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Brexit: Food Prices and Availability (EUC Report) - Motion to Take Note

– in the House of Lords at 2:05 pm on 25th April 2019.

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Lord Teverson:

Moved by Lord Teverson

That this House takes note of the Report from the European Union Committee Brexit: food prices and availability (14th Report, HL Paper 129).

Photo of Lord Teverson Lord Teverson Chair, EU Energy and Environment Sub-Committee

My Lords, it is a great pleasure to introduce this report, which, like the previous one that was debated this afternoon, is a year old. For that reason, I am sure that we will bring the debate up to date. On the other hand, in a key way nothing has happened: we are still in the European Union, and the concerns, fears, expectations and hopes of this report when it was written a year ago are still to be proven or unproven. I hope that today’s debate may still contribute something, for when or if Britain leaves the European Union, on this important area of food. I emphasise, though, once again, like all my fellow EU Sub-Committee chairs, that the committee itself is completely neutral on Brexit or no Brexit: what we are attempting to do through these reports is to explore the issues in depth and to call Ministers and the Government to account, as we will today.

The report we are debating today is particularly important because food is not an issue that we necessarily debate in this House very regularly. Although food and Brexit, and the issues that are in the report, are very important, we Members of the House of Lords are able to go downstairs and have a two-course meal for probably a fiver. It does us good, it is very nutritious and there is probably no one around the Chamber, I suspect, who is challenged in terms of diet, consumption, being able to eat or food poverty. Yet today a report came out saying that we now have some 1,800 food banks in this country and that some 14 million meals over the last year were provided to those in fuel poverty—sorry, food poverty; I was speaking in the wrong debate there. What I want to emphasise during this debate is that while we as—dare I say?—typical Waitrose customers may not be too concerned about this area, it is a real challenge to a large number of families in this country. Food prices and food security really matter.

Let me give a little background. Why is food particularly important and why is it different in terms of the Brexit debate? First, unlike services and unlike many manufactures, food is perishable. If we do not deliver it, if we do not get it through borders, if we do not manage to get it through phytosanitary controls, the product is wasted. It is an important part of the food supply chain that is very time-determinate. The other area is that food is particularly important in terms of public health and biosecurity. Therefore we cannot just throw open our trade gates and ports, because there are serious issues around public health—as we saw with the tragedy of foot and mouth disease some decades ago—and all the challenges we have with biosecurity.

We import some 50% of our food, and 30% of all our food comes from other European Union countries. You have to add on to that, in terms of this debate, another estimated 11% that comes through the 50 trade deals and agreements that the EU has with some 56— sometimes reported as 60—other states. So altogether, 40% to 41% of the food consumed in this country comes through EU or EU-related treaties. For some 30 years our self-sufficiency—an area which sometimes receives particular political attention—has declined. That is not necessarily a very easy answer.

We have to remember that, unlike manufactures—certainly unlike services—the agricultural sector is still least affected by reductions in trade tariffs and the costs of trade. Barriers to agricultural produce, whether processed or raw, are still relatively high in world trade. As we know, the EU tariffs that we reflect at the moment in our joint customs regime are on average something like 22% on the cost of food coming in from non-EU areas—although developing countries of course have preferential terms in that area. It is worth saying that one of the biggest determinants of the change of food prices is the exchange rate. It was certainly true for the Minister when we held the inquiry that that was far more important than the Brexit issue. We must remember that the two are intricately related; a bad or difficult Brexit probably means a major impact on exchange rates as well.

I will go through a couple of scenarios that the committee considered as to what might happen with food prices. One is very optimistic: once we are a free trading nation, we will have complete control over our tariffs and could decide to completely reduce them to zero and open our agricultural markets to the rest of the world. In that scenario, food prices should come down quite substantially. That would of course have a major effect on the UK agricultural industry, but it might be seen by a Government at the time as a price worth paying. But we must remember that, under World Trade Organization rules and most favoured nation rules, if we reduce tariffs to zero for one area and do not have trade agreements with other nations, they all have to be reflected in precisely the same way. That is particularly concerning in terms of a no-deal exit from the European Union. We could reduce prices in that sort of situation, because there would probably be a glut of UK products that could no longer be exported to the EU because of its external tariff. So there is optimism on prices.

Alternatively, in a no-deal Brexit we will almost certainly have, not the frictionless trade we all want for the future but one that is very much the opposite—high paperwork, full controls on phytosanitary, documentation and new IT systems. In terms of the export and import of goods, it is estimated by the port of Dover that the difference could be from two minutes, as at the moment, for goods passing through on ro-ro to as much as 45 minutes under full documentation. Efficiency will go down, and that cost will ultimately have to be borne by consumers. A completely open and free trading nation could have world markets and increased food security, but, again, our domestic self-sufficiency will almost certainly go down. Again, we have a whole area of technical regulations and red tape barriers. As we now know, even more than a year ago, we have a situation where other free trade deals are probably far more difficult to implement than we had thought at the time.

I will look briefly at a no-deal scenario. Exchange rates will probably go adversely, which will cause prices to go up. There will be border checks and a tariff regime—although, as the Government since our report have published what those tariffs might be, it is interesting to see that there would still be substantial tariffs in a number of areas such as pigmeat, sheepmeat and similar products, and not so much in manufactures.

In the time that I have left, I will concentrate on labour and food security strategy. One of the consistent themes in the reports of my sub-committee is the real challenge of labour post Brexit, with or without a deal. This was mentioned in previous debates. Certainly, some 30% of the individuals engaged in the food processing industry, which is the largest manufacturing industry in this country, are non-UK EU nationals. In Cornwall, where I live, that proportion is significantly greater. Some 80% of the workers in the horticultural industry are seasonal, and 96% of them are from other EU countries. So there really is a challenge in delivering UK food in terms of both the supply chain and actual production and harvesting. We also looked a number of times at vets, who are overwhelmingly non-British EU citizens. There, too, there is a huge challenge.

I will return to the other development since this report was produced a year ago—immigration policy, and the potential £30,000 level of barrier to entry. Clearly these sectors will be hugely challenged by that. A year ago, the Minister was even against a seasonal workers scheme. I believe that now there is a change there, and I would be interested to hear from the Minister whether it is still the intention to change that.

Members of the committee felt very strongly that overall there was a need for a food security strategy. I would like to think that through listening to our report the Government have now undertaken to publish one post Brexit, but I would be interested to hear from the Minister where that is now.

I have one or two questions from the committee. First, we have already seen within the WTO the conflict around tariff rate quotas and splitting those between ourselves and the European Union, and the objections, particularly from southern hemisphere producers. I would be interested to hear where we are on that. On IT systems, the so-called CHIEF system had huge capacity issues in terms of future customs procedures, so can the Minister say where we are in terms of replacing the system or at least enabling it to cope with the huge amount of increased paperwork? On tariffs, I found it difficult to understand the Government’s proposal in terms of the Northern Ireland/Republic of Ireland border, where they said that there should be no tariffs. I do not understand how that cannot cause both large distortions in trade and indeed criminality —so I would like to understand that. It was almost a surprise to the committee that the former Minister, Sir George Eustice, said that to help trade through ports there would be no phytosanitary checks. If that is still the case, how long would that last for, and when will that national food strategy come out?

One of the things that came out strongly from our report is that the Minister at the time seemed a lot less concerned about food and its security and pricing than the committee and certainly our witnesses were. It is quite obvious that the frictionless trade in food and food products that all of us, including the Government, want, is impossible in the context of the red lines that the Government still have. I do not understand how those can be reconciled, and nor does the committee. Food will be the first casualty of Brexit, particularly if it is a no-deal Brexit. In addition, we have food poverty and real wages have not gone up in the UK since before the recession in 2008. For the lowest decile of the population, food now accounts for 33% of household expenditure, whereas for the top decile—which I suspect a number of us are in, although perhaps not myself—it is only 10%. That is a real challenge. I look forward to the Government taking this issue seriously for the future and to the answers that will be given by the Minister, as well as to the noble Earl’s maiden speech. I beg to move.

Photo of Lord Carrington Lord Carrington Crossbench 2:22 pm, 25th April 2019

My Lords, I declare my interests as a farmer, as set out in the register. I had hoped to speak after my noble friend Lord Devon so that I could already have bathed in his wisdom, but all I can do now is wish him luck. I welcome this debate on the report but regret that it comes nearly one year after publication. Much water has passed under the bridge, therefore while I welcome the report and agree with most of its recommendations and conclusions, I will now highlight what is relevant but missing.

Much has been written, both inside and outside Parliament, on the likely impact of Brexit on food prices and availability, but to me the one thing that is obvious is that until the scope and timing of Brexit is clear, all we can do is make informed guesses. With so much outside the control of this country—third-party status, negotiations with non-EU countries, non-tariff barriers, visa restrictions and much else—the most sensible approach is to identify those areas where we have control of the agenda and do not need the approval of third parties, and make sensible reforms forthwith.

In this respect I direct your Lordships’ attention to the fact that currently we produce 60% of our food, and with improvements in technology, good husbandry, capital investment and suchlike, we could increase this percentage, particularly in fruit and vegetables. However, one of the most important factors for our producers and consumers is that we have a comprehensive food strategy and an agreed agricultural policy that enables long-term decisions to be made with a degree of certainty that the rules will not change in the investment cycle. I therefore seek clarity from the Government on when this House will be able to consider the Agriculture Bill, which appears to have become stuck on Report in the other place since September of last year. Why are we waiting, when the finalisation of that Bill will provide the certainty that farmers require and enable sensible investment that should benefit both food prices and availability?

Many aspects of this important Bill need to be further discussed and hopefully amended, but it is firmly in our hands and does not require the approval of Brussels or anyone else. Briefly, the Bill sets out the transition from area-based subsidies to payments to farmers for public goods. Personally, I have no real objection to this change, as long as food production is classed as a public good. The policy will, I hope, improve our degraded soils and fragile wildlife, but I have a concern about the scant reference to the production of all-important food. This was certainly picked up in the other place, in particular by the honourable Member the SNP spokesperson Deidre Brock, who said:

“We have a Bill to regulate agriculture that is silent on the very essence of agriculture”.—[Official Report, Commons, 10/10/18; col. 171.]

As in all things, there has to be compromise, particularly when we are deciding between the balance of environmental benefits and food production. We also need to understand that currently subsidies account for between 50% and 80% of a farmer’s income. The farming industry is likely to be very financially vulnerable for some time while the necessary changes are made to its business models.

Bearing in mind that upland farming needs all the help it can get, whereas grade 1 land requires no area-based subsidy, people seem to forget that a huge proportion of farmland in this country is of pretty average quality and beauty, and its profitability has been highly dependent on the basic payment subsidy. With the steady withdrawal of this subsidy, many farmers of this land will be looking around for the best option available to guarantee that they get a steady and predictable income with as little risk as possible. The Government’s proposed new environmental land management system—ELMS—is likely to attract many, but potentially at the cost of lowering food production in this country. Growing crops will be inherently more risky because there will be no subsidy to fall back on in the event of some disaster related to commodity prices, climate events or disease.

We do not want to discourage sensible food production at a very uncertain time. People will say that the environment will benefit and the public will benefit from increased access, but we cannot eat the environment or graze ewes with lambs in a public playground. We need to study closely the clauses in the Agriculture Bill that cover the circumstances for intervention in agricultural markets and thereby provide farmers with a safety net to justify their taking additional risk rather than just harvesting subsidies. The intervention clauses are currently based on the existing common market organisation regulation—CMO—which now looks a little dated.

Surely we should be looking at other support mechanisms that are used around the world to support farmers in the event of the advent of factors outside their control. In this respect I urge the Government to look at insurance mechanisms, whereby farmers pay premiums to an insurance scheme supported by government. We could also look again at the cereals deficiency payments scheme that operated before we joined the EEC. Such schemes help to address the harmful effect of uncontrollable adverse events on producers, which is also of benefit to consumers, as it enables farmers to survive events that are out of their control and continue to produce, rather than going bust.

This is not the moment to go into the detail of the Agriculture Bill, but purely to make the point that we are wasting valuable time by not addressing domestic issues completely under our control that could have a significant impact on food production in this country. This would be a major contribution to the stabilisation of prices and availability of food.

Photo of Viscount Hanworth Viscount Hanworth Labour 2:30 pm, 25th April 2019

My Lords, the difficulty of discussing the effect of Brexit on food prices and availability is that we do not yet know what form Brexit will take, if indeed it materialises. Nevertheless, I shall talk about some of the worst things that could happen. At present, we do not even know whether there will be a transition period to allow some of the outstanding matters to be settled in advance of a definitive severance. Part of the reason for the lack of detailed planning has been the unwillingness of the European Union to negotiate trade policy and other matters in advance of a settled agreement.

Another part of the problem is the lack of detailed perspective that might have been available if the Government had embarked on meaningful exercises in forward planning. Our committee has been assured by the Minister that the problems that have concerned us will be largely overcome by rolling over existing arrangements. This presupposes a ready accommodation of post-Brexit Britain by the European Union.

However, leaving the EU without establishing a customs union would pose a severe impediment to the free movement of goods. Under the arrangements of the European Union, goods that have originated therein have had free passage to anywhere else in the Union without tariffs or other impediments. The European Union is surrounded by a tariff wall that protects its economic activities from competition that might undermine them. This allows member states to pursue their comparative advantages in industry, agriculture and services, while creating a benefit for all of them.

As we have been told, the UK produces 48% of the food that it consumes and the remainder is imported. The imports come preponderantly from the European Union, which provides 30% of what we consume. Another 11% comes from non-European Union countries under terms of trade negotiated by the European Union, which have guaranteed sanitary and phytosanitary standards and, where appropriate, standards of animal welfare. These guarantees have obviated the need for inspection at our borders.

The UK also exports a substantial proportion of its agricultural output and the products of its food and drink industry. The value of these exports is about half the value of the corresponding imports, and some 60% of the exports are sent to the European Union. In the event of a no-deal Brexit, or with the UK outside the EU customs union, all these exports will be subject to the tariffs that the EU must apply uniformly to countries that are not its members. Some of the tariffs would be so high as to threaten the survival of the relevant UK industries. The import tariffs that the European Union imposes on agricultural products are among the highest. For whole milk, there is a 70% ad valorem tariff; for beef, it is 56%; for lamb, it is 40%; and for poultry, it is 14%. These tariffs are testimony to an enduring purpose of the Union, which has been to protect its farmers. Their imposition on our farmers would devastate them.

If we were to be outside a European Union free trade area, we should inevitably be imposing tariffs on our import of foodstuffs. They would be needed to protect our agriculture against the competition from cheap imports. The World Trade Organization rules oblige the UK to treat imports from the European Union in the same way as it treats imports from any other country. To the extent that we are prepared to lower our tariff barriers to protect our consumers from price increases, we should be further imperilling the livelihoods of our farmers, who would already be suffering from the loss of their export markets.

It has been widely observed that rising food prices are bound to affect the poorest members of our society the most. If we were prepared to import cheap foodstuffs that do not fulfil the European standards of quality and, at the same time, to alleviate our own quality controls, our food exports would be disbarred from the EU market.

On 13 March, the Government issued a schedule of tariffs that would apply in the case of a no-deal Brexit. This gave industry and agriculture next to no time in which to absorb the details and formulate plans in response, if 29 March had indeed been the date of leaving the European Union. High tariffs were proposed for beef, sheepmeat, poultry, pigmeat, butter and some cheeses. These were aimed at protecting the producers whose exports will suffer from the aforementioned high European Union import tariffs. To the dismay of the National Farmers’ Union, protection was not extended to eggs, cereals, fruit or vegetables.

Given that there will be no tariff at the border between Northern Ireland and the Republic, one wonders how the regime could be maintained without creating severe distortions. Perhaps in replying, the Minister would care to deal with that point, as he has been asked to by the noble Lord, Lord Teverson.

One Cabinet Minister proposed in a television interview that the UK could grow more food to keep prices down. He asserted that if supermarkets bought more at home, British farmers would produce more, and if they bought more from abroad, it would damage French and other continental producers. He seemed to be suggesting that the latter would be a desirable outcome. The derision he encountered was because he had no idea of the timescale that would be required for the necessary adaptations by our farmers. Increasing food production takes time, and it would not be possible to increase production in time to meet the demands of Brexit. Nor was he taking sufficient account of the fact that the variety of food that we presently enjoy in this country comes from our willingness to import what we cannot grow. The prospect of reverting to cabbages and potatoes in winter and lettuces and cucumbers in summer will fill many consumers with dismay. At present, we can eat whatever we wish at any time of year.

Nevertheless, it is appropriate to consider matters of self-sufficiency in food and the security of its supply in the wider perspective of global trends in agriculture. The present abundance of food is a temporary benefit. It is likely that there will be severe global shortages within two decades. The threat of global starvation envisaged at the end of the Second World War was averted by a combination of fortunate circumstances. These included the mechanisation of agriculture, an ample provision of fertilisers, the advent of hybrid varieties of cereal crops and the availability of abundant supplies of water from irrigation. The resulting period of relative abundance came to be known as the Green Revolution. It is now at an end, and many of its gains are being reversed.

The problems of soil salination, which arise from the ill-advised use of irrigation in warm climates, have severely diminished the agricultural output in many regions, including the Indian Punjab, which has been described as the Asian bread-basket. The global warming we are experiencing has made inroads into the agriculture of tropical regions that are becoming deserts. The rise in sea levels, which is the consequence of the thermal expansion of water, threatens to inundate low-lying river deltas, where much of the agricultural output originates in the developing world. A one metre rise in sea level will eliminate 30% of those low-lying croplands.

Evidence of the precariousness of our supplies of agricultural produce and their susceptibility to untoward global events has already been demonstrated by the experience of 2008, when there was a spike in food prices. To the extent that we cannot rely on global supplies, we must become more self-reliant. We can do so most effectively in the context of integrated European agriculture. A hard Brexit will make this difficult, if not impossible, to achieve in the short term, and it is uncertain how much time is available to us to secure our food supplies in future.

Photo of The Earl of Devon The Earl of Devon Crossbench 2:39 pm, 25th April 2019

It is a sobering honour to follow the noble Viscount, who is such an eminent expert in the field of environmental science.

A predecessor of mine named Ordwulf, the Saxon Ealdorman of Devon, ordered bread, cream and jam for workers rebuilding Tavistock Abbey after the Viking raids of 997 AD. Earls of Devon have been purveying the Devon cream tea—cream first, I say to the noble Lord, Lord Teverson—ever since. It would be sad if our current European entanglements were to endanger that ancient farming food legacy, as it appears they might if the current EU-wide tariffs on clotted cream are abandoned. I am grateful for the work of the noble Lord, Lord Teverson, and the committee, as well as for its report, which forensically dissects the risks to our crucial farming and food industries in these uncertain times.

I am glad to offer a maiden speech on a topic close to my heart. As convention requires, I will introduce myself without controversy, although that may be challenging given that I am an old Etonian hereditary Peer and the youngest of four siblings. In my defence, I chose none of those characteristics. I did, however, choose to take this seat. I shall explain why and what I offer to this House.

Here, I suffer from a split personality as I am one of the youngest and yet one of the oldest Members of your Lordships’ House. As a youngster, I am father to Joscelyn and Jack, who have skipped school to be here today. I am husband to AJ, who has exchanged successful, sun-drenched California for damper Devon and the charms and challenges of a 700 year-old family-owned heritage and social enterprise centred on Powderham Castle. Those who have ridden the Great Western Railway beyond Exeter will have passed Powderham, and may have glimpsed its estuary-side marsh and farmland, which we have stewarded since the 1300s—an interest relevant to this debate. We principally farm venison and arable crops, while providing grazing for beef and sheep and foreshore for shellfish. We also host a food festival which celebrates Devon’s farming and food heritage.

Professionally, I am another lawyer, but I offer some distinguishing characteristics. I was called to the Chancery Bar before a chance meeting in another bar—in Las Vegas—caused my relocation to the US. I became a California litigator, specialising in technology and intellectual property disputes. I continued to work on IP and technology matters, and now practise in Exeter and London. As a youngster, therefore, I offer the House the services of a relatively tech-savvy father of a school-age American immigrant family and a dual-qualified lawyer who passionately runs a local heritage SME in his spare time.

Turning to my alter ego, I am the Earl of Devon. In that capacity, I am one of the older Members of your Lordships’ House, vying with Arundel, Shrewsbury and others for pre-eminence from the mists of medieval history. By repute, Empress Matilda first bestowed the earldom on Baldwin, who held Exeter Castle against the usurping King Stephen in one of England’s earliest European entanglements. Baldwin’s descendent, Hugh de Courtenay, was summoned to Parliament by Edward I in 1283. Your Lordships may recall that Parliament sat in Shrewsbury, not Westminster, that year—a regional precedent perhaps to be considered again when the Palace is being restored. Hugh was confirmed to the earldom in 1335. Since then, we have served almost every monarch while championing and defending the interests of Devon. That is the historic reason for my being here: simple public service, trying to do a job that is older than this venerable institution and for which many have lost their lives.

Indeed, far from occupying a comfortable hereditary seat for the past 700 years, we have actively engaged in this nation’s narrative. Some examples are pertinent to this debate. We fought at Crécy and Poitiers, becoming founding Knights of the Garter; our arms adorn St Stephen’s Hall as a result. A Courtenay cleric was Richard II’s Chancellor and Archbishop of Canterbury; his arms sit alongside the Throne in this House. His nephew was keeper of Henry V’s purse; he both financed and died on the Agincourt campaign and is buried beside Henry V in Westminster Abbey—a surprising grave-mate for our most heroic medieval king. The Wars of the Roses saw successive attainders and beheadings, but we backed both sides and survived; another Courtenay cleric thus officiated at Henry Tudor’s coronation. A Courtenay was Henry VIII’s champion at the Field of the Cloth of Gold, before losing his head to the Reformation. We provided six ships to fight the Armada and hosted William of Orange to dinner on his first night on English soil, welcoming the Glorious Revolution. We served King George and Queen Victoria alongside the Iron Duke from these red Benches, feasting on a diet of Corn Laws. My grandfather was one of the last on the beaches at Dunkirk; he took a bullet through his helmet in north Africa before devoting his life to defending his home from the ravages of time and the taxman, welcoming visitors for a Devon cream tea from 1959. He never made a maiden speech but my father did; he was the final hereditary Peer to do so by right in 1999.

If I can offer one consistent theme from this somewhat self-indulgent and appallingly patriarchal history, it is this nation’s ever-ambiguous relationship with mainland Europe. Here we are in yet another passionate Brexit debate but, as our family story shows, for a millennium this country has not settled its relationship with the continent, and I do not expect it ever will. We are blessed and cursed in equal measure by our geography. As an island nation, we simply cannot control the equivocal nature of our physical relationship with Europe. We will always question whether we are in or out. What we can control is how we live with that ambiguity. I fervently hope that we can cease the hatred and invective and end the interminable years of political bickering over Europe, allowing us to focus on what truly matters and what can really improve people’s lives. It is notable that while this mother of all Parliaments fiddles over Brexit, our country and our environment literally burn. We saw wildfires in north Yorkshire on the hottest Easter Monday ever recorded—Earth Day, ironically—and London has been ablaze with climate change protests.

Turning to the report, in response to the committee’s conclusion that tariffs will increase food prices in a no-deal Brexit, the Government repeat the tired refrain that food prices are much more subject to exchange rates, and global commodity and fuel prices, than tariffs. While there may be technical merit in that point, reference to escalating global commodity prices begs the obvious question of why, with climate change gathering momentum, we are devoting almost all of this nation’s political energy to an ancient and insoluble argument over Europe, rather than focusing efforts on a climate catastrophe the like of which we have not seen before.

To echo the noble Lord, Lord Teverson, on food prices, my old preschool teacher, Mrs Wooldridge, runs a local food bank in Newton Abbot. It is our charity of the year this year. It reports ever-increasing food insecurity. Can the Government explain to Mrs Wooldridge why lower-income families in the heart of Devon—such a farming and food Mecca—are struggling to feed themselves healthy and affordable food? What specific efforts will be made to avoid escalating food-bank dependency if we ever exit Europe?

On farming, I agree with the Minister that Brexit affords a rare opportunity to revitalise agriculture. We all know that agriculture sits at the heart of trade and our nation’s place in the global economy; the Woolsack reminds us of that every day, stuffed as it with our earliest tariffed export. I second the noble Lord, Lord Carrington. Can the Minister please let us know when we will see the Agriculture Bill and whether the Government will elevate the production of sustainable, local, affordable and healthy food to the top of the list of public goods that farmers are to deliver? Finally, on tariffs, please can the Minister explain the impact of a no-deal Brexit on the Devon cream tea, particularly the cream?

In conclusion, I thank all those who have enabled me to be here today: my family and the teams caring for Powderham and my practice; the remarkably able and patient staff of this House, including the doorkeepers and the security staff who risk their lives daily; and the many of your Lordships from all corners of this House who have been so welcoming and encouraging. I thank you all.

Photo of Lord Bilimoria Lord Bilimoria Crossbench 2:49 pm, 25th April 2019

My Lords, it is a huge privilege to follow my noble friend Lord Devon, who made an outstanding maiden speech. It demonstrated why he will make an outstanding contribution to this House. In his hustings speech to join the House of Lords—there is big competition to get in as a hereditary Peer—he said:

“I inherited the earldom of Devon upon the death of my father, Hugh, in August 2015. He was a Cross-Bench Peer, who enjoyed the distinction of being the last hereditary to take his seat by right in 1999. I sat on the steps of the Throne as he made his maiden speech in the debate on the future of the hereditary peerage. I was never prouder of him. He spoke of his duty and of how our family has championed Devon in this House for centuries”.

That sense of duty came across in my noble friend’s speech today, and I am sure his daughter—sitting on the steps of the Throne—will be equally proud of him as he was of his father.

My noble friend’s story is tremendous. I am wearing my Cambridge University Hawks’ Club tie in solidarity with him, a fellow Hawk, who played rugby for Cambridge; he was at St John’s. He went on a rugby tour to Las Vegas in America, where there was a chance meeting with a talented and famous actress, AJ Langer. The current Countess of Devon acted in several episodes of the popular 1990s show “Baywatch”. Today the two of them look after their family heritage, which my noble friend spoke so eloquently about. He will bring to bear his legal background as a barrister—he is dual-qualified, both here in the UK and in California in the United States—and the huge experience he has in IP, technology, arbitration and legislation, having won many famous cases. He has championed Devon, rural interests and the maritime economy. Yes, he is privileged to inherit an eight centuries-old castle, farm and land, but it is also a sustainable family SME. He will hope to be sensitive to the impact of legislation on small businesses. Most importantly, when he concluded his hustings speech, he said:

“As someone of no political affiliation, occupying a role created long before modern political parties, I will be determinedly independent”.

That came across in his wonderful maiden speech just now, on which we all congratulate him.

On the topic we are talking about, the Environment, Food and Rural Affairs Committee in the House of Commons released a very good report last year, Brexit: Trade in Food, which said:

The UK’s food and farming industry generates over £110 billion a year and employs one in eight people in the UK. Trade is vital to the industry. The EU is the UK’s single largest trading partner in agri-food products, accounting for 60% of exports and 70% of imports”.

It said very clearly, a year ago:

“Brexit will inevitably introduce friction to trading routes”.

It focused on the WTO option. It also highlighted the gross value added of the agri-food sector: agriculture and fishing was £11 billion; food and drink manufacturing, £31 billion; food and drink wholesaling, £12.6 billion; food and drink retailing, £30 billion; non-residential catering, £36 billion; and the total was £121 billion. It also listed employment in the agri-food sector: agriculture and fishing was 440,000 people; food and drink manufacturing, 420,000; food and drink wholesaling, 260,000; food and drink retailing, 1.1 million; non-residential catering, 1.8 million; total food sector, 3.6 million; and total agri-food sector, 4 million.

In 2017, exports of food, feed and drink were £22 billion, up 22%, yet we imported £46.2 billion-worth of food, feed and drink. The UK’s five largest export markets are Ireland, France, America, Germany and the Netherlands. Some 60% of UK food exports go to the EU and 70% of imports come from the EU. Seven of the UK’s top 10 export markets are EU member states, and Ireland is the UK’s largest export market. The UK imported more from Holland than from any other country—we have to note the Rotterdam effect—and the top nine countries from which the UK imported food, feed and drink in 2016 were EU members. The EU is absolutely crucial to this industry.

I congratulate the noble Lord, Lord Teverson, and his committee on its excellent report, Brexit: Food Prices and Availability, which was published a year ago. It makes many points that I will not repeat, but the most important is to put this in the context of our overall trade with the EU. Roughly 50% of our trade is with the EU: 44 to 45% of our exports and 55% of our imports. The report also makes the point that, on top of that, about 17% of our trade is through free trade agreements the EU has with other countries around the world—it categorically states that. Actually, therefore, two-thirds of our trade is through and with the European Union. The report then says that if no deal happens,

“Brexit is likely to result in an average tariff on food imports of 22%”.

It says that very clearly, then goes into great detail about the dangers and problems of rolling over the existing free trade agreements that the EU has with over 50 countries around the world. What is the reality? Maybe the Minister can confirm this. To my knowledge, agreements with only about six countries—including the Faroe Islands—are ready to roll over at the moment. It then talks about food standards and says:

“We heard no evidence that non-EU imports could increase significantly; 20% of the UK’s food already comes from outside the EU and there do not seem to be many other likely sources of supply”.

In a paper earlier this year, Food Politics and Policies in Post-Brexit Britain, Chatham House said:

“For almost half a century, the UK’s food system—comprising the totality of food production, transport, manufacturing, retailing and consumption—has been intrinsically and intricately linked to its membership of the European Community and, subsequently, the EU. Arguably, for no other sectors are the challenges and opportunities of Brexit as extensive as they are for UK food and agriculture. Reforming the UK’s food system won’t be easy”.

Import substitution will not be a practical reality. It went on:

“Currently, the UK operates on a ‘just in time’ food system, maintaining five to 10 days’ worth of groceries in the country (often less in the case of fresh produce). Once the UK is outside the EU, its food industry will need to factor in time for longer inspections of food imports at its borders, and build the necessary infrastructure to conduct these checks”.

Chatham House further said:

“The complexities of reforming post-Brexit food and agriculture sectors run deeper than economic and institutional entanglement. Price, safety, nutritional content and provenance of food are all deeply emotive among populations”.

The Institute for Fiscal Studies says:

“There is a great deal of uncertainty over what the nature of the UK’s post-Brexit trading arrangements will be. Decisions over post-Brexit membership of the single market and participation in the customs union will have profound effects on the price and import mix of the foods on UK supermarket shelves. It is also unclear whether sterling will depreciate further … as Brexit proceeds. These uncertainties over tariffs and the exchange rate mean that UK households are potentially going to be affected by considerable and unpredictable changes in food prices, with the poorest households”— this is a point the noble Lord, Lord Teverson, made—

“much more exposed to this risk than the richest households”.

The New York Times, in an excellent article earlier this month, asked:

“What would a no-deal Brexit look like? … Ports could be jammed … Food shortages could erupt … Manufacturing could halt … Medicine shortages could loom … British and EU citizens will be in limbo”.

This is not project fear any more. Three years ago you could arguably say that project fear was involved. Today this is more and more project reality.

The British Retail Consortium has said that food prices have reached their highest rate of inflation in almost six years. Its chief executive, Helen Dickinson, said:

“The bigger threat to food inflation remains the risks of a chaotic no-deal Brexit, which would lead to higher prices and less choice on the shelves”.

My own business supplies thousands of Indian and curry restaurants. An owner in Wales, Ana Miah, the managing director of the Juboraj group of restaurants in Cardiff, said that the value of the pound had increased the cost of food products from abroad and that he was concerned about the impact of no deal on the economy generally. It is affecting every part of the industry.

The impact on food banks has been mentioned in this debate. In Scotland the use of food banks hit a record high in 2018, soaring by 17% over the previous year, according to a report by the Trussell Trust. It said:

“Our benefits system is supposed to anchor any one of us from being swept into poverty but it’s not working for everybody that needs it. The government has a responsibility to prevent people from facing hunger. There must be additional protection and support in place to ensure people are not swept into poverty as Brexit unfolds”.

The chair of the Food and Drink Federation said that he is “absolutely terrified” of the possibility of a no-deal Brexit. Ian Wright warned of massive disruption in the industry. I could go on. It is not just one institution, authority or expert; it is one after the other.

To top it all, we had the leaked letter that the Daily Mail discovered, written by no less than Sir Mark Sedwill—the UK’s top civil servant—which warned of a 10% food price hike. Leaving the EU without any sort of trade deal and relying on WTO rules would also see a 10% spike in food prices, he said. This is from every quarter.

Parliament has categorically said that we will not tolerate a no-deal Brexit. Will the Minister confirm that a no-deal Brexit is not an option? As the 31 October deadline looms, we will not have no deal because we do not want no deal and will not agree to no deal. What will we do?

Jacob Rees-Mogg, basking in his fame, sent out a tweet saying:

“Cheaper food, clothing and footwear are all potential Brexit benefits”.

But what do the farmers say to that? One tweeted back:

“Disagree. I don’t think you can find substantially cheaper food (if you can, at what cost?) And then no-deal means you put barriers up to trade (non-tariff ) which means added cost to the food we import. That pushes up prices in my view. And that’s before you think currency”.

Another farmer, who milks 180 head of cattle in a dairy farm in South Wales, said:

“What about us? Do we suddenly not matter? Myself & my cows produce you #milk. We deal with over 100 local businesses. We maintain our beautiful landscape. And we tell our food & farming story in schools & events”.

This report shows categorically once again that we have a deal that Parliament has not agreed to. We have a backstop that will be essential. Northern Ireland is absolutely crucial. The whole Irish question was hardly talked about in the referendum and is now a major issue. The Irish border is the Achilles heel of Brexit.

We will come to 31 October, but before that we have council elections and EU elections; we have the Brexit Party and Change UK; and we may have a Conservative Party leadership election and a possible general election. I came back from India last week, where everyone said—whether government, business or citizen—“What is this great country of yours doing? Why don’t you sort yourselves out?” We can sort ourselves out very simply by putting it back to the people and having another referendum with today’s electorate, which will vote by over 60% to remain in the European Union. That is the best option for all, including for farmers and food.

Photo of Lord Palmer Lord Palmer Crossbench 3:02 pm, 25th April 2019

My Lords, I too welcome that, at long, long last, this report is being debated. It really is a scandal that, after all the hard work put in by members of the committee, they have had to wait nearly a year to have their report debated, especially as food prices change daily if not hourly. I add my congratulations to my noble friend on a really superb maiden speech. I remember well his father’s maiden speech and how proud he would have been today.

I have done several stints on what was Sub-Committee D and several under three very distinguished chairmen, although two are now on leave of absence. I well remember being chastised one Wednesday morning for missing a meeting. I got on to a train to visit my very ill mother and was taken aback by all the racegoers on my train. I am sure that the chairman thought I was skiving to go racing at Royal Ascot, which I was not. I never missed a Wednesday meeting again.

We went to Brussels several times—and Aberdeen and invaded the fish market—but my best memory of all was, after a very early start, we had the best breakfast I have ever had in the Fishmongers’ Hall having been to Billingsgate Market. We even had the chance to address the European Parliament—each of us for just 90 seconds. It was there that I met my childhood hero, Lord Plumb, who, had he not retired from the House, would have made a powerful contribution to this afternoon’s debate.

Forty years ago, 47% of the weekly wage went on food; today, it is in single figures. In other words, food is very cheap today. I have been involved in the food industry all my walking life and one of my earliest memories is helping my father to herd his pigs just after I learned to walk. I even have a photograph to prove it. We live in crazy times when water is more expensive than milk.

When I returned from working for my father in Belgium, I started working for my mother trying to run a small farm in one of the most beautiful parts of the Scottish Borders with fabulous views to the Cheviot hills in England. I took on 17 employees and was latterly farming a bigger acreage with just three men, all of whom were born and brought up at home and of whom I am immensely proud. I remember 25 years ago during lunchtime at harvest time, the telephone was seldom silent and being offered £165 a tonne for low-nitrogen malting barley. Oh to be offered that today, especially when one takes into account the huge increase in staff wages and in all inputs, not least of all the price of fuel.

I am fortunate to have known the Minister long before he was ennobled, and it is encouraging to know that he has at heart our countryside, which we farmers do our very best to look after for the public’s enjoyment, and long may we be able to try to do so.

Photo of Lord Rooker Lord Rooker Labour 3:06 pm, 25th April 2019

My Lords, this has been an incredibly interesting debate. I had better declare an interest first in being a member of the EU sub-committee. The only relevant interest that I have to declare is that I recently chaired an egg summit for the country’s largest retailer. This is only a guest appearance: my noble friend Lady Jones of Whitchurch cannot be present this afternoon and I said that I would be happy to fill in. There is no way that I intend to wind up, although the noble Earl, who is not now in his place—I do not complain about that—made a remarkable maiden speech. At one point, when he was giving us an incredible practical history lesson, I wrote, “Nothing has changed”. That is the way it seemed to me. But he raised an issue that I will come to in a moment in some detail and for that I am grateful.

On the complaints, the Minister should be able to answer the question about the Agriculture Bill delay. There is no good reason for it. There is also the Fisheries Bill. Everyone is mystified by the inability of his department to progress this matter in the other place.

I want to raise three issues. On the issue of tariffs, which is not unimportant, in relation to Northern Ireland and Ireland, the Government announced on 13 March that 87% of goods were tariff free and then said that they would not apply tariffs to Northern Ireland for goods coming from the Republic. But there was no explanation about how goods would be treated that came into Northern Ireland and to Great Britain that originated in the Republic of Ireland. This is not a clear-cut matter. It is not black and white. The milk in Bailey’s Irish Cream crosses the border four times during production, so this is a constant flow. It is an integrated system on the island of Ireland. How would goods going from Northern Ireland to Ireland be treated? Would they have to be covered by EU tariffs—yes or no? There is a massive lack of clarity on some basic issues relating to Ireland and Northern Ireland in respect of contact with Great Britain.

I do not think that Defra has had much of a grip on this. I realise that it is a small player. I am not complaining about the department. It is a small part of government and usually gets forgotten until the end of negotiations. People start to think about fishing almost last, and before the very last comes agriculture. All the great issues of state are dealt with and carved up, and the department gets short shrift at the end. But some clarity now about the situation between the north of Ireland and the Republic regarding the Government’s announcement about what they plan to do about tariffs would not be amiss.

I have two other issues to raise with the Minister. Both drop from the report, without going over the history of the fact that we have had to wait a year for it. The first concerns food prices. It has been raised by more than one noble Lord. There are arguments about what the effect would be on food prices and, like the report, I am not for one minute saying that the increase in tariffs would go straight through to the checkout. It would not. The 22% increase in the average tariff on food would not be anywhere like that. Indeed, senior members inside the Government have said it could be 10% on some products. Others have suggested that World Trade Organization trading would increase consumer prices for food by about 4%. In paragraph 9 of the Government’s response to this report the Minister is quoted. I have forgotten who it was; I think it was George Eustice, but I think the Secretary of State said the same thing:

The Minister set out in his appearance at the committee”, that World Trade Organization trading,

“is an extreme scenario … it shows that food prices might go up by about 4%. It is pretty marginal”.

That is the Minister’s attitude. Is it marginal for the poor, those on the lowest incomes?

Defra is a good publication ministry and it is always worth looking at Food Statistics in Your Pocket: Prices and Expenditure. The latest edition I have is dated 26 February this year. Under table 2.1 it states:

“A rise in food prices is more difficult for low income households to cope with because those on low incomes spend a greater proportion of their income on food—a rise in food prices has a disproportionately large impact on money available to spend elsewhere”.

Table 2.2 is very interesting. It shows that, on average, in 2017 households spent 10.6% of income on food. Households in the lowest 20% of equalised income spent 50% more. They spent 15.2% of income on food in 2017, so the relative affordability of food is definitely not good for the poorest. The table clearly shows that gap.

Table 2.3 shows that income after housing costs fell 10.7% between 2002-03 and 2016-17 for low-income households. The same table shows that over the same period food prices increased 4.3% in real terms, so for households with the lowest 20% of incomes, incomes fell by 10% over the same period as food prices went up by 4%. We already know that such households spent 50% more of their total income on food than the average, and the Minister says 4% is pretty marginal. That is a really “do not care” attitude as far as the poor are concerned.

I was going to use the Trussell Trust’s information for last year—2017-18—when it distributed 1,332,952 three- day emergency food supplies, which was a 13% increase on 2016. Today it has produced figures showing that last year it distributed 1.6 million food packs, a 19% increase on last year, so food prices are crucial for the low paid. As someone said, it probably does not bother many people in this House, but no one in government appears to care. Benefits are being cut, and universal credit is an absolute disaster, as I know from my work on the Secondary Legislation Scrutiny Committee, and nothing seems to be being done there. There is a major crisis here. Teachers are spending their salaries on buying food for children. The graphs are all going the wrong way. The income of the lowest paid is going down and food prices are going up. It does not matter whether it is 4% or 10%, I do not call it pretty marginal for that section of society. It would be really nice if the Minister, for whom I have tremendous respect, showed he cared about it. Of course, whether he can do anything about it is a different kettle of fish.

My second and final point involves the Minister. At one time, I kept a list of all the comments he had made about food standards and Brexit. He has hung himself out at the Dispatch Box on probably a dozen occasions in the past couple of years. I draw his attention to the Government’s response to this report. Paragraph 48 states:

“Any new products wishing to enter the UK market must comply with our rigorous legislation and standards—we will not compromise on animal welfare and food safety”.

The second sentence of paragraph 50 states:

“We have no reason to believe that other third countries”—

“other” because we will be a third country when we are out—

“cannot meet our high standards, and this will be a condition for any market access granted as part of future trade agreements”.

Incidents happen at Question Time. A very convoluted exchange at Oral Questions in this House on 19 March started with a Question from the noble Baroness, Lady McIntosh of Pickering. The Minister was questioned by my noble friend Lord Cunningham and one or two others in relation to tariffs that the Government have produced in relation to eggs. Because of the convoluted nature of the exchange and what looked like a contradiction, I tabled a Written Question to the Government, and the Minister answered it. I asked about the apparent contradiction in the announcement of farming tariffs and the operation of Council Regulation 5/2001 from December 2000 relating to marketing standards for eggs. When I came back to the House on Tuesday, I saw the Answer from the Minister on my desk. I have not tracked it down in the printed Hansard, but I have here the one with his signature on it, so it will do. It is House of Lords Question 14741. The Minister answered:

“The Government remains committed to high standards of animal welfare and food safety. In the event of no deal, existing UK import standards will still apply and the level of tariff applied does not change what can and cannot be imported. Furthermore, existing EU egg marketing standards will be retained in UK law once we leave the EU. Where the UK cannot sufficiently guarantee that imported eggs are equivalent to these Regulations, the eggs must be clearly labelled as not meeting the UK standard. This will provide the necessary clarity to enable consumers to make informed purchasing choices”.

Frankly, I think the Minister should start to regret ever signing that Answer because he has actually admitted that following Brexit the Government are prepared to allow food products into this country that do not meet our standards, and that they would be put on sale with a notice saying that they did not meet our standards. One thing is a cast-iron cert: they will be cheaper than home-produced products and people will buy on price. That is the point of the supermarket. When you are in the lowest 20%, you will buy on price. I do not understand how the Minister could have signed that Answer, which contradicts every statement he has ever made about us not allowing food into this country that does not meet our standards. What he has effectively said is that such food does not meet our standards or our regulations, but we will allow it in and we will label it saying it does not meet UK standards. I do not deny that it would not be on sale if it was not safe. I am not arguing the safety argument; I am arguing the standards argument because it contradicts everything he has ever said. How can a Government Minister at this stage in Brexit, with all the debates that we have had, knowingly sign off an Answer like that? It is bad enough that he was presented with the Answer in the first place, but he signed it off when he must know that it contradicts every speech he has ever made here about maintaining our standards. I look forward to his response when he has further advice.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs 3:19 pm, 25th April 2019

My Lords, I always think that it is very important to have further advice when something is technical. However, I open by declaring my farming interests as set out in the register.

I am of course most grateful to the noble Lord, Lord Teverson, and all the committee members for this Select Committee report on food prices and availability post EU exit. I do not think that the delay to this debate has diminished the quality of our considerations or the subject matter of the report, in that it has provided a long fuse and has helped the department.

I am particularly delighted that the noble Earl, Lord Devon, has chosen this debate to make his wide-ranging, powerful and historic maiden speech. I join your Lordships in very much looking forward to further contributions from him, when his experiences of rural Devon and beyond will be of much interest and value. I do not propose to engage in a discussion about Cornish and Devon cream interests, but I noted that exchange.

At the time of publication, the Government welcomed the report and the issues it raised, such as tariffs and animal welfare. A number of them have helped shape, and continue to help shape, the work of my department.

The report’s first recommendations refer to the need to negotiate new free trade agreements that allow the continuation of tariff-free imports of food from the EU and to roll over existing agreements. I say to the noble Lord, Lord Bilimoria, that we agree: the Government want us to leave the EU with a deal. Clearly, as most of your Lordships have understood, we have, as all individual departments have prudently done, prepared for any outcome, and that has involved considerable work with business and stakeholders. That is why the Government announced on 13 March a temporary tariff regime that would apply if the UK were to leave the EU without a deal—a point referred to by the noble Viscount, Lord Hanworth.

In developing that temporary—I emphasise, temporary—tariff regime, we were deeply mindful of the risk of increases to consumer food prices that the committee highlighted in its report. The noble Lord, Lord Rooker, and other noble Lords are absolutely right: food prices are of critical importance to us all but they have a dramatic impact on the most vulnerable in our country. The Government brought forward this regime for a no-deal scenario with the aim of mitigating any price increases that consumers might face from tariffs by setting tariffs to zero on 87% of total current imports by value. I say to the noble Lord, Lord Teverson, that that point, highlighted in the report, was immensely valuable. The report was published some time ago but this temporary tariff regime was designed, and will continue to be designed, to ensure that we look to the interests of the consumer.

A number of historically protected agricultural sectors—beef, sheepmeat, chicken and other poultry, pigmeat, milled rice, butter and some cheese products—would have their tariffs maintained under this temporary tariff regime. I say to the noble Earl, Lord Devon, that we have sought to find the right balance on the question of clotted cream, liberalising tariffs to maintain current supply chains and avoiding an increase in consumer prices. Cornish clotted cream will, however, continue to receive the protection of a geographical indication in the event of no deal, although I say in particular to the noble Lord, Lord Bilimoria, that we are all working for a deal.

I say to the noble Viscount, Lord Hanworth, that we have sought a policy that strikes the right balance. He referred to farming interests. As I said, we have sought the right balance between exposing sectors to an unreasonable level of disruption and liberalising tariffs to maintain the supply chains and avoid consumer price increases.

The question of Northern Ireland was raised and there are a number of considerations here. Diverting goods through Ireland solely to avoid tariffs would of course be unlawful. Although the vast majority of taxpayers are compliant, we recognise that there remains a minority who may well seek to breach the rules. HMRC remains committed to promoting compliance and tackling avoidance, and it will take steps to ensure that, should there be a temporary arrangement, this is not abused.

Regarding the questions raised by the noble Lord, Lord Rooker, I will look at Hansard because, given the time, I need to give a more detailed reply. However, in terms of Northern Ireland goods going to the Republic of Ireland, the UK Government would be able to take unilateral measures, although we could guarantee only those steps under the control of the UK Government. Although we do not wish this to happen, if at any point we are in a no-deal situation, we are committed to entering into urgent discussions with the European Commission and the Irish Government to agree jointly long-term measures to avoid the hard border—something that we must surely seek to do.

On the continuity of existing trade agreements, the committee also expressed concern about the potential impacts that failing to roll over EU free trade agreements could have on the price and availability of food in the UK. In the event of the UK leaving the EU with a deal, the EU has agreed to notify partners with which it has a free trade agreement that the UK should continue to be treated as though it were still a member state during the implementation period. Similarly, during the implementation period the UK would continue to apply the EU’s common external tariff, including the preferential tariffs and quotas applied to imports from the EU’s FTA partners. This would mean that imports of food from these countries would be able to continue on current terms.

I say to the noble Lord, Lord Bilimoria, that we have signed agreements with countries accounting for more than half of the UK’s total trade with EU FTA partners, and we continue to progress remaining outstanding agreements. Discussions with many other countries are at an advanced stage and we are still working to secure as many continuity FTAs as possible. We will of course inform Parliament and businesses as soon as we conclude agreements with partner countries. As the UK will charge no tariffs on imports of many goods, even where no free trade agreement is in place, the impact on UK food prices of not rolling over agreements will be smaller than it otherwise might be.

The noble Lord, Lord Teverson, asked about the WTO and the splitting of TRQs. WTO members which disagreed with the way that the TRQs had been split have had an opportunity to lodge their objections. There will now follow a formal process of negotiation with those countries.

On non-tariff barriers, the report covers the need for the frictionless import of food to continue. Defra is, and remains, actively engaged with the cross-government Border Delivery Group on the different activities. These include, for example, ensuring flows across the border of passengers and their pets, food, live animals, fish, animal products and endangered species, as well as the movement of parcels and freight. Working with the Border Delivery Group, our objectives for the border reflect the Government’s objectives in all scenarios—an efficient border facilitating food supply that protects the nation from biosecurity risks and enables our food and farming industry to flourish through trade internationally.

Upon the UK’s exit from the EU, for animal, animal product and high-risk food and feed imports no new border checks will be introduced except for certain goods that come from third countries and travel through the EU before they arrive in the UK. This is a continuation of the pre-EU exit arrangements, which we know manage disease risk effectively. I am glad that the noble Lord, Lord Teverson, raised biosecurity. As the Minister with responsibility for biosecurity, I would certainly not accept any diminution in our biosecurity standards.

To minimise disruption for users, allow the continued movement of goods and help maintain our biosecurity and food safety, Defra has developed a new system for imports: the import of products, animals, food and feed system—IPAFFS. This system is ready to be launched as required. In order to facilitate the continuous flow of trade at all UK ports, we have been working to ensure that the border is sufficiently resourced in any scenario. Defra officials have visited and maintained contact with all the major ports and airports. We have carried out detailed discussions with these ports and other stakeholders to ensure that they are prepared. Our preparations mean that we are confident that processes for dealing with imports of food will not impede the flow of goods through UK points of entry after exit.

The noble Lords, Lord Teverson and Lord Carrington, asked about the national food strategy. The Government are committed to publishing a national food strategy once we leave the EU. This work is still in a scoping stage and I cannot prejudge its focus, but we expect it to cover the entire food system from farm to fork.

The noble Lords, Lord Rooker and Lord Carrington, and the noble Earl, Lord Devon, asked about the Agriculture Bill. I am looking forward to debating the intricacies of that Bill with your Lordships. I hope that we will bring the Bill to your Lordships’ House as soon as possible. We certainly want this legislation. It will help our farming, horticultural and forestry sectors become more profitable, and help sustain our precious natural environment.

I was pleased that the noble Lord, Lord Teverson, raised the issue of self-sufficiency in today’s debate as well as in the report. This country is certainly capable of producing more of its own food. Indeed, the noble Lord, Lord Carrington raised this. Our country has a high level of food security built on a diverse range of sources including strong domestic production, where we are entirely self-sufficient in oats, barley, milk, sheep and lamb. I say to the noble Viscount, Lord Hanworth, that I cannot see any scenario in which we would seek no imports from any other country. We realise that we are not in a position to grow and rear certain products in this country which we know that British consumers want to continue to enjoy. The noble Earl, Lord Devon, also raised the issue of our domestic produce. I say categorically that we have the best agricultural and horticultural products in the world. We want to encourage our domestic producers to continue to produce high-quality homegrown food.

The noble Lord, Lord Carrington, raised another important point, about how we use science and put the latest scientific discoveries into practice. Historically, this country has been renowned for some of its agricultural innovation; that is why I am pleased that the Government committed £160 million to the five-year agri-tech strategy in 2013. We will also continue to support British food and agricultural innovation through the £90 million Transforming Food Production initiative. It is also important that we have committed to maintain the level of farm support until the end of this Parliament.

On the issue raised by the noble Lord, Lord Carrington, about the Agriculture Bill and productivity—self-sufficiency in particular—the Agriculture Bill contains specific provisions targeted at supporting farmers and growers to improve their productivity by helping them access new equipment and technology. Farmers will be able to benefit from the latest agricultural practices and techniques to aid in the production of food.

There is also the issue of food as a public good. Public goods are defined in economics as having specific characteristics in terms of the operation of the market. Food does not have these characteristics and is not a public good; it is a market good. It is bought and sold by producers and consumers, and consumers are able to make choices about the food they buy. As Defra Ministers have previously stated, we are giving serious thought to how we might address concern around food production and security when the Agriculture Bill progresses.

The noble Lord, Lord Teverson, raised the issue of sufficient labour. Defra has put in place a number of processes to ensure that seasonal employment numbers are not adversely affected. For example, up to 2,500 non- EEA workers will be able to come to the UK this year and next for seasonal employment in the edible horticultural sector under a new pilot scheme.

The noble Lords, Lord Rooker and Lord Teverson, and the noble Earl, Lord Devon, raised the subject of food prices. The truth is that prices are affected by weather, transport logistics, exchange rates and fuel prices. While of course the Government do not control these factors—indeed, noble Lords may recall, for instance, that just last week the press reported on the impact of last year’s weather on food prices—we work closely with industry to provide transparency for consumers. As I have already detailed, the Government are doing what they can to reduce non-tariff barriers, support our farmers and transition trade deals to control prices.

I am conscious of time, but turn to the question of standards. I will reiterate to the noble Lord, Lord Rooker, what I have said, although I might want to offer a more detailed reply on eggs—in fact, I have one here. Almost all our domestic egg production is from domestic egg producers. We think they are well placed to continue to meet that production. Existing EU egg marketing standards will be retained in UK law once we leave the EU. Where the UK cannot sufficiently guarantee that imported eggs in shell for consumption are equivalent to these regulations, these eggs must be clearly labelled as not meeting the UK standard. This will provide the necessary clarity to enable consumers to make informed purchasing choices. EU egg marketing standards relate to methods of production such as free range or barn; they do not relate to hygiene standards.

I will look at what I have said in my answer because I want to place on record that I do not make the point about standards lightly. It is precisely, and I am happy to say—

Photo of Lord Rooker Lord Rooker Labour

I would like to give the Minister an opportunity. It would be quite acceptable to me and, I am sure, the rest of the House if he withdrew that answer and gave a more considered one. One way or another, that answer makes it quite clear that unregulated food products that do not meet our regulations—once the doors open others will try it—will come into this country. That is something that we have said we will not put up with.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I am certainly prepared to engage in close scrutiny with officials to ensure that the words in my reply to the noble Lord are as I would require: that we are clear that we will not have trade arrangements with countries that would be contrary to our own requirements and standards. As I have said, all the EU legislation, through the work your Lordships did in the withdrawal Bill, will be coming on to our statute book when we leave. I am most grateful for the noble Lord’s generosity in taking me to task, perhaps, but giving me the opportunity of a reprieve.

I want to emphasise welfare and environmental standards, while allowing for the shortness of time. A number of noble Lords have mentioned climate change. It is absolutely clear that we need to multi-task. We are a country that has been recognised—I had at one time the climate change adaptation brief—as one of the most successful in terms of reduction of carbon among the G7, as a sophisticated economy. We have a very strong record on that. We need to build on it. I fully recognise that we need to ensure that we tackle these areas as well as the weighty matters of the Fisheries Bill, the Agriculture Bill and the forthcoming environment Bill. The environment Bill is clearly part of what we need to do, not only for the UK and our overseas territories but in terms of the contribution we make globally.

The noble Lords, Lord Palmer and Lord Rooker, raised the point that the average UK household spends 10.6% of its income on food. Again, I want to place on record that food banks are inspirational and deserve all the recognition they receive. That response from civil society and, often, from faith groups to support vulnerable people is one of the extraordinary elements of this country, where we do so much volunteering. With £95 billion a year being spent on welfare benefits, we have to get this right; that is a lot of money. We need to make sure that it gets to the right people, and fast. Wherever possible, we need to continue the work of the food banks. I find those figures impressive in one sense, but immensely worrying and depressing in another.

We have had a fascinating debate. I have gone over my time, but surely the subject matter was worthy of that. This is not a timed debate, so all I have to do is apologise to my excellent Whip. I am most grateful to the noble Lord, Lord Teverson, particularly for his patience and that of the committee, in that we are having what has been a very interesting debate—including an outstanding maiden speech—at a time when there is a lot more work to do. This report raises subjects that will be of continuing relevance and importance.

Photo of Lord Teverson Lord Teverson Chair, EU Energy and Environment Sub-Committee 3:41 pm, 25th April 2019

My Lords, I also congratulate the noble Earl, Lord Devon, on his speech. I give him one bit of advice: when you sum up the last debate on a Thursday in this House, you should be very brief—and I will be.

I thank all noble Lords for their varied contributions. I am now tempted to get into a debate about climate change, but we will not do that. I am pleased—I have every faith in what the Minister says about this—that the Government have now perhaps changed their message from the rather casual view on food prices and biosecurity demonstrated to the committee and mentioned by the noble Lord, Lord Rooker. That has also happened on the Labour side, with all the various difficulties there. I hope those will change.

I am a proud resident of Cornwall. I represented it in the European Parliament, together with Plymouth. However, my maternal family is from Devon. When I have a cream tea in my home near Tregony in the centre of Cornwall, I usually put the cream on the bottom and the jam on the top, but could the House keep that within these four walls?

Motion agreed.

House adjourned at 3.42 pm.