UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 5 - i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WELSH AFFAIRS Committee

Committee Room 2, The Senedd, National Assembly, Cardiff

THE national Assembly FOR WALES (legislative COMPETENCE) (agriculture AND RURAL development) ORDER 2008

MONday 15 DECember 2008

ELIN JONES, MR HUW BRODIE and MR DORIAN BRUNT

WAYNE DAVID, GETH WILLIAMS and BILL SCRIVEN

Evidence heard in Public Questions 1 - 52

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Monday 15 December 2008

Members present

Dr Hywel Francis, in the Chair

Alun Michael

Hywel Williams

Mark Williams

________________

Memorandum submitted by Minister for Rural Affairs

Examination of Witnesses

Witnesses: Elin Jones, AM, Minister for Rural Affairs, Mr Hugh Brodie, Director of Rural Affairs, and Mr Dorian Brunt, Lawyer, Welsh Assembly Government, gave evidence.

Q1 Chairman: Good afternoon. Welcome to the Welsh Affairs Committee. Would you introduce yourselves, but before you do can I place on the record our appreciation for the Assembly's work on this matter under the leadership of Mr Nick Bates? We have greatly benefited from his work. We have worked with him and had the benefit of an informal video link committee recently and we have also benefited from their recent report, which was extremely helpful to us. Minister, could you introduce yourself and your colleagues to us, please?

Elin Jones: Elin Jones, Minister for Rural Affairs in the Welsh Assembly Government. This is Dorian Brunt, who is a solicitor within the Welsh Assembly Government, and Huw Brodie is the Director of my Department of Rural Affairs.

Q2 Chairman: Can I begin with a very simple, straightforward question, which we normally ask on occasions like this! What is the purpose of seeking the proposed Order?

Elin Jones: the purpose of the Order is to enable the Assembly to have powers to legislate in the field of the red meat sector within the agricultural field. We already have considerable powers devolved in agriculture. The main driver for this Legislative Competence Order is that the Assembly Government has a need to create a measure ultimately, if this Order is approved, which would allow us, as Welsh Ministers, to raise levies in the red meat sector directly rather than - as the NERC Act 2006 enables us to create a Welsh Levy Board separate to the Welsh Government and Ministers themselves - able to raise that levy. It is to ensure that the Welsh Ministers are able to raise that levy directly. The Order itself is framed in a way that mirrors the NERC Act and the field of responsibility given in the NERC Act 2006. That is the Order that you have before yourselves.

Q3 Alun Michael: What will the Order allow the Assembly to achieve that it cannot already achieve using broad powers under the National Environment and Rural Communities Act?

Elin Jones: With the National Environment and Rural Communities Act 2006, the Welsh Ministers are able to set up a body to raise levies and to promote the Welsh red meat sector, but we are unable to raise the levies directly ourselves. As you may know, it is this Government's policy to reduce the number of quangos, and for functions that can be undertaken by Welsh Ministers more appropriately, democratically accountable, then it is the policy of the Government to directly undertake those functions. In this context it would be the raising of the levy that would be enabled by a measure following this Competence Order. I think that at this stage I need to draw your attention to what is outlined in the explanatory memorandum: it was the response of the previous Government, following the Radcliffe Review, which formed the new levy-raising bodies after 2006 - it was the intention at that time for Welsh Ministers to undertake the raising of levies directly. But during the process of the passing of the NERC Act 2006 the coincidence of timing of the consultation here in Wales meant that it was too late to undertake any change to the legislation, the Act itself. Therefore the only means by which we can now accomplish this is by a Legislative Competence Order of the nature you have in front of me.

Q4 Alun Michael: That the principle of the red meat industry is a devolved issue, that agriculture is devolved is my starting point. It is against that background that this Legislative Competence Order is a little bit of a puzzle in a way. If you look at the detail, it is about the Levy Board, and the requirement for there to be a levy board, and precisely the issue that you have just alluded to. The relationship between Ministers and Hybu Cig Cymru; but that is not what the LCO deals with, either in its text or in the memorandum. Why is your memorandum, which does set that out very clearly, not the memorandum that is associated with the text; and why does the text seek to do that rather than being this very wide - there seems to be a dissonance between the explanation you have given for why you want it, which seems entirely sensible, and the text and explanation within the formal Legislative Competence Order.

Elin Jones: The text of the Order itself mirrors almost exactly the text of the NERC Act 2006 in giving us the powers to create the body to promote red meat; but of course it does not give us the power to raise a levy directly ourselves; so it was felt that that text was appropriate for this Order in order to measure that NERC Act. If we had reduced the text in any way, then we would have had to take a decision as to why, and we would be accountable for reducing the text or the ability of -----

Q5 Alun Michael: If you followed your detailed memorandum, which makes perfect sense, would not a Legislative Competence Order that says that notwithstanding the provisions of the NERC Act, the Welsh Assembly Government shall have the power to raise the levy directly rather than through the Levy Board because that is what the argument has been, but it is not what the Legislative Competence Order says?

Elin Jones: The Legislative Competence Order needs to refer to the fields in schedule 5 of the Government of Wales Act, and therefore it is appropriate for fields within agriculture to be specified, and for Welsh Ministers then to create, if they can, measures from within that modifying field.

Q6 Alun Michael: I can understand that. That is not the case that is being made. In general, is it not the case that the red meat sector is a matter for the Assembly with the exception of the fact that there is this anomaly, if you like, of this restrictive requirement in that particular Act?

Mr Brodie: Chairman, if I can come in here, there are two points. The first is that the way in which the Order is phrased reflects the fact that if you are referring to levy, you have also to refer to the purposes for which the levy would be spent. That is why the scope is defined as it is, in exactly the way as the NERC Act. The broader point is that although the purpose that the Minister has outlined is obviously the immediate purpose that the Assembly Government would be seeking to pursue through a measure, because, as you yourself acknowledged, this is very much a devolved field of activity, it would seem logical within the spirit and letter of the guidance for LCOs for the Assembly Government to seek devolved competence in the red meat sphere. There may well be other measures that we may conclude in due course should be brought forward. In paragraph 19 of the report of the Assembly Committee, you will see that the respondents, to their own inquiry, unanimously supported the idea that red meat was an area where it would make sense for the Assembly to have devolved legislative competence.

Q7 Alun Michael: That is entirely logical; it is just that it seems tome there is a dissonance between the specific requirement and what the Legislative Competence Order says. Can I go on to a second issue, which is the lack of a regulatory impact assessment! Given the fact that, as you have just said, this would have much wider implications than merely dealing with the anomaly in the Act, the issue of whether differences on either side of the border have any impact is surely a reasonable question to be asked. We have the memorandum submitted by the Veterinary Public Health Association, which raised quite serious issues in terms of the possibilities of different arrangements in veterinary requirements on either side of the border. I am not questioning the issue of devolution, because it seems to me that this is very much a devolved area, but is that not precisely the sort of reason why a regulatory impact assessment should have been undertaken?

Mr Brodie: There are two answers to that: first, in relation to the industry within Wales, we are proceeding on the basis of the responses from consultation on the Radcliffe Review in Wales taken in 2006. There is always a danger here that we refer exclusively to the measure rather than to the actual field of the LCO, but I will go with the sense of the question. The proposed way in which we would be handling the measure would not make any difference to the way in which the levy would operate in Wales.

Q8 Alun Michael: But that would be a policy decision, would it not?

Mr Brodie: Having the power for the levy actually to be set by Ministers in consultation with the industry rather than by the Welsh Levy Board with the industry - there is no direct reason why that should affect the way in which anything should operate.

Q9 Alun Michael: With respect, you are coming back to the discussion of the measure, not the -----

Mr Brodie: I have been led into the discussion, as I said just a second ago, by the nature of the questioning. In terms of the cross-border issues, you will see from the transcript and indeed the report of the Assembly Committee that we are very, very conscious that if there were different arrangements for levy on either side of the England and Wales border, or indeed with Scotland, given that a significant number of animals coming to Wales are slaughtered from Scotland - the arrangements for levy have to be discussed and agreed on a GB-wide basis, both in terms of the level of levy and in terms of the way in which it was raised. We have no policy intention to go off down the unilateral road on that. The particular measure we are using as the one we have most in mind for how the devolved competence would be used in the first instance - there is not a cross-border implication that lies behind it.

Chairman: This is your last question!

Q10 Alun Michael: In your answer you are both going to the question of the measure rather than the Legislative Competence Order, and, with respect, into matters of policy. As you referred to the hearings before the Assembly Committee, you will be aware of the qualifications that were put in, which were basically about policy issues, by Mr Thomas, responding to questions in that committee.

Mr Brodie: I think we have been led into discussions of a particular measure, and all I would be saying is that in respect to any potential measure we might bring forward under this devolved legislative competence in general, is the sense that we are extremely conscious of the cross-border issues and would not be proposing to use any power in an irresponsible way that ignored cross-border implications. Anyone sitting in our seats would have no interest in doing that, because the implications would hit the Welsh industry in just as problematic a way as it would hit the English or Scottish industries.

Q11 Hywel Williams: I just wanted to know why the LCO thing is sought now and the co‑ordination with the passing of the 2006 Act - can you explain why it was not done then?

Elin Jones: Since I was not around in 2006 with this particular responsibility, I will ask Dorian to highlight the processes that went on at that time. To me, it seems as if it is a clear case of consultation in Wales and the legislative process at Westminster not coinciding in close enough a way to allow the desire of the Welsh Assembly Government at that time to feed in to the amendments for the NERC Act.

Mr Brunt: I agree with that. There was an unfortunate timing issue. As you may know, the Radcliffe Review began in March 2005, but during May the first draft of the NERC Act was laid before the House of Commons Standing Committee. Then in October Radcliffe reported and it was amended at that time to take into account the Radcliffe recommendations, so on 12 October 2005 the final version of the bill was laid and started its process from the House of Lords. The Welsh Assembly Government consultation did not begin until November, precisely because the Radcliffe Report was not published in its final form until October. I presume that there were some discussions going on in Whitehall during that time, but it was our obligation to consult on the Radcliffe Review. Unfortunately, by the time our consultation finished in February, the NERC Bill had been making a steady progress through Parliament and it was not possible to amend the NERC Bill and incorporate the issues that were required by our consultation results.

Mr Brodie: The NERC Bill received Royal Assent in March and there was a very narrow window, and understandably perhaps the UK Government felt it was too late to make any amendments at that stage.

Q12 Mark Williams: How would the proposed Order improve democratic accountability of Hybu Cig Cymru, not least because Ministers do have power to issue directions already. I know the rationale, and you have talked generally about the policy objectives and quangos, but how will this specifically help in a different way to what is already there?

Elin Jones: It would make Hybu Cig Cymru directly accountable to Welsh Ministers. They are currently delegated their functions from the Welsh Levy Board, and their levy is decided by the Welsh Levy Board, and therefore there is a direct accountability that would result from the measure that would result, and possibly from this Order; so I think it creates a clarity for everybody concerned, that there is a direct relationship between Hybu Cig Cymru and Welsh Ministers without having the organisation known as the Welsh Levy Board for that purpose.

Q13 Hywel Williams: I will just ask the broad question: what are the key reasons why someone working in the industry would welcome the making of this Order? Suggestions have been made to us of such as matters as making it easier for Ministers to address practical issues, for example the protected geographic status which Welsh red meat enjoys and outbreak of disease, the carbon footprint of the industry and that sort of thing? Can you outline your considered view?

Elin Jones: At this point in time, Hybu Cig Cymru is working on a red meat strategy for the future of this important sector of the agricultural industry in Wales. I have not had sight of their draft strategy to date, but they will in the New Year be consulting on that strategy. That is the appropriate mechanism to look at how Hybu Cig Cymru, its producer members and processor members, want to develop this important sector. Therefore, I look forward to seeing the strategy they have in mind for the future of their industry. I think they are the appropriate body to be consulting. There is an ownership from the sector, whether that is producer or processor, for this process and for the future of their industry; but equally I have a responsibility to ensure that this sector is developed in a way which meets Government aspirations as well as the aspirations of the sector. You alluded to one particular issue there, which is the carbon footprint of the red meat sector, which is of interest to many people including the sector itself and to us as a government where we are looking to reduce greenhouse emissions and have a government target for that - not that I have anything up my sleeve to create a measure for the purpose of reducing greenhouse emissions by legislative process at this point in time!

Q14 Hywel Williams: I think you have answered this question when we were discussing the NERC Bill. Why is this proposed Order restricted to the promotion of the red meat industry alone, rather than the promotion of Welsh agriculture more generally?

Elin Jones: The decision following the Radcliffe Review, which did look at the levy-raising bodies of all sectors of UK agriculture, the decision, as a response to consultation and the decision by the Welsh government at the time and in co-ordination with the UK Government was that the appropriate place for having a red meat sector body was in Wales. That was not the decision of the Welsh government or the response to the consultation, so in other sectors that are equally significant in the Welsh agriculture field such as the dairy sector and grains and cereal, then it was decided that that was best met by a UK sector development body. I have not sought to change that.

Q15 Hywel Williams: Can I ask you something more specific! The definition in the proposed Order is limited to sheep, cattle and pigs. Why are other sorts of animals such as deer and goats or ostrich not included? Could it cause problems if these industries expand in Wales into the future?

Elin Jones: The reason that it includes only those three types of animals is because those are the animals that currently levies are raised for. You ask an important question, whether the Order itself should then be extended to include other animals, and it is a question I asked myself and others during this process. Other powers available to us would allow us to undertake general promotion economic development work with the sectors that you have identified such as venison or goat or other meat sectors.

Q16 Alun Michael: To be clear, everything other than the raising of a levy?

Elin Jones: Everything that we currently do apart from the raising of the levy, yes.

Q17 Hywel Williams: There is a definition for cattle and pigs in the proposed Order, but no definition for sheep. I know you have said that it is self-evident, but can you explain to the Committee why there is no definition of sheep?

Elin Jones: Sheep require no definition because a sheep is a sheep, whereas cattle requires definition because the question would come: is a bison a cattle or not a cattle? So cattle and pigs require definition, and sheep apparently do not - does not!

Q18 Mark Williams: The proposed Order mirrors the NERC Act in its action in the areas of efficiency, productivity, marketing, development of the read meat industry. The National Beef Association talked about possibly adding technology and economic return to the list. What are your thoughts on that?

Mr Brodie: We regard that as unnecessary because those issues are implied within the general framing of the terms. Using the phraseology in the NERC Act is sufficiently broad and indeed the other respondents to the Assembly Committee's own inquiry in this actually agreed with that conclusion, which is why the Assembly Committee decided to back the National Beef Association's view.

Mr Brunt: We looked at those proposals for adding new words, but having been the lawyer involved with the draft of this legislation and talked it through, one of our main problems was that the words "technology" and "economic return" are fairly vague concepts in themselves. If we had the time and more specific definition and more specific background from the proposers, maybe we could have considered it in more detail, but those words themselves are a very wide concept and we took the view that because of the wording of the NERC Act in the LCO matter, that it would probably come within that anyway; but without further definition it is difficult to pinpoint precisely what they were looking for.

Q19 Mark Williams: In the evidence to the Assembly Committee, Professors Marsden and Morgan talked about the LCO needing to be viewed in the dynamic context of agri-food policy in the UK and EU. They were talking about draft legislation on the Provision of Food Information to Consumers and matters of that order. Do you feel the scope of the proposed Order enables the Assembly to adopt a flexible approach to future developments including Welsh priorities that develop out of consultation and future changes to EU law?

Elin Jones: I think the Order does provide a sufficiently broad context for any legislation that might come into being from the Assembly members or Government in the future, and which is not specifically about the current proposal from this Assembly Government on the requirement for Welsh Ministers to be able to raise a levy. Therefore, as you have mentioned, the discussions that are ongoing at a European, UK and Welsh level about the role of food labelling, may well lead to countries within the UK or the EU will want to legislate on in the future. This could provide an opportunity to do that. The legislation on food labelling is very complex, and we would have to consider that, or whoever will be there at that time will be considering that at an appropriate time - but it is providing a possible framework.

Q20 Alun Michael: Minister, you said that the wording reflects the wording of the Natural Environment and Rural Communities Act, and that that is the explanation for the way it is phrased. I am using the full title of the Act, incidentally, as part of my fight-back against the use of acronyms! Can you explain one variation, which is that the Act provides powers for the Assembly and obviously the equivalent bodies to act for a purpose designated by that Act; whereas the proposed Order uses the language of allowing the Assembly to "act in relation to". Perhaps it is a lawyer's point, but why the difference of language?

Elin Jones: I think I might refer you to my lawyer!

Q21 Alun Michael: I think that might be wise, yes"!

Mr Brunt: It is a deliberate difference between the language of section 88 to Matter 1.1 set out in the LCO, and it is for the reason that the NERC Act - the Natural Environment and Rural Communities Act is set in a particular context, and the powers are set out in full within the context of the Act. As you know, Chapter 2 is a self-contained section dealing only with levy-raising boards, whereas the wording of the LCO is set in the context of the Government of Wales Act, and therefore in order to read the wording set out in Matter 1.1, which is part of Schedule 5, you have to read it in the context of section 94, which says that the legislative competence areas are set out in schedule 5. It is slightly tweaked wording, but it is because of the different way the different acts work.

Q22 Alun Michael: The result of that is that it is slightly wider in terms of its application because it comes in the context of the wider legislation. Can you give us some examples of what difference it might make in practice having the wording you have selected rather than the wording that is used in the legislation?

Mr Brunt: In my view, there would be no difference in practice. The EU matter allows the National Assembly to legislate in the competence area as set out in there. The competence area, if you like, is the purpose for inserting the matter, and it just so happens that because of the way the acts are drawn the word "purpose" only appears in the 2006 Act and does not appear in here. In my personal view, and in the instructions I have given to the Welsh Legislative Council in the discussions we have had, it is not intended to be any different. It is a fairly boring, I suppose, technical, legal point.

Q23 Alun Michael: It is the connection to the pair of legislation in effect.

Mr Brunt: Yes, that is why, because schedule 5 has to be read with section 94 of the Government of Wales Act. That is section 95.

Q24 Mark Williams: Turning to cross-border issues, would the proposed Order give rise to any cross-border issues affecting the Welsh export trade, or farms specifically based on the border?

Elin Jones: No. It should make no difference to the existing situation. Obviously, there is a lot of cross-border trade, and that works both in the context of the Welsh/English border and the Welsh/English and Scottish borders and the export industry. Any changes to trading situations that the Government would want to involve itself in would be subject to quite considerable consultation if that was to happen, and it is not something that I am look at to happen in the near future. I do not see that this particular order would in any way have an immediate effect on cross-border relationships, whether that would be processors or produces or the general public.

Q25 Mark Williams: You have ruled out changing the rate of the levy at least in the short term in order to stop a disruptive cross-border sort of battle. Does that point in the direction of Assembly Ministers not having the ability to change the levy as distinct from England, or does that open a broader picture?

Elin Jones: The ability to have a different levy in Wales already exists with the Welsh Levy Board, and this would merely mean that with the proposed measure the Welsh Ministers would undertake that. I have no interest at all in having some kind of competition with the English Ministers or Scottish Ministers or their equivalent bodies in setting differential levies that would have an effect on trade in a way which could support processors in Wales possibly if lowered the levy, but would not provide the funding to promote the meat produced from Wales. So every action we take in that has an equal, almost negative reaction to it as well.

Q26 Chairman: It would seem that we have been working hard at avoiding questions about measures. Ministers go to the edge of that, so you can refuse to answer this if you wish. Should the proposed Order require the Assembly to consult the red meat industry before introducing a measure that alters either current levy rates or the basis on which levies are raised?

Mr Brodie: If we were to propose to change the basis or rate of levy, there would indeed need to be consultation, and that would apply whether the Welsh Levy Board were to make such a proposal under the present arrangements, or whether Welsh Ministers were to propose a change in the future. There would be no difference.

Q27 Alun Michael: As a supplementary to this, there is a different arrangement to be in place, so how would the consultation differ for instance if there was a proposition to change the levy in England than if there was a proposition to change it in Wales? One would be a proposition from a levy board, and a proposition from Ministers in Wales; but otherwise what difference would there be in practice?

Elin Jones: I do not think there would be much difference at all. If England, through their levy board, were to undertake a consultation on change of levy, they would need to consult with their own industry, but also with our industry and our Government here, because of cross-border issues in the meat trade as we have outlined.

Q28 Alun Michael: So in both cases there would have to be consideration of the implications across the border?

Elin Jones: I would expect the English Levy Board to take the views of Welsh processors and producers and the Welsh Government into account.

Q29 Alun Michael: And vice versa?

Elin Jones: Yes.

Chairman: Minister, thank you and your colleagues for answering all our questions, which have been very helpful, very comprehensive and very clear.

Witnesses: Wayne David MP, Parliamentary Under-Secretary of State, and Mr Geth Williams, Head of Legislation Policy, Wales Office, and Mr Bill Scriven, Head of AHDB, DEFRA, gave evidence.

Q30 Chairman: Good afternoon, and welcome to the Welsh Affairs Committee, and a particularly warm welcome to the Minister - I understand this is your first occasion before the Committee. For the record, could you introduce yourself and your colleagues?

Wayne David: Thank you very much indeed for your welcome, Dr Francis, not least because I am a former member of this Committee, albeit for a short time - but I am very pleased to be here. I would like to introduce Geth Williams, on my right, who is Head of Legislative Policy in the Wales Office, and Mr Bill Scriven, who is head of Agricultural and Horticultural Department Board Sponsorship Team at DEFRA.

Q31 Chairman: Can I begin, Minister, by asking you a very straightforward question: what do you see as the purpose of the proposed order?

Wayne David: Essentially, as has already been explained, the purpose of the order effectively is to address an anomaly that exists with regard to Welsh red meat, and in particular with regard to the levy. That is clearly set out, but also there is a broader issue in terms of conferring full responsibility for a sector that is already largely devolved, and I think that those two elements together make this a sensible, albeit modest, step forward.

Q32 Chairman: Can I follow that up by referring to evidence given by the Welsh Rural Affairs Minister, Elin Jones? She stated that the proposed order would increase democratic accountability of Hybu Cig Cymru once the Welsh Levy Board is dissolved. Do you agree with that, given that Hybu Cig Cymru is already controlled by the Welsh Ministers who are accountable to the Assembly?

Wayne David: I think it is a very strong point indeed. The Welsh Assembly Government has a very clearly defined policy, which it has been implementing for some time, to move away from non-departmental public bodies - quangos in other words - in order to have direct democratic control. I think that the Assembly Government has already clearly indicated that if this legislative competence order comes about there will be a direct measure to remove from existence the Levy Board, which is the quango, and have a direct influence, a direct relationship between the Ministers of the Welsh Assembly Government and Hybu Cig Cymru, which is the meat promotion body with the responsibility for directly levying the fee from the producers, usually abattoirs, and responsibility for the broader promotion of the industry.

Q33 Alun Michael: Before I go on to specifics of comparison, did this come as a great surprise to Ministers and officials at the Wales Office? Did you think that this had already been devolved until the need for this legislative competence order emerged?

Wayne David: Obviously, much of the discussion pre-dates my position in the Wales Office, but I think at the time it was acknowledged that with regard to the Radcliffe Review in 2005 and the Natural Environment and Rural Communities Act 2006, there would have been an opportunity there for this issue to be addressed in the legislation. However, for reasons of time essentially really, rather than politics, this issue was not included in the legislation as the Welsh Assembly Government was hoping, and therefore there was that anomaly in existence from that time, and the Welsh Assembly Government is seeking to address that at this moment.

Q34 Alun Michael: Can I look at the comparison between the situation in Wales and England - assuming this goes through? Are Ministers who have responsibility for agriculture in England, and actually the equivalent of Hybu Cig Cymru, which presumably is the Agricultural and Horticultural Development Board, equally accountable as it is proposed that Welsh Ministers are in fact in relation to Hybu Cig Cymru?

Mr Scriven: AHDB operates throughout the UK in certain areas - oilseeds and cereals being the UK function for it. For most of the other sectors it covers it operates in Gt Britain. The only area where it only operates in England is in relation to red meat. The AHDB are required, under the terms of the management statement, to clear their corporate plan with Ministers. They are also required to seek approval from Ministers for changes in levy rates as well, so there is a degree of ministerial scrutiny. That scrutiny applies not only to our Secretary of State but also the relevant ministers in the other administrations where AHDB carries out its functions. The Welsh Ministers are consulted on changes to levy rates in relation to, for example dairy, horticultural and cereals.

Q35 Alun Michael: Does having that single board create complexities in relation to farming in England, for example?

Mr Scriven: I think there is a mistake there in looking at AHDB as a body that deals with farming in England; it is a body that deals with matters throughout Gt Britain. From an administrative point of view it adds a degree of complexity because that means we need to coordinate agreements between three or four countries, depending on the sector that we are looking at. Actually, it is part and parcel of our work.

Q36 Hywel Williams: On a practical level, what will the proposed Order allow the Assembly to achieve that it cannot already achieve at present under the Natural Environment and Rural Communities Act?

Wayne David: I think it will give the Assembly a degree of direct control. It will abolish a quango, which is a good step forward in democracy. It will also give the Assembly the power to confer to its own Ministers the ability to directly determine what the levy is with regard to red meat, but also it will allow more effective control over policy development regarding that sector of agriculture.

Q37 Hywel Williams: You are foreseeing that there might be a levy sometime in the future! The Minister that was before us before did not comment upon that.

Wayne David: It is not for me to say what the Welsh Assembly Government policy might be in the future. I think the Welsh Assembly Government as it is has clearly expressed the view that there does need to be a close degree of symmetry and maximum of cooperation. That will certainly continue for the foreseeable future, and that makes a great deal of common sense.

Q38 Hywel Williams: Clearly, in the area I represent there are large numbers of animals that are taken over the border for selling on. Just a further question in this field: will the proposed Order allow Welsh Ministers to be more reactive to the needs of the Welsh red meat industry than is currently the case with the Levy Board, particularly on issues such as the policy situation between health food and sustainable agriculture?

Wayne David: I would not claim too much for this LCO, but I think it is certainly indicative of the desire to reinforce as far as possible the partnership between the farming industry and democratically elected politicians. I think that by removing an intermediary quango, if you like, that that relationship will remain firm and get stronger. It is worth noting that the proposal we have before us has the strong support of the industry in Wales. There has been a great deal of consultation, and there is a great deal of consensus around the need for this important, albeit modest measure.

Mr Williams: It should allow not only Welsh Ministers to be more responsive to the red meat industry in Wales but the National Assembly as well, because they will be able to legislate from now on, and the industry would be able to lobby the National Assembly should it wish the legislation to take place.

Q39 Mark Williams: Turning to the scope of the order and some definitions, which are very limited in themselves in the sense that it is the promotion of the red meat industry alone rather than a more general promotion of the Welsh agricultural industry, how would you regard a request for a broader competence from the National Assembly?

Wayne David: It is important to recognise that we are talking about an insertion into Part 1 of Schedule 5 of the Government of Wales Act, and I think what we are talking about is an expansion of what is there, and something that should perhaps have been addressed some time ago, as was explained earlier. That, in a sense, helps to round off an area of devolution that already exists. In a sense, I do not see it as a departure, or as an extension to what we have already, but a reinforcement of what was firmly established in the Government of Wales Act.

Q40 Mark Williams: Turning now to the specific definition, Elin Jones was very clear on the definition of red meat. Deer and goats are excluded. If those industries are to advance and grow in the future years, could this cause problems?

Wayne David: I do not think so. I think that this Legislative Competence Order has already been explained. It draws its inspiration from the existing legislation. Virtually the same wording is used in this LCO as in the NERC Act; but it is also worth making the point that although other animals have been mentioned - for example, venison, goats and so on - the definition of what is red meat is very clear. The decision has been taken to stick with that definition, and I think that that is a good, practical, as well as legal view. I also think, more broadly, with regard to venison for example, that this is a growing industry in parts of Wales, in Brecon in particular, and I understand that venison is becoming more popular - venison-burgers are very popular, so I am told. However, it is important to recognise that there is a whole host of separate issues that need to be addressed when we look at this, not least because I understand that venison are shot rather than sent to abattoirs. There are issues that have to be considered very separately, I would suggest, to what we are considering here today.

Q41 Mark Williams: Elin Jones made very clear why sheep were not defined in the proposal, as distinct from cattle and pigs. Do you have anything to add to that?

Wayne David: No!

Q42 Alun Michael: Coming to the detailed wording of the Order, it permits action in relation to efficiency, productivity, marketing and development of the red meat industry. There was a submission from the National Beef Association urging that technology and economic return should be added to this list. What is your view of that proposal?

Wayne David: I think that those are areas that need to be addressed. My advice is that the current wording is sufficiently broad for those issues to be addressed within the current scope.

Mr Williams: We simply thought that if you start including specific terms, where would it end; and if you omitted any specific terms, then there would be a risk that the courts would maintain that that was a deliberate omission.

Q43 Alun Michael: A danger of deliberate omission by implication! The other big question is how flexible it will enable the Welsh Assembly to be in relation to future developments in agri-food policy so that if Welsh priorities develop, for instance, out of the food and farming consultation, or changes to the new law, do you believe that this provides sufficient flexibility for any foreseeable priorities that might be established by the Assembly?

Wayne David: I can only reflect the view of the Assembly, and that is to answer in the affirmative. He Assembly has indicated that it intends to bring forward a measure based on this Legislative Competence Order, which is very specific.

Q44 Alun Michael: I was looking rather more into the -----

Wayne David: The Assembly has indicated that it is a long-term strategy that is in the process of development and consultation, of five to ten years, and that may well require utilisation of this LCO to bring that out through one or more measures, but that is something that is down the line; and at the moment the importance is focusing on ensuring that the strategy is in place.

Q45 Hywel Williams: Minister, you were hear earlier on when Doran Brunt explained the difference between "for purpose" and "in relation to" in terms of Matter 1.1 and he explained that it was essentially a technical matter. Is that the way that you see it as well, or are there any particular actions that could be undertaken at present, which could not be undertaken at present or which could be after the proposed Order has been passed? Is it just a matter of technicality?

Wayne David: The issue was specifically addressed earlier, so it is a matter of technicality. We do not see any particular significance in the very small change of wording to ensure coherence within the relevant legislation.

Q46 Hywel Williams: Will the proposed Order give rise to any cross-border issues affecting either the export trade or farms based near the border? This matter has been addressed previously. One of the reasons why I have a particular interest in this is that there has been the unfortunate closure of an abattoir in my constituency, which means that a substantial amount of animals are moved over to England for slaughter. I would be concerned about what happens to the levy in that kind of situation. Will there be any cross-border implications?

Wayne David: In putting together this proposal and the memorandum, and also during the consultation that took place, the issue of cross-border complementarity has loomed large. I think that the Welsh Assembly Government has made it very clear that there will be a great deal of cooperation with the development body at the other side of Offa's Dyke to make sure there is a great deal of complementarity built in. I would also point out that the Welsh Assembly Minister is also pointing out that the Welsh Assembly sees no advantage whatsoever - quite the opposite - in encouraging any kind of bidding war. I think that that is a very important policy statement. Therefore, we already see a great deal of cross-border activity occurring between parties; that is likely to continue and is not likely to be impeded in any way whatsoever through this LCO.

Q47 Mark Williams: Given what you and the Rural Affairs Minister have said, would you therefore see a case for removing the power to vary Welsh levy rates - remove that from the scope of the Order, given, as you say, that need for compatibility along the border in particular?

Wayne David: I think it is important in terms of democracy to recognise that, as was found with consultation in the 2000-2006 period, there was a need for a Welsh Levy Board, and I think that that need in democratic terms that still exists, and it has become more important in fact. That is why this measure will directly lead to the removal of the Levy Board in Wales. I think, however, that we are talking about a distinct area here, and the Welsh red meat sector has a distinct view, and this is shared by the Welsh Assembly Government. There are small variations in the levy that is charged across the sector, but by and large I think we are talking about two systems that are very similar. I think there is some difference between having a system that is very similar and which tries to get complementarity, and having one that is automatically uniform. It is that automatically uniform system that would not be helpful to anybody.

Mr Williams: The Welsh Levy board can obviously set a rate that is different already to the rate in England, so this Order does not actually change that.

Q48 Alun Michael: Can I probe in relation to why there seems to be a little bit of dissonance between the Order itself and the arguments made for it! In relation to the Order itself it refers only to red meat, and the argument that has been made is that it is limited to red meat because those elements of red meat that are defined within the Order are subject to levy-raising powers. However, the Order itself does not refer to levy-raising powers; it is a much broader instrument. Would it not have been much more sensible to broaden the scope of the Order, albeit having a specific reference to the more direct responsibility that Welsh Ministers are proposing that they should exercise, for the reasons that both you and the Minister have given?

Wayne David: The view that was arrived at after a fair amount of consideration was that it would be far simpler and straightforward, and far more legally sound to reproduce the wording that already existed in the NERC Act, and that was the -----

Q49 Alun Michael: I understand that, but if it said in relation to levy-making powers, and then went on to make that distinction, then it would be clear why it was reflecting the wording in the Act; however, the implication is that the Assembly wants it more broadly in relation to red meat, which as I said earlier already devolves responsibility anyway. It seems a bit illogical, in a piece of legislation that does not actually refer, neither in the text nor in the memorandum, to the Levy Board - or the reference to the levy-raising powers and the methodology for raising the levy are referred to outside the legislation and the explanatory memorandum. It is all very logical, but it seems a little bit odd. Was it really a compromise that this seemed the best fix?

Wayne David: I do not think it was. My understanding is that the items that are listed under Matter 1 are issues that the levy is being used for, and would be used for in the future. That is an important fact to bear in mind. If those items were removed, you would not have the specificity with regard to what the levy could and should be used for. It is also case that we are not simply talking about the levy here; we are talking about a longer-term strategy, and the Assembly might at some point in the future, depending on how their strategy develops, seek to introduce legislation based on this LCO, which might seek to reinforce, extend, modify or whatever the points that are listed there.

Q50 Alun Michael: That is precisely my point, because that might well apply to deer and other animals, to which the levy may not apply.

Wayne David: Well, those are issues that perhaps ought to be considered elsewhere. We are very specific in defining red meat, as has already been defined; and in terms of policy development I would reinforce the point that Hybu Cig Cymru is an extremely popular and successful organisation and is doing a good job in terms of promotion, and the Assembly Government, I understand, wishes to have a direct relationship with them rather than through this intermediate body.

Alun Michael: Understood.

Q51 Chairman: I asked this question to Elin Jones: should the proposed Order require the Assembly to consult the red meat industry before introducing a measure that alters the current levy rates or the basis on which levies are raised?

Wayne David: There has already been consultation. There has been extensive consultation and extensive evidence has been given to the Assembly. That is indicative of the genuine desire to have a broadly-based measure of support for that. When it comes to the measure that will be introduced as a consequence of this LCO, we will also see that same kind of consultation continue.

Mr Williams: We would expect consultation on the face of a measure rather than on the face of an order.

Q52 Chairman: Thank you very much for the evidence you have given us. We are particularly impressed with your knowledge of venison and the brevity of your answer on sheep!

Wayne David: That was the best answer of all!