Wednesday 27 January 2010
[Dr. William McCrea in the Chair]
Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Tami.)
It is a pleasure to serve under your chairmanship, Dr. McCrea. It is good to see so many hon. Members join us for the first debate of the day, on the future of dairy farming in the UK. I know that a number of hon. Members want to make contributions, so I shall be as brief as I can and do a general skirt-through some of the issues.
The first Westminster Hall debate in my name, back in 2005, shortly after I was elected, was on this very issue. I am returning to it in the closing weeks of this Parliament because many of the challenges facing the dairy sector that prompted me to write to Mr. Speaker the first time round have not changed fundamentally. The industry still faces difficult and uncertain times. I accept that the picture is not entirely bleak and there are some positives to talk about, but dairy farmers across Britain and the EU have been through another horrible year.
The seriousness of the situation was recognised by a Welsh Assembly committee report on the future of dairy farming in Wales published shortly before Christmas. The European Union has also recognised the particular difficulties facing the dairy sector in the past year or so across the continent. Its work on the EU dairy market situation was debated upstairs in European Committee A on Monday night.
My starting point today is the same as it was for my first debate, in 2005. It is the simple belief that a vibrant, healthy dairy farming sector is vital to Wales and Britain, both for its importance to the rural economy in many parts of the country and for its contribution to national food security. It is good to see hon. Members present from all corners of the British isles, representing at least four different political parties.
I thank the hon. Gentleman not only for initiating a very important debate, but for coming back to ensure that farmers have a voice in the House. It is good to speak under your chairmanship, Dr. McCrea. Dairy can play a major role in food security, as the hon. Gentleman just mentioned. The other issue is the need to ensure a long-term viable, sustainable future for farming, instead of farmers living on the edge, never quite knowing what the price will be. Does the hon. Gentleman agree that the issue is farm-gate prices as well as food security?
The hon. Gentleman, who is a doughty campaigner on behalf of the dairy sector in the UK, has summarised the key issues very well. The debate is about exactly those issues. It is about restoring confidence to the sector so that farmers can plan for a stable future, and seeing some profitability come back into the sector.
I, too, congratulate the very hard-working hon. Gentleman on achieving this debate. Adding to what the hon. Member for Chorley (Mr. Hoyle) just said, does the hon. Member for Preseli Pembrokeshire (Mr. Crabb) agree that the other consideration, which is more important now than it was five years ago, is the environmental one? My constituents in Montgomeryshire find it quite frustrating to look on to the hills and into the fields and see locally produced livestock—sheep and cattle—and then to observe that the supermarkets are full of produce that has come thousands of miles from the other side of the world. Surely that is bad environmental politics and very bad for our local economy as well.
I agree with the general thrust of the intervention. It is a good thing to be supporting local food, and in my local supermarkets I see an increasing amount of local produce on the shelves, but we need to see more of it. We need to give much more priority to local, home-grown produce.
I welcome you to the Chair, Dr. McCrea, and I congratulate the hon. Member for Preseli Pembrokeshire (Mr. Crabb) on obtaining this very important debate. Does he agree that one difficulty that the dairy sector, along with other farming methods, has faced is that the legislation from Europe has hindered many farmers, who have been put to unnecessary expenditure? Then of course we have the difficulties with the banks at the moment.
There is no question but that one of the things that has eroded profitability in the dairy sector in recent years is the significant increase in production costs, and a large part of that increase has been driven by the increasing amount of regulation.
To return to my speech, I do not look on the decline in dairy farmers as a positive restructuring of an industry in transition and I do not believe that we in this place should be neutral about the forces shaping this important industry. One positive thing that came out of our debate in 2005 was the formation of the all-party group on dairy farmers. I pay tribute to my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), who is present, for taking a lead on that and, with the assistance of the Royal Association of British Dairy Farmers, ensuring that there is a dedicated cross-party voice speaking up for the dairy sector in this place. When he is not authoring books on Colonel Gaddafi, my hon. Friend is being a powerful advocate on behalf of dairy farmers in his local area and across the UK.
Last month, a consortium of farming organisations, including the National Farmers Union, Farmers For Action, NFU Scotland, NFU Wales, the Farmers Union of Wales, Dairy Farmers of Scotland and the Royal Association of British Dairy Farmers, wrote to me and the other officers of the all-party group to alert us to the very difficult year that the dairy industry went through in 2009. My request to Mr. Speaker for today’s debate was in part a response to that sobering letter that we received just before Christmas.
If we look back over the past five years, it is clear that the sector has been shaped by a number of events and trends. The volatile milk price hit healthy heights in 2007-08, but has since collapsed, leaving many farmers once again receiving a price for their milk that is well below their production costs and leaving them unable to plan investment in the new kit that they need to stay competitive. Bovine tuberculosis has continued its destructive spread through many dairy farming areas, decimating dairy herds in the process.
I agree absolutely. I shall make some comments about bovine TB later, but it is clear that that disease is having a devastating impact on many farmers in many parts of the UK and we need urgent action.
Last year, we saw the collapse of the Dairy Farmers of Britain co-operative, which rocked the sector and left many farmers facing losses of tens of thousands of pounds each. That shook confidence across the board. Meanwhile, Britain’s supermarkets have continued to expand and increase market share relative to other outlets for dairy products, and the question of their market power and strength within the supply chain persists.
I agree; that is a key point. I am pleased that the Government have finally responded positively to that recommendation by the Competition Commission. My party has been campaigning for that for some time, as have other parties. There is no question but that we need a serious neutral body that can look clearly at the way in which the supermarket supply chain is working, make recommendations and take remedies where appropriate.
On the point about supermarkets, we have also seen some positive trends in the past few years. I am thinking of the move by Tesco, Asda, Marks and Spencer, Waitrose and others towards direct contracts with milk suppliers, which has meant that some farmers are receiving an economic return for their production, although I accept that others who are outside those contracts are left struggling. We have seen continuing attempts by the major processors to create higher-value-added brands, which can achieve better prices for products, but set against that, we have seen the Food Standards Agency persist with its campaign against dairy products—its vilification of dairy products as part of its campaign against saturated fats.
One supermarket that the hon. Gentleman did not mention is Booths Supermarkets in the north-west, which deals with local farmers. I do not know whether he has seen the same in his own area, but a new Asda supermarket is coming to Chorley. There is nothing wrong with that, as long as it plays its part. I have suggested to Asda that it ought to have a local purchasing agreement to buy local farm produce in order to reduce the number of food miles. Does the hon. Gentleman agree that that would be a good way forward and show that Asda, or whichever of the big supermarkets is involved, is playing its part to support our local community?
That is an excellent suggestion and I hope that Asda responds positively to the recommendation that the hon. Gentleman is putting to it.
The backdrop to the debate has been a changing one, and I shall describe some of the challenges in more detail in a few moments. First, however, I want to say a few words about my constituency, which is part of the great west Wales milk producing region, where dairy farming has been part of the fabric of economic and social life for generations. In that respect, we are not debating just an economic activity, but an activity that sustains the very social structure of rural life in Pembrokeshire and many other parts of the country.
What has happened in my constituency is a microcosm of what has been happening to the dairy sector right across the UK in recent years. Some of the dairy farmers in my constituency who briefed me before the 2005 debate are no longer producing milk; some have switched to beef farming, while others have quit the industry altogether. Still others have retired because their children did not see a viable future in dairy farming, and their farms have been sold or merged into much larger farming units. Pembrokeshire is also a key bovine TB hot spot, and a number of our large dairy herds have been devastated by the disease. In addition, several of my constituents were directly affected by the collapse of the Dairy Farmers of Britain co-operative.
However, the picture in my constituency is not entirely negative, and there are some positive things. I would point, for example, to the dairy processing plant in Haverfordwest, which is owned by First Milk. The co-operative uses the brand name The Pembrokeshire Cheese Company to create high-value-added cheese brands and will, I hope, create a better future for the local dairy farmers who supply it.
The hon. Gentleman mentioned the collapse of Dairy Farmers of Britain. Did he, like me, experience the outrage felt by farmers in his constituency, who basically acted in good faith and who were of the impression that the organisation was allowed to trade long after it had become insolvent? Many of my constituents lost tens of thousands of pounds as a result. Sadly, the same probably happened in the hon. Gentleman’s constituency and in the constituencies of other colleagues.
The hon. Gentleman is right. Some troubling questions remain to be answered about Dairy Farmers of Britain, although it is important to say that the company is not entirely reflective of farming co-operatives and that we should keep faith with co-operatives, which are one vehicle for farmers to achieve a greater return on their product. The Environment, Food and Rural Affairs Committee is carrying out an investigation into what happened at Dairy Farmers of Britain, and some unanswered questions will need to be addressed.
My constituency has witnessed the outstanding success story of Laurence Harries, who farms near Cilgerran in the north of my constituency. His award-winning Daioni brand of flavoured organic milk drinks is appearing all over the UK and internationally. As I am sure you are aware, Dr. McCrea, Daioni is the Welsh word for goodness. Laurence Harries says that a few years ago he
“set up with a single tanker, a couple of lorries and a lot of wishful thinking”.
Last year, he secured a deal to supply the academy and youth teams at Chelsea football club with Daioni milk drinks. He also supplies the Welsh rugby union. A year ago, I was on a Eurostar trip to Paris as part of a Conservative joint working group meeting with French parliamentarians from the Union for a Popular Movement, and the milk that we were served was Daioni organic milk from my constituency. Although it is a high-value, niche brand, it is an example of what can be achieved when good farming skills and excellent business acumen are combined. However, even Laurence Harries would admit that he is exceptional. For the larger number of milk producers in my constituency who supply the generic liquid milk market, the last few years have not been happy.
The dairy sector constitutes 18 per cent. of the agriculture industry in the UK and more than 30 per cent. of agricultural production in Wales. However, the falling number of dairy farmers and the decline in milk production are continuing across Wales and the UK, with a growing concentration of milk production in particular geographical areas. I have seen figures that suggest that the number of UK dairy farmers has halved since 1997, and the Welsh Assembly Government have estimated that 26 farmers leave the dairy industry on average every week. One in 10 farmers say that they will leave the industry within two years. Over the past five years in Wales, the number of producers has fallen by a third.
We are therefore seeing falling numbers of farmers, accompanied by falling numbers of dairy cattle, falling milk production and the closure of processing plants. UK milk production has fallen by 8 per cent. since 1997 and is now at its lowest level for more than 30 years, although Dairy UK, the trade body representing the dairy processing sector, takes an upbeat view and believes that production has now stabilised and may even be creeping up again.
Wales has seen a 7 per cent. fall in cattle numbers in the past five years, and more than 900 redundancies have been announced in the Welsh milk processing sector, resulting in major changes to regional processing capabilities. In his response, I am sure that the Minister will maintain that milk production volumes have remained broadly static in the past 10 years, but as far as I can see the trend has been downwards. I would therefore welcome his comments about where we stand on dairy imports and about what the trend is, particularly in the context of national food security.
There is a school of thought in the industry that believes that one way forward would be completely to remove subsidies to allow the market to deal with the issue by creating a level playing field across the whole of Europe and the UK. What is the hon. Gentleman’s view?
Most of the farmers I speak to in my constituency say that, ideally, they would not want to be in the game of receiving subsidies; they want to compete in the marketplace and to be business people first and foremost, and that means receiving a fair price for their product. They want to receive a price that fairly reflects the economic value of their produce, but that is not happening. I am wary of saying that we should move quickly to remove all support for farmers, which would leave them desperately exposed in a difficult, volatile market, and we need to tread carefully. However, I reiterate that most of the farmers I speak to want to be business men first and foremost, not recipients of subsidies.
Yes. My right hon. Friend makes his point very effectively.
There can be little doubt that the fluctuating price of liquid milk and the increasing cost of milk production have contributed significantly to the lack of confidence in the dairy industry in recent years. We have seen milk prices move from a low in 2006, when the average dairy farmer was estimated to be losing almost 5p per litre, to a high in 2008, when prices soared by up to 40 per cent. However, in the last year, as I said, the price has fallen back dramatically. Today, the price paid for milk is once again falling below the cost of production for many farmers. At the same time, production costs have increased by 27 per cent. since 2006, undermining much of the confidence that the industry regained in 2007 as prices increased.
The think tank Open Europe has stated that the cost to farmers of UK regulation has more than tripled since the Department for Environment, Food and Rural Affairs was created in 2001. I would welcome the Minister’s response to that point and his comments on how he sees the future of farm regulation and what can be done to minimise the additional production costs that farmers face as a result of regulation.
It is clear that this is not an isolated trend in the UK, and dairy farmers across Europe have faced challenging conditions. I spent part of last summer on a dairy farm in northern France, and the farmer and his family described a situation very similar to the one experienced by farmers in the UK. However, one difference in the French situation is that French agriculture receives huge political support across the board. No one can be a serious politician in France unless they are willing to stand time after time and speak up for French agriculture. Although hon. Members are well represented here, those present largely have significant dairy interests in their constituencies, and we need far more colleagues to speak up for farming who do not have dairy farms in their constituencies, but who nevertheless recognise the importance of dairy farming to the UK.
In answer to parliamentary questions over the past year, the Secretary of State has reiterated his opinion that the UK dairy industry is in a much better position than most of its European competitors. However, the Farmers Union of Wales has suggested to me that if it were not for the current exchange rate, farm-gate prices would be likely to be about 30 per cent. lower. Does the Minister therefore accept that the industry’s saving grace this year has been the weakness of sterling, rather than a fundamental strengthening of the sector? I would also welcome his comments on what needs to be done to ensure that UK dairy farmers can weather the storms created by volatile milk prices but still plan and undertake long-term capital investments so that they can stay competitive.
Bovine tuberculosis is another area on which there has been a frustrating lack of progress in recent years. I have met farmers in my constituency whose cattle herds have been decimated by the disease. Indeed, two years ago I spent a Sunday with one of Pembrokeshire’s leading dairy farmers, whose farm had just been hit by it. It was moving to see a strong man brought almost to tears by the decimation of his stock. It is not like losing a faulty batch of widgets on a production line. Farmers invest their lives in raising those animals, and they love them. When they must see a herd go off to be slaughtered, it is a moving and difficult thing. I recognise that that area of agriculture policy is devolved in Wales, and I take my hat off to the Welsh Assembly for taking some bold decisions in moving ahead with an eradication programme that includes a careful element of active wildlife management.
I have put the question before to Ministers, and ask it again today: why, given that the scientific evidence base on which Welsh Assembly Ministers operate is identical to the one available to DEFRA, do English Ministers still refuse to recognise a role for a targeted cull as part of the plan? The Welsh Assembly has the same evidence and is moving ahead. There is a pilot programme in my constituency.
I apologise, Dr. McCrea, for my late arrival. This is an important debate and my hon. Friend touches on a vital point, particularly for border counties such as Shropshire. Many farmers in the county are landowners on both English and Welsh sides of the border. It is puzzling and frustrating when there are advancements on the Welsh side of the border on the vital issue of TB, and not on the English side. We need progress quickly.
I shall say more about TB and do not want to take up the hon. Gentleman’s time, but in response to that point I must say that the science is not conclusive that culling will eradicate TB. The Secretary of State made his decision on the basis of the scientific evidence. The eradication group that he has set up does not dismiss culling as a tool in the box, which might be used, but the evidence suggests that just culling creates a vacuum and draws the infection in, and does not eliminate it.
I am grateful for that and look forward with interest to the Minister’s reply to the debate; but the Welsh Assembly does not believe that it is all about culling. No one argues that. Culling is part of a comprehensive strategy and the Assembly is proceeding in a careful and targeted way. I am not known for often praising the Assembly, but I salute it in this instance.
I pay tribute to the hon. Gentleman for securing the debate and for his work on behalf of the dairy industry. The evidence to which he has referred is evolving, and is it not true that the so-called perturbation effect that was predicted has not been demonstrated, as areas where the experiments were carried out have continued to be monitored? The effect has not materialised as was envisaged.
To back up my hon. Friend, with reference to what the Minister said, the Ministry of Agriculture in France recently issued a statement that the reason bovine TB has practically been eradicated in France is the part culling of badgers.
That is also a useful intervention.
Sir David King, the former chief scientific adviser, was quoted in the Farmers Guardian last week as saying that DEFRA’s refusal to tackle the badger population was a “source of great exasperation”. He went on to suggest that the TB epidemic could put an end to dairy farming unless the Government considered a cull of infected badgers. As I said, the Welsh Assembly is at last moving ahead with a programme that includes an element of active wildlife management. It is being piloted in the north part of my constituency and is a brave move.
One of the new emerging challenges for the Secretary of State is unquestionably what I regard as the unbalanced and distorted healthy food agenda being promoted from some quarters, which seeks to demonise dairy products. I am thinking principally of that increasingly powerful arm of Government, the Food Standards Agency. There was a time when I thought that the job of the FSA was to help to ensure that the hygiene and safety practices in the production and sale of food were of a sufficient standard to avoid the risk of illness or worse, but I see from its recent press releases, and from its website this morning, that it sees one of its main jobs as warning people away from dairy products, as part of its campaign against saturated fat. The website names those products: cheese, cream and ice cream. I see from a press release of the past few days that it wants us to abandon full fat milk. Frankly, many of my constituents do not want their taxes to be used to fund that kind of nonsense. Obesity in Britain is not caused by eating dairy products. In Westminster Hall this morning you can see, Dr. McCrea, a group of some of the healthiest parliamentarians. I see marathon runners, rugby players and fell runners: an incredibly healthy group. It is no accident that they are also some of the proudest and fiercest advocates and defenders of dairy products, the eating of which is part of a healthy lifestyle.
The dairy sector is being made a scapegoat by the Government because of their rank failure to tackle the more profound drivers of obesity in this country: the British obsession with getting drunk; the collapse of sport in schools; the end of cookery in schools, driven by the health and safety madness that has affected a generation of young people; and the proliferation of poorly regulated low quality fast food outlets in many town centres. I do not mean McDonald’s, which has been good news for farmers in recent years, but the proliferation of low quality cheap fast food. Will the Minister join me in condemning the Food Standards Agency’s misguided approach to dairy products? Does he agree that the Government must not give mixed signals to the dairy sector, sending Ministers to farming conferences one day, to speak up the British dairy sector, and channelling money to anti-dairy campaigns the next? Will he join my call for more sense from the Food Standards Agency?
I could say more about lack of investment in the sector, driven by a lack of confidence and certainty about the future, but I want to bring my remarks to a close to enable other hon. Members to contribute. I am sure that some of them will talk in more detail about the ombudsman. I support the creation of an ombudsman. The supply chain has been characterised by accusations and mutual mistrust, and we need somehow to get beyond that. There needs to be recognition of a partnership between farmer, processor and retailer, with common sense in the relationship. My hope is that the ombudsman will have enough powers and clear guidance to make that happen. However, I want to say a word of caution about what the ombudsman can achieve. I have talked to some farmers who believe that the ombudsman can somehow radically change the price they get for milk, and I think that view may be naive. Unless the Minister can correct me, I do not understand that it would be the job of the ombudsman to fix prices. I should welcome the Minister’s remarks on how he sees the ombudsman’s role in the dairy sector and with respect to milk prices.
I am grateful to have had this opportunity to raise concerns affecting the dairy sector in the UK and in particular my constituency. I am conscious that perhaps I have not covered all the issues, and optimistic that other hon. Members will fill in the gaps. I look forward to the Minister’s giving us good news and reasons to be optimistic about the dairy sector in the years ahead.
I shall be as brief as I can, Dr. McCrea, partly because so many hon. Members want to speak, and also because I must leave slightly before the end of the debate, as I have an important meeting about flooding to attend.
I congratulate the hon. Member for Preseli Pembrokeshire (Mr. Crabb). I do not agree entirely with all that he said—I shall explain why—but it is right to discuss dairy farming. I have taken an interest in dairy farming and the dairy industry for a long time, not least because the Severnside processing plant chimney is at the bottom of my garden; I cannot but be influenced by that important industry.
I want to make four quick points. First, I make a plea to my hon. Friend the Minister about what is happening in Gloucestershire at the moment, which is the epitome of some of the industry’s problems. The county farm estate is actively debating the conflation of its dairy holdings from well over 20 to 11. In a previous life, I chaired the county farm estate’s smallholdings group on the county council, and I have always been a great upholder of the belief that dairy farming is an important sector, as it allows people to start in agriculture who could not do so in any other way. It would be a tragedy to use the current problems as an opportunity to increase the size of holdings, as younger people would never be able to get into dairy farming. I hope that my hon. Friend the Minister will look, as a matter of urgency, at what is happening in Gloucestershire.
I have had two debates on the subject, and I have always upheld the importance of the county estate nationally, but this is another side of the debate. I totally oppose selling off what I think of as the county’s family silver, but I also worry that we might shut out dairy farming in what, after all, are the country’s milk fields. That needs to be considered. I hope that the Government have a view on the matter. They may say that it is up to local government, but we need the Government to take a strategic view.
My second point is about something that was mentioned by the hon. Member for Preseli Pembrokeshire—the common agricultural policy and how its reform might affect dairy farming. I have been a complete long-term critic of the CAP. I think that it has done more damage to the dairy industry than to any other sector of industry. Milk quotas should have been removed a long time ago. They are a huge disincentive in this country, and there is no excuse for them.
The problem with CAP is that a one-size-fits-all strategy does not work. We should be expanding our dairy industry rather than having to go cap in hand to Europe—forgive the pun—to try to maintain the current situation. The latter is not acceptable. It is about time that we were allowed to pull out of the CAP, if nothing else, because we need to rebuild our dairy industry.
My third point is about bovine TB—something on which we will disagree. The debate is so sterile. Yes, I have read the independent science group report, but to me the science is clear. Culling does not work. It is counter-productive. So I turn to what we are doing in my area and the vaccination strategy. The Select Committee on Environment, Food and Rural Affairs debated the matter long and hard.
I congratulate the Government, but I wish they would move more quickly. In every other area of animal disease, we are trying to find a vaccination strategy, yet with bovine TB, we go back to the old argument that if we cull one species that carries bovine TB, even though many others carry it, it will be a magic bullet. There is no magic bullet. It is a dreadful disease. I met someone from the farmers’ stress network yesterday, and I know what damage it does to people’s lives. It is a really awful disease, and we must get hold of it.
As a fellow member of the Select Committee, I remember those debates. I also recall that our report recommended that culling might be an effective tool. The evidential picture is evolving. I know that the hon. Gentleman cares a great deal about the industry, but does he agree that we ought to keep an open mind on these things, perhaps allowing culling to take place in some areas? It could make a huge contribution.
I accept what the hon. Gentleman says. However, I agreed to the report with gritted teeth; people know that I am a great compromiser, and I believed it important to have consensus.
The biggest problem is that we might give people the illusion that culling will work; if so, we will let them down. We must be honest. It is not going to work. There will be legal challenges in Wales, and it will take years to clear that out of the way. In any case, only a small part of Wales is experimenting with culling. We should not fool ourselves. The idea that it will be imposed on Shropshire, as the hon. Member for Preseli Pembrokeshire suggested, is an illusion. Let us be honest, and get on with finding a solution in the vaccination strategy. We should not go along cul-de-sacs that have been tried before and did not work.
I shall be careful how I phrase my last point, because the Select Committee is considering Dairy Farmers of Britain. It was wrong to see the failing of that organisation being attributed to its structure, its co-operative nature. Mistakes were made in its management, but its biggest mistake was to try to compete in the liquid market with the wrong production structure. If it had specialised, it would probably have had a greater chance of getting through its deep-seated capital problems.
I welcome the ombudsman, who was mentioned earlier. I pay tribute to the hon. Member for St. Ives (Andrew George), who has driven the idea relentlessly, with some help from my hon. Friend the Member for Chorley (Mr. Hoyle), myself and others. I pay credit to that campaign. The dairy industry has done badly because supermarkets, in particular, have used milk as a loss leader, playing all sorts of games with processors and especially with farmers.
Because of my hon. Friend’s knowledge, I invite him to comment on two quick points. The other thing that dairy farming needs is agricultural shows. What more can be done? Will the Government support them, to ensure that we get the Royal Lancs show back? It is a great way of ensuring that the public understand farming, particularly dairy farming.
My second query is about the spraying of nitrates and slurry. Should there be more flexibility to ensure that farmers have more time to do so?
On the second point, my hon. Friend is talking about another mad EU regulation, but no one takes a blind bit of notice of it. On the first point, I agree with him entirely. I am in favour of shows. It is important that farmers should have the opportunity to show off the good things that they do. The problem nowadays is that few farmers go to shows because they are too busy. They face too many constraints, not the least of which is that their income is insufficient for them to spend time there.
We should support the ombudsman. A previous report found that one problem was the poisonous atmosphere in the dairy industry. It is the most difficult industry, as everybody distrusts everyone else. The different levels distrust each other; it is not competition within the segments of the sector, but a real dislike of some of the things that are going on.
I say to the Government that this country needs a clear strategy for dairy farming. There is no excuse for avoiding that. I would like to see the industry completely outside Europe, because the CAP has done immense damage. A strategy has to be brought forward to rebuild some of the relationships. I would like to see more co-operation; indeed, it was wrong to say that its co-operative structure caused problems for Dairy Farmers of Britain. If we can get on with that, we will have served our purpose and done what we should be doing. Our purpose is not simply to maintain that important sector but to build it for the future. That is what we need to see.
It is a pleasure to serve under your chairmanship, Dr. McCrea. I pay tribute to my constituency neighbour, the hon. Member for Preseli Pembrokeshire (Mr. Crabb), for securing this debate. The hon. Gentleman, the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) and I have raised these issues on numerous occasions, and have ensured that, for the past five years, we have had an annual debate on agriculture in this Chamber.
As the hon. Member for Preseli Pembrokeshire said, some aspects of dairy farming are devolved. I shall endeavour to delve into the devolved settlement, but I want to focus on producers, suppliers and retailers and the relationship between them. That is the fundamental problem that our dairy industry faces.
I hesitate to use the word “crisis” as it is emotive, but figures on the long-term position of dairy farming in Wales show that it is in serious decline. In 1994, there were 5,300 dairy farmers. The number had fallen to 3,600 by 2004, and figures for December 2009 show that it has now fallen to 2,059. Those figures show that 60 per cent. of Welsh dairy farmers have left farming over the past 15 years, something that I think is reflected in England.
There was an important geographic message from the hon. Member for Preseli Pembrokeshire. He does not like the word “Dyfed”. Neither do I; it is an old county term that describes our area. However, I will use it now because half of the dairy farmers of Wales are from Dyfed—from my constituency of Ceredigion, and from Carmarthenshire and Pembrokeshire.
We can wax lyrical about the social implications of the loss of the dairy sector, but it is a reality. We are talking not about isolated farms appended to big towns but about large areas of the rural economy being dependent on farmers and farming families. Losing those farms and those families has implications well beyond the production of milk. It affects village schools and the local economy more generally.
I concur with what the hon. Member for Stroud (Mr. Drew) said about county starter farms and encouraging young entrants into the industry. We lost our farms in Ceredigion a long time ago. One of the dispiriting things about making farm visits and meeting the two farming unions in Wales is the constant repetition of questions. Five years ago, questions were asked about young farmers and how to attract people into the industry, and we are still facing the same problems. I have had some emotive discussions with farmers who want to pass on their farms to their children, but find that their children drift away and move into other areas, because there is perceived to be no future in the industry. At the end of the farming hustings in Ceridigion, we always ask the question, “If you had a child, would you encourage them to stay in the farming industry?” Many say, “In all honesty, with hand on heart, we could never make that recommendation given the state of the industry.”
There have been some glimmers. I congratulate the Minister on ensuring that Wales has received a fair distribution of the £25 million EU rescue package, which, as far as I can tell, was calculated on the proportion of dairy cattle rather than on the Barnett formula, and I pay tribute to the Assembly Government for their role in that. I share a constituency with the Minister who has responsibility for rural affairs, and I pay tribute to her for the work that she has done. However, I should like some clarification on future emergency spending. If we need such spending again—I hope that we do not—will it be allocated according to relative need rather than population?
I thank the Minister for that. I am also taking consultation from the Welsh Assembly Government. There is sensitivity about the matter. During the foot and mouth scare in 2007, there was concern from the devolved Administrations about the extent to which DEFRA funding came to Scotland and Wales.
I am pleased that the Government have finally agreed to a supermarket ombudsman. I appreciate that such a matter is not directly within the Minister’s portfolio, but it is crucial to the farming sector.
I agree with my hon. Friend that the ombudsman is vital. Does he not think that the Government should give powers to the ombudsman so that they can be proactive in carrying out investigations? It is no good just waiting for complaints to come in. Many people in the sector are concerned that if they make a complaint, their products could be boycotted, so it is important that the ombudsman has strong proactive powers.
I thank my hon. Friend for raising that matter. The hon. Member for Preseli Pembrokeshire made a fair point when he said that the ombudsman will not be the solution to all problems, but expectations are high. If this is to be an ombudsman without teeth, it will be costly lip service and will fail at the first hurdle.
We have a job of communication to do with our constituents. When Mr. and Mrs. Average go into a supermarket and purchase their milk for a couple of days, only a tiny share of that milk price actually finds its way to the producers. Prices may have gone up a bit, but they have still been low over the past couple of years. They have gone up from 18p a litre to 23p. People do not understand—the farmers understand—why a greater share of the price is not finding its way back to the farmer. This is about not just the supermarkets and the monopolistic control that they exercise, but the relationship with the processors, which needs to be considered as well. NFU Scotland says that there has been evidence of some upward movement on prices paid by processors, but given the increased profits of the likes of Wiseman’s, Arla and Dairy Crest, it is disappointing that the rise has not been steeper. Figures from DairyCo show that, between February and October last year, the price of bulk cream rose from £750 a tonne to £1,700. It has slipped back now to £1,130. There is still a feeling that not enough of that money is finding its way back to the producers.
The purchasing power of supermarkets is a fundamental concern. Again, I welcome the announcement that the ombudsman issue is to move forward. Some supermarkets treat farmers more fairly than others and they should be rewarded for their support by not allowing others to cut corners, thereby restricting the ability of producers to make a living.
Some contracts are linked to production costs. Those are welcome and contribute to keeping farmers in business, but much more needs to be done. One of the first jobs of the ombudsman is to establish whether the price of milk has been kept artificially low, which is what we suspect.
Does the hon. Gentleman agree that the dedicated milk contracts that all the major retailers have are, by and large, a positive thing? They have not led to an across-the-board increase in farm-gate prices, as some of us had hoped, but they are good for the farmers. What would be positive now is for those dedicated contracts to expand into the cheese markets, so that we have dedicated cheese contracts as well. That would help many other farmers.
I agree. As the hon. Gentleman said, it is the scale of those contracts rather than the principle itself. He mentioned dedicated contracts in the cheese industry. We have present not only the chair of the all- party group on dairy farmers, but the chair of the all-party group on cheese, my hon. Friend the Member for North Cornwall (Dan Rogerson), who has done a lot of work on promoting the cheese sector. Pembrokeshire, like Ceridigion, has many cheese producers who need support. It is in that spirit that the regulator is to be welcomed. I am glad that the Government have listened to our concerns. Organisations such as the Farmers’ Union of Wales have been talking about a regulator for 10 years or more, and I am glad that it is now happening. I should also pay tribute to the hon. Member for Ynys Môn (Albert Owen) who, as promoter of the Grocery Market Ombudsman Bill, will be pursuing the matter as well. I would welcome assurances from the Minister that the code of practice will be legally binding and that the ombudsman will be given powers to sanction supermarkets when they transgress.
The issue of bovine TB is fundamental and needs to be addressed. It has been partially addressed, and I pay tribute to the Welsh Assembly Government for the brave, but immensely regrettable, decisions that they have taken.
There have been difficulties recently with milk collections, and getting milk to processors. The dire weather we have had recently has forced some farmers to throw away their milk. Moreover, there has been concern over Milk Link’s decision to ban the use of plastic roadside containers when tankers are unable to reach the farms. That has been a real issue across much of rural Wales. Some disruption was understandable, but surely we should do everything we can to ensure the distribution of milk. Steel storage tanks being required by Milk Link are not affordable for many farmers, who are already operating on very tight margins. They do not have the money to invest in any capital infrastructure.
Lastly, let me turn to the point about healthy food. Like me, the hon. Member for Preseli Pembrokeshire has praised the Assembly Government for what they are trying to do on the cull. I am sure that he would also like to praise them for the initiative that they took on milk in schools. Reinstigating free milk in schools sends a powerful message to both parents and the sector about support. The Assembly Government may be in a stronger position to pursue that matter, but they have done it and done it well.
The dairy sector is undeniably in a difficult position. None the less, there are a few glimmers of hope out there. Processors have shown that profits can be made in the dairy industry, and we now have a promise of a body that can at least assist in ensuring that those profits are fairly distributed. We now need action to make that a reality, so that the constant stream of people leaving the industry, with all the effects on the rural economy, can be halted.
I pay tribute to my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) for securing the debate. He is one of the most active members of the all-party group.
When I was first elected in 2005, Mr. Jones, a dairy farmer near Shrewsbury, explained to me the seriousness of the situation facing the dairy sector. It was his lobbying that convinced me to go to see supermarket bosses. In my naivety, I thought that as an elected Member of Parliament I could demand to see the chief executives and haul them into the House of Commons to speak to them. Some of them did send representatives to speak to me and discuss my concerns, but they were very arrogant. They said that they were doing all that they could and that any regulation would be unviable. They tried to do all they could to deter me from pursuing the matter.
That is why I set up the all-party group on dairy farmers. That is the way we do things in the House of Commons: we work together on a cross-party basis to lobby Government on issues that are of importance to us and our constituents. I am very pleased to say that the all-party group on dairy farmers is one of the largest all-party groups in the House of Commons, with more than 120 Members of Parliament. The leader of my party, my right hon. Friend the Member for Witney (Mr. Cameron), is a member of the all-party group and should he be elected to the office of Prime Minister I will ensure that I keep reminding him of the fact that he joined the group. If any hon. Member here today has not joined the all-party group on dairy farmers, I would ask them to see me after the debate, to ensure that they join.
I very much welcome the report from the Conservative party, saying that, if we are elected to office, an ombudsman-regulator will be appointed to regulate the supermarkets. I will hold a Conservative Government to account on this issue and ensure that they make the appointment in a very speedy way. I will also ensure that, as the hon. Member for Ceredigion (Mark Williams) has suggested, the ombudsman-regulator has proper teeth and specific guidelines, so that they can help dairy farmers in their discussions and negotiations with these all-powerful supermarkets.
The all-party group on dairy farmers issued a report in the autumn of 2006 and we presented it to the then Secretary of State for Environment, Food and Rural Affairs, who is now the Secretary of State for Foreign and Commonwealth Affairs, and to the then shadow Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for East Surrey (Mr. Ainsworth). The main thrust of that report was to seek to have a regulator or ombudsman for supermarkets. Our group has been pushing for that appointment for the past three years. Initially, I was told, “Impossible. You’re never going to get a regulator for supermarkets. It’s totally unrealistic, a pipe dream. Just forget about it.” So it just shows that if someone perseveres, feels passionately about an issue, never accepts a no and keeps plugging away, ultimately—hopefully—success will come.
The all-party group on dairy farmers visited the European Parliament on a cross-party basis to meet the European Commissioner for Agriculture and Rural Development, Mrs. Fischer Boel. She said that she felt that part of the problem was that we had too many milk processors in the United Kingdom. She also said that a certain amount of consolidation within the United Kingdom market would not be a bad thing. I would like the Minister to note that she said that the European Union would not interfere if there were certain consolidation in the dairy sector. In her own country, Denmark, Arla has 80 per cent. of the milk processing. She said that that was one of the most important factors in Denmark; the strength of Arla in its discussions and negotiations with supermarkets. Therefore, that is something that I would like to promote.
My hon. Friend the Member for Preseli Pembrokeshire and others have spoken about bovine tuberculosis. Bovine TB is absolutely devastating in Shropshire and it has increased at a massive rate in the past few years. My hon. Friend talked about the emotion of this issue and that struck a chord with me. I have sat with some of the farmers in my constituency. I will mention one, Mr. Chris Bulmer of Snailbeach. We basically sat together at his kitchen table, having tea, and I have to say that we both got rather emotional about the issue of bovine TB. I am not prone to being overtly emotional with constituents, but this was an extremely emotional matter. People such as Mr. Bulmer live for their farms and their animals, and when they see the extraordinary suffering and wanton slaughter of their animals that has to go on, it is very upsetting.
One of the most difficult things that I have had to do in my constituency is speaking to the Shropshire Wildlife Trust, addressing 500 of its members. The first question to me was, “Well, Mr. Kawczynski you horrible chap, why do you want to kill all those lovely badgers?” Of course, the emblem of the Wildlife Trust movement is a badger and so passionate are the members of the Shropshire Wildlife Trust about badgers that they have even taken my wife and me to look at a badger sett in my constituency. They gave my daughter a cuddly badger soft toy, which I think was a bribe to encourage us to think nicely of badgers. The problem is that, although we all like badgers, badgers themselves suffer terribly as a result of this disease.
I have to say that the next Conservative Government must tackle this issue of badgers and I expect to see a limited cull of badgers, should a Conservative Government be elected to office. I make no bones about saying that, because I am absolutely convinced that culling must be part of the process of controlling badgers, no matter how controversial it is.
I just want to talk very briefly about the Rural Payments Agency. I must say that I am still trying to sort out problems with the RPA on behalf of various constituents. Some dairy farmers are still grappling with this issue, on top of bovine TB and the low prices they receive for their milk. I will mention to the Minister one of my constituents, Mr. Hamer of Longden, who is still having terrible problems with RPA payments and I very much hope that he can help Mr. Hamer with those problems.
Lastly, the all-party group on dairy farmers will be meeting shortly. Among those coming are representatives of the Farmers’ Union of Wales, the Dairy Farmers of Scotland and the Royal Association of British Dairy Farmers. I must say that sometimes when we have these meetings, not enough Members of Parliament attend, because of their other commitments. So I will be sending every MP who has attended this debate notification of the next meeting of the all-party group on dairy farmers. As I have said, we have a lot of representatives of different farming organisations coming and I would be grateful if Members of Parliament who are here today attended the next meeting of the all-party group.
Thank you, Dr. McCrea. I will try to be brief.
Much has already been said about the plight of dairy farmers. Indeed, in my own constituency, I think that we are down to fewer than 10 dairy farmers at the moment and that is in the biggest agricultural constituency in England and Wales. So we have suffered. However, one of the remaining herds in my constituency has 350 cows, showing the way that the industry has gone.
With all the farmers who have gone out of the industry, we are left with a small number of farmers, but they must be the most efficient farmers in the whole farming industry. Even so, they are struggling to survive with these milk prices. Therefore, we get some idea of the consequences of low commodity prices.
However, we should not be surprised about these difficulties. The point that I will make, which I do not think has been made by any other hon. Member, is that when we went into the single farm payment scheme it was on the basis that we would be competing not only within Europe but within the world on a commodity basis. The single farm payment was to compensate farmers for a drop in commodity prices. Not much liquid milk is traded, but huge amounts of dairy products, including generic cheddar cheese, are traded throughout the world. That has been the problem that has pulled down milk prices in Britain. We should consider the fact that milk production in Britain has only fallen from 13 billion litres to 12 billion litres, despite the number of people who have gone out of the dairy industry.
Of course, the reason that commodity prices have fallen is that we are doing away with intervention buying, which kept up prices within the European Union, we are doing away with import tariffs, which discouraged cheaper imports from being brought into the country, and we are doing away with export subsidies, which allowed surplus product in this country to be exported and dumped on the world market. So it is not surprising, in a way, that we have lower commodity prices.
Many important issues have been raised, such as the ombudsman, TB and various other issues. However, the really important question is this: what will the common agricultural policy look like in 2013? I do not think that anyone has really addressed that issue.
We know what the CAP should look like; it should give a commercial return to farmers and a guaranteed supply of products at reasonable prices to consumers. However, what does it look like in detail and in principle? The National Farmers Union has given us some indication. It has said that the future CAP, with regard to milk and other products, should be:
“a simple policy…market-oriented…geared towards competitiveness”.
The final indication of what the CAP should look like—but not what it will actually be like—is that the NFU says it should be:
“fundamentally a common and an agricultural policy, predicated on a firm belief that the above aims are best achieved through a common policy framework with EU rather than national funding.”
The NFU recommends no co-financing or co-funding but a straightforward common agricultural policy.
In the last 30 seconds available to me, I must say that the experience of the dairy industry, and indeed of some of the arable sector at the moment, is that with great dips in commodity prices, the farming community and industry still need direct payments. Yes, some payments are pillar 2 and fund public goods, but if we are to have a vibrant agricultural industry in this country, direct payments such as the single farm payment will be necessary if we are to survive in a cut-throat global competition for commodities.
It is a great pleasure to serve under your chairmanship, Dr. McCrea. I pay tribute to the hon. Member for Preseli Pembrokeshire (Mr. Crabb) for securing this debate and starting it off so admirably, and for his commitment to the sector, not just in his own constituency but across the country. My hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) said more in four minutes than many of us are capable of saying in 40. If I just endorse everything that he said, I can knock about five minutes off my speech in order to allow others more time to wind up.
I was at the Castle Green hotel in Kendal two weekends ago for the Cumbria Young Farmers annual general meeting and jamboree. It was a wonderful evening and a great opportunity. I listened to all the speeches made and sat there with my notebook writing down all the jokes—as a Liberal Democrat, I am a keen recycler, and that extends to my speeches and jokes as well—but at some point during the evening, I realised that there was absolutely no context in which I would ever be able to use one of the jokes and get away with it.
Apart from having an entertaining and slightly off-colour sense of humour, the young farmers, a good proportion of whom were dairy farmers, demonstrated to me that however difficult and challenging life in the dairy sector has been and continues to be, there is nevertheless immense room for optimism. A new generation of young people are set to become the backbone of a dynamic, competitive and innovative dairy industry. However, the system is not making it easy for them. There is a huge risk that young dairy farmers’ ambition, work ethic and talent will be stifled.
As we have heard from many hon. Members, these are immensely difficult times for dairy farmers. Since 1997, the number of dairy holdings has decreased by 50 per cent. and the number of dairy farmers by 35 per cent. In the past three years alone, liquid milk production has dropped by 7 per cent. That is 1 billion litres of lost production. Production levels in this country are at their lowest since the 1970s, despite the fact that the UK population is now 15 per cent. higher and demand is rising. We are losing milk production capacity because farmers are leaving the industry. Some go to the wall; some slip quietly into other work; many wait for retirement. As my hon. Friends have said, they will retire having actively encouraged their children to do anything but follow them.
Supply is tightening, yet the prices paid to farmers are pitiful. The estimated cost to the farmer of producing 1 litre of milk in October last year was 26p, and the average farm-gate price for liquid milk was 24p. The average farmer is making a loss on every litre produced. That is the average, but hundreds of dairy farmers, including dozens in my constituency, get less than 20p a litre. Many of us wander down one aisle in the supermarket and make ourselves feel good by buying fair trade coffee, but in the next aisle we buy milk that might be sourced locally but is anything but fairly traded.
The factors behind the decline in production capacity are complex; we have heard about many of them. Even over-production is blamed, but that is an insult to the intelligence of dairy farmers. Production in this country is declining and demand is rising. To prove a point, to compensate for the steady loss of UK producers, imports of liquid drinking milk rose from 87.7 million litres in 2007 to 134.1 million litres in 2008. There is no question of UK producers over-producing; in fact, they are under-producing.
The hon. Gentleman and I took part in a debate initiated by the European Scrutiny Committee only a couple of days ago. Does he agree that the importance of reviving the whole dairy industry in the context of European legislation is essential and that we should ensure that dairy farmers in this country are not only protected but given an opportunity to engage in new milk contracts, as proposed by a series of Ministers?
The hon. Gentleman makes an important point. Undoubtedly, we need to protect our dairy farmers from unfairness in the market. I do not think that any dairy farmer wants a protectionist system, and I endorse the comments made by my hon. Friend the Member for Brecon and Radnorshire about reforming the common agricultural policy in that respect.
Last summer, the EU Agriculture Committee issued a report showing that farm-gate prices for a litre of milk had dropped 31 per cent. while the shelf price of milk had dropped by only 2 per cent. We also know that in the past decade, supermarket mark-ups—the proportion of the price of a litre of milk that goes into the supermarkets’ pocket—have tripled. In consequence, farmers are leaving the industry.
One would think that the free market would not allow a situation in which buyers kill off their own suppliers or reduce their ability to reinvest in greater efficiency and productivity. To quote John Maynard Keynes,
“Markets can remain illogical far longer than you can stay solvent.”
That has clearly been borne out within the dairy industry. In any case, an unfettered market is not a free market.
Dairy farmers are effectively forced to accept the prices that they are offered. Supermarkets’ and processors’ ability to abuse their market power legally must be curtailed. That is why we endorse the setting up of a supermarket ombudsman. I pay tribute to my hon. Friend the Member for St. Ives (Andrew George) for leading on that issue for many years. We as a party championed it for a long time while being ridiculed by others, but it is good news that those others have come on board.
It is important that the supermarket ombudsman should, as my hon. Friend the Member for Argyll and Bute (Mr. Reid) said, be powerful and proactive, not supine and reactive. Hon. Members will know all about ombudsmen and will have had many reasons to make use of them on their constituents’ behalf. Ombudsmen tend to be able only to react to complaints, to investigate only one tenth of complaints and to find in favour of the citizen in only one third of cases. That is not a model likely to strike fear or even respect into the hearts of the supermarkets.
We support a powerful supermarket regulator based on a model similar to Ofcom, with proactive investigative and enforcement powers, a remit to go out and look for trouble and the ability to stand up forcefully to those who abuse market power, with appropriate sanctions at its fingertips. Anything less might be counter-productive by providing supermarkets with the necessary political cover to continue exploiting dairy farmers and other producers.
Such exploitation was seen in its rawest and most appalling form after the tragic collapse of Dairy Farmers of Britain in May. Afterwards, some members of the co-operative were forced to accept as little as 10p a litre from buyers who simply took advantage. We have heard of the devastating losses involved. In my constituency, the average farmer lost £20,000 from their May milk cheque and perhaps £50,000 on their investment within the co-operative. The effects of that tragedy are still being felt and have caused unbearable financial and emotional strain among friends of mine who were struggling to get by even before the collapse.
We are pleased by the £25 million in emergency support from the European Union. We lobbied for it from the beginning, whereas the Government did not. We are concerned that that money should be spent appropriately. For example, some of it could be spent to support the co-operative movement. After the demise of Dairy Farmers of Britain, it would be easy for many farmers to conclude that their best bet is to go it alone. I am sure that all of us would agree that that is the wrong lesson to learn. The co-operative movement is an important element in providing farmers with the strength to compete powerfully within the marketplace.
In conclusion, abuse of market power is the main challenge to our dairy farming industry, but it is not the only challenge. Unnecessary regulation is also a huge problem. The extension of the European Union’s nitrate vulnerable zones directive has caused and threatens to cause immense damage to farmers in general and dairy farmers in particular. That new directive will mean many farmers have to spend around £50,000 on a new slurry tank simply to comply with the measure, with absolutely no benefit to their business. That will be the straw that breaks the camel’s back for many farms.
There are more challenges to come. The Government made an announcement this week on cost sharing, and the establishment of an animal disease levy will be cause for alarm for many dairy farmers in Cumbria and across the country. The proposal to charge farmers at a rate of £4.80 per cow to pay for the clean up of disease outbreaks, which in the case of the 2007 foot and mouth crisis was wholly the Government’s fault, is unjust and extreme. Such a proposal will help to push even more dairy farmers out of business. We have heard about the Government’s failure to tackle bovine TB, and I endorse those remarks. Some 29,000 cattle were slaughtered in England for TB control reasons just last year. Squeamishness over a controlled cull of badgers led to that mass slaughter of cattle, and a failure to deal with that disease is contributing towards making many farms non-viable.
The story of British dairy farming in recent years is one of market failure, and Government failure to tackle market failure, versus the staggeringly impressive resilience of an industry that is determined to succeed against the odds. That battle continues and my money is undoubtedly on dairy farmers to win. I suggest that it is time this House got off the fence and took their side.
It is a great pleasure to serve under your chairmanship, Dr. McCrea. Before I say any more, I refer hon. Members to my entry in the register. Until 14 months ago, I was the only dairy farmer in the House. I left dairy farming for many of the reasons discussed today—not least because of the effects of the nitrates vulnerable zone directive. I also left the industry because I did not invest in my business, for the very good reason that my unit costs of production were greater than the pence per litre I was receiving. That situation is replicated across the country and has led to a dramatic reduction in dairy farmers and the amount of milk we are producing. There is a range of other issues, including food security.
I pay great tribute to my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) for not only securing the debate but speaking passionately about the needs of this important sector of the farming community, which he represents—he has done so in the past and will continue to do so, whichever party is in government. I also pay tribute to hon. Members such as my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), who have set up the all-party group on dairy farmers. They do great work and hon. Members from all parties who take part in that should feel proud that they have set up something really important.
As I said, since 1997, I have been one of 14,000 dairy farmers who are no longer dairy farmers—if hon. Members can follow that tautology. Since that time, milk production has fallen by more than 1 billion litres and the National Farmers Union has warned that Britain will lose its “critical mass” of milk suppliers. That is important, because when someone has left dairy farming, it is very hard to go back to it. If someone is growing sugar beet and they stop doing so, they can go back to it easily. In areas such as mine—the central south of England—we have lost slaughterhouses, a large amount of veterinary expertise, cattle markets and all the infrastructure that supports mixed farming units. One does not get that infrastructure back. Such a situation makes a dramatic difference to our landscape and our biodiversity. The issues relating to the subject go much further.
I also pay tribute to the hon. Member for Stroud (Mr. Drew), who made an important point about skills. We are losing skills across the farming industry, particularly in stock farming, and we make a great mistake if we do not understand the need to bring young people in and give them a career in a good industry.
According to DairyCo, if the increasing trend in the consumption of dairy products is extrapolated forward, annual consumption in 2030 could be in the region of 16 billion litres, which is some 23 per cent. greater than the current UK production level. The hon. Member for Westmorland and Lonsdale (Tim Farron) makes a good point: to say there is overcapacity in this industry is completely wrong.
The price that dairy farmers receive for their milk has fluctuated between 15p and 28p a litre over the past 13 years, which has led to wide variations in profitability. The UK average farm-gate price has been consistently below the average for the EU15 throughout the past decade, which partly explains why dairy farmers have under-invested in their businesses compared with their European counterparts. In addition to the fall in prices paid to milk producers, during 2009, more than 1,800 dairy producers suffered significant financial losses. We have heard about the effects that the collapse of Dairy Farmers of Britain has had on many constituents of hon. Members in this Chamber.
The NFU estimates that an average supplying member lost in the range of £10,000 to £15,000 as a result of being left without pay for milk collected in May and up to 3 June. As well as low farm-gate prices, dairy farmers have had to manage rising input costs, which has left little spare for investment. As the hon. Member for Westmorland and Lonsdale pointed out, the unit cost of production of 26.5p per litre is significantly higher than the average milk price at the time of 24.5p per litre.
In 2009, DairyCo’s farmer intentions survey revealed that only 18 per cent. of dairy farmers intend to increase milk production—down from 35 per cent.—with 13 per cent. intending to exit the industry within the next two years. An increase in production is forecast on some farms, but the reduction in the number of dairy farmers will result in a further fall in milk production next year. With demand for dairy products increasing and domestic supply declining, it is vital that the Government act to put the dairy industry on a secure and sustainable long-term footing.
I suggest to the Minister that there are five steps we need to take to improve the outlook for the dairy industry. I hope that he will have time to deal with them in his remarks. First, we have heard talk of supply chain fairness but, in recent years, the price for raw milk has dropped by 27 per cent. and the consumer price has risen by 11 per cent. Government documents on the dairy market state:
“On the whole, there is little connection between the price paid by the consumer for milk and the price paid to producers”.
On Monday, there was a European Committee debate in which my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) asked the Minister a question. I will repeat that question, because it needs a full answer from the Minister. He said
“Can the Minister tell us the Government’s view about the relative market share within the UK, vis-à-vis the main processes, and the EU? Many people will find it astonishing that there are co-operative and other organisations in the EU with up to 80 or 90 per cent. of the domestic market, yet in this country, the OFT has frequently over the past decade, forced the break-up or restricted mergers and amalgamations to give equivalent market share.”—[Official Report, European Committee A, 25 January 2010; c. 9.]
That is a really important matter. My hon. Friend the Member for Shrewsbury and Atcham talked about Arla in Denmark, which has an 80 per cent. share of the market in that country. We broke up Milk Marque when it had only 37 per cent., which has had a detrimental effect on the ability of producers to work together to get a fair deal.
We have heard about a need for proportionate regulation. That is so important. As I said, I have experience of the impact of the nitrates vulnerable zone directive. None of us wants impossible levels of nitrates to be in our water supply, but we know from the Government’s figures that the changes imposed by the directive in respect of muck spreading will lead to a 1 per cent. drop in nitrate leaching. That has a massive cost—an impossible cost for some businesses—for the farming community.
We need effective action on disease. Much has been said about TB but, of course, Johne’s disease is also having a large impact on production. On TB, the Minister was wrong to say in his intervention that those of us who support a limited cull consider that to be a silver bullet and that is all we talk about; we are talking about a cull as part of a much wider approach. The hon. Member for Stroud talked about vaccination but, frankly, it will be 2014 before an oral Bacillus Calmette Guérin is available. What state will the dairy sector be in in many areas of this country by then? It is vital that the Government grasp the nettle and get a grip of the TB issue.
That point was poignantly made on “Countryfile,” which is a programme that sometimes irritates me because it considers the matter through the prism of a rather more urban view. There is a man called Adam on that programme, of Adam’s farm, and he showed precisely the frustration, depression and anxiety caused during TB testing.
We need a stronger focus on research and development. When R and D is so fundamental to the immense challenge of increasing food production while conserving our natural resources, it is critical that we get the most from our world-class science base. That will require the Government to do everything they can to help our universities, institutes and scientists to maximise their contribution to strengthening food security, both here and across the world. They need to do that by equipping farmers with the tools necessary to produce more and impact less. Smart solutions must be found to translate research more effectively into practical use at farm level, so that yields and quality in all sectors improve. I do not have time to go into details, but I would very much like to take that point up further with the Minister.
My final point is on honest labelling. We have heard much about that in the debate and we have been talking about it for a long time, so I hope that the Government can come on board and understand the problem. More than 408,000 tonnes of cheese are imported into this country, and imports of cheese have increased by 60 per cent. in the past 10 years. There is real concern among dairy organisations, such as the Royal Association of British Dairy Farmers, that the ability to put dairy products on our shelves without telling the consumer where they come from is not fair on our farmers.
There is much more that I would like to say on the subject, as it is one that is close to my heart. I can assure hon. Members that if we are in government in a few weeks time we will take the plight of the British dairy farmer to heart.
It is a pleasure to see you preside over the debate today, Dr. McCrea. I begin by congratulating the hon. Member for Preseli Pembrokeshire (Mr. Crabb) on securing the debate and on his excellent opening speech. I agree, as clearly many colleagues do, with much of what he said, although not all of it. The only thing that spoilt his speech was his reference to Chelsea FC—I do not know why he wanted to go there, but it was entirely up to him, as it is his debate.
It is clear from the three debates that I have attended in Parliament on the subject within the past week that the future of our dairy industry, and of our food industry more generally, is a prominent issue on the parliamentary agenda, and rightly so. I have listened carefully to the comments raised during the debate. Despite some of the concerns expressed, I believe that the sector can and does have a positive future and that it will play its part as an important and valuable element of the agricultural sector and the food chain, contributing to both the economy, rural areas and the wider environment. I think that the underlying tone of the majority of the contributions made today agrees with that optimism and positivism, despite the concerns that have been raised.
I recognise that the medium-term challenges facing the UK and EU dairy industries are real. I meet with the NFU and other groups regularly to talk through concerns. Yesterday, I attended a meeting with the board of Dairy UK, at which we had a lengthy discussion and I responded to questions on a range of matters. As colleagues will know, I also chair the Dairy Supply Chain Forum, where all the stakeholders play a full part.
We need to take a long, hard look at the dairy sector. It is clear that the substantial sums of money the EU has allocated to dairy farmers in the past year alone are unsustainable. The health check, the economic recovery plan, market management and the dairy fund have contributed billions of euros to dairy support, but those funds are not the answer to the sector’s difficulties, as many colleagues have said. The EU dairy sector needs to be leaner and more competitive to benefit to the full from the opportunities of a globalised market and to withstand its shocks.
We need to help the sector as prices rise to compete without support. With that in mind, we look forward to continued discussions in the high-level group, which was set up by the European Agriculture Council and the European Commission, and to further reform of the common agricultural policy subsequently. The high-level group process offers an opportunity to inform the direction of travel towards further reform, rather than away from it.
I will try to respond to some of the points raised in the debate. The hon. Member for Preseli Pembrokeshire referred to the declining number of UK dairy farmers. It is clear that there is a natural consolidation in numbers. We are moving towards having fewer farmers, as has been clearly outlined, and larger dairy farms, but that is a move towards greater efficiency. The number of UK dairy farmers is falling more slowly than the number of our competitors in Europe, as has been outlined.
The hon. Gentleman also raised the issue of TB, and the Government recognise the seriousness, the disaster and the tragedy that that represents for herds, farmers and farming. There is also an economic impact on the UK taxpayer because of compensation costs. The hon. Members for Shrewsbury and Atcham (Daniel Kawczynski) and for Newbury (Mr. Benyon) referred to the emotional aspect of that problem. I saw the piece on “Countryfile” about Adam’s farm and recognise that it is a huge issue. I will come back to that in due course.
The hon. Member for Preseli Pembrokeshire also raised the question of Dairy Farmers of Britain. Clearly, as my hon. Friend the Member for Stroud (Mr. Drew) mentioned, the Environment, Food and Rural Affairs Committee is looking at that and will come forward with its report. It is taking evidence from all those involved, including Ministers.
The hon. Member for Upper Bann (David Simpson), in an intervention, expressed his view on subsidies. The UK strongly supports the end of quotas by 2015, and we lobby hard against market distortions. We lost the argument, and I know that there was some disagreement about the €300 million and whether that was a good or bad thing. We argued against the money being devoted to dairy farming because we thought it would further distort the market and not help the UK dairy industry, although obviously it was supported by the majority of member states at the Agriculture Council. As I said in my intervention, we are consulting on the share-outs of the €29 million allocated to the UK.
With regard to the question that the hon. Member for Preseli Pembrokeshire asked on the burden of EU regulation, our aim is to keep the administrative burdens to a minimum. That is a key part of our negotiations at EU level and considerations during all of our policy development, as I am sure he knows. He mentioned unhealthy diets and remarked that there is a range of causes, from alcohol and a lack of exercise to poor food choices, and I do not disagree. I do disagree, however, with his accusation that the Government are not addressing those problems. We might have different conclusions on what the priorities should be and what emphasis should be given, but the Government are addressing all the issues he raised and will continue to press on that. I am more than happy to endorse the dairy industry and dairy products, and I said the same to Dairy UK yesterday. Indeed, my wife says that I have bread with my butter, rather than the other way round.
The hon. Member for Preseli Pembrokeshire asked about the trends on dairy and milk imports. The UK imports high-value products and exports low-value commodities as a rule, which leads to the distortion, and no one would deny that the exchange rate is having an impact. With regard to the Food Standards Agency, it is clearly DEFRA’s role to promote agriculture and dairy, but the FSA has a responsibility to promote a healthy diet and eating well. We do not see those two aims as incompatible. We see dairy as an important element in a balanced, healthy diet, and we make sure that we get that message across as strongly as we can and as frequently as we can.
I will not return to the TB debate, if hon. Members will forgive me, because that matter has been aired well during the debate, and the same is true of Dairy Farmers of Britain. We covered the matter of the ombudsman in a debate last week. The vast majority welcome the advance of the ombudsman. The only Member I have heard speak against it is the hon. Member for Shipley (Philip Davies), who was alone in the Chamber last week on that. That demonstrates that, although there is not unanimity, there is overwhelming support for an ombudsman from all three Front Benches.
The hon. Member for Shrewsbury and Atcham mentioned the size and power of Arla, but we covered that point to an extent in the European Committee, so he will forgive me for not referring to it again. I congratulate him on the establishment of the all-party group on dairy farmers—I hope that that advert increases attendance at the next meeting.
The hon. Gentleman will have to forgive me, as I have one minute left and will not get through my points if I give way.
The hon. Member for Ceredigion (Mark Williams) asked about the UK’s share of the €300 million, and we are consulting on that. The hon. Member for Shrewsbury and Atcham asked about RPA payments. Its performance over recent years has been far better than it has ever been. It now has 80 per cent. of the payments already out. If he wants to write to me on any specific problems, I will be happy to do what I can to look into them. The hon. Member for Newbury gave us the benefit of his personal experience as a former dairy farmer, adding significantly to the value of the debate. I answered some of the questions that have been raised in the debate on Monday.
In conclusion, the prospects for the sector, in the sector’s view, are positive, but there are challenges. The Government are trying to help and will continue to do so. The sector is fundamentally sound, and the efficiency improvements, innovation and investments in new products mean that in the medium to long term the sector can do well.
Kenya (Drought and Famine)
It is a privilege to serve once again under your erudite chairmanship, Dr. McCrea, as per usual. I am delighted to have secured an Adjournment debate on an international topic that has been important for a considerable time.
As the developed world changes we see economies decline and then recover. Many of the emerging economies and markets in the near and far east attempt to play catch-up with the developing world. But in the context of those changing economies on a global scale there is one persistent problem, in a geographical sense, for more than 1 billion people: that is, the continent of Africa. Kenya has a population of some 40 million, a quarter of whom are under nine years of age. So it is a significant, populous country yet it has a young population.
Every international political leader of standing in the past 30 years has given, at some point in their tenure, a statement or repeated statements on their determination to help resolve the problems that afflict much of the African continent, but unfortunately the reality is that as they leave office many international statesmen and stateswomen find that those problems are similar to when they entered office.
Drought, famine and corruption are three debilitating reasons for Africa’s awful dilemma, and they afflict Kenya as much as any other country. Despite all the aid and assistance offered it seems to many on the outside that things do not change. Yet there is hope. I have been to Kenya and other parts of Africa. Tribute needs to be paid, and repaid, to the many volunteers, missionaries and charities that are involved in delivering help and hope to the people of Kenya. In north Kenya I witnessed at first hand some excellent work being carried out by missionaries, who for many years have toiled without reward to deliver assistance to the people there.
I congratulate my hon. Friend on securing this debate on the important subject of the difficulties in Africa. I wonder whether he agrees with me on this point. I speak to a lot of charitable organisations that I deal with and one message comes across frequently: although a lot of good work is being done by missionaries and organisations in Africa on irrigation and other projects, there is a real need for further education within the population in South Africa, especially in the rural areas—the extreme areas—to maintain irrigation and help people to help themselves. Although we put a lot of finances in, and it is good and right to do so, there needs to be more self-control and more education to maintain such projects.
I thank my hon. Friend for his timely intervention. When I was in the northern part of Kenya, such was the level of deprivation that a new school being built by one church group was the major building work in the entire region of north Kenya. Yet that was a commitment addressing a need at local level. I concur with my hon. Friend.
In the east Africa region some 23 million people are at severe risk because of the reduction in rainfall in recent years. The average rainfall used to be 200 mm between March and May but last year in that region it was 40 mm—a reduction of some 80 per cent. on average rainfall that was already low.
A charity entitled Excellent Development does phenomenal work in Kenya. It does superb work constructing sand dams, which are a comparatively cheap and ancient system, where the water retention properties of sand are used to help grow bananas, tomatoes and beans. They cost about £8,000 to construct, making them relatively cheap. A sand dam is a reinforced concrete wall built across seasonal river beds. A pipe is built into the dam, going 20 metres upstream, and over one to three seasons the dam fills up with between 2 million and 10 million litres of water. The sand, which filters water through the pipe built into the dam, delivers a clean, reliable water supply for up to 1,200 people. These dams can last for approximately 50 years and they deliver a clean water supply for approximately £7 per head of the population. Some 200 dams have been built by Excellent Development in the past eight years in Kenya, which means that approximately 250,000 people are able to access a clean water supply as a result of a cost-effective measure by a charity that deserves the praise that is heaped upon it.
This type of innovative forward thinking can, if replicated in other parts of Kenya and across the African continent, offer hope to millions of people who otherwise would have none. Offering people ownership of the benefits of many of these projects on an anti-corruption basis can also help remove the stigma that has attached itself to some of the aid efforts of the past in Africa.
Simon Maddrell, who is the originator of Excellent Development and is originally from the Isle of Man, and Joshua Mukusya, who is described as a charismatic Kenyan agriculturist, pioneered the sand dam technology in Kenya to help impoverished communities. Between them they have delivered considerable assistance to more than 250,000 in Kenya. Simon Maddrell’s original applications for charity work were turned down several times, but he decided—I have much sympathy with his decision—that if he could not join them he would beat them. He set up his own charity.
I should also like to mention the work of Dr. Rene Haller, who is from Switzerland. Dr. Haller started experimenting with different trees to see if any would put down roots into the dry, rocky terrain in northern Kenya. The casuarina tree, whose seeds were washed up on Kenyan shores when Krakatoa erupted in the 1860s, was thought to be the best candidate. It produces nutrients in nodules on its roots and so is self-sustaining.
Haller set up a charity and managed to establish many different business enterprises supported by rehabilitated land, both employing and providing food for hundreds of local people. He managed to demonstrate the value of conservation—for example, by showing farmers the benefits of tree planting in preserving water for irrigation. Another activity complements dam-building projects. To prevent the freshwater pools from becoming breeding grounds for mosquitoes, fish have been introduced and the fish eat the mosquito larvae. The fish are also a rich source of protein for the community and they fertilise the water, which makes it even better for feeding the crops. Any surplus fish are sold, providing much-needed income for local communities.
I and my party have supported successive Governments in their endeavours, through international aid agencies, to help in Kenya and throughout Africa, but I hope that the Minister today can offer the prospect of additional help to projects such as those that I have outlined, whereby a difference can be made on a local and regional basis. I am talking not just about a difference in per capita spend in Kenya, but about a difference that is seen on the ground, at very local level, and that individuals there report as a positive step, a renewal step, a regenerating step. I am talking about steps that provide them and future generations with the wherewithal to regenerate that part of Africa.
I join the hon. Member for East Londonderry (Mr. Campbell) in welcoming the opportunity to serve under your chairmanship, Dr. McCrea. I do not think that I have had that privilege before now. I also, in the usual way, congratulate the hon. Gentleman on securing the debate and on the way in which he introduced the topic. I welcome, too, the interest of his party colleague, the hon. Member for Upper Bann (David Simpson), in the debate. I join both hon. Members in paying tribute to the considerable number of charities, aid agencies and individuals who make it their life’s work to serve people less fortunate than themselves on the continent of Africa, and in particular today, to those working in Kenya.
In a debate such as this, it is worth noting that although many of the countries in Africa still face considerable challenges, there has been considerable progress across the continent. One thinks of the considerable numbers of children who are now in school, the rising economic growth and extra jobs that are being created—notwithstanding the impacts of the current global recession—and the fact that less conflict is taking place in Africa now than probably at any time in the last 30 years, albeit there are still considerable challenges.
May I rectify an omission? I also thank those people involved in the Westminster Foundation for Democracy, who have made a considerable contribution to the work in Kenya and other parts of Africa. I omitted to mention that in my speech and I thank the Minister for giving way to allow me to do so now.
The hon. Gentleman makes an important point about the contribution of the Westminster Foundation for Democracy, which does very good and important work—work that is appreciated by politicians and parliamentarians across the globe, but particularly in a number of Commonwealth countries.
The hon. Gentleman rightly drew the attention of the House to the issues relating to drought, famine, corruption and good governance. Those issues would challenge any state, but they are challenging Kenya in particular at the moment. He is right to highlight the fact that for millions of people living in Kenya, hunger is a harsh reality. In 2009, an estimated 3.8 million Kenyans needed emergency food aid, hence the importance of today’s debate.
It is perhaps worth pointing out that the real problem is not that there is no food available in Kenya, but that food is available only at a price that puts it beyond the reach of most people, particularly those living in remote or marginalised areas. There are a number of reasons for that. As the hon. Gentleman said, last year’s drought had far-reaching consequences for Kenyan farmers, for other food producers and for people in Kenya more generally. El Niño rains were expected from October to December, but many areas experienced a shortfall of rain. It is a cruel irony that although rain is now falling in Kenya, it is falling at a rate that has caused harmful flooding in many areas in the past week alone. All that means that Kenyans are likely to suffer even more hunger this year than they did last year, and that is why the work of the charities that the hon. Gentleman described is so important.
The second barrier to affordable food has been the post-election violence that has blighted some areas. As a result of tensions and conflict, pastoralists in north and east Kenya have had difficulty accessing land and water sources. The fear of violence also means that even those who did manage to produce food face problems supplying it to their usual markets.
The third challenge has been the massive rise in food prices. The hon. Gentleman will probably remember that food prices across the world rose steeply in 2008 in line with rising oil prices. Although global prices fell later, Kenyan prices remained high last year, with maize costing about double the average global rate. That was in part due to high transport costs, but according to research recently carried out by the World Bank, domestic prices in Kenya also reflect subsidies that the Kenyan Government have offered to maize producers. By subsidising producers who sell maize to the National Cereals and Produce Board, the Government have, in effect, kept maize prices high. In addition, although the subsidies were meant to be part of the response to the food shortage, the reality is that only a minority of large farmers benefited, leaving the impoverished majority even worse off. Indeed, according to the same research, half of all maize revenues are enjoyed by just 2 per cent. of farmers.
Those, then, are some of the underlying causes of the shortage of affordable food in Kenya. I assure the hon. Gentleman that the Government are committed to trying to tackle these challenges and to giving help to those who need it immediately. Let me set out how we have responded. First, on humanitarian aid, my right hon. Friend the Secretary of State announced in October that we would provide £39 million of extra funding to tackle the food crisis across the horn of Africa, bringing Britain’s total new commitments for 2009 to £83 million. As the hon. Gentleman will recognise, the horn covers a number of countries beyond northern Kenya, but Kenya certainly benefited.
I have to tell the hon. Gentleman that Ethiopia must remain our priority, given the sheer number of people in need. In 2009 alone, however, our direct humanitarian support for Kenya reached nearly £15 million. That money is helping to provide a full emergency food ration for up to 220,000 people for three months, treatment for more than 25,000 cases of severe acute malnutrition, clean water for 200,000 households and vaccination against measles for 400,000 children.
The hon. Gentleman’s intervention is extremely timely, because I was moving on to reassure the House that the money we give Kenya is channelled through reputable agencies with a sound track record of aid delivery and good financial management, which the Department has worked with in several humanitarian emergencies. We have audited them regularly and are confident in their ability to get aid to those at the sharp end who need it the most. We believe that humanitarian aid should be focused on those groups where the needs are greatest, rather than spreading larger amounts of assistance more thinly.
Hon. Members will be aware that the Department for International Development, under the leadership of my right hon. Friend the Secretary of State, published a White Paper on development last July. In that White Paper we made clear our commitment to ensure that agriculture and food security will be given the highest international attention. We have as a result also lobbied other Governments to do more in Kenya. The announcement that we made on additional funding has helped to put pressure on others to do more to help the people of Kenya. My ministerial colleagues and I have approached our international counterparts and I have written personally to Development Ministers of all major donor countries to alert them to the famine in the horn.
We have tried to lead the international response to the difficulties that the people of Kenya face, and to do so by example. In 2009, the UK was the third biggest bilateral donor of humanitarian assistance to Kenya, after the US and Japan. In addition, the UK accounted for 17 per cent. of the $41 million committed by the European Community Humanitarian Office, and more than 15 per cent. of the $30 million committed by the UN Central Emergency Response Fund. The aid provided by the UK and others has brought some stability and has meant that food has been available, at least in the short term. The challenge is to avoid the same situation happening year after year.
That brings me to our second area of activity: helping Kenya to become self-sufficient so that it no longer needs to depend on humanitarian aid. We know that cash can have greater long-term benefits than food aid because it allows people more flexibility in the way that they organise their lives and incomes. We are providing £122 million over 10 years to improve the livelihoods of the poorest Kenyans, particularly in the drought-prone arid lands. Much of that is going through a hunger safety net programme, which provides cash to 90,000 poor rural households. A very rough equivalent would be the social security system of the UK. The fledgling programme is the start of a similar system in Kenya. Additional funding from the Kenyan Government, the World Bank and UNICEF extends that to another 120,000 households. In total, that means that more than 1 million of the poorest Kenyans will receive support in the form of cash rather than food aid.
We are also putting money into new crop and livestock insurance products to help poor households manage the risks posed by extreme weather events; we are trying to support people in looking after themselves for tomorrow, rather than just in dealing with the immediate situation. We have also just started working with the Ministry for Development of Northern Kenya and Other Arid Lands on a programme of longer-term support that will reduce dependence on humanitarian assistance. We plan to commit up to £15 million to that programme.
Thirdly, we have increased the frequency and intensity of our discussions with the Government of Kenya. Last year the Kenyan Government allocated more of their own resources to dealing with the consequences of drought than ever before. Frankly, they could do still more. Kenya has substantial domestic resources and should be perfectly able to prioritise the plight of its most vulnerable citizens. We shall continue to take every opportunity we can to make that point. We have also encouraged the Kenyan Government to develop their own longer-term strategy. We are working with Ministers and officials in Kenya to help them to appreciate the economic consequences of climate change, which is clearly an increasing factor in some of the difficulties that the people of Kenya face. It is particularly important that they are able to take advantage of the opportunities offered by new climate finance, including the resources committed at Copenhagen. I therefore hope that the hon. Member for East Londonderry will agree that a lasting solution to food insecurity does not lie in humanitarian aid, however crucial it might be in the short term, and that the Department needs to focus on not only the immediate humanitarian needs of the people of Kenya, but how to help them to avoid a repeat of the present situation in the longer term.
The hon. Gentleman specifically asked whether we could give further support to particular charities and he described the work of charities with which he is familiar. We have a strong programme of support for civil society; indeed, the Secretary of State increased that support last July, at the time of the White Paper. I do not know whether the organisations that the hon. Gentleman mentioned have had discussions with the Department, but if he wants to write to me or to bring some of their representatives to see me, I would be happy to listen to any presentations and to point people to potential sources of funding for work with the Department. The hon. Gentleman will understand that I can give no guarantees to him or the House, because we clearly need to do our audit checks. In principle, however, I would be happy to meet him and the organisations concerned, if he thinks that that would be useful.
Perhaps the last point that I should make is that we are seeing a disaster of the magnitude of that in Haiti every year internationally. At the same time, however, we are regularly seeing continuing emergencies of the sort that the hon. Gentleman has brought to the attention of the House. The international system is having to deal with the reality that a growing number of people need humanitarian assistance, some for relatively short periods, others for much longer. There continues to be a question as to whether the international humanitarian system is tooled up, for want of a better phrase, to cope with the expected increase in the numbers needing humanitarian assistance. As the Prime Minister said at Prime Minister’s questions only last week, we need to keep our eye on that particular issue. DFID and I as a Minister in the Department are continuing to put considerable time and energy into the issue.
I hope that I have done justice to the issues that the hon. Members for East Londonderry and for Upper Bann have raised. I repeat that I am happy to meet the hon. Member for East Londonderry and colleagues in the charitable sector with whom he has worked. I hope that people—perhaps in Kenya—will reflect on the issues that we have discussed and on whether they can do more to tackle the long-term challenges that Kenya faces.
Colombia (Human Rights)
[Miss Anne Begg in the Chair]
It is a pleasure to serve under your chairmanship, Miss Begg. I sought this Adjournment debate because I visited Colombia last year and saw at first hand the human rights atrocities that go on in that country. The Colombian Government are a slick PR machine, well rehearsed at saying all the right things about how they are tackling the human rights crisis, but the real situation is very different from what they say. In fact, the regime in Bogota is complicit in the abuses.
However, the Labour Government are endorsing the proposal for an EU-Colombia free trade agreement—something that will only serve to legitimise the terrible record of the Uribe regime. Our Government say that they will ensure that a human rights clause is incorporated in the agreement and that that will provide the UK and the EU with leverage to force Colombia to comply with certain human rights standards, so I want to pose these questions to the Government.
First, if innocent people are still, as we speak, regularly being murdered by the Colombian army, why do the Government and the European Union believe that rewarding the regime with an FTA will do anything to improve the situation? Surely it would be better to wait for the killings to end—to tell the regime that it can have the agreement after it starts respecting human rights, not before.
Secondly, how will the Government monitor improvement by using the clearly bogus figures produced by the Uribe PR machine? Thirdly, what is the mechanism for withdrawing the agreement? We understand that withdrawal requires unanimous agreement by all the EU member states—something that we are never likely to get, regardless of the abuses in Colombia. Lastly—this is the proof of the pudding, as I see it—the EU already has a generalised system of preferences trade agreement with Colombia, which includes human rights clauses that the Colombia regime is currently flouting, yet the EU, far from suspending that agreement pending an investigation, as it is doing with Sri Lanka, is choosing to reward the Colombian regime with a full free trade agreement.
I come now to some specifics of the human rights situation in Colombia. First, I want to focus on the abuses suffered by our trade union colleagues, because, as we all know, that country is the most dangerous place on earth in which to be a trade unionist. It is vital to put it on the record that contrary to the assertions of the regime in Bogota and some of its more fervent supporters in the international community, the situation has not improved for trade union members. The facts are clear. In 2007, there were 39 assassinations of trade union leaders; in 2008 there were 49. That is a 25 per cent. increase in the number being killed.
The statistics are the same for other abuses. More trade unionists are receiving death threats and being forced to flee their homes and jobs. More trade unionists have disappeared and more trade unionists are being locked up without trial. It is high time that people stopped swallowing the propaganda of the Colombian regime and looked at the reality.
It is also important to examine who is perpetrating the attacks and, according to the Colombian TUC, that is pretty clear. In 90 per cent. of the cases, the perpetrator of the abuses is the state, either directly via the police and army or indirectly through allowing right-wing paramilitaries linked to the army free rein to butcher our trade union colleagues in that country. The question of why they are being targeted also comes back to the Colombian state. On repeated occasions in recent years, the Colombian President himself, President Uribe, has spoken out publicly about trade unionists, human rights activists and the like, but instead of saying how important their work is and offering support for their predicament, he has lashed out at them, describing them as criminals or terrorists. Such comments lead to people being killed, and President Uribe knows that.
Like the hon. Gentleman, I have visited Colombia, but I did so about eight years ago. I met President Uribe and all the officials there and was given assurances that the extra-judicial killings and the murders of trade union representatives were now under control and were stopping and it was all a put-up job by other organisations. I came back to this country and had meetings with Ministers here and was given the same assurances, but we see things, if not staying the same, getting even worse. Is the hon. Gentleman confident that this time the Government will actually listen and take action on this matter?
The proof of the pudding will be in my hon. Friend the Minister’s response. I agree with the hon. Gentleman, in that the Colombian Government run a slick PR system and they are very convincing, especially when we are talking to Ministers, but I am confident that our Minister will see through that and see the Colombian regime for exactly what it is.
What is truly astonishing, however, is the impunity that the perpetrators of the attacks enjoy and the almost total lack of any genuine effort on the side of the Colombian authorities to confront the problem. More than 100 union leaders have been murdered in Colombia since 2007, yet in not one of those cases does anyone appear to have been convicted and jailed for the assassination. That is a green light to those who engage in the attacks to continue doing so. Although the Colombian regime claims that it is dealing with the issue, it is unable to supply the names of anyone who has been convicted of any of the killings or to say in what jail they are being held.
Does the hon. Gentleman accept, if he takes the figures from the Human Rights Observatory, that in fact there has been a significant reduction in the number of union leaders being killed? For example, in 2008 it was 17; in 2009 it was nine. I would be interested to know where he got his figures from.
You can imagine the outcry, Miss Begg, if nine trade unionists were killed in this country; you can imagine the effect that there would be. The situation is similar for journalists, because Colombia is one of the most dangerous countries in the world in which to be a journalist. Six were assassinated there during 2009, and the concerning thing about such cases is that those murdered are invariably the journalists reporting on Government corruption, human rights abuses or other issues that the regime in Bogota would prefer to be swept under the carpet. There has been widespread harassment of journalists deemed unsympathetic to the Administration of President Uribe, including by the DAS—Department of Administrative Security—secret police, who in one case threatened to murder the daughter of a reporter if she did not shut up. It is not enough simply to condemn those who violate press freedom or kill trade union activists. Those responsible need to be named and shamed, and in this case that is primarily the Colombian regime.
The second human rights issue that I want to touch on is political prisoners, as although the regime in Bogota appears to find it impossible to arrest those responsible for killing trade unionists and others who speak out against President Uribe, it seems to have no problems whatever in locking up critics for long periods without trial, on the flimsiest of evidence. That tactic of jailing opponents is used by several nasty regimes around the world. Burma, Zimbabwe and Sudan jump to mind, and the Foreign Office has rightly spoken out in those cases. What is strange in the case of Colombia, unlike the others that I have mentioned, is the deafening silence from our Government. Let us be clear: although the regime denies it, the Colombian authorities are throwing large numbers of people in prison simply for their political beliefs.
With five parliamentary colleagues, I visited several of the victims of that criminalisation in two prisons in Colombia last year. It was clear that they were being locked up on bogus evidence that would not be taken seriously in most countries. They are normally accused of rebellion or terrorism; but they are not taken to court so cannot clear their names. They are left to languish in jail for months—and, indeed, for years.
I, too, had the opportunity a few short years ago to visit Colombia. Along with my colleagues, I had the chance to meet a number of displaced people. I understand that their number has increased to about 4.5 million—but perhaps my hon. Friend was coming to that. Does he agree that that figure alone suggests that it is time for a strategy to return to peace in a country that does not give the impression that its leadership is prepared to do so?
My right hon. Friend is renowned for his work in international development. Indeed, he is regarded by many in the House, if not all, as a man of the highest integrity. In case there is any ambiguity about what we are saying, my right hon. Friend has confirmed that it is also his view.
Why have we not condemned this state of affairs more forcibly? The truth is that it should not need much pressure to get the Colombian authorities to release those prisoners. For example, the British NGO Justice for Colombia has managed to get more than 15 political prisoners released; and only days after we visited the prison, one of the prisoners whom we had met was freed, which allowed a very public denunciation of his situation in the Colombian press.
I would like to focus on one prisoner, a woman I met last year. She is an outspoken defender of human rights and trade union rights, and she remains in prison unconvicted even as we speak. I ask the Minister to consider the case of Liliany Obando. She is an academic, and has toured north America and Australia at the invitation of trade unions there, with the express intention of raising awareness of the human rights crisis in Colombia. Her high profile work clearly angered the regime in Bogota. Shortly after she returned from one of her speaking tours, she was dragged from her home in front of her young children, and thrown into jail. That was a year and a half ago, and she is still there. I therefore urge the Minister to make urgent representations on her behalf and publicly demand that the Colombian authorities release her immediately.
I understand that one of the accusations against Liliany Obando is that she was collecting money for terrorists, yet she had raised money from a Canadian trade union to be used for an educational project in Colombia. That accusation was condemned by the Canadian Government. I hope that the Minister will consider taking the same position today.
My hon. Friend makes a perfectly valid point. The Canadians have been very proactive, not only in that case but on the situation in Colombia in general. I shall touch on that aspect later.
I wish to cover one other matter—one that is so important that it deserves the attention of everyone here today. It is the question of extra-judicial execution. It is a deplorable practice. The Colombian army is murdering civilians, and then dressing their bodies and pretending that they were guerrillas killed in combat. It does it because, in the grotesque world of Colombia’s Ministry of Defence, soldiers who achieve a high body count receive financial bonuses with time off work and their officers receive promotion.
To the south of Bogota is a poor neighbourhood called Soacha. Over the past few years, countless young men from that neighbourhood, where unemployment is extremely high, have been offered jobs by a bogus employment agency established by the army. The young men, some as young as 17, when going off for their first day at work, simply disappeared—that is until their bodies were paraded on television by the army as guerrillas killed in combat; they were even wearing FARC guerrilla uniforms. The problem was that although their bodies were riddled with bullet holes, their uniforms were not; they had clearly been dressed as combatants after they had been executed.
It has since transpired that that practice is systematic, and is carried out by military units across Colombia. I understand that about 2,000 cases have been identified—that is 2,000 civilians who have been slaughtered in cold blood by the Colombian army. What happened at Soacha was important, although Colombian human rights groups had been highlighting the practice for some time—only, I might add, to be accused by President Uribe of being anti-army terrorists.
Soacha was the first time that the media, the United Nations and others became involved. Indeed, the UN High Commissioner for Human Rights said that the phenomenon was so extreme, so systematic, that it could be described as a war crime. Soacha therefore became an emblematic case; and everyone, including the US Government, expressed concern and called for justice—and the Colombian Government promised that justice would be done.
Once again, however, despite the promises, the Colombian Government appear to have done nothing. Although a small number of soldiers were detained pending trial, I understand that in the last couple of weeks, now that international scrutiny has subsided, the Colombian authorities have started releasing those men without them having faced trial. Basically, those responsible for that industrial-scale slaughter are back on the payroll.
That, however, is just the tip of the iceberg, as the majority of those involved were not even investigated. Their ringleader, General Mario Montoya, who in any other country would have been jailed for life, was instead appointed Colombian ambassador to the Dominican Republic. He remains there today, no doubt living the cushy life of a diplomat, yet his victims’ families have received no justice.
The contrast with the plight of Colombia’s political prisoners could not be greater. It is astonishing that the authorities in Colombia seem unable to catch the soldiers responsible for the extra-judicial killings, or the hundreds of people who have assassinated trade unionists, yet at the same time they are most effective at locking up those who speak out against the abuses and the Uribe regime more generally.
To sum up, it is important to say that the Colombian regime is expert at misleading the international community, and at providing misleading and bogus information to try to pull the rug over our eyes. Senior Government officials will sit in front of us, smile, look straight into our eyes and tell a pack of lies. It is crucial that we do not fall for it. We need to listen to what human rights organisations, trade unions, independent journalists and so many other brave members of Colombian civil society are saying. What they are saying is supported by evidence that the Uribe Administration are complicit in the violence and are not the slightest bit serious about dealing with the abuses.
If we believe the propaganda, we will be doing an immense disservice to the people of Colombia. For that reason, I call on the Minister to end British political, diplomatic and military support to that odious regime. In particular, in light of all the evidence, it is absurd to suggest that pushing ahead with a free trade agreement between the European Union and Colombia will help to alleviate the suffering of Colombian civil society. Colombia’s trade unions, human rights groups, organisations that represent peasant farmers, its indigenous people and thousands of others have made it clear that such an agreement would make the situation worse, not better.
It would be a disgrace for the British Government to support anything that merely served to legitimise Uribe. We should be on the side of those whose rights are being abused, not of those who are perpetrating the abuses.
I congratulate the hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this debate. He brings an important subject before the House. I have much respect for him. I know that he feels passionately about the matter and has consistently spoken up for human rights in Colombia.
I declare an interest in that I recently visited Colombia as a guest of the Colombian Government; it is entered in the Register of Members’ Interests. I am also secretary of the all-party group on Latin America, and a member of the Conservative party Human Rights Commission with responsibility for Latin America. I have often raised human rights matters, not only with the Colombian ambassador in London but with incomers and ministerial visitors from Colombia—and, indeed, when I was in Colombia.
I condemn any killing of any sort in Colombia, whether it be the assassination of political leaders, the recent assassination of a regional governor, or the assassination of trade unionists or journalists. All murders and killings are wrong, but I hope that the hon. Gentleman and some of his esteemed colleagues will recognise that progress has been made. I dispute the figures that he has brought before the Chamber this afternoon. Every murder and killing is a murder and killing too far; they leave behind a suffering and grieving family. None the less, there has been a reduction not only in extra-judicial killings but in the killings of journalists and trade unionists. The perpetrators of such murders are wide and varied, and it would be wrong entirely to place the blame at the foot of the Government of President Uribe.
If the hon. Gentleman cares to look at the statistics for the amount of close protection and bodyguards that are given to trade unionists, he will see that they have increased. Perhaps I might pay tribute to him in that regard. The Government of Colombia were right to listen to the view of many people in this House—whether they be on the left or right—that there should be better provision for the protection of trade unionists, and that is happening and it should continue to do so. The Government of Colombia are right to keep the matter under review and if the provision needs to be extended, so be it.
There is a contradiction at the heart of the hon. Gentleman’s argument. On the one hand he suggests that the Government should do more to promote human rights in Colombia, and on the other, some people on the Labour Back Benches have been campaigning very hard to see human rights training for senior military officials in Colombia withdrawn. That is what has happened. Therefore, the contradiction at the heart of his argument is clear. We need people at the very top as well as people in voluntary organisations, non-governmental organisations, and advocacy groups promoting human rights.
Does the hon. Gentleman not concern himself with the fact that when we look at Colombia we discover the tremendous problem of drugs and the influence of the drug barons? We are told that drug-related conditions are second only to cancer as a cause of death. Does he not feel that much more needs to be done to co-ordinate a response to remove that blemish?
I completely agree with the right hon. Gentleman. The fact is that drugs from Colombia—I was recently in the jungles of Colombia—fuel crime in the streets everywhere, whether it be in West Bromwich Albion, Shropshire, or in the Rhondda. I am glad that the British Government are working in close co-operation with the Government of Colombia to deal with the issue. What is of particular concern is the new and emerging link between al-Qaeda and the FARC, which live and breathe off drug money. Moreover, because farmers have been so successful in diversifying their crops away from cacao, a lot of the drug production has been displaced into Venezuela. A question perhaps for another day is: what are the Government of Venezuela and President Chavez doing with the revenue that is coming from drugs in Venezuela? Therefore, progress is being made, but we want to see more.
Let me touch now on the organisation Justice for Colombia, which is funded by the TUC. Although I do not have an issue with that, the TUC and some trade unionists need to recognise that progress is being made. If occasionally they made one positive statement about the most minuscule amount of progress in whatever Government department in Bogota, some of their many siren calls about the Government of President Uribe might be taken more seriously. They need to applaud on occasion and condemn, as I do, when there are human rights abuses. I suspect that even if President Uribe or any future president were to get it absolutely right, Justice for Colombia may well move on to President Calderon and become Justice for Mexico.
Let us consider the facts. There has been a reduction in homicide, including the homicide of union leaders and teachers, who are also unionised members; a 90 per cent. drop in kidnappings; and a huge demobilisation of guerrillas, from the FARC and the other two groups—perhaps there is a lesson there for the Afghanistan campaign—the members of which have become integrated into society and run farms and small businesses. FARC numbers are running at around 9,000, which is a huge success. Both individuals and the collective have been demobilised and vulnerable groups have been protected.
If we look at who has attended this debate today, we will see that many of the glitterati of the left are here, and they are entitled to their view. I suspect that much of this agenda—not all of it, the human rights issue is important—is driven by an anti-capitalist outlook on life. [Hon. Members: “Oh!”] Yes, shock, horror. It is also driven by a slight dash of anti-Americanism. The fact is that the EU-Colombia free trade agreement will address many of the issues on which we agree. It will reduce poverty, enfranchise people to set up their own small and medium enterprise businesses, allow people to have the money to put shoes on their children’s feet, and enable people to send their children some distance to go to school. If there is no agreement, millions of Colombians will be locked into the poverty they find themselves in at the moment. If there is a real campaign against the free trade agreement, the left in the Labour party should say so and tell its Front-Bench team. I will support the Government if they continue to support the drive to see that trade agreement come forward.
There have been successes in the Colombian economy. GDP and exports are up; inflation is down and private investment and foreign direct investment have risen. Britain, of course, is a major investor. I caution the left of the Labour party, those anti-bilateral trade agreement people, and those who have the dash of anti-Americanism running through their blood, that many pension trusts and investors from this country invest in Colombia. A destabilised Colombia would present a peril to pension investment and to the people who draw pensions in every constituency represented in this House today. The public sector debt and unemployment are down, and we want to see more people in employment, but let us recognise progress when progress is made.
Please forgive me, Miss. Begg, but I need to leave this debate early. I am sure that some hon. Members will be delighted about that. I will read the debate in Hansard. I am sure that it will be exhilarating, especially with my hon. Friend the Member for Rayleigh (Mr. Francois) and the Minister for Europe on the Front Benches.
Let me finally touch on Venezuela. It is particularly unhelpful to the poor people of Venezuela and Colombia and to the region as a whole for President Chavez to use hot talk to endanger stability and geopolitical peace in the region.
I am coming on to that; I am giving the hon. Gentleman some context first. The fact is that there are incursions on both sides of the border. They should end and both Governments should ensure that the rhetoric is reduced and that there is dialogue in a measured, calm and reasonable way, because conflict in the region would be absolutely disastrous for both countries.
I also encourage the hon. Gentleman himself, through his Venezuelan contacts, to encourage the Government of Venezuela not to talk in apocalyptic terms and not to talk about nuclear ambitions—I have a reference to such talk here and I am happy to send it to him. That talk is destabilising for the region and—dare I say it?—it is also destabilising for the poor people in the region and for human rights throughout Latin America.
I conclude by saying that much progress has been made in Colombia. It is not enough, it is not being made quickly enough and more needs to be done. However, I encourage the glitterati of the left in the Labour party to recognise where progress is being made. Yes, they should condemn when it is appropriate to do so, but occasionally they should recognise and applaud where breakthroughs have been made.
I congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this debate. It is an important debate and he has covered the issues affecting Colombia comprehensively. Indeed, when one also takes into account what the hon. Member for The Wrekin (Mark Pritchard) has just said about his involvement with and understanding of Colombia, it makes for an extremely comprehensive background to the debate.
The issue that I want to raise is a narrow one. I want to focus my remarks on the secret police in Colombia, who are known as DAS. I want to bring to the Minister’s attention, although I think that he will be aware of them already, the press reports in Colombia that have suggested that there is a link between the UK security forces and DAS, which is a suggestion that I find greatly disturbing. We need to take these reports seriously and I will be listening to what the Minister has to say regarding the issue.
When we look at the situation of the security forces in Colombia, I think that hon. Members would agree that the reports that have emerged indicate that there is a straight link between President Uribe and the security forces; that, in fact, they report directly to him. I think that colleagues will also be aware of the recent scandal involving the security forces in Colombia. They have been involved in drug trafficking. It would appear that their involvement has been basically to neutralise the complaints that have been made regarding other activities.
This may be another point that the Minister can respond to, but I understand that, because of what has gone on in Colombia with the security services there, Interpol has decided that it should no longer co-operate with the DAS security forces. As I say, perhaps that is something that he will refer to in his winding-up speech.
I also understand that senior Colombian officials have been embarrassed by the scandal involving the country’s security services and that they themselves have made statements, which have also been reported in the press, calling for disbandment of the security services. Again, that may well be something that the Minister wants to refer to in his winding-up speech.
Having listened to my hon. Friend the Member for Paisley and Renfrewshire, North, I think that it is fair to say that there is still thuggery in Colombia. I think that that is accepted, although the hon. Member for The Wrekin made the point that there has been a reduction in the number of homicides in Colombia. Nevertheless, the very fact that a homicide can take place is to be considered disturbing. Although that decline in the number of homicides has happened, the thuggery is still there.
Indeed, when we look at what the Colombian security services have been involved in, we know for a fact—the evidence shows it—that death lists have been drawn up by the security services, they were passed to paramilitaries and paramilitaries carried out the murders. Although there may be a reduction in the number of homicides, the fact that that kind of activity can take place in a modern society is very disturbing.
Hon. Members may well have seen or read this already, but I understand that it has been reported in the Colombian press that, in one instance, members of DAS were ordered to participate in the murder of a trade union leader. The fact that the security services are involved in intimidation, which can lead to murder, and have tried to cover their tracks by drug trafficking again causes me concern about the way in which that society operates.
We also know that the threats have been widespread. I want to make the point to the Minister that communication intercepts of, for example, Supreme Court judges, trade unionists, human rights activists and so on have been made. We know that as a result of those intercepts, death threats were made. It would be a laugh if it were not so serious, but the death threats have been made in accordance with a textbook that is issued to DAS officers. The textbook sets out how they should approach or communicate with a particular person to make their death threat. It is because of the way in which these death threats have been made to this group of people that they have been traced back to that textbook and therefore to the security services.
I understand that the actual machinery that was used to make those intercepts is alleged to have come from the UK. It is alleged that the machinery was provided to the security services of Colombia and that it is being used, as I have said, in an intimidatory way. Perhaps that is something else that the Minister will refer to in his winding-up speech. If there is indeed evidence that such technology has been exchanged with or sold to Colombia, I hope that he will take action to ensure that that activity is brought to an end.
The final point that I want to make to the Minister is related to the way in which the British embassy in Bogota appears to have a relationship with, for example, the director of DAS. I have been told that I can be provided with a list of the people who were invited to a dinner at the embassy last year and that among the names on that list is that of the director of DAS. If that is correct, again, I find it very disturbing that that man, who is responsible for intimidation, has been invited to attend a dinner at the British embassy.
I understand the hon. Gentleman’s concern. However, is he not in danger of confusing the relationship between the UK embassy and Colombia in relation to counter-terrorism advice, help and support and the embassy’s counter-narcotics help and support, given that those two issues are linked to what goes on in the streets of London and elsewhere?
I do not think that I am in danger of confusing those issues. We have evidence that the director of the security services is so involved in thuggery that we should keep our distance from him. We should pass instructions down the line to our embassy in Bogota saying that we should not invite people to dinners at the British embassy when we know that they have been involved in the violation of human rights, as this person has been. When the Minister winds up, perhaps he can let us know whether any instruction has been passed down the line to ensure that we do not invite people who are involved in thuggery to the British embassy. Inviting such people to dinners at our embassy is not helpful, because it gives Britain the wrong image throughout Latin America. If I am proved correct about this issue, I hope that action can be taken and that an instruction can be passed down the line saying that we should not be involved with people we know to be involved in thuggery.
I congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing the debate. I have been described as many things, but I have never been described as part of Labour’s glitterati. When I look round at Members from places such as Barnsley, Paisley and Renfrewshire, and Bradford, I know that those are the places where the real glitterati hang out.
My hon. Friend mentioned the proposed free trade agreement between the EU and Colombia and how its so-called human rights clauses are likely to have no effect on the situation in Colombia or on the behaviour of what can only be classed as the abhorrent regime in Bogota. However, I would like to add a couple of points about the agreement that make it even more imperative that the British Government insist on delaying it.
The first point relates to the international situation and the United States. The hon. Member for The Wrekin (Mark Pritchard) accused some of us of anti-Americanism, but I side with Americans such as Mark Twain, who said that he did not want to see the eagle of freedom sink its talons into any other country. There is a sizeable body of opinion in America that thinks differently from right-wing Republicans. As hon. Members and the Minister will be aware, the US Congress, backed by the President, has so far refused to ratify the country’s free trade agreement with Colombia. The reasons that have been given for that are the human rights situation, the ongoing attack on trade unionists and others and the continuing impunity that the Colombian authorities have permitted. I understand from recent press reports that the US ambassador in Colombia announced last week that he thought there was little chance of the US-Colombia agreement going anywhere at this stage. Interestingly, Foreign and Commonwealth Office Ministers are often portrayed as America’s outriders, so I wonder how they feel about the present situation. On most occasions, we seem very pleased to follow in America’s wake, but what are we doing now?
In addition, the Canadian Parliament has not ratified the proposed Canada-Colombia trade agreement, again after incredibly fierce debate about the human rights consequences. Similarly, the European Free Trade Association group of countries has delayed approval of its free trade agreement with Colombia, again on human rights grounds. For the European Union to press ahead with such an agreement would send entirely the wrong signal—that human rights are not so important to the European Community. It would also shatter the international consensus on the issue and provide President Uribe—one of the worst human rights abusers in the world—with an incredible domestic propaganda victory, which his regime, more than any other, does not deserve.
My other point on the free trade agreement is perhaps of more concern. The Minister will correct me if I am wrong, but I understand that informal discussions with the European Commission have revealed that suspending the proposed EU-Colombia free trade agreement on human rights grounds at some point in the future would require the unilateral agreement of all 27 EU member states, and senior Commission officials have privately admitted that there is no chance whatever of securing that unanimity. The Colombian regime presumably knows that—as has been said, it has an excellent intelligence agency domestically and internationally—and therefore has little interest in whether there are human rights clauses in the agreement, safe in the knowledge that they would never be enforced in any case. Therefore, the arguments that the Foreign Office has repeatedly put forward in recent months about including human rights clauses in the agreement are slightly disingenuous—I am being quite polite there. Colombia clearly does not respect human rights, and incorporating in the agreement clauses that will never be implemented will do nothing to change that.
My hon. Friend mentioned that Colombia benefits from a generalised system of preferences-plus trade arrangement with the EU. That mechanism specifically says that countries benefiting from the GSP must comply with several international human and labour rights standards. If they do not, it says that an investigation should immediately be opened into their conduct and that trade preferences should be suspended, as recently happened in the case of Sri Lanka and, before that, Belarus. Colombia complies with virtually none of its obligations under international treaties. Do not get me wrong, the Colombian Government swear that they comply with everything, but that is nothing more than spin in reality. They regularly breach International Labour Organisation core labour standards, and collective bargaining in the public sector, for example, is illegal under Colombian law. They also flout international human rights norms almost daily. Has the European Commission pushed for an investigation or a suspension? It has not. I wonder why. When such abuses so clearly continue, why on earth would it be sensible to upgrade Colombia’s trade status?
When one looks at how the GSP human rights clauses have been so comprehensively ignored, it is beyond belief that the Foreign Office should continue to bleat on about how the human rights clauses in the proposed free trade agreement will make all the difference, give us leverage, force an improvement and all the other nonsensical arguments that we have heard. When I last met a Colombian trade unionist just before Christmas, she clearly told me how strange she and her colleagues felt about what was happening with the free trade agreement. They had always assumed that Europe was to the left of, or more progressive than, its counterparts in Washington. For us to push ahead with the agreement, while the United States has taken the position that it has on human rights, is an utter disgrace. It is stomach-churning that a Labour Government should provide this undeserved reward to a regime that murders more trade unionists than every other repressive regime in the world combined. I and other members of the glitterati will continue to raise this issue, because the fate of working people, whichever country they live in, is closely linked with our politics, and we will not give up on them.
It is always a great pleasure in such debates to follow my hon. Friend the Member for Elmet (Colin Burgon), who is a new Labour colleague and friend. I congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on calling the debate. It is always a great privilege to support an hon. Member whose constituency’s title is as long as mine.
In December 2009, I was fortunate to be a member of a delegation to Colombia sponsored by the Justice for Columbia campaign, and if hon. Members have a look at the Register of Members’ Financial Interests, they will see my entry in that weighty tome. I want to make some general remarks about that visit, which was my first to Colombia. First, the country is very beautiful and has an excellent climate. Its regions are very fertile and it is very productive agriculturally. It is rich in mineral resources and the people are fantastically friendly to Europeans like us. The problem, currently, is that the people of Colombia are being badly let down by their national Government, whose performance has a negative impact on the country’s standing in the world. The biggest problem is the infringement of Colombian people’s human rights, particularly the number of extra-judicial killings that continue to take place, and particularly the killing of opposition politicians and trade unionists. As Amnesty International has said, Colombia is the most dangerous country in the world in which to be a trade unionist. For the past decade, more trade unionists have lost their lives in Colombia than in all the other countries of the world put together.
When we arrived in Bogota to go to the hotel in the city centre, one of the first things that I noticed was the number of people on motorcycles, and the fact that they all had reflective bibs and crash helmets with the registration number of the motorcycle. That is because of the number of drive-by shootings from motorcycles carried out in places such as Bogota. That is the sort of legislation that the Colombian Government have had to pass to try to protect as many ordinary people as possible. It is a sad indictment of the current state of affairs.
I want, having set the general scene, to turn the Minister’s attention to two seriously worrying incidents that occurred while we were in Colombia. The first was something that we witnessed in a town called La Macarena, a tiny community in a remote rural region called Meta, which the delegation visited. My hon. Friend talked about the appalling phenomenon of extra-judicial executions, in which the Colombian army has murdered thousands of innocent civilians and then tried to deceive public opinion by claiming that they were guerrillas killed in combat. The people responsible for those crimes have gone unpunished, and I understand that the new commander of the Colombian army, who was allegedly appointed to clean things up, was previously the officer in charge of a region called Antioquia, where perhaps more extra-judicial executions have occurred than anywhere else. In addition to him, numerous other army officers who were behind those killings have been promoted. Virtually all remain on active duty, which is no doubt the reason why the murders continue.
In La Macarena we met local people and human rights activists from the region, who gave us details of case after case of innocent, mainly young, people simply disappearing. No one was investigating the cases, and those who dared to speak out about them were threatened and, in some cases, forced to flee the area. However, what shocked us the most was the cemetery in that small village, which could be better described as a mass grave. On the village outskirts, right next to the main military base in the region, was a cemetery with more than 1,000 unmarked graves. Each had a little cross with the letters “NN” on it, which in Colombia means an unidentified body, along with the date of burial. Nearly all had a date in either 2008 or 2009. There were just as many dated 2009 as there were dated 2008, to answer the point made by the hon. Member for The Wrekin (Mark Pritchard), who is no longer in his place, about progress being made by the Colombian Government. That is not what I witnessed at first hand in La Macarena.
Even more chillingly, there were four graves that had been dug ready for the next crew. I got the impression that they had been dug to order, ready for the next four extra-judicial killings. No one except the army knows who the people in those graves really are, and as access to the region is severely limited, and no autopsies or investigations are carried out, it is almost impossible for anyone else to identify the victims. To make things clear, those people are not included in the 2,000-odd cases of extra-judicial execution that are being investigated. Those dead people are completely unregistered. I strongly believe that the army in that region systematically murders people and buries them in the cemetery. The army admitted to killing them, but said that they were all guerrillas killed in combat— although there are not that many guerrillas within 100 miles of La Macarena because of the heavy military and police presence.
Something else that caused me concern was that when we met the officer in charge of the military establishment, Colonel Yunda, he explained to our group that he had been trained by the British Army. He even gave us the name of the sergeant-major in charge of the course he was on. We were all very disappointed and found it very hard to accept that a British soldier had trained that colonel for the Colombian army.
My first request to the Minister, therefore, is that he should arrange for our embassy in Bogota to take a serious look at what is happening in La Macarena. I have no idea whether all those bodies are still there. Some say that the Colombian army might try to remove them, now that it knows that the cat is out of the bag, but we have plenty of photographs as documentary evidence. Given the relationship of the Foreign Office with the regime in Bogota I feel sure that a strongly phrased request from our ambassador to the Colombian authorities to explain who the hundreds of dead people in La Macarena cemetery are, along with pressure to allow an independent investigation and proper autopsies, would have an effect on the Colombian Government. I ask the Minister to ensure that our embassy intervenes.
When we flew from La Macarena to Villavicencio we went to a civilian airport, and that was the only place where I saw direct evidence of harassment of local people. On that day flying around Colombia to the war zones, as it were, we were accompanied by two human rights activists, Edison Cuellar and Carolina Hoyos, who are very brave people and a credit to the people of Colombia. When we got to the civilian airport we were late for our next engagement, so we got on the minibus as quickly as we could. I was called later, as I was the only MP there, to go back into the airport, because the people there had detained Edison and Carolina. We had shown our passports and gone straight through, and the people on the gate had called two guards over—I guessed they were members of DAS—who began investigating and questioning them, asking them where they were from, their home addresses and so on. They were harassing them. After a while, when I went to find out who those people were, they gave us false passes. The dispute went on for a while and I said I would raise it with the ambassador. Eventually, those two guys, who were dressed in jeans and did not look like security men at all, produced passes showing that they were DAS security men. I know that if I had not been there Edison would have been in danger of taking a good beating. It reminded me to some extent of Grimethorpe in 1984 during the miners’ strike.
My second request to the Minister relates to one of those activists who were in our company, Carolina Hoyos. She is an exceptionally brave young woman, and a human rights activist in Meta region. She helped to arrange our visit to La Macarena. Carolina has taken testimony from hundreds of victims of human rights abuses in the region and has been a great help to us. We were in awe of her commitment and bravery. However, just days after we left the region, when we got back to England, her home had been broken into. All the documents about the cases that she was investigating—cases clearly showing the complicity of the Colombian army in the abuses—were stolen. Other items of value were left. It was clearly a burglary to order. I do not think that it was a coincidence that her house was burgled after she had accompanied us on the visit. I am deeply concerned for Carolina’s personal safety, and would therefore welcome a commitment from the Minister that he will look into her case, and that of her colleague Edison Cuellar, who also worked with us on our visit and is the vice-president of the regional human rights committee. It needs to be made crystal clear to the Colombian authorities that nothing should happen to either of them.
The UK’s relationship with Colombia is extremely important to the Colombian Government. After all, the UK is the largest foreign investor in Colombia after the USA, with investments totalling more than $16 billion. We should be using our relationship with the Colombian Government to apply more pressure to eliminate human rights abuses.
The hon. Member for The Wrekin said that nothing positive comes from the Colombian Government. The number of kidnappings in Colombia has fallen drastically in the past few years. That should apply equally to the number of extra-judicial killings.
I congratulate the hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this debate on an issue of undoubted importance.
Colombia is suffering one of the worst humanitarian crises in the world. It has the world’s second largest number of internally displaced people—3 million to 4 million have fled their homes in the past two decades—and one of the highest murder rates in the world. Today we have heard from many hon. Members who have been to Colombia and witnessed at first hand the suffering of the people there, including poor peasant farmers, indigenous people, trade unionists, human rights activists and journalists. The list seems to go on and on. Although killings by gangsters are obviously a great cause for concern, there is something particularly chilling about state-sponsored executions and the repression of different political viewpoints. It is an affront to the foundations of a free democracy.
Behind the figures and statistics often heard in such debates are individual stories, particularly those of people whom Members have met, which often end up being the most poignant and powerful. I was moved by the story of Liliana Obando and am looking forward to hearing the Minister’s response on her case. Equally, I was shocked by the practice of killing innocent civilians and dressing them up in guerrilla clothing in order to claim a bonus. The fact that that happens not occasionally but systematically is deeply shocking.
The Colombian Commission of Jurists shows that state agents are directly or indirectly responsible for three quarters of extra-judicial killings, political murders and forced disappearances. The Colombian Government’s record has been pitiful. Last year, they made a show of arresting 42 current and former members of the army for such crimes, but 38 have been released pending trial, and now the deadline for prosecution has lapsed. As many Members have pointed out, even when the Colombian Government say the right thing, they all too often do the opposite.
The UK Government have changed their position on Colombia. They have cut off bilateral aid for de-mining and human rights training for the army but, bizarrely, continue to give military aid for counter-narcotics programmes. The Minister is shaking his head; I hope that that means that it is no longer happening. We should not be giving military aid and legitimacy to an army with such a poor human rights record. In addition, although I do not have time to go into detail, the many killings by right-wing paramilitary forces and by guerrilla groups, including FARC, have left many ordinary Colombians fearing for their lives.
President Uribe seems to be following the worrying trend in the region of trying to extend his term of office by changing the constitution, but that is ultimately an issue for Colombians to decide. Depending on the Constitutional Court’s ruling, there might be a referendum in which they get to have their say, but in general terms, it is not a good trend for democracy. In a democracy, no one person is indispensable. Last month, the International Crisis Group highlighted the dangers for institutions in Colombia and the dominant Executive power if democratic checks and balances were undermined and the constitution were changed. It could have severe consequences for the human rights situation in Colombia.
I will be brief, because I want to ensure that the Minister has plenty of time to respond to the many points raised in this debate. I encourage him to touch particularly on human rights abuses by the Colombian army and the state itself. The Government have been strong in their condemnation of paramilitaries and guerrilla groups. I hope that condemnation of the Government and state actors will be equally strong in his remarks.
There has also been an interesting debate on free trade agreements. Although discussions and negotiations should certainly continue, there is no strong case for renewing the agreement while the human rights issues remain unresolved. I welcome the Minister’s comments on that and look forward to hearing him set out clearly and in full how he thinks the Government can bring pressure to bear on the Colombian Government to protect the human rights of everybody in that country.
It is a pleasure to serve under your chairmanship, Miss Begg. I congratulate the hon. Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing this important debate, which he introduced with evident commitment.
In the past decade, Colombia has made significant progress in reasserting Government control over much of its territory, combating drug trafficking and terrorist activities by illegally armed groups and reducing poverty. Since the development of Plan Colombia in 1999, the Colombian Government, with substantial support from the UK, the United States, Canada and others, have stepped up their counter-narcotics and security efforts.
Against that backdrop, the human rights situation is improving, but Colombia remains a country in transition. Although the country’s security situation has vastly improved in the past decade, fighting between the armed forces and illegally armed groups continues to harm the country’s citizens, especially its most vulnerable groups, the displaced, the indigenous population and Afro-Colombians.
Years of reforms and training, as well as key changes in leadership, are leading to welcome progress in increasing the armed forces’ respect for and understanding of human rights. Practical examples include the army’s new rules of engagement, which exist to ensure that international humanitarian law is followed in combat situations. However, revelations of extra-judicial killings in Soacha and a preliminary report by the UN special rapporteur for extra-judicial killings indicate that far-reaching reforms have not fully taken hold.
The hon. Gentleman is being as generous as ever. The British Government support a European free trade agreement with Colombia, with the justification that human rights in the country will be closely monitored. Given that the budget for investigating forced disappearances was only £13,000 last year and the budget for identifying the victims of forced disappearances was £39,000, would it not be wise for the Minister to commit to considering that budget in order to ensure that there is a body of evidence to test the justification for the treaty?
I suspect that the hon. Gentleman may want to have a repeat bite at the Minister himself if time allows, but he has put the question to me as insurance. I will not speak for the Minister—I will allow him to respond in his own way—but having sufficient resources to investigate such matters is probably important. However, I will leave him to give his own definitive answer.
To their credit, the Colombian Government have responded firmly to the revelations of extra-judicial killings by issuing a zero-tolerance policy for abuses and implementing reforms to prevent similar crimes in future. The prosecutor general’s office continues to investigate more than 75 members of the armed forces linked to the killings. The Government still have much to do, but those are signs that they recognise the severity of the problem and are working to address it. None the less, according to Human Rights Watch’s annual world report published in January 2009, hundreds more cases of extra-judicial killing and other human rights abuses await resolution. Non-governmental organisations have criticised the impunity resulting from the backlog of cases, and some worry that the departure of prosecutor general Mario Iguaran on 31 July 2009 will cause further delays. In 2008, the Colombian Government increased the office’s budget and personnel levels, which was a step in the right direction and an indicator of the Government’s commitment to ending impunity, but more trained investigators and prosecutors are needed to address the office’s overwhelming case loads.
Despite the challenges that the prosecutor general’s office faces, it has made several important advances in human rights cases during the past two years, including arresting four retired generals for collusion with paramilitary forces and reopening the case against retired general Rito Alejo del Rio for his alleged crimes during Operation Genesis.
It is crucial that the United Kingdom Government do all they can to help Colombia during the next few years. I know that my hon. Friend the Member for Aylesbury (Mr. Lidington) has spoken to both British and Colombian officials, who expressed their disappointment at the Government’s decision on 30 March 2009 to end bilateral human rights projects with the Colombian Ministry of National Defence, even though the United States and Canada have increased financial commitments to such projects.
Will the Minister say why that decision was taken at such a crucial time for the evolution of human rights in Colombia and will he confirm that the decision was not linked in any way to cost-cutting measures in the Foreign Office? In addition, will the Minister explain how the budget shortfall currently affecting his Department is impacting on funding for Colombian programmes? While the Foreign Office is under so much financial pressure, it is important that the Government finally shed light on how much they are spending on counter-narcotics programmes. That issue links indirectly to human rights abuses across Colombia.
I have no doubt the Minister will explain that the Government are unable to publish what resources are used in counter-narcotic operations because of security concerns. However, the United States, which runs extensive counter-narcotic operations in Colombia, diligently lists every dollar spent on such operations for the public to see. The Department of State’s Bureau for International Narcotics and Law Enforcement Affairs annually publishes extensive information on not only how much money is spent, but details of the programmes in place and analysis of their success over the past 12 months. Of course, there is a need to protect national interests and individual personnel, but the secrecy with which the Government surround their counter-narcotics programmes leads only to unfounded suspicions and, in some cases, conspiracy theories. Will the Minister let us know which body monitors how much money the UK Government spend on counter-narcotic operations in Colombia and who is responsible for assessing the effectiveness of the programmes?
Despite the difficult fiscal reality in which we find ourselves, I urge the Government to continue to take the issue of human rights seriously and to support the Colombian Government in their reforms. In the past, Colombia has struggled to exist as a democratic nation against an utterly ruthless, well-organised, drug-financed terrorist group. I ask hon. Members who have spoken this afternoon—some with considerable passion—to acknowledge the reality that the country has faced.
Investment in and trade with Colombia can help the country to overcome those challenges. A free trade agreement would be an effective mechanism whereby Colombia could use the resulting economic opportunities to boost social conditions. That would ultimately lead to better respect for human rights and reaffirm Colombia as a strategic partner for the UK in Latin America. UK investment in Colombia is substantial—more than $16 billion a year—and it is surely in both countries’ interests to build on the trade links that already exist.
However, having said that, it is undoubtedly true that real issues remain around the persecution of trade unionists and human rights defenders in Colombia. A human rights clause in any free trade agreement with the EU that would enable suspension of the agreement if it is breached would act as an incentive to have frank and constructive dialogue. The promises and good will expressed by the Colombian Government have not always been translated into practical effect and improved human rights at a grass-roots level, but sometimes they have. I hope that the Minister will continue to give those issues a high priority in the formulation of Government policy.
Many points have been made and I have been urged by a number of hon. Members to give the Minister as much time as possible to reply. I know that Back Benchers will want to press the Minister in interventions, so partly out of deference to them, I will conclude and give the Minister 16 minutes to speak in response.
It is a delight to sit under your chairmanship, Miss Begg. I warmly congratulate my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) on securing the debate. This subject is one of the key issues the UK faces in our relations with Latin America and the European Union. As he may know, there was a very interesting debate on the subject in the European Parliament on Monday. I know that many hon. Members follow these matters keenly, as do many of our constituents. Many hon. Members write to me on the issues that their constituents have raised, and we watch the topic very closely.
I am reminded of the words of Arthur Ponsonby—a Labour Under-Secretary of State in the Foreign Office in 1924—who, a few years after 1924, said:
“When war is declared, truth is the first casualty.”
In the ongoing war there has been in Colombia between different groups—paramilitary and military, and different drug lords—it has been difficult to see the truth. Although the hon. Member for The Wrekin (Mark Pritchard) spoke with his customary intelligence, his version of events was rather different from the version of events that I have. He has a rather over-optimistic interpretation of the situation in Colombia.
When truth is tested, we need to adhere to our virtues. I have a simple request for the Minister: will he comment on the activities of the former British ambassador to Colombia, Sir Tom Duggin? I understand that after leaving the embassy in Bogota, he took control of the Colombian operations of the mercenary company Global Risk Strategies, which is now known as the Global Strategies Group. That firm was established by Damian Perl, a former marine, and Charlie Andrews, a former Scots Guard officer. It has operations in Afghanistan and is one of the largest mercenary companies operating in Iraq. The company has been mired in controversy, and many of its staff members—ex-Fijians and ex-Gurkhas—have been killed in action. Will the Minister comment on the appropriateness of our former ambassador taking up such a role in such a controversial country?
I am grateful to my hon. Friend for that intervention. I understand that Sir Tom Duggin has not worked for the company to which he refers for a couple of years. It is obviously difficult for me to comment on his work for that company when he is a former civil servant. I am not aware of any direct conflict between Sir Tom Duggin’s former responsibilities and the work he has done, but if my hon. Friend has specific allegations he would like to make, I hope that he will put them in writing to me, so I can look into them.
I do not know the specifics of the matter or of the work in which Sir Tom Duggin has been engaged—I have never met the man—but if my hon. Friend says he is not making an allegation, I suppose that there is nothing I can investigate.
My hon. Friend the Member for Paisley and Renfrewshire, North spoke with passion. Whether he is a member of the glitterati of the left—a rather weird phrase that was used this afternoon—I do not know. I have spoken to others who went on the trip to Colombia and know that the visit was an eye-opener for many of those who went. I will come on to some of the specific issues that he raised in a moment. The hon. Member for The Wrekin suggested one of the more bizarre things I have heard today: that FARC and al-Qaeda are somehow linked. That is the first time that I have ever heard such an allegation, which seems bizarre in the extreme.
It is interesting to note that the work we do on counter-narcotics with the Colombian Government is very similar to the work we do with the Venezuelan Government on counter-narcotics. Both of those countries fully acknowledge the problem that they have. We have to acknowledge that the consumers of cocaine in this country are part of the problem that leads to the human rights abuses across the Andean countries—in Peru increasingly, in Colombia, in Ecuador and, of course, in Venezuela. In Venezuela, the issue is largely to do with the trade—the passage—through the country, which often goes on to Africa. I am glad to say that we work closely with not only the Venezuelan Government but the Spanish Government to try to prevent that trade. The hon. Member for The Wrekin has a rather exaggerated understanding of what a free trade agreement can or cannot achieve.
I also say to the hon. Member for Rayleigh (Mr. Francois) that, although I want to see a free trade agreement with Colombia, Ecuador and Peru, I do not believe that it should be any free trade agreement. The point being made today is this: if we are convinced that the current human rights abuses are such that we might want to cease the free trade agreement, why on earth would we want to sign up to a free trade agreement that we could not be certain we would be able to suspend? I have said regularly to my Colombian counterpart, and to President Uribe for that matter, that they will have to do significantly more work before the whole of Europe will feel able to subscribe to a free trade agreement. I also believe that it would be wrong for us to close the door on negotiations on a free trade agreement, because that would simply be like saying to Colombia, “Don’t bother engaging with Europe on those issues and carry on exactly as you are doing.”
I think that we should be pushing hard on the issue of human rights with Colombia to ensure that all the issues are dealt with so that we can then sign a free trade agreement, and that is the track that we have been encouraging the Spanish Government to go down during their six-month presidency of the EU. It cannot be just any free trade agreement. One specific issue on which we have held firm is the question of whether a suspension, if we wanted to suspend, would come in immediately when we think that there are significant human rights abuses, or after a 15-day delay. We think that it should be immediate, and I have made that point firmly to the Colombian ambassador to the UK.
My hon. Friend is absolutely right. Unanimity would be required to sign up to the agreement and to suspend it. I am less pessimistic than he is about the possibility of securing a suspension if one was wanted, because that is precisely what we have done in the case of Sri Lanka, on which it has not been all that difficult to secure unanimity.
There are some key challenges in Colombia in relation to human rights. The first, which has barely been touched on today, is the problem of poverty. Many millions of Colombians live in abject poverty and have no opportunity to make a decent living or feed themselves properly. That is one of the key issues the Uribe Government have said they are intent on tackling. It is true that they have made some progress on poverty, as have many other countries in Latin America, but we want to see much further progress, not least because the roots that the drugs trade is able to press down into Colombian society depend on the endemic poverty across the country.
The second key human rights challenge, as many hon. Members have mentioned, is the number of murders. Colombian statistics might indicate a fall from 28,000 murders in one year to 16,000 in another, but that is still 16,000, a very large number of murders. That is accompanied by complete impunity. We have heard today of the number of cases in which there is no investigation, let alone the cases in which there is some investigation that takes a long time. Clearly, where there is no justice, there is a significant human rights abuse. Therefore, I want to see all the murders tackled, whether they are extra-judicial killings or those that result from the general level of violence in the population.
The third key human rights challenge, as hon. Members have mentioned, relates to trade unions, and I raise that point as a trade union member myself. The number of trade unionists, and other human rights defenders for that matter, who are murdered in Colombia is still far too high. We could have an exchange about whether that number is 49, 39, 17 or nine, but the fact is that trade unionists are being killed because they are trade unionists, and that must stop. We must make that absolutely clear, as I have done regularly.
The case of Liliana Obando has already been raised with the Minister this afternoon. As he is aware, a large number of trade unionists have been, and are being, held in custody in Colombia. Will he make representations to the Colombian authorities about that woman?
My hon. Friend is absolutely right, and we have already made representations about Liliana Obando. We first did that on 27 April 2009 when we sent two letters from the British embassy: one to Carlos Franco, director of Human Rights First and director of the presidential programme for international humanitarian law; and the other to the director of international affairs from the prosecutor general’s office. On 25 June we received information from the prosecutor general’s office. The Colombian Foreign Secretary is in London tonight and tomorrow for the conference on Afghanistan. I shall be seeing him this evening, and I will raise that case specifically with him. It is not something we will let go over the days to come.
When I visited Colombia before Christmas, I raised with all the people I met, including President Uribe, the need for Colombia to seize the issue of human rights abuses. Otherwise, it is difficult to see how in the end it can be the closest partner with the EU, which we would really like to see. Furthermore, a couple of weeks ago the Colombian Deputy Foreign Minister, Adriana Mejia, was here in London. I raised a series of human rights issues with her then, and I intend to write to her about the case that my hon. Friend has just raised.
I mentioned earlier the issue of impunity, which is still one of the biggest problems. In many parts of Latin America the prison systems are simply unable to cope and the criminal justice systems are unable to deal with cases fast enough. Therefore, the perpetrators of extra-judicial killings, whether paramilitaries, members of the military or whoever they are, simply go by without any justice at all. We would not accept that in this country, and we should not accept it for the people of Colombia either. That is why we work particularly hard to try to tackle the issues of corruption that exist in the criminal justice system in Colombia.
I know that my hon. Friend is doing his best to move the agenda on, but with regard to the point raised by my hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) about the use of technology by DAS to identify potential human rights activists, would he commit to investigating whether it is British technology that is used and report back to the House on that, given that we are moving into an era of struggle for information freedom, as Hillary Clinton says?
My hon. Friend might not be a member of the glitterati of the left, but he is certainly a member of the glitterati of the blogosphere, so he is much more technically competent than I am. I am happy to look into that matter, but I am slightly hesitant about what I might be able to say in public, because traditionally, as I think all hon. Members accept, we do not want to talk publicly about the specifics of our counter-intelligence work. As a former Minister in the Ministry of Defence, he will understand that.
Another problem, which I have raised with the deputy Minister for human rights in Colombia, relates to the law on rebellion, or rebeldía. Intrinsically, at face value, that certainly does not seem like a law that respects human rights. One might think that it allows someone to rebel—I see several hon. Members on whom the Whips might have more of an effect if we had a law on rebellion in the UK. The serious point is that it is absolutely clear, as my hon. Friend the Member for Elmet (Colin Burgon) said, that Colombia needs to do considerably more to abide by conventions of the International Labour Organisation and the UN. Recent reporting and monitoring of changes in the law suggest that it is moving in the right direction on those issues. Consequently, I am keen to encourage the Colombian authorities to move further.
We have touched on the issue of the drugs trade, and undoubtedly that is one of the single biggest causes of death, violence, criminality and corruption within the whole of Colombian society. It is one area where I think we British have a shared responsibility with Colombia. That is why we do not provide military aid to the country. We have stopped providing human rights training to the military because we do not want to provide aid to the military. Instead, we try to tackle the drugs trade.
EU-Israel Trade Agreement
This debate relates to the information given to Her Majesty’s Revenue and Customs by those exporting goods from Israel and Israeli settlements to the United Kingdom and the effectiveness or, as I shall demonstrate, the ineffectiveness of HMRC checks in preventing fraud.
Under the EU-Israel trade agreement, produce from Israel enters the UK and other EU member states under a preferential agreement that exempts it from import duties. The agreement only applies to Israeli territory that is within its internationally recognised borders, and that has recently been reaffirmed in a legal ruling from the European Court of Justice.
The Israeli authorities have long had a cavalier attitude to compliance with the agreement. In 1997, for example, in another Adjournment debate, I drew attention to the then practice of Israeli authorities of importing Brazilian orange juice, re-labelling it “Made in Israel” and re-exporting it under preference to the European Union. Israel has also unilaterally interpreted the agreement as applying not just to Israel but to the numerous settlements in East Jerusalem and the west bank, even though they are illegal under international law. Settlement produce has been routinely labelled “Made in Israel” and thereby exemption has been claimed from import duty. Not only is that defrauding the EU taxpayer by avoiding legitimate import duty, but it sets a dangerous precedent that could allow other countries unilaterally to reinterpret their agreements with the EU.
As a result of the abuse, in February 2005 the EU introduced a technical arrangement requiring all goods from Israel to be marked with their place of origin and postcode, supposedly so that individual customs authorities could identify settlement goods and prevent the fraudulent obtaining of exemption from import duty. However, it is clear that these checks are not working and that goods from settlements are still being misrepresented as originating in Israel.
An indication of the likely scale of abuse can be estimated from the total duty raised on settlement goods in 2009, which was just under £22,000, compared with demands for duty in 2005-08 that averaged £110,000 per annum, which is five times the level raised in 2009 and suggests that at least 80 per cent. of settlement goods are imported without duty being paid on them. The information and powers available to HMRC are so weak that the controls are unenforceable and the European Commission oversight is ineffective.
I shall now deal with the mislabelling of goods and will talk first about agricultural produce.
I would rather not, if my hon. Friend does not mind, because I have a lot of densely argued stuff that I want to get on the record.
There is mixing of produce within one consignment. It is well known that the major exporter, Agrexco, which is responsible for 60 to 70 per cent. of settlement produce, mixes settlement and non-settlement produce in its depots and then labels the whole lot as originating in Israel, which means that all of it gets the import duty. It has been confirmed by EU diplomats that that happens in respect of oranges. The answers that I have received to written parliamentary questions give additional indirect proof of that, showing that in the 12 months to March 2009 HMRC identified six consignments as being from settlements although they were validated by the Israeli customs authorities as originating in Israel, and describing a particular consignment which contained two consignments of herbs that were identified because the packaging was properly labelled as coming from the Jordan valley, although they were included in a consignment purporting to be from Israel. Obviously, mixed consignments are hiding settlement goods. Although HMRC undertakes physical inspections, it cannot look at every consignment—there are tens of thousands a year—and it is presumably only detecting the tip of the iceberg.
The trade agreement sets out in detail the documentation that is required from exporters and importers: the original commercial documents accompanying the customs import declaration; the sales invoice and delivery/consignment note or packing list issued by the exporter and showing the UK importer; health documentation where required; and, where a preferential rate of duty is claimed, either a proof of preferential origin showing the place of production and zip code on the invoice or on form EUR1, which is issued by the exporter and stamped by the Israeli authorities. It is clearly stated on EUR1 that anyone signing the form will be committing an offence under section 167 of the Customs and Excise Management Act 1979 if the declaration is incorrect. The importer is also held responsible.
The problem is either that documentation is insufficiently detailed to reveal all settlement goods’ origin or there is deliberate falsification at the Israeli end. The first problem is that the EUR1 form does not travel with the goods, and as long as the form has a location and postcode and is stamped by the Israeli customs authorities it can be accepted by HMRC. That is a huge loophole. A report in 2006 in the Israeli business magazine “Globes” helpfully described how it is done:
“The method is easy: you invent an address within the Green Line and operate using this address. In this way you do not have to pay the customs fees that apply to products exported from across the Green Line. The method works, but not for those whose company carries a name that gives away the true location—such as Golan Height Wineries.”
The Israeli authorities clearly turn a blind eye to this practice, although it is interesting to see that, at the same time, they have set aside 30 million Israeli shekels through the Israel Export Institute to be used for compensation for manufacturers from across the green line, by paying the import duties for them. However, presumably that is only done for those whose names give away where they are, because only four exporters have applied.
Given the well-documented policy of deliberate falsification, the powers of HMRC are incredibly weak. If HMRC has doubts it can make a verification request, but that request just goes straight back to the same Israeli authorities who mislabelled the produce in the first place. I have received a written parliamentary answer that confirms that the issuing and verifying authorities are the same.
In 2007-09 HMRC asked Israel to verify 65 preference certificates that were doubtful, but even when it asks, the Israeli authorities do not necessarily respond. In the same period HMRC made 21 requests for information to Israel, but 12 were not answered within the 12 months stipulated in the agreement.
Strictly speaking, customs can only levy import duty if they can definitely tell that goods are from settlements. However, it is interesting that, in dealing with BRITA water-carbonating machines manufactured in Maale Adumim, even though the Israelis first said that those were made “under Israeli Customs administration”, and then refused to reply when asked to confirm that they came from a settlement, German customs levied import duty in the absence of definite proof from the Israelis that those were manufactured within Israel. HMRC could learn a few lessons from German customs and could perhaps be a bit more robust about levying duty when it has strong suspicions.
There are two other things that HMRC should be doing. First, more information on exactly where the products are from could come from the traceability system set up by retailers and importers, which is primarily to meet food safety requirements but is also there to give information to customers. That system is much more detailed. For example, my hon. Friend the Member for Birmingham, Northfield (Richard Burden) asked Tesco about some dubious-looking mangoes in one of its stores and was given the precise name of the farm that they came from, which turned out to be in Israel.
I accept that HMRC cannot demand the traceability information, but it could ask the retailers and importers if it could look at it where suspicions arose about the customs declaration, because that would give HMRC independent, extra information. It is in the interests of retailers that their audit trail is not compromised. They would not want goods in their stores to be labelled as coming from the west bank if that was not so, or to give a different description to HMRC and thereby avoid the import duty.
The second issue is the spot checks that HMRC does on consignments. It has not done any checks at all on sweet peppers, halva or tahini, although all those products are known to be produced in settlements. Halva and tahini, for example, are produced in the Barkan settlement by Achva and sold widely in the UK. It would be an obvious thing to target those products. HMRC does apparently target products and addresses that have misrepresented produce before and where there are known production facilities in settlements, but it does not seem to do that often. I would be grateful if my hon. Friend the Minister said how often imports are challenged. Why does HMRC not step up the spot checks and use the information that is widely available from, for example, the recent report by the School of Oriental and African Studies and the information available from a number of non-governmental organisations in Israel about which goods are most likely to be coming from settlements?
The third issue is that no action seems to be being taken against those who make false declarations, apart from charging the import duty. As I mentioned, however, the form that they all sign confirms that they would be committing an offence if the declaration was incorrect and, in a debate that I introduced before Christmas on consumer labelling of settlement goods, the Minister of State, Department for Environment, Food and Rural Affairs, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick), clearly said that claiming preference on settlement goods was “an offence”.
Section 167 of the Customs and Excise Management Act 1979 is the provision that is used to take action against people who are thought to be smuggling cigarettes by pretending that they are for personal use when they are actually bringing them into the country for resale. Those individuals can be fined or detained and persistent offenders imprisoned for up to seven years. I do not understand why the same rigour is not used against those who are doing it, for purely commercial reasons, from settlements in Israel.
I now turn to a specific case relating to cosmetics in which it seems to me that even more blatant fraud is occurring. Cosmetics, particularly from Dead sea products, are very significant imports into the UK; there were 417 consignments of beauty and skincare products in 2009. I want to focus on Ahava, a firm that is part-owned by two co-operatives based at Mizpe Shalem and Kibbutz Kalia. Both are in the occupied Jordan valley and both are on the EU list of settlements. The products that Ahava produces are based on Dead sea mud, which is extracted at both those sites and processed at Mizpe Shalem. There is no evidence of any other production facilities and certainly none within green line Israel, although the head office is near Tel Aviv.
The Ahava website and product labels clearly give the postcode at Mizpe Shalem and then say “Israel”, which is an incorrect description. Its chief executive was totally open in a BBC interview a year or so ago about the fact that it uses the head office address, not the site of production, to justify the “Made in Israel” claim. That could not be more blatant. There is no argument about this one, and when challenged—
Sitting suspended for a Division in the House.
I was just talking about Ahava and mentioning that when the firm was challenged about where its site of production was, it made no attempt to rebut its site in the occupied territories, but just waffled about how
“the Dead Sea treasures are international and do not belong to one nation”,
which was an interesting response to an HMRC request.
In answer to another written parliamentary question, HMRC confirmed that all such cosmetics— not just Ahava ones—are imported as “from Israel”. Many other companies working with Dead sea products and which are known to have their facilities in the west bank must also be using some other address to get the “Made in Israel” designation. It means that Ahava products, although labelled as “from the occupied territories”, must be designated as originating from Israel on the EUR1 form, which means that it is putting down the head office, not the site of production. Other companies that use products where the Dead sea mud and other minerals are processed or mixed with other ingredients from Israel should, on the EUR1 form, be setting out the proportions that originate from Israel and the proportion originating not from there, but from the west bank. However, they are obviously not doing that.
There is an additional issue that is beyond HMRC, which is whether Ahava and the others are violating article 55 of the Hague regulations on exporting non-renewable resources from an occupied territory. The Ahava case is so blatant that Dutch customs have now agreed to investigate after questions in Parliament from Socialist party MPs. Surprisingly, HMRC claims not to have shared any information with the Dutch authorities, which seems extraordinary. The HMRC claims to closely monitor imports, but has so far identified no cases where doubt existed over the place of production of imported cosmetics. However, it has asked the European Commission to check that the Israeli authorities are including the place of production and not the head office on the proof of origin.
That brings me to the role of the European Union. Apparently, UK Customs does not have the power to visit the occupied territories to check production facilities and so on, but the European Commission does. Any irregularities reported to the Commission are supposed to be disseminated to European Union member states, including information about the action taken. That does not seem to be happening in relation to Ahava or, in the German case, to BRITA.
Officials from the Commission origin unit visited Palestine and Israel in 2009, apparently to get a clearer picture of where the production sites were. However, the European Anti-Fraud Office, OLAF, which can enter the premises of Israeli exporters and examine their bookkeeping, has apparently not passed on any information about what came out of that visit. I should point out that because movements in the west bank are controlled by the Israeli army, OLAF cannot make unannounced inspections of premises in the settlements themselves. What information has the European Commission gathered? Has that information been communicated to member states, and will HMRC be acting on it? If not, will the Minister press for more effective action by the Commission?
To summarise, the Israeli authorities, the export companies and the producers all have a strong interest in misrepresenting the origin of settlement produce. First, they have a direct financial incentive, through the exemption from import duty if the goods are alleged to be from Israel. Secondly, there is the possibility of evading consumer boycotts aimed at settlement goods; that has become particularly important now that the Department for Environment, Food and Rural Affairs has insisted that guidance more clearly identifies settlement goods for the consumer. It has to be said that they have a track record of deliberate falsification. However, HMRC monitoring relies on inadequate documentation, and if there is doubt, it has to go back to the same authorities for confirmation; it can then be kept waiting for up to 10 months. Even in a blatant case such as that of Ahava, no action seems to have been taken.
The European Commission is also failing in its duty to collect the information needed by member states to deal with fraud and to disseminate information between the various customs authorities. It is absolutely unacceptable that such systematic and sustained fraud should be allowed to continue. I have five specific questions on that point.
First, in relation to agricultural produce, will HMRC discuss with retailers how they can share their traceability information? That should at least ensure consistency between consumer labelling on whether exemption from import duty applies. Secondly, will HMRC consider more rigorous verification procedures that do not rely on the same source of information as the original issuing authority? If necessary, that should be taken up urgently with the European Commission.
Thirdly, given that the technical arrangements are unenforceable, what action will the Government take at EU level to make them enforceable? Fourthly, will HMRC do spot checks based on a proper risk assessment—that is, on known settlement producers, and information from external reports. Fifthly, will the Minister explain how Ahava cosmetics, which are known to be produced in the occupied territories at Mizpe Shalem, are permitted to be designated “Made in Israel” and escape import duty? Will the Minister instruct HMRC to investigate Ahava urgently, and to share that information with their Dutch colleagues in order to stop this fraud?
Her Majesty’s Revenue and Customs is sensitive of the need to ensure that settlements products do not receive preferential tariff treatment incorrectly. Over the past eight years, it has been monitoring UK imports under the agreement and taking steps to identify consignments that have been mis-declared. Of course, the department is always happy to receive information to aid its targeting, and to listen to suggestions for ways in which controls and checks in this sensitive area may be improved. I am therefore grateful to my hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) for highlighting a number of areas that merit further consideration.
In 2009, UK importers made claims to Israeli preference on some 20,300 import declarations; the total value of the goods concerned was £419 million. That was equivalent to 63 per cent. of all imports from Israel. Within that overall figure, there were about 3,600 claims to preference on agricultural products, which again equated to 63 per cent. of all imports of agricultural products from Israel.
The high total volume of imports means that Revenue and Customs must undertake checks, which may be the physical examination of goods at the time of importation or post-importation documentary checks on the basis of risk. In the case of physical examinations, Revenue and Customs and the UK Border Agency, which undertakes the examinations at the frontier, must ensure that the right balance is struck between the levels of customs controls and the free movement of legitimate goods, and that is particularly important with regard to perishable fresh produce.
Revenue and Customs selects imports for check on the basis of information and intelligence received from the European Commission, interested parties, the media and other Government Departments, and on the basis of irregularities it has already identified.
On 1 February 2005, the technical arrangements, to which my hon. Friend referred, came into force. They require exporters in Israel to insert the place of production and accompanying postcode on all proofs of preferential origin issued. However, it does not constitute a requirement for all goods to be marked with the place of production.
Revenue and Customs welcomed the technical arrangement, because it enables the department to check the place of production against the list of settlements locations, which have been circulated to member states’ customs by the European Commission. The list was last updated in September 2009.
Under the terms of the arrangement, Revenue and Customs immediately refuses, without the need to return the certificate to Israel, a claim to preference made under the agreement where the place of production is in a settlement. Since 1 February 2005, the department has rejected some 515 proofs of preferential origin under the arrangement, and has issued customs duty demands totalling £289,000. The figure of 515 represents about 56 per cent. of all Israeli proofs of preferential origin, which have, to date, been checked on the basis of risk.
However, since the introduction of the technical arrangement, Revenue and Customs has initiated some 27 verification inquiries with the authorities in Israel when it has had concerns about the accuracy of the place of production that has been inserted on the proof of preferential origin.
I mentioned earlier that Revenue and Customs is always prepared to consider and act, where possible, upon any new intelligence that will help it to improve its risk assessment and targeting. It will, therefore, undertake further checks in respect of known settlements producers, and pay particular attention to imports of cosmetic products from Ahava.
My hon. Friend may be interested to know that each year, Revenue and Customs checks around 3,000 import declarations on which a preferential rate of duty has been claimed. Those checks result in around 370 verification inquiries, covering some 2,400 proofs of preferential origin. The monitoring of Israeli imports is an important part of those overall checks.
In June 2008, Revenue and Customs received information that suggested that the fact that an Israeli place of production and postcode is included on the proof of preferential origin does not necessarily mean that the products concerned—notably fresh fruit, vegetables and herbs—originated in Israel. There were concerns that the location and code may simply refer to a company’s head office or distribution centre in the state, the produce concerned having actually been grown or produced on a farm in a settlement.
Such concerns were repeated in various press articles and television news stories, which also raised concerns about the labelling by UK supermarkets of fresh produce, such as herbs and avocado pears, which some had admitted to purchasing from Israeli-managed farms in the settlements. While the correct labelling of products after importation is not the responsibility of Revenue and Customs, it recognised that it is not possible to establish from documentary checks alone whether produce is labelled as originating in a place other than an Israeli location.
Since the end of July 2008, officials in the UK Border Agency have, at the request of Revenue and Customs, undertaken 51 targeted physical examinations of dates, frozen sweetcorn, fresh herbs, avocado pears, grapes and tomatoes imported under the EU-lsrael agreement. We now understand that in the case of avocados, the intelligence received may have been flawed.
Only two labelling irregularities have been identified so far, and they concerned imports of fresh herbs. The packaging showed that the produce originated in the Jordan valley, while the accompanying proof of preferential origin showed that the herbs were produced in a location in the state of Israel.
There is no blanket legal requirement for the place of production to be inserted on all produce or its packaging. In the absence of such a marking, as was the case in a number of the examinations undertaken to date, there is little that Customs can do when the accompanying proof of preferential origin shows that the produce was produced in an Israeli location. Similarly, the department does not have sufficient evidence to the effect that the goods were not produced in Israel where “produce of Israel” has been inserted on the product or its packaging. Most of the products that have been examined to date bore such an origin marking.
With the voluntary labelling guidelines that Revenue and Customs contributed to DEFRA’s issuance of its guidelines, we are hopeful that those UK supermarkets that decide to implement the voluntary arrangement will persuade their suppliers to display clearly the place of production on their products or their packaging. That could have a useful knock-on effect in helping Revenue and Customs with its series of targeted physical examinations. In the meantime, we will extend our series of targeted examinations to include peppers, halva and tahini.
We are aware that certain supermarkets may be able to identify the origin of their products from their tracking systems and we would be very happy to utilise those systems, where possible, to refuse claims to preference immediately at the time of importation into the UK. However, when we look at our import declaration database, supermarkets are rarely shown as the importers on the customs declaration. In effect, it would be possible only to utilise a tracking system post-importation of the goods and the checks would have to start at the supermarket end of the chain.
We are prepared to explore with supermarkets the feasibility of using their tracking systems to link particular products that the systems show as originating in the settlements with particular customs import declarations and any claims to preference made on them.
The Revenue and Customs delegate to the European Union’s origin committee has advised the European Commission and other member states in the committee’s meetings of the UK’s actions in respect of monitoring of the EU-Israel agreement, particularly in relation to the series of targeted physical examinations.
Outside of those meetings, Revenue and Customs has asked the Commission to ensure that the Israelis are correctly complying with the requirements of the 2005 technical arrangement by inserting the precise place of production rather than a head office or distribution centre on the proof of preferential origin. We will continue to press this point with the Commission.
We are aware of the Commission’s fact-finding missions to Israel and Palestine in 2009 and we have asked the Commission to provide us with reports of those missions as soon as they are available.
My hon. Friend referred to provisions in section 167 of the Customs and Excise Management Act 1979, which enable Revenue and Customs to take action against traders who commit an offence. Under those provisions, we can only take criminal action against the UK importer where there is firm evidence to the effect that they knew that the goods originated in a settlement but nevertheless claimed Israeli preference. The provisions do not enable the department to take action against the exporter in Israel who has drawn up a proof of preferential origin containing an incorrect place of production or an incorrect origin declaration.
However, new civil penalty provisions came into force on 24 December 2009, as a result of which Revenue and Customs can issue a financial penalty where an importer persistently claims preference on products that are not entitled to such treatment, which will be in addition to the liability to pay the full rate of customs duty.
Although legal constraints mean that the department has no alternative other than to initiate verification inquiries with the Israeli customs authorities, it is happy to make improvements to its risk assessment and to include further fresh produce in its series of targeted physical examinations. We will also pay further attention to imports of particular products, such as cosmetics, which were mentioned by my hon. Friend. We will explore with supermarkets the possibility and feasibility of using their tracking systems post-importation to identify imports of goods that were not entitled to the preference claimed.
We will continue to work closely with the European Commission and other Departments with the objective of ensuring compliance with the rules in this complex and sensitive area. That will include pressing the Commission to monitor the operation of the 2005 technical arrangement even more closely.
Water and Sewerage (South-west)
Wherever, this is still an opportunity to raise a vital issue that affects my constituents in Torbay and many other people across the far south-west, and it has done so for more than 20 years.
The high water bills facing South West Water customers have been in place since privatisation and stem from the iniquitous requirement for 3 per cent. of the population to pay for the clean sweep programme for 33 per cent. of the UK’s coastline. The average bill for South West Water customers is £490, a staggering £723 for unmetered customers. The next highest average bill is Wessex Water at £412 and the national average is £343.
Ofwat has only recently, since the publication of the interim Anna Walker report, paid some attention to that disparity in water and sewerage charges. South West Water customers with water meters can look forward to a £6 fall in prices by 2015. That is not much, but it is a move in the right direction. Ofwat’s action will also be of little help to unmetered customers, whose bills are set to rise by 29 per cent., taking their average up to £935 a year. While many more will move to metered billing, a number will remain who cannot have meters installed, the majority of whom live in blocks of flats. Their bills will increase exponentially, plunging thousands into water poverty. The £6 reduction itself will be little consolation to many of my constituents on low incomes who are struggling to pay the historically high bills. The south-west has some of the lowest incomes in the UK coupled with some of the highest housing costs.
The Walker review of charging for household water and sewerage services is long overdue. It has now published its final report and, rightly, there is an entire section dedicated to the unique problems faced by consumers in the south-west. Chapter 14 begins by reinforcing the underlying inequalities facing the region: the high proportion of pensioners; the large rural area to be covered; the lower disposable incomes and—importantly in terms of water costs—the domination of tourism in the local economy.
A great attraction in the south-west is its coastline; an estimated 18 million people visit the region every year, and research shows that at least 7 million of those visit specifically to go to the seaside. There is, therefore, an important challenge to keep the coastline clean. More crucially, in terms of water bills, the Walker report recognises the low asset base that South West Water started with at the time of privatisation. That has improved now that the clean sweep programme has been implemented. The company has the highest capital expenditure by far—over 150 per cent. of the average of the water companies.
The right hon. Gentleman makes a point that has been made at meeting after meeting by the hon. Member for Plymouth, Sutton (Linda Gilroy), her colleague, the hon. Member for Plymouth, Devonport (Alison Seabeck), and Liberal Democrats. May I finish, because it is an important point. For example, we all contribute to the wonderful museums and galleries here in London that are a national asset—but they are based in London. The same logic should apply to water charges.
The hon. Gentleman referred to chapter 14 of the Walker report. I am sure he understands that the Prime Minister put that in train several years ago following the affordability pilot. However, since the scale of the problem we were lumbered with 20 years ago is so big, does he agree that, equally, the solutions to it will probably come from more than one direction, as outlined in the Walker report?
The hon. Lady is right and I shall cover some of that ground in a moment.
The report rightly states:
“These high…prices compared to the rest of the country cause the sense of unfairness. They also, of course, aggravate issues of affordability.”
Fortunately, Anna Walker has suggested some potential remedies for that injustice. There is a clear financial imbalance in the way the water companies were set up at privatisation. South West Water customers shouldered a disproportionate burden of the programme to clean up our coastline and improve our bathing waters.
It is clear from the report’s recommendations that retrospective financial redress is necessary, not least to fund the continuing cost of South West Water’s investments. One remedy is a one-off payment, which, as the report states
“is equivalent to reducing the financial burden of the regulatory asset base per customer in the South West Water area.”
That would cost approximately £650 million. Another alternative is an annual subsidy to South West Water. Walker estimated a figure of about £33 million a year. There are options on how to fund the subsidy: direct Government funding or a levy of about £1.50 to every household water and sewerage bill in the rest of the country.
My hon. Friend is making an excellent case, and I congratulate him on securing the debate and on all the work that he has done in the past. The scale of the figures that he is talking about shows the size of the investment that bill payers are being asked to make. That is the crucial point. If the Government cannot help with the lump sum because its scale in the current circumstances is so high, that shows what is being asked of ordinary bill payers in the south-west and, indeed, what has been asked of them during the past 20 years since the botched privatisation.
That is certainly one conclusion that we could rightly draw.
On the matter of an annual or lump sum subsidy, while a one-off payment would go some way to redress the balance—as Walker points out, there are strong arguments in favour of a one-off adjustment—it would not completely rectify the long-term problems facing the region. A further subsidy would be necessary in the future, especially if we envisage a time when another widespread series of improvements are necessary. An annual subsidy would resolve that problem for the foreseeable future. However, those solutions throw up a wider problem surrounding fairness. Aside from South West Water, customers in Wales or Wessex are also paying above the average—in their case, £100 more per year than those, say, in the Thames Water area. If we are to adjust for inexcusably high bills in the south-west, why not in Wales or any other area? Would not the logical extension of the argument be that water bills should be equalised throughout the United Kingdom?
Referring back to what my hon. Friend said about the need for equalisation, does he agree that it is important that we deal with the problem now as a matter of urgency? In future, there will be a need for considerable investment in other parts of the country, and it might be the case that for other national goods the cost needs to be spread throughout the country. Would it not be a double unfairness for South West Water customers to have to pay for their retrospective costs while also having to help foot the bill for the other bill payers in the country?
We need an answer, and we need it soon.
Of course, privatisation should not have happened to this industry. Water is not something that lends itself easily to competition on the free market. Indeed, all we have is a system of regional monopolies, unlike the other utilities, which have seen rigorous competition and benefits for consumers as a result of their privatisations. In effect, all privatisation has done is to siphon off funds to shareholders that could have been invested in a more effective clean sweep programme.
I am extremely grateful. I apologise to the hon. Gentleman for intervening. He is very generous. I totally agree with what he is saying. This is long overdue and most welcome. But would he not concede that historical costs involved pre-privatisation would have had to be paid for by the taxpayer anyway, to do with the infrastructure work of South West Water—the Victorian ducts and so forth? Those costs would have had to have been met by the taxpayer in some way, shape or form, regardless of privatisation.
Indeed those costs would have had to have been met, but they would have been equalised out across the whole of the United Kingdom. They would not have just fallen on those in the far south-west.
In my constituency, customers have not only suffered from high water bills, but a reduction in standards for the clean sweep programme. In the early 1990s, South West Water announced a £95 million project to provide a supertunnel for sewage from the three towns in Torbay. Not only would it have stopped any raw sewage entering the sea, it would have had more than enough capacity to deal with the flash flooding that has become more and more common. The Government of the day reduced the environmental standard required of the clean sweep programme, and so the Torbay scheme—effectively the last big capital works programme—was downsized. Consequently, we have a system of combined sewerage overflows that pollute the sea several times a year. For a tourist economy that in no small part relies on the cleanliness of its beaches and water, it is simply not good enough. Torbay can still boast more blue flag beaches than any other UK seaside resort. If the previous Government had not reduced the environmental standard, we would now be able to market Torbay as an area where every beach is a blue flag beach.
Even more worrying is the flooding that has become a common occurrence in parts of Torbay. The residents of Station lane in Paignton, for example, have suffered frequently as a direct result of the scaled-down clean sweep scheme. I ask the Minister to take separate and urgent action to bring a more satisfactory solution to solve the long-running sores of flooding and sewerage outfalls in my constituency.
Returning to the Walker report, there are recommendations, on which I hope the Minster will comment, that would be of benefit to consumers across the United Kingdom. Chapter 11 focuses on water affordability. The recommendations would help many vulnerable and low-income residents in my constituency: a 20 per cent. discount for those in receipt of tax credits and other benefits; a discounted tariff for low-income families with children; and reforms to the WaterSure scheme. All those will help. There is also scope for targeted water efficiency work interlocking with Warm Front and the decent homes initiatives. Walker recommends focusing these efforts on high water cost areas—the south-west, in particular. For the south-west there is the further suggestion of a seasonal tariff to take into account the population swell and increased water demand during the peak tourist season. Such a scheme is currently being piloted by Wessex Water, but this one focuses more on environmental than affordability criteria. The practicality of such a scheme across the far south-west, with en masse meter readings, is very doubtful. The potential solutions are not, unfortunately, quite as straightforward as they sound.
There will be a great deal of groundwork to be undertaken by Ofwat. For the overall system of redressing the financial balance, there will be, as Walker points out, a range of legal, technical, financial and economic issues. They will need to be contemplated, and financial corrections will need to avoid distorting markets and state aid considerations. Ofwat is best placed to advise Government on how to progress this, and I urge the Minister to instruct Ofwat to waste no time in looking into these matters.
There are difficulties with all the proposals, but the one with the most resonance and the most practicality is an annual levy on other water company areas to address the low customer base in the south-west. It would avoid state aid issues and appears the fairest option to pursue. I hope also that the Minister has had sufficient time to consider the report carefully, as he indicated he would in a parliamentary answer to me earlier this month.
The people of the south-west have suffered from the burden of high water bills for more than 20 years, and I hope that the Minister will give an indication today that such an injustice can finally be put to an end.
I am very pleased to respond to this debate. I congratulate the hon. Member for Torbay (Mr. Sanders) on securing the debate and also on the considered and intelligent way that he made his points on behalf of his constituents and others in the south-west. I am pleased to see several hon. Members who have lobbied me intensively during my time as a Minister in the Department for Environment, Food and Rural Affairs. I am sure they lobbied my predecessors as well. I hope that my progress report today will reassure them.
It is worth pointing out that I responded last year to three separate debates on this issue, all of which were well attended. I could certainly forecast at that point that it would not be long after Anna Walker produced her final report that I would be here once again, and the hon. Gentleman has not disappointed me—quite rightly, too.
Since the last debate in October, we have made a lot of progress on water matters, as the hon. Gentleman said. Ofwat issued its final determinations of water price limits on 26 November, which will reduce bills by an average of £3 and a little more within the south-west. That is good, but it does not solve the underlying issues. Bills in the UK will fall by an average of £3 before inflation between 2010 and 2015. At the same time, critically, provision will also be made for £22 billion in investment.
On 22 December, DEFRA published river basin management plans for 10 river basin districts in England and Wales. The plans set out how we will achieve good water status for each lake, stretch of a river, estuary and coastline. To respond to the hon. Gentleman’s understandable comments, several strands of work in the south-west river basin plan are directly relevant to him and his constituents. We are working with South West Water to investigate urban drainage systems to identify and remedy misconnections and other sources of diffuse pollution that are putting the quality of the coastal water at risk. Because planned development in the area will be concentrated around Torbay, future management of urban drainage in the future is an important consideration. We support how the SeaTorbay partnership is working to improve public understanding of and involvement in coastal wildlife and conservation.
On 19 November, we published the Flood and Water Management Bill. The Bill received Second Reading in the House on 15 December. Last Thursday it completed Committee stage, and Report and Third Reading are provisionally scheduled for 1 February.
Last but by no means least, Anna Walker published her final report on charging for household water and sewerage services on 8 December. It included a package of recommendations to DEFRA Ministers and Welsh Ministers. I am glad that the hon. Gentleman referred to the situation in Wales as well. Welsh constituents are covered not only by Welsh Water/Dwr Cymru but by Severn Trent.
I reiterate my thanks and congratulations to Anna Walker. I think that all Members appreciate the outstanding work that she and her team have done in grappling with a range of complex and incredibly difficult issues, not only in the south-west but nationally, involving the fairness of current charges. Her final recommendations reflect extensive and exhaustive stakeholder engagement, including workshops across England and Wales. Two were held in Plymouth, and I know that some hon. Members attended both the first and second to make their views known. The thoroughness of Anna Walker’s work is reflected by a chapter in the report dedicated to the south-west. She recognised, as do we, that there are issues to be resolved.
The Minister is absolutely right to say that the Walker report homed in on some of the issues in the south-west that cause the greatest problems for people on low incomes, but is water poverty not a national issue? Should the Government not consider it in the same way as fuel poverty? We would not expect fuel customers in the north-east to be responsible for their own winter fuel payments because it is colder up there. Surely, as a point of principle, we should not expect South West Water customers to pay for the fuel-poor; the burden should be spread nationally.
I will turn to the detail of the Walker recommendations and the possible way forward in a moment. Anna Walker rightly identified that, curiously, the issue in the south-west—she highlighted the causes, to which I will turn in a moment—could well in future be a burden somewhere else in the country. We do not want to replicate the mistakes of the past. If I have time, I will turn in my remarks to what discussions have taken place on the Flood and Water Management Bill in light of that. I will come to the hon. Lady’s points in a moment.
Anna Walker concluded that the regulatory regime in England and Wales has served customers well over the last 20 years, but that we now face considerable new challenges across the UK. In particular, demand for water is growing and water supply is already under pressure across the south and east of England. On top of that, we face challenges such as climate change and water affordability.
The final report highlights that water affordability is a real issue for some households across the whole of the UK, but notably in the south-west. It therefore recommended a package of measures for the Government to consider how to help low-income customers. My hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) made the comment that there is a package there, which is quite interesting. There are a range of possible solutions that she puts forward as a package.
Anna Walker proposed that the WaterSure tariff should be retained for low-income customers with high essential use for medical reasons, but that bills should be capped at the national or regional average, depending on which is lower. That would be paid for by regional water customers. She also suggested that all metered customers on certain means-tested benefits should be offered a 20 per cent. discount on their bills or, failing that, that a discount should be introduced for low-income households with one or more children.
Let me just add that during the Committee stage of the Flood and Water Management Bill, the issue of social tariffs operated by companies was raised. It was raised across the room by Labour and Liberal Democrat MPs. I agreed to take away and consider whether a new clause should and could be brought forward on Report to enable companies to operate social tariffs. I thought it would be interesting to put that on the table. The Bill is essentially concerned with the implementation of the Pitt recommendations. We are trying to deal with the issue of debt in water companies, which impacts on the wider consumer base, and if we can get it right, we may be able to do something about an enabling power around social tariffs.
Turning to the chapter in Anna’s report on the south-west, I have acknowledged repeatedly in debates here and elsewhere that South West Water customers pay more for water and sewerage services than other customers do. This year, the average household bill is around £490, which is 43 per cent. more than the national average. Anna looked closely at why that is the case. She concluded that one of the key reasons that bills in the south-west are relatively high when compared to other parts of the country was, frankly, the poor state of the local sewerage infrastructure at the time of privatisation in 1989. The source of the problem goes back to the birth of privatisation and, I do not hesitate to say it, to the midwives who conceived this particular child. She found that South West Water had an underdeveloped set of assets due to the reliance on sewage disposal at sea, which meant that the region had the smallest regulatory asset base per property of any water and sewerage company at that point in time. That meant that South West Water had to spend a lot of money on infrastructure development to meet national standards, with the result that South West Water went from the company with the smallest regulatory asset base per property to the one with the highest, and here we are.
The cost of investing in the sewerage system in Devon and Cornwall, post privatisation, as the hon. Member for Torbay knows, has been met by the company’s customers. Anna Walker identified a number of options that could potentially address that. One option would be a one-off financial adjustment funded by the Government to address the specific circumstances of South West Water at the time of privatisation. A further option that she identified was an annual transfer to the south-west from the Government. Alternatively, she proposed that bills in the South West Water area could be adjusted—either as a one-off, or annually—through contributions by other water customers across the rest of the country.
In addition to her more general recommendations on affordability, Anna suggested that households in the south-west could be helped by a seasonal tariff that would charge more for water during the summer months. That would take account of the fact that water use in the south-west in the summer is up by one third on the rest of the year. Anna Walker indicated that if water in the summer months was charged at three or four times the normal unit cost, then average residents’ bills could be reduced by around £40 to £60 a year. However, I know that there is some concern about seasonal tariffs and their impact on the tourism industry in the south-west. I understand that. Under Anna Walker’s proposal, water bills would increase for hotels, guest houses, restaurants and other seasonal businesses during the summer months. That brings us back to the question of what is the fairest way of charging for water.
Let me pose some questions that Anna rightly posed too. First, is it fair for local or national water customers, or the taxpayer, to pick up the tab, given that it is visitors to the south-west in the summer months who make use of peak-period water? Curiously, the analogy is correct. When I went on holiday to the south-west last year, I had north-east MPs say to me, “Whatever you do, you must make sure that you do not replicate the mistakes of the past and have us paying.” It is a tricky one. Visitors to the south-west in the summer months during the peak period make use of the water and sewerage services. All I am saying is—I am not proposing this as a solution—that a seasonal tariff may offer the opportunity, as Anna proposed, to provide part of a fairer distribution of costs.
May I focus on a part of the matter that is often overlooked? Visitors already pay a contribution through their accommodation tariff—all hotel accommodation is water-metered. Is it second home owners that we are getting at? I think that the tourism industry, which is still the biggest industry and the largest employer in Devon and Cornwall, would see the seasonal tariff as a stealth tax. I would like to knock that one off the table as soon as possible.
I hear what the hon. Gentleman is saying, and I am certainly not favouring one proposal over another, or even proposing a mix at the moment. As we take the matter forward, it is important that the hon. Gentleman and others, their constituents and the wider consumer representation base have the opportunity to properly wrestle with the recommendations and try to find the right way forward. I know that earlier today we were hopeful of securing, with a delegation led by my hon. Friend the Member for Plymouth, Sutton alongside honourable colleagues, a meeting with the Prime Minister. Unfortunately he has been delayed, as we know, by some other business. However, I understand that the meeting will be rearranged not only to raise the issue with him, but to secure—I am convinced that he will give this—his support for resolving the matter. Anna Walker was only one stage.
The hon. Member for Torbay (Mr. Sanders) asked in his speech whether the Minister would refer the options for the south-west to the regulator. I know that the Government have to respond to the whole report and will take time to do that. Will the Minister please comment on that? Hopefully, we will be able to secure the Prime Minister’s interest in doing so too.
Yes, I am happy to do so. As I said, things have progressed, and we are not waiting to get on with it. In our response to the final report, I and colleagues in the Welsh Assembly Government said:
“We welcome the publication of Anna Walker’s final report of her independent review of charging for household water and sewerage services. Anna Walker and her team have done an excellent job engaging with stakeholders and tackling difficult issues around charging for water, fairness and affordability. We will consider Anna Walker’s recommendations carefully”—
it is right that we do so—
“ahead of a full public consultation.”
Also, in line with the specific recommendations that Anna made for the south-west, I have already asked Ofwat to consider and advise on the options for dealing with bills in the south-west.
Neither my right hon. Friend the Member for West Dorset (Mr. Letwin) nor I were aware of the delegation to the Prime Minister. We have not been operating in a vacuum; we have been discussing the issue with South West Water and other stakeholders, which may or may not be of interest to people following the general election. Would it not be in order, as it affects all our constituents in the south-west, for the Conservatives to at least be invited to come along to the delegation, or is it a Lib-Lab pact?
Personally, I would have welcomed any representation that the hon. Gentleman and his party wanted to make. I would only point out that in the year and a half that I have been Minister, I have received no delegation, request for a delegation or representations from the hon. Gentleman and his party whatever. However, even at this late stage, I would welcome any requests for a meeting with me to express their views.
In conclusion, we are awaiting Ofwat’s advice on Anna Walker’s proposals on water charges in the south-west. It is, of course, for Ofwat to consider the practicality and fairness of these proposals ahead of advising Ministers and to decide how much time it needs to complete the task.
Sitting adjourned without Question put (Standing Order No.10(11)).