irranca-Davies: Good. It is important to note the economic importance of farming, and it is great to see that NFU Cymru is shortly to launch its own booklet focusing on the economic impacts of agriculture and the supply chain. Significantly, it is being launched by our Welsh Assembly Minister for Business, Enterprise, Technology and Science, Edwina Hart. That is significant,
The Secretary of State for Wales (Mrs Cheryl Gillan): I was pleased when I read about the Welsh Minister’s initiative. Does the hon. Gentleman agree that it is important for it to get a wide circulation outside Wales, too? It is important to talk not only within the borders of Wales, but to the wider diaspora in the United Kingdom, and possibly in Europe, too.
Huw Irranca-Davies: I agree entirely. It is a good example. The message of the NFU Cymru booklet and its agenda should be adopted more generally and across government. We must find a way to include that message in the mainstream debates in Parliament, too. Agriculture is not a fringe event; it is mainstream. If we are to get jobs and growth, it must be part of the economic drive.
I do not think that there is a constituency in all of Wales that is not touched in some way or other either by the food production end or the landscape aspect of farming. In my own patch, nine out of 10 post offices are rural. It is a former coal mining area and, politically, it is—Government Members, excuse me for a moment—a die-hard red constituency. Coal mining is the background in my constituency, but so is farming. More than 40% of my constituency area is pure upland hill farming. In fact, just the last generation—not too long ago—combined their mining with their farming. That is what we did. We were always diversified, before Ministers found the word. There is a strong tradition of that throughout Wales; it is not a matter of city against urban. Wales particularly lends itself to that continuum—we are all inter-reliant on what we get out of the countryside and our fisheries and on how that creates jobs.
I shall talk briefly about the Agricultural Wages Board. I hate to say it, but I have no doubt that we have lost the battle. We are fighting hard, but, from all the signals that the Minister is giving on the AWB, we will lose the battle in England and elsewhere. However, I want to make an appeal. The battle is not lost in Wales, nor should any of us give it up. Discussion is ongoing between Alun Davies and the Welsh Assembly Government, who are minded to retain the purpose of the board for the very reasons highlighted by the farming communities. As I have said, Wales is a different type of farming environment. The AWB is the ideal body, in some form or other—okay, make it a bit lighter—for small family farms with limited resources. It is ideal for dealing not only with wages, but with seasonality and with staff not working on some days for all the hours but on others working all the hours that God could possibly send, and more. Accommodation, holiday pay and other entitlements are linked to that. Frankly, those are the last things that full-time small farmers want to deal with on a person by person basis. They want someone there to say, “This is the way it will happen,” which is what the AWB has done. It is one reason why we should support and encourage—or pressure—the Minister of State, Department for Environment, Food and Rural Affairs, the right hon. Member for South East Cambridgeshire to work well with Alun Davies and the Welsh Assembly Government to ensure that there is a model at least for Wales, if not for anywhere else.
Jonathan Evans: Although the hon. Gentleman may regard the rates set by the AWB as a floor, might people not also argue that they too often become a ceiling? Employers look at those low levels and use them as a benchmark for keeping wages down. While he addresses that matter, perhaps he might also say why, in the 21st century, an AWB should set dog allowances, for example.
Huw Irranca-Davies: I am not saying that there is no need whatever this year to consider the AWB’s whole remit or that it should not undergo an element of reform. However, if farmers and farming organisations in Wales and elsewhere—although we are on a losing battle in England—are powerfully arguing that they see the necessity of the AWB, I would argue that it is something that should be retained. It has a purpose in this century.
The hon. Gentleman’s point on pay levels is interesting, but I am frequently told by farmers in Wales and elsewhere that they go well beyond those limits. In terms of not simply pay, but other entitlements, including annual leave and so on, at least the AWB provides a base level, which can be built upwards from. It is a brave person who says, at this time in the economy, to the agricultural sector, “We are so confident that things are going fine that—don’t worry—we will take this backstop away.”
Susan Elan Jones (Clwyd South) (Lab): I wonder whether my hon. Friend agrees with the point that was made by the Government Minister speaking in the Committee of the Bill that became the Public Bodies Act 2011? A challenge was made to him on this point and he basically said that there are many posts in agriculture that pay well beyond the minimum level. Our response was that that was great, but that we sought to protect those in circumstances where does not happen.
Huw Irranca-Davies: Absolutely right. That is a valid point. The AWB is a positive mechanism, not a negative one. My appeal to those in this Committee is to talk to the Minister with responsibility for agriculture in the Lobby and elsewhere and urge him to at least work effectively with the Welsh farming Minister to ensure that the model that Wales wants is left in place.
Roger Williams (Brecon and Radnorshire) (LD): The hon. Gentleman has given this a lot of thought, but it strikes me that the number of people employed directly on farms in Wales is very small indeed. That is not to say that they are not important, but the majority of the people working on farms do not work in an employee/employer relationship, but as a contractor, and I am not sure whether they are covered by the Agricultural Wages Board.
Huw Irranca-Davies: I agree that it is not the one magic bullet in terms of how we should deal with the work force. I understand that a debate may have been secured for when we come back from the recess, to which I am sure the hon. Member for Brecon and Radnorshire will want to contribute, on the future of the Gangmasters Licensing Authority. It is also subject to the current red tape review.
“The Union has always supported the AWB and remains concerned that unless there are systems in place to protect payments to agricultural workers, the industry will not attract the highly skilled individuals it needs to thrive. As many farms in Wales run with relatively few staff, the AWB is considered an important means of avoiding potential conflict and lengthy negotiations with individual staff.”
Before I discuss CAP reform, I want to discuss battery hens. It is great to see the UK and Wales at the leading edge within Europe because of our investment over the past six years in moving to enriched cages and away from the old-style cages. It was disappointing and we did not expect it—I certainly did not—when on 1 January, the date on which the measure came in, we found that our position was slightly weakened, because there are still several hundred thousand hens unfortunately in the old-style cages in parts of the UK. I understand from the Minister of State, however, that that will not be the case within weeks or months.
Wherever farmers are still using the old-style cages, we need to crack on rapidly and get on with their replacement, especially if we are going to negotiate powerfully with countries such as Spain, where probably only half of the hen farmers have made the more expensive investment in the enriched cages. In France, I understand that the replacement level is at about 75%. We are probably up there at over 99%, but we need to be at 100% so that we can be out in the EU negotiating from a strong position, saying, “We want infraction proceedings brought against the other countries”. We do not want Welsh and other UK farmers finding in three months’ time, when the next trade figures are published, that there is an increase in imports of shelled eggs, liquefied eggs or powdered eggs. We know that those products would be coming from farms doing it cheaper, because their animal welfare standards are lower and they do not care. They would be dumping their products on the UK. I will look with interest to see what happens.
There is one thing that the Secretary of State may be able to help with. We have already made our support for the measure clear to the Minister of State, and I know that, not only in opposition, but in recent months, he has also made it plain that he was exploring the avenue for a UK legal ban. In a recent debate in Westminster Hall, he made it clear that he had received official, legal advice from his Department. I was a Minister, so I know that he would have had to look at it and generally go with it. Although he cannot publish it, he says that the legal advice says clearly that there cannot be an enforceable UK ban on egg products from non-enriched cages. However, we know that the EU is committed to enforcing the ban on non-enriched cages at a rate of knots to bring Spain up to standard and to deal with those remaining in France and elsewhere throughout the EU. If we know that that is the direction of travel of the EU Commission, what is the risk of infraction if the UK Minister were to say, “I’ll tell you what, we will ban any of those products coming in.”?
We frequently had to make the decision not only on the legal advice in front of us, but on the advice given for the risk of infraction as well. If that advice were, “Well, actually the EU Commission wants this. It has started infraction proceedings against other countries that are so far off compliance it’s laughable,” what is the risk of infraction? Minister, go for it. No one will bring a multimillion-pound infraction case against him when in three or six months, hopefully, everyone else will be up to speed. If the Spanish were not up to speed by then, would we not want to see them infracted? Why should our farmers carry the cost of their investment, stand up proudly and say, “We have done the best for animal welfare standards”, but know that they could be undercut by producers overseas?
David T. C. Davies (Monmouth) (Con): The hon. Gentleman makes an excellent speech and a number of valid points, culminating by asking, “Why don’t we tell the European Union to get stuffed?” All I can say to him is: welcome to the club. I am a member of various right-wing dining clubs, and I am absolutely certain that they will make space for the hon. Gentleman if he would like to join us.
I would be more diplomatic. I would not tell the EU Commission to get stuffed—heaven forfend—but there is a valid exercise to be performed by the Minister: not simply to look at legal advice, but to ask seriously, “What is the risk of infraction, when the EU commissioner has already started instigating proceedings for infraction against those countries that are not complying with a ban, when we are?” Good grief, I should have thought the risk was very low.
The only thing I cannot join the hon. Member for Monmouth in is in giving an absolute stomping to the Commission, but there are times when the risk is such that it is acceptable to say, “We are doing what the commissioner wants on this occasion. Let’s argue and put a ban in place.”
Mrs Gillan: The hon. Gentleman makes a valid point. He knows that, within a few days, we will be fully compliant with a ban. England, Wales and Scotland are already fully compliant and we expect Northern Ireland to follow suit in the next few days. That is really good news. As he probably knows, the Commission has already written formal infraction letters to 13 out of the 14. It is also looking at having the action plans from all non-compliant member states—including the UK as it was—so progress is being made.
I should declare an interest as the proud owner of several hens. I know they are much happier running around a field and in an open space than in those terrible batteries. I had two ex-bats as well that lived out their lives happily, so I am with the hon. Gentleman on this, too.
Huw Irranca-Davies: That is excellent news. Let me leave it at that. I am glad that such rapid progress is now being made in the UK. It gives us a stronger negotiating position. It also gives us a stronger position with officials to examine the risk element. If we are to be fully compliant within a few days, we are in an even stronger position to say to the commissioner that we will now impose a UK ban.
Lots of people want to speak, so I will deal briefly with CAP reform. First, let me with the CAP a happy birthday—its 50th anniversary is this year. For all the criticism that it always gets—sometimes quite rightly—over the past five decades it has, by and large, delivered price stability and given farmers the ability to invest, reinvest and be more productive. However, we know it is not fit for purpose, and that is what we are trying to deal with in this period of CAP reform. What must it deliver for us in Wales as well as the rest of the United Kingdom? Food security? Yes, but also affordability, because taxpayers want their money to be well used as well as affordable food prices on the shelf—the public benefits.
The point has been well made that farmers have always been stewards of the environment. We now have a much more explicit statement of that, and it is no longer enough that they farm and look after the countryside. We need to measure, one way or another, how what we are doing affects biodiversity. My right hon. Friend the Member for Neath mentioned the public benefits of flood alleviation in the Plynlimon hills. Such benefits, and those of actions such as the reintroduction of Welsh whites, rather than Welsh blacks, on those hills, and the blocking of the drainage channels put in after world war two to allow those fields to be planted, need somehow to be measured effectively. Driving innovation, productivity and competitiveness in the medium to long term is right, but we do not want to lose the environmental benefits or damage the economics of farms by pushing too hard, too fast and causing people to fall of a cliff edge. Simplification is also important.
In this context, I worry about the old adage, “You can’t teach an old dog new tricks.” I worry about the bureaucracy and inertia of EU institutions, which sometimes do not act as radically as we would like. For a number of years, the UK has probably been at the leading edge of pushing for reform, but I am not sure that we will get the reform that we want or need for our farmers because of the difficulty of pulling 27 nations together in agreement.
More than £350 million a year comes back into Wales through EU common agricultural funding. I welcome detailed involvement, as well as the presence, of Alun Davies—our man in Brussels, so to speak—and MEPs such as Derek Vaughan, who are fully involved in the agricultural agenda. They have played what Welsh Assembly Government Minister Alun Davies has described as a “constructive role” in shaping the UK’s position.
I would like to flag up the transition from historical to flat-rate payments, which I mentioned earlier. That transition is a special issue for Wales, as it is for other devolved areas. On the protection and enhancement of existing stewardship and wider public benefits, one thing we must not do under the greening proposals in CAP reform is throw the baby out with the bathwater. We are and have been at the front edge of making environmental gains through the various stewardship schemes in Wales, England and elsewhere, for which we are sometimes criticised by farmers, but we are also at the front edge of delivering biodiversity and other wider public benefits. The greening proposals appear a little too rigid in places—the Commission is well aware of our concerns. We do not want to lose the benefits we have already gained, or make farmers, who are fully committed to environmental schemes, say, “Well, this is too much for me.”
The idea of three-crop rotation, for example, might seem eminently sensible out in Brussels, but it seems ludicrous to say to some farmers, “You have to do that on a regular basis in the way that we tell you.” Such a Brussels micro-management approach looks like a re-emergence of the set-aside proposals for certain percentages of land, but we all know that the game has moved on so much. Green non-governmental organisations now recognise that often it is not about setting aside land, because that can be sterile land; what we need is good land and good innovations, including in intensively farmed areas, to ensure that we have wildlife, birdlife and biodiversity. I am a little worried by the prescriptive nature of some of the current CAP reform proposals, but I know that the Commission is minded to work through those proposals.
Tenant farmers have already been mentioned. The active farmer proposals under the CAP reform are both interesting and a cause of concern. What about the farmer who diversified long ago—the farmer who runs a JCB off his land and does a bit of plant haulage, or who rents the cottage out the back to tourists and so on? What about the National Trust in Wales? Its prime activity is not farming, but it farms a hell of a lot. It is a membership-based organisation. Is it an active farmer?
Again, I know the Commission is acutely aware of that and wants to it work through, because it recognises the good work the UK has done over the past couple of decades, but we have to ensure that it does. Coming back to simplification, we have to avoid the situation where farmers, agronomists and so on have to leap over hurdles to get back to their current starting point. Let us try to simplify before we get to the final CAP proposals.
I have spoken for a long time and that is all I have say about CAP reform, although there are millions of things that I could go on about. I simply urge the Committee and Members of the House to keep a close eye on CAP reform as it goes through. Without a doubt the principles behind it are the right ones, but in practice, in a country such as Wales, where there are special conditions, and in the UK, where we have been at the leading edge of not only delivering good food and good produce to people’s tables, but achieving environmental gains and wider public benefits, we need to ensure that all that is preserved in the way that CAP reform goes through. We will then have done a good job. The Minister of State, Department for Environment, Food and Rural Affairs, has a hard role ahead of him, but I am sure that the Secretary of State will ensure that the voices of Welsh farmers are put strongly to him at every twist and turn of the EU negotiations.
It has been a good sitting this afternoon. There has been much cross-party agreement on many issues, especially the CAP negotiations. We should welcome the fact that the UK Government, unlike many others in Europe, not only acknowledge the existence of the devolved nations, but also encourage the involvement of Ministers from the devolved nations in the CAP negotiations.
The hon. Member for Ogmore mentioned the work being done by our Members of the European Parliament. One key thing that struck me on my recent visit to Brussels was the farming unions telling me that the four Members from four different parties that we currently have in Europe work together extremely well, ensuring that the case is made—[ Interruption. ] Four parties. Unfortunately, there is no Liberal. They feel that they have a “Team Wales” operating in Brussels, and the MEPs play a full part in that. When it comes to ensuring that the CAP changes actually work for the benefit of Welsh farming, having a strong, unified voice in Brussels is extremely important.
Many hon. Members have already touched upon people’s concerns about the CAP. There is a real problem with the payment entitlement scheme. The potential effects of land banking should concern us, and many hon. Members have discussed it already. Land banking could increase the value of land to the extent that the common agricultural policy’s aim of making it easier for young farmers to get into the industry will actually be mitigated by the unintended consequence of the proposals for the payment entitlement scheme. The UK Government, supported by the Welsh Government, should work extremely hard to ensure that we do not, by mistake, end up making it more difficult for young people to enter the industry.
In the same way, there is concern out there that for many of its 50 years, the common agricultural policy has been responsible for over-production across most of Europe. We all remember the 1980s, when Europe had butter mountains, milk lakes, and wine lakes while people were starving in other parts of the world, which was completely unacceptable. Although many go in the right direction, there is concern—six months prior to any agreement—that the CAP change proposals may have unintended consequences and move us back to a situation where production is discouraged rather than encouraged, at a time when one could argue that food security is more important. I am not saying that that will be the final consequence of CAP reform, but we must keep it in mind.
While I suspect that no one in this room will oppose the greening measures in the CAP, there is real concern about the Commission’s intention to include greening as part of the 70% of pillar one, not just as part of pillar two. I would be reluctant to see Welsh farmers, who in many ways have been at the forefront of the greening
Finally on the CAP, the hon. Member for Ogmore made the point about the definition of an active farmer extremely well. If that definition is based on the turnover of anyone involved with land, we will have a problem, so we should try to rectify that. The whole point of the common agricultural policy is to support the farming industry and if, again as an unintended consequence, that is not the case, I would be greatly worried. However, the CAP negotiations are certainly moving ahead, and the partnership that we can see between the Ministers from the UK and Welsh Governments should be applauded.
We should take into account how this Government are trying to make things easier for our rural communities. When we talk about agriculture, it is impossible not to refer to rural communities’ economic needs. This morning, the shadow Secretary of State commented on the effect of the VAT increase on fuel prices for hard-pressed motorists and farmers in rural areas, but I thought his comment about the effect on farmers was bizarre. I suspect that he is not very up to speed on VAT law, because I do not know of a single farmer who is not VAT registered. If any element of our rural communities is not complaining too much about the increase in VAT, it is farmers, because they benefit extremely well from how the VAT system treats their industry. The shadow Secretary of State certainly made a very odd point.
There has been an increase in VAT, but on numerous occasions now, not only have this Government, despite inheriting such huge financial problems, reduced the duty on petrol and fuel, but they have not implemented changes proposed by the previous Government. By August, that will make a total difference of 10p a litre in fuel duty—10p less than would have been the case—and if VAT is taken into account, it is 12p less per litre. That is a significant contribution, which should have cross-party support.
On transport, I am extremely concerned about the real threat to rural bus services that will result from a very odd and last-minute decision by the Government in Cardiff. This debate is about the policy towards Welsh agriculture of the Government in Westminster, but it is important to point out that the changes that the UK Government have implemented on the fuel duty rebates for bus operators have been done with 18 months’ notice and mean a cut of about 20%. I am sure that bus operators in England find it extremely difficult to service rural areas and communities, and the changes will undoubtedly have an effect, but in Wales, we have had an announcement giving eight weeks’ notice of implementation for a cut of about 27%.
Nia Griffith (Llanelli) (Lab): Does the hon. Gentleman accept that, even after those interim changes, the actual amount given to bus operators in Wales will be more than that given to those in England?
The Chair: Order. I remind the Committee that we are considering the UK Government’s agricultural policy as it relates to Wales. I would be grateful if the hon. Member for Aberconwy returned to that subject.
Guto Bebb: Indeed, Mr Caton. I was going to make the point that many in my agricultural communities depend on public transport, and the lack of such services is a real problem. In my constituency, if fuel prices have increased—there is a real issue for people when public transport becomes more expensive—the difference will be 0.4p.
The Chair: Order. The hon. Gentleman cannot have heard what I said. The Question before the Committee is about the UK Government’s agricultural policy as it relates to Wales. Will he please get back to that?
Another way to support the agriculture industry in Wales as the result of the UK Government’s policy relates the Food Standards Agency. I have real concern about the proposals for abattoirs, which were touched on by the hon. Member for Ceredigion. The one point he missed is the fact that not only will the policy, if implemented, significantly affect smaller abattoirs, but it specifically militates against abattoirs based in rural areas, believe it or not. That is because, under the proposed changes—I know they have been suspended for six months and certainly the abattoir I represent in Llanrwst is grateful for that—the FSA will be able to charge abattoirs for travelling time and mileage, so the more rural the abattoir, the greater the charge on the business. I ask the Government to look carefully at the FSA’s proposal. Once we are confident that the FSA is working in an efficient manner we can start looking at charging, but it would be a significant mistake to do that now.
Finally, on the question of supporting agriculture in Wales, one of the key things the Government are attempting to do is to rebalance the UK economy towards the exporting and manufacturing of goods. We should all welcome that. We are seeing the effect in the food industry in Wales—my question this morning related to the export of Welsh lamb—but just as important is giving small businesses the confidence to engage in export markets. I am delighted that in my constituency we have a wonderful success story: a local butcher, Edwards of Conwy, who diversified into a factory producing sausages has recently won a significant contract to export his produce to Malaysia. That is a real sign of success because one of the things that we need to do as a Government is to persuade small businesses—by small I mean those with 50 or fewer employees—that they can engage with the export market. By exporting the high-quality produce of the Welsh agricultural industry, they are making a significant contribution to retaining the added value that agriculture offers in Wales.
I accept entirely the important relationship between the tourism and agricultural sectors. Over a period of 20 years we have encouraged the agriculture sector in Wales to diversify towards tourism as a means of supporting farming families in our communities. We need to be aware of the importance of integrating tourism with the agricultural sector, because quite often they have been
I have in my constituency Plas y Brenin, which is one of the finest outdoor pursuit centres in the whole of the United Kingdom. Every January it holds a dinner where Plas y Brenin says thank you to landowners and farmers in the vicinity for their support during the year. They make a point of inviting everybody who supplies them. It is interesting that they are so careful in terms of their supply chain that they get their meat from the two butchers in Llanwrst, not one of them, because they want to show that they are supporting everybody. That event is one where the tourism sector and the agricultural sector come together because ultimately they are the key drivers of the rural economy in Wales. They need to work together. They do not need to be distrustful of each other and the UK Government must be aware that when they are supporting agriculture and tourism in a Welsh context, they are supporting industries that are working together for the benefit of employment in rural parts of Wales.
Albert Owen (Ynys Môn) (Lab): I am glad to follow the hon. Member for Aberconwy because he is right that the content of the debate has been very high from all parties. The comments and speeches made thus far show that no single party in this Committee can claim to be the party of rural Wales. Every party represented here can speak for their constituencies equally. I am well placed to say that as someone who represents a constituency that has been represented by four parties: David Lloyd George, for the Liberals of course; Ieuan Wyn Jones, the leader of Plaid Cymru; Keith Best for the Tories and Cledwyn Hughes, who was Secretary of State for Agriculture. But there is one to whom I wanted to refer in particular and that is Sir Owen Thomas who was the first Labour rural MP in the United Kingdom. He represented my constituency from 1918 to 1923. We have been talking about the Agricultural Wages Board, and he set up an agricultural workers’ combine when he became a Member of Parliament, because he suffered great injustice; his family were turfed off their land by an unscrupulous landlord. His combine worked with quarrymen’s unions and miners’ unions to form an agricultural workers’ union, which was a forerunner of many of the unions that represent rural workers today. I wanted to get that on record, because it is important that we pay tribute to our predecessors, from all parties, who helped to shape agricultural policy in this country.
Another area on which I agreed with the Minister of State, Department for Environment, Food and Rural Affairs, the right hon. Member for South East Cambridgeshire, was labelling. The Government’s approach to labelling is very sensible. It is important not only to have a voluntary code with the supermarkets but to
I will touch on CAP reform only briefly, because many contributions have touched on it. It has been said that one CAP does not fit all—[ Interruption. ] It was not meant to be a pun, but “cap” came out more easily. If I can entertain the Committee I am happy to do so. Europe, or indeed the UK, cannot have one policy for agriculture in the whole of the United Kingdom, because there are issues specific to Wales. The hon. Members for Aberconwy and for Arfon mentioned representation of the nations and regions at the reform talks. That is important, because there is a lot in common between some of the nations and regions in Europe and Wales, and they can put a case forward for areas of Wales. I will not go into that, however.
I want to mention a couple of areas that have not been touched on. Two issues that greatly affect my constituents in rural areas are fuel and the grocery code adjudicator. I want to touch on renewable energy as well, because although some of it is devolved, many of the tariffs are set at a UK level. First, I will talk about fuel. I will pay tribute to Governments of any colour if I agree with them, and I welcome the Chancellor’s freeze of fuel duty. It is not the first time that has been done; the previous Chancellor did so on numerous occasions when the economy was suffering. The previous Labour Government removed the fuel duty escalator that was introduced in the 1990s for a good period of time, and put it back. In the current economic circumstances, I would have been lobbying for any Chancellor of the Exchequer to do the same. I am not sure what the fuel stabiliser is and how it works, so I will ask the Minister directly, because it would be useful for us to know.
People in rural and periphery areas of the United Kingdom pay a lot more for their petrol and diesel than people in some urban areas, and I have some examples of that. I raised the matter in a written question to the Minister, and I have mentioned it on a number of occasions. I support the rebate scheme that the Government are looking into and piloting, but I feel—this may be taken as a party political point, but I make no apologies for saying it on behalf of my constituents—that areas of Wales should have been included in that pilot scheme. I checked during the interval which areas of Scotland qualified for the pilot scheme, and I discovered that not only the remote islands of Scotland but the Inner Hebrides were included. I will take a correction in an intervention from the Minister if I have got that wrong.
The island of Skye is well connected by a bridge, as is the island of Anglesey by two bridges, so the case can equally be made for Anglesey. I am disappointed that the Government did not consider including an area of Wales in the scheme. I would have preferred that to be the island community of Anglesey, but periphery areas should certainly have been considered. On average—I checked the prices on a website today—there is a 5% to 6% difference in the price per litre of diesel and petrol between my area and the average in the United Kingdom.
I urge the Minister to exert some pressure. I know the pilot is probably closed, but I feel that the Government have ignored Wales when it comes to those pilot areas. It is an oversight but it is not the first time that has happened. Although we talk about boundaries, and each and every one of us has a self-interest in that respect, Scotland and England have been given exemptions that Wales has not. It is about time that Wales was given a level playing field when the Government are looking at giving exemptions to parts of the United Kingdom.
Because of the time constraints, I will move briefly on to renewables and conclude with the grocery ombudsman. Microgeneration is a big issue. We have discussed innovation, and hon. Members on both sides of the Committee have said that farming does not stand still, that it is an innovative industry. An area in which it can lead is microgeneration. Microgeneration and electricity generated for under 50 MW is a cost devolved to the Welsh Assembly, and although planning issues lie with local government, tariffs are set by the UK Government. We have seen the debacle over feed-in tariffs for solar, which has impinged not only on large schemes, but on micro schemes. People who live in rural areas rely on micro schemes, and saw them as a way of producing cheaper electricity. Again, in periphery areas of Scotland and Wales, electricity is generally more expensive, so they were ideal. I saw a scheme in which a 15 kW wind turbine microgeneration—I support onshore microgeneration—was able to produce four times the amount of electricity needed for that farm and the rest was put into the grid, but the tariffs are set differently.
I urge the Government to look at hydro microgeneration, an area that has been overlooked for far too long. The kit needed to produce electricity in the schemes is expensive, so grant aid would be needed to set them up, and a tariff for renewable energy produced from tidal, wave or movement of water could be brought in to help agricultural areas such as my own and those across Wales. We have plenty of water and rain, which could be used to our advantage.
Finally, on the supermarket ombudsman, as I still call it, I think the Secretary of State was trying to make a political point by saying that the Labour party had 11 years in government to do it. She gave the impression that a recommendation was made 11 years ago that an ombudsman should be brought in. For clarity, I will read—[ Interruption. ] I will take a brief intervention.
Albert Owen: That is still a cheap political remark. In 2000, the Labour Government asked the OFT to look into supermarkets and towards a code, which it agreed to do. The Competition Commission then set up the code because of campaigners such as myself, suppliers, and others. A Library research paper on the Grocery Market Ombudsman Bill found that:
In 2008—not 2000 or 2001—the Competition Commission published another report. The commission cannot create a new body itself, but in August 2009, it recommended that the Government establish an ombudsman. I make the point because after that recess, I entered the ballot for a private Members’ Bills and was successful in introducing a Bill to take forward the Competition Commission’s recommendation made only a few months before that.
The important political point is that I had all-party support. All parties represented here today said that it was a priority—a priority—to bring in an ombudsman with teeth. A weak measure in draft form has been kicked into the long grass. It bears no resemblance to what cross-party activity or the Grocery Market Action Group, of which I am a member, wanted. A “priority”, for any party coming into government, should mean in the first term. They did not even introduce a draft Bill, because the matter went out to further consultation until 2010. Here we are, in 2012, and we have not seen a final Bill. The one that has been in draft has been hugely criticised by the Select Committee on Business, Innovation and Skills for having no teeth.
We want farmers, producers and customers to have confidence that the ombudsman will have teeth to do the job, who should be proactive in looking at the industry and making recommendations. The ombudsman should be able to impose mandatory fines on companies. Naming and shaming can happen now. Any one of us can stand up and name and shame a supermarket, but when we hit its pocket, it feels worse. The measure is self-financing and should be introduced, as a matter of priority, in the Queen’s Speech. I urge the Government to use their influence, because already years have gone by in which the farming community have suffered. It is calling for the measure, which has cross-party support, so we should move ahead with it. I shall leave it at that, because other people want to speak.
We have had some light-hearted debate this afternoon about which party has the trust and loyalty of the farming and rural community, but no party should take the members of that community for granted, because they will say it as they see it and cast their vote as they think appropriate. My dear father, whom no one could call a socialist, often used to say, “It is the Labour Governments who produce the best Agriculture Ministers.” I am sure that had he lived long enough to see our present Minister, he might have modified that a bit. [ Interruption. ] He was a good Tory. Our present Minister has proved to be a good ally of the agricultural community. The hon. Member for Ogmore does not escape entirely: he did some good work when he was in office. I sat on many Standing Committees with him when he took legislation through, but I have to say that it was I who educated and tutored him when he stood against me in 2001. He has made progress since then.
I welcome the debate and congratulate the Secretary of State on securing it. Agriculture is a huge part of the Welsh economy and of our nation’s culture. When we have a strong agricultural industry, we attract able and keen young people to enter it. Welsh agriculture is strong at the moment, and that strength is built on the back of rising commodity prices. The exception is the dairy industry, which has persevered with very low returns for many years. We hope that by introducing a grocery adjudicator, the hon. Member for Ynys Môn will do good work in addressing that.
The Government must be aware of forces on the horizon that might affect agriculture and they must be prepared to something about them. First are the three F-words in agriculture: fuel, feed and fertiliser. Those are the big input costs, which are increasing considerably. Before everybody gets too excited about increases in commodities, they should have a look at the answers to my written questions at columns 664-68W of Hansard, which show that over the past 20 years food prices, both at the farm gate and at retail level, have remained stable. Indeed, it could be argued that food has had a moderating effect on inflation in this country, because food prices have always risen less quickly than the main retail prices index.
Recently, of course, there have been spikes in food prices, mainly caused by floods, pestilence, droughts and other disasters, but it is often said that the best thing to address high prices is high prices themselves, because they encourage people into production, and as production rises, so prices fall. The message of Sir John Beddington’s Foresight report “The Future of Food and Farming” is that many forces are at play—including increases in population, global warming and some arable land becoming incapable of supporting crops—that will ensure that food prices are higher, if not the highest, in future.
Against that background, the CAP undoubtedly needs to be reformed, and we have had a lot of talk about that today. Many issues that I wanted to cover have been covered, but many people would like a reduction in direct payments to farmers, which has been suggested today. I think that will be the direction of travel, but it should be gradual because we have to maintain viable and profitable farming so that we have land managers in the countryside who can deliver the public goods that we expect farmers to deliver.
My message for the Secretary of State, the Minister and Alun Davies on the reform of the common agricultural policy is that they should establish a framework or architecture; the details can then be decided in the
On exports, I am not sure whether the Minister was completely accurate when he said that there were no barriers to exports to America, because my information is that there are. Indeed, I talked to the American agricultural attaché about it some weeks ago. We need to break through those barriers if we are to have thriving exports of our excellent food.
Wales has been a hot spot of agricultural science over the years. The work that has been done in Aberystwyth by Professor Stapleton and others was right at the forefront of worldwide agricultural research. However, science has almost become a four-letter word that dare not be said when discussing agriculture. I recently visited the Syngenta facility at Jealott’s Hill, which used to be part of ICI, and it has difficulties bringing any new products to market because of regulation that is not risk-based. One regulation says that any run-off water should have less than half of one millionth part of the compound in it, which is about half a gram in an Olympic-sized swimming pool. It is difficult, because of regulations that are not science or risk-based, for any scientific progress or research to take place in Europe at the moment.
The same goes for the use of genetic modification. I wish we could get back to some sound basics, because we have already lost the unit that was working at Jealott’s Hill, and I recently heard that some 150 people had lost their jobs at BASF because of the approach to GM in Europe. The scientific work that we were once famous for in Wales, the UK and Europe is leaving us and going elsewhere in the world.
I will not add anything on the issue of the supermarket ombudsman. I just ask the Government to bring forward a Bill as quickly as possible, and to put it in the Queen’s Speech. I want to say one or two words about less favoured areas, because 80% of Wales is a less favoured area. It has real productivity problems compared with some other agricultural nations. I almost despair at the fact that the Welsh Assembly Government have done away with Tir Mynydd and Tir Gofal, and introduced the Glastir scheme, which, though it was meant to attract 10,000 farmers, only 1,700 farmers wish to take forward at the moment.
My last point is on a tax issue; tax is important to agriculture as it is to all other sectors. It is about the reduction in capital allowances. I can understand why the Government would want to introduce that reduction for businesses that are incorporated, because they have had the benefit of corporation tax reductions. However, almost all farms are non-incorporated businesses; they pay their tax on self-assessment, either as sole traders or as partners. Their businesses will be greatly disadvantaged by the reduction of capital allowances, and they will get no benefit for tax reduction as a result. I ask the Secretary of State and the Minister to make representations on behalf of those non-incorporated businesses; they should have no reduction in their capital allowances, as that will have a hugely detrimental effect on their businesses.
The decision to establish the AWB was welcomed with open arms. It was clearly recognised in 1948 that a decision about rural workers’ wages and payment could not be left to market forces. Without the regulation afforded by the board, the protection of a safety net is removed, and there is no way of ensuring that workers are offered a fair wage or guaranteed a fair standard of living. As many as 152,000 farm workers in England and Wales rely on the protection of the AWB. The board got a fair deal for apprentices and seasoned farm managers alike. I fear that the majority will now be worse off.
Simon Hart: I have two quick points. Will the hon. Lady explain how the situation would work where there were cross-border issues—where farms stretched into England from Wales—if there was one system in one country and a different one in the other? Secondly, senior farm managers are surely salaried and not covered by the AWB anyway.
Mrs James: I thank the hon. Gentleman for his intervention, but I will not waste time on it. I am sorry; I will carry on. I do not know the answer to the cross-border question, because I do not farm on a cross-border basis. We are developed enough, when it comes to cross-border issues, to solve these problems and work together, as do many other organisations, such as commoners groups, which get together and do things collectively. I think we can solve that one. As for the senior managers, I am sure that they started their careers somewhere and were grateful for the AWB.
My only direct experience of farm work is the smallholding my husband maintains with tireless dedication. He has never employed anyone on the farm, and it is a family affair, as are the concerns of many other upland farmers in Wales. I realised long ago, early in my marriage, that those 80 acres or so would never maintain three generations. In turn, each has sought work outside the farming industry to support themselves.
My hon. Friend the Member for Ogmore mentioned the mining connection. My father-in-law was a miner for 47 years. My husband was also a miner, and it was those wages that supported him. By the time our son reached the age at which he wanted to take over and do more on the farm, he could not be maintained by it. It is sad that many young people will not get the chance that our son has. Fortunately, he wants to continue in the tradition of his father and grandfather, but he knows that it will be a tough, uphill slog all the way.
I recognise that agricultural work calls for a love of our countryside and a dedication to protecting our invaluable environment. In many cases, it is a skilled occupation, demanding knowledge and experience gained over many years, yet figures produced by the Department for Environment, Food and Rural Affairs show that agricultural wages remain persistently below those of a manual worker, at about 70% or 80% of their average payments. The National Farmers Union consistently
Similar data show that the agricultural working week can sometimes be substantially longer, depending on the season, and the requirements of the livestock and the arable crops. DEFRA’s own figures show that the abolition of the AWB will take £9 million a year out of the rural high street, and that reduction will be created by cuts in holiday and sickness pay alone.
It has long been argued that the earnings gap between agricultural workers and other manual employees is because of the benefits in kind available, such as tied housing, fuel allowance, and provisions. I do not need to remind members of the Committee of the serious disadvantages associated with living in tied accommodation. That is another area of social inequality that will affect the rights of numerous families, but the Government continue to greet that fact with great ambivalence, and choose to ignore the many repercussions of the legislation, including the risk of an increase in rural homelessness and rural poverty.
Successive reports highlight the changing nature of farming and agriculture in this country. The suggestion that farming is essentially about a network of small-scale family businesses, with all the associated interdependencies and benefits in kind, is no longer viable, either as a concept or a financial model. The knock-on effect is to make it even more difficult for young people to enter this important industry and, in time, become the guardians of our wonderful countryside.
We all know that farming has to modernise and keep up to date with ever-changing trends, and that the needs of housewives are ever more demanding, but if we are to ensure that there is sufficient enticement for young people to live, work and raise families in our rural communities, competitive wages must be paid. As in other industries, modernisation and a focus on competitiveness does not necessarily mean the imposition of low pay and employment uncertainty.
The Farmers Union of Wales opposes the abolition of the AWB, as it fears that its closure will leave farmers exposed. In particular, it fears that those who hire out their skills to neighbours and bigger farming operations will be left without the safety net of a fair wage for their skills. Luckily, we in Wales have the reassurance that the Welsh Government do not want the AWB to disappear; they are in discussions with DEFRA on that very point. I understand that the debate has moved on, but unless Ministers can tell me otherwise, the fact that agricultural workers remain at the bottom of the pay scale is still a threat, and there does not seem to be a real change in attitude and stance.
I have heard talk about the necessity of driving down the cost of food production, but I see little evidence of that imperative translating into cheaper, more affordable food in the shops. Many of my constituents take the time to tell me about how food prices are increasing, and that is unfair. It is not the farmer who imposes those costs, but it is the farmer who is blamed by many housewives.
With food inflation running at nearly twice the rate of inflation on other goods, we have to question just how much of that astonishing figure is the result of increasing fuel costs, and how much is structural—by that, I mean
Jonathan Edwards (Carmarthen East and Dinefwr) (PC): I wished to make this point in my speech, but I will not have the opportunity now. Milk is a case in point: supermarkets use it as a gateway product. Their objective is to decrease the price of milk, so what can we do to ensure that producers get a fair price for their product?
Mrs James: The supermarket ombudsman was a great idea, and I will watch carefully to see what happens with the groceries adjudicator. When I talked to my local supermarket managers—I have many supermarkets in my constituency, as one can imagine in an inner-city constituency—they were clear about the pressure that they are put under by their managers. Discussions about prices that the housewife is happy with go on all the time. We have to start educating people in Britain about the fact that food costs money. We want to keep costs down, but if we want good-quality food that competes, and that is good value and of good standard, we may have to pay a little extra. That is difficult for people to understand.
I will not say a great deal more; I have managed to say what I wanted to say. I am sure that whether we are working cross-border, or co-operatively within the farming industry in Wales, people will want farming to be a success, and will want farmers to be paid a fair and decent wage.
Nia Griffith: Our agricultural enterprises are the mainstay of our rural communities. It is farmers’ painstaking work year in, year out, that gives our countryside its characteristic appearance. Over the years, the Welsh farming community has been very stable and loyal to its area, and the farming tradition is passed down from one generation to the next. However, farming nowadays requires hard-headed business decisions—decisions of the head, not the heart. In recent years, the rapid expansion of opportunities for young people to look further afield and broaden their horizons has led many to question assumptions that they will simply carry on with the family farm. If we are to reinvigorate the farming community with a younger generation, we need to make sure that support is there.
Although many agricultural matters are devolved to the Welsh Government, UK policy none the less has a significant impact on our farming communities. That includes the aspects of agricultural policy that are not devolved, the wider economic policies of the UK Government, the important role of speaking up for the whole of the UK, and the role of influencing decisions at the EU level, particularly involving reform of the common agricultural policy.
Committee members have paid tribute to the many fine features of and developments in the Welsh farming community, but they have also highlighted some of
CAP reform was discussed by many hon. Members, including my hon. Friend the Member for Ogmore, who demonstrated great expertise. That complex subject will no doubt involve long hours of negotiation, but of particular importance to Welsh farmers is the transition from historical payments to the new regime. Given that the NFU reckons that the overwhelming majority of farmers will experience a change of more than 10% from their present levels of income from the CAP, it is vital that UK Government Ministers work closely with the Welsh Government Minister, Alun Davies, and take on board the concerns of Welsh farmers. It is vital that the UK’s position at the negotiating table is not weakened or derailed by the Prime Minister seeking to play to a Eurosceptic audience.
Many hon. Members on both sides of the Committee expressed dismay at the delays to the groceries code adjudicator Bill. Our 2010 Labour manifesto included a commitment on a supermarket ombudsman. Indeed, the Conservative and Lib Dem manifestos included a commitment—supposedly—to a grocery adjudicator. When can we expect to see progress? Why the delay? If there is to be a thriving farming industry in future, farmers need a fair price for their produce, as the hon. Member for Carmarthen West and South Pembrokeshire set out most eloquently, and they need a means of redress if they are being unfairly treated by supermarkets. We will need a Bill with teeth. Will the Under-Secretary confirm when the Government will introduce a Bill? Will it include meaningful sanctions that will act as a deterrent to sharp practices, and will the adjudicator have the power to launch investigations and the ability to impose fines at the outset?
For many people, mention of the Gangmasters Licensing Authority is synonymous with the Morecambe bay cockle picking tragedy. We in Wales have a long tradition of cockle picking by local families, who pass the knowledge and skills down from one generation to the next. We have seen the chaos that ensues when large gangs descend upon our beaches. Opposition Members would like the Gangmasters Licensing Authority’s remit extended to cover not only the agricultural sector, but areas such as construction and the care sector. Good operators have nothing to fear from the authority; in fact, they have everything to gain, because the authority helps to create a level playing field by blowing the whistle on those who are gaining an unfair advantage on the backs of exploited workers.
In the light of the Macdonald report, which went as far as suggesting the dismantling of the Gangmasters Licensing Authority, I am pleased to hear that the Government are not going to abolish the authority. I was also pleased to hear the Minister of State admit during questions this morning that there could be distinct advantages if the GLA was further strengthened by giving it the power to impose civil penalties for abuses, rather than having to pursue lengthy and costly court cases.
The Agricultural Wages Board has been mentioned by many hon. Members, including my hon. Friend the Member for Swansea East. A clear case has been made for keeping the board. I will not repeat all the points
Both coalition parties have boasted how they will stand up for small businesses, but when the FUW makes a request, they ignore it. Indeed, such is the consternation of the FUW that the Welsh Government are investigating the legality of a Wales-only entity. What a disgrace this is.
Susan Elan Jones: Does my hon. Friend agree that it is most extraordinary that, in all the speeches and statements from the Government on the Agriculture Wages Board, there has been no mention whatsoever of the possible impact of the proposal on the Welsh language and Welsh-speaking heartland communities? Does she agree that it is high time that the Government conducted an impact assessment on that subject?
We know that the Government are keen to chop up red tape, but they should congratulate the Welsh Government on agreeing, following an extensive review, to adopt all 74 proposals made in the report compiled by Gareth Williams, the chairman of the Institute of Directors in Wales. Those recommendations include improving the single payment application process, reducing and simplifying farm records, making it easier for farmers to diversify their farm businesses, and reducing the overall number of farm inspections, while adequately addressing risk.
On animal health laboratories, the hon. Member for Ceredigion made a good case for keeping the labs in both Ceredigion and Carmarthen. The laboratories in Carmarthen and Aberystwyth are likely to close, but there will still be costs involved in keeping a presence there. The British Veterinary Association says that that will mean the loss of the expertise that plays a critical role in supporting disease control for local veterinary practices and maintaining good disease surveillance. What will the Under-Secretary do about it? Has he had any talks about it? Will he stand up for the laboratories in Wales?
On broadband, farmers are now expected to work online, and good internet connections are vital to help rural businesses thrive and to open up new economic opportunities in areas where distance from the market makes it difficult to attract more traditional factories. The Government, however, have substantially reduced the money to be allocated across the UK for the roll-out of next-generation broadband and put back the time scale by some three years. That particularly affects Wales because of the rural nature of the country.
Whereas the Government expect the market to deliver high-speed broadband to around two thirds of the UK population, it is misleading to think that that is also the case for Wales. An open market review that was conducted as part of the Welsh Government’s next-generation broadband project indicated that the market was likely
My hon. Friend the Member for Ynys Môn made many valuable points, including about microgeneration, the potential for feed-in tariffs for hydro-generation, and the case for a fuel rebate pilot in Wales as well as in Scotland.
We know the saga about feed-in tariffs. I thank the Secretary of State for setting up a meeting with the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), and I want to thank the Under-Secretary for attending that meeting. I am, however, distinctly disappointed that the UK Government are pursuing the case in the Court of Appeal and wasting taxpayers’ money when they should be addressing the issue by sitting down with the people involved in the industry, and doing all that they can to backtrack and save the industry from the utter devastation that their policies are wreaking on it.
On farm theft, we are extremely lucky in Wales that we have a low crime rate and a high detection rate. Nevertheless, the significant 20% cuts in policing have to be absorbed somehow, and they will inevitably have a knock-on effect on our rural communities. As a result of rising fuel costs, the theft of heating and vehicle fuel has become more common across Wales. We greatly regret the Government’s decision to make a 20% cut, which cannot be justified and is certainly not something that the public want, and that cut will have a significant impact on our rural as well as our urban communities.
There are many other problems affecting our rural communities. We all know that the Government have boasted about their programme of no planned post office closures. Instead, however, we are seeing unplanned post office closures because the Post Office Local model, which pays by commission and does not provide a proper salary for the person running the post office, makes it almost impossible to replace a post office when a postmaster or postmistress retires. Indeed, the Rural Shops Alliance has said that it is simply not a viable model to follow. We will see post office after post office closing in our remoter rural communities.
We are also in trouble with pubs. The pub companies review is yet another example of the Government’s extraordinary complacency in the light of real problems that face businesses in our communities. Although a report was produced by the Business, Innovation and Skills Committee in 2010, the Government did nothing. Such was the exasperation at the Government’s failure to respond, many Members acted to secure a Back-Bench debate on the issue last month. Will the Under-Secretary tell us what discussions he has had with ministerial colleagues about the pub companies review and set out the Government’s timetable for an independent body to review self-regulation?
Moving on to rural poverty, we know very well that beautiful surroundings and spacious, well-kept gardens can mask the harsh reality of rural poverty. Employment opportunities are often limited, with only low-paid work available locally. Escalating transport costs can mean that it is hardly worth travelling to neighbouring
Changes to housing benefit will have a significant impact on our rural communities. It is not just those unable to find work who claim housing benefit: some 15% of recipients receive it because they are on low income, while 42% of recipients receive it because they are pensioners. Several changes, such as the under-occupancy rules, will hit rural Wales particularly hard. Very often only three-bedroom houses are available, and people have no option but to be in such accommodation although it is ruled that they should perhaps be in one-bedroom accommodation. There is a similar problem with the extension of the shared room rate to the under-35s. Again, there is little option in our rural areas, so people might not have alternative accommodation. They may face either having to use some of their food money to pay their rent, or eviction.
Bank lending is of major significance to our farmers. The cost of grain and fertiliser is such that farmers have to spend an awful lot of money that may not be recouped for several months. Farmers raise that problem with me time and again, and it is particularly serious if want to expand our food production, which we have every reason to do, so that we achieve food security and reduce the number of food miles. Given that bank lending is still a major problem for farmers, I ask the Under-Secretary to address it urgently and do something about it.
As the Secretary of State said this morning, we cannot separate the issue of farming from the more general economic context. It is important to remember that over the period of this spending review the Government will be taking some £6 billion out of the Welsh economy through tax increases and cuts to allowances. This is cutting too far and too fast, and it will have a severe impact across Wales, including on our rural communities and small rural industries that depend on people’s disposable income. I urge the Under-Secretary to put pressure on the Chancellor to change tack and provide a genuine economic impetus to get the economy going because, otherwise, our farming industry, like everyone else, will suffer the dire consequences of a prolonged recession.
Let me turn briefly to one or two comments made in the debate. The hon. Member for Arfon sounded as though he was giving a eulogy for one of the Plaid Cymru leadership candidates. As I have mentioned, my hon. Friend the Member for Ynys Môn, gave a direct explanation of the truth behind the groceries code adjudicator Bill, as well as making the case for feed-in tariffs for a range of renewable energy sources. The hon. Member for Aberconwy made his point about exports very eloquently, and the hon. Member for Brecon and Radnorshire reminded us about the rocketing costs faced by farmers and the long history of scientific research in Wales.
The Parliamentary Under-Secretary of State for Wales (Mr David Jones): May I say what a pleasure it is to serve under your chairmanship, Mr Caton? The attendance today indicates that this is a very timely debate.
I thank the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire for his attendance during this morning’s sitting. I am sure that Members on both sides of the Committee will agree that he brought a considerable level of obvious personal expertise during the questions and the following debate. The shadow Secretary of State has explained to me why he cannot be here, and I fully understand his reasons. I told him that I would nevertheless roundly criticise him, and he said that he, too, would understand that. During the luncheon adjournment, he criticised the need for the Minister of State to stay throughout the morning sitting, but I am sure that he would have criticised him had he left after the questions. The Minister of State made some extremely useful interventions on hon. Members during their speeches. The Secretary of State was right to acknowledge the value that she personally placed on the presence of the Minister of State when the shadow Secretary of State cheekily asked her a question. The fact is that agriculture is a technical subject, and it is fair to say that for most of us—with the exception of the hon. Member for Ogmore and my hon. Friends the Members for Montgomeryshire and for Brecon and Radnorshire—it is not our field.
This debate is very timely given that, until next summer, negotiations will be continuing on the reform of the CAP. Although all the devolved Administrations clearly have an interest, overall responsibility for the conduct of those negotiations resides with the UK Government. Nevertheless, as we have heard, the Government are liaising and will continue to liaise very closely with the Welsh Assembly Government to ensure that the settlement arrived at does not disadvantage farmers in Wales. However, it must be remembered that the CAP currently accounts for more than 43% of the EU budget, and much of that expenditure represents very poor value for money.
We want agriculture to become increasingly competitive, without relying on subsidies, and that ambition is shared by the Welsh Assembly Government. As was pointed out by the hon. Member for Ogmore, the Welsh Deputy Minister for Agriculture, Food, Fisheries and European Programmes, Mr Alun Davies, is closely involved with colleagues in Westminster in the negotiation process. He is in constant touch with the Minister of State, Department for Environment, Food and Rural Affairs, and with the Wales Office. It therefore cannot be said that the Governments at both ends of the M4 are not liaising very closely on this important issue.
In his speech, the shadow Secretary of State raised several issues that were picked up by other right hon. and hon. Members during the debate. He rightly commented on the excellence of Welsh produce. He name checked several Welsh producers and, as befits his reputation as a bon viveur, Harrods. I particularly endorse his remarks about Patchwork, which does indeed produce the finest pâté you would ever care to consume and has the special advantage of being based in my constituency. I also echo the comments of my hon. Friend the Member for Aberconwy about the excellence of Edwards sausages.
The right hon. Member for Neath also mentioned the issue of broadband and its particular importance in rural areas. That point was also discussed at some length by the hon. Member for Ynys Môn. Both Members were right to stress the importance of this issue, which was identified in the Wales Office rural economy taskforce report. Right hon. and hon. Members will know that a pilot project is already proceeding in the area of Pwllheli on the Llyn peninsula. Furthermore, the Government last year provided some £56.9 million to the Welsh Assembly Government for the roll-out of broadband in Wales, which is more than would be anticipated under the Barnett formula.
The Government’s intention is that 90% of the entire country should have access to superfast broadband by the end of this Parliament, with everywhere else having access to at least 2 megabits per second. As many hon. Members have pointed out, that is of particular importance to those in farming communities, who are increasingly required to file agricultural returns, tax returns and all sorts of other returns over the internet. In many parts of Wales that is quite impossible because Wales has more than its fair share of not-spots. The Welsh Government are responsible for the implementation of the Government’s broadband strategy in Wales, but Broadband Delivery UK, as the responsible arm of Government, is taking a very close interest in the way in which they seek to achieve the Government’s aim.
The issue of telephony in rural areas was also mentioned. That is a particular problem, but shortly we hope to have access to 4G, a significantly enhanced technology that will provide not only voice communications but very fast data communications, too. Although Wales is suffering from a number of not-spots, it will see improvements in the foreseeable future.
The right hon. Member for Neath rather cheekily raised the issue of Government food procurement. I say cheekily because it is not that long ago that he himself was in Government, and so he knows full well that Governments across the EU need—some Members such as my hon. Friend the Member for Monmouth might say sadly—to comply with EU legislation on public procurement. We cannot specify a specific UK origin of what we buy, but we do work to support British farming and we can ensure that all food procured by Government meets the stringent British food production standards, which are some of the best in the world. The right hon. Gentleman should also be aware that there would be a significant danger to adopting the protectionist measures that he seems to be belatedly advocating in that it would allow other EU states to apply similar measures, thus depriving UK and Welsh producers of access to their markets. If I thought that the right hon. Gentleman was being serious I might be affronted, but I do not for a moment believe that he was.
The right hon. Gentleman also mentioned the Agricultural Wages Board, a subject that was touched on by a number of other right hon. and hon. Members, including the right hon. Member for Delyn, the hon. Members for Ogmore, for Blaenau Gwent and for Swansea East. The Government believe that the proposed abolition
Jonathan Evans: When listening to the arguments in relation to the AWB, did my hon. Friend recall that there were at one stage 26 wages councils that were abolished back in 1993 against the wishes of the Opposition at the time. I do not recall any proposals in the past 13 years for the wages councils to be brought back.
Mr Jones: My hon. Friend is entirely right. The Agricultural Wages Board may be seen to be a relic of a much earlier age. Things have moved on. The Government are in discussion with colleagues in the Welsh Assembly Government on the consultation process, and we hope to be in a position to announce details shortly.
To repeat the point made by the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire in response to the question of the hon. Member for Newport East, who is not here now, an impact assessment will be published as part of the consultation process. It is fair to say that the vast majority of farmers are willing to pay, and do pay, a fair day’s pay for a fair day’s work. To suggest that there will be some sort of exploitation of workers if the AWB is abolished is an unwarranted slur upon the farming community.
The right hon. Member for Neath also raised an important point about the movement from historically based decoupled annual payments to area-based payments, which the hon. Member for Ogmore also touched on. The right hon. Gentleman was right to express concern, as was the hon. Member for Arfon, that this could result in a cliff edge for Welsh farmers during the transitional period with a 40% drop in one year. The Government recognise that 40% is far too high, and the Commission is proposing a five-year transition period, which the Government feel is reasonable, but, as the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire pointed out, if there is to be a five-year period, why should there not be a reduction of 20% in the first year, rather than, as he put it, a big hit of 40%? That is the Government’s position on the transition, which needs to be taken far more slowly than the Commission apparently now proposes.
Several hon. Members specifically mentioned rural fuel prices, which are of considerable concern in rural Wales and were identified in the taskforce report. The hon. Member for Ynys Môn asked why the rebate scheme was not extended to Wales, so I will reiterate our position. The Wales Office did indeed write to the Treasury urging that parts of Wales be considered for the pilot project, but the Treasury decided not to do so.
Huw Irranca-Davies: Briefly, in the remaining time, I want to say that one of my points has been lost in the mix. There is a company called GB Oils, which I name using parliamentary privilege, that has had an impact on rural petrol retailers, forecourts and fuel heating. The company has been repeatedly in court, repeatedly found guilty and repeatedly investigated by trading standards. Will the Minister meet petrol retailers and me to talk about the moot practices of that particular company, which owns more than 40 companies in the UK and supposedly trades independently but effectively holds a cartel and uses dark practices?
Mr David Jones: I am not entirely sure that I can accede to a meeting, but if the hon. Gentleman would care to write to me specifying the points he has raised, I would consider it. Given the nature of his intervention, I am sure he would understand that at this stage I cannot simply agree to such a meeting.
The hon. Member for Ceredigion commendably raised a constituency issue in the shape of the Animal Health and Veterinary Laboratories Agency, which also has an establishment in the constituency of the hon. Member for Carmarthen East and Dinefwr. The Government recognise the concern about the future structure and location of the agency’s services, and I have been in personal communication with DEFRA colleagues on that issue. I am assured, and the assurance was repeated this morning by the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire, that the reorganisation will not involve the closure of any sites.
What recent assessment she has made of the implications for farmers in Wales of the introduction of a groceries code adjudicator; and if she will make a statement.
Mr Paice: The Government are creating the groceries code adjudicator—GCA—to enforce the strengthened groceries supply code of practice and published a draft Bill for pre-legislative scrutiny on 24 May 2011. The Government’s response to the scrutiny recommendations was published in October 2011. The GCA will have the power to receive complaints about the way supermarkets treat their direct suppliers from anyone in the supply chain at home or overseas, and deal with them confidentially. This includes farmers who may not directly supply the large supermarkets.
What recent discussions she has had with the Welsh Government on the proposed badger cull in England.
Mr Paice: Bovine TB is a devolved matter. There is a great deal of information sharing between the Administrations. As well as informal contacts, DEFRA officials liaise closely with the DAs, including Welsh Government officials, though the monthly UK TB liaison group.
What steps she is taking to ensure compliance by egg producers in Wales with the welfare of laying hens directive.