The Committee consisted of the following Members:

Chairs:Mr Dai Havard  , Martin Caton 

Andrew, Stuart (Pudsey) (Con) 

Bebb, Guto (Aberconwy) (Con) 

Brennan, Kevin (Cardiff West) (Lab) 

Bryant, Chris (Rhondda) (Lab) 

Cairns, Alun (Vale of Glamorgan) (Con) 

Clwyd, Ann (Cynon Valley) (Lab) 

Crabb, Stephen (Preseli Pembrokeshire) (Con) 

David, Mr Wayne (Caerphilly) (Lab) 

Davies, David T. C. (Monmouth) (Con) 

Davies, Geraint (Swansea West) (Lab/Co-op) 

Davies, Glyn (Montgomeryshire) (Con) 

Edwards, Jonathan (Carmarthen East and Dinefwr) (PC) 

Evans, Chris (Islwyn) (Lab/Co-op) 

Evans, Jonathan (Cardiff North) (Con) 

Fabricant, Michael (Lord Commissioner of Her Majesty's Treasury)  

Flynn, Paul (Newport West) (Lab) 

Francis, Dr Hywel (Aberavon) (Lab) 

Gillan, Mrs Cheryl (Secretary of State for Wales)  

Griffith, Nia (Llanelli) (Lab) 

Hain, Mr Peter (Neath) (Lab) 

Hanson, Mr David (Delyn) (Lab) 

Hart, Simon (Carmarthen West and South Pembrokeshire) (Con) 

Irranca-Davies, Huw (Ogmore) (Lab) 

James, Mrs Siân C. (Swansea East) (Lab) 

Jones, Mr David (Parliamentary Under-Secretary of State for Wales)  

Jones, Susan Elan (Clwyd South) (Lab) 

Llwyd, Mr Elfyn (Dwyfor Meirionnydd) (PC) 

Lucas, Ian (Wrexham) (Lab) 

Lumley, Karen (Redditch) (Con) 

Michael, Alun (Cardiff South and Penarth) (Lab/Co-op) 

Moon, Mrs Madeleine (Bridgend) (Lab) 

Morden, Jessica (Newport East) (Lab) 

Murphy, Paul (Torfaen) (Lab) 

Owen, Albert (Ynys Môn) (Lab) 

Ruane, Chris (Vale of Clwyd) (Lab) 

Smith, Nick (Blaenau Gwent) (Lab) 

Smith, Owen (Pontypridd) (Lab) 

Tami, Mark (Alyn and Deeside) (Lab) 

Williams, Hywel (Arfon) (PC) 

Williams, Mr Mark (Ceredigion) (LD) 

Williams, Roger (Brecon and Radnorshire) (LD) 

Willott, Jenny (Cardiff Central) (LD) 

Sarah Davies, Mark Etherton, Committee Clerks

† attended the Committee

The following also attended ( Standing Order No. 102(4) ) :

Paice, Mr James (Minister of State, Department for Environment, Food and Rural Affairs)  

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Welsh Grand Committee 

Wednesday 8 February 2012  


[Mr Dai Havard in the Chair] 


9.30 am 

The Chair:  The first half hour of the sitting is for questions. Although several questions have been grouped, there are still 12 sets, so brevity will be appreciated to allow us to make progress. 

Oral Answers to Questions

Environment, Food and Rural Affairs

The Secretary of State was asked—

Canal and River Trust 

1. Alun Michael (Cardiff South and Penarth) (Lab/Co-op): 

What assessment she has made of the potential effects in Wales of the creation of the canal and river trust.



The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice):  The creation of the canal and river trust in England and Wales will ensure a sustainable and prosperous future for the waterways. It will further liberate the potential of the waterways and provide benefits for the public. It will offer the users of waterways the opportunity to play a role in their governance and to bring their passion and expertise to the waterways. It will also enable local communities to have a greater say in how their canal or river is run. 

Alun Michael:  I agree with the Minister about the trust’s virtues—that was why we argued for it—so I hope that he will join me in paying tribute to my hon. Friend the Member for Ogmore, who was the Minister when the process to create it was started, and the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon), who has steered through the process. Will the Minister comment on what the question was about: the benefits of such an arrangement for Wales? Will he ensure that the trust becomes a fully representative elected body within a reasonable period, although that will take a little time, and that sight is not lost of the necessity of the trust engaging the public? 

Mr Paice:  I entirely endorse the right hon. Gentleman’s words. As he rightly says—I am glad to recognise this—the policy is bipartisan, so I assume that he is aware of all the background. On the benefits for Wales, I specifically

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referred to the fact that the trust is in England and Wales. The benefits will be similar, in that it is difficult to identify specific benefits that might be attributed to Wales but not England, or vice versa. The trust is for both those parts of the UK. It will become a representative body, and the right hon. Gentleman is right to ask us to ensure that all the areas that it covers are represented on it. 

Common Agricultural Policy 

2. Jonathan Edwards (Carmarthen East and Dinefwr) (PC): 

What recent progress she has made on reform of the common agricultural policy; and if she will make a statement.



Mr Paice:  This Government, and indeed those of several other member states, believe that many of the Commission’s current proposals require significant change. The Secretary of State for Environment, Food and Rural Affairs and I, with senior departmental officials, are working hard to explain the UK’s views, to build relationships and to engage with fellow Ministers from Governments across the European Union, including those in the devolved Administrations throughout the UK. 

Jonathan Edwards:  Direct payments account for about 80% of Welsh farmers’ income. By pursuing their agenda to reduce the CAP budget, are not the UK Government working against the interests of Welsh farmers? 

Mr Paice:  No, we are not. We negotiate on behalf of all farmers throughout the UK. Unsurprisingly, I have seen the hon. Gentleman’s press release, which is clearly written from his political perspective. I entirely reject any suggestion that the UK Government are not taking clear notice of the views and perspectives of Welsh agriculture. As I have just intimated, I have had regular meetings with Ministers from this Welsh Government and their predecessor to ensure that, whenever possible, we speak with one voice. 

It is far too early to see what the outcome will be and, as I have said, we have several areas of concern. On the specific issue of direct payments, the Government have said that we want them to be phased out in the long term, which is very different from the previous Government’s stance. We believe that the best way to assist farmers to face a challenging future is to concentrate the CAP resources more on pillar two than on pillar one so that we can make targeted investments to help them to become more competitive. 

Last week, the Welsh Government responded to a paper on regulation. I was interested to see how much emphasis the preamble placed on the high level for Welsh farmers, for whom, compared with the best, there is considerable room for improvement. 

Huw Irranca-Davies (Ogmore) (Lab):  The Minister and I have debated this subject at some length but, specifically for Welsh farmers, one of the things that is causing great anxiety is the possible transfer from historical payments to flat-rate payments. What discussions has the Minister had? Will he give the Committee and Welsh farming communities an assurance that they will not be left behind because of the anomalous UK position? Does he have their best interests at heart? 

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Mr Paice:  I can repeat the assurance that I gave the hon. Gentleman in Committee last week. We fully understand that point, although we support—I think that this is widely accepted—the need for Wales, Scotland and Northern Ireland to move from a historical to an area-based system over a period of time. We cannot go on subsidising people on the basis of what they were paid in 2001, but the Commission’s proposals for a 40% shift in year one is far too high. We have agreed with all the devolved legislatures in the UK that we will press for a smoother transition of 20% a year over five years. 

Gangmasters Licensing Authority 

3. Chris Evans (Islwyn) (Lab/Co-op): 

What recent assessment she has made of the effectiveness of the Gangmasters Licensing Authority in tackling worker exploitation in Wales.



8. Geraint Davies (Swansea West) (Lab/Co-op): 

What recent assessment she has made of the effectiveness of the Gangmasters Licensing Authority in tackling worker exploitation in Wales.



Mr Paice:  We have not undertaken a separate assessment of the effectiveness of the GLA in tackling worker exploitation in Wales, but its activities have been the subject of detailed consideration as part of the employment theme under the Government’s red tape challenge. The red tape challenge ministerial star chamber has endorsed the need for the GLA to enforce protections for vulnerable workers, subject to better targeting of non-compliant operators and reducing burdens on the compliant ones. The GLA will continue to be monitored under the Government’s ongoing reviews of public bodies and enforcement agencies. We will make further announcements on the GLA in due course. 

Chris Evans:  I thank the Minister for that response. According to the Health and Safety Executive, 34 people lost their lives in agricultural work-related incidents in the year to March 2011. Has the Minister had any discussions about how the GLA is working in Wales? Will the Welsh Assembly Government have any input into its reform? 

Mr Paice:  Discussions with the Welsh Government about the GLA’s operations in Wales are ongoing, but the hon. Gentleman is putting two separate issues together. The horrendous safety record for agriculture—not only in Wales, but throughout the UK—is a health and safety responsibility, rather than a matter for the GLA. The GLA is about trying to stop the exploitation of vulnerable workers. I entirely share the hon. Gentleman’s concerns about the industry’s safety record, and we will do everything possible to reduce that horrendous rate, but it is not directly linked to the GLA. 

Geraint Davies:  But how will the Government balance the increased risks of lighter touch regulation with the exploitation of children and workers? Will the Minister take forward the idea of regulation to other sectors, in particular the care and construction sectors in which, as in the farming sector, we are seeing deaths? If he is reducing costs and regulation, will he extend the footprint of regulation to those other important sectors? 

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Mr Paice:  The extension of the protection offered by the GLA would be a matter for my right hon. Friend the Secretary of State for Business, Innovation and Skills, not for the Department for Environment, Food and Rural Affairs, so I cannot comment. However, we need to differentiate between the protection of vulnerable workers, who are primarily, albeit not only, from overseas and are engaged in the agricultural industry—that covers their terms and conditions of employment, as well as safety issues—and the separate issue of preventing the horrendous accident rate throughout the industry. There is no evidence that that is any worse among the groups covered by the GLA than in the rest of the industry. 

Nia Griffith (Llanelli) (Lab):  Will the Minister confirm that he will not be watering down the powers of the GLA in any way? Does he agree that it could be strengthened if it was given the power to deal with matters using civil penalties, rather than through a lengthy court process? 

Mr Paice:  That is a good point because we do think that the civil process could play a more enhanced role in the GLA. On the hon. Lady’s first comment, we are not planning to water anything down but, as I said, we are looking at how we can better target the GLA’s work on areas where there is a real problem. For several years, there has been concern that the GLA was spreading its wings into areas in which there was no problem to be addressed, such as the forestry sector. We need to refocus its efforts on the areas in which there is exploitation, and we, like her and everyone in the House, are determined to get on top of that. 

Animal Health and Veterinary Laboratories Agency  

4. Mr Mark Williams (Ceredigion) (LD): 

What recent assessment she has made of the future of the Animal Health and Veterinary Laboratories Agency laboratories in Aberystwyth and Carmarthen; and if she will make a statement.



Mr Paice  rose—  

The Chair:  You are getting plenty of exercise this morning, Minister. 

Mr Paice:  Yes; three of us share the questions in the Chamber. 

On 1 September, the Animal Health and Veterinary Laboratories Agency announced plans to re-organise its regional laboratory structure to enable savings of approximately £2.4 million a year. The restructure does not close any sites because surveillance and post-mortems will continue at all sites at present. Both Welsh laboratories in Aberystwyth and Carmarthen are affected by the rationalisation. Implementation will be in two phases, and phase 1, which includes the two Welsh laboratories, will be completed by 31 March. 

Mr Williams:  I welcome the Minister to the Committee and I am grateful for his response. Does he acknowledge that there are real concerns about testing because of the loss of unique local knowledge of farms and farming held by staff at those laboratories, and due to genuine

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fears that a 24-hour turnaround time for samples and carcases will be harder to deliver, given the remoteness of testing sites from the farmers whom they serve? 

Mr Paice:  I understand the concern to which my hon. Friend refers. We know that it is held by some of the farming industry, but I need to emphasise to the Committee that more than 50% of samples are sent by post at present, so the only people who really benefit from a local lab are those in its vicinity. The system of sending the majority of samples by post has worked well. AHVLA assessed the system to check that it was working all right before it made the decision. 

I emphasise that, even today, the fact that a person lives near a laboratory does not necessarily mean that their sample will be tested there, given the specialisms in different laboratories throughout the country. I can honestly say that we do not believe that there will be a reduction; indeed, the introduction of weekend working could enhance the speed of response. 

Kevin Brennan (Cardiff West) (Lab):  The laboratories play an important part in animal health and welfare. Does the Minister believe that Welsh Government’s decision to call in the application for a mega-dairy in mid-Wales will also be beneficial for animal health and welfare in Wales? 

Mr Paice:  Unsurprisingly, the decisions made by the Welsh Government are for the Welsh Government to account for. As, they are not for me to comment on, I am not going to. Mega-dairies are primarily a planning matter. As the hon. Gentleman knows, when we had such an application in Lincolnshire a year or so ago, we left it entirely to the planning procedure, and I think that that is the right way forward. 

Nia Griffith (Llanelli) (Lab):  Returning to the animal health laboratories in Carmarthen and Aberystwyth, as the premises will be kept open and the possibility of taking animals for post-mortem will remain, and so there will be minimal staffing, what consideration has the Minister given to moving more services there, given the desperate need to decentralise and to ensure that there are good public sector job opportunities in Wales, not just in the more prosperous areas of England? 

Mr Paice:  I certainly agree with the hon. Lady’s comment about decentralisation. That is important, as is the logic of using what facilities we have to their maximum. However, at the same time, that will involve rationalisation, because if we are to utilise empty space in some places, we will clearly vacate places elsewhere. It is for the chief executive of the agency to deal with that level of organisation. 

As I said to the Environment, Food and Rural Affairs Committee a couple of weeks ago, we are embarking on a review of the whole surveillance process, which includes post-mortems, with a view to it having a more modern approach through which we can have much greater engagement with private sector veterinary laboratories, which are now much more modern and state of the art—sometimes they are even better than those that we have—and develop a surveillance system with the industry that is suitable for the 21st century, obviously with the ability to detect any disease that comes in. That review

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will encompass that and all the other laboratories and post-mortem facilities, and the relocation and reuse of existing resources is obviously part of that review. 

Agricultural Installations 

5. Simon Hart (Carmarthen West and South Pembrokeshire) (Con): 

What estimate she has made of the (a) number and (b) volume of slurry stores, silage clamps and fuel tanks installed more than 20 years ago which have been found to be unsafe.



Mr Paice :   The principal purpose of legislation on the construction and use of slurry storage facilities is environmental protection, so it is entirely a devolved matter. I understand that the Welsh Government are consulting on whether the rules that first came into place more than 20 years ago should now come into force, rather than the derogation that has existed, and whether all farms should have to comply with the standards set out in those regulations. 

Simon Hart:  There is real concern in the farming industry across the whole of the UK, including in Wales, that this issue, coupled with the possible loss of agricultural capital allowances, could lead to people leaving the industry altogether when they have no real need to do so. Can we get some early clarity from the UK Government, which might influence the Welsh Government, that the matter will be addressed urgently? 

Mr Paice:  Yes, I can give my hon. Friend that assurance. DEFRA is holding a similar consultation in England to that to which I have just referred. I take the strong view that what matters is that farmers do not allow slurry to get into watercourses and that the process that we follow should be targeted at ensuring that outcome, rather than putting too much emphasis on the detail of how farmers fulfil that responsibility. Clearly, however, we have this anomalous situation that the Government of the day granted the industry an open derogation to a legal requirement. Something must be done to address that anomaly, and that is part and parcel of the proposals. 

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC):  Will the Minister assist us by saying which Minister is responsible for the English Government policy? 

Mr Paice:  Obviously, all DEFRA Ministers accept full responsibility, but the individual Minister who handles this is the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury. 

Agricultural Wages Board 

6. Mrs Siân C. James (Swansea East) (Lab): 

What recent discussions she has had with Ministerial colleagues on the effect on rural poverty in Wales of the closure of the Agricultural Wages Board.



10. Jessica Morden (Newport East) (Lab): 

What assessment she has made of the potential effects on the rural economy in Wales on the closure of the Agricultural Wages Board.



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13. Nick Smith (Blaenau Gwent) (Lab): 

What recent discussions she has had with Ministerial colleagues on the effect on rural poverty in Wales of the closure of the Agricultural Wages Board.



14. Mr David Hanson (Delyn) (Lab): 

What assessment she has made of the potential effects in Wales of the abolition of the Agricultural Wages Board.



Mr Paice :   There have been no specific discussions with ministerial colleagues on the effect of rural poverty in Wales were the Agricultural Wages Board abolished. However, the Government believe that the proposed abolition of the board will reduce administrative burdens on the agricultural industry and enable it to adopt modern flexible employment practices, which will increase employment opportunities and benefit employers and workers in both England and Wales. As is required by the Public Bodies Act 2011, the future of the Agricultural Wages Board will be subject to public consultation, and we are currently discussing that consultation process with Welsh Government Ministers. 

Mrs James:  I thank the Minister for his reply, but perhaps he can clarify something: has DEFRA undertaken any form of impact assessment on the abolition of the AWB? If not, why not? 

Mr Paice:  The answer is that we have. It is virtually complete and will be part of the consultation when it is launched shortly. 

Jessica Morden:  The Minister said earlier that he has regular meetings with the Welsh Government and that, when they can, they speak with one voice, so why did DEFRA expressly ignore the views of the Welsh Government, and also of the Farmers Union of Wales, when it went ahead and abolished the Agricultural Wages Board? 

Mr Paice:  First, we have not abolished the Agricultural Wages Board because, as I said, the Public Bodies Act requires us to conduct consultation. Secondly, the fact that we have regular meetings with the Welsh Government does not mean that we always agree on every issue. It would be absurd to expect that, but we work closely with the Welsh Government whenever possible. They will no doubt respond to the consultation, and we will decide how to proceed after that. 

Nick Smith:  The Agricultural Wages Board was established by Clement Attlee, who took inspiration from the wages board that Churchill created when he was President of the Board of Trade. Does the Minister really think that he knows better than those former Prime Ministers? 

Mr Paice:  I congratulate the hon. Gentleman on his ingenuity, but that is not particularly appropriate because, needless to say, we live in a different world today. It is possible that I would have been a strong advocate of a wages board in those days to deal with the work exploitation of the time but, as the hon. Gentleman identifies, that was a long while ago. The size of the agricultural work force has diminished incredibly since then—I do not

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have the figures to hand—and employers are far more knowledgeable about labour markets. We believe it is time we brought the way it works into the 21st century. The hon. Gentleman’s comments could equally apply to all the other wages boards brought in by those gentlemen and others, none of which his party put back in place during 13 years in government. 

Mr Hanson:  The Farmers Union of Wales says: 

“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.” 

Will the Minister tell us why he thinks the union is wrong? Will he also guarantee that, if he proceeds with the abolition of the Agricultural Wages Board, wages will not fall for those who work in the farming industry? 

Mr Paice:  I do believe that the concern expressed by the FUW is wrong. As a result of the actions of the right hon. Gentleman’s Government, which were supported by us, we now have a national minimum wage, which did not exist in the days when the eminent people cited by the hon. Member for Blaenau Gwent were Prime Ministers. We believe that that underpins the whole process. More importantly, everyone currently employed in the industry will retain whatever protections they have in their existing terms of employment. We believe that the most important way to attract the young, capable people that the industry needs is to bring the way it operates into the modern world. More than 50% of the work force are already paid a premium that is considerably ahead of where the Agricultural Wages Board would put their status. 

Meat Exports 

7. Roger Williams (Brecon and Radnorshire) (LD): 

What steps her Department is taking to promote Welsh meat exports.




9. Guto Bebb (Aberconwy) (Con): 

What recent representations she has received on Welsh lamb exports to the US and China.



Mr Paice:  With permission, Mr Havard, I shall answer Questions 7 and 9 together. 

We recently published the action plan on farming, food and drink exports. DEFRA will continue to work closely with Welsh and other stakeholders to implement that plan, especially to reduce animal health barriers to trade in beef and lamb, with regard not only to China and the USA, but to developing new markets such as in India. 

Roger Williams:  I draw the Committee’s attention to my declaration of an interest. 

I commend the Minister and the Department on that document, which will be very productive. There is a huge demand for protected geographical indication Welsh lamb throughout the world. Some trade barriers are a legacy of concerns about bovine spongiform encephalopathy from previous times. Will the Minister use the best efforts of our diplomatic service and other trade bodies to ensure that those barriers are taken down? 

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Mr Paice:  I can certainly give that undertaking. I and all Ministers readily accept the challenge of creating more growth in the agricultural sector, particularly in exports, but that is not unique to agriculture. The Government believe that exports are going to drive the country’s recovery, so all our overseas embassies and UK Trade & Investment are very much charged with stimulating business abroad. When there are particular barriers, such as historical concerns about BSE, the chief vet, I and others in DEFRA will tackle them head on. Approval was given to a chain of abattoirs to export pig meat to China only last week. Although that is not the lamb to which my hon. Friend refers, it is another example of how we are making progress. 

Guto Bebb  rose—  

The Chair:  Order. Before we continue, there is a bit of confusion about the order in which we are taking questions. I had it that Mr Bebb would ask Question 9 separately. The Minister is dealing with Welsh meat exports, so I plan to roll the questions together and call Mr Bebb so that his particular question can be encompassed in the Minister’s answers. 

Guto Bebb:  We should all be proud of the success of Welsh lamb—30% of Welsh lamb is now exported—but there are specific issues when exporting Welsh lamb into some new markets, especially China and the USA. Will the Minister assure me that that issue is being addressed by the Department at a UK level? 

Mr Paice:  I apologise, Mr Havard, if you were not informed of my intent; the answers ran very much together. 

I assure my hon. Friend that we are taking China very seriously—I have just referred to pig meat exports. I hope to go to China with a trade delegation later this year to try to deal with the remaining challenges. I am not aware of any problems with the United States, but if he knows of particular issues, I will be more than happy to have a meeting to discuss them. 

Albert Owen (Ynys Môn) (Lab):  I welcome the Minister to the Committee. Will he assure us that exports of Welsh premium lamb—the best lamb in the world—are clearly labelled? Are he and his fellow Ministers looking seriously at the country-of-origin issue so that meat that comes from abroad but is packaged in this country has the country of origin labelled on it? There should be a Welsh dragon on it if it is produced in Wales, and information telling us otherwise if it is not. 

Mr Paice:  I entirely share the hon. Gentleman’s demand and desire for accurate country-of-origin labelling. No doubt Welsh lamb for export is properly labelled when it leaves Wales. The precise labelling in the country to which it is going will be the responsibility of that country’s Government, because they will have their own labelling regulations. I assure him that we have taken two important actions on imports into the UK. First, we have a voluntary code, to which all supermarkets, major retailers and the hospitality sector have signed up, stating that all fresh meat will be labelled with the country of origin, which means the animal’s true origin

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and not just where it was processed. Secondly, the food information regulations in Europe have completed their progress and will apply, certainly initially, to all fresh meat. They stipulate that all fresh meat has to advertise its country of origin, which means where the animal originated. Those are two major steps towards meeting the hon. Gentleman’s objective. 

Farming (Economic Growth and Green Jobs) 

11. Owen Smith (Pontypridd) (Lab): 

What recent discussions she has had with ministerial colleagues on the contribution of the farming sector to economic growth and green jobs in Wales.



15. Mark Tami (Alyn and Deeside) (Lab): 

What recent discussions she has had with ministerial colleagues on the contribution of the farming sector to economic growth and green jobs in Wales.



18. Dr Hywel Francis (Aberavon) (Lab): 

What recent discussions she has had with ministerial colleagues on the contribution of the farming sector to economic growth and green jobs in Wales.



19. Albert Owen (Ynys Môn) (Lab): 

What recent discussions she has had with ministerial colleagues on the contribution of the farming sector to economic growth and green jobs in Wales.



Mr Paice:  DEFRA has the key priority to support and develop British farming and encourage sustainable food production to help to enhance the competitiveness and resilience of the whole food chain, including farms and the fish industry, and to help to ensure a secure, environmentally sustainable and healthy supply of food with improved standards of animal welfare. I regularly meet ministerial colleagues right across Whitehall to discuss a wide range of issues related to that priority. 

Owen Smith:  I thank the Minister for his answer. Has he made any assessment of the number of solar feed-in tariff projects on farm buildings that have been cancelled as a result of the Department’s mishandling of the FIT review? 

Mr Paice:  I am afraid that the answer is that I have no estimate of that figure because, as the hon. Gentleman knows, that is a matter for the Department of Energy and Climate Change rather than DEFRA. Obviously, I am aware of the overall issue and the recent court hearings on the subject, but DEFRA does not have the statistics that he seeks. 

Mark Tami:  What discussions has the Minister had with the Welsh Government about the expansion of rural broadband? Broadband is vital for helping economic growth, yet it remains poor and even non-existent in many areas. 

Mr Paice:  The answer is “Very considerable”, and I think that my right hon. Friend the Secretary of State for Wales will refer to that matter in her speech. DEFRA has, within England, put in a considerable sum of extra money, on top of Broadband Delivery UK, and there are extremely close conversations with the Welsh Office and the Welsh Government, because it is best to work

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together when possible on such networks. We are determined to roll out access to efficient broadband right across the UK, because it is central to the Government’s determination to achieve digital by default for all Government administration. 

Dr Francis:  Has the Minister had any discussions with the Welsh Government on how best to increase the interface between farming and forestry on the one hand and, on the other hand, the emerging leisure and tourist industries in valley areas, particularly in my constituency, where there has been excellent progress as a result of the work of the Labour-led Neath Port Talbot county borough council? 

Mr Paice:  The direct answer is that I have not discussed that specific issue with Welsh Ministers, but obviously I would be happy to do so. I am aware that the Welsh Government are taking forestry out of the Forestry Commission and putting it in with the wider environmental organisations in Wales, presumably because they believe that that will lead to the greater cohesion that the hon. Gentleman seeks. 

The Chair:  Order. I am afraid that the half hour for questions is exhausted. 

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC):  On a point of order, Mr Havard. The right hon. Member for Cynon Valley and I were low in the batting order, so our

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questions were not called. I have no complaint about that, but will the Minister respond in writing to the questions that were tabled? It would be helpful if he would. 

The Chair:  I understand that the Minister will do so. Having extemporised around his brief this morning, he will write elegant answers to all Members who have not received them today. 

Mr Paice:  I am happy to say that that will be the case. I add, however, that the right hon. Gentleman suggested earlier that he would ask his question in Welsh; I hope that he will understand if I reply in English. 

Mr Peter Hain (Neath) (Lab):  On a point of order, Mr Havard. I congratulate the Minister on his steadiness under fire, having been dispatched into the fiery cauldron of the Welsh Grand Committee by the Secretary of State. Will he say whether that was a friendly act on her part? 

The Chair:  I have no doubt that the Minister will write to you about that, too—privately. 

We move to the main debate. This sitting will continue until 11.25 am. Again, Members know that if they wish to speak later, the time that we take at the beginning will restrict our time at the end—it is a piece of physics. I am in your hands, and you are in your own in that regard. 

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Agricultural Policy 

10.1 am 

The Secretary of State for Wales (Mrs Cheryl Gillan):  I beg to move, 

That the Committee has considered the matter of the UK Government’s agricultural policy as it relates to Wales. 

I welcome you to the Chair, Mr Havard. I hope that our proceedings will run smoothly throughout the day. I know that Mr Caton will be taking over for the afternoon sitting. 

The previous Welsh Grand Committee, which was on 20 October 2011, was held in Wrexham. I was delighted to take the Committee—with the agreement of the shadow Secretary of State—out of Westminster and into Wales for the first time since 2001, as I firmly believe that it is important to make the Committee more accessible. I said then that I would value feedback from all Committee members, so that we can decide whether this is something that we do in future. I therefore remind Committee members to feed in any views at this stage, because we will discuss in future whether it would be fitting to hold a Committee in Wales at least once a year. 

Mr Peter Hain (Neath) (Lab):  I am certainly happy to talk to the Secretary of State about that, and it was fine going to Wrexham, but we will want to take into account the fact that the attendance here is much greater. Members have busy lives in Westminster; they may be on Select Committees or Standing Committees, so it is simply much easier to attend a Welsh Grand here. She ought to bear that in mind. 

Mrs Gillan:  The right hon. Gentleman makes a valid point. I do not want to have the discussion here, but I wanted to remind Committee members that that offer is on the table. The Committee may decide that it does not want to move in that direction, in which case we will decide always to sit here, if that is more convenient for Members. 

I want to ensure that we develop the process, so that we can have meaningful debates. I have to disagree with the right hon. Gentleman: it was certainly not a hostile act to invite the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for South East Cambridgeshire—quite the reverse. I wanted to ensure that Welsh Members had an opportunity to discuss, at first hand, matters relating to agriculture, not least because it is largely devolved. However, there is a proper and fitting role for all Members of Parliament to play in considering agriculture as it affects Wales. My right hon. Friend and I have served in Ministries together, but not in this area. I congratulate him, because, as usual, he showed great command of the subject—more than many people in Committee did. I thank him for coming here, and I hope he will continue that good dialogue with Welsh Members on agricultural matters. 

Mr Hain:  I join the right hon. Lady in thanking the Minister for coming. Is she not desperately relieved that she did not have to answer the questions herself? 

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Mrs Gillan:  Yes. [ Laughter. ]  

The Chair:  Honesty and brevity. Carry on! 

Mrs Gillan:  I intend to keep my replies to a minimum, because it is important for all Members to have a say. 

We all know that large numbers of people in Wales live within easy commuting distance of big urban conurbations. It is almost too easy to focus on such communities, but about 90% of our land is non-urban, and one person in three in Wales lives in a rural area. With the responsibility for issues affecting such communities split between Cardiff Bay and Westminster, it is important that we understand their concerns, and that Members of Parliament have a voice. 

Mr David Hanson (Delyn) (Lab):  I asked the Minister of State, Department for Environment, Food and Rural Affairs, whether he supported the Farmers Union of Wales’s views on the abolition of the Agricultural Wages Board, and he said that he did not. Has the Secretary of State, in the Government’s private meetings, reflected the FUW’s views that the abolition of wages boards is wrong because it restricts training and entry into agriculture in Wales, and does she support its opinion? 

Mrs Gillan:  I talk to the Farmers Union of Wales regularly. In fact, we spoke recently, as the right hon. Gentleman knows, because we had a very good Welsh breakfast in the House of Lords to reflect on good Welsh produce. I believe he was in attendance. 

It is fair to remind people that the National Farmers Union in Wales supports the policy on wages boards, and the Public Bodies Act 2011 requires a public consultation on the future of the AWB. The Government will make a formal decision once they have considered the consultation responses, but I would encourage the right hon. Gentleman to make representations. 

Mr Hanson:  I will. 

Mrs Gillan:  I am sure he will, and hopefully we will hear a speech from him later. 

Nick Smith (Blaenau Gwent) (Lab):  Nearly a third of agricultural workers live in accommodation provided by their employer. How does the Secretary of State expect those workers to conduct independent negotiations without the AWB? 

Mrs Gillan:  I think they will still have security. I hope that the hon. Gentleman is not casting aspersions on the vast majority of farmers who are willing to pay a fair wage for a decent day’s work, and skilled workers will still continue to be paid a premium. However, he makes a valid point, and it is something that will be considered. 

Hywel Williams (Arfon) (PC):  Will the Secretary of State give way? 

Mrs Gillan:  I will make some progress, if the hon. Gentleman does not mind. 

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This is the first time since 1998 that the Committee has discussed agriculture. With the reform of the common agricultural policy, which is high on the Government’s agenda, it is essential that we have the opportunity to talk about the issues that impact on our rural communities. CAP reform will have a significant impact in Wales, and it is vital that Welsh interests are considered as we help shape a CAP that will serve the interests of the whole of the UK and provide for a more sustainable farming community. 

The CAP budget cannot keep increasing when public finances are so stretched across Europe, and I hope that we all agree on the need to encourage efficiencies and the move towards a self-sufficient farming sector. Although that will be a challenge, we must move the industry away from direct support over the long term. Doing that will require using CAP support to invest in measures that aid innovation, which in turn will help our agricultural industry to grow and concentrate on the things it does best. The Government are committed to maximum engagement within the EU, and we are demonstrating real leadership by developing proposals and alternatives that will benefit farmers across the whole of the UK and in Wales. 

As we know, the UK is recovering from the biggest financial crisis for generations. We are affected by inflation driven by global commodity prices and a debt crisis in the euro area, and the full scale of the 2008-09 crises has now become clearer. Those financial difficulties are being felt across the UK and across all industries, but they are having a particular impact on our rural communities and the agricultural sector. When I talk to businesses in rural areas, they tell me that the economy is their biggest concern. The Government’s actions to reduce the deficit and rebuild the economy have helped to restore stability and bring down interest rates to record lows, and they have benefited businesses and families. I am sure we all agree, however, that unemployment in some parts of Wales has been higher than we would all like for longer than we would all like, and rural communities are no exception. 

There has been some good news in the agricultural sector, however. The latest labour market statistics show that 39,000 people were employed in Wales in the agricultural, forestry and fishing sector, which is a rise on both last year and last quarter. We have made it clear that economic growth must be led by the private sector, and the agricultural sector clearly has a key role to play. It is a significant contributor to both the UK and the Welsh economy, and it provides employment for large numbers of people in our rural communities. Farmers also have an important role to play in encouraging tourism—a point to which the hon. Member for Aberavon alluded—and supporting employment in a number of related industries. Farmers are the cornerstone of our food and drinks industry, supporting an infrastructure of processing, distribution and retail businesses. 

We have got a lot to be proud of. There are many iconic products that place us firmly on the food map. Only last week—I am looking at the hon. Member for Ynys Môn—an application was made to protect the name of Anglesey sea salt under the EU protected food name scheme. As it is a product that I regularly use, I hope it gets that nomenclature. If it does, it will join Welsh beef and Welsh lamb. Promoting the excellent food we produce here in Wales is essential if we are to

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grow the industry further, so the work that the Welsh Government are doing to attract official status for products such as Carmarthen ham, north Menai strait mussels and laverbread is an important part of the equation. I know from my many visits to the Royal Welsh show how many hon. Members on the Committee also attend that show, which has record gates—increasing gates—and where we are able to see the huge promotion of good Welsh products from our agricultural sector. 

Last year, I asked the Under-Secretary of State for Wales, my hon. Friend the Member for Clwyd West, to lead a taskforce exploring the major issues affecting rural communities and economies across Wales. Although the matter is largely devolved, I thought that we in the Wales Office should understand the current situation. He visited rural areas to discuss at first hand the concerns of local farming and agricultural communities. The work reflected the complexity of devolution, because many of the areas that affect rural life fall under the Welsh Government. 

Respondents to the taskforce highlighted a number of important issues, which were touched on in the question and answer session, such as broadband supply, fuel prices and bank lending, and I believe that we have made real progress on all of them. Broadband, as we all know, is absolutely essential to help businesses grow. The evidence presented to the taskforce showed that connections in our rural areas were slow or sometimes completely non-existent, which is why the investment in broadband is so significant and important. 

The Government have provided Wales with a total of £56.9 million to help bring broadband to everyone, and to bring superfast broadband to 90% of homes. I am sure the Committee will be pleased to hear that earlier this week I had an excellent meeting with the Welsh Minister for Business, Enterprise, Technology and Science, and I was pleased to hear how that money is being used. It will bring improvements in previous broadband not-spots, and it will support several successful rural projects. There we have a good example of our two Governments working very well together in the interests of Wales, and I am looking forward to hearing of more and more rural areas that are connected. 

Albert Owen (Ynys Môn) (Lab):  The Secretary of State makes an important point. Like other Welsh MPs, I have constituents who have problems not only with broadband but with mobile phone coverage, which is a serious issue. Does the Secretary of State agree that something must be done in such areas? Many individual mobile phone providers have installed masts, but there is not the required frequency. Many run their broadband, these days, from mobile phone coverage. 

Mrs Gillan:  The hon. Gentleman makes a valid point, and I hope that people who read the Committee’s proceedings will take note of it. 

I visited a business in Wales that is doing a tremendous export job, and I asked, “What is your biggest problem?” The reply was, “Well, when I have a customer here from overseas, and he is ready to ring back head office to make a decision, he finds he does not have a mobile phone signal, and he is not going to wait until he is half an hour down the road to get that acknowledgement. So an opportunity will perhaps pass us by.” That is a

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prime and practical example. I want to do everything I can in the Wales Office to encourage increased and better coverage, because the lack of coverage inhibits our businesses. 

We have taken action on fuel prices. In last year’s Budget, we immediately reduced fuel duty and replaced the fuel duty escalator with a fair fuel stabiliser to encourage fairness and stability by raising fuel duty only with inflation. We took further action in the autumn statement to defer the January fuel duty increase and cancel the August inflation-based rise. 

Jonathan Edwards (Carmarthen East and Dinefwr) (PC):  I recently received correspondence from the Federation of Small Businesses stating that the Treasury’s preferred stabilising mechanism is unlikely to achieve the objectives to which many of my colleagues aspire. Will the Secretary of State raise the issue of the FSB’s preferred model with the Treasury? That model would be neutral for the Treasury and would genuinely stabilise fuel prices. 

Mrs Gillan:  The hon. Gentleman is absolutely right. I talked to the FSB in Wales about that last night. I said that I was interested, and it has agreed to send me a letter. The FSB said, “It is not going to cost the Treasury a penny.” I said, “Well, that will be interesting. I am sure they will look at it if it is not going to cost them a penny.” Like the hon. Gentleman, I am interested in the FSB’s proposals, and I have no hesitation in putting them forward for colleagues to consider. 

Huw Irranca-Davies (Ogmore) (Lab):  Will the right hon. Lady explain why Wales did not feature in the rural fuel rebate scheme, which was confined to parts of the western highlands and so on? Does she anticipate a roll-out of the scheme in Wales in the near future? Also, has she made representations about what is, effectively, a scandalous robbery, whereby individual private petrol forecourts in rural Wales are being held to ransom by what are essentially oligopolistic large suppliers of petrol? Those forecourts are being invoiced for prices that they have not been quoted. Has she had representations on that, and has she made representations on it? 

Mrs Gillan  rose—  

The Chair:  Order. The Secretary of State may answer by all means, but let us be clear that we are discussing agricultural policy. Context is important—doubtless context is all—but if we could confine our debate to how these matters affect agricultural policy, it would be appreciated. 

Mrs Gillan:  As fuel prices were mentioned in our study of rural matters, it is obviously something of concern to the agricultural community. 

Everyone is aware that there are enormous extra costs, particularly distribution costs, attached to the highlands and islands. The fuel rebate pilot is an opportunity to test the effectiveness of the rebate scheme and, of course, will provide much-needed relief to remote island communities, as pump prices in such areas are particularly

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high. I reassure the hon. Member for Ogmore that the Government will assess the results of the pilot and consider whether further roll-out to remote areas of Wales would be appropriate. I am jumping the gun, as we have yet to assess the results of those pilots, but I am sure we share the same acute interest in seeing whether there could be any benefit for our remote rural communities in Wales. 

Albert Owen:  The issue affects agricultural workers in my area, as well as owners of land and property. I remind the Secretary of State that the Under-Secretary told the Committee that the Department made a bid to the Treasury for rural areas of Wales to be included in the first phase, which was ignored. Surely the Government should not be treating Wales as second class. We have included islands in England and Scotland, but not in Wales; I represent an island in Wales, and have a vested interest. We are not taking part in this pilot, but prices are as high in the peripheral areas of Wales as they are in areas of England and Scotland. 

Mrs Gillan:  Sadly, it is a fact of life that bids to participate in programmes do not always succeed. This was a case where— 

Albert Owen:  Stand up for Wales! 

Mrs Gillan:  I am standing up for Wales. [ Interruption. ] The hon. Gentleman is not making a valid point. It will be good to see the evaluation of the pilot, and to see whether the scheme can be applied to the remote areas of Wales. 

Huw Irranca-Davies:  Will the right hon. Lady give way? 

Mrs Gillan:  No, I will make some progress. Many points were covered, but the last point raised in our agricultural report was on bank lending. Through the Project Merlin agreement, the banks lent 10% more in the first three quarters of 2011 than in the same period in 2010; the latest figures are due to be published on 13 February, and I hope that we will see that the trend has continued. Access to finance for the agricultural sector still remains a key focus for our Government. 

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC):  Earlier, we referred to tourism, another occupation that some farmers diversify into. Did the right hon. Lady know that the clearing banks in Wales have a policy against lending anything to anyone connected with tourism? What impact does she think that has on rural Wales, and will she intervene? 

Mrs Gillan:  If the right hon. Gentleman writes to me with specific examples, I would be delighted to look at that. I have not heard that expressed in such bold and bald terms, but if that is the case, then it is certainly something that I would want to take up. 

As the right hon. Gentleman will know, we also introduced the national loan guarantee scheme, which will lead to reductions in the cost of bank loans for smaller businesses. In many cases, that scheme will lead to reductions of up to 1% on business loan rates. I think I have taken up enough of the Committee’s time, I have been as generous as possible in giving way. 

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Jonathan Evans (Cardiff North) (Con):  Before my right hon. Friend sits down, could I ask her to address this point? She has talked about the issues raised with her by farmers. In the last 10 to 15 years, one of the issues most raised by farmers has been the inequality of the relationship between producers and giant supermarkets. This issue was to have come up in questions, but the question was not reached. We have now a groceries code adjudicator—[ Interruption. ] Please let me continue. The reality is that farmers fear that when they raise issues of concern, it may affect their relationship with supermarkets. The capacity to raise concerns through trade associations, unions and non-governmental organisations is very important if we are to challenge this inequality. 

Mrs Gillan:  My hon. Friend brings up the draft Groceries Code Adjudicator Bill. I have a copy here, if anyone wants to have a look at it. 

Huw Irranca-Davies:  I have already read it. 

Mrs Gillan:  I bet you have. 

What is key is that 11 years ago the Competition Commission published a report that raised these concerns. It has taken this Government to bring in a draft Bill. It has taken this Government to consult on it, and to look at the issue. To respond to my hon. Friend the Member for Cardiff North, these matters can be raised anonymously; that will give protection to the individuals and the outfits concerned. I think that is most important. 

Several hon. Members  rose—  

Mrs Gillan:  I have been very generous in giving way. I am going to conclude. 

Albert Owen:  On a point of order, Mr Havard. Is it in order for a Member to inadvertently mislead the Committee by suggesting that we have an adjudicator? Is it also in order for the Secretary of State to say that the Competition Commission did what it did 11 years ago, when it was in 2008? It was 2009 when the code came in— 

Stephen Crabb (Preseli Pembrokeshire) (Con):  Speech! 

Albert Owen:  It is a point of order. I am being heckled by the Government Whip, who is at the back of the room. It is important to put on the record the correct procedures. We have a draft Bill, not an adjudicator, and the commission was in 2008. 

The Chair:  That is not a point of order for the Chair. I think you have made your point clearly. The question of the efficacy of the introduction of the Bill may be a subject of debate later today. I call the Secretary of State to conclude her remarks. 

Mrs Gillan  rose—  

Hywel Williams:  On a point of order, Mr Havard. I think my point of order will be a proper one, in contrast to the previous one. 

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The Chair:  Convince me, Mr Williams. 

Hywel Williams:  Is it good practice for the Secretary of State to take an intervention from a Member who tabled a question on a subject—the groceries code adjudicator, in this case—if that question was not reached when we were questioning the Minister of State, Department for Environment, Food and Rural Affairs, the right hon. Member for South East Cambridgeshire? Will you advise the Secretary of State appropriately? 

The Chair:  I did advise everyone at the start that we had a lot of questions. We got through three quarters of them, and with a little brevity, we might have got through all the questions listed. I had no idea what intervention the hon. Member for Cardiff North was going to make, but the Secretary of State has dealt with it. I say again that we can return to the matter later in the day if further clarification is required. 

Mrs Gillan:  I do not think that there is a groceries adjudicator; I do not think I said that. I think it was a slip of the tongue by my hon. Friend the Member for Cardiff North. I have read the background, overview and explanatory notes to the draft Groceries Code Adjudicator Bill. The commission had produced a supermarket code of practice, but it became clear that more could be done. It is this Government who are taking action on the issue, as I think everyone would agree. 

A wide range of issues that impact on the agricultural sector involve both the Government here and the Welsh Government. I am committed to working with the Welsh Government to ensure that our agricultural industry and rural communities have the right conditions for growth and share in the prosperity that we must create for the whole of Wales. I shall be interested to listen to the contributions of all hon. Members to the debate; I hope that the contributions will inform my ministerial colleagues, me and the wider community on how we can improve the situation for our agricultural community. 

10.27 am 

Mr Hain:  I thank the Secretary of State for facilitating the debate. She mentioned the previous time we discussed agriculture. From memory, I think that that meeting was in Carmarthen, and we had massed ranks of farmers outside, whom the then Secretary of State, Ron Davies, addressed. They were seeking liberation from 18 years of miserable Conservative policies on agriculture and rural affairs. 

While I welcome this Welsh Grand Committee on rural issues and the Welsh countryside, agriculture and rural affairs are largely devolved to the Welsh Assembly. Notwithstanding the Clerk of the Committee’s helpful delineation on the Order Paper of what is in order, I wondered about the Government’s motives in calling the debate, not least because the Secretary of State has lost no opportunity to bash the First Minister and the Welsh Government. I am glad that she has been on better behaviour today; she has not indulged in that unfriendly sport. 

The Chair:  Order. Just to be clear, the delineation of the question is on the Order Paper; however, it is not the Clerk who makes clear to you the delineation of the question, but me in the Chair, thank you very much. 

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Mr Hain:  Mr Havard, I gratefully accept that telling off and correction by your good self. 

There are pressing issues to do with the wider rural economy, including the lack of growth and jobs, the threats to rural post offices, and the rising prices of food and fuel. The Secretary of State referred in passing to action taken by the Government on fuel, but she did not mention the massive hike in VAT, which put up fuel prices hugely for rural residents, particularly farmers, and for which she should apologise. 

Jonathan Edwards:  On two occasions since the general election, the Labour party has had the opportunity to support Plaid Cymru and Scottish National party motions to reduce VAT temporarily. Why did it abstain on both occasions? 

Mr Hain:  As the hon. Gentleman knows, we do not take any Plaid Cymru motions seriously. That said, the role of farming and food is crucial in stimulating the economic recovery. As the shadow Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Wakefield (Mary Creagh), noted at the Oxford farming conference recently, agriculture and the food supply chain are important to food production and food security, as we face the long-term challenges of climate change, population growth, and increasing demands on our water and land resources. The success of Welsh farming and food is also vital to re-establishing economic growth—something that is worryingly absent from the Government’s strategy. 

I am pleased that my right hon. Friend the First Minister, Carwyn Jones, has, in contrast to the UK Government, recognised the economic importance of the food and farming sectors by moving responsibility for rural affairs to the Welsh Government’s Department for Business, Enterprise, Technology and Science. One of the defining political issues of this century, as the Welsh Government recognise, is food. Food security is on the agenda as never before—globally—and it could be a source of conflict, along with water shortages, across the world in future. 

Employment in the manufacture of food and beverage products in Wales in 2010 was 19,500. That represents 15.4% of total employment in manufacturing in Wales—a significant number. Wales accounts for 5.5% of total UK employment in the manufacture of food products. We are home to fantastic brands such as Rachel’s Organic and Edwards of Conwy. I pay tribute to Patchwork of Ruthin, makers of some of the best pâté you will ever taste; it is now stocked in Harrods. [Laughter.] May I say that I do not know that personally? I do not recall shopping in Harrods. I think that that is more a shopping habit of the Secretary of State, with her lavish lifestyle. 

Halen Môn, in the constituency of my hon. Friend the Member for Ynys Môn, produces the finest sea salt, apparently enjoyed by President Obama—what good taste he has. I hope that it will allow him to rub salt in the wounds of his right-wing Republican opponents in the coming presidential elections. What with award-winning produce from the Black Mountains Smokery, washed down with Gwynt y Ddraig cider from Pontypridd, and Claws Shellfish in Pembrokeshire, finished off with some Gorwydd cheese from Trethowan’s, Wales is not just the land of song, but the land of the finest food. That is around 7% gross value added to the UK economy, with 55,000 people employed. 

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That is why we should applaud the Labour Welsh Government’s focus on food and fisheries. Their food strategy, “Food for Wales, Food from Wales”, aims to support the sector, so that it grows still further in a sustainable and profitable manner, including by: providing business support and grant assistance to Welsh companies in the sector; improving Welsh food sector supply chains; encouraging public sector procurement of Welsh food and drink; supporting food festivals in Wales; driving the “Wales the True Taste” brand; and organising and hosting the annual “Wales the True Taste” food and drink awards. 

Mrs Gillan:  As I have not yet had breakfast, my taste buds have been tempted by the right hon. Gentleman’s long list. I cannot let him finish this part of his speech without reminding people that we have some fantastic Welsh vineyards as well. I do not know whether he has been to the Ancre Hill vineyard in Monmouth, which I visited recently and which has award-winning wines. I want people to have the full range of products in mind when they think of food and drink coming from Wales. 

Mr Hain:  I completely agree with the Secretary of State. When she is on her next shopping trip to Harrods, I hope that she will check whether those wines are stocked there. 

Mrs Gillan:  It has been decades since I have been into Harrods, let alone shopped there. I will learn about it from the right hon. Gentleman, who can tell me about his shopping trips there. 

Mr Hain:  Methinks the right hon. Lady squirms too much. 

My hon. Friend the Member for Ogmore has reminded me that we have fantastic, world-class whisky in Penderyn in the constituency of my right hon. Friend the Member for Cynon Valley. 

All this has to be seen against the background of coalition policies in the United Kingdom that set a gloomy and desperately difficult economic situation for farmers and rural communities. Labour’s five-point plan for jobs and growth wants investment in food and farming in Wales and the wider rural economy. Such investment would support skills and apprenticeships, help rural businesses access bank finance, bring forward investment in critical infrastructure such as rural broadband—an issue raised this morning—and create access to new markets. 

We want a fair and competitive supply chain for growers, processors and retailers, which is why, when Labour was in government, we secured cross-party agreement on the need for a groceries code adjudicator to ensure a fair deal for farmers and producers. We, together with consumer organisations and farmers, are desperately worried by the Government’s procrastination and delays, which mean the adjudicator will probably not be up and running until 2014-15—the eve of the next general election. We, like others, including the National Farmers Union and the Farmers Union of Wales, are worried that the adjudicator will be a toothless beast that scares no one and delivers no justice for farmers and consumers—all mouth and no trousers, as the saying goes. 

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It is not good enough just to talk about buying local produce; the UK Government need to practice what they preach. They spend £2 billion a year on food, and are well placed to support Welsh farmers and food standards through procurement, yet the latest figures from the Department for Environment, Food and Rural Affairs show that the Department bought less than a third of its food from British sources in 2011, which is an outrage. 

David T. C. Davies (Monmouth) (Con):  I wonder whether the right hon. Gentleman believes that the UK Government should be willing to ignore European Union regulations on the purchase of food, and to tell the European Union that we will be governed not by it, but by the British Government; that would allow us, of course, to purchase more of our own food. 

Mr Hain:  I know the hon. Gentleman froths at the mouth at the opportunity to talk about Europe, as do his colleagues, but the truth is that this has nothing to do with European regulation; it is about supporting local farmers and local food producers. 

Is the amount of local food bought by DEFRA as little as 18%, a figure cited by the Secretary of State for Environment, Food and Rural Affairs at the Dispatch Box within the past two weeks? She has since had to clarify that figure. [ Interruption. ] The Minister of State, Department for Environment, Food and Rural Affairs, mutters from a sedentary position that it is not, so perhaps the Secretary of State for Environment, Food and Rural Affairs will clarify that figure. The Cabinet Minister representing the lead Department on procurement, supposedly fighting the good fight for fairness in Wales and the UK, does not even know what her Department is doing, other than doing pitifully poorly on buying Welsh and other British food. No. 10, the shop window of diplomacy to the wider world, could not even reveal, when an hon. Friend of mine asked, how much British, let alone Welsh, produce it uses. That is simply not good enough. 

Although we welcome the food export strategy announced by DEFRA last week, we ask the Government to lead by example and do more to support Welsh and British produce in their kitchens, canteens and ministerial lunch boxes. 

Simon Hart (Carmarthen West and South Pembrokeshire) (Con):  I understand the right hon. Gentleman’s frustration at not knowing about the Government’s procurement, but could he tell us about the Wales Office’s procurement when he was Secretary of State? 

Mr Hain:  We tried to encourage local procurement at every opportunity. The matter has become increasingly urgent for farmers across Wales due to the desperate economic situation that they face because of the policies being pursued by the hon. Gentleman’s Government. 

Huw Irranca-Davies:  It is a well-trodden maxim that people can only succeed at what they measure. Does my right hon. Friend agree that it is a good idea to have consistency across Whitehall on sourcing, not only to GB standards, but from GB suppliers? At the moment,

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No. 10 cannot even tell us what its sources are; nor can the Cabinet Office or any other Department. At least if we know what we are measuring, we can hold Whitehall to account. That should have cross-party support. 

Mr Hain:  I agree with my hon. Friend. He puts the point eloquently and forcefully. 

The abolition of non-enriched battery cages in the EU was, in large part, down to the push from UK consumers who were concerned about the welfare standards of hens. It is a credit to our egg farmers that they have invested millions in the change. It is only right that they should reap the rewards, especially when other EU countries have failed to invest and are still housing hens in old-style, non-enriched, battery cages. 

Despite promising repeatedly before and after the general election to legislate for a UK ban on non-enriched eggs, the Minister with responsibility for farming says that that is now not possible, disappointing farmers and consumers alike. The best he can offer is border checks on eggs as they enter the country. Knowing this Government’s dismal record on waving people through immigration checks, the Welsh public and farmers are right to be suspicious of the effectiveness of border checks on eggs. That is why my hon. Friend the Member for Ogmore, the shadow Farming Minister, is supporting egg producers and the food manufacturing industry in identifying the good eggs and bad eggs in the industry. [ Laughter. ] I am just trying to cheer you up, Mr Havard. 

Along with the Farmers Union of Wales, we are extremely disappointed with the Government’s decision to abolish the Agricultural Wages Board. I hope that the Secretary of State and the Minister of State, Department for Environment, Food and Rural Affairs, who has helpfully stayed on after questions, for which I thank him— 

Albert Owen:  He is a good egg. 

Mr Hain:  I would not go that far; my hon. Friend is far more generous than I am. I hope that the Secretary of State and the Minister will take notice of the passionate arguments made by my hon. Friends about the need to retain the board. Abolition will take millions from the sick pay and holiday pay of low-paid agricultural and horticultural workers in Wales over the next 10 years. 

Nick Smith:  Working on a farm can be hard and dangerous. Without the Agricultural Wages Board, sick pay for a grade 1 worker will fall from £180 a week to a statutory minimum of just £81.60. Does he agree that that is a staggering fall in income for those too ill to work? 

Mr Hain:  I think it is shameful, and I am grateful to my hon. Friend for drawing that to the Committee’s attention. I hope that the Secretary of State will champion the rights of farm workers in that predicament. 

If the Agricultural Wages Board is abolished, it has been estimated that as much as £9 million annually will be taken out of the rural economy in the UK. According to my simple calculations, that is taking around £450,000 a year out of the Welsh rural economy. Does the Secretary

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of State care to contradict the £450,000 figure, and will she perhaps give her own? Will she write to me on that matter? 

Mrs Gillan:  I look forward to receiving a letter from the shadow Secretary of State with all his calculations in it, and how they have been arrived at, and then I will certainly write to him. 

Mr Hain:  I have already made the request; I do not intend to write to her as well. I expect a letter in response, in terms of the conduct of the Welsh Grand Committee. I look forward to that. 

Mr Hanson:  My right hon. Friend will know, because he has visited my constituency, that I represent a large number of farmers and a heavily rural area. Does it surprise him that not one farmer, constituent or business has written to me asking me to vote for the abolition of wages boards in the agricultural sector? 

Mr Hain:  It would not surprise me at all. We have the support of the rural community in wanting to retain the Agricultural Wages Board. When the Government set up consultations on whether bodies should be kept, they do so not just for fun; there is a motive: to try to get rid of them. It is absolutely iniquitous that they are considering going down this road; that, in common with their general attitude of having a free-for-all on deregulation, will leave farm workers in a desperate situation. 

Susan Elan Jones (Clwyd South) (Lab):  Does my right hon. Friend agree that all is perhaps not lost, and that the Government should go back and look at the coalition agreement? The Liberal Democrat spokesperson on DEFRA matters in the Lords, Lord Greaves, made it quite clear when the issue came up in the other place that it was not in the coalition agreement, so perhaps the Government have wrongly read the script. 

Mr Hain:  Wrongly reading the script is a regular occurrence for the Government on many rural policies, but it is an interesting point, and perhaps this right-wing Government’s Liberal Democrat fellow travellers will care to explain themselves. 

Sucking money out of the rural economy by abolishing the Agricultural Wages Board will leech expenditure out of the area where agricultural workers live. It will come out of pubs, post offices, local shops and farm businesses, depressing the rural economy at a time when spending in Wales is already squeezed, and causing even more job losses. 

Labour wants the common agricultural policy reform to encourage growth, a secure food supply, and environmental benefits for Wales. The farmers of Wales produce public goods as well as food, and CAP reform must recognise that. In the way they manage their land, the upland farmers of Plynlimon and Porth help with flood alleviation, biodiversity, and carbon abatement, and they protect our landscape and agricultural heritage while putting high-quality, affordable food on our plates.

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CAP reform must not undermine their ability to steward our countryside for future generations and feed the country. 

Let me ask the Secretary of State how the farmers of Wales will be protected from the cliff edge of the move from historical payments, as they are at a disadvantage compared to the farmers of England in that respect. What discussions has she had with the Secretary of State for Environment, Food and Rural Affairs on the matter, and what assurance has she been given that smaller Welsh family farmers in some of the most precious environments will not lose out in UK Ministers’ negotiations in the EU? I offer her the opportunity to intervene if she wants. How will the existing strong environmental schemes in Wales be protected under the CAP changes? It would be ludicrous if the new greening proposals undermined the work already in place, disadvantaging farmers and the natural environment. 

We also need to be alive to the challenge of food poverty in Wales. Last year, food prices here rose by 4.9%, which outstrips the food price rises in other OECD countries and far outstrips food price rises in Germany, France and Ireland. An average family of four can expect to spend another £5 a week at the till, or over £250 extra a year. That is on top of the rapid rise in fuel prices over the past couple of years, adding to the pressure on those hard-working families in the squeezed middle, who, including those in Welsh rural communities, are identified by my right hon. Friend the Leader of the Opposition, but ignored by the Prime Minister. The growth in food banks across the whole UK is testament not only to the generosity of others, but to the tragic growth of food poverty, as well as fuel poverty, under this callous Government. I know families in my constituency and across Wales are feeling the pinch in the supermarket every week. What are the Government doing to stop the big increases in food prices? 

Rural areas are especially reliant on the provision of affordable fuel. They need to warm their homes when off-grid, and to fill their tanks with petrol to get to work and hospital, and to maintain a social life. My hon. Friend the Member for Ynys Môn rightly asked why the Secretary of State did not see fit to trial the rural fuel duty rebate pilot scheme from this March in Wales, rather than in Scotland’s Inner and Outer Hebrides, the Northern Isles, the Isles of Scilly, and the islands in the Clyde only. Did the Secretary of State bother to argue for the schemes to be piloted in rural Wales, or did she miss the opportunity? Was she asleep at the wheel, so to speak? Perhaps she can go on the record and explain what she did. 

Largely because of this Government’s decisions, life is not easy for rural Wales. Labour is with the Welsh countryside in these tough times. Labour is with farmers and food producers, rural public services and the rural economy, the environment and the landscape we all love, and the people who try, despite the worst efforts of this Government, to maintain a living, thriving countryside and communities in Wales. 

10.50 am 

Mr Mark Williams (Ceredigion) (LD):  It is a pleasure to serve under your chairmanship, Mr Havard. I want to return to the subject, initially at least, of the question I posed earlier on the veterinary laboratories in Carmarthen

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and Aberystwyth. I thank the Minister of State for his answer and in particular his assurance about Saturday working under new arrangements, which is welcome. He said that 50% of samples served by those laboratories in Aberystwyth and Carmarthen were already dealt with by post and that those who would face a change would be those who currently benefit from the immediacy of the location. I understand that but he will appreciate that as a constituency Member my concern is with those farmers in Carmarthenshire, Pembrokeshire, Ceredigion and southern Gwynedd who are served by those laboratories as well. 

Roger Williams (Brecon and Radnorshire) (LD):  My hon. Friend makes an important point. Those facilities serve the whole of south Wales and Powys as well. It is of broader geographical significance than he implies. 

Mr Mark Williams:   That is an uncharacteristic note of criticism from my hon. Friend. He is right. Powys is an integral part of this picture too. The issue has perplexed the Environment, Food and Rural Affairs Committee and the Welsh Affairs Committee. The Minister of State has come to both those Committees and given evidence. It continues to worry those working at the sites and the wider agricultural community. The Welsh Affairs Committee has been to Carmarthen and met staff from both Carmarthen and Aberystwyth. It was an impressive experience. The dedication of the staff was unquestionable. The average length of service of the Carmarthen staff was 31 years. We heard about the parasitology work; the expertise developed in Aberystwyth makes it a real centre of excellence. But the real concern revolves around the practicalities of the new arrangements. 

The following questions were put to the Environment, Food and Rural Affairs Committee by members of staff at the Carmarthen meeting. How can another site such as Shrewsbury deliver a 24-hour turnaround time in the analysis of samples? How can there be a 24-hour turnaround time from the delivery of an infected carcase to the door of the facilities in Carmarthen? How can they proceed through the analysis, the diagnosis and the treatment within 24 hours? We heard that 43% of samples in the preceding two months were delivered to that Carmarthen site by hand. As I said in my question, both Carmarthen and Aberystwyth have built up extensive, encyclopaedic knowledge of their local areas, the farms, the risks and the potential solutions. 

Jonathan Edwards:  Does the hon. Gentleman agree that if there is to be a centralisation or rationalisation policy, surely it makes sense to centralise in the livestock-intensive areas? 

Mr Williams:  I am grateful to the hon. Gentleman. I will come on to that point later. I refer to the answer the Minister of State gave to the question posed by the hon. Member for Llanelli about spreading this work across the United Kingdom as a whole, including areas such as Carmarthenshire and Ceredigion, which are heavily livestock intensive. I also want to commend the impressive relationship between those scientists, the vets and the farming industry out there on the field. The fear is that if we lose those testing facilities—retain the post-mortem facilities, but close the laboratories—we will lose that expertise. We heard also, informally, what happened

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when the labs closed in Bangor. A third of the work transferred satisfactorily to Aberystwyth; a third of the work went off to Shrewsbury but, as a lady I was speaking to put it, a third of the work “disappeared”. That is particularly alarming. 

The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice):  May I tell the hon. Gentleman that part of the reason behind the changes is that the work is disappearing? The number of samples being tested across England and Wales has been in decline for many years. That is the genesis of the rationalisation. 

Mr Williams:  I am grateful to the Minister for that response. I pay tribute to his expertise in this field. I was to come next to motivation behind the move. A monetary saving? Yes, most certainly, I acknowledge that savings have to be made. It is also said to be an attempt to streamline the service to make it more efficient and responsive to the farms that those laboratories serve. That is the problem I have with this. What are the savings of shutting down laboratories, mothballing the labs, keeping the fabric of those buildings intact while we retain the post-mortem function? What are the savings, when there is talk of redeploying some staff elsewhere? 

The message came strongly from Carmarthen and Aberystwyth staff, who met the Select Committee, that savings could and should be made. Many have already been made: bigger Animal Health and Veterinary Laboratories Agency centres and headquarters, but retaining our labs and, critically, the surveillance functions, and continuing to work with the local veterinary service, not relying on it exclusively. 

As the hon. Member for Carmarthen East and Dinefwr just said, in such a hugely significant livestock area, what further guarantees can the Minister give us that, with hived-off laboratory functions, the post-mortem service will not eventually also cease? That is another fear of the Farmers’ Union of Wales revealed during questioning at the DEFRA Committee hearings. 

Mr Llwyd:  I agree fully with the hon. Gentleman’s sentiments and the case he makes. It is doubly unfortunate because Aberystwyth is a hub of very good agricultural science. He knows there has been a movement to set up a veterinary science department at the university. This measure will not help at all. Given the new problems coming virtually every year now—we have bluetongue and other things on the horizon—we need more of these facilities not fewer. 

Mr Williams:  I agree with the right hon. Gentleman, who is right to highlight the excellent pioneering work undertaken at the university and IBERS. There is an opportunity to build Aberystwyth as a critical hub in these matters. 

I welcome what the Minister said about the review by the advisory board looking into surveillance issues. However, I remain convinced that we must retain a laboratory presence in south-west and west Wales, given the scale of the livestock population, the distances involved, and the transport of carcases and samples not

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be dealt with by post. Concerns were raised in both Select Committees about the potential for decay in samples in transit. 

What are the contingency plans of AHVLA? Work was undertaken in Carmarthen at the time of foot and mouth disease, and there was expertise and scope for work on the previous Assembly Government’s TB-eradication programme. I am clear where we stand on that now, but there was scope and potential to develop further that Carmarthen site. Should such sites not be developed as centres to gather information about diseases, in other words surveillance centres? 

The Minister said that the advisory board is looking into surveillance issues. I question the timing of that. We are facing closures post-2013 in Aberystwyth and Carmarthen. How do those closures fit in with the opportunities hopefully afforded by the advisory group on surveillance? 

These are genuine concerns. I appreciate that we are talking about comparatively small numbers of people. I think the figure of 10 in Carmarthen has been mentioned, and maybe one or two jobs in Aberystwyth. However, they are key skilled jobs. There may be some redeployment opportunities elsewhere, or there may not. I am concerned that Wales will lose its last laboratories and their associated expertise. 

Mr Paice:  I want to pick my hon. Friend up on that, because I know he will not want to say something that might unnecessarily give cause for concern. He referred to foot and mouth, and I have to emphasise that all testing for exotic diseases is done at the Institute for Animal Health at Pirbright. The proposals do not affect the current process for dealing with serious notifiable exotic disease. 

Mr Williams:  I stand corrected, and I thank the right hon. Gentleman for that point. The critical point, which I want to make again, is that we need to retain this expertise. This is by no means a scaremongering exercise; it is about retaining a facility and expertise in Wales for the benefit of the UK as a whole. 

Nia Griffith (Llanelli) (Lab):  Does the hon. Gentleman remember that, on our visit to the laboratory, we looked down a microscope and saw some rather virulent E. coli bugs? 

Mr Williams:  Indeed. That made as great an impression on me as it did on the hon. Lady. I hesitate to say this, but the thing that impressed us most about that visit was that the carcase was dealt with immediately upon arrival, with the appropriate tests being undertaken on the site. The farmer could then have some reassurance, and the appropriate action could be taken. 

The second matter I want to address is the Food Standards Agency proposal to transfer the cost of meat inspections to the industry. That has been a cause of concern for some of my constituents. I appreciate that implementation may be some way off, given that the Government have announced that the current arrangements will remain in place for six months from April 2012. However, if the proposals go ahead, the cost to farmers

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and slaughterhouses could be about £25 million a year, and the impact will hit small and medium-sized slaughterhouses the most. 

Smaller, more local slaughterhouses play an important role in the farming community. To put that in context, small and medium-sized slaughterhouses are responsible for slaughtering more than 50% of cattle, 70% of sheep, 25% of pigs and 40% of poultry. The closure of smaller slaughterhouses would mean the loss of an invaluable local service in rural communities such as mine, as well as threatening jobs—again, it would not be many, but I would hazard a guess that they are key jobs in the local community. 

Such closures would also undermine much of what has been achieved in local food production over the past few years. Produce would have a higher carbon footprint and lose its local aspect, which attracts many consumers to it. I will resist the temptation to reel off a list of Ceredigion food producers, but I would commend to Members Gorwydd Caerphilly, Teifi cheese and Toloja cider. There are all sorts of products at the Aberystwyth farmers’ market, which is held twice a month. Farmers’ markets have been a huge success. [ Interruption. ] It is on a Saturday, at 10 o’clock—I will see the right hon. Member for Dwyfor Meirionnydd there. 

Farmers’ markets are commendable. We have had huge success. We have talked about tourism, and there is immense potential for food tourism across our constituencies. Local farmers’ markets, local butchers, and the organic market have grown immensely over the years, but they will suffer as a result of the implications of the proposed policy. I therefore urge caution. 

We have heard about the challenges of the CAP. The Committee will hear more from my hon. Friend the Member for Brecon and Radnorshire about the impact of the changes on the industry post-2013, but I want to address a concern about the impact of the proposed payment entitlement scheme, which the FUW brought to my attention. The FUW is concerned that the EU’s abolition of the current payment entitlements held by farmers on 31 December 2013 and its creation of new entitlements based on areas declared on 15 May 2014 will create a reference year. Many farmers are trying to maximise the land they have before that point, and the effects have been noted by many people. There is real concern that the measures will lead to land barracking, which will jeopardise tenant and licensee farmers and create an interest in rental and land values, disrupting the industry as a whole. I concur with the FUW’s concerns that that could restrict and complicate matters, particularly for young people wanting to enter the industry. 

11.5 am 

Hywel Williams :   Agriculture and, particularly, the family farm are the backbone of Welsh rural life. Farming is not only a business to make money, but a way of life that, in much of rural Wales, has served to sustain other countryside businesses. One must remember that such businesses are part of a system in which one aspect is dependent on the other. The health of farming sustains the community and has also been vital in sustaining, preserving and developing our language and culture. Therefore, for many reasons, we need to sustain and develop a healthy, flourishing farming industry. 

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I hardly need repeat the genuine worries of many in our farming communities, because we have heard them for a long time, but the reason why they reappear is that such concerns are not assuaged and people are not convinced. Suffice it to say that farming in Wales is still in some danger, with an ageing work force, insufficient incomes and uncertain futures for new entrants. I am glad that Welsh farmers are a resilient and hard-working bunch—a group of people who will not give up easily—and I am proud that my party has consistently fought for better conditions for farmers and a brighter future for the industry. 

The majority of agricultural policy in Wales is rightly devolved, as has been noted. It has been handled exceptionally well in the near past—some would argue that it is perhaps not being handled quite so effectively now, but there we are. The most important issue facing Welsh agriculture is CAP reform. Within that, the Welsh national interest is sometimes—perhaps often—different from the British interest, and I listened carefully to earlier exchanges on that matter. We have an industry of small farmers and families who make their livelihood from the land, while in particular parts of England, farms are often far larger. They are almost agri-businesses, and their interests are different. 

Direct payments account for about 80% of farmers’ incomes in Wales. The annual direct payments to Welsh farmers of £280 million represent a huge amount of money going into rural or marginal areas. Such places are, to be frank, areas of poverty. This round of CAP reform therefore has great significance for the industry for the foreseeable future—over the next decade. As the Minister of State, Department for Environment, Food and Rural Affairs, said earlier—he conceded this, in fact—the Conservative party has long favoured cutting CAP payments and trusting to competition, which might favour large-scale farmers. However, such farmers are very much in the minority in Wales, which is one reason why Welsh interests and those in the UK might not always coincide. The Liberal Democrat 2010 manifesto also argued for changes to CAP structures, albeit without explaining precisely how they would benefit small farmers. 

Roger Williams  rose—  

Hywel Williams:  I thought that the hon. Gentleman might respond as I glanced his way. 

Roger Williams:  Rather than going back to an old manifesto, let me say that one of the proposals for the reform of the common agricultural policy is that 10% is allocated to a small farmers scheme, which I would have thought that the hon. Gentleman’s party would encourage. 

Hywel Williams:  We are very much in favour of supporting small farmers, and I look forward to hearing the hon. Gentleman’s speech later in the debate. 

Elin Jones, who was Plaid’s Welsh Assembly Minister for Rural Affairs, said that she was pleased that the European Commission was proposing to keep direct payments from 2014. When she was a Minister, she said that she was not persuaded by initial proposals for greening payments under pillar one and that she believed that all but the basic environmental requirements should be delivered by pillar two. She supported in principle

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the proposals of supporting only active farmers. On moving to an area basis from the current historical regime, she argued for a transitional period of at least five years, and I was greatly encouraged by what the Minister of State said about that. Elin Jones stated clearly that she thought it was important to retain the two-pillar structure for CAP, because it offers the basis for maintaining a competitive edge for Welsh farming more widely, as well as making a key contribution to socio-economic and environmental cohesion in rural Wales. 

The hon. Member for Ceredigion referred, quite rightly, to the concerns of the FUW and others about the change in 2013-14. I will not rehearse those arguments, but I agree entirely that there is a danger that a snapshot will be taken at a certain point and that that will encourage land banking and other practices that would damage the industry. I hope that the Government can reassure us that that is not likely and tell us what steps will be taken. 

The CAP has undergone substantial reform, especially in the past decade, following major reforms in 2003 and a health check in 2008. Some would say that farmers in Wales have been subject to more radical reform than those in some other parts of the EU through the full decoupling of direct payments from production. Many Welsh farming families see the Commission’s proposals as disappointing and perhaps a missed opportunity, given that we have been through such periods of change. The Commission’s proposals—as far as I understand them; they are quite complicated—are aimed at delivering what it calls 

“smart, sustainable and inclusive growth for European agriculture”. 

Who could gainsay that? 

We have a good industry in Wales. We produce the finest red meat and dairy products, as has already been suggested. I suppose that I should confess that I tasted many of those products at a recent FUW farm breakfast at Ty’n Hendre in Tal y Bont, outside Bangor—alas, as my waistline might testify. On a more serious point, last Friday I welcomed to my constituency two representatives of the embassy of Japan: Mr Daisuke Otsuka and Mr Sinichi Ishikawa. During the course of their visit, we dined on Welsh lamb, which they enjoyed enormously. They said that it was an interesting experience for them because lamb does not figure on menus in Japan to a great extent, as the usual options are pork or beef. Given that they enjoyed it and that there is clearly a gap in the market, I would like the Minister to reassure us that the UK Government are doing all they can to encourage the export of lamb to Japan. 

I think that the fact that we have collectively emphasised the quality of Welsh produce for a long time has paid off. However, there are continuing concerns about country-of-origin food labelling, particularly regarding its implementation and the possible penalties that might be incurred. Sadly, I did not get the chance, but I wanted to ask the Minister of State about the concerns that many people have about the inclusion of foreign-produced meat in products such as sausages, ready meals and pies. I would like his reassurance that that will be considered when the ombudsman is established. Single-country labels for meat should require that the animal was born, raised and slaughtered in the country in question, and I was glad to hear reassurance that that will be the case. We in Plaid also want the public sector to adopt a food

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procurement policy that favours local Welsh food so that public money is not spent on food that undermines the high standards that we have achieved in Wales— 

Mr Llwyd:  And that adds food miles. 

Hywel Williams:  As my right hon. Friend says, we do not want to increase food miles. 

There is a growing emphasis on the need to produce more food. Almost every day we read in the papers about the gap that is opening up between the number of people in the world and the amount of food available. The standard calorie requirement that is usually cited is, I think, 3,000 a day, although that might be something of an overestimate, but it is clear that a gap is opening up. Welsh farmers fear that the Commission’s proposals to take land out of production—the figure that I have seen is 7%—will make producing quality Welsh food even more difficult. Such land could be used productively while acknowledging the green agenda, so that needs to be considered. 

Farmers are key to securing our natural environment and often they do so just as a matter of good husbandry. They do that because they care for the land and, historically, they have looked after their farms for many generations. However, of course, they are also involved in a highly competitive business and there are constraints upon them. They are competing not just with businesses down the road, but with businesses all over Europe—and, in some cases, with businesses on the other side of the world. Welsh agriculture, and UK agriculture in general, are under particular pressure. 

I understand that the Commission proposed introducing a mandatory single payment scheme throughout Europe—the basic payment scheme. Payments in Wales are currently based on a historical payments rate, and a move to flat-rate, area-based payments is bound to result in substantial and unwelcome change. I understand that the Welsh Government say that only 17% of farmers will stay within 10% of their current entitlement. Some 48% will gain but 35% will lose out. In an industry that is clearly under pressure, that should worry us. 

As I said earlier, single farm payments account for about 80% of net farm incomes in Wales, so such a change will undoubtedly have profound effects on Welsh farming, with dairy farmers and intensive livestock producers being most badly affected. My hon. Friend the Member for Carmarthen East and Dinefwr hopes to address this point if he catches your eye, Mr Havard. 

We have pursued a two-pillar approach in Wales, with pillar one direct payments providing income supports for farmers because of market failure and pillar two measures being used to deliver green objectives. About 80% of Welsh land is classified as a less-favoured area, or an area with natural constraints, as that will be known from 2014. The worry is that if a small pot of money is spread over a large area, the scope for redressing the deficiency will be limited, thus putting farming in the less-favoured areas in an unsustainable position. 

We in Plaid argue that the interests of Welsh farming and British farming are not always congruent. We want Welsh farming to be represented directly and exclusively by a Welsh Minister. Given that that is not likely to

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happen immediately, it is vital in the meantime that the Welsh Government work closely with the UK Government to progress Welsh interests. 

Huw Irranca-Davies:  The hon. Gentleman makes a good point about the representation of Welsh interests. It is important that there is one voice for the UK in the UK delegation, but will he commend the work of the Deputy Minister for Agriculture, Food, Fisheries and European Programmes, Alun Davies, whom I understand—I am sure that the Minister can confirm or dispute this—is attending virtually every meeting in the European Agriculture Council and every Whitehall meeting? 

Mr Paice  indicated assent.  

Huw Irranca-Davies:  I note that the Minister is nodding. Mr Davies is a full-time presence who is engaging constructively with the UK Government. 

Hywel Williams:  Indeed, the Minister has pointed that out to me effectively—should I confess that I am on Twitter, or Trydar as we say in Welsh?—and has jumped on me from a great height on this point. Of course, it depends what Mr Davies is arguing for. It is not just a matter of turning up; that is one thing, but what he is arguing for is another—[Interruption.] Perhaps we had better not intrude into private grief. 

Mr Llwyd:  In this context, I think that I should mention that Mr Groucho Marx said that 90% of success is turning up. 

Hywel Williams:  In those terms, the current Welsh Agriculture Minister is extremely successful—the previous one was even more so. 

Roger Williams:  I pay tribute to the contribution of the Agriculture Minister in the Welsh Government on CAP reform. Does the hon. Member for Arfon agree that we have a little bit of doubt about the line that that Minister is taking on the electronic identification of sheep and the possible penalties, if that did not work as well as one would hope? 

Hywel Williams:  The hon. Gentleman makes a good point because that is a matter of concern. [ Interruption. ] Perhaps I should try to make some progress because I am sure that you will pull me up if I do not, Mr Havard. 

It is vital that Wales presents a consistent message on the issues that arise. We need to build alliances, not only in the UK but, I would argue, with areas across Europe—sub-states and Governments—that have similar concerns. I am sure that there is scope to do more. 

As I would have said if I had had the opportunity to put my oral question to the Minister, we in Plaid have campaigned for an ombudsman or groceries code adjudicator for a very long time. The ombudsman must ensure fair conduct in retail-supplier relationships in the food chain, and all political parties in Wales support that. I know that the Government are committed to setting up that body, but what is the timetable? What penalties will be available? Will the code be voluntary, as was suggested earlier, or will the body have real teeth?

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I doubt that the Welsh farming industry would be happy with just a continuation of the voluntary arrangements. 

Mr Paice:  I am slightly puzzled by the hon. Gentleman’s reference to voluntary arrangements. That is not the proposition at all. Will he clarify why he thinks that we have proposed voluntary arrangements? 

Hywel Williams:  I stand corrected. I thought that the Minister referred to a voluntary code of practice earlier. 

Mr Paice:  No. The code of practice is already in place, as the hon. Member for Ogmore said, and it is statutory. The purpose of the ombudsman—or adjudicator, as we will call him—is to enforce that code of practice, to receive and monitor complaints, which can be anonymous and from third parties, and to adjudicate on those complaints. He or she will then have the principal power of naming and shaming, but the Secretary of State will retain the option to introduce the power to issue fines, if it proves necessary. 

Hywel Williams:  I thank the Minister for that useful clarification. 

Albert Owen:  I am grateful to the Minister for clearing up what the draft legislation proposes. Is the hon. Member for Arfon as concerned as me that the adjudicator will not be able to be proactive and go looking for issues that have been brought to their attention? Somebody will have to go to them, and the fear of farmers and producers of going to the adjudicator for a finding will be a problem. We need to debate that, which is why we need the Bill before us in a final draft. 

Hywel Williams:  No doubt that matter will be debated, but the Minister makes the important point that there will be a facility to approach the adjudicator anonymously. 

I served on the Public Bill Committee that considered the Public Bodies Act 2011, and I was as disappointed

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by the outcome as other hon. Members, because the Act gives Ministers the power to abolish the Agricultural Wages Board through secondary legislation. I understand that a consultation is going on, but I was not encouraged by Ministers when we discussed that Bill because they refused all the reasonable arguments that Opposition Members made. Pertinent points were made about new entrants and training. I do not want an industry in which the workers are paid minimum wage. They should be rewarded properly for their skills, and I hope that that will be the case. 

Simon Hart:  Will the hon. Gentleman express Plaid Cymru’s view of the evidence from the National Farmers Union Cymru on the Agricultural Wages Board? Does he sympathise with it in any respect? 

Hywel Williams:  I have read the evidence. 

Simon Hart:  Do you agree with it? 

Hywel Williams:  Our view is that we want the Welsh Government—[ Interruption. ] I will try to explain, if I am allowed. We hope that the Welsh Government can maintain a form of an agricultural wages board for Wales for all the reasons that were so well rehearsed during our consideration of the 2011 Act, not least the value for small farmers. We could then ensure that there is an outcome that suits the particular nature of Welsh agriculture. 

The Chair:  I am afraid that our time is now exhausted. Under Standing Order No. 102(4), I allowed the Minister of State to participate in our proceedings, and I thank him for helping the Committee. 

11.25 am 

The Chair adjourned the Committee without Question put (Standing Order No. 88).  

Adjourned till this day at half-past Two o’clock.  

Prepared 9th February 2012