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It is also important to recognise that a considerable proportion of milk and milk products are sold through middle-ground retailers, catering establishments or as food ingredients. The four largest grocery retailers account for less than one quarter of volume sales of raw milk processed in the UK. I know, because I heard it from the farmers in my own region at the Devon show last week, that the south-west has a particular grievance. One of our main recipients of milk is the farmers own co-operative, Milk Link, which, according to the table that I was given before the debate, pays the lowest price of any taker of milk. It is important to put the debate about retailers in that context.
Mr. Bradshaw: I shall give way, but I must warn Members that my policy is to be courteous to the hon. Member for Ceredigion, who secured the debate. I want to answer the points that he raised, so I shall limit the amount of times that I give way.
Mr. Paice: I totally appreciate that point, and I am grateful to the Minister. He quotes Milk Links price, so I just want to put on record that the co-operatives also plan to pay a dividend on top of the milk price. Milk Link has just paid a 7 per cent. dividend, which needs to be added to the price.
It is also important that we politicians and the industry focus not only on price, but on profitability. Several Members have acknowledged that there remains a worrying disparity in the cost of production of the most and least efficient dairy farmers. In 2003, there was on average a 12p per litre differential between the most and least efficient dairy farmers. We encourage all producers to examine carefully their production costs and to seek ways in which to minimise them. The rest of the supply chain also has its part to play in cutting costs, maximising efficiency, innovating and adding value.
There has been considerable investment in processing capacity, and as a result, we have some of the worlds best processing plants. However, there are some less efficient plants, too, just as there are efficient and inefficient producers. That is why the Department has funded a study through the dairy supply chain forum to benchmark processor efficiency internationally. The Milk Development Council is also conducting a benchmarking study on producer efficiency. We have invested more than £1.3 million through the agricultural development scheme to help the dairy sector address efficiency issues.
Profit margins are a concern, however, in particular the apparent increasing margins on liquid milk sold through the retail sector. Although that is a Europe-wide phenomenon, the Competition Commission, in the emerging findings from its inquiry into the groceries market, has noted that supermarkets are retaining an increasing share of the retail price for milk. The commission will look further into that issue, both in the milk sector and in other primary produce sectors. The Government welcome that development, and we will of course respond to any recommendations.
Several Members cited the Irish and Danish models. Let me say something about the support given to the Irish cheese market. The advice that we have received is that there is not unanimous support for the model that has been adopted in Ireland. There is concern about the system propping up inefficiencies in the Irish dairy sector, which is fragmented. Its processing industry is not as efficient as it could be, and we believe that the future of the UK cheese sector is best served by adding value, creating branded products and innovating, something that I am pleased to say is happening. It is also pleasing to note that Britain produces more varieties of cheese than France does.
I share Members concerns about the advertising decision last year by Ofcom, which was made on the advice of the Food Standards Agency. It is important to acknowledge the reasons for the decision. Although I understand that only 20 per cent. of advertising for cheese products takes place during childrens programming, 90 per cent. of that advertising was for highly processed varieties such as Cheestrings and Dippers products.
I welcome the FSAs commitment to look again at the nutritional profile model and to review it now that it has been in place for a year. I understand the dairy industrys concerns and I agree that cheese is a valuable part of a nutritious and balanced diet.
My hon. Friend the Member for Bishop Auckland (Helen Goodman) raised concerns about regulation. I have been responsible for many regulations in statutory instrument debates, and we have a debate on cattle identification this afternoon on a measure that will reduce the number of regulations from five to one. The Animal Welfare Act 2006 reduced from 21 to one the number of regulations. When one tots up the number of new regulations, it is also important that one takes into account the number of regulations that the Government have got rid of.
A number of hon. Members, including the hon. Member for South-East Cambridgeshire (Mr. Paice), raised the issue of bovine TB. Aside from badger culling, he raised several issues, and I can assure him that the Government are doing everything in our power to further the vaccine test, and field trials are under way. I met the academics who are attempting to develop the polymerase chain reaction test and I shall write to him about the matter. The hon. Member for Leominster (Bill Wiggin) was at that meeting, but I shall happily send the hon. Member for South-East Cambridgeshire the details of it. My understanding is that while there is potential, the test is not yet at a stage at which our scientists will advise that it can be put into field trials.
It was interesting that the issue of badger culling was raised, but I am not sure what the Liberal Democrat
policy on the matter is. I am also not sure what the Conservative policy is. As the hon. Gentleman acknowledged, we have only one more monthhopefullyto go before Professor John Bournes independent science group produces its final report on the badger culling trials.
It would be odd for the Government to make a major policy announcement in advance a report for which we have only three or four weeks to wait. I assure the hon. Gentleman that we intend to make a decision on the issue soon after the report is published. I say to him what I also said to the dairy farmers that I met at the Devon show last week: it is important that the industry intensively engages in some of the practical and organisational challenges that would result in any decision to include wildlife controls as part of our bovine TB policy.
A number of Members talked about regulation. I do not intend to repeat what the hon. Gentleman saidhe gave a good riposte to those who argue for the introduction of regulation. The hon. and learned Member for Torridge and West Devon (Mr. Cox) recalled that the Conservative Government under Prime Minister Thatcher agreed to the single market, which she trumpeted as one of her greatest achievements. I do not know whether the hon. and learned Gentleman suggested that we should go back and undo it, but as the hon. Gentleman pointed out to himperhaps privatelythe single market is of huge benefit to our industry and even to our farmers.
The difficulty with the Danish model is that Denmark has land borders with Germany and easy border arrangements with Scandinavian countries, so it operates in a completely different market. We have a GB market for liquid milkwe are a net exporter of liquid milk. The competition authorities in this country take a different view from those in Denmark. Arla was set up before the current competition rules applied. The Government encourage and help farmers to set up co-operatives, but we cannot condone or encourage the setting up of cartels. I hope that all hon. Members will accept that no Government should do that.
I also wished to raise the nitrates problem. Tomorrow, as part of the energy White Paper, there will be a positive announcement on anaerobic digestion, for which Members may wish to prepare themselves. There is huge potential for a win-win situation for the environment and for renewable energy.
I will bring forward reform proposals to renew our constitution with the first draft constitutional reform bill later this year.
How will that draft constitutional reform Bill work, what will be in it and how will it be implemented? I do not expect a clear answer from the Minister today. Not only is he new to his briefI congratulate him on a well-deserved change of responsibilitiesbut he will have to pick his words carefully until that changeover. However, given such an unequivocal commitment from the current Chancellor and future Prime Minister, the Minister and his officials should now be on the alert, thinking and drafting ahead of the day when a new Prime Minister, with such a clear commitment, takes over.
A new democratic settlement in the UKmoreover, one driven by someone who believes in itis a certainty. Clarity of leadership and greater self-discipline among reformers is essential if serious progress is to be made in the face of the forces of conservatism and the status quo, which will be ranged against us. The lost landslides for change will not be repeated and things will be even harder than they could have been. However, we can now use our democratic imaginations once again. That means councillors who make their own policies and raise the income to implement them; MPs who genuinely hold the Government to account; Prime Ministers directly elected by the people; our health, police and other public services given meaningful democratic governance; and people at the top who not only preach change or die to others, but practise it themselves, changing their own outdated political institutions first.
Reform can mean a Britain whose democratic culture and heart is finally matched by an institutional framework that is also democratic, finally catching up with what is commonplace in virtually every other western democracy. Great prizes await us if we can seize this moment, freeing the talent of the nation and extending the right to govern beyond the incestuous confines of No. 10, the media and the bureaucrat. Change will mean enabling every parish, neighbourhood and community to run what is appropriately theirs, doing so because it is right for them, not because it ticks a target box to placate Whitehall. Change will also mean returning responsibility, so as to revive interest not merely in voting but in running our localities, our regions and our lives.
Of course details on the constitutional reform Bill must remain scarce, so let me sketch some possibilities. Perhaps we can be honest about our federal system in the UK, defining what the regions and the nations can do, and what central Government are entitled to do. Perhaps we will finally commit to a separation of
powersa legislative, a judiciary and an Executive, each with its own legitimacy. Perhaps we will list and legalise prerogative powers and for the first time give the prime ministership statutory legitimacy.
However, making any of those things happen and sustaining them will require a written constitution and entrenchment. Gordon Browns reference to a written constitution at the 2006 Labour party conference gave hope that, for the first time, the British political system would finally be created on an honest and understandable basis. That is the last unfinished business of British democracythe British people prising the political rulebook from the closed grasp of the Executive.
Imagine the rules of our politics and government not being discovered by judicial archaeology, as John Smith used to describe it, but being in the pocket of every child at school and on every familys kitchen table or bookshelf, understood and proudly owned by those whom it affects. If we already have a constitution, as some claim, what is wrong with writing it down, so that all those who are affected and governed by it can read it? The way we are governed should not be secretive, and made up as government goes along; it should literally be an open book for all.
A written constitution would also introduce a dynamic into British politics. Merely describing what currently exists would not be enough. No self-respecting founders would dare stop at a snapshot of our over-centralised system. Imagine enshrining as article 1, The chief executive of our nation may not be elected by the people, nor even endorsed by a new Parliament, but shall be summoned by an unelected sovereign. Imagine article 2, Laws will be subject to veto and delay by an unelected second Chamber, or article 3, Local government will be the creature of statute, changeable on the whim of central Government, let alone article 4, The British people shall not be citizens with rights and responsibilities. They shall be subjects of an hereditary monarchy. The simple effort of writing down an unwritten constitution must, after a brief period of disbelieving ridicule, invite analysis and generate a serious momentum for reform.
The very act of committing a constitution to paper would raise the question that lies behind all our key debates on UK democracy. Do we want to continue our centralised unitary system or evolve a pluralist democracy, with many equally legitimate institutions? The latter would inevitably precipitate the most radical package of democratic reform ever presented to the British people by a major political party. Moreover, putting our political settlement beyond easy repeal, in a written settlement, would change our political system for good and bring an end to short-term tinkering and tampering by the Executive. It would do for democracy what putting the Bank of England in charge of interest rates did for our economy and end winner-takes-all politics, replacing it with an acceptance that political action in future must be checked, negotiated and accountable, as it should be in a modern democracy.
Replacing our command politics with the synthesis of all our talents will not only facilitate better democracy; it will be a more effective way of governing ourselves in the modern world, freeing our economic potential and improving value for money. The 1980s
proved that Executive power at its most extreme and unhindered has failed, even when led by its most obsessive and dynamic driver, Mrs. Thatcher. A written constitution is a different path, which is about using the abilities of all our institutions and people, at all levels and in all locations, not about deference, hierarchy and control from the centre. Although Labour will, I hope, be the midwife of pluralism, it will not be our sole property. Pluralism echoes the best traditions of liberalism and conservatism, and will liberate us all.
There will undoubtedly be a serious debate between the different institutions. A reformed House of Commons will of course discomfort the Executive. An elected second Chamber will want to spread its wings. Individuals using a British bill of rights will expose the Government to much greater accountability and influence the future development of the judiciary. European initiatives will have to be debated much earlier and in greater detail, while constitutionally independent local government will be assertive and rejuvenated and willlike all the new institutions to which I have referredmake mistakes. Above all, not only will individuals feel greater ownership of the political system and be more demanding of it; they will be less tolerant of abuse of power and better equipped to put it right, as we should be in a democracy.
Winning the general election to decide the national Government will always be vital. However, in a balanced pluralist democracy, with other equally legitimate institutions available through which political voices can be raised and progress realised, losing a general election will never again be the end of meaningful politics for four or five years. A written constitution would end the subcontracting, from a whole nation to a small elite in the Executive and around No. 10, of the political action that we should all enjoy.
How can we bring this about? The most obvious way would be to put the key ideas and reforms in a draft constitutional reform Bill. Parliament and people would then debate in the most extended pre-legislative consultation in our history, and the draft would define the powers of each political institution, the separation of powers between Executive and legislature and how a constitution would be approved and amended.
Meanwhile, the components of a new constitution could evolve. While the national debate proceeded, each separate reform, carefully formulated and consistent with the others, could be progressed by legislation. When the legislative programme necessary for the democratic agenda was completed, a written constitution extracting the fundamental principles, briefly and elegantly, could be simply crafted.
Unlike constitutions that have been the statements of political victors in history, fortifying their own power, ours in the UK will need to be part of a programme of democratic change. A draft Bill with full pre-legislative scrutiny involving the publicin person and onlinewould make the remaking of our constitution massively educational. A constitution could only be the product of a nationwide debate. That in itself would re-energise and revive politics in the UK. Unlike all previous constitutions, this onein the age of television and the computercould have a million
founding fathers and founding mothers, rather than being the property of a handful of the great and the good.
The constitution would need to be accompanied by a serious burst of democratic activity. Imagine the political parties and the Electoral Commission acting with passion and exuberance, promoting education in democracy and citizenship at school and in the community, rebuilding the local political base by training and equipping the next generations of councillors and political activists, funding research, monitoring and advising on the mix of electoral processes, spreading best practice at home and abroad, shaking up the more fusty local electoral registration offices and promoting tax donations and other funding of political parties and linking their state aid to activity. We could be in serious danger of exciting people about our democracy.
A written settlement for our democracy will mean a different world for the media too. Initially, the clash and reconciliation of independent political institutions will doubtless be painted as splits and crises by those habituated to inhaling the line from No. 10. However, the media too, freed of the illegitimate burden of being the only institutional voice on a par with central Government, will grow to understand and revel in diversity and legitimate debate. Advocates of the new settlement must be clear that, of itself, pluralism does not provide answers, but creates an accessible, open set of democratic structuresthe framework in which real policy battles and choices can be expressed and then reconciled.
The followership of todays unitary system wants certainty, not democratic interaction. The written constitution is the boxing ring, not the political fight itself. It will be the guarantor of a fair contest, not the deliverer of a pre-determined result in which the Executive always seem to win. Pluralist democracywith all its debate, conflict and compromiseswill be represented by the centralists as a system out of control. Thankfully, power will indeed be out of their control; it will have passed into the hands of the many in British politics.
The obstacles are many, the most deadly being our own conservatism and timidity; even those with little or nothing to lose will fear change unless it is put forward confidently and coherently. Even in this legislature, daily abused by Government, there are still the self-deluded who cling to the mythology of parliamentary sovereignty, unable or unwilling to see that that was superseded long ago by governmental sovereignty.
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