The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): I beg to move that,

May I begin by saying that it is a pleasure to be here today and to serve under your chairmanship, Mr Fraser?

The draft order forms part of the legislative programme set out by the First Minister of the Welsh Assembly Government, the right hon. Rhodri Morgan AM, on 15 July 2008. It inserts a single matter into field 1—the agriculture, fisheries, forestry and rural development field—of schedule 5 to the Government of Wales Act 2006. These are the first legislative powers to be conferred on the National Assembly in this area. Hon. Members will know how important this industry is to Wales. Red meat contributes some 39 per cent. of Wales’s agricultural output and Wales accounts for over 25 per cent. of the total levy on sheep collected in Great Britain. A thriving red meat industry is vital to Wales and important to the UK as a whole.

The order would enable the National Assembly to legislate in relation to the promotion and development of a red meat industry in Wales. Specifically, the order would enable the Welsh Assembly Government to fulfil their policy aim of conferring on Welsh Ministers the functions currently carried out by the Welsh Levy Board, including raising a levy on the Welsh red meat sector. This is not possible under existing powers.

Honourable Members may find it helpful if I briefly summarise the background. In 2005, the Radcliffe review looked at the then five GB and UK statutory agricultural and horticultural levy bodies, covering potatoes, horticulture, cereals, meat and livestock and milk. The Natural Environment and Rural Communities Act 2006 led to the abolition of these boards and the creation of a new Agriculture and Horticulture Development Board. The NERC Act also allowed the Welsh Ministers to create separate Wales-only bodies for the development, promotion and sustainability of their respective industries.

The Welsh Assembly Government consulted the agricultural industry in Wales about how best to manage future promotion and development in each of these sectors. The industry wanted separate arrangements for the development and promotion of the red meat sector in Wales because of its importance to rural community infrastructure and the wider rural economy. Consequently, in February 2008, Welsh Ministers established the Welsh Levy Board to set and raise red meat levy in Wales. The other levy-raising sectors in Wales are administered by the AHDB as part of GB-wide arrangements, in respect of the horticulture, milk and potato sectors, and UK-wide arrangements for the cereal and oilseed sector.

It is the general policy of the Welsh Assembly Government to ensure that their functions are exercised in-house wherever possible, rather than by arms-length bodies or quangos. While the NERC Act allows Welsh Ministers to create separate Wales-only bodies for the development, promotion and sustainability of the respective agricultural industries, it crucially does not allow the National Assembly to confer those functions directly on Welsh Ministers. The Welsh Levy Board currently sets and raises a levy for the Welsh red meat industry to fund the promotion and marketing of the industry.

In practice, the Board has delegated many of its functions to Hybu Cig Cymru, a company limited by guarantee and wholly owned by the Welsh Ministers. As a result of the competence conferred by this order, the Welsh Assembly Government would be able to bring forward legislation in the National Assembly to abolish the Welsh Levy Board and confer its functions on Welsh Ministers, including raising a levy on the Welsh red meat sector. That would make Hybu Cig Cymru directly accountable to the Welsh Ministers, streamlining the levy-raising process and making it more efficient and accountable.

The scope of the powers conferred on the National Assembly reflects those functions already given to the Welsh Ministers and Secretary of State by the NERC Act. This ensures that levy-raising powers are set within a broader context of developing the red meat industry in Wales. A levy is simply a means of developing the industry through financial support. Of course, it is what gets delivered as a consequence of the levy that really matters.

This draft order has already been unanimously approved by the National Assembly for Wales in plenary on 31 March. It has also been subject to pre-legislative scrutiny by a committee of the National Assembly in Cardiff bay and by the Welsh Affairs Committee and the House of Lords Constitution Committee here in Westminster. As always, I am grateful for the thorough and considered scrutiny that they have undertaken. I was very pleased to read the conclusion of the Welsh Affairs Committee that

and that the competence that the order confers:

The Lords Constitution Committee simply confirmed that the order does not raise any matters of constitutional principle.

The draft order before this Committee today demonstrates the UK Government’s commitment to devolving legislative competence to the National Assembly for Wales. It shows that the system of conferring legislative competence on the National Assembly by means of Orders in Council, or legislative competence orders as they are better known, is working very well.

I believe that it is right that, through this order, key decisions about the red meat industry in Wales will be taken by the National Assembly and, if the Assembly so decides, by Welsh Ministers. The order will enable the best possible framework to be put in place to ensure effective leadership for the industry during these economically challenging times.

I commend this order to the Committee.

Mr. David Jones (Clwyd, West) (Con): Thank you, Mr. Fraser. I also want to say what a pleasure it is to serve under your chairmanship today.

We do not intend to oppose the making of the order and I am sure that the Committee will be pleased to hear that I intend to keep my remarks short. As we have heard from the Minister, the effect of the order is to amend the provisions of the Natural Environment and Rural Communities Act 2006, so as to enable the Welsh Assembly to pass a measure or measures that would result in the dissolution of the Welsh Levy Board, which, as we have heard, is currently responsible for promoting the Welsh red meat industry, and also to enable alternative arrangements to be put in place.

As I understand it, from reading the explanatory memorandum and after hearing the Minister’s explanation today, it is the intention of the Welsh Ministers to take the functions of the Welsh Levy Board in-house and to carry out those functions themselves. That is all of a pattern with the policy of the current Welsh Assembly Government, which tends to take a highly centralist approach to the delivery of its policy objectives. That approach has resulted, for example, in the abolition of the Welsh Development Agency and the Wales Tourist Board.

The Conservative party takes the view that, generally speaking, such centralisation has not been beneficial. However, it is clear from the draft order and it was also confirmed by the Welsh Affairs Committee in its pre-legislative scrutiny that abolition of the Welsh Levy Board, as a consequence of this order, would not necessarily mean that the board, or some similar arm’s length body, could not be re-established at some time in the future by a Welsh Assembly Government of a different complexion.

I note from the Select Committee’s report that it is the intention of the Welsh Assembly Government to preserve Hybu Cig Cymru in its present form. That also appears to have been confirmed by the Minister this afternoon. Hybu Cig Cymru is very highly valued indeed by the Welsh livestock industry and the Conservative party would be extremely concerned if its functions were undermined in any way. We trust that the Welsh Assembly Government will be as good as its word in regard to the preservation of Hybu Cig Cymru.

The Minister said that the passage of these measures indicates that the legislative competence order system is working. However, it is worth noting that the only reason that we are considering this draft order at all is that the Assembly Government did not take the opportunity in sufficient time to have its preferred model for promotion of the Welsh red meat industry incorporated in framework powers in the Natural Environment and Rural Communities Act 2006, which I feel was a missed opportunity. I would suggest to the Minister that the lesson to be learned is that far closer consultation needs to take place at an earlier stage between Whitehall ministries and the Assembly Government so as to avoid the need for unnecessary legislation at a later date. In this connection, clearly the Wales Office has a central role. Those are the only comments I wish to make on the draft order. As I have said, we do not intend to oppose it.

Mark Williams (Ceredigion) (LD): Thank you, Mr. Fraser. It is a pleasure to serve under your chairmanship this afternoon. My party wholeheartedly welcomes this LCO. It is an important order for Welsh agriculture. It fits well with the current devolutionary settlement on agriculture. Most of the functions with regard to meat production have already been devolved and it is entirely sensible that we should continue giving the Assembly Government all the powers that they need to promote the critical red meat sector.

Looking around the room at the constituencies represented here, the red meat sector is critically important to the economy of rural Wales. It is essential that the powers relating to the sector should be held in one place, where possible. It is not appropriate to delve into the debate about the effectiveness of the LCO process in Committee. We had effective scrutinising in the National Assembly. I think it was the first time that the Welsh Affairs Committee, of which I am a member, had informative informal discussions with the relevant Assembly committee.

The LCO has wide-ranging support. The seven submissions to the Assembly Committee were universal in their support for the order. It will allow the Assembly Government to work with the industry to improve the marketing and promotion of the sector, and will give the Assembly Government the legislative powers to increase efficiency and productivity, improve and develop the services the industry provides to the community, and improve the industry’s contribution to sustainable development.

I would like to place on record my support for the comments made by the Welsh Assembly Government Minister, Elin Jones, who happens to share a constituency with me. In that constituency is the headquarters of Hybu Cig Cymru. Elin Jones made the point that it will remain independent of the Assembly Government. During her evidence to the Welsh Affairs Committee, she also made the critical point about accountability. Notwithstanding that, the independence of Hybu Cig Cymru is extremely important. It needs to work with the Assembly Government and the industry to promote the red meat sector. A hands-off approach is a better approach at this stage.

The Assembly committee also considered the question of levy-setting and consequences for cross-border issues. That is a matter for the future measures that we believe the Assembly should be in a position to make. I am sure that they will consider that. It is a rightful matter for the National Assembly. I look forward to seeing the measures that arise from the LCO to support a critical sector in the Welsh economy.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) (PC): Thank you, Mr. Fraser. It is a great pleasure to serve under your very able chairmanship, albeit for a short period of time, hopefully.

The immediate purpose of this draft order is to give the Welsh Assembly Government more and greater flexibility in order to define the arrangements for the determination of levies raised from the red meat sector, which I hope in turn will promote and develop our Welsh red meat industry. As has been said, that industry in Wales is extremely important to the Welsh economy. It is important that we are able to compete in terms of advertising with other parts of the UK and also, beyond these shores, across the channel. I welcome this as an added tool for the Welsh agriculture industry. I do not see that giving greater powers to Hybu Cig Cymru will in any way stymie its independence. I would argue that it is quite the opposite. In any event, there is no point in getting bogged down in semantics.

We have in effect a new strategic action plan, which we hope will safeguard and further develop the Welsh red meat industry. The strategic action plan was prepared by Hybu Cig Cymru—Meat Promotion Wales—and it aims to improve business performance, develop innovation and business links, improve the industry’s level of understanding of market trends and, crucially, influence consumer behaviour.

More than 33,000 people are employed in the red meat supply chain in Wales. The industry contributes £361 million a year to the Welsh economy, including red meat exports of about £108 million per annum, 43 per cent. of the total annual value of Welsh agricultural output. We cannot really stress too heavily on the need for that kind of innovative and strategic approach. They are very substantial figures.

The whole approach has been fully welcomed by the chair of Hybu Cig Cymru, Mr. Rees Roberts, and he would, would he not, seeing as he drafted the thing in the first place. I understand that the impetus of it came from Mr. Roberts, and he is a person well known to all of us, and a person who has the best interests of agriculture at heart. With those few words, my party, Plaid Cymru, and I believe every other party represented here, fully welcome the innovative change in the law. I hope that it will bring great benefit to the Welsh agriculture industry.

Mr. Dai Havard (Merthyr Tydfil and Rhymney) (Lab): It is nice to serve under your chairmanship, Mr. Fraser. I have not done so before, and I will try to behave myself. I get worried when I read documents such as the one before us. I look at the part that deals with consultation, and the first sentence says that there has been no consultation on the order. In fact, as Members opposite have explained, there has been consultation, but it is taking place in such a way that involves the legislative competence order process, which I am watching very carefully.

On this occasion, perhaps everyone will be relieved to know that I have no objection to this particular transfer of power. The reason for that has partly been explained elsewhere. For a long time, there has been a need for a strategic approach on a deal of questions in Wales, and that is what the Cynulliad, the Assembly, is supposed to provide. If the order enables it to do that better, then I am in favour of it. I shall give an example. I live in the rural, urban, south Wales, ex-coalfield valleys—it is all of those things. It is not one thing, but a number of things. I have five family farms in my constituency that have now collaborated, Cig Mynydd Cymru, and they are very prosperous in terms of promoting their own produce in my ex-mining valley town in Treharris. Go to 16B Perrott street, and Steve Davies will sort you out with some excellent meat that comes from those valleys. It is not just rural Wales, as has been understood elsewhere, but the valleys of Wales, in the old industrial valleys, as well as the rest of Wales, that produce an input into the industry, and the order gives them the development possibilities. I understand the point about centralisation of administrations and bureaucracies, but the key word is strategic. On this occasion, I am only too happy to see its ability to behave more strategically and help small organisations and the large producer interests, which have been known to have their own ability to promote their cause. On that basis, I welcome the order.

Mr. David: First, I thank all Members for their support this afternoon. It is good to see that the order has a broad amount of consensus between all political parties, and that is important.

I will respond to a few points that have been raised. First, on the issue of consultation, there has been a tremendous amount of it. There has been consultation with the two farming unions in Wales, the Assembly Members and the Welsh Affairs Committee. There has been an ongoing debate in the industry, in Parliament and in the National Assembly. Frankly, it is difficult to imagine that there could have been more consultation than what there has been on the issue.

With regard to Hybu Cig Cymru, a firm commitment has been given by the Welsh Assembly Government that they have no intention of reducing its independence or autonomy, and it will continue to be a free-standing body. As one hon. Member mentioned, the chair of Hybu Cig Cymru is also supportive of the order.

Furthermore, the headline of an article in the Western Mail on Hybu Cig Cymru and the support for the red meat industry read, “New read meat strategy hailed as vibrant catalyst for Wales”. It is important to recognise that the order represents one element of that broader strategy; all of the elements fit together, and maintaining the effectiveness and autonomy of Hybu Cig Cymru is central to that strategy.

On the points raised by the hon. Member for Clwyd, West, the LCO system is generally working very well. It could be improved and streamlined, but it is a new process and we are learning as we go along. The order is a small but important example of how the system under the Government of Wales Act 2006 is working very well indeed. The order is not a path-breaking measure, but, as I told the Welsh Affairs Committee, it addresses an anomaly that existed and was widely recognised for some time. The timing of the consultation on the Radcliffe review was very important and meant that it was not physically possible to include a framework provision in the NERC Act, because by the time the Bill was drafted and the proposals of the Welsh Assembly were formulated, the Bill was itself in its latter, parliamentary stages. The issue therefore relates to timing, rather than to a lack of political will or co-ordination, and this LCO essentially addresses the gap that existed at that time.

I welcome the comments made by the hon. Member for Ceredigion, and the support of the hon. Member for Meirionnydd Nant Conwy. It is important that rural areas in particular recognise that the order is a significant element in enhancing the prosperity of the rural parts of Wales.

The hon. Member for Merthyr Tydfil and Rhymney is absolutely right to mention the need for a strategic approach to the matters under discussion. The National Assembly for Wales is using its new powers to develop a whole host of different policies in a range of different areas, and the order is but one element of the Assembly’s broader strategy to improve the situation in Wales for the betterment and well-being of the people of Wales. While I do not claim that this measure alone will transform the face of Wales or of agriculture—far from it—it is nevertheless a crucial ingredient in taking us forward.

Mr. Llwyd: For once, I disagree with the Minister, because he understates the order’s importance. Given that over 25 per cent. of the UK’s entire sheep population is in Wales, and given the need to concentrate on the red meat sector, the order is actually crucial to Welsh agriculture. Without the order, Welsh agriculture would not be competitive and would in effect be doomed, so, although it might not look like very much, it is an important piece of legislation.

Mr. David: The difference between us is one of language more than anything else. This is an important measure that has been prioritised by the National Assembly for Wales, has been thoroughly scrutinised and is broadly supported by the agricultural industry in Wales. My point is that, by itself, it is not going to lead to a transformation of the situation.

Mr. Havard: The point that I tried to make earlier was that agriculture is part of the picture, and a strategic approach in the south Wales valleys, for example, is about developing all of the things that are necessary in a co-ordinated jigsaw of activities, because the valleys are both industrial and rural. If there is no strategy for each individual part as well as for the whole, there is no strategy. In that sense, the order is a vital component, but it is not the be all and end all.

Mr. David: I think that there is a broad consensus across the Committee. I certainly do not disagree with my hon. Friend’s point; the order is as important for south Wales—the valleys in particular—as it is for rural areas. I am very pleased that there is a broad consensus in relation to the measure.