Direct Payments to Farmers (Legislative Continuity) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 21st January 2020
(4 years, 9 months ago)
Commons ChamberRead Hansard Text
This text is a record of ministerial contributions to a debate held as part of the Direct Payments to Farmers (Legislative Continuity) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Secretary of State for Environment, Food and Rural Affairs (Theresa Villiers)
I beg to move, That the Bill be now read a Second time.
This is a Government who are backing Britain’s farmers. We will always recognise the importance of the work that they do to care for our countryside and our natural environment and, of course, to put food on our plates. We know that, if we are to level up the rural economy in the way we want to for our whole country, we must support the agriculture that is at the heart of our rural communities.
The Bill is a short technical piece of legislation with a simple purpose: to empower the UK Government and the devolved Administrations to pay basic payments to farmers for the 2020 scheme year. It therefore maintains the status quo for pillar 1 for this final period before we start to leave the common agricultural policy behind completely.
The core purpose of the Bill is enacted by clause 1, which puts direct payment legislation for 2020 on the domestic statute book. That provides a legal basis to make such payments for the 2020 scheme year. As hon. Members will be aware, almost all EU legislation was imported on to the domestic statute book by the European Union (Withdrawal) Act 2018, but funding for the 2020 basic payment scheme will come out of the 2021 EU budget. That would therefore have involved the UK in the next EU multi-annual budget cycle. In the negotiations, the EU and the UK agreed that they did not want that to happen, so the CAP provisions providing the basis to issue basic payments in the UK for 2020 were disapplied by the terms of the withdrawal agreement reached last year.
That policy decision has left a legal gap, which we are now proposing to fill. This legislation will provide clarity to farmers on funding support this year. If Parliament were to reject the Bill, no direct payments could be made by the UK Government or by the Administrations in Scotland, Wales or Northern Ireland. That would have serious consequences for farmers across the nation who have planned their businesses on the basis of continuity of direct payments for this scheme year.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
The next European multi-annual financial framework will run from 2021 to 2027, but this Bill will allocate funds for one year only. What is the British Government’s intention: will there be a multi-annual framework for farming support, or will the decision be made annually?
Theresa Villiers
In our manifesto, the Government set out our commitment to retain 2019 levels of support for farmers throughout the current Parliament. The exact basis of the allocation and division of those funds remains to be determined, but we will work closely with the devolved Administrations in taking decisions.
Harriett Baldwin (West Worcestershire) (Con)
I welcome the certainty given to farmers and food producers for 2020. What advice would the Secretary of State give to an estate agent in my constituency on how it should value a significant estate currently in receipt of quite a lot of common agricultural payments?
Theresa Villiers
It will be important for the estate agent in question to follow developments relating to the transition to a new system of farm support in England. I will outline that later in my remarks, but we view leaving the common agricultural policy as a vital opportunity to create a better system that more effectively supports our farmers and enables them to deliver crucial public goods, including for the environment and animal welfare.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Further to the points raised by other Members, long-term planning is very important for farmers. They might, for example, plan to build a hay shed two years hence. Moreover, any lowering of the value of the pound would have an impact on farmers, because the price of fertiliser would go up and any machinery not made in the UK has to be imported. May I appeal to the Government, therefore, that the value of the pound be calculated into any sums as they are worked out for our farmers?
Theresa Villiers
The hon. Gentleman makes an important point about farmers’ need for certainty and continuity, which is one of the reasons why we have brought forward this Bill today. That is also why we propose a seven-year transition period to move away from the basic payments of the common agricultural policy and towards the new approach of environmental land management for England, which this House will have the chance to debate within the next few weeks.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I echo the concerns raised about farmers’ need for continuity, but may I ask a slightly different question? What protections for vulnerable habitats does the Secretary of State envisage this Bill supporting?
Theresa Villiers
The Bill is a vital stepping stone to getting us to the transition period in 2021, when we will start to introduce our national pilot for the environmental land management schemes, which will replace the common agricultural policy in the United Kingdom. We have every expectation that those schemes will enable farmers to do even more than they presently do to protect habitat and valuable biodiversity.
Theresa Villiers
I give way to the Chairman of the Select Committee on Environment, Food and Rural Affairs.
Neil Parish
I am the former Chairman at the moment. I very much welcome the Secretary of State’s statement. It is great to have continuity. I want to return to the point made by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) about the value of the payment. At present, the payment is made in euros; the rate used is the average rate in September. Does my right hon. Friend expect this year’s payment to be virtually the same as that for last year? In the past it was based on the value of the euro at the time of the payment, but I imagine that that will not be the case this time.
Theresa Villiers
My hon. Friend is correct to say that taking over domestic responsibility for the payments means that the currency fluctuation, which has had such a significant impact in past years, is not likely to affect payment levels in the same way. None the less, we have yet to decide the exact levels of basic payments, although the Chancellor has set out the overall spending envelope with which to fund such payments.
Tim Loughton (East Worthing and Shoreham) (Con)
As we move towards the transition period—more will be appearing in the Agriculture Bill—we obviously welcome the environmental sustainability measures. One thing that is not mentioned here is the fact that many farmers look after places of archaeological interests—scheduled monuments that have access for the public and need to be maintained. Does the Secretary of State envisage that the payment system will recognise that farmers are not just there to enhance agriculture and produce food; they are also stewards of historical and archaeological monuments, for which they need to be compensated?
Theresa Villiers
My hon. Friend will be pleased to hear that clause 1 of the Agriculture Bill, which Parliament will have the chance to consider very soon, does recognise the importance of access to the countryside, and to our culture and heritage, by listing that as one of the public goods that we can potentially support through our new farm support scheme. He makes an important point.
I am pleased to say that the Chancellor confirmed on 30 December that overall levels of funding available for direct payments for 2020 will be the same as those for 2019, so the Government will provide £2.852 billion of support, topping up remaining EU funding. That announcement from the Chancellor, combined with this Bill, provides reassurance to the devolved Administrations in Scotland, Wales and Northern Ireland that they will be able to issue basic payments to their farmers in 2020. All four Administrations have said that these payments will be made, and that is in addition to the £216.6 million of further funding secured in the summer for farmers in Scotland and Wales.
Scott Mann (North Cornwall) (Con)
I welcome the £3 billion announcement from the Treasury supporting our farmers, showing again that the Conservative Government support our rural communities. In the transition period from the current system to the new one, could this be done on a multi-annualised basis, so that some of our farmers can invest in some of their infrastructure to prepare themselves for the challenges that lie ahead?
Theresa Villiers
In setting out the seven-year transition period, we have recognised the concerns that my hon. Friend raises about the need for a multi-annual period. We will be providing further information on how the transition to environmental land management will work in due course. No doubt the debates on the Bill will give us a further opportunity to discuss and develop how the transition period will operate in practice.
Cat Smith (Lancaster and Fleetwood) (Lab)
Will the Secretary of State give way?
Cat Smith
I thank the Secretary of State; she is being very generous. One of the concerns that my constituents will have is around the payments from the Rural Payments Agency, which has received huge cuts since 2010. The civil servants who are working to deliver payments to farmers obviously work very hard, and I have some very positive stories in casework that I could show her. However, a huge proportion of farmers in Lancaster and Fleetwood are concerned about the delays in payments. She talks about maintaining the status quo. Will she change the status quo in terms of reforming and re-staffing the Rural Payments Agency to ensure that farmers can actually receive the money in a timely manner?
Theresa Villiers
I hear what the hon. Lady says. Clearly, there have been difficulties in the past, but I would say that the RPA’s performance in recent months has been better than for many years, with, last year, 93% of farmers receiving payments by the end of December. But there is always scope to improve, and I will certainly follow this matter very closely, not just in terms of the 2020 scheme year but in relation to the role of the RPA as we move forward with the reformed system.
The additional funding that the Government have allocated consists of £160 million for Scottish farmers to correct a perceived historical injustice in relation to past years’ allocations. The remainder was awarded following the recommendations of the Bew report. Neither commitment would have been secured without the strong campaign led by Scottish Conservative MPs to get a fairer share of agricultural support for their farmers. I pay tribute to all of them, including those who sadly did not retain their seats at the election: Colin Clark, Stephen Kerr, Kirstene Hair and Paul Masterton.
Provision for the uplift in funding resulting from the Bew report and the campaign by Scottish Conservatives is made in clause 5. What is more, as I have said, the Government have a manifesto commitment to match the current overall budget for farmers in every year of this Parliament, so the Bill is an essential mechanism to provide continuity and stability for our agriculture sector as the United Kingdom leaves the European Union.
The Bill is narrow in scope in terms of subject matter and duration. Its provisions are consistent with the approach agreed by Parliament in the European Union (Withdrawal) Act 2018. Clause 2 sets out the approach to be taken by the courts regarding the interpretation of EU law. Clause 3 will enable secondary legislation to make operability amendments and to allow us to keep pace with post-exit regulatory change concerning 2020 direct payments, should the UK choose to do so. For England, the Bill bridges the gap between the common agricultural policy and the start of the agricultural transition in 2021. It does not change our policy, nor does it alter our ambitious vision for the future of food and farming in England.
The next steps in our radical reform of farm support in England will be debated in this House on Second Reading of the Agriculture Bill. That legislation will finally enable us to break free from the common agricultural policy. It will ensure that we take back control of our farming policy and our farm support payments. That will enable us to replace the perversities and constraints of the deeply flawed CAP with a new system that pays public money for public goods. We will reward farmers for environmental stewardship and high standards of animal welfare. Our farmers have always played a crucial role in safeguarding our countryside and our environment. As we deliver this far-reaching transformation, that role for farmers will become even more pivotal in delivering goals such as cleaner air and water, healthier soil and better access to the countryside.
This will be one of the most important environmental reforms in this country for decades, and it is a major benefit delivered by Brexit. It needs to play a central role in tackling the two great environmental challenges of our time: reversing the disastrous decline of nature and biodiversity and protecting our climate.
Duncan Baker (North Norfolk) (Con)
I come from the rural constituency of North Norfolk, where farmers form one of the most important sectors. Does the Secretary of State agree that the Agriculture Bill brings an excellent opportunity to tackle climate change head-on and that, as an industry, the farming community has an important part to play in helping with our environment?
Theresa Villiers
My hon. Friend makes a strong point. We believe that our new system of farm support can work for farmers and our environment. We believe that we can do a thousand times better than has been the case under the CAP.
Bill Wiggin (North Herefordshire) (Con)
My right hon. Friend must surely agree that the purpose of subsidy is to ensure that British agriculture can compete with agriculture in the European Union and, indeed, the rest of the world. Will she therefore ensure that her Department does the necessary research, so that when we move from direct payments for acreage to public money for public goods, the money does arrive on the farm? We cannot afford for our farmers to be poorer because of these excellent intentions.
Theresa Villiers
We will be looking carefully at all aspects of the scheme. This is a hugely challenging thing to deliver, which is why we will phase it in over seven years. Of course, it is essential to get the funds to the farmers who are delivering the public goods that we want to secure. Because change always brings its challenges, to ease the introduction of the new system, we will adopt a seven-year transition period, and the Bill is a vital step in smoothing the path towards the start of that period.
This legislation may be less radical than the forthcoming Agriculture Bill, but it is still vital for the livelihood of farmers across our United Kingdom. I hope that Members will give their backing to this short but crucial legislation, so that we can give our farmers continuity, certainty and support as we move towards exit day and our departure from the European Union. The Bill provides a stepping stone to a more profitable, more productive, more resilient and more sustainable future for farming in this country, so that our hard-working farmers can continue to produce high-quality, high-welfare, iconic British food that is prized around the world and appreciated so much by all of us here at home. I commend the Bill to the House.
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
We have had a good and comprehensive debate, with a number of excellent maiden speeches along the way.
Many Members talked about the future of agriculture policy after the implementation period. That is a matter for the Agriculture Bill, which was presented to the House last week and will be debated in due course. A number of hon. Members made reference to trade deals and the vital importance of maintaining our standards as we enter them. I agree with that, and our manifesto set out clearly the Government’s approach to maintaining standards as we negotiate future trade deals. These issues will be reflected in future trade mandates.
The Bill before us is about a very simple issue and covers one year only—namely, the year 2020. It is required as a consequence of the withdrawal agreement, because article 137 disapplied the direct payments regulation and the horizontal regulation. The reason it disapplied that particular regulation is down to a quirk of EU CAP funding, in that the basic payment scheme payments for 2020 are funded out of the 2021 budget year. The UK will not be part of the multi-annual financial framework from 2021. It will therefore not contribute and must fund the scheme domestically for this year. The Bill simply makes the common agricultural policy, as we have it today, operable for the current year.
Secondly, the Bill addresses the issues highlighted in the Bew review. It creates the powers necessary to change the financial ceilings to implement in full the recommendations of the Bew review, so that there will be an uplift in funding for Scotland and Wales to reflect their severely disadvantaged area status. The shadow Secretary of State asked whether that fund would be new money or whether farmers in England and Northern Ireland would have their funds top-sliced to pay for it. I can confirm that the uplift for Scotland and Wales will be paid for with new funds. There will therefore be no loss to the BPS payments for English or Northern Ireland farmers.
The shadow Secretary of State, whom I welcome to his position as a fellow west country MP, claimed that the Bill before us would have been unnecessary had the Agriculture Bill passed in the last Parliament. However, he will be aware, having debated these issues with me in the Bill Committee, that in the last Parliament it was envisaged that the withdrawal agreement would be concluded, agreed and implemented before the Agriculture Bill concluded.
For reasons I am sure no one in this House need be reminded of, the withdrawal agreement became a quite protracted debate. In the event, because certain forces in the last Parliament came together to try to block Brexit altogether, that issue had to be resolved before Bills such as the Agriculture Bill could progress. I am pleased to say that it was eventually resolved through the general election. This Government now have a clear mandate to leave the European Union at the end of this month, and to do so with the withdrawal agreement that the Prime Minister negotiated in October.
It is also wrong for the shadow Secretary of State to say that had we passed the Agriculture Bill earlier, we would have been in a position to begin the agricultural transition sooner. Both our White Paper and the Agriculture Bill always envisaged the transition period starting in the 2021 scheme year. We are back on course. There is therefore no need for the Bill to cover anything other than the current year. The Agriculture Bill, which we will debate shortly, will deliver everything we need for future years.
Neil Parish
I very much welcome what the Minister is saying, because the transitional period from 2021 to 2028 is exactly the way to do it. The key will be making sure that we have the new policies in place in time for farmers to take up the new payments.
George Eustice
My hon. Friend makes an important point. Obviously, the transitional period is a feature of the Agriculture Bill that we will debate in the coming months.
The performance of the Rural Payments Agency was highlighted by the shadow Secretary of State and a number of other hon. Members. I pay tribute to Paul Caldwell, the chief executive of the RPA, and his team for the huge progress that they have made to get the current CAP system stabilised and back on track. They have just lodged their best performance for many years, with more than 93% of farmers paid by the end of December and many more paid since then. The environmental and countryside stewardship schemes have been stabilised, with those payments back on track too. In recent years, making sense of a hopelessly bureaucratic common agricultural policy has certainly had its challenges, but I urge Members to refrain from criticising the RPA while it tries to deal with those bureaucratic challenges, and I thank it for the work that it has done.
That brings me to the point raised by my hon. Friend the Member for Tiverton and Honiton (Neil Parish) about the scope to simplify schemes. The truth is that, in this particular year, the horizontal regulation and all the CAP regulation will come across, and the scope to change or simplify is very limited. There will, however, be a margin of appreciation, with the absence of draconian EU audit requirements, for us to consider how we implement those things. There will be some modest changes, but the big changes he seeks, such as addressing the problems of the three-crop rule and wider regulatory problems in the scheme, will be provided for in the Agriculture Bill and are a matter for the future.
The shadow Secretary of State and a number of other Members alluded to rare breeds. I am sure that the shadow Secretary of State has read the new Agriculture Bill, and I am sure he will read it again closer to its Second Reading. He will presumably have noted that we have made an addition to the list of objectives for public goods, to include native breeds and genetic resources, so that we will be able to directly support and recognise the public good value of rare and native breeds.
The hon. Member for Edinburgh North and Leith (Deidre Brock) made the point that this legislation is important for all parts of the UK. I am pleased to say that both the Scottish Parliament and the Welsh Assembly have granted a legislative consent motion. This Bill is uncontentious. We will have many disagreements on elements of the Agriculture Bill, but this piece of legislation is necessary for all parts of the UK.
The hon. Lady also mentioned wider issues, including seasonal agricultural workers. I would like to pay tribute to Kirstene Hair, the former Member for Angus, for the considerable work that she did on that issue. The Conservative party and the Government are now committed to quadrupling the size of the seasonal agricultural workers scheme from 2,500 to 10,000. That was largely due to the work done by Kirstene Hair. I am pleased to welcome the hon. Member for Angus (Dave Doogan) to his seat, and I am reassured to hear that he has already picked up on this issue, since the soft fruit industry in his part of the Scotland is vital. I commend him on an admirable speech.
I also commend the excellent maiden speech by my hon. Friend the Member for Brecon and Radnorshire (Fay Jones). She spoke with passion about her constituency, and I know that she will be a champion for it. As a former DEFRA official, she will certainly bring plenty of expertise to the House on Bills such as this.
It is a great pleasure to welcome back my hon. Friend the Member for Eddisbury (Edward Timpson). I have fond memories of the month that I spent assisting him in the Crewe and Nantwich by-election in 2008, the first time he was elected, and it is great to have his expertise back in the House. My hon. Friend the Member for North Cornwall (Scott Mann) raised issues about the rolling up of payments in future agriculture schemes. That is provided for in the new Agriculture Bill. I know that he is passionate about public access for schoolchildren and perhaps even cycling, and I will discuss those issues further with him.
My hon. Friend the Member for North Herefordshire (Bill Wiggin) is a committed enthusiast for our native breeds, the pasture-based livestock system and food labelling. We will debate those issues further on Second Reading of the Agriculture Bill. The hon. Member for Ceredigion (Ben Lake) asked an important question about whether this money will be required to be spent on the BPS. It has to be paid and spent within the parameters of the direct payment regulations. In theory, there is some discretion in how the Welsh Government spend it. In practice, the rules of the direct payment scheme are so prescriptive that the scope to do anything different is very limited. I point out that, under the Bew review, there has been an uplift for Wales, albeit less generous than the one for Scotland.
My hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) asked about the budget and currency fluctuations. Article 13 of the state aid rules was retained through the European Union (Withdrawal Agreement) Bill, and we do not believe that there will be any implications of having fixed the exchange rate in the year just gone for the forthcoming year. My hon. Friend the Member for North Dorset (Simon Hoare) talked about the importance of profit in farming, which I concur with. In conclusion, I hope that I have covered as many of the different points raised as possible, and I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Direct Payments to Farmers (Legislative Continuity) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Direct Payments to Farmers (Legislative Continuity) Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on Consideration and up to and including Third Reading
(2) Proceedings in Committee, any proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings in Committee of the whole House.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.
(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to other proceedings up to and including Third Reading.
Other proceedings
(5) Any other proceedings on the Bill may be programmed.—(Leo Docherty.)
Question agreed to.
Direct Payments to Farmers (Legislative Continuity) Bill (Money)
Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Direct Payments to Farmers (Legislative Continuity) Bill, it is expedient to authorise the payment out of money provided by Parliament of:
(1) sums required by the Secretary of State for making payments to farmers under the direct payment schemes provided for by the Direct Payments Regulation (Regulation (EU) No 1307/2013) as incorporated into domestic law by the Act;
(2) any increase in the sums required for that purpose where the increase is attributable to a decision made by virtue of the Act to increase the total maximum amount of direct payments in the United Kingdom;
(3) administrative expenditure of the Secretary of State incurred by virtue of the Act in connection with the operation of those direct payment schemes;
(4) any increase in the sums payable out of money so provided by virtue of any other Act where the increase is attributable to the Act and arises in connection with the operation of those direct payment schemes.—( Leo Docherty.)
Question agreed to.
Direct Payments to Farmers (Legislative Continuity) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateTuesday 28th January 2020
(4 years, 8 months ago)
Commons ChamberRead Hansard Text Amendment Paper: Committee of the whole House Amendments as at 28th January 2020 - (28 Jan 2020)
This text is a record of ministerial contributions to a debate held as part of the Direct Payments to Farmers (Legislative Continuity) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Minister of State, Department for Environment, Food and Rural Affairs (George Eustice)
Clause 1 provides the legal basis for the Government and devolved Administrations to make payments to farmers under the direct payment scheme for 2020. The clause is needed because article 37 of the withdrawal agreement means that the EU legislation governing the 2020 common agricultural policy schemes will no longer apply in the UK on exit day. This was fully intended; it is part of extracting the United Kingdom from the European Union’s next multi-annual budget cycle, which starts in 2021, and it allows us to take back control of agriculture policy and domestic agricultural funding.
The Bill is needed because of a quirk in the way that the EU common agricultural policy is funded. Pillar one payments—the so-called basic payment scheme payments —are funded from the following year’s budget, unlike pillar two payments for things such as countryside stewardship, which are funded from the budget year in which they apply.
Sir Desmond Swayne (New Forest West) (Con)
Does clause 1(3) include the higher level stewardship regime, or is that part of a separate settlement?
George Eustice
It includes the basic payment scheme. Only direct payments are in the Bill’s scope, and that includes the annual area payments that most farmers would receive.
As we are not contributing to the next multi-annual financial framework, we have decided that we should fund this year ourselves to provide farmers with continuity. The withdrawal agreement therefore disapplied the direct payment scheme to the UK. The European Union (Withdrawal Agreement) Act 2020 applies that agreement, and disapplies the direct payment scheme, so to pay farmers for this year, we have to provide this regulation.
Vicky Ford (Chelmsford) (Con)
Chelmsford is largely an urban constituency, but when I visited one of my local farms just before Christmas, it was devastating to see that, because of the wet weather, people there had not been able to plant any of their winter wheat. They are doing some fantastic work with new crops such as millet, so that we do not need to import that. Will the Bill help to give farmers across Essex and the east of England the certainty they need at this challenging time?
George Eustice
The Bill will absolutely give them that certainty. The Bill is essential if we are to give farmers their direct payments—those area-based payments—in December. If this direct payment regulation did not come into UK law, we would be unable to do that.
John Redwood (Wokingham) (Con)
Will the Minister confirm that as we move on to the new policy, there will be an emphasis on growing more food at home for import substitution, so that these general moneys can lead on to moneys that help us to build a bigger domestic food industry?
George Eustice
My right hon. Friend will be aware that we have presented a separate Agriculture Bill, which has had its First Reading. It sets out all the powers we would need to reform agriculture policy. The direct payment regulations before us bring the CAP into UK law and on to the UK statute book, and in the Agriculture Bill, there are powers to modify these regulations, so that we can remove the rough edges and simplify them. There are also powers in the Agriculture Bill to strike a very different course for our agriculture—a course based on payment for public goods, but also on providing farmers with grants to invest in new technology, so that they can improve their profitability or add value to their produce. That Bill also recognises that our food security is vital, and commits the Government to reviewing it every five years. That, however, is obviously a matter that we will debate in the coming weeks and months; I want to return to this direct payments Bill.
Simon Hoare (North Dorset) (Con)
My hon. Friend the Member for Chelmsford (Vicky Ford) mentioned the need for certainty in her arable sector. We have a strong arable sector in North Dorset. Does the Minister agree that the certainty that this Bill provides to our farmers is of particular importance to those involved in the dairy and beef sectors, both of which are incredibly strong in North Dorset?
George Eustice
I very much agree with my hon. Friend. The Bill will give certainty and clarity about this year to all farmers who currently make a BPS claim and have done for some years. That will include, of course, dairy farmers and beef farmers. Beef farmers in particular have been through a rather difficult year, in which beef prices have been suppressed, and the knowledge and clarity that there will absolutely be continuity this year, and that payments will be made, will be very welcome to them.
Tim Farron (Westmorland and Lonsdale) (LD)
The Minister’s own Department’s figures recognise that 85% of livestock farm income comes through basic payments. Of course, this 12-month stay of execution will be welcomed by many of my farmers, but from next January, he is planning to phase out BPS, and the danger is that there will be no certainty about its replacement before 2028. Does he not worry that we will lose many livestock farmers during that seven-year transition, and does he agree that he should therefore delay the phasing out of BPS?
George Eustice
It is important to recognise that a significant proportion of sheep farmers in particular do not receive the basic payment scheme area payment, because they are on contract farm agreements and the landlord receives that money. Nevertheless, the hon. Gentleman makes an important point. I think the principle of investing in public goods has support across the House, but we need to strike this new course sensitively and ensure that agriculture remains profitable. We want a vibrant and profitable agriculture industry, which is why the Agriculture Bill also makes provision for payments to improve productivity, and sets a quite long transition period of seven years, so that we can gradually phase out the old legacy scheme. He will be reassured to hear that the Bill before us makes no changes at all for the coming year. Farmers in his constituency can rest assured that once this Bill is passed, the direct payment scheme will operate this year in exactly the same way as it has in previous years.
Ben Everitt (Milton Keynes North) (Con)
Does the Minister agree that there is a balance to be struck between incentivising productivity and rewarding farmers for their role in looking after our countryside—the hedges, copses and spinneys that make England, and indeed Scotland, Northern Ireland and Wales, so unique in their character, and so different from some intensive agricultural operations in European and beyond? If we are to remain competitive and our land is to remain productive and profitable, we need to find a system that balances those priorities, protecting what we love about our countryside, while recognising the wonderful contribution our farmers make to our agricultural economy.
George Eustice
My hon. Friend makes a very important point. It is all about striking the right balance. The premise behind the direction of agriculture policy is this: rather than trying to put on a sticking-plaster, and masking poor profitability in agriculture, we ought to have a coherent policy that rewards farmers properly for their work to improve the environment, create new habitats and so on, and that makes them able to become more profitable by investing in new equipment, adding value to their product and improving transparency in the supply chain. That is our approach—tackling the causes of poor profitability, not masking them with an arbitrary area-based subsidy.
Simon Hoare
My hon. Friend is being characteristically generous in giving way. I hope he will agree with me, and probably most people in this House, that as important as this Bill is—so, too, is the Agriculture Bill, to which he referred—it will be for nothing if we do not have some form of equivalence clause on food imports to ensure standards of animal welfare and public health. All of the Minister’s good intentions, both for this Bill and the Agriculture Bill, will come to nothing if we suddenly find ourselves swamped by cheaper imports that make all the countryside issues to which my hon. Friend the Member for Milton Keynes North (Ben Everitt) referred absolutely irrelevant.
George Eustice
My hon. Friend makes an important point. Obviously, that is not a matter for this Bill, but our party’s manifesto makes a clear commitment to our maintaining standards as we approach new trade deals, and to our ensuring that we do not water down our standards or undermine our producers.
Neil Parish (Tiverton and Honiton) (Con)
The Minister says that there will be complete continuity of the basic farm payment over the coming year. Does that include continuity of the three crop rule and all the regulation that goes with the present system? Farmers will need to know that. They have got used to the system, and so has the Rural Payments Agency, so we need to know whether the system will be exactly the same, or whether there will be some changes.
George Eustice
My hon. Friend makes an important point, and I will come on to that when I describe some of the regulations that will be brought across by the Bill. The system will be exactly the same, including the so-called three crop, or crop diversification, rule, the requirement for environmental focus areas, all the scheme deadlines for getting forms in, and the penalty matrix. I am not a huge fan of many of those things, and have been critical of them in the past, but we have taken a decision that charting a different course is a matter for the Agriculture Bill. This is a short Bill that is about providing farmers with immediate continuity and legal certainty that they will get their payment in exactly the way they used to—for this year only; then we will set out a different approach and a different course.
John Redwood
Can the Minister remind the House how, in the implementation period, we will avoid having to pay twice—both sending money to Brussels and paying direct?
George Eustice
As my right hon. Friend will be aware, under the financial settlement in the withdrawal agreement, we did not make a contribution to the next multi-annual financial framework, so the UK will not contribute to the EU budget from 2021 onwards, and will therefore not contribute to the budget that would fund this current year of BPS. We will fund it domestically, and that is why the direct payments regulation must be brought on to a UK regulatory footing.
Neil Parish
There is an argument that for many years the UK has actually contributed much more to the common agricultural policy than we have received from it. Can the Minister assure me that as we will not make those payments, we should save some money for the Exchequer?
George Eustice
My hon. Friend will remember the debate that took place in 2016. The UK has typically received back roughly half of what it put into the EU budget, and our contribution to the common agricultural policy on average has been double what we have received from it, historically.
James Cartlidge (South Suffolk) (Con)
Further to the intervention from my right hon. Friend the Member for Wokingham (John Redwood), and so that I understand this point, am I right that in this transition year we effectively pay as if we were members, but we are also funding domestically this farming payment under the Bill? Is it netted off, or are we in effect paying more for this year overall? Does that make sense?
George Eustice
It is complicated—as ever—with the common agricultural policy, but I tried to explain this point in my opening remarks. It is a quirk of the way that the EU budget works that the EU borrows the money for the pillar one payment—the BPS and area payments—from next year. Because the payments are made typically from December onwards, the money comes out of the 2021 budget. The pillar two payments come out of the 2020 budget—the year in which the money is spent. Put simply, we have not contributed to the 2020 capped budget because it is borrowed from 2021. I know that is complicated, but in essence we are not paying twice.
Fay Jones (Brecon and Radnorshire) (Con)
Am I right in saying that the Welsh Government take 15% of the direct payment away from farmers and transfer it into pillar two, and that that is the most that any Government across the European Union can take?
George Eustice
Yes, my hon. Friend is right. Under the common agricultural policy, there is provision for something called modulation, under which member states are able to transfer a chunk of money from pillar one to pillar two. Wales transfers 15%, or modulates by 15%, from pillar one to the pillar two budget. England modulates at the rate of 12.5%, and Scotland and Northern Ireland modulate considerably less, but still a little bit. There is a provision for that, and the Bill brings that regulation into UK statute.
Without clause 1, neither the Government nor the devolved Administrations would be able to continue to operate the 2020 direct payment schemes, and that would severely affect the agricultural industry, threatening the financial viability of agricultural producers who have planned on the basis of continuity of payments for this year. The direct payments basic legislation, and the implementing and delegated legislation, will become domestic law on exit day, as opposed to at the end of the implementation.
Siobhan Baillie (Stroud) (Con)
Climate change is a threat that we must all take action to tackle, and my constituents and farmers care deeply about it. Does my hon. Friend agree that the Agriculture Bill and these changes will provide us with a great opportunity to encourage greener practices in the world of agriculture?
George Eustice
Yes—my hon. Friend makes a very important point. As we chart a new course on agriculture policy, one key objective set out in the Agriculture Bill, which was recently published, was on climate change. It is absolutely the case that we should support farmers to farm more sustainably and reduce their greenhouse gas emissions, and that will be a matter for future policy. This Bill does not envisage radical change compared with what has gone before. Some provisions—the so-called “greening provisions” that are brought across by the Bill—will potentially have a modest impact on our carbon emissions and climate change, but addressing that issue properly will be a matter for future policy.
Clause 1(3) sets out the regulations that are covered. That includes the direct payments regulation, apart from article 13. Article 13 of the direct payments regulation is still there in retained EU law, because the withdrawal agreement Bill brought that element of the regulation across, so we do not need to do that a second time. We need that state aid provision because the withdrawal agreement committed us to an equivalent approach to the EU for this year. There is also the Commission delegated regulation (EU) No. 639/2014, which supplements the direct payments regulation, and Commission implementing regulation (EU) No. 641/2014, which lays down rules for the application of the direct payments regulations.
Joy Morrissey (Beaconsfield) (Con)
In Beaconsfield, we are still very keen to receive these payments, and the Minister is right to bring forward the Bill. Many of my farmers would like to produce more, but that is currently restricted under the CAP. Does the Bill deal with that? For example, I have a chicken farmer who would like to increase the number of chickens and eggs that they produce, but there are restrictions because of the common agricultural policy payments. Is there anything in the Bill that will allow them to increase productivity as we move out of the EU?
George Eustice
If my hon. Friend writes to me on the specific issues for the chicken producer that she mentions, I am happy to look at that. As a general rule, poultry producers tend not to qualify for the basic payments scheme, because it is area-based. Of course, it could be a mixed enterprise, where the producer has a poultry unit and some land on which they claim BPS. There are also some domestic environmental regulations and a licensing scheme that the Environment Agency runs that would affect certain establishments in the poultry sector.
The Bill brings across existing legislation exactly as it is and does not envisage any change. The only change might come from the absence of EU auditors, as this is no longer an EU budget. Therefore the absence of the risk aversion that is a feature of Whitehall—where we have perpetual legal jeopardy and the constant threat of infraction, of disallowance risks and of arbitrary fines slapped on by EU auditors—means that we may be able to have a margin of appreciation in how we interpret some of these regulations, so that we can, for instance, send farmers a warning letter, rather than stinging them with a fine as we are required to under EU law.
Alex Chalk (Cheltenham) (Con)
It is very welcome to us in Cheltenham that in future the Government plan to use state support to promote biodiversity on farms to a far greater extent than is permissible under the CAP. However, will the Minister indicate how we can expect our landscape to change as a result of these very welcome policy changes?
George Eustice
The Agriculture Bill, which is a matter for future discussion, envisages in clause 1 that we would support, for instance, measures to reduce climate change and carbon emissions and measures on carbon sequestration. We have a commitment to establish additional new woodland areas. In some areas, I suspect that there would be some land-use change. We also want to use our future policy to support a more sustainable approach to farming, for instance getting more farmers involved in catchment-sensitive farming schemes, integrated pest management, better soil husbandry and better stewardship of our hedgerows. All these issues will have an impact on our environment and its biodiversity.
Simon Hoare
The Minister talked about having a lighter touch, in terms of moving to a warning letter rather than having fines, and many farmers will breathe a huge sigh of relief at that. What scope does he see in the Bill to build on the trend of performance improvement, which we have started to see from the RPA but where there is still headroom for further improvements, therefore hopefully further de-stressing the art of agriculture in this country?
George Eustice
My hon. Friend makes an important point, which links to something I said earlier about the removal of the perpetual legal jeopardy that Whitehall has been subjected to while we have been an EU member. The issue, particularly in the CAP, is that there is a system of fines relating to what is called disallowance risk. The UK typically pays around £100 million a year in disallowance risk fines, often for very trivial errors such as a supposed lack of accuracy on maps, with a requirement that we map fields to four decimal points of accuracy, and issues about how things are recorded—even though they may be recorded, it may not be in the form that the EU auditors require. Some EU audits retro- spectively make things up, so we never know how an auditor will interpret the regulations in front of us. That means that officials who work very hard in DEFRA to make sense of these complex regulations will often take a view, have legal advice and interpret a regulation in a particular way. Subsequently, auditors will come along with a different view and that creates a disallowance risk. It is a very difficult situation to have a constant sense of legal jeopardy, which leads to risk aversion and people being very cautious and sometimes quite draconian in how they deal with farmers. That has been a constant problem with the existing scheme.
Simon Hoare
As a former Parliamentary Private Secretary to my hon. Friend, I am pretty forensic on these matters, as he will know—I am grateful to him for his indulgence. What plans do he and our right hon. Friend the Secretary of State have for communicating, monitoring and embedding the change of culture in the RPA? I do not say this to be rude to the RPA, but it will have been trained in a certain way of doing things and, rather like people who have been held prisoners for 40 years, will have no idea how to deal with its freedom once it is released. How will he ensure that the lighter touch that is now available as a result of the domestic legislation is communicated to all levels of the RPA so that as soon as possible, from day one, farmers will feel the benefit? A legislative change, if not implemented by the practitioners, is no change at all.
George Eustice
My hon. Friend makes an important point. All of us—officials in Whitehall, Members of this House, and indeed, generally as a country—have to get used to our freedom and to enjoying it, and develop the confidence to exercise judgment in all fields as we leave the European Union and become a genuinely self-governing country again, which is what we will do.
I have already had a meeting with the chief executive of the RPA. It has made considerable progress over the past 18 months in improving its performance, but I have tasked him with looking at any changes in process—anything that could be adapted, removed or changed—that would make the application of the scheme easier once we have removed the constant threat and legal jeopardy caused by EU auditors, so we are doing a piece of work on this.
John Redwood
I just want to say well done to the Minister. It is really uplifting that there is something positive and that we can save some money.
George Eustice
I thank my right hon. Friend for that comment. He and I have taken a similar view of pan-European legislation for some time, and obviously there will be many opportunities as we leave.
Mr Richard Holden (North West Durham) (Con)
Many upland sheep farmers, particularly in my constituency, will welcome not only the extra year of payments and the confidence it will give them, but the less draconian approach that the Government seem intent on taking. With the Agriculture Bill coming, can the Minister further reassure farmers in my constituency that there will be a phased approach so that they have time to get used to the new measures?
George Eustice
Yes, my hon. Friend makes a very important point. Today’s Bill today simply brings across the existing schemes, including, as I have pointed out, all the so-called greening rules, all the cross-compliance rules, and so on. There is a small margin of appreciation that we can apply to interpret these sensibly and proportionately, which we have not been free to do to date. That said, we recognise the importance of a gradual transition to our new agriculture policy, which is why that policy envisages a seven-year transition, with a gradual phasing out of the BPS and with support to ensure that farmers have a prosperous and profitable future.
Alexander Stafford (Rother Valley) (Con)
Now we are getting rid of the cosh of legal threat hanging over our hard-working farming community, including in Rother Valley, can we use this as an opportunity to help, educate and upskill our farming community on the importance of biodiversity and so increase the flora and fauna in our beautiful areas? The farming community in Rother Valley already knows this, but what other support can the Government provide to encourage these things?
George Eustice
There are several important schemes, such as the Government-funded Farm Advisory Service and the various wildlife campaigns that also support farmers to farm in a more environmentally sensitive way. The future agriculture policy envisages that we will provide advice and support to farmers—direct on-farm advice—about what might work on their particular holding, with their particular soil, landscape and topography. It is an exciting future, and having the right technical advice will be an important part of it, so my hon. Friend makes a good point.
Pete Wishart (Perth and North Perthshire) (SNP)
The Minister will have seen the Scottish Affairs Committee report on agriculture in Scotland. It recommends that in considering the funding envelope across the UK he support less-favoured areas and that the funding follow the quality of the land. He was not particularly enthusiastic about that suggestion. I wonder if he has changed his mind. If not, on what central tenet does he see the distribution of funding across the UK being based?
George Eustice
Obviously we will work with the devolved Administrations on future funding. The Bill—in later clauses, so I will not dwell on it now—deals with recommendations for the allocation of funding this year, pertinent to the conclusions of the Bew review, which I will come on to. More generally, future policy envisages payment for public goods, but it also envisages a long transition towards that. We have given a commitment to keep the agriculture budget the same at least for this Parliament. [Interruption.] Within the UK, yes, there will be some discussions on allocation, but every component of the UK is likely to adopt a transition period during which they would want to keep, at least for a time, something akin to the current system as they move to a new one. That said, the funding settlement is for a future day and discussion, not for the Bill today, which covers this year only.
Dr Neil Hudson (Penrith and The Border) (Con)
The Minister talked about public goods. As a veterinary surgeon, I am proud to say that in Penrith and The Border, in Cumbria and across the UK we have the highest standards of animal welfare and farming. Does he agree we need to articulate the fact that those standards will not be watered down and that these Bills are an opportunity for the UK to become a beacon for the rest of the world and that we will be able to raise animal welfare standards in our future trading partners?
George Eustice
Yes, my hon. Friend makes a very important point. As I have said, we have a manifesto commitment to protect animal welfare and food standards in future trade deals. Moreover, future policy envisages our being able to make payments to farmers—for instance, those who enter into a high welfare or high animal health scheme. We have an exciting opportunity to support high health and welfare schemes that could, for instance, reduce our reliance on antibiotics, which has been identified as a clear public good for future policy.
I will return to clause 1, as I realise there have been many interventions, which I have taken because clause 1 contains the meat of the Bill in that it brings across all the regulations.
The Chairman of Ways and Means (Dame Eleanor Laing)
Order. For the sake of clarity and because new Members are present who might be concerned about sticking to the rules, I should explain that in addressing clause 1 the Minister is perfectly in order and absolutely right to address all the other aspects of the Bill because we have grouped all the clauses and amendments together, and any Member may at this point refer to any aspect of the Bill they wish to raise.
George Eustice
Thank you, Dame Eleanor.
The Bill also covers the horizontal regulation, which governs the way paying agencies should operate; Commission delegated regulation 907/2014, which supplements the horizontal regulation with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of the euro; Commission implementing regulation (EU) 908/2014, which lays down the rules for the application of the horizontal regulation with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, and securities and transparency; Commission implementing regulation 809/2014, which lays down rules for the application of the horizontal regulation with regard to the integrated administration and control system—the so-called IAC system—rural development measures and cross-compliance; and Commission delegated regulation 640/2014, which also supplements the horizontal regulation with regard to the IAC system and conditions for refusal or withdrawal of payments and administrative penalties applicable to direct payments, rural development support and cross-compliance.
Duncan Baker (North Norfolk) (Con)
Does my hon. Friend agree that these proposals show how the Government are leading the fight on climate change while also protecting our precious farming community? Not only will this Bill safeguard our payments for the next year, but the whole thrust of the Agriculture Bill is to allow our farmers to farm in a sustainable, environmentally friendly way that rewards them for protecting and helping our environment, which has to be applauded.
George Eustice
Yes, my hon. Friend makes a very important point, and that is why we have set a very different course with our future agriculture policy, though it is based on payment for public goods. It is important that we support our farmers and properly reward them for the work they do for the environment.
James Cartlidge
Farming in South Suffolk is fairly horizontal—fairly flat—so I welcome these regulations. On a key technical question, under all those regulations the top level of payment awarded at EU level is in euros, whereas, of course, the allocation for the payment in UK law is in pounds sterling. Is there therefore any currency risk through the year to the payments that will ultimately be received by our farmers?
George Eustice
There is no currency risk for British farmers in this year, because the total size of the budget has already been set by the Treasury, and it has been set at the same level as last year. Under the regulations, we have to go through the formal process of setting the exact payment rate, but, because the budget has been guaranteed and it has been guaranteed that the payment system will be the same, farmers have a high degree of confidence that—barring any minuscule changes—their payment will be the same as it was last year.
My hon. Friend has put his finger on an important problem with the common agricultural policy. It introduced an entirely unnecessary exchange rate risk for our farmers, in that money was sent to the European Union in pounds and was then denominated in sterling at a fixed point in time, typically in September each year. That meant that if the pound had had a good year and had rallied against the euro, farmers found that their payment would be lower, whereas sometimes when the pound fell, as it did after the 2016 referendum, they had an early Brexit dividend and received a higher payment than they might otherwise have expected. That unnecessary exchange rate risk has now gone, and the budget is set for this year.
I do not want to bore people too much with these regulations. I have listed them all in detail, and there is a reason for that. In the European Union, particularly in the context of the CAP, there are three types of regulations. There are the basic regulations, which the Council of Ministers has quite a bit of involvement in shaping, and on which, through working groups, the member states have a vote. There are delegated Acts or regulations, in which there is far less involvement for the member states. They collectively have a kind of veto power, but have less of an amending role. Then there are the implementing Acts or regulations, which the Commission pretty much just makes up without any particular involvement of the member states.
That said, I am conscious that Members will never have debated any of these regulations. Ministers will have been aware of debates and discussions taking place in working groups as the basic regulation was formed, and they will have received submissions letting them know that something alarming had been handed down in an implementing Act and we could not do anything about it. Obviously, as we make regulations in future, the scrutiny of the House will be brought to bear, and Members will be able to engage in and scrutinise every bit of the detail of future agricultural policy.
The regulations that I read out earlier may have seemed like a list of rather meaningless numbers, but I can tell Members who are interested in what they mean collectively, in terms of what the farmer is required to do, that basic payment scheme rules are published annually by the Rural Payments Agency. Let me give Members a flavour of those.
The publication “Basic Payment Scheme: rules for 2019” sets out the key dates during that scheme year to which farmers must have regard. It includes, for instance—and all this is born out of the regulations that are being brought across today—the setting of 1 January as the official start of the year. The period between 1 January to 30 June is regarded as the
“EFA period for EFA fallow land” .
That is the period during which land must be fallow if farmers want to claim it. On 13 March, the “window opens”, and farmers can start sending in their applications. Between 1 May and 30 June, the so-called three crop rule kicks in, along with the
“EFA period for nitrogen-fixing crops”.
During that period, farmers must demonstrate that in that window and that window only, they have three crops on their farms. Another rule states that one of those crops can be fallow land, but the qualifying period for that type of fallow land is different from the one for the type that is covered by the EFA period.
There is a deadline of 15 May for farmers to submit their BPS application forms. They are then given a couple of weeks’ grace during which they can make changes, and they have until 31 May to do that. There is then a “late application” deadline, which means that farmers are effectively given 21 days to submit late applications, but will lose, typically, 1% of their payment for each late application day.
Siobhan Baillie
Will my hon. Friend tell us a little more about the legal provisions enabling amendments and corrections to be made after we have left the EU, and how it can be ensured that the Bill is operable and can continue to be implemented?
George Eustice
My hon. Friend has made an important point. Let me say two things. First, clause 3, which I was going to come on to—I understood that you wanted me to address all the clauses simultaneously, Madam Deputy Speaker—deals with that issue in respect of the claim year 2020, in that it gives us powers akin to those that were in the European Union (Withdrawal) Act 2018 to make particular modifications and changes, simply to make this body of law operable. For instance, it enables us to replace the words “European Commission” with the words “UK Minister”, or, indeed, “devolved Administration Minister”, and it gives us the power to introduce subsequent statutory instruments to make the legislation operable.
Secondly and more broadly, for the purpose of future policy, the Agriculture Bill includes a power to modify policy. This Bill does not modify policy, but it gives us the power to make operable changes akin to those in the European Union (Withdrawal) Act.
Ben Everitt
I think it important to learn the lessons of our involvement in the common agricultural policy over the years, and to consider some of the things that have gone wrong with it. In the context of implementing future changes in regulation, we should recognise that, for example, the set-aside rule—which those of us who were in farming in those days know and love—would sometimes represent the difference between profit and loss for a farm. To put it bluntly, the difference between the farm being viable and not viable was what the EU paid farmers not to grow anything. How can we incorporate that balance between productivity in our land and a viable economic agricultural and rural sector in our future legislation? I am heartened to hear that we are keeping that option in this Bill.
George Eustice
I agree that we must learn the lessons of the common agricultural policy. Having dealt with it for some seven years in total, I know that it is something of a bureaucratic quagmire. It is very difficult to navigate, and we tend to find that the more rules we invent, the more rules we need in order to make sense of the ones that we already have. That is why we end up with all sorts of complexity, as set out in the 127-page document containing guidance and rules for farmers.
The real lesson to be learnt is that whatever we do in future should be less rules-based and more based on delivering outcomes, and should also be tailored to the needs of an individual farm. When farms have poor profitability, we should try to tackle the causes of that poor profitability by helping farmers to invest and improve fairness in the supply chain, rather than by means of an arbitrary area-based payment. That is the direction of travel that we have set out.
Victoria Prentis (Banbury) (Con)
Does my hon. Friend agree that those like me who have smallholdings are often overwhelmed by the body of rules, and end up not claiming money that they should rightly claim? Has that been a problem historically, and are there any records that show how many people are covered by this?
George Eustice
Every month I have to deal with appeals lodged by farmers following decisions made against them involving, for instance, penalties or disqualifications for their particular claim year, perhaps because they were late in submitting their claim. There is often a tragedy behind those stories, and the scope for a Minister to address that within the boundaries of EU law is often quite limited, but we will have the chance to address it in the future.
Jonathan Edwards (Carmarthen East and Dinefwr) (PC)
I do not think that anyone will disagree with the Minister about the need to get rid of overt bureaucracy, but on Friday I attended a farmers’ breakfast with representatives of the Farmers Union of Wales, and I know that my local farmers fear that they will lose access to their biggest export markets. Over 90% of Welsh lamb and beef goes into the European single market. What assurances can the Minister give that access to that market will remain unfettered following the completion of the negotiations?
George Eustice
The hon. Gentleman makes an important point—a number of others have raised it—about the importance of trade. That can be about protecting our standards in respect of the trade deals that we do, but it can also be about access to the European market, which is particularly important for some sectors, notably the sheep sector. That is why the political declaration that was agreed as part of the withdrawal agreement—effectively a heads of terms—sets out the ambition to move to zero-zero tariffs on all goods. That is the approach that we will be taking, as outlined in the political declaration, but it is not dealt with by this particular Bill.
Jonathan Edwards
I know I am pushing the boundaries slightly, but was the Minister at all concerned by the comment by the Chancellor of the Exchequer about a week ago that there would be no alignment with European standards? If that is the case, there will be no access to EU markets, will there?
George Eustice
The political declaration was very clear, and it is implicit in the withdrawal agreement that we have now put in place that there will be no alignment with EU law. We are seeking agreement on the recognition of equivalence and understandings based on equivalence. It is understood that, yes, there could be some border checks and some additional paperwork, because we will not be aligning with EU law and those rights. I was not alarmed by what the Chancellor said, and I was not surprised by it, as it has been in our manifesto and it is also in the political declaration. I fully support that approach.
Simon Hoare
A moment ago, my hon. Friend was setting out the timetable for applying for the new basic payment. Could he, for the benefit of the Committee, set out in a little more detail when farmers can expect to receive those payments, on the presumption that an application has been legitimate and cleared all the necessary hurdles in order to secure that payment? Are we just going to mirror what exists at the moment, or are we going to create something different?
George Eustice
For this year, the 2020 year, the payment window will be exactly the same as in previous years. The payment window opens on 1 December. Last year, the 2019 year, we paid around 95% of farmers by Christmas or the end of December, and the latest intelligence I have is that up to 97% of farmers have now been paid. So the vast majority of farmers—well over 90% and probably more like 95%—can expect to be paid in December 2020.
Fay Jones
On that point, I have a farmer in my constituency who is still waiting for his basic payment from last year. Rural Payments Wales is in a mess over a degree of payment. Will there be any opportunity, either in this Bill or in the forthcoming Agriculture Bill, to include a measure to allow compensation when farmers’ payments are delayed by Rural Payments Wales or the Rural Payments Agency?
George Eustice
That is a matter for the Welsh Government. I know that the RPA has had its issues in the past. All paying agencies in all parts of the UK are dealing with an incredibly complex body of law with a complex audit structure around it. As I say, with that being removed, I anticipate that all parts of the UK will find it easier to get payments out in a timely fashion by the end of this year.
I want briefly to touch on some of the other types of rules that are covered by this body of regulation. It sets out all the eligibility criteria—for instance, for common land and how to apply for it. It sets out specific requirements for areas such as the New Forest, which has a separate type of approach. It also sets out all the rules on transferring entitlements. There is a feature of EU law that states that someone can only claim on an area of land on which they have also lodged a so-called entitlement attached to that land, and there is a market in the transferable entitlement. The body of regulation also sets out all the so-called greening rules that were added in the last CAP reform. That includes the crop diversification rules for arable land, which stipulate that such land must have at least three crops. It includes the environmental focus area, which is the calculation someone can apply for their hedges to count towards that area. It lists the types of crops that qualify as leguminous crops for the purpose of the EFA rules. It sets out all the rules on buffer strips, including how wide a buffer strip must be when it is alongside a watercourse, and whether someone is allowed to have arable land or pasture alongside and adjacent to that buffer strip. The list goes on. It lists the types of crops that can count towards the three crop rule. For instance, it stipulates that a cabbage can be deemed to be the same as a cauliflower for the purposes of the three crop rule because they come from the same family. In other cases, it stipulates that certain crops are to be treated as separate.
Hon. Members may well be asking why on earth we will be bringing across regulations of this clunky nature. The answer, as I said at the beginning, is to provide clarity and certainty to farmers for this year only. The common agricultural policy, as currently designed, is a bureaucratic quagmire and we have no intention of retaining it for the long term. However, we recognise that evolving from the system that we have to the one that we want will take some years, and in this particular year we are proposing no change at all.
Dave Doogan (Angus) (SNP)
I am grateful to the Minister for this information and for the insight, albeit at a slightly higher level, about how we are to proceed from the Bill into a future relationship between Government and the agricultural sector. How will he detail the relationship between Government, the devolved Administrations and the industry? Can they look forward to a two-way communication whereby they can have confidence that the Government fully understand the ambitions and pressures in the sector as we develop further legislation?
George Eustice
I can say that, for the Bill before us today, we have received legislative consent motions for every part of the UK, including Scotland. It is universally in the interests of every paying agency to have this Bill agreed and on the statute book so that they can pay for this year. Future policy will be a matter for the devolved Administrations, and I know that the Scottish Government will be charting their own course and setting out their own legislation. I know that the Welsh Government, while seeking some provisions in a schedule to the Agriculture Bill, will also now be predominantly striking their own course and making legislation in their own Parliament. It will be very much an issue for the Scottish Government to work with Scottish farmers, but of course we have procedures to co-ordinate around the UK and to set up frameworks where necessary. We also have Joint Ministerial Committees, which I regularly take part in it with my opposite numbers in the devolved Administrations.
Joy Morrissey
Regarding tribunals and disputed claims, are we going to set up a temporary agricultural tribunal or legal system to handle the processing of such claims or disputes? For example, there could be disputes over a buffer strip or over payments or claims, or perhaps when a family member of a deceased farmer has to make a new claim. Will a process be put in place as a temporary measure to handle the necessary legal framework?
George Eustice
My hon. Friend makes an important point. The short answer is that we have an appeals system in place. We have the independent agricultural appeals panel, which is drawn from agricultural experts, lawyers, land agents and farmers. It is a lay panel, but it hears complaints and legal objections to penalties coming from farmers. Once the appeals panel has made a recommendation, it comes to the relevant Minister, which is me. I have spent seven years dealing with these appeals, and I can reassure my hon. Friend that I leave no stone unturned in ensuring that farmers who lodge an appeal are given a fair hearing and that the issues they raise are taken into account.
Ben Lake (Ceredigion) (PC)
On the matter of disputes, when it comes to funding allocations between the different Governments of the United Kingdom, how does the Minister envision any disputes on that level being resolved?
George Eustice
In terms of our discussions with the devolved Administrations, these are issues that we resolve through the Joint Ministerial Committee. We have frame- works to do that.
I will take no further interventions, because I want to address the other clauses before we move on to other speeches. I am sure that other hon. Members have a great deal to say. Clause 2 applies the provisions in the European Union (Withdrawal) Act 2018 to the direct payments legislation. This is simply about interpretation, to ensure that our courts interpret this legislation in a way that is consistent with that Act.
Moving on, clause 3 contains regulation-making powers for the Secretary of State and the devolved Administrations in relation to the retained direct payments legislation. The parliamentary procedures that apply are covered in schedule 2, which is about the power to make operability changes to correct deficiencies, such as changing the words “European Commission” to “the relevant authority in England” and so on. It is simply about making the particular provisions that are brought across operable. I will address the amendments to schedule 2 when winding up, because the shadow Minister will want to make his points before I deal with them.
Dave Doogan
I have very much enjoyed the observations from around these islands in this debate. I would like to reflect on the answer that the Minister gave me, and offer him an opportunity to expand on it a little in his summing up. I asked how Ministers in the UK Government would interact with the agricultural sector, its representative bodies—the NFU and the National Farmers Union of Scotland—and Ministers in the various devolved Administrations on how we take forward the next cycle of developing a post common agricultural policy, post-EU agricultural framework for the United Kingdom.
Although the devolved Administrations have substantive authority and control over many of these issues, they are necessarily subsidiary to the UK. I definitely wish that that was not the case, but in so far as it remains the case, it is incumbent on Ministers to take a co-operative and collegiate approach to setting objectives for developing, and delivering the very best for, our agricultural sector. I would like to hear how the Government intend to do that.
In the Minister’s response to a question from the hon. Member for North West Durham (Mr Holden), we heard about the phasing of the changes as we evolve after the common agricultural policy, and about how that phasing would be undertaken. That is a key element of understanding exactly what farmers and representative bodies wish to see. As the Chair of the Select Committee pointed out, there are elements of the CAP that are worth keeping, and the Minister would do well to ensure that he liaises with people on the frontline of agriculture about what those elements are. There must be recognition that although the Bill bridges a gap, it does not give an opportunity for the meaningful transition of long-term planning. Many colleagues across the House have spoken about the need for investment in capital equipment and machinery because of the changes in the produce of farms. It is important that there is some indication or signposting about transferring and evolving the post-CAP scenario into something that will really deliver meaningful material change for agriculture.
George Eustice
I wish to address some of the points raised by hon. Members, including the shadow Minister, who tabled some amendments.
On the claim that the Bill has been rushed, the reason that we need to get it through Parliament now is that we cannot allow an air gap to open up in the application of these regulations. We leave the EU at the end of January. Members will be aware, from what I said earlier, that the scheme year is already open. Farmers are already making decisions about cropping and how much land they must leave fallow. Many of the deadlines are already upon us. The scheme window opens in March, so we must have the legislation in place to ensure that the schemes can be implemented. That brings me to my main point, regarding Opposition amendments 8 and 9 to schedule 2, which would remove the made affirmative procedure. The regulations must be made by exit day so that there is not an air gap. If we waited for the affirmative procedure, these necessary regulations would not be in place in time; there would not be operable law in place. That is why the made affirmative procedure is appropriate for clause 3(1) and (3).
The shadow Minister suggested that we needed a provision to extend the Bill. We do not need such a provision because the Agriculture Bill will replace these arrangements. As far as compensation and late payment penalties are concerned, the simple fact is that we need to simplify the scheme to ensure that people are paid on time, not to have lots of complex remapping. That is what we intend to achieve through this legislation.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 9 ordered to stand part of the Bill.
Schedules 1 and 2 agreed to.
The Deputy Speaker resumed the Chair.
Bill reported, without amendment.
Third Reading.
George Eustice
I beg to move, That the Bill be now read the Third time.
I thank the House for the debate on this Bill, which is so vital for the agricultural sector across the UK. I recognise the frustrations that some Members might have had because of the need for the Bill in the first place, given that the Agriculture Bill is on its way. Let me reaffirm that this Bill makes no policy changes; it is about continuity. It is a small, technical Bill to ensure that the Government and devolved Administrations are able to pay direct payments to farmers for the 2020 scheme year. Our future intentions for agriculture in England have been laid out by the Government in our Agriculture Bill, which was introduced on 16 January. We know that farmers need stability, certainty and a smooth transition to our new system of public money for public goods, so we will not switch off direct payments overnight. That would be irresponsible. There will be a seven-year agricultural transition period, allowing a system of public money for public goods to be introduced gradually.
I acknowledge that the Bill is being passed according to a tight timescale. However, it is imperative that it and the necessary secondary legislation are in place and in force by exit day, which will be upon us at the end of this week. The withdrawal agreement will stop the CAP direct payments legislation applying in the UK for the 2020 scheme year. This was intended so that the UK would not have to pay into the EU’s next budget cycle, which funds the 2020 direct payment year.
Neil Parish
I am going to try once more to get an answer from the Minister. We will not be paying into the common agricultural policy money that comes back to us, but will we be paying the amount that we paid before, which contributed to the CAP across the rest of the European Union?
George Eustice
I am sorry that I was not able to address my hon. Friend’s point previously. We will not be contributing to the next multi-annual financial framework or the 2021 budget. Therefore, not only will we not be contributing and getting back money for our farmers—we will pay that ourselves—but we will not be paying into this scheme year for EU farmers, because we will not be contributing to that part of the budget.
I am pleased that the Bill is becoming law so that we can ensure that farmers in each and every part of the UK have the certainty they need as we leave the CAP, and embark on our new and ambitious programme. The Bill has received legislative consent motions from every part of the UK, including Northern Ireland, even though the new Administration formed only recently, and I concur with the point made earlier by the hon. Member for Strangford (Jim Shannon).
Direct Payments to Farmers (Legislative Continuity) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateWednesday 29th January 2020
(4 years, 8 months ago)
Lords ChamberRead Hansard Text Amendment Paper: Committee of the whole House Amendments as at 28th January 2020 - (28 Jan 2020)
This text is a record of ministerial contributions to a debate held as part of the Direct Payments to Farmers (Legislative Continuity) Act 2020 passage through Parliament.
In 1993, the House of Lords Pepper vs. Hart decision provided that statements made by Government Ministers may be taken as illustrative of legislative intent as to the interpretation of law.
This extract highlights statements made by Government Ministers along with contextual remarks by other members. The full debate can be read here
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, I should at this juncture declare my farming interests as set out in the register.
The Bill before your Lordships is concerned with government spending and not changes to policy; it has consequently been certified as a money Bill. I will therefore focus my remarks on discussing the principles and contents of the Bill.
The Direct Payments to Farmers (Legislative Continuity) Bill is of critical importance. Principally, this small technical Bill seeks to provide continuity and stability to farmers by enabling direct payments to be made in all four parts of the United Kingdom for the 2020 scheme year. These payments are currently worth nearly £3 billion per annum to UK farmers.
The need for the Bill arises from the fact that Article 137 of the withdrawal agreement will on exit day—at 11 pm on 31 January 2020—stop the EU legislation on 2020 direct payments from applying in the UK. This is part of removing the UK from the next EU multiannual budget, in which the UK will not be participating and it would not be appropriate for this country to continue to contribute towards.
The Government are ensuring that, before we begin to reform our agricultural system to suit our own domestic circumstances, the interests of UK farmers are protected in the meantime. It is time sensitive, as the Bill and all necessary secondary legislation must be in place on exit day, because after that point the EU direct payments legislation will cease to apply in the UK for the 2020 scheme year.
This gets to the heart of what the Bill is—and, crucially, what it is not. The Bill will lift and incorporate the EU direct payments legislation for the 2020 scheme year on to the domestic statue book. It will allow the Government and devolved Administrations to make operability fixes to that legislation so that it works and can be used to continue to make payments to farmers for the 2020 scheme year. The Bill does not allow for wide and sweeping agricultural policy reforms.
The Government are committed to ambitious and wide-ranging agriculture reform in England. The Agriculture Bill will introduce a new domestic agriculture system based on the principle of paying public money for the delivery of public goods, such as clean air and water and healthy soil. This will be achieved over a seven-year agricultural transition, starting in 2021, during which direct payments will be phased out in England. But this is not the Bill to bring about these changes.
The Bill’s purpose and scope are narrow and sufficient to provide the Government, devolved Administrations and farmers with the legal certainty that payments can be made for 2020. It is important to provide certainty to farmers, and I hope that farmers will be assured by the recent Government commitment to provide £2.852 billion in funding for 2020 direct payments in the United Kingdom. This means that the overall levels of funding available for direct payments for 2020 will be the same as for 2019. The Government have also committed to maintain the current overall annual budget to farmers each year until the end of this Parliament.
This Bill will give Defra and the devolved Administrations the legal basis for paying direct payments for 2020. This Bill legislates and works for the whole of the United Kingdom. The Government have worked closely with the devolved Administrations, which have had a unity of purpose in safeguarding the interests of the United Kingdom’s farmers.
I want to address one further important point. In September 2019, the Government accepted the recommendations of the review of the noble Lord, Lord Bew, concerning the allocation of farm support funding in the United Kingdom. I thank the noble Lord for the essential work he did on this review, which paved the way for the Government agreeing to an increase in the funding allocations for Scotland and Wales. The Bill enables the Government to deliver on their promise to uplift the funding for Scotland and Wales, while maintaining the funding for England and Northern Ireland, for 2020.
Turning to the Bill’s main provisions, Clause 1 incorporates the EU legislation governing the 2020 CAP direct payments scheme into domestic law on exit day. This will ensure that the Government and the devolved Administrations can make payments to farmers for this claim year.
Clause 2 applies Sections 6 and 7 of the European Union (Withdrawal) Act 2018 for the purpose of the legislation being domesticated under this Bill. In applying Section 6 of that Act, it provides certainty to the domestic courts about what can and cannot be considered. In applying Sections 7(2) and (3) of that Act and the Schedules, it makes it clear how the legislation we are domesticating can subsequently be amended.
Clause 3 contains five powers. There are two powers, one conferred on the Secretary of State and the other conferred on the devolved Administrations, to make operability amendments to the law we are domesticating to make sure that it works in a domestic setting. For example, it would be used to replace references to the European Commission with the domestic equivalent. I must say, particularly looking at the Opposition Front Benches, that your Lordships will be familiar with this, not least because it is akin to the power in Section 8 of the European Union (Withdrawal) Act 2018, under which the many EU exit SIs were made. There are another two powers, again one conferred on the Secretary of State and the other conferred on the devolved Administrations, to replicate any changes made by the EU to its equivalent legislation during 2020, should it be considered appropriate to do so. Quite simply, this is a discretionary keeping-pace power. Finally, there is a power conferred on DAERA in Northern Ireland to retain policy flexibility for its Ministers to continue to move entitlements in Northern Ireland towards a uniform unit value, like the rest of the United Kingdom.
Clause 4 makes provision for the domestic publication of EU regulations relating to direct payments. It also enables regulations made under the European Union (Withdrawal) Act 2018 on rules of evidence to apply equally to the body of law we are domesticating under this Bill.
As I said, Clause 5 enables the Government to implement, as far as they relate to 2020, the recommendations of the noble Lord, Lord Bew, detailed in the review bearing his name. It achieves this by making amendments to the direct payment regulation. This clause demonstrates the Government’s commitment to all farmers across the constituent parts of the United Kingdom.
This is a small technical Bill but it is none the less significant. It is about providing continuity and stability to farmers. Where the Agriculture Bill provides for the beginning of a transition in England towards a new system of paying public money for the delivery of public goods, this Bill will enable us to pay direct payments for the 2020 scheme year across the United Kingdom while also delivering on the Government’s promise to provide fair funding allocations. I beg to move.
Lord Gardiner of Kimble
My Lords, in many respects this has been a preliminary to our deliberations on the Agriculture Bill; I fully expected that. I will first address in particular the noble Baroness, Lady Young of Old Scone. I am worried that she is going to be worried, because I can identify in the Agriculture Bill so much of what she said. In my view, every single element that she mentioned—including soils, floods and climate change—is engaged in Clause 1(1)(a) to 1(1)(j). Because this comes up again, I also want to discuss the balance of all that we want to do. If your Lordships will forgive me, as we have had a preliminary on the Agriculture Bill, I think it is important that I set out the Government’s bona fides.
The noble Lord, Lord Teverson, hit on something that I as a farmer have often reflected on. As a farming sector, we will now have to look to the British taxpayer and say, “We would like your support.” The way in which to look at this is very much Michael Gove’s legacy: the public are prepared to support farmers in doing all the many things in Clause 1(1)(a) to 1(1)(j) in the Agriculture Bill to enhance the environment. With over 70% of our land farmed, the farming world can play an invaluable role in restoring biodiversity and nature recovery.
I also want to emphasise Clause 1(4) of the Agriculture Bill, which says:
“In framing any financial assistance scheme, the Secretary of State must have regard to the need to encourage the production of food by producers in England and its production by them in an environmentally sustainable way.”
The Agriculture Bill is not a proposal for us not to produce food. I hope that the noble Baroness, Lady Young of Old Scone, and other noble Lords who have raised so much of this, will take some reassurance in what is before us when we come to consider that Bill. I also say to the noble Baroness and other noble Lords that the food strategy that Henry Dimbleby is undertaking is absolutely about bringing forward by the summer a national food strategy that goes from farm to fork.
I want to say in the preliminaries that the noble Earl, Lord Devon, has hit on something that I think is very important for us as a nation and our pastoral farming. By that, I mean the best traditions of pastoral farming. Moving from British meat products to plants produced in other parts of the world where we have seen environmental degradation —be it in the production of almond milk, avocado or soya—we should be careful of being buffeted by fads and fashion. I think of what pastoral farming does to the landscape and rural environment in so many parts of the world. We should be very cautious about moving towards a system of jettisoning and disregarding the importance of livestock agriculture to very high standards in this country.
I am grateful to the noble Lord, Lord Teverson, for raising the issue of public money. Let us take ourselves back to earlier caps: could we really face the nation and talk about lakes and mountains, as we had to before, if we are to receive public money?
The noble Baronesses, Lady Jones of Whitchurch and Lady Bennett, and the noble Earl, Lord Devon, asked: why are we here now? The Bill is dependent on the terms of, and has no effect without, the withdrawal agreement. Therefore, we could not introduce this Bill any sooner than we did. Royal Assent cannot occur before Royal Assent to the European Union (Withdrawal Agreement) Bill.
The noble Baroness, Lady Jones of Whitchurch, asked why we were not doing more on future support in the Bill. The Bill is, as I have described, a small technical Bill to lift the 2020 payments mechanism for us to deal with 2020. There are many provisions in the Agriculture Bill that will enable us to outline and deal with the mechanism for continuing to support farmers in their essential work and the production of food.
I will reiterate what I said in my opening remarks on funding. The Government are committed to matching the current overall budget available to farmers in every year of this Parliament. I am not in a position to say what a future Government might do after a future general election, but my view is that we are right to match that overall budget. That is a government commitment. As I said, on 30 December the Chancellor of the Exchequer announced funding for direct payments that matches the total funding for direct payments available for 2019. I think that that is an indication of a Government who are not being cavalier but who absolutely understand that farmers need to have an understanding of where they are this year, and as we go through with all the transitional arrangements and the continuance on a tapering scale of direct payments, so that they can work with the new system and we can progressively reduce direct payments. There are powers to do that.
The noble Baroness, Lady Young of Old Scone, mentioned scrutiny, which is important. Defra will consult before making SIs under the Agriculture Bill. We had some very successful results from scrutinising the exit SIs, for instance.
In no particular order, my noble friend Lady McIntosh asked about live exports for the second time this week. I repeat what I said before and it will not change: we are extremely concerned about the long journeys that live animals are undertaking. The veterinary profession is very concerned about this and it is something we will work on.
My noble friend Lady McIntosh also asked about tenant farmers. This Bill is about status quo for the scheme in 2020, but new provisions on tenancies in the Agriculture Bill will ensure what we believe will be a vibrant future for agricultural tenancies, providing tenants of agricultural holdings with agreements that have more flexibility and removing barriers to investment and productivity.
On remapping, in future years we will look to simplify the administration of existing schemes for farmers and the RPA. On the RPA’s payment performance, it was generous of the noble Earl, Lord Devon, to say that the RPA was working very hard. This year I think that we are up to 97% already being paid. We will obviously focus on completing the remaining claims and releasing payments as soon as possible.
On the issues that the noble Baroness, Lady Bakewell of Hardington Mandeville, raised, my colleague the Minister of State, George Eustice, has had meetings with the RPA’s chief executive. There have been considerable improvements over the past 18 months, but I and they are very conscious that we need to improve the position in particular on the environmental schemes and the countryside stewardship schemes. It has been improved, but there is more room on that.
My noble friend Lady Byford asked about timings on the Agriculture Bill. The Second Reading will be in the other place on Monday 3 February, so clearly it will reach your Lordships in the due time of its deliberations in the other place. I look forward to that. As I said, I think that we have had a very good preliminary.
My noble friend Lady Byford and the noble Baroness, Lady Bakewell, asked about trials. We are currently running a programme of tests and trials. It is important to say that these are about co-designing with farmers in all sorts of topographies in the country. This will be so that we have a range of trials, because part of the work of an ELM in certain parts of the country will quite clearly be somewhat different. The focus might well be on elements of paragraphs (a) to (j) of Clause 1(1) of the Agriculture Bill, for instance. We are working closely with a range of environmental and agricultural stakeholders to design collaboratively the new ELM scheme, so that it is fit for purpose. We will provide further information over the coming year, but, following these tests, we want to refine the co-design to ensure that it works on the ground for farmers and other land managers, and that it delivers the environmental outcomes that we and the farmers want.
The noble Baroness, Lady Bakewell, asked about the rates of exchange. The level of funding available for direct payments in 2020 for each part of the UK will be the same as for 2019; the funding is based on the same financial ceiling and exchange rate.
Several noble Lords, including the noble Baroness, Lady Young of Old Scone, raised trade. We should be proud of our British produce for domestic and export consumption, and of its reputation as being of the highest quality. As I have said so many times to your Lordships, any future trade agreements must work for consumers, farmers and businesses. We will not water down our standards on food safety, animal welfare or environmental protection as part of a trade deal.
On the review by the noble Lord, Lord Bew, it is a great privilege to have one of your Lordships undertaking a review that clearly was knotty. Your Lordships were right; the noble Lord’s skills will become legendary. This was a knotty problem for all sorts of reasons. Also important is the noble Lord’s confirmation of the collaborative spirit across the devolved Administrations. It is a feature of life that we are always wanting to find the areas of disagreement rather than agreement. I say to my noble friend Lady Byford, and the noble Baroness, Lady Jones of Whitchurch, that this money will be ring-fenced, to be spent on farmers in Scotland and Wales respectively. I assure your Lordships that this money will not be taken by farmers in England or Northern Ireland. It is additional money, resulting in an overall funding increase of £56.6 million for UK farming over the two-year period.
As I mentioned before, the transition period, raised by the noble Baroness, Lady Jones of Whitchurch, and the noble Earl, Lord Devon, is a seven-year transition. We intend to introduce changes steadily. In 2021 we will start applying reductions to direct payments. Reductions will apply progressively. We will offer land management schemes throughout the transition. Countryside stewardship will remain open to new applicants until 2023-24. Additionally, existing high-quality countryside stewardship and environmental stewardship agreements will be extended, protecting their environmental outcomes and farmers’ incomes. The new environmental land management scheme is being developed, with full ELM rollout across England in late 2024.
Food security was raised by the noble Baroness, Lady Bakewell, and my noble friend Lady McIntosh. The Agriculture Bill includes a new requirement to report on food security. I say to my noble friend Lady McIntosh that on self-sufficiency, we are at 75% of UK production for indigenous grown food, but there are many things that the consumer likes that we do not produce here, so self-sufficiency is not the point. It is about food security. Candidly, I know about tea in Cornwall, but not about coffee and citrus fruits. We need to be conscious of food production, but conscious of food security too.
The Government believe that upland farmers play a vital role as stewards of the countryside and our iconic landscapes, and that across the land they are well placed to benefit from new ELM schemes, which will reward farmers for what many in those areas are already doing.
My noble friends Lord Cathcart and Lord Caithness asked about transition. I get the Farmers Weekly and the Farmers Guardian every week and there is no doubt that there is an awareness and considerable discussions, individually and across farmers generally, about this period of change and the co-design. I emphasise again that none of this will work if it is not the farmers’ idea and concept, too. It is vital that we get it right by co-designing these schemes with farmers.
In response to a point raised by my noble friend Lady Byford and the noble Lord, Lord Bew, on the devolved Administrations, the Government are committed to engaging with the devolved Administrations to develop a fair approach to future funding allocations. We agreed to consider the needs of farmers in England, Wales, Scotland and Northern Ireland, recognising that agriculture policy is and will remain devolved.
My noble friend Lord Caithness asked what amendments Defra expects the EU to make to the CAP this year. We are not expecting the EU to make significant changes but the Bill includes a power, but not an obligation, for us to undertake any amendments. He also asked about greening under pillar 2. Under our new ELMS scheme we are considering how best to reward farmers and land managers for the good work they do in managing the countryside.
On the countryside stewardship scheme, a new round of countryside stewardship will be open for applications in February, with the agreement starting in 2021. This will be a stand-alone domestic grants scheme and we have made an SI on that matter. My noble friend Lord Caithness also asked about this in relation to Northern Ireland. It is a matter for DAERA. Since the start of the current scheme, payment entitlements in Northern Ireland have been moving towards, but have not yet reached, a uniform unit value.
The Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly have all granted legislative consent Motions for the Bill, and the NFU has welcomed it.
On the issue of the carry-over of the three-crop rule, raised by my noble friend Lady Byford, the Bill does not introduce new policy. The basic payment scheme, including the greening rules, which include the three-crop rule, will apply for 2020. The Agriculture Bill will allow us to simplify the current scheme from 2021. However, the Rural Payments Agency has recently updated its GOV.UK online guidance on flooding and wet weather so that farmers are clear on rules and possible alternative options which will allow them to remain compliant.
On the Northern Ireland protocol, an issue raised by the noble Lord, Lord Teverson, spending that supports the production of trade in agriculture products in Northern Ireland is exempt from state aid rules when meeting Article 10.2 conditions. I do not have time to say more on this matter but if there was anything further on it I would.
The noble Baroness, Lady Jones of Whitchurch, also raised the issue of pillar 2. Under the withdrawal Act 2020, Defra and the devolved Administrations will continue to deliver rural development programmes under the terms of the EU regulations, which are not the subject of this Bill.
My noble friend Lord Inglewood raised a number of pertinent points but I am afraid that taxation is above my pay grade.
Obviously, there are issues—many of which will come up in the Agriculture Bill—but I want to take the opportunity with this short Bill to put on record my thanks to the Bill team and all noble Lords who have engaged in these deliberations. The Bill is necessary. I hope I have explained why we are doing it now and why we could not have brought it forward before although it was an issue we understood we would need to manage. It has also enabled the Government to address the review of the noble Lord, Lord Bew, dealing with 2020.
These measures have been agreed by the other place and are overwhelmingly supported by the devolved Administrations, stakeholders and farmers across this country. As I have said, this Bill is certified and is therefore a money Bill. I will look at Hansard because there are many questions which go beyond this Bill. If any particular points come up in other deliberations, I will come back. In the meantime, I beg to move.