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Clause 78 - Power to establish boards

Natural Environment and Rural Communities Bill – in a Public Bill Committee at 11:15 am on 5th July 2005.

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Question proposed, That the clause stand part of the Bill.

Photo of Paddy Tipping Paddy Tipping Labour, Sherwood

This is an important part of the Bill, and it would be appropriate for the Minister to make some remarks and answer some questions on it. It is clear that the powers to reform agricultural and horticultural bodies and perhaps create new ones are wide ranging. They have the potential greatly to change the structure of the levy boards.

The idea is not new. It was telegraphed in the Haskins report and the Government announced their decision in March. I know some of the bodies involved. As the hon. Member for South-East Cambridgeshire said, many of them have been around for a long time. I simply say to the Minister that a change of this kind will not necessarily be easy. I have no objections to changes. Clause 78 and the following clauses set out the process, but it will be important to have a long period of consultation and work on it. Other clauses give powers to dispose and reallocate property, which will not be easy.

I ask the Minister to sketch out for the Committee and those who watch our proceedings the timetable that he has in mind. Later parts of the Bill—I hope that you will allow me to make these remarks now, Mr. Forth—spell out how the changes will be dealt with by way of secondary legislation through statutory instruments. I understand that the negative procedure will be used. Again, it is important that there is a long period of consultation so that Members of Parliament can have an opportunity to comment.

I do not underestimate the need to change, but neither do I underestimate the contentious nature of some of the issues. I would just like the Minister to   outline his thinking about the timetable, consultation and parliamentary procedures involved.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I agree with the remarks made by the hon. Member for Sherwood (Paddy Tipping). He has taken the opportunity to raise the issue under the first clause in this chapter of the Bill. A couple of amendments that I have tabled will be discussed in relation to clause 88, although they touch on the point that he has raised. Perhaps now is the right opportunity to discuss the general point, and I agree with him. I hope that the Minister will take the opportunity to discuss it.

What we have here, understandably, is the Government's desire to take the one legislative opportunity that they have in this parliamentary Session—and, being realistic, that they are likely to have for two or three years—to create the powers to deal with whatever comes out of the Radcliffe review of the existing levy boards. None of us knows what those conclusions will be. In the agricultural industry, there are a multitude of different views about the value of the British Potato Council, the Home-Grown Cereals Authority, the Horticultural Development Council, the Meat and Livestock Commission and the Milk Development Council. Given the MDC's report last September into supermarket margins, I suspect that some organisations would be quite happy to see the back of it. It was quite a major report to which—without wishing to digress—the Government perhaps have not made as strong a response as I would wish.

Those bodies exist. If people go out, as I do, and discuss the matter with farmers and farmers' organisations, they will realise that there are a multitude of views. We do not yet know what conclusions will come out of the inquiry. It may be proposed that some of the bodies remain in their current state, some may be merged and some may be abolished. There are many permutations. We do know that there will be a report. As an aside, I hope that that report to the Government will be published as a precursor to what follows. That is not the same as the Government's publishing their own proposals that they will make as a result of the report—the proposals to which the hon. Gentleman referred.

Clearly, there is the potential for a significant impact on the agricultural industry for the next—dare I say it, in light of the earlier discussion—20 years or perhaps more. I do not think that there is anybody who does not appreciate that, given the changes that farming faces—the advent of the single-farm payment, stewardship schemes and so on—farming itself must change. Through some form of statutory levy, these bodies are engaged in promoting their particular sectors of the industry, helping to market their products and improving standards. In principle, everybody understands those objectives. Farmers need to grasp that more clearly than perhaps many have in the past and they need to understand that, if they are to compete in a more globalised agricultural economy, the role of such bodies is important.

Whether the bodies should remain as statutory bodies or become voluntary, and whether they should remain levy-funded or should be funded by   subscription are issues that will be part of the current review. As I have said, I know that there are many different views. It would be helpful if the Government gave us an update on their plans in relation to the principle of dealing with these bodies and if they addressed how they see the sequence of events unfolding. I will not trespass on your indulgence by talking about my amendments, which I will deal with later, Mr. Forth, but it would be useful if the Government were to lay out how they see things happening, when they expect the report to arrive, when they expect to produce their proposals, and how long they expect to spend consulting the industry and everybody involved in the food sector.

There is also the vexed question of devolution. Some of the bodies have a cross-border role or there is an element of devolution within them. The Meat and Livestock Commission is an example of a body in which is an element of devolution. It would be useful if the Minister could explain how that devolved aspect relates to the inquiry and whether the agreement of the Welsh Assembly or, I think in one case, the Scottish Parliament would be necessary to any change, and how that will work. These bodies are constantly evolving. They need certainty. I hope, therefore, that the review will not take too long because people on these bodies—the chief executive of one of them is a constituent of mine—are anxious to move on and to know where the organisation is going. While there is uncertainty, those organisations cannot do that. As the hon. Member for Sherwood has rightly said, this would be a useful opportunity for the Minister to explain the Government's thinking on the powers that they are seeking to take in the chapter.

Photo of Roger Williams Roger Williams Opposition Whip (Commons)

I, too, would like to join the hon. Member for South-East Cambridgeshire in paying tribute to the members and the staff of those organisations who have played such an important, positive part in promoting British agriculture and food production.

Without straying too far from the clause, there will be huge changes in British agriculture in the next 10 years resulting from the mid-term review of the common agricultural policy. Some of the recent discussions about further reform of the CAP do not take into account the radical reform that has taken place in the past two years, where no money will be provided for farmers to promote production in the future. The support of agriculture will be entirely decoupled from commodity support.

A huge number of issues have been raised in relation to the review that is taking place and the report that will be made on future developments. I support a reform of the bodies in question, probably to bring them into a single body that will be given the duty of considering the whole of British agriculture and commodity support and production in this country. In coming to a decision on whether to have a body that is supported by the Government or industry—or both—either through a levy system or subscription system, account should be taken of the fact that there may be a huge reduction in agricultural production in this country. Farmers may consider the systems and ask themselves whether it is worth their   while being involved in food production, or whether they should use the land for some other purpose. This body, in looking for its financial base, should take that into consideration, and I wonder whether the Minister has considered that.

Under the system until now, bodies have been almost assured of a supply of money because agriculture has been regulated by quotas or by a subsidy system that encouraged production and investment in that production. That may no longer be the case in future. I am worried about food security as well, because this country has been awash with food from production here and supply from the world market. Reform of the CAP could lead to a huge reduction in food production in this country, and this body, or bodies that are set up in the future, will have to take account of that and come to some conclusions about it. I would be grateful if the Minister, among the other reflections he has committed himself to make, would reflect on those issues.

Photo of Jim Knight Jim Knight Parliamentary Under-Secretary (Rural Affairs, Landscape and Biodiversity), Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Rural Affairs, Landscape and Biodiversity)

I will start by explaining what the chapter does, then move on to the detail of the clause. The chapter gives the Secretary of State powers to establish new bodies for agriculture-related industries and to dissolve existing levy bodies, which are, as we have heard, the British Potato Council, the Home-Grown Cereals Authority, the Horticultural Development Council, the Meat and Livestock Commission and the Milk Development Council, and any new bodies created by the provisions. Those powers will provide the means for implementing the recommendations of the current review. The review is now under way and we believe that it will lead to significant benefits for all stakeholders. Indeed, the stakeholders have been positive about our carrying out of the review and the taking of powers to implement it here.

My hon. Friend the Member for Sherwood raised important questions about the timetable and consultation. On the timetable, we expect the report to be published by the end of the year. Indeed, there is a scenario whereby publication of the report may coincide with the Bill going through the Lords. That would give their lordships an opportunity to examine the section in that context, but I cannot guarantee that.

We are certainly committed to publishing the report. I give my hon. Friend that reassurance as well. We will publish our response as soon as possible thereafter. The time that it takes us to publish our response depends to some extent on what the proposals are and the complexity of whatever the review says. We will then consult.

The Sub-Committee of the Select Committee on Environment, Food and Rural Affairs, which my hon. Friend ably chaired, raised some of those questions. I remind the Committee that the Sub-Committee was, in principle, content with the proposal that

''Ministers be given power to amend primary legislation relating to the levy bodies by way of secondary legislation.''

It noted that  

''It is not unprecedented for Ministers to take powers to create new public bodies by secondary legislation.''

It was rightly concerned that an additional degree of parliamentary scrutiny of orders should be made under this chapter. It is normal practice to include a draft order when consulting on affirmative statutory instruments. That would be done by the affirmative procedure. The Government are content to publish orders for scrutiny by the Committee and others as part of the normal 12-week consultation period when implementing any findings of the levy board's review. That is what we said in our response to the Environment, Food and Rural Affairs Committee.

The Bill represents an important and timely opportunity to put in place a general provision that will enable Ministers to implement the findings of the review. In referring to Ministers, I am talking about the appropriate authority to make an order. That is what is said in clause 78.

In that regard, I want to address the devolution point made by the hon. Member for South-East Cambridgeshire. Clause 87 defines the appropriate authority. In England, it is the Secretary of State, and in Wales, it is the National Assembly for Wales, and so on. We are trying to account for the devolution settlement by using the term ''appropriate authority'' and defining it later in the Bill. There will be a specific obligation in the terms of reference to take account of the priorities of Ministers in the different parts of the United Kingdom. We fully recognise the devolutionary imperatives. Clause 97, on commencement, reflects the need for flexibility in how and when the powers are used in practice.

As I said, the review will not report until the autumn. A more specific legislative proposal would inevitably pre-empt the review's findings, but not to make a proposal now risks the Government having no legal means of implementing the recommendations of the review once concluded. We are keen that the benefits should be realised as soon as possible.

The hon. Member for Brecon and Radnorshire made a good point about the way in which farming is changing and about levies in particular. In time, there may be a need for a levy body for non-food crops. That is certainly within the scope of the flexibility that we are giving in the powers, and it may be something that will emerge in future.

So clause 78 is the key clause in chapter 2. It enables the Secretary of State to establish a levy board for a defined purpose, but is limited by clause 79 to an affirmative resolution order. The clause allows functions set out by clause 80 to be assigned to a new body and provides for its constitution as set out in schedule 8.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs) 11:30 am, 5th July 2005

I want to pick the Minister up on his point about non-food crops. His last reference was to clause 80, which defines the permissible functions of the boards. I seek clarification as to whether setting up something for a completely new type of non-food crop is in the embrace of those provisions or whether they are concerned purely with setting up new bodies to   carry out the functions of existing bodies, although perhaps under a new structure.

Photo of Jim Knight Jim Knight Parliamentary Under-Secretary (Rural Affairs, Landscape and Biodiversity), Department for Environment, Food and Rural Affairs, Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Rural Affairs, Landscape and Biodiversity)

That is an interesting point. My instinctive understanding is that the powers are wide enough and that the answer will probably depend on how we define agriculture. Yes; it appears that my instincts might be correct and that the definition of agriculture would allow for the establishment of a levy board in respect of non-food crops.

Photo of Roger Williams Roger Williams Opposition Whip (Commons)

I made some comments previously that might be construed as affecting my entry in the register, Mr. Forth. I should like to restate those interests.

Question put and agreed to.

Clause 78 ordered to stand part of the Bill.

Schedule 8 agreed to.

Clauses 79 and 80 ordered to stand part of the Bill.

Schedule 9 agreed to.

Clause 81 ordered to stand part of the Bill.

Schedule 10 agreed to.

Clauses 82 to 85 ordered to stand part of the Bill.