Environment, Food and Rural Affairs Committee 

Oral evidence: Brand Britain: Promoting and Marketing British Food and Drink, HC 1039

Wednesday 6 March 2019

Ordered by the House of Commons to be published on 6 March 2019.

Watch the meeting 

Members present: Neil Parish (Chair); Dr Caroline Johnson; Kerry McCarthy; Mrs Sheryll Murray; David Simpson; Julian Sturdy.

Questions 260 - 346

Witnesses

I:  David Rutley MP, Parliamentary Under-Secretary of State for Food and Animal Welfare, Department for Environment, Food and Rural Affairs; Graham Stuart MP, Parliamentary Under-Secretary of State, Department for International Trade; Ananda Guha, Deputy Director, Exports and EU Exit, Department for Environment, Food and Rural Affairs.

Written evidence from witnesses:

– The Department for Environment, Food and Rural Affairs

Examination of witnesses

Witnesses: David Rutley MP, Graham Stuart MP and Ananda Guha.

Q260       Chair: Starting with Graham, you can go across and introduce yourself for the record, please.

Graham Stuart: Graham Stuart, Minister for Investment at the Department for International Trade.

David Rutley: David Rutley, Minister for Food and Animal Welfare at Defra.

Ananda Guha: Ananda Guha.  I am the deputy director for exports and EU exit in the agri-food chain directorate of Defra.

Chair: I am unusually going to hand the first question over to Caroline for a fairly obvious reason.

Q261       Dr Johnson: Thank you, Chairman.  The obvious reason is that I am the parliamentary private secretary to Minister Stuart and therefore will keep my questions focused only on the domestic agenda and to Minister Rutley.  I am going to ask you about buying British and how we encourage consumers to buy British.  Do you think it is important to encourage members to buy British food?

David Rutley: Yes, I do.  First of all, thanks very much for inviting us today.  It has been fascinating to read the evidence sessions so far.  You are obviously taking this incredibly seriously, as are we.  The inputs that you get will no doubt help us in shaping our future strategy as well.  That goes without saying. 

Coming back to the question about domestic promotion, yes, we do.  We think it is a very important priority.  We have seen and continue to see good campaigns being taken forward by the likes of the NFU, retailers and AHDB.  That points to what can be achieved.  When you look at what other countries do, it also highlights that there is more that we can do.  We are committed to doing that.

Q262       Dr Johnson: People buying foods from supermarkets have increasingly seen shelves stacked with British produce and British meat, and supermarkets are increasingly labelling so that people can see where the meat has come from.  You do not see that to the same extent in restaurants and in processed food.  What can Government do to encourage restaurants and businesses to speak about where their food has come from and to encourage customers to ask?

David Rutley: We will no doubt talk more about this, but as we leave the EU, there will be opportunities in terms of food labelling and how we can help make that more transparent.  The issue is that, while we are in the EU, we do have state aid rules.  That does make it more complicated about how we can promote product and produce by origin.  That is a challenge.  That said, look at the landscape that we see in the UK. I am sitting next to a Yorkshire MP so I have to be a bit careful what I say, because it is, in his opinion, God’s own county.  Deliciouslyorkshire do some fantastic work in promoting their produce locally.  You can think of Taste of the West and what goes on there.

Chair: There is more than one God’s own county.  You realise that.

David Rutley: Yes, I think you are talking about Cheshire at this point.

Q263       Dr Johnson: Lincolnshire is too, of course.  I was more specifically meaning that if, for example, I was to buy a pizza from a well-known pizza restaurant, say a ham and pineapple pizza, I would not have any indication of where that ham had come from at all.  If I went to the supermarket, I may well find that information on the fresh meat counter.  How do we encourage retailers to put that information out there?

David Rutley: You are saying it is not just retailers; it is also restaurants and the like.

Dr Johnson: Restaurants, yes.  Maybe chain restaurants know where it is coming from.

David Rutley: That is where we can start working more collaboratively and more closely with these organisations.  There is a degree of that.  There is more that we can do.  For example, every week now—and this is more around preparedness for exit from the EU—I meet with UK hospitality, the NFU, the Food and Drink Federation and BRC to talk about how we can move things forward against that scenario.  What that is showing is that if we work more collaboratively every day of the week as business as usual, not just because of this event that is coming up over the next few weeks, we can tackle those issues more easily by having a more common and shared agenda and a greater sense of partnership. 

One of the challenges in the food industry is that it is very fragmented.  There are lots of different channels.  People could use that as an excuse to say that it is very difficult to bring parties together, but there is an opportunity now and in a way the export opportunity helps point the way.  Also, when you look at the way that we are having to work closely together because of EU exit, it shows that we can get better results by working better together.  We, Defra, need to be working more closely with the industry, and we are beginning to do that now, which is very positive.  Also, the food sector needs to come together with a common and clearer set of asks for how we can move things forward.  There is an opportunity.

Q264       Dr Johnson: How do we encourage consumers to scrutinise this information?  How do we encourage the general public to ask restaurants where their meat has come from and to take a greater interest in its provenance?

David Rutley: Again, there is a balance we need to strike right now because of state aid rules, but we have a number of regional and devolved Administration-led campaigns that can be utilised.  There is a question that the Chairman might also be interested in, in that you can see that England is not getting the same sort of shout in amongst what is quite a complicated jigsaw of different programmes.  That may or may not be appropriate.  What we need to do is make the current initiatives work more clearly and then think about how we can bring in any overlay around England to get that message across as well.

Q265       Dr Johnson: The third area in which British food can be supported is in public procurement.  What are the Government doing to encourage the use of British food and British produce in public procurement contracts?

David Rutley: As Ms McCarthy will know, we had quite a lively debate about public procurement yesterday in a no-deal scenario.  We talked about the sector in some depth.  Yes, there is a lot that we are doing, and it is also worth pointing out the size of that market.  It is £2.4 billion in food and catering.  We do need to figure out how we can help promote local businesses to get involved.  In the 2017 Government manifesto there was a commitment that 33% of all central Government purchasing will come from SMEs.  We are taking that commitment forward.  As far as catering goes, in 2014, there was a plan for public procurement—PPP—for food and catering services.  What that then produced and aimed to do was to create a simpler process for SMEs to be able to get into the procurement process.

Q266       Dr Johnson: That is a slightly different question.  That is saying you are going to get the food from small business.  It does not necessarily mean that it is British food.

David Rutley: We have to be careful in terms of state aid.  What is interesting is that this creates an opportunity because SMEs are, by definition or by probability, more likely to be local UK businesses.  What I am trying to say is this is an opportunity to get more small businesses involved because what we are going to be doing is creating a balanced scorecard. We are going to be setting out some very clear standards that are much simpler for the businesses.

Q267       Dr Johnson: Is this post Brexit?

David Rutley: This is going on now.  This is all part of what we are working on in public procurement.

Dr Johnson: Do you have any indication of the proportion of food that is procured by the Government or Government Departments that could be produced in the UK?  I appreciate we cannot produce every single type of food.  In terms of food that can be produced in the UK, what proportion of the food that is procured is British?

Q268       Chair: Can I add to that? You gave a figure of £2.4 billion.  Is that total public procurement across both Government and private?

David Rutley: No that is food and catering, Chair.

Q269       Chair: Is it also across local government, the health service and everything?

David Rutley: That is my understanding.

Q270       Chair: Do you have any figures about how much of that food at the moment is British produced?

David Rutley: I do not but I can get that.

Chair: Can you try to get that for us?

David Rutley: I will come back to you.  Those questions are legitimate.

Dr Johnson: How much of it is British produce?

Chair: I think you should know that, Minister.

David Rutley: Okay.  I seek your forgiveness.

Chair: If you want to make sure that we are promoting British food, you ought to know the figures.

Q271       Dr Johnson: What proportion of it is British food and what proportion of the food that we could potentially purchase from the UK are we purchasing?

David Rutley: Unfortunately I do not have that statistic with me.  We will get it for you.

Chair: It would be a useful figure to have.

Q272       Kerry McCarthy: My understanding is that in France they have a law that 50% of publicly procured food should be either organic or locally sourced.  That is tied in with a very ambitious plan to promote agroecology.  I wondered whether that was something we have looked at and, if we do not aspire to it, is there a reason why we do not aspire to it?

David Rutley: I am personally not aware of that.  What we are trying to do is tackle this from a different dimension, which is more about getting SMEs involved, which will be mostly British businesses.  We believe that is the way we can navigate through state aid rules.  I do not know about the French situation.  Are you aware of that, Ananda?  Otherwise, we can get back to you on it?

Ananda Guha: We certainly can get back to you.  The French produce everything.  That is the reason they benefit from the CAP.  They are a big producer of food, and they are rightly proud of it.  We can aspire towards that but I am not sure, if we had a similar target, we would be able to meet it, because we do not necessarily produce the types of things that represent the balanced diet that we aspire to in the public sector, for instance.

Q273       Chair: We are not asking you to get to 100% but I think you will find that 50% would not be so difficult to hit.  We produce many of the staples that people eat.  We do not necessarily produce rice yet but, like I said, there are a lot of things that we do produce.  It is too simple just to bat these things away.  For years we have had Ministers come here and say, “It is all down to European regulation.  That is why we cannot buy and procure British”.  We are just about, God willing, to Brexit next week.  There are advantages if we choose them.  I will give the trade Minister a hard time in a minute.  He will want to import all the cheap food he can from all around the world.  We have to make sure that British food is served up to our public sector.

Kerry McCarthy: In terms of state aid rules, there is a problem with specifying British but you can say “organic and locally sourced”, and organic tends to have shorter journey times.  You are allowed to do that.

Chair: We can say, “Buy British”, can we not, when we leave?

Kerry McCarthy: I am not sure.  Yes, when we leave.  Even now, we can get around it by saying “locally sourced”.

Chair: Minister, I will ask you the direct question.

David Rutley: The key thing is if we are leaving, the state-aid-rules environment changes fundamentally.  That is where we need to start developing our thinking and our approach.

Q274       Chair: “Buy British” with a clear union flag on it is possible, is it not, Minister?

David Rutley: Again, we need to work through our approach.

Q275       Chair: Can we have a, “Yes, it is possible”?

David Rutley: We are going to work through our approach to get the best possible outcome for our businesses, without a doubt.

Q276       Chair: That is not much of an answer, is it, Minister?  Let us go on to the next question and see if we can get on better with this one.  Should country-of-origin labelling be made mandatory for characteristic ingredients of every food product, for example the origin of chicken in a chicken curry?  This has been a pet thing of mine for years.  You are saying that we cannot label everything but you can label the principal ingredients.  You have a barcode now.  It is possible.  What are you going to say against that, Minister?

David Rutley: Do you mean having a barcode?

Chair: Having the principal ingredients of a processed product.  This is where a lot of inferior product and other things come into our diets, through processed product.  What are you going to do about it?

David Rutley: With processed products, it becomes more complicated because there are different ingredients from different sources.  There is no question that it is more challenging.  We want to make sure that we get our labelling as transparent as possible.  We have said in previous settings or maybe outside of Committee that we are going to be looking at food labelling across the board when we leave.  That will be a fundamental review of sustainability, around welfare and ingredients.  We are already on to it with allergens.

Q277       Chair: There is also a very serious point now.  It is very difficult with people that suffer from allergies and what it is in the product.  There is an argument to make sure, for all those very good reasons, that we know what is in there.  First, we have a real chance to do it and, secondly, we probably should do it.  I know the Secretary of State is quite keen to do more because of the tragic cases recently.  You talk about it being challenging but I would rather have some sort of idea of how you have been challenged and what you are going to do about it, rather than just tell us that it is challenging.

David Rutley: On the allergen point particularly, there is a consultation that is going on at the moment.  The Secretary of State has made it very clear, and I am very clear as well, that we need to strengthen our allergen labelling and how we do that.  One of the options is full ingredient labelling and making sure that the allergens are highlighted.  This is on food that is prepacked and for sale on the premises.  As we are talking now and as we have been looking at this over recent months, it is very clear that there is a more fundamental requirement for food labelling.  It goes much broader than that and will be easier to do once we leave the EU.  We are absolutely committed to doing it. 

As I said, there are a whole range of aspects to it.  I am sure our questioning will get into some of the things we are trying to do, setting up the gold-standard metrics that will help us provide an architecture to consider all of these things.  We already have a plethora of different assurance schemes, again that we no doubt will talk about, which all help.  What we need to do is figure out the best way in the new environment of getting ingredients, origin, safety, welfare standards and sustainability standards on to the packaging.  We all want to do that because we want to make sure it is safe and it is traceable, and that will help with our exporting as well.

Q278       Chair: It would also help with traceability.  Going back to 2012, when we had the horsegate problem where we were getting too much horse meat in the beef burgers, which had no business being there, that was food fraud and it should not have been there.  We found then the way food moves all over Europe, all over the world and is mixed in in various countries, if you have a list of the ingredients and where they come from, at least it will give you an opportunity to think about why so much beef is coming from that particular country when they do not produce much beef.  Could it be that some of it is being swapped for horse meat?  There is an issue there as well.

David Rutley: Yes, absolutely.  That is why this review is going to be so important.  What I am trying to get across is that there are several layers on this.  I am sure even within your Committee there are some people who feel some aspects of labelling are more important than others.  The other thing we need to bear in mind is that the producers will need to work out how to get this on to their packaging as well.  There is going to be quite a dialogue that we need to work thorough to satisfy these different audiences.

Q279       Chair: The processers will always resist because they will say that it is all very difficult.  Of course, they do not actually want us as consumers to know that in that chicken curry is imported chicken meat, so they would much rather sell it as a British product that has been produced here, and then it is hidden as to where all this food comes from.  If we want to promote Brand Britain in Britain, we need to look at processed food; it might be processed egg product or all sorts of things.  This is where the imports come in.  They do not come in as whole eggs, whole chickens or anything else.  They come in as parts of chicken, liquid egg and powdered egg.  All of those things are important.  Do you have any timescale?  How urgent do you see this as being?

David Rutley: The allergen one is going on straight away.  As far as the food labelling goes, that will be a priority once we leave.

Q280       Chair: Do you have a timescale?

David Rutley: I cannot give anything more than that.  It is going to be an urgent priority and the Secretary of State has said that in multiple forums.

Q281       Chair: You are on record as saying that it is a priority, so we will have you back in six months’ time.

David Rutley: I would welcome that opportunity.

Ananda Guha: At the moment, of course, the big challenge for the Ministry is EU exit and the information that we are conveying to food companies about labelling.  We have issued some guidance on how pragmatic we will be in enforcing certain bits of food labelling.  It is absolutely critical that we get that right.  We can then move on to something that actually works for the UK, rather than the obligations we have.

Q282       Chair: I do accept that if there was not any food on the shelves, nobody would be very happy, but I do not want you to use that as an excuse to take too long in getting it done either.

David Rutley: No.  As I said, multiple audiences have their own concerns about this issue so we need to be on it.  As far as labelling goes, we are working very closely with the industry to make sure that they can work through what is going to be required.  There are multiple changes of origin, address and so forth.  We are having to give them some time.  We have now said they have 21 months to make that transition, except for GIs, where there is three years.  We are trying to make it reasonable on their part as well, but we need to persist and move forward with labelling reviews more generally.

David Simpson: This is to David again.

Chair: We will get to you in a minute, Graham.

Q283       David Simpson: Yes, we will.  You are not getting away with it.  In relation to Defra, are they developing a gold standard for food and farm quality, for use domestically and in driving exports?  How does the Red Tractor fit into all of this?

David Rutley: Let us talk about the gold standard.  That is an important project we are taking forward.  This is primarily around metrics.  I have met with the team.  As I said, there are multiple layers in which people want to look at assurance and look at labelling.  What we are doing is carrying out some work to try to create an architecture or a framework with common metrics, so that can then either provide focus for something that we take forward within Defra or, more likely, we can use working in collaboration with existing or new assurance schemes with other third parties and other stakeholders, to create a more joined-up landscape of assurance.  This is a very important and in-depth piece of work about trying to get to grips with what those metrics should be.

Q284       David Simpson: Internationally, is Red Tractor the proper vehicle for doing that?

David Rutley: It has received some really outstanding international recognition for the work it does.  It stands high in international benchmarking and is setting world-leading standards.  There is no question about that.  When you look at what Red Tractor was initially set up to do, it was there to help assure and also to help in some way move forward promotion as well.  The primary focus has been more in the domestic market rather than outward looking.  As, again, we start looking at the new landscape and thinking through how we want to label, we will need to think through the role of Red Tractor in conjunction or against all the other opportunities that are out there.  The focus with Red Tractor has been more inward looking. 

I have met with Lucy Neville-Rolfe, who heads it up, and we have talked about their ambitions; they have really big ambitions for Red Tractor.  We need to see it again in the context of our wider export strategy, working with DIT to figure out what is going to get the best possible return for our outbound markets as well as our domestic markets.

Q285       David Simpson: Do you believe, whatever happens after 29 March, post Brexit, that we have too many brands?  We have Brand Britain, Red Tractor and others.  I have raised this with a number of people giving evidence.  Is it better to have one UK brand to market, or are you content with the number of different brands that we have?  Is it confusing?

David Rutley: It could be better co-ordinated, at the least.  At least we need to look at better co-ordination and make sure we get the best value for money, because there are lots of competing schemes with different roles.  At the very least we need to get more joined up and better co-ordinated.  I do not think we will ever get to one.  We have one scheme.  It is also complicated by the fact that we have devolved Administrations with their own ambitions.  In England, we have taken more of an approach that is focused on our regions, which have very strong opinions as well. 

There is a journey to be taken here, one that I am not going to try to put into the long grass, far from it.  We have been very focused, and continue to be, on EU exit.  That is taking up a huge amount of our bandwidth.  Once we can start moving forward to think about what happens next, how we get better co-ordinated is going to be absolutely key.

Q286       David Simpson: Is it not confusing for the like of the China market, for example, where we have Red Tractor labelling and Brand Britain labelling?  They are different brands.  I am not saying it is, but would it be confusing to try to get in, from that point of view? 

David Rutley: It could be confusing.  When you see other markets, that is why we need to explain.  That is why we need to get these different initiatives better co-ordinated.  If you look at our results, we are seeing a real improvement in what is happening with our exports. Often in the UK and in England we take more of a localised approach.  We certainly do, compared to other countries, in the way we deliver services.  I do not want to say that we are going to put one scheme forward and that is it.  We have a heritage that we need to respect and navigate our way through.  Some of your fellow colleagues in Northern Ireland would have a view on that as well. 

There does need to be better co-ordination.  When you look at the size of the prize out there, and when you see what other countries are doing in terms of their export potential and results in food and drink, although we are doing well and improving, we have a long way to go.

Q287       David Simpson: Graham, do you have a view on that?

Graham Stuart: I would agree.  We have the devolveds and they are entitled to promote their particular brands.  Does that make it slightly more confusing from a UK point of view?  Yes, but it is part of accepting the constitutional arrangements we have.  If you look at things like the Northern Powerhouse and the Midlands Engine, we are very proud of those initiatives.  We are pretty strict at not promoting those in an international context.  Though the Northern Powerhouse and Midlands Engine have been funded to lead delegations abroad and promote, when you go to a stand at a big event abroad, you will see that the GREAT branding is there, with the devolveds.  Sometimes there can be people turning up in their own right otherwise, but we recognise the fact that there is this need to try to be as well organised and coherent as possible, while also accepting the energy and dynamism and the fact that Scotland, Northern Ireland and Wales promoting themselves is part of having devolution. 

We work quite well together.  Look at where the devolved people are placed.  They are typically by hosted by us.  When I speak to people in post, thinking there might be some kind of conflict, that is not what I hear.  I hear they are seamlessly working together, using our platform and promoting.  Occasionally, there will be slight confusion in the market but there is energy and drive that the devolveds bring by working together co-operatively, as we try to do in Government, which is more in the absence than the reality very often, and we try to make sure we hang together and that altogether it does a good thing.  We are growing the exports but the opportunity to do so much more is there.

Q288       Chair: Before we leave this question, as you have the floor, we have a Secretary of State who wants to improve our welfare standards and make ourselves even more of a gold standard, which is a great direction.  Putting your international trade hat on, how are you on the import of food that comes into this country that has not met those standards?  We seem to be getting some resistance to being able to put anything on the Agriculture Bill and the Trade Bill to maintain our high standards when imported food comes in.  I have this horrible feeling, which may not be right, that your Department for International Trade wants to buy cheap food from wherever it can get it.

Graham Stuart: There is a balance to be struck, Mr Chairman, between the consumer interest, the producer interest and the like.  I do not think there has ever been an area in agriculture, in all the years I have known you, where you have not been right, but this might be one.

Q289       Chair: What is your conclusion then? You are throwing the gauntlet down now.

Graham Stuart: I know the challenge here is for you to challenge me and not the other way around, but I would say to you to not be so defeatist.  I would say to you that the reason we are managing together to promote and export more of our food and drink products is precisely because of our high standards.  Sometimes people will not hear a reassurance when it hits them repeatedly in the face.

Chair: You threw the gauntlet down so let me come back at you.

Graham Stuart: It is the golden rule of appearing before a Committee: do not do that.

Q290       Chair: I am very happy to sell and promote British food across the whole world and I think we have a very good and high standard.  What our farmers and producers cannot do is have higher and higher standards here and then have imported food that does not meet those standards.  Do not wax lyrical to me about how I am not trying to sell British food or whatever, because that is not true.  It is quite the reverse.  You will suddenly allow a lot of lower-welfare, higher-density produced chicken or whatever into this country.  It is not about the chlorine wash; it about the density of production, using more antibiotics and all of these things that we are doing very well in this country.  I do not want those imports coming in and undermining our producers.  I do want an answer as to where your Department is on this.  You cannot have one Secretary of State going in one direction, saying that we must have higher and higher standards, and the other Secretary of State saying, “Let us let in competitive food and if the farmers cannot compete, too bad”.  They are not competing on a level playing field.  That is what the problem is.  What is the answer to that, Minister?

Graham Stuart: The reason why—I hesitate to say this—you are wrong, Mr Chairman, is because one Secretary of State you painted there is correct and accurate and the other is not.  My Secretary at State in DIT has not said any of the things you have said.  My Department, just as with Defra, is committed to the maintenance of those standards.  There will be no change whatsoever in the quality and product standards that are required in this country.  There is absolutely no intention to lower our standards. 

I am not claiming you are feeding the myth, because, representing this Committee, you look at the welfare of farming and food production in this country, quite rightly, but Liam Fox could not be more explicit; Michael Gove could not be more explicit.  We are determined to maintain those standards.  There is no plan whatsoever to lower standards that we currently have.

Q291       Chair: Why can we not have an amendment to the Agriculture Bill or the Trade Bill stating that, then?  There is great concern about that.  If that is your stated policy, why is there resistance?

Graham Stuart: I am not in charge of either of those Bills.  Our policy is so clear.

Q292       Chair: Graham, I will be quite straightforward with you.  I had another of your Ministers in your Department who told me, bluntly, that we would not be able to sign a trade deal with America for anything else if we did not accept their standard of chicken production or whatever it might be.  That is a load of nonsense, because the EU signs lots of trade deals that put in exact production methods.  That is why I am rightly worried about the situation.

Graham Stuart: The Trade Bill, as I understand it, is focused on the trade agreement continuity.  It is not a platform for describing future FTAs; it is for existing ones.  Our entire aim there is, as close as we can, simply to replicate the existing one over. 

Q293       Chair: If you do not want it on the Agriculture Bill, where do you want it?

Graham Stuart: This is not what I do every day but the area is one in which, under WTO rules, you can have product standards.  We have said we will not reduce those.  That is it.  When you come to the specific amendments, if it goes further than that and if it tries to exclude something that meets our standards, that would be in breach of WTO rules and other things.

Q294       Chair: Therefore, you would accept something that would maintain our standards as they exist at the moment.  Is that what you are saying?

Graham Stuart: I am saying that I see no need for that whatsoever.  We are absolutely clear in our intent and I am unaware of any amendment that would be acceptable to both sides.  That is why, so far, amendments have been resisted.

Q295       Chair: We have to decide as a Government whether we want to get agriculture and food production into a very productive state and therefore produce very cost-effective food or whether we are determined, rightly enough, to push up standards and probably push up costs along with them?  You cannot go in both directions.  What I rather fear is that one Department is driving us in one direction and the trade Department will be trying to drive us in another, saying, “If you cannot compete, tough”.  That is alright if you are competing under the same rules of production.  That is where the crux of the problem is.

Graham Stuart: It is about product standards.  The way the WTO has developed is around the product standard.  You have to meet our product standard to be allowed to sell it here.  We have no intention of lowering our product standards.  If you can compete and deliver a product that meets those standards and you can out-compete someone, that is the whole basis of competition.

Chair: It is.  I do not argue with you but it has to be on the same basis.

Graham Stuart: The danger is that you use standards as a guise for protectionism.  Standards must be maintained and we are committed to maintaining them, but you must not allow them to be used to protect someone who has not innovated.

Q296       Chair: You cannot have one Ministry saying, “Let us move everybody towards a higher and higher standard”, and then another Ministry saying, “Let us let food in under the previous standard”.  The two do not work like that.

Graham Stuart: There must be one product standard and anything sold in the UK has to meet that standard, wherever it is produced.

Q297       Chair: That is why there has to be an agreement between the International Trade and Defra Secretaries of State on a direction of travel.  At the moment, there is not.  David, you wanted to come in.

David Rutley: It is important to highlight that with the withdrawal Act, we are going to transfer into the UK statute book all the EU safety and animal welfare standards.  That is something that is going to be key.  I know Ms McCarthy has raised this issue in numerous forums with me.  She is very keen on this issue and probably will ask some more questions on it as well, for understandable reasons.  Chlorinated chicken and hormone-treated beef will not be able to come in because the standards are either part of UK law already or will be with the withdrawal Act.

The other thing worth pointing out is you do make some important points and we are not deaf to those points.  We are trying to respond and give you the assurance you need.  The fact we are here saying the same thing is really important.

Graham Stuart: As are our Secretaries of State, contrary to what you keep suggesting, Chair.

Chair: They are both on record going in different directions.  I can find it for you, Minister, if you want me to.  Carry on, Minister.

David Rutley: This is really important as we think about the Agriculture Bill, because it does things that help here as well, which is by helping producers to be able to work to higher standards of animal welfare, and they will get paid for that because it is perceived as a public good.  We will be setting up 50-odd pilots to work through these different dimensions of ELM.  Animal welfare will be part of that.  We can then start figuring out how we can market even higher welfare standard products internationally.  It is very clear.  The Minister has made a good point.  We trade on our quality.  Many other European markets trade on their quality.  We want to show that we can be even better than other markets.  The new ELM programme will help us with that.

Q298       Chair: You are going to take the poultry and the pig sector, the very competitive, very much under-subsidised industry, into subsidy, are you?  There will be limitless production, because chicken and pigs can be overproduced overnight if you want to.

David Rutley: It is a choice, is it not?  People can decide if they want to participate in that.

Q299       Chair: I do not get it.  You have the trade side of it saying, “Let us be more competitive.  Let us get out there and get those markets.  Let us not worry about the trade that is coming in because we can compete”, and then Defra is going in a different direction.  It is not going to work in the long run.  I understand where you are trying to get to.

David Rutley: In medicine, we are going for personalised medicine, are we not?  In a way, we do that with the food market all the time.  We try to get food that is tailored for individual tastes.  There are people that are more concerned about the welfare standards that are used in their food, and they are prepared to pay a premium.  We would give them that opportunity.  Producers will not be forced to get involved with that.

Q300       Chair: During this Brand Britain inquiry, in previous evidence we have had, we have heard that people will buy British but as soon as the price starts to go up, the number of people who buy British drops back very, very quickly.  You are right that some people will go out and pay more, but a lot of people will not.  That is where a lot of your production is.  Is your ambition to make us into a niche market producer or do you see us still in mainstream agriculture?

David Rutley: Just to let the Committee know, I used to work as a director at ASDA.  Hopefully that gives you a clue that I understand the mass market.

Chair: That is where the food is.

David Rutley: I understand not only the need to make sure it is safe, not only that it needs to be environmentally sustainable or to high welfare standards, but also that we need to make sure it is affordable.

Q301       Kerry McCarthy: To echo what the Chair was saying, we were told throughout the Agriculture Bill committee that the place for provisions about no lowering of standards in trade deals rightly belonged in the Trade Bill.  We were told when the Trade Bill went through the Commons the point that the Minister made about it only being about carrying over current trade deals and not about future trade deals, though, as I understand it, Lord Hannay thoroughly rubbished that during Committee stage in the Lords.  He is someone who should know.  I am looking forward to seeing what the Lords say in response to the amendments that are being put forward this afternoon. 

You cannot have a Government Minister, or ex-Minister now, standing up in Agriculture Bill committee and saying, “We agree entirely with what is being said in this amendment but it is the wrong Bill.  It belongs in the Trade Bill”, when the Department for International Trade are saying it has no place in that Bill.  That cannot be sustainable.  There has to be a joined-up line on that.

I have heard from so many sources that the Department for International Trade is not fully in sync with the Defra Secretary on this. On The Andrew Marr Show on Sunday, he was very much dodging around the question.  That is more of a statement on that.  You need to get your lines straight.  I think it needs to be in legislation.  You can ask what happens if we trade on WTO terms or whatever, but it is about a trade deal being negotiated.  You can put anything in that trade deal and we need firm commitment that there will not be a lowering of standards in it.  People do want to see it in legislation now, rather than waiting for the trade deals.

David Rutley: I know we have been in correspondence actively on this.  It is worth bearing in mind commitments have been made.  We have the withdrawal Act.  As I understand it, as we start looking at future international trade agreements, under the CRG Act these treaties will be subject to ratification.  Parliament does have a role in scrutinising.

Chair: The Secretary of State for Trade put out a statement yesterday.  There is a committee or a system that is going to work to look at these trade deals.  I would like it, Graham, if we could have a breakdown of how that is going to work and how that is going to affect agriculture in writing.  That would be quite useful.  It would be a useful process for Parliament to have some influence over what the trade Department is doing and proposing.  As much as we love you and trust you, we have to keep an eye on you.  That is for certain.

Q302       Mrs Murray: Maybe you can both answer this but it might be a bit easier for you, Mr Rutley, to answer.  I want to ask you about geographical indicators, and I include the designation of origin and also the traditional speciality guarantees on this.  Of course, the famous Cornish pasty is subject to that.  I know that you have said that hopefully these will continue and you will introduce UK geographical indicators, even in the event of no deal, but how concerned are you that the EU may not continue to protect UK GI products after Brexit?  How confident are you that we will be able to see them continue?  I know we can do it within the UK, but I would like to look to Graham as well, to ask whether we would still be able to have those protections if we export outside of the EU.

David Rutley: In a deal scenario, all of these things would need to be negotiated.  In a no-deal scenario, we will be clearly establishing our own UK GI system and our own programme.  My understanding is that as far as the EU goes, for a period of time at least our GIs would be recognised by the EU.

Q303       Mrs Murray: Moving on to Graham, do you think that these could perhaps benefit UK producers in exporting?

Graham Stuart: Do you mean the maintenance of GIs?

Q304       Mrs Murray: Yes, the maintenance of GIs.  Will people be more inclined to buy Cornish pasties if they were absolutely sure that those Cornish pasties were made in Cornwall with Cornish produce?  I am looking at things like Stilton cheese, the regional ones, West Country beef and West Country lamb.

David Rutley: One thing we absolutely can do is get behind those 87 GIs.  There is no question about that.  There was a complication at least about co-ordination amongst the other schemes.  One thing we can do under any scenario is to get fully behind those 87 GIs.  That is an exciting prospect when you not only have Cornish pasties but Cornish clotted cream and all these other fascinating products that we need to make more of.  What we can do with our new logo and our new initiative is make sure that the provenance of those products can stand out more.  We are working on the logo.  That will come forward in due course.  We are giving industry time to get used to that.  That is a perfect tool for us, within Defra and DIT, to get behind those products.

Graham Stuart: With these new GI logos, the aim is to be simple, eye-catching and to be launched shortly after exit day with the time, as David says, to allow people to adopt it so that we can generate recognition of that product status, by getting that branding right.  We are absolutely committed to having that UK GI scheme.  It will continue to be protected under the EU.  In the event of no deal, it is possible that the EU could withdraw that but given their GI indicators, which we wish to have, although nothing is certain in the no-deal world, I would be fairly confident the mutual benefit on either side would mean we would see that maintenance.  With a new UK GI scheme, complete with new logos, there is a real opportunity to do exactly what you are saying, Ms Murray, and that is to promote even more effectively Cornish pasties and other GIs right round the world.

David Rutley: If there are further sampling opportunities available, I will gladly join in to make sure the assurances are of the highest standard.

Mrs Murray: I will make sure the next time I bring some up to Westminster, you try one of Sheryll Murray’s Cornish pasties.

Graham Stuart: The last one I had a couple of nights ago, I have to confess, was not traditional but it was still delicious.

Q305       Chair: Graham, when we are negotiating a trade deal with America, the Americans universally hate these geographical indicators.  Are you going to maintain all the geographical indicators in that trade deal?

Graham Stuart: The Americans have just published the mandate for their FTA negotiations with us.  They are remarkably similar, as you might expect. 36 of 38 of their objectives are basically the same as they are with the EU.

Q306       Chair: Are you committed to maintaining it?  We need a yes or no.

Graham Stuart: Absolutely, we are.  We are bringing in the new scheme, we are coming up with the new logos, we are going to promote it and we are determined.  This is a longstanding issue with the US.  We are determined to defend our GIs.  We are proud of the fact that the most prominent of them all, scotch whisky, is more than 20% of all our food and drink exports, with significant increases again last year.  They work.  We want that to continue.

Chair: I thank you for that reassurance.

Graham Stuart: That is why I am here—to reassure you.

Chair: It is all recorded.  Thank you very much.  That is evidence to be later used against you.

Q307       Kerry McCarthy: There is a target at the moment to increase the value of food exports to £23 billion by 2020.  Will that be met?

Graham Stuart: We are at £22.5 billion, I think, in the latest numbers.  Against that £23 billion number, that does not look too bad.

Q308       Kerry McCarthy: Despite Brexit.  Has an assessment been made?

Graham Stuart: The joy is that in 2017, which we have final figures on, we had a 10.9% increase in exports overall, across all sectors, taking us to £619 billion.  It is now up to £630 billion and counting.  We have more exports than ever before, having had a long time under the previous Government where we did not get out of 20-something-percent as a percentage of GDP for exports.  We are up to 30%.  We have set an aim of getting to 35%.  We have the export strategy.  It is challenging. 

Of course, food and drink is one of the areas where there is the greatest potential.  It is fragmented and it is dominated by SMEs, which creates barriers, but that is why we have set up a dedicated international trade Department.  We only have to do three things: promote exports, promote investment and deal with trade barriers from the marquee FTAs down to the agreement that Liam Fox signed in China to allow dairy goods in.  I know that from being in Taiwan last year, meeting the President and so many others, and talking to them about pork, for instance.  In October last year, they let that happen.  If we keep working at it, promote effectively, co-ordinate better, work closely with industry, go and find every single barrier that we can identify around the world and remove it, there is a real opportunity.

Q309       Kerry McCarthy: This is usually when I start talking about the pig trotters protocol and the fact that we still have not managed to start selling them, but I am going to resist.

Graham Stuart: I share that frustration.  I remember years ago when we could not sell pork into China.  A lot of good work had gone on.  I think Jim Paice was then the Agriculture Minister.  He went out and we managed to open it up.  If I look back, I do not think historically, regardless of who was in Government, we have taken this market access issue as seriously as we should have.  You get one of these things sorted and it works out to £240 million to £250 million extra over five years, just for dairy, and each one of these is worth significant money. That is why we are upping our market access work.  That is why we are upping our trade policy capacity from a very low base historically.

Q310       Kerry McCarthy: You had the GREAT campaign, Food is GREAT. Can you attribute any of the rise in exports to that campaign?

Graham Stuart: As David leads on it, I will let him take the credit for that, which we can.

Chair: Go on David.  Take the credit.

David Rutley: Let me give you an example of a fantastic product in my constituency, Macclesfield, Forest Gin.  They distil their own gin from items they forage.  It is a fantastic story.  You would have thought that would be something that would stay in a private premises and be enjoyed with their own family, but the owners decided they wanted to move things further forward.  They wanted to tell their story to Harvey Nichols.  They got in there.  Then they thought, “Crumbs, how do we get into other premium markets?”  They spoke to DIT.  Before they knew it they were on a trade mission to China and now they have a huge amount of export business going their way.  Where I am optimistic is if we can do that in one of those very niche areas, almost like a microbusiness, like Karl Bond and his family have established, we can do it elsewhere as well.  I know that Mrs McCarthy has an interest in China and trade in China.

Kerry McCarthy: We went there together, did we not, with other people?

David Rutley: Yes, in 2011.  The opportunity was unbelievable.  You could smell the opportunity there.  The fact that we now have a Department focused on and looking at that in a targeted way is good.  In the past we may have sprayed our initiatives a bit too much around the world; now there is much more focus.  If we can do that for a small distillery in Macclesfield, we can do that in every other constituency that is represented around here.  You could look at it as a fragmented industry but what it means is that it is an industry that is widespread around the country.  We need to get those businesses interested in promotion and exporting.  There has been a lack of focus in this country.  We have looked too much to traditional markets.

Q311       Chair: In a way, our home market has always been quite big but that has almost been a weakness in a way, because we have concentrated on that and not enough on exports.

David Rutley: I set up a trade fair in and around Macclesfield with UKTI, as was, for north-east Cheshire.  I said that we needed to get the Indian High Commission there and we needed to get the Chinese Embassy there.  They did not come in the end because at that stage—and this was just after our visit to China—the people that turned up, who were not just food manufacturers, wanted to trade with the EU and with the US, which were the traditional markets.  They had not got that ambition.  That is now coming our way.  I know that the work the Minister here is doing is helping.  Clearly the ambition around the table here is that we move to a much higher gear, and I think we can.

Graham Stuart: It is early days.  The Committee can make recommendations to help us.  We are just over two years old.  They say politicians will always do the right thing when they have exhausted all the alternatives.  We can get it right and raise it up. 

I have a constituency story as well.  Just down the road from me, I cycle frequently past Crème d’Or, which is a chocolate distributor in east Yorkshire.  They ended up serendipitously looking at exports, engaged with us and now they are selling into Dubai and Shanghai, and growing their export turnover all the time.  They did not really think of themselves as being a potential exporter.  In our analysis, we think there are more companies generally—this is not food and drink specific—that could export and do not than there are that can and do.  When you look at the potential upside, if we can get more effective and inspiring people facilitating them, supporting them and getting them over the barriers, then there is a huge potential.

David Rutley: There is real growth in chocolate.

Q312       Kerry McCarthy: Have either of you had discussions with the organic sector about the potential problems they will face once they are outside the EU certification process?  It is a real concern.  The Soil Association is based in Bristol.

David Rutley: Yes.  There is an active dialogue.  I know you are very aware of the challenges there.  I am too.  As part of our weekly meetings, we are looking at what the implications might be around third country applications.  The good news is we are moving forward well with the animal products and the EU are engaging well with that.  In organics, we do not have the same dynamic.  We are aware of it.  What that highlights is how important next week’s deal is.

Graham Stuart: I do not think we have touched so far on the sector deal.  DIT has been working closely with Defra to negotiate with the food and drink industry.

Kerry McCarthy: I think that is the next question.  I do not want to steal anyone else’s question.  I think it is from the Chair himself.  Hold your fire there.

Q313       Chair: It is from Julian.  We never quite got the answer of how much of the £23 billion is attributed to the GREAT campaign.  I know Kerry asked it.  Have you evaluated that at all or not?

David Rutley: My understanding is that it accounts for £50 million of that.  While we are talking, I will reconfirm that with you.

Q314       Chair: It is worth having.  It is fairly small at the moment but are you looking to build on that?

David Rutley: Absolutely.

Chair: £50 million is £50 million, but it is £23 billion there.

Graham Stuart: It is £50 million or £60 million and that is what we have attributed to it.  As my Department exists to promote UK plc, as anyone would know, when you talk to the Treasury and they want to improve your efficacy, if any of us could have an algorithm that showed what our promotional spend brought back, we would all give up our day jobs and become billionaires applying it.  The truth is you have to be out there promoting.  There will be a certain amount you can attribute.  That is what we have done conservatively. It is significant and it shows that it pays off, but there will be an awful lot of benefit we do not capture because, when you go out and promote in that way—

Q315       Chair: I am not knocking the work you have, because it is all good but, like I said, it needs to pick up.  To a degree, it has to be an guesstimate in some ways, because it is not 100% scientific, I suspect.

Graham Stuart: We think we have pretty robust measures.  That will mean a lower number but it still shows a very good ratio because the spend is £1.5 million and you are looking at a £50 million or £60 million return on a conservative investment.  It is pretty good.

Q316       Julian Sturdy: Graham, I know you want to come in on sector deals, so I am going to raise this now for you.  The Food and Drink Federation has put forward a food and drink sector deal proposal.  That is on the table.  Where are we with that?  Are the Government going to accept it?  If they are going to accept it, what are the timescales?

Graham Stuart: We are supportive of it.  We have been working closely with them.  We want to see it happen.  Since the industrial strategy that set this out, every sector has started doing this.  There is a bit of a queue.  We are very keen.  It is our biggest single manufacturing sector, of course.

Chair: £106 billion, which is 13% of our manufacturing.

Graham Stuart: Unless David is able to do otherwise, I cannot give you an exact date unless we have that, but we are looking to take that forward.  We think it will help to bring a step change in the sector.

David Rutley: Just to come in at this point, because of the focus on what is going on with EU exit, the negotiations are ongoing but they have been slowed because the focus in the industry and across Departments has been on EU exit, but they are ongoing.

Q317       Chair: There is a certain amount of frustration in the food and drink industry.

David Rutley: I met with Ian Wright this morning.  I meet with him every week.  He is positive that we move forward with this.  We all are as well.  Everybody accepts that there is a bigger issue going on at the moment that we need to navigate our way through.

Graham Stuart: The classic ministerial vague answer is that we are seeking to get it done as soon as possible and we are absolutely committed to seeing that happen.  How could we not be, with a sector of this importance, as you rightly say, Chair? 

The export element of the deal focuses on three priority areas.  The first is building up our cadre of in-market food and drink specialist staff.  I know you have heard evidence from Beijing.  For instance, we are simplifying the fragmented online food and drink export landscape and basically trying to make our digital offering better—we are seeking to do that all the time—as well as improving the provision of high-quality market intelligence.  We have, for instance, on our website 18,000 to 20,000 export opportunities across the piece, including a number in food and drink.  We are trying to get better at that all the time, so that we can make it as easy as possible for people to identify an opportunity, reach out and fulfil it. 

Going back to the agricultural counsellor in China, it has been very successful, assisting in the dairy access that I mentioned, which is worth £240 million over the first five years, and significantly progressing towards regaining beef access, which we have been making a priority.  It is a long, slow business.  It is two to five years, which is why we need to make sure that we get aligned.  That is why we work together and jointly fund positions.  We think there is a huge amount more we can do in so many markets across the world.

Q318       Julian Sturdy: We will get on to the counsellors in a minute.  I know you cannot come up with a specific timescale, but I think it is really important we do not push this into the long grass.  There is a bit of a feeling within the evidence we have taken on this, Chair, that it has been pushed into the long grass.  Could we get that commitment that things are going to move forward? Do you have any idea of timescales?  Even if you cannot give us a specific date, is this something you envisage happening this year?

Graham Stuart: David.

David Rutley: Yes.  The answer is yes.

Q319       Chair: Will it be early or late this year—spring, summer or autumn?

David Rutley: Let us get through next week first.  This is a priority.  We need to do it.  We know elements of this work well.  Now we have to get some resources, the full machinery of Government and the real commitment of business behind it.  Speaking with Ian Wright, the chief executive of FDF, this morning, he realises it is a priority as well.  There is an even more urgent priority right now and then we can get on with this work.

Graham Stuart: It is worth saying that we are not waiting for the sector deal to get on with certain other things.  We are seeking to improve in-market support in other regions.  The Government are boosting our overseas network of posts focusing on agriculture, environment, fisheries and trade negotiations, with four posts spread across Canberra, Ottawa, Wellington and Tokyo.  As a result of ongoing support from DIT and Defra working together, DIT Dubai will access regional FCO funding to recruit an agriculture, food and drink counsellor for the Gulf region.

Q320       Chair: Is there an agriculture counsellor in all of those areas?

Graham Stuart: Yes, that is my understanding.  Ananda will correct me if I am getting that wrong.

Ananda Guha: On the sector deal, the issue is that we agree on the principals.  We all agree and both Secretaries of State have written to say they endorse it.  We talk about in-market support.  We talk about the posts, as the Minister has said, and we talk about market intelligence.  On the exports, that makes perfect sense.  We are looking through what that actually means in terms of industry and Government-level support.  That is where the issue about the in-country support comes in.  I used to be a diplomat.  In technical terms, a counsellor is of a certain grade.  The one in Beijing is someone who is graded, in civil service terms, as a grade 6.  We look at other posts.  Some of those will be Second Secretaries; some of those will be others depending on the level of responsibility.  To call them counsellors per se is not strictly bureaucratically true, but we will have expertise in the relevant priority posts going forward.  On Tokyo, I believe we have started a recruitment process for a Second Secretary, hopefully who speaks Japanese.

Q321       Julian Sturdy: For clarity, what grade is a Second Secretary?

Ananda Guha: A Second Secretary is an HEO in the civil service. In the Foreign Office, they call it a C4.

Q322       Julian Sturdy: It is a lower grade than the counsellor we were talking to from China.

Ananda Guha: I am a former diplomat.  In certain places you need to be of a certain grade to get through the door.  In others, you need the expertise, contacts and so forth.  We are calibrating accordingly.

David Rutley: This is a targeted and tailored approach.  We are getting the resources in place.  What is also important to highlight is the different roles and responsibilities that we have with our different Departments.  What Defra is working hard to do is focus on the market access and get those really difficult technical issues worked through.  DIT works with that but that is our major lead.  DIT comes in on working through on the export promotion and maximising the opportunity.  It is working very closely together.  My guess is that we have been working as closely together now as we ever have before, and with a renewed impetus as well.  It is a big opportunity.

Q323       Julian Sturdy: That is useful information about it being tailored specifically and on the understanding of the grades.  We are talking about five priority market areas that have been discussed.  Do you think that is ambitious enough?  Should we be looking at other areas as well?

David Rutley: There are other opportunities but we do need to target our resource.

Q324       Julian Sturdy: Is it a resource issue or a priority issue?

David Rutley: It is an opportunity.  There is the size of the opportunity and the difficulty to get in.  From the experience in China, it is a challenging market to gain access to.  You have to be focused, otherwise you do not realise the opportunity.  What we have to do with that one is say that is a priority, we are going to get some resource behind it, move it through, be there for the long haul, get weight of activities behind it and get the right companies in to maximise the opportunity.

Q325       Julian Sturdy: We are behind the curve in China.

David Rutley: We are.  That became very clear when I went there in 2011.  I do not go on very many parliamentary trips but that visit overnight, or over that week, changed my world view.  We were off the pace then.  We have moved a long way since but there is still a lot more we need to do in those key markets.  Although I would love to say we are a great trading nation and we will cover the whole world, we need to focus on those markets.  That is why it is obvious we should go after China.  We need to look at India as well.  In the US, there are big opportunities there, and in Japan, particularly with some of the events that are coming up over the next years.

Q326       Julian Sturdy: There are other developing markets that are moving quite quickly as well.  You can look at Africa—Nigeria and places like that.

David Rutley: Those markets I am not so familiar with, but the Prime Minister was in Africa last year, looking at the opportunities there.

Graham Stuart: We do change our target markets based on where we think the opportunity is.  If you look back at the 2016-20 International Action Plan, which we did jointly with Defra, we now have different targets to the initial target markets there.  The DIT priority markets in 2018-19 are China, India, North America—the US and Canada—Latin America, with Mexico, Brazil and Argentina, as the key ones, and Western Europe—France, Germany and the Netherlands—Nordic, the Baltics and UAE.  That is because of the changes. 

In terms of your point about why we are restricting it to so few, going back to my earlier market access point, two to five years is a major resource allocation and a long time to get it over the line.  We generally try to prioritise because the danger is that you tell every sector and every region that you are taking them seriously and then you spread the effort too thin.  You do not do the job. If we had more resource, we could do more markets but even if we had double the resource, you would still find that we would try to find priority markets and really put our effort into those.

Q327       Chair: On the resource issue, there is an argument with AHDB that there is £50 million to £60 million paid in levies by farmers and processors.  Could more of that not be used in promotion?  That would make the farmers a lot happier.  This is more to David.  There is a review of the AHDB.

Julian Sturdy: There is the New Zealand example, Chair, when we took evidence.

Chair: That is right.  We took evidence from the New Zealanders.  Their farmers are much more hands-on with their equivalent of AHDB.  They have to put to the farmers what money is taken, where that money goes and it is much more market-orientated, partly because New Zealand has to be a huge exporter anyway.  Could we take a lesson from that?  This AHDB report seems to be mysteriously sitting somewhere.  I suspect a lot of it is written and it is not coming out until after our report.  That is just me being suspicious. 

Is there an argument to spend and help the trade Department, where there is money that is already being put in by industry, to shift some of that towards counsellors—call them what you like—in various grades across the world?  The Danes and the Dutch, all of those that are inside the EU, are doing more than we are already.  The point you make, Graham, is that it is all very well.  I understand the resource issue but if we do not get out there quickly, where are we going to get these markets from?  We have money already.  It is good to put it into research but is it better to put it into a market at the moment and then do the research later?  Are you considering that at all?

David Rutley: We are certainly, as we have already said, putting extra resource into the market for the market access points.  We need to work harder on promotion.  Yes, there is more that can be done in working more closely with AHDB.  Food is GREAT already does and helps move things forward on the exports.

Q328       Chair: They have had some success stories but they could do more.

David Rutley: They have been using Food is GREAT branding in the majority of their overseas activity at over 20 international shows.  It shows that they can work closely together.  Our Defra communications team works closely with AHDB to quality-assure the marketing campaigns.  That has been going on for three years.  We have committed to work even more closely going forward.  There are going to be quarterly meetings then. 

You also rightly talk about the review.  That review has been put on hold because of EU exit, of course, but we are very committed to taking that forward.

Q329       Chair: Is the review virtually done?

David Rutley: My understanding is that there is more work to be done.  Genuinely this has been a very useful opportunity to come before you, because it highlights the different pieces of the jigsaw in a different way.

Q330       Chair: You might be able to take on some of our ideas in your review.

David Rutley: I very much hope so.  Looking at the submissions and evidence that has already been highlighted, there is more that we can do.  Dr Johnson made the point about domestic markets.  There is clearly more we need to do there too.  We will take the ideas.  This has helped me focus more on what we need to be doing with that organisation.  That review becomes even more significant.

Q331       Julian Sturdy: I do not know the answer to this; maybe others do.  We were talking quite a bit about resources.  How do we compare in the UK with the resources we are putting into these counsellors, as we are still calling them—I understand that is a broad term—into the five priority areas.  How do we compare to other EU countries in the amount of money as the UK we are putting in?

Graham Stuart: We are not terribly good at being able to answer that question.  As we approach the SR later this year, how do we compare?  You can either and try to prove efficacy, as I referred to earlier, which you cannot do in promotion at one level.  You cannot be certain of that linkage.  The other thing you do if you are in business and in promotion is look at what your main rivals do, benchmark against them and, if every one of them is going to that show, you go there too.

Julian Sturdy: We might get on to the trade shows.

Graham Stuart: As a general principle, one of things we are trying to do is get a better idea.  You get little insights.  Ananda might be able to correct me, but in Beijing we did not have anybody, and then we got our counsellor.  The Germans had nine people; I do not know if they were of equivalent seniority.  We have a team of seven supporting our counsellor there.  It is about trying to get a real understanding of how we compare and what the resource is. 

Ananda might be more helpful but I cannot give you that great an opinion.  My feeling is that in some places, in some markets, we are being out-competed and we need to up our game.  The first thing to do is get that intelligence and make sure that we win the battle for appropriate resource, which we can show will be beneficial.

Julian Sturdy: I would agree with you on that.  That is the evidence we have taken, which leads us to that conclusion.

Chair: We have evidence that we are thin on the ground in places.

Q332       Julian Sturdy: From what you said, Graham, do you think it is a good idea that we should be benchmarking that?

Graham Stuart: Absolutely.  In DIT now, you look at it and ask, “If that is our job to promote, what is Defra’s role?” You look at the whole complexity of it, the specialism and all the rest of it.  We have to work together.  If we are the promotional arm of UK plc, and when you go out and do my job, as a former small businessman who found Government interference to be mostly unhelpful, it is extraordinary to go out and find just how important it is; you just cannot get over the line and you cannot get over the line in these places, however big a company you are, if the Government do not help.  There is a massive role for Government.  I am not sure that we have historically stepped up and realised how we need to play that role.

You look at the performance of some of our European neighbours, and they were ahead of us in taking half the Cabinet twice a year to key markets; we would visit once every two years with the head of Government.  We have to lift up.  We need to benchmark it.  If we are going to make a success post Brexit, we need to use the spur of the fact that, though you could go backwards, we do not want to, so we have to go out and optimise our opportunities.  There is a huge amount out there.  We have to have the right people in the right place with the right skills appropriately resourced.  That is the challenge that we have.  Our budget, as it happens, as a Department was set before we were even set up.  Although it looks to rise because of our trade policy development, our core export and investment work has reduced budget-wise over time, which, as you approach Brexit, is an interesting position to find yourself in.

Chair: That probably leads quite neatly into the next question.

Julian Sturdy: David, I cut you off.  I do apologise.

David Rutley: No, it is fine.  I wanted to say that it is fair to say that some other countries have invested more resource.  It is worth highlighting the fact that we are a bigger economy than some other markets. Agriculture and food is more important to some of those other markets as a percentage than it is here.  We come at this from a different position than other countries.  That is all I am saying. 

Again, going back to not only talking about the domestic market but also the international market, at the very least we could achieve better results if we were better co-ordinated.  There are real opportunities here that we need to take forward.  As the Minister says, there is the spending review ahead as well.

Graham Stuart: We export £22 billion and we bring in £46 billion.  We have £22 billion of exports but a £24 billion trade deficit.  You cannot view any area where you do not sell as much as you bring in as a failure; otherwise, you have a very simplistic view of trade.  That is quite a big gap, though.  There is a sense in which we could be more effective.

Q333       Chair: Some of the food we would not be able to grow here.  There is still a big gap.

Graham Stuart: Exactly.  You have to be realistic.  You would hope to close that, would you not?  If you did, you would look at those numbers in the billions and think it was worth getting yourself in order to be able to do it.

Q334       Julian Sturdy: We took evidence in the Committee on the ERDF funding, which said that this funding resulted in a postcode lottery whereby some regions in England provide better export support than others.  Do you think that is fair?

Graham Stuart: As we leave the EU, there is going to be an opportunity, because of DIT’s current regional ITA delivery partners, which are right across England.  Interestingly, the ITA export wins, which we register as facilitating, more in food and drink than any other sector.  I am pleased to say that to this Committee.  They use European regional development funding to support projects to increase support for SMEs across the English regions, including events, workshops, support for companies attending trade missions, export advice, sector support, grants, et cetera.  Over a three-year period since 2015, the ERDF funding has been worth £39 million.  That is general background and does not answer your point. 

DIT is planning that from 2020, following the re-procurement of our regional ITA service, these delivery partners, and the launch of a new enhanced ITA service, ERDF co-investment funding for high-growth SMEs will be provided through an internationalisation fund.  We are looking to create a replacement one, and we would welcome any thoughts you have on making sure that properly meets the needs, fairly and equitably across the country.  There are so many areas of funding that do not look equitable when you look at them across the country.  I would like to make sure that when you have a new fund starting up, it is important to set it up right, because inertia sets in.  It is very hard to change something, as we know from our rural campaigning.

Q335       Julian Sturdy: The process is ongoing for the replacement.

Graham Stuart: It is indeed.  If the UK leaves the EU without a deal, the Chancellor has guaranteed funding for existing projects and those in the pipeline, such as the internationalisation fund. I give you categorical assurance of that, Mr Chairman.  I am sorry it is not in legislative form but I hope you will accept that at face value.

Chair: Do not worry.  Whatever position will sit on record.

Graham Stuart: Precisely.

Q336       Julian Sturdy: Graham, you touched on trade shows.  Has the funding for the trade show access programme declined?  If so, why has it?

Graham Stuart: We have tried to make sure it is as focused as possible on its primary purpose, which is to get people going into it.  What we did not want to do is find we were funding the same people who managed to tap into it.  We have said that it needs to be a focused and limited number.  That is what it is for.  I am trying to think whether I have the notes here on the exact funding envelope.  I do not want to fail to answer your question or misinform you on it.  I do not know whether I will get refreshment from behind on that.  I might.

Julian Sturdy: We can give you time.

Graham Stuart: We have made changes.  That has upset some people because they ask, “Why are you restricting it?”  We are restricting it because it is limited.  You can argue that in certain sectors you need more than that in order to get properly into the exporting world.  We have to strike a balance and I am pleased to say that most people seem to be supportive.  I do not think it does tell me the answer to your question.  Even refreshment has not refreshed me, Mr Chairman.

Q337       Chair: Do you have some figures there for us or not?

Graham Stuart: I have.  The 2018-19 total TAP programme is forecast to support 317 events and provide 3,338 grants to SME businesses, but that is the grand total and it does not answer Mr Sturdy’s question, which was whether it has gone down.  I want to answer that.  Do I have that there?  No, that does not answer it either.

Chair: You had better let us have that in writing.

Graham Stuart: I will do that.

Q338       Julian Sturdy: You talked about new entrants, rather than being people who are continually going on them.  What is the take-up like for that?  Is that something that is getting new businesses and new SMEs to come along to the tradeshows?

Graham Stuart: There are about half a million businesses that we think are perfectly capable of exporting that do not.

Q339       Julian Sturdy: Is that becoming a problem?

Graham Stuart: We have a big pool to fish in and the programme is there to help bring them on board.  We have the Exporting is GREAT campaign.  We have a long way to go and the TAP programme is but one part of it.  There is very vocal championing of that.

Q340       Julian Sturdy: I probably did not phrase my question very well.  What I am trying to understand is, out of those who are accessing the trade shows, how many are new to the system?  How many are new SMEs that are coming on board?  You said at the beginning that you do not want the treadmill of them all going round.

Graham Stuart: With some exceptions, which do not seem to fit with the rules but seem to have been funded anyway, they are basically new ones.  You get up to six grants and then you stop, on the basis that you have been supported by the UK Government.  It does not cover all your costs but it helps and tips you over into giving it a go, going to Gulfood, SIAL or whatever, and we help bring all those together.  If you go to shows, we find that we do all sorts of things like getting booths so that people can come to meet-the-buyer events. 

TAP is just part of the programme.  We also bring buyers over to the UK and then get them lined up to meet suppliers here.  Although it might be based in one part of the country, we are trying to open it out to others.  We can get better at that because the way the regions and ITAs work is that they can too easily sit in their own world, trying to demonstrate their own performance, whereas we are trying to everyone to work together.  If we get good buyers, we obviously want every suitable company from wherever they are to be in the room and win those contracts.

Q341       Chair: Before we finish, a lot of the evidence we have had from a lot of the people we have met is that they feel very often, when they are at trade shows, that there is not enough resource coming in from our own country.  You, Graham, have said that as we leave the EU we have to drive this more.  Whether the programme has gone up or down—and I rather think the amount of finance might have gone down—surely it ought to be doubled or trebled.  I do not want to waste money but if we are really keen on getting out there, we have to be out there in force and in number.  China likes status.  You have to get people out there with status.  All of these things are so important.  It is not any longer about talking the talk; it is going to be about walking the walk if we are going to get these trade deals and extra export.  I am not saying we cannot get it.  I think we can, but we are going to have to put some money into it.  That leads me back to the previous question.  Should there not be a conversation between Defra and yourselves, through the AHDB and levying monies, to see where we can get more resource?  It is no good talking about it for too much longer, is it, because we have to get there?

Graham Stuart: One of the reasons for the sector deal is to get us all together.  There are existing ways we do that already.  You can see David’s commitment with his weekly meetings.  Also, it is not all down to the Government and it will not be as good if it is all down to Government.  Giving business a stake in it and feeling they are helping pay for it will make them make it work and sweat more.  I do not disagree with you.  That is why DIT was set up: to go and do that.  We need to benchmark ourselves against others and we need to out-compete them.

Q342       Chair: I suspect when we do our report, one of the issues will be very much that we are doing okay but we can do better.  That is where we can perhaps help you in your drive to get out there.  I am not saying we are not getting out there but I think we can all accept we could do some more.  People are really keen to get out there and do it.

Graham Stuart: I can tell you, Mr Chairman, that there is not a shortage of opportunity for us to go after were we to have the capability and capacity to get after it.

Q343       Chair: More resource would not go amiss.

Graham Stuart: It is not for me to lobby in such a way but you may make your own conclusions.

Q344       Chair: Okay.  You are not going to be quite so blatant. We will be.  That is very much part of it.  The final question is to David.  We have covered most of the AHDB.  One of the issues is that you do not quite know when the report will be published on the AHDB.  Have you any idea what the key recommendations are likely to be at the moment?

David Rutley: I do not at the moment, no.  I need to get closer to that process myself.  As I said, the process has been postponed and it is key that is has been because we need to focus our efforts on getting ready for what happens after next week.  You have made the point, Chair, very clearly and wisely.  I will get closer to this.  It probably sits in with Minster Goodwill’s brief, but we need to work closely together to make sure that we can maximise the opportunity around that review.  That message has been received.

Q345       Chair: I accept that.  I also would like to very much accept your offer.  What I would like you to do is look to see what our report says and where it can help.  Please use that information to make it work through AHDB and others.

David Rutley: You can be assured that both of us are looking forward to that report.  This has been a very useful meeting to help prepare for and answer some very salient questions.

Q346       Chair: I thank you both very much for this afternoon.  David, you are coming in on 27 March for another wonderful session.  There we will be talking about the wonderful calm sea we now have after we have signed the withdrawal Agreement and everything is sailing properly.  If it is not, there will be even more questions and answers regarding our readiness for where we will in a WTO-style no-deal Brexit situation.  We will have to wait and see, will we not?

David Rutley: I am grateful to you for making me aware of that.  I was not aware of that until this morning.  I look forward to that opportunity and also to respond to your debate tomorrow.

Chair: You will not be able to contain your excitement.  Yes, we have dangerous dogs tomorrow.

Graham Stuart: We too will look at your report with a great deal of interest.  My experience always was that Government would, when you published it, diss it immediately and then six or eight months later, start slowly to implement it on the basis that you had listened to a whole load of people, had a balanced committee, came up with recommendations and most of them are not normally mad, though some are.  Hopefully we can be a little quicker than the Education Department was in my day.

Chair: We have this dangerous dogs debate that is not actually about third-party puppy sales.  Of course, when we brought it in our report about a year ago, the Government were definitely not doing it and then in the summer the Secretary of State announced that we are going to have, or he is consulting on a ban on third-party puppy sales.  I was standing in front of him at the time so he did give us credit for it.  I am not quite convinced that if I was not standing there we would have got the credit. 

You are right, though.  The role of Select Committees is to keep grinding away and putting the stuff out there.  There are some good ideas in it and Government can pick from it.  I do not expect it all to happen immediately but you are absolutely right.  Thank you both very much.  It makes good evidence for us for when we are finally putting the report together.  Like I said, I wish you well and all of us well for next week.  May we make the right decision.  With that, I will allow you to escape.  Thank you also, Ananda, for coming as well.