Rules for Direct Payments to Farmers (Amendment) Regulations 2020
Financing, Management and Monitoring of Direct Payments to Farmers (Amendment) Regulations 2020
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Victoria Prentis)
I beg to move,
That the Committee has considered the Rules for Direct Payments to Farmers (Amendment) Regulations 2020 (S.I. 2020, No. 91).
The Chair
With this it will be convenient to consider the Financing, Management and Monitoring of Direct Payments to Farmers (Amendment) Regulations 2020 (S.I. 2020, No. 90).
Victoria Prentis
That was crystal clear, as you promised, Ms Nokes. It is a pleasure to serve as a new Minister under your chairmanship in your first Committee.
These two statutory instruments concern the European Union law governing the 2020 direct payments schemes. They were brought into UK law on exit day by the Direct Payments to Farmers (Legislative Continuity) Act 2020, which most of us will remember. The matters in the two statutory instruments are closely related, so it is sensible that we consider them together. They make technical amendments to address deficiencies in the retained EU law, so that the direct payment schemes can work effectively in the UK for this year. They do not introduce policy change.
I will deal first with the Rules for Direct Payments to Farmers (Amendment) Regulations 2020. I should explain why it was necessary to use the made affirmative procedure for these instruments: they needed to come into force on exit day at the same time that the relevant direct payments legislation became incorporated into UK law. The scheme runs throughout the entire calendar year. Without these instruments, the UK Government and the devolved Administrations would not be able to administer the direct payments schemes effectively for the remainder of the 2020 year.
These SIs ensure that the UK Government are able to meet their commitments to funding in the agricultural sector. I am pleased that the Government have announced funding of nearly £3 billion for direct payments for the 2020 scheme year, matching the total funding that was available for direct payments in 2019.
As the Committee will be aware, agriculture is a devolved policy area. We have worked closely with the devolved Administrations to produce these instruments, which contain provisions that apply across the UK, and I am pleased to say that they have given their consent to the provisions.
Turning to the SIs themselves, the rules for direct payments regulations amend three retained EU regulations, which together establish the direct payments schemes and set scheme eligibility rules, including rules for the basic payment scheme, the greening payment, the young farmers payment, the redistributive payment and voluntary coupled support. Those EU regulations have been brought into UK law only for the 2020 scheme year.
The financing, management and monitoring of direct payments to farmers regulations amend five retained EU regulations relating to the administration, inspection, enforcement and monitoring of the schemes. It is worth explaining that those EU regulations apply across the whole common agricultural policy, but have been brought into UK law only in relation to 2020 direct payments. Therefore, this SI makes amendments only in relation to 2020 direct payments.
Each SI also makes amendments to existing domestic legislation in England. Many of the amendments are of a uniform type across both instruments, such as merely changing EU-specific terms to domestic equivalents. For instance, references to “member states” will, in most instances, be replaced with the term “relevant authorities”.
Some amendments remove administrative processes that lose their purpose outside the EU context, such as requirements to send notifications to the European Commission about our implementation of the schemes. We have domestic provisions in their place. As the retained EU law covers only the 2020 direct payment schemes, some amendments are needed to make that clear. There are also amendments that update cross-references to EU legislation and remove provisions not relevant to the UK.
Other amendments are different for each statutory instrument. The rules for direct payments regulations remove the process of setting financial ceilings for each direct payment scheme, because it is unnecessary in a domestic context to have legislation setting out ceilings, especially when those are administered at a devolved level. The financing, management and monitoring of direct payments to farmers regulations remove the EU’s auditing and accounting rules to enable suitable domestic equivalents to take their place. They also remove the EU’s budget management processes, where those do not work in a domestic context, and make amendments to clarify how the domestic 2020 direct payment schemes interact with the cross-cutting common agricultural policy provisions, which will continue to apply to the UK during the transition period.
Without the changes made by these statutory instruments, domestic legislation would be unclear and not function effectively for the 2020 scheme year. The instruments provide important and necessary continuity for farmers, the Rural Payments Agency and the devolved Administrations. I therefore commend them to the Committee.
Victoria Prentis
I should like to start by thanking the hon. Member for Cambridge for his kind words on my new appointment, and say that I too look forward to considering the Agriculture Bill in Committee tomorrow, and to the many hours that we shall spend together, along with the hon. Member for Bristol West and many others who are present in the Room. We will then see more of the framework for future agriculture policy. Like the hon. Gentleman, I am burning with anticipation, which I am hopeful will shortly be assuaged, to see the new policy document for British agriculture. I know that he and I have been doing a lot of reading over the past 10 days, and we may be doing a lot more in the near future. It is very exciting.
I will not be able, as the hon. Member for Cambridge anticipated, to deal with all his drafting points here and now. I shall try to deal with some of the substantive points he raised, but I undertake to write to him in detail on the drafting issues. Even if I become an experienced Minister, I do not know whether I will be able to deal with that sort of drafting issue on the hoof—even though, as he said very kindly, that is my background. Being in front of the hon. Gentleman is rather like being in front of the Court of Appeal, which is never a happy position for a lawyer to be in.
Let me deal with some of the issues that the hon. Gentleman raised. The statutory instruments maintain the status quo and do not change the rules that farmers need to meet. If a farmer breached the scheme’s rules in January this year, the Government and the devolved Administrations could still enforce the scheme in exactly the same way as would have happened in the past. That was part of the reason for introducing the Act. The SIs simply enable a smooth transition and allow the payments and the mechanisms about which the hon. Gentleman expressed concern to carry on.
I know that the hon. Gentleman is very interested in transport policy: he and I spent many hours in transport debates when I was the parliamentary private secretary to the Department for Transport and he led the opposition to some of the Government’s policies. I am assured that the provisions on active farmers, including the rules on airports and railway services, have been maintained in a way that allows each part of the UK to continue to operate the rules in exactly the same way as before.
On exchange rates, the position in the past has been that we in the UK are subject to fluctuations in exchange rates in the same way as other parts of the EU. I am told that the level of funding available for direct payments this year will be the same as it was in 2019. The funding is based on the same financial ceiling and exchange rates that were used in 2019. That may end up being beneficial for us, and the SIs ensure that, at the very least, we have continuity for our farmers.
As the hon. Gentleman rightly anticipated, I am afraid the exchange rates that will be used to calculate BPS payments in 2020 will be set in a statutory instrument that will follow later this year. In line with EU regulations, the exchange rates for BPS have been set out each year based on the average of exchange rates set by the European Central Bank in the month of September, so we are possibly getting a good deal this year. Next year, we will set them out in a statutory instrument. I hope that answers his question.
On inter-pillar transfers, I took the hon. Gentleman’s little dig about the 15% rate in the past. This year, each part of the UK will set its own level for direct payments for 2020 under the current rules, which will enable up to 15% of the direct payments budget to be used for rural development. That is a very good step forward.
The hon. Member for Ayr, Carrick and Cumnock talked about the money that has been provided for Scottish farmers and crofters following the Bew review. The extra money that the Government have committed to provide to Scotland and Wales ensures the fair allocation of farm support funding. We will amend the UK financial ceilings for direct payments to take account of the extra funding in relation to the 2020 scheme year. We will do that by producing a further statutory instrument and, in advance, we will seek the consent of, and work closely with, the devolved Administrations to ensure that that consent is forthcoming. The Government will continue to engage with the devolved Administrations to agree the longer term funding position.
On exchange rates and funding generally, the level of funding available for direct payments for each part of the UK in 2020 will be exactly the same as it was in 2019. The funding is based on the exchange rate that was used last year, which should ensure continuity. On future schemes, we know very well that farmers need stability, certainty and a smooth transition to move to a replacement system, so we will not switch off direct payments overnight. We have provided an agricultural transition period of seven years, beginning next year in 2021, so that farmers have time to adapt to the new provisions. During that period, we will offer schemes to boost industry productivity and improve animal and plant health and animal welfare. There will be schemes to enable farmers, foresters and growers to invest in new equipment and improved technology. We will talk about that a great deal over the coming weeks in the Agriculture Bill Committee.
The new environmental land management scheme is being piloted from this year. The full scheme is due to be rolled out across England in 2024, so we have three years to get it absolutely right. I look forward to working with Members from all parties to ensure that we do that.
The hon. Member for Cambridge mentioned crisis reserves. We will rely on our usual domestic powers and procedures to respond to a crisis, as we have done many times before, such as with animal disease.
Any future trade agreements must work for consumers, farmers and businesses in the UK. We will not water down our standards on food safety, animal welfare and environmental protection as part of any future trade deal. Goods seeking access to our markets will have to meet our standards. We will discuss those issues again—probably tomorrow.
The instruments we have discussed correct deficiencies in the legislation that establishes the scheme eligibility rules for farmers’ direct payment schemes, as well as the legislation governing the financing, management and monitoring of the schemes. They ensure that the 2020 schemes can continue to run effectively with no disruption for farmers, providing farmers across the UK with stability and certainty. They pave the way for a smooth transition to our new system of public money for public goods in England. I urge hon. Members to agree the amendments that the instruments propose, and I commend the regulations to the Committee.
Question put and agreed to.
Resolved,
That the Committee has considered the Rules for Direct Payments to Farmers (Amendments) Regulations 2020 (S.I. 2020, No. 91).
The Financing, Management and Monitoring of Direct Payments to Farmers (Amendment) Regulations 2020
Resolved,
That the Committee has considered the Financing, Management and Monitoring of Direct Payments to Farmers (Amendment) Regulations 2020 (S.I. 2020, No. 90).—(Victoria Prentis.)