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Significant doubts remain, however, as to whether HMRC is policing the process effectively. Written parliamentary questions have shown that HMRC made only two requests for further information on suspect Israeli imports in 2008. It is well known that Agrexco, the major Israeli fruit and vegetable exporter, allows agricultural produce from the settlements to be mixed with produce from within Israel, with the whole then being exported as "made in Israel". I will pursue Treasury Ministers on the steps that HMRC will take to institute more effective control of imports of Israeli produce to end the admixture of illegal settlement produce, which seeks to flout EU regulations and unlawfully claim the trade preference on produce that is contaminated with settlement goods.

Since the "made in Israel" rules began to be enforced more effectively-albeit still not totally effectively-produce from the settlements that is declared as such to HMRC is permitted to be imported and sold. Such produce is commonly labelled "West Bank" or "Jordan Valley", but both those descriptions could apply either to goods produced by Palestinians on Palestinian land, or to goods produced in illegal Israeli settlements, and the consumer has no way of knowing which. Significant numbers of British consumers wish to avoid buying produce from illegal settlements.

Mr. Andrew Smith (Oxford, East) (Lab): I congratulate my hon. Friend on securing this extremely important debate and on the forensic and persuasive way in which she is advancing her argument. Does she agree that consumers will reasonably be worried about whether they are being tacitly complicit in an illegal act by buying goods from the occupied territories that are mislabelled "West Bank"?

Dr. Starkey: Indeed, I was just getting to that point. As I know that a number of hon. Members have come to the debate to express their support, and given that I have a detailed argument and do not intend to give way to anybody else, it might be helpful if I list for the record the Members who are present. Apart from my right hon. Friend, there are my hon. Friends the Members for Brighton, Pavilion (David Lepper), for Battersea (Martin Linton), for Birmingham, Northfield (Richard Burden), and for Staffordshire, Moorlands (Charlotte Atkins), and the hon. Member for Orkney and Shetland (Mr. Carmichael).

To return to the debate, the reasons for not buying the produce are multiple. As my right hon. Friend said, the settlements are illegal under international law and many consumers do not wish to collude in illegality by buying the produce, but there are other reasons. Evidence from a number of Israeli human rights groups, including Worker's Hotline-Kav LaOved-and the Coalition of Women for Peace, shows that workers within the settlements, whether Palestinians or Asian migrant workers, are not paid the Israeli national minimum wage, nor do the employers apply Israeli health and safety regulations. Although the international community does not believe that Israel has sovereignty, Israel obviously takes a different view, and in 2007 the Israeli courts established that for them Israeli standards should apply within the settlements. Israeli law is therefore being flouted by the minimum wage and proper health and safety regulations not being applied to the workers within the settlements.
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Settlement goods are therefore not only illegal but rely on an exploited, underpaid and under-protected work force.

I am pleased to say that some UK retailers-the Co-operative Group and Marks and Spencer, for example-have stopped sourcing goods from settlements, but some retailers continue to import settlement goods and for them accurate labelling is absolutely crucial. The lack of clarity in the labelling of settlement goods and the consequent confusion for consumers led DEFRA to put guidance for retailers on its website that suggested the description "West Bank", but that guidance was removed in 2008 without explanation. In March 2009, DEFRA convened a meeting with, among others, various members of the British Retail Consortium. The BRC tells me that its members-more than 90 per cent. of the UK grocery industry-want to give their customers

The BRC says:

The BRC hoped and expected that the meeting in March would lead to renewed guidance from Government to ensure that labelling was accurate, but despite continued requests from BRC and lobbying by a number of hon. Members, including me, no revised guidance has appeared.

Given that the Foreign and Commonwealth Office made it clear in a letter in April to Lawyers for Palestinian Human Rights that it was

it could take

and that the FCO conceded that labelling "West Bank" may not,

the continued delays in finalising the revised guidance are inexplicable, and the various explanations given by DEFRA and others in Government have been unusually coy. A written parliamentary answer from DEFRA on 16 July-three or four months after the March meeting-said that a consultation would be carried out shortly, but no consultation was carried out. A letter from the Department for Business, Innovation and Skills on 5 November simply said that it had been decided that it was best not to consult over the summer, but it did not explain why the officials had not got on with it once the summer was over.

Another written parliamentary answer from DEFRA on 23 November said that the Department

It is not clear what the Department means by "strong opinions". People have strong opinions about GM foods, but that was never used as an argument not to label clearly the GM content-quite the reverse. There is a suspicion that the delay is due to lobbying by the Israeli Government, and Israeli press reports suggest that that is the case. That leads one to wonder whether it is
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normal for our Government to listen more to foreign Governments with a track record of flouting EU labelling regulations than to UK retailers and consumers.

It is not clear what next steps the Government are considering. There is nothing complex about the fact that the settlements are illegal and that consumers need clear and unambiguous information to exercise choice. The FCO does not think that the matter is complex and since November 2008, it has actively been working at European level to ensure that, across the EU, all member states accurately label settlement goods. BIS also seems not to admit to any problem: it knows that retailers would welcome an end to the confusion, because they do not wish to mislead their customers. Is it DEFRA that is dragging its feet, or does the pressure come from elsewhere?

In the end, this is an issue of compliance with consumer legislation. In March 2009, in an attempt to address the current situation, Palestinian human rights lawyers submitted to the Government legal advice from Kieron Beal, which sets out the possible legal liability of retailers. The advice points out that the label "West Bank" is something that could clearly influence a reasonable consumer-obviously, a legal concept-in the context of his or her transactional decisions. It suggested that retailers may at present be at risk of prosecution under the Food Labelling Regulations 1996 and/or the General Food Regulations 2004. If the product in question is subject to regulation 5(f), retailers run the risk of criminal prosecution if the country of origin designation is either wrong or sufficiently ambiguous that it might mislead a purchaser to a material degree as to the true origin or provenance of the food.

The lawyers further highlighted the Consumer Protection from Unfair Trading Regulations 2008, which are apparently derived from the unfair commercial practices directive 2005. The advice states:

It goes on to say:

Given that the retailers want clarification from DEFRA to ensure that they are compliant with consumer protection legislation, DEFRA must explain clearly why no guidance is being offered. I have the following questions for the Minister, of which I gave him notice beforehand.

First, why was the voluntary labelling guidance suggesting "West Bank" removed from the DEFRA website in 2008? Is it because the Government accept legal advice that "West Bank" is misleading and ambiguous and
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therefore unlawful? Secondly, what is the real reason for the endless delays in finalising new guidance? Is it pressure from Israel, and if so, why does that outweigh international law, obligations to UK consumers and the wishes of UK retailers? Are there technical problems, and if so, what are they? Will the Minister confirm that his prime responsibility is consumer protection in the UK and that that must take precedence over the opinions of foreign Governments? Fourthly, if the question of labelling is so complex, how many officials are currently working on sorting out the matter and coming to a conclusion?

Fifthly, has the draft guidance gone to Ministers? If it has, to which Ministers has it gone and which Ministers have approved the guidelines so far? Finally, is the Minister aware of labelling guidance in other EU member states? I draw his attention to the example of wine from the Golan heights, which is apparently sold in Swedish Government stores-they control all alcohol sales in Sweden-labelled as "Made in Occupied Syrian land". That seems to be an extremely good precedent. It is not ambiguous or misleading and it does not recognise the Israeli settlements in Syrian Golan heights.

The delays in enforcing clear and unambiguous labelling of settlement goods is yet another example of the Government's pusillanimous approach in matters relating to the Israeli occupation. It is not enough to make declaratory statements, as the Foreign Office frequently does, recognising that the occupation is illegal. Those declaratory statement must be backed up by practical policies to give force to that recognition of illegality. Clear labelling of settlement goods is one way in which the Government could do that and, at the same time, fulfil their legal obligations to UK consumers on clarity.

11.18 am

The Minister of State, Department for Environment, Food and Rural Affairs (Jim Fitzpatrick): It is a pleasure to see you presiding over the debate today, Mr. Martlew. Let me begin by expressing my gratitude to my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) for requesting this debate, thus drawing further attention to such an important issue. I acknowledge the presence of a number of parliamentary colleagues supporting her contribution. I hope that I will respond to the various issues that she has raised, including the questions that she listed at the end.

The question of the country of origin labelling that should be given to the imports from the occupied Palestinian territories is extremely sensitive, and provokes strong and contrasting views. However, I heard very clearly my hon. Friend saying that strong views are no reason for a Government to decide not to come forward with appropriate conclusions.

My hon. Friend has eloquently drawn attention to the plight of the Palestinians in the occupied territories, and the difficulties that they experience. She has also referred to the resentment that they, and those who support them in this country, feel about the fact that goods originating from illegal Israeli settlements are simply labelled "Produce of the West Bank". All of that is against a background of deep concern, which we in the wider international community feel about the continued existence of those settlements. I should make it absolutely clear that not only is settlement building on occupied
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land illegal under international law, as my hon. Friend said, but the construction of Israeli settlements in the west bank and in east Jerusalem makes it increasingly difficult to envisage a contiguous and viable Palestinian state.

The clear position of the UK Government is that we are opposed to boycotts of Israeli or Palestinian goods. We do not believe that boycotts help to engage or influence Israel or that they lead to progress in the middle east peace process.

One thing that I want to respond to is the suggestion that imports originating from illegal settlements are entering the UK described as "Produce of Israel" and are therefore benefiting from the preferential access terms available under the EU-Israel association agreement. If that is indeed happening, an offence is being committed. The EU-Israel association agreement is quite clear that only goods originating from the state of Israel itself, rather than from the occupied territories, are entitled to be imported under those preferential terms. If an importer or retailer is in any doubt about the geographical origins of goods imported from that region, Her Majesty's Revenue and Customs will be able to help them. I also acknowledge that my hon. Friend has, as she mentioned, taken this matter up with Treasury Ministers.

My hon. Friend referred to the need for consumers to be given more information about the origins of goods imported from the west bank. It is the Government's responsibility to ensure that consumers have as much information as they need to make informed purchasing decisions. The Government have received a number of representations on this issue, as have retailers. By law, an importer or retailer needs only to give a country or a recognised geographical area by way of an origin declaration. The west bank is a recognised geographical area. Therefore, as far as the Government are concerned, it continues to be perfectly legal to give that description of origin on the labels of goods imported from the west bank.

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My hon. Friend has expressed a view different from that, and ultimately the interpretation of legal definitions is a matter for the courts. However, the legal advice that the Government have received does not suggest that using "west bank" as a description of origin would be considered misleading.

I understand that some consumers wish to have access to more detailed labelling information, so that it is clear to them whether the produce that they are purchasing is, in fact, produce of Palestinian growers or produce of Israeli settlements. As consumer demand has grown, supermarkets have been taking a keen interest in this issue. That is why we have been considering how best to address the concerns of importers and retailers in the United Kingdom who wish to respond to consumers who share those concerns.

I want to deal with the specific question that my hon. Friend put at the end of her speech. It related to labelling arrangements that apply in Sweden, for example, to wine imported from the Golan heights. The Golan region is currently under Israeli control and the situation there is quite different from that which prevails in the west bank. The west bank is a mixture of Israeli settlements and Palestinian producers. That is why our guidance will focus on the west bank.

This issue is a complex and sensitive one, and it is important that we do not arrive at an unsatisfactory conclusion. Nevertheless, I acknowledge my hon. Friend's frustration, and that of other right hon. and hon. Members, at the time that has already been taken to deal with this issue. We aim to give the Government's position before the Christmas recess.

I am grateful to my hon. Friend for raising this issue today; in doing so, she has helped to inform our position further and helped us to make that commitment.

11.23 am

Sitting suspended.

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Manufacturing Industry

[Joan Walley in the Chair]

2.30 pm

Dr. John Pugh (Southport) (LD): It is a pleasure to speak under your chairmanship, Ms Walley.

In a way, this is an odd subject for me to choose, because I am not an expert in the field of manufacturing industry and I hope to learn quite as much as I assert in the course of the debate, given the exalted company I am among, but I am driven by two motives. The first is to expiate a slight sense of guilt, because I have spent my entire life consumed with affairs such as philosophy, education and politics, but my father's career was almost entirely in manufacturing industry and he left me in no doubt from boyhood onwards that anything I did was entirely parasitic on the noble tradition of British manufacturing.

I am also driven by reflections on recent events. One event that struck me took place in my constituency. A sweet factory, which had existed for some time, closed down. It is not unusual for a seaside town to have something such as a sweet factory in the midst of it; the economies of seaside towns are quite mixed. The factory was profitable and was investing in new machinery. It was adding to the employment mix in Southport and had a good market for its goods-albeit with dental complications for some consumers of them. I was not especially fond of the product, but I did visit the factory and I had no reason to think that it would not be there for many years.

However, the factory was bought and closed down by a private equity firm. In fact, it was the same private equity firm that took over Halfords and the AA. The land was sold for housing, some of which has started to be built but none has so far been sold, due to the recession. The machinery was sold off to Slovakia-I presume that people are making Chewits out there as we speak. On one hand there was a loss of livelihood and, clearly, of employment, but on the other hand there was a profit for the investors in the private equity company. Some would be very affluent individual investors and some would be organisations such as banks and pension funds. That is, in a sense, how the market works.

Another event that triggered me to apply for the debate was something that I came across in a news broadcast. It was the story of Kemble Pianos-the last big piano manufacturer in the UK making standard, not specialist, pianos-which is being moved by Yamaha to Asia. We have to look at that and ask what has happened to the British piano industry, which at one stage was a major manufacturing industry. Clearly, the home market is not as good as it ought to be. The export market has slumped to some extent. We can blame a range of causes, including the rise of digital keyboards and the lack of decent music teaching in schools. However, the effect of the end of piano production in the UK must be a massively increased carbon footprint for pianos.

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