Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, we are anticipating a vote in the Chamber at around 4 pm.
Agriculture (Financial Assistance) (Amendment) Regulations 2023
(1 year, 9 months ago)
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Lord Benyon
That the Grand Committee do consider the Agriculture (Financial Assistance) (Amendment) Regulations 2023.
Relevant document: 31st Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Benyon) (Con)
My Lords, in moving the regulations I declare my farming interests as set out in the register.
This is the third year of the seven-year agricultural transition period. The new financial assistance schemes under the Agriculture Act are an important part of this transition as farmers move away from direct payments. They will help to ensure that sustainable food production and the delivery of improved environmental outcomes go hand in hand. Indeed, we are investing in the very foundations of food security—healthy soils, clean water and abundant pollinators—to support a prosperous long-term future for the sector.
We are due to meet at a later date to debate the statutory instrument that sets the reductions to farmers’ 2023 direct payments. I want to be clear to anyone who is minded to support the fatal Motion tabled by the Liberal Democrats about exactly what they would be voting for. First, that vote would be against small farms. We are replacing unfair and ineffective area-based payments with targeted payments. Some 50% of the direct payments budget went to the largest 10% of recipients, so by seeking to stop the agricultural transition the movers of this Motion are voting for that unfairness to continue. Secondly, that vote would be against food security. Support for that Motion would be a vote for the EU’s area-based subsidies to continue, and they did very little for farming, food production or the environment. The link between food production and the common agricultural policy was substantially severed in 2005.
If the fatal Motion on the other regulation is successful, the effect would be insufficient funding to deliver current plans. Specifically, we would have to cancel all the agreements or plans under Countryside Stewardship 2023, the sustainable farming incentive, landscape recovery, farming in protected landscapes, support for producer organisations, the future farming resilience fund, the livestock information programme, the animal health and welfare pathway, and the Institute for Agriculture and Horticulture. This would mean immediately stopping work on projects to restore nearly 400 miles of river and to protect and provide habitat for 263 species—such as water vole, otter, pine marten, lapwing, great crested newt, European eel and marsh fritillary—across 40,000 hectares. We must therefore continue our move away from direct payments and the legacy of the EU’s bureaucratic common agricultural policy, which did little for farming, food production or the environment. I hope that, with that little taster of the debate in a week or two, I have persuaded noble Lords who were minded to table that Motion to rethink.
The regulations that we are debating today provide the legal framework for Defra and its delivery bodies to enforce and monitor the financial assistance schemes and to publish data about grant payments. This instrument makes technical amendments to those regulations to support the continuing transition to new schemes. Through this instrument, the definitions of three financial assistance schemes from the 2021 regulations have been removed. This change does not impact the schemes, which have already been launched, or their funding. It is so that the Government can be more flexible in adapting schemes to suit farmers’ needs. For example, the Government will be launching the animal health and welfare grants through the farming investment fund, which were previously defined as separate schemes.
The data publication requirements are amended so that the Secretary of State may exempt financial assistance schemes awarded to improve the health or welfare of livestock or plants if full publication would hinder the scheme’s purpose. For example, identifying a land manager who has received grants related to diseases in livestock could be damaging to their business and deter them reporting future cases. Similarly, the Government will continue to exempt the tree health pilot and animal health and welfare review from the full publishing requirement to protect the interests of affected parties. The Government have continued to name these schemes in this instrument to provide certainty to existing beneficiaries. However, as with all exempted schemes, the aggregated data for these payments will be published.
The Government are making sure that the taxpayer still knows where the funding is going. This instrument amends the data publication requirements so that, where the Secretary of State is required to publish the aggregate of financial assistance paid under a scheme, they must also publish the number of agreement holders who received financial assistance under that scheme.
These amendments will allow the financial assistance schemes to run more efficiently and effectively for farmers and help to achieve their intended benefits under the Agriculture Act while still making sure that there is accountability to the public. Therefore, this instrument is an essential step in ensuring that farmers can help build and maintain resilient businesses by spending public money in a way that helps us to secure the public good. I beg to move.
Baroness McIntosh of Pickering (Con)
My Lords, I am grateful to my noble friend the Minister for setting out the detail of and background to the regulations before us today. I simply want to probe him on a couple of points, if I may, including on how these regulations will apply, especially to English farmers, and particularly tenant farmers.
The guidance was published in March 2022, and the path to sustainable farming was set out earlier. Has the guidance been updated since 2022? I do not see that in the Explanatory Memorandum, paragraph 11. If they are just technical changes, that may not be so important.
Why was no impact assessment done? As my noble friend said, this is year three of the seven-year transition and where the finances will start to bite quite dramatically. I state at the outset that English farmers will feel unfairly treated. My understanding is that the direct payments will continue in Scotland, so those farms in North Yorkshire, Durham, Cumbria and Northumberland will look across the Scottish border and see a slightly more familiar scheme to that which they have now and which is being taken away from them. Is that something that concerns my noble friend the Minister?
My real concern is the transition from basic farm payments to ELMS. My noble friend concentrated very heavily on the advantages to the environment. I press him on how this will impact on hill farmers, upland farmers and small farmers everywhere, in particular those who produce grazing stock such as spring lambs and, indeed, fatstock cattle.
In a Financial Times article on 5 March, it is calculated that a drop in farm business income—a measure of net profit—of almost two-thirds is expected in this financial year. That amounts to a drop in profit of £16,300. When I was an MP next door—as indeed was my noble friend—I worked very closely with the graziers. I would hazard a guess that that £16,000 per grazier was their total income. The question is this: what alternative money will they seek? They tend to have the rights in perpetuity but they tend to be tenant farmers elsewhere. If they do not get direct farm payments because the landowner, where they farm elsewhere, is taking it then obviously they will not be getting any compensation.
My noble friend the Minister will be familiar with the work of Julia Aglionby, a Professor of Practice at the University of Cumbria’s Centre for National Parks and Protected Areas. Her projection is that income will recover to £22,900 in two years before slumping back to £16,700; this would place it at just above a third of its 2021-22 level. I understand that of particular concern to the president of the NFU is the fact that at the heart of this squeeze on government payments is the decision to calculate payments on the basis of income foregone plus costs, meaning paying for green improvements at rates aimed at recompensing farmers for the resulting fall in agricultural income.
According to the president of the NFU, Minette Batters, for some farms that took part at the pilot stage, the work was simply not cost effective. As my noble friend the Minister will be aware, upland farms are particularly affected because they tend to produce less food than lowland sites, meaning that they are considered to have foregone less income and are paid lower rates. As I understand it, most farmers will receive £151 a hectare for managing grassland with minimal fertiliser, but those doing the same work in so-called severely disadvantaged areas or upland farms will be paid only £98. That is a severe drop in income and this is only the third year of seven.
Can my noble friend the Minister address those points? How are these farmers meant to survive? What are the department’s projections for the fourth, fifth, sixth and seventh years? Where the farmers in the uplands are tenant farmers, as many of them will be—I appreciate the fact that, in North Yorkshire, where I served as an MP, and in County Durham, where I grew up in the Pennines, probably 50% of the farming community is made up of tenant farmers—what hope do they possibly have of farming in future if they are not eligible for food production grants going forward? I realise that they will get money for stonewalling, which is a tradition that we want to keep, but they are hardly contributing to food security or sourcing more food—as the Prime Minister would like them to do—for our schools, hospitals and local garrisons. What future does my noble friend see, even in this coming year, for upland farmers and, separately, for tenant farmers?
Lord Grantchester (Lab)
I declare my agricultural interests as recorded on the register, in that I own agricultural land and am in receipt of payments. I thank the Minister for his introduction to the regulations before the Committee and welcome my noble friend Lady Anderson of Stoke-on-Trent to her new Defra responsibilities.
I had thought that we would be debating two instruments today: this one and the one on direct payments to farmers. The disastrous mess being created by the Government on food production is evidenced by the loss of that second instrument today; it is to be debated later this month through separate fatal and regret Motions.
These amendment regulations, albeit seemingly on technical administrative measures, have the potential to add greater confusion for food producers while taking away parliamentary oversight and giving more powers to Ministers. The regulations will minimise the references to specific financial assistance schemes and definitions in the original 2021 regulations to allow future changes to be made to the design of specific schemes, seemingly without due consideration and process and without the need for amendments to have parliamentary approval. Seeming to be subject to constant flux cannot instil confidence in the agricultural community to align long-term business planning with the perceived lack of consistency of government objectives on environmental sustainability. Are there are guidelines regarding the duration period? How many reinterpretations of schemes might the Minister’s department pursue without necessitating a fresh mandate? Will the Government commit to undertaking consultations on every change?
The instrument proposes extending exemptions for agricultural holders, under animal and plant welfare measures, to have to publish certain information. This administrative ease brings added complexity if an agreement holder is only partly involved in such schemes, as well as others. Can the Minister give an assurance that all agreement holders will be notified in advance of all the information to be published? Will that notification be subject to challenge?
On the wider issue, will changes of personnel within an agreement holder—for example, in the case of farm partnerships—necessarily have to be notified to Defra for legitimacy and the maintenance of agreements? I presume that this would have implications where the Secretary of State is required to publish the aggregate of financial assistance paid under the schemes, necessarily adjusted for exemptions.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his introduction to this statutory instrument and for his time, and that of the officials, in providing a briefing. I welcome his warning of impending doom should the fatal Motion be agreed in two weeks’ time.
The gist of this SI is that some information on the financial assistance that farmers receive for their activities will not now be published and therefore open to scrutiny. The Agriculture Act indicated that this information would be available for public scrutiny, and these exemptions from publication relate to the annual health and welfare review and the tree health pilot.
The Secondary Legislation Scrutiny Committee considered this SI on 28 February and asked a number of questions of Defra as to why there should not be publication of the assistance farmers are receiving. The answers related to the likely disadvantages farmers would face if detailed information was published. In the SLSC report, it is clear that Defra Ministers would be able to exempt certain schemes from the full publication requirement without having to lay secondary legislation before Parliament.
Defra stated that it
“carefully considered where publication could have a detrimental impact on scheme uptake, risk achievement of target outcomes and value for money, as well as potentially damage individuals and businesses.”
Can the Minister give examples of where such instances might occur, leading to a detrimental impact on the farmer and on scheme uptake? It would be useful for the Committee to know this.
Turning to the Explanatory Memorandum itself, the last bullet point in paragraph 7.4 refers to
“the investigation of breaches and suspected offences in connection with applications for, or the receipt, of financial assistance”.
Can the Minister say how many suspected offences and breaches are recorded in any one year? Is this a big problem or only an occasional occurrence? Paragraph 7.6 states that the instrument
“omits the previous definition of the ‘farming investment fund’ that referred only to section 1(2) of the Act… For example, the policy intention is to launch the ‘animal health and welfare scheme’ as part of the farming investment fund”.
Can the Minister please give an example of just what this means?
Paragraph 7.7 of the Explanatory Memorandum indicates that publishing a full list of financial assistance received could lead to individuals and businesses not reporting cases of pests and diseases, for fear of not being able to sell their stock or produce or being accused of having poor animal health practices. I understand this rationale but, on the other hand, it is important that everybody knows where there are outbreaks of pests and diseases. It is not helpful to neighbouring farms if, for instance, there is an outbreak of African swine fever in pigs in an area, especially if they are kept outside and neighbouring farms are unaware of that.
It is not just animal diseases which it is important to be aware of. For example, plants and trees are also under threat; in particular, they are under severe threat from oak processionary moth and Xylella fastidiosa. Can the Minister provide assurance that pests and diseases will be notified to Defra and its officials, even though they are not on the published list of financial support given to the farmer or the individual concerned?
I fully support the importance of encouraging farmers to join as many schemes available under ELMS as possible to maintain their living. It is also important for the public to understand what the money they receive is spent on. I also accept that publishing some information could give the wrong impression of what is happening on farms. It is important to protect farmers and their families from the activities of animal rights activists, wherever possible.
There is a fine line between total transparency on how public money is allocated and protection of the privacy and reputation of those engaged in agriculture in the wider sense. I am confident that the Minister is fully supportive of this. I have expressed my concerns but, generally, I support this SI.
Baroness Anderson of Stoke-on-Trent (Lab)
My Lords, I thank the Minister for his introduction to this SI. While this is my first outing shadowing him, I am sure it will not be my last—unless this goes horribly wrong—and I look forward to our interactions in the months ahead. I also thank his officials for indulging my newbie questions in the briefing.
In recent weeks, our newspapers have been filled with tales of food shortages, excessive levels of food inflation and the associated food poverty. There has even been a national debate about our domestic turnips. No longer is the impact on our farmers and rural communities reserved to news stories on “Farming Today”. We live in a period of global uncertainty and economic challenge; this is no less the case for our domestic agricultural economy than for any other sector. Labour shortages, new bureaucracy and the ongoing impact of the war in Ukraine on grain and energy supplies are having a direct and daily impact on our domestic food supplies, as well as on the natural environment.
It is therefore vital that, in our post-Brexit world, we get the regulatory and payment structures fit for purpose to ensure security of food supply, and that we do everything that we can to support our farming businesses and communities. They are invaluable to our long-term sustainability and security, and we all rely on them. That is why the Labour Party will not be opposing this SI. However, I have some questions for the Minister relating to the implementation of the regulations.
The financial assistance amendment places more burden on Defra civil servants in terms of monitoring and the likely ongoing adaptation of some of the financial assistance schemes already launched. Can the Minister confirm that Defra has the resources to apply these changes in a timely manner over the next 12 months, given the additional strains which would be placed on his department by the Retained EU Law (Revocation and Reform) Bill, should it pass into statute? I promise that I do not seek to rerun the arguments which were heard in Committee on the REUL Bill last week; rather, I seek reassurance from the Minister that this has been considered and that appropriate resources are in place.
Following on from the debate in the other place on this statutory instrument, I hope the Minister can assist the Committee in answering some specifics which his colleague, the Farming Minister, failed to address. My colleague Daniel Zeichner sought clarification on Regulation 5(c); can the Minister confirm which schemes do not require a request for payment but will instead require an annual declaration to the Secretary of State? How many cases do we believe will fall into that category each year?
I also seek clarity on points raised by the right honourable Kit Malthouse in the other place in Committee. Referring to paragraph 7.6 of the Explanatory Memorandum, he asked:
“Does that mean that, without parliamentary consent, the Minister can start or close a new scheme or quietly”—[Official Report, Commons, Delegated Legislation Committee, 28/2/23; col. 8.]
abandon a funding mechanism that is no longer viable? As my noble friend Lord Grantchester highlighted, given the significant discretion that now rests with the Secretary of State, can the Minister confirm that, when schemes are launched, amended or closed, the department will be required to consult their beneficiaries before the terms are revised? If so, to what timetable will the department work?
I know that the Minister has vast experience of this area, which I do not claim to have, and is committed to making these regulations work for our farmers. I look forward to working with him in the months ahead to deliver the best possible deal for our rural communities.
Lord Benyon (Con)
I thank noble Lords for their valuable contributions. I start by welcoming the noble Baroness, Lady Anderson, to her position; I built up huge respect for her when we were on Select Committees together and am delighted that she will be holding me to account—I should be careful what I say; I am a bit nervous because I know what an effective parliamentarian she is. It is great to see her in her place.
I shall tackle as many of the points raised as I can. In response to my noble friend Lady McIntosh, this is a devolved issue, so this instrument, like all our agricultural policy, is for English farms only. We are working really hard to make sure that the vast majority of the schemes that we take forward are available to tenants. We have changed the rules so that tenants can access schemes without the consent of landlords in the vast majority of cases, particularly in the sustainable farming incentive. We are working through the Rock review, which is a brilliant piece of work, and want to see as many of its recommendations implemented as we can, as quickly as possible.
My noble friend asked about the need to update the 2022 guidance. There is no need to because we are not changing the policy. There is no need for an impact assessment for the same reason. She asked about area payments in relation to Scotland and England. I cannot comment on what Scotland is doing because we are still not entirely certain. However, I can say with every fibre of my being that the need to move away from area payments is long overdue. When I arrived at Defra in 2010, the Farming Minister was Sir Jim Paice. He was absolutely clear, and I agreed with him, that we need to prepare the farming community to move away from the completely unacceptable system whereby the largest farmers get most of the money. The CAP system and area-based payments were not friendly to small farmers. Under our schemes, small farmers will be able to be more fleet of foot and adapt.
Upland farmers will have access to 130 of the standards that we are seeking to implement. I will talk more about that in future. I worked with Julia Aglionby; her input in trying to make our schemes fit graziers who have access to areas of uplands in particular has been invaluable. I gather Ms Aglionby is publishing her assessment of what this means. We will examine that and respond to it.
Baroness McIntosh of Pickering (Con)
I feel I may have confused my noble friend. I did not mention area payments. I said that there is envy of what the Scots are being paid. My concern is that the way that the calculation has been done—income forgone plus costs—is leading to this perverse situation of a fall in incomes.
Lord Benyon (Con)
I will seek to address those points as I go through my remarks. We want to make sure that the £2.4 billion is spent more fairly. That means a greater incentive for smaller farmers to receive more of the pie because they have been hard done by under the common agricultural policy. I will come on to talk about this as I address other points.
The noble Lord, Lord Grantchester, raised some important points. I make no apologies for the fact that we have amended the schemes. He quite rightly asked about consultation. The schemes are indicative. We want to make sure that, as we work through not only our tests and trials but the implementation of these schemes, we are listening to farmers. This has probably been the largest consultative process that I have experienced in my time in Defra. The food, farming and countryside team has attended agricultural shows, done webinars, visited clusters of farmers, attended the vast majority of farmers’ social gatherings that can possibly be imagined and responded to concerns raised. We will continue to do that through our standard routine engagement with organisations such as the NFU, the TFA, the CLA and others and also directly with farmers. I have been able to put farmers who have raised particular points with me straight through to the director concerned and she has been able to answer their questions, so the answer to the noble Lord’s question about continued consultation is absolutely yes.
Agreement holders will have to be notified. On the noble Lord’s point about changes in farm tenure and ownership, these will be considerably simpler under the schemes. There should be no deterrent effect to being able to transfer the schemes if, for example, a partner in a farming partnership arrangement changes and there should be no bureaucratic barrier more than a notification, if required, in those schemes. There are issues relating to the time left of a farm business tenancy, for example. If it is less than three years, I think, it can be rolled over but it needs to be notified.
We are measuring the impact on the environment of the uptake of these schemes. We will also be measuring the impact on the environment of farmers and land managers accessing private sector green finance, and making sure that we are working to strategies through our Countryside Stewardship, which now has more than 30,000 farmers in the scheme. We have raised the payments by 40% and have increased the amount of support for farmers to go into those schemes. We want to make sure that local nature recovery strategies are doing what Professor Sir John Lawton did in his ground-breaking paper, Making Space for Nature: seeking to connect environments where possible.
The noble Baroness, Lady Bakewell, talked about the exemptions. It is important that we get this right. Whether it is a perception or not, perceptions are reality in this case. If there is a perception about making public the fact that you are taking part in an animal health and welfare grant scheme or you might have tree diseases on your land, and that will be a barrier to farmers taking part in the schemes, then I think we are right to seek that exemption.
As the noble Baroness points out, there have been cases where certain animal rights organisations have targeted farmers. On the question of African swine fever, it is a notifiable disease, so somebody not notifying the Government would be breaking the law, but that is an absolute nightmare prospect. In all our border security measures, biosecurity and everything that we seek to do, the risk of that sort of disease coming into our farming community is at the forefront of our minds. We are tracking what happens and where it is spreading across Europe and making sure that, with people coming to this country, in this globalised world in which we live, we seek to minimise the chance of that disease happening here.
The noble Baroness, Lady Anderson, raised the issue of food shortages. The principal cause of the headline-grabbing shortages was strange climatic conditions in southern Spain and Morocco, from where we receive most of our tomatoes at this time of year. It is a warning to us, but also to retailers, that we can expect strange climatic conditions. Our supply chains, which are resilient and were proved to be so during the pandemic, need to be prepared for such risks so that we can continue to see the food that we want to see on our shelves.
The noble Baroness’s question on resources is a good one. We in Defra are putting enormous resources into this; I can assure her that other issues we are seeking to deal with at the same time will not have an impact on the importance of rolling out these schemes, explaining them to farmers, getting as many as possible to sign up to them and making sure that we are supporting our farmers to produce food. We want them to produce food sustainably but we also have hungry mouths to feed. Food security remains an absolute priority for my department and the Government.
I will tackle other points as they have arisen and hope that I will cover all the questions. One point raised was on how we are helping farmers who will become unprofitable as a result of direct payment reductions. There are a number of ways in which farmers can be profitable without direct payments, including farm efficiency improvements, diversification and receiving money under new schemes. The actions taken will depend on the particular farm. The future farming resilience fund provides farmers with free advice from an independent provider to help them work out what to do for their business, including how best to improve business practices.
The impact on farmers of the phasing out of direct payments is obviously at the forefront of our minds. There is evidence showing that the scope—
The Deputy Chairman of Committees (Lord Duncan of Springbank) (Con)
My Lords, I fear the bells ring for us. We shall adjourn for 10 minutes then reconvene and return to the Minister’s remarks.
Lord Benyon (Con)
I am grateful to resume this, and I will get through these points as quickly as possible.
Let me clarify something about the exemption, which the noble Baroness, Lady Bakewell, rightly raised. The exemption is limited to only a few potential schemes that are established for reasons of plant or animal health or welfare and are in a similar position to those already exempted by Parliament in the 2021 regulations. Schemes developed under the other Section 1 purposes will continue to be published in full., including Defra’s core environmental land management or productivity schemes,
The proposed power to exempt a scheme or part of a scheme from full publication will be available only where it satisfies two conditions: first, if a scheme is established to protect or improve the health or welfare of livestock or to protect or improve the health of plants; and, secondly, if the Secretary of State is satisfied that publication is likely to hinder the extent to which the scheme achieves that purpose. As I have said already, we feel that these two areas fulfil those two tests. Ahead of any use of the power, we will provide our rationale on new exemptions to the EFRA Committee in the other place. We will also publish aggregate data on each exempt scheme.
Going back to the point about the impact on farmers of the phasing out of direct payments, there is evidence showing that the scope for productivity improvement would enable a large majority of farms to be profitable. In 2019, the Government published a farming evidence compendium that set out the impacts of removing direct payments, including analysis by sector, location and land tenure, and provided analysis on how farm businesses across all sectors can offset the impact of the scheme. In October 2021, the Government published further evidence in Agriculture in the UK Evidence Pack. We will continue to do this. Of course, under the Agriculture Act, we are required to publish details of our food security every three years. Our belief on our food security is that we will remain self-sufficient to roughly the same degree that we have been in recent years. Of course, fast balls, such as avian influenza and the war in Ukraine, come but, broadly speaking, we hope to be able to continue with roughly the same level of food security and, if possible, to increase it.
On upland farmers, farmers will be paid for more than 130 actions—not standards—in all the schemes that are applicable to them. I really hope that we can get across to them the message that they are valued, that they have a future and that we can work with them.
As I have said, we believe that our schemes will have no overall impact on the food security of our country. Investing in the natural environment will help us reduce future risks related to climate heating and the loss of biodiversity. We are designing our schemes to achieve win-wins for food and the environment where we can. I sometimes get questioned in this place by people who believe that food production and the environment are mutually exclusive. I know that everyone here is intelligent enough to know that that is not the case, that you can farm productively on much of our land and that we can restore the catastrophic loss of species that we have undergone in recent years to where they were. We can end that decline by 2030 and see the number of species and commitment to nature realistically delivered by our amazing farmers using these schemes and their own ingenuity.
If we do not continue to reduce direct payments as planned, we will not be able to offer any of the new schemes across the environment, productivity and resilience. Not only would we be unable to accelerate the rollout of the environmental land management schemes, as we are already doing with the sustainable farming incentive, we would have to cancel our plans for any new agreements in SFI and Countryside Stewardship. We would be unable to offer anything in the majority of the rest of our schemes, including landscape recovery and animal health and welfare. We might even have to cancel some of the more than 30,000 existing Countryside Stewardship agreements already in place.
There was an average increase of 10% in revenue payment for the Countryside Stewardship scheme, and our ongoing activity, such as managing habitats, saw an average of 48% for capital rates. Under the Agriculture Act, we have offered 7,870 Countryside Stewardship mid-tier or higher-tier revenue agreements and 1,508 capital agreements. This is farmers taking up schemes and doing good work on their farms—precisely the sort of thing that the public want to see in terms of public goods being delivered.
For our other agri-environment agreements, environmental stewardship, Country Stewardship under retained EU law and under the Countryside Stewardship regulations passed last year, we have 35,000 live revenue agreements. In the first year of the sustainable farming incentive, with the opening offer, we have more than 2,300 live agreements. The Government are accelerating the rollout, with six additional standards being added this year.
On the question about bureaucracy, the noble Lord has probably been and I have been the victims of bureaucracy which seemed wrapped in a mystery about why it needed to be so detailed. Applying for the SFI takes a matter of minutes, and they are probably the most valuable minutes that a farmer can spend in a year. It takes between 20 and 40 minutes for an average farmer to apply for many of the schemes.
The statutory instrument will help the industry move beyond the bureaucracy of the EU’s common agricultural policy so that the Government can better reward farmers for delivering climate and environmental benefits. I hope I have addressed the issues raised by noble Lords and that they will approve this instrument. I commend these draft regulations to the Committee.
Higher-Risk Buildings (Key Building Information etc.) (England) Regulations 2023
(1 year, 9 months ago)
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Baroness Scott of Bybrook
That the Grand Committee do consider the Higher-Risk Buildings (Key Building Information etc.) (England) Regulations 2023.
The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, the regulations set out the high-level information to be provided to the Building Safety Regulator and clarify the parts of a building for which individual accountable persons are responsible. These regulations are part of the new regime for building safety created by the Building Safety Act 2022.
I will start by providing some context and background to these important regulations. After the Grenfell Tower tragedy, the Government appointed Dame Judith Hackitt to conduct an expert review of the building safety regime. Her review recommended a new approach to managing fire and structural safety risks in higher-risk buildings. She advised that there should be clear accountability and responsibility for building safety in these buildings. Her report also set out that the body which enforces the new regulatory regime will need accurate and up-to-date information about those higher-risk buildings. The Government accepted Dame Judith’s recommendations and brought forward the Building Safety Act, which received Royal Assent in April 2022.
The regulations are split into two parts. The first part, in line with Dame Judith’s recommendations, establishes the key building information that must be provided to the Building Safety Regulator by the principal accountable person. This information will support the regulator’s initial triage of the potential risk factors in existing higher-risk buildings. This will allow the regulator to determine the order in which buildings should be required to apply for a building assessment certificate.
Under the new system, principal accountable persons responsible for existing buildings will be required to register with the Building Safety Regulator from April this year, before applying for a building assessment certificate at a later point. Building assessment certificate applications will enable the Building Safety Regulator to review the wider risk management and safety arrangements in place for those buildings. The key building information will also be used by the Building Safety Regulator to analyse trends and risks in higher-risk buildings. In addition, if any issue emerges in higher-risk buildings, the regulator will be able to use the key building information to identify similar buildings, systems or features and contact the relevant accountable persons.
It is important that the key building information is provided to the Building Safety Regulator at an early stage, so that it can use the information to prioritise which buildings should be required to apply for a building assessment certificate first. The regulations require that the principal accountable person must provide key building information to the regulator within 28 days of applying to register their higher-risk building or buildings.
The Government are today laying regulations which set out the registration requirements in more detail. The principal accountable person must also promptly notify the Building Safety Regulator of any subsequent changes to the key building information. The regulations set out what information must be included as part of that. This includes information about the current uses of the higher-risk building and whether its principal use has ever changed. It also includes information about the structural design of the building, the number of storeys and staircases, the pitch of the roof, the energy supply, any energy storage and whether the building has a structural connection to any other building. The key building information also includes information about the materials used in certain parts of the building: the external walls, the external wall insulation, the roof and any fixtures attached to the external walls or roof. Information will also have to be provided about the type of evacuation strategy for the building, such as “stay put” or “simultaneous evacuation”, and about certain fire and smoke control equipment within the building.
All this information is pivotal in helping the Building Safety Regulator to exercise its day-to-day functions and duties, understand typical features and trends in buildings and identify safety concerns. Guidance will make clear exactly what information is required to meet this legal obligation, and it must be submitted in electronic form. The Building Safety Regulator will issue a direction setting out the precise format for that.
Another of Dame Judith Hackitt’s recommendations was for a clear model of risk ownership for a whole building, which would be required to achieve the effective management of building safety. However, building ownership and land law is complex; some tall buildings will have multiple entities involved in their ownership, with varying degrees of responsibility for the building’s safety. That is why Section 72 of the Building Safety Act makes it clear who is responsible for the fire and structural safety in a higher-risk building: the accountable person.
Baroness Brinton (LD)
My Lords, I declare my interests as a vice-president of the Local Government Association and a vice-chair of the All-Party Parliamentary Fire Safety and Rescue Group. I also had a previous role for a decade, some years ago, as bursar of two Cambridge colleges. My questions for the Minister today are about the practical delivery of these regulations and how they will work.
The definitions in the regulations appear reassuring, but I want to ask how the systems between the accountable person, or AP, and the principal accountable person, or PAP, will work. What and where are the levels of signing off on buildings? This returns to an issue I raised three weeks ago, on 21 February, when we looked at the regulations setting out the definition of a high-rise building in Grand Committee. If there are 13,000 existing high-risk, high-rise buildings and the sections of the regulations are under prescribed key building information in two of these regulations, and are covered in Regulations 4 to 24, can the Minister confirm that the size of the directorate, and the level of qualified staff with the regulator, will be able to respond knowledgably to this deluge of information that the APs or PAPs will have to provide?
In the Commons, when asked about resource for the regulator, the Minister said:
“Of course we want to make sure that the regulator is properly resourced in order to fulfil its vital functions and, again, I will follow up with further information in writing.”—[Official Report, Commons, Sixth Delegated Legislation Committee, 22/2/23; col. 6.]
Given that that was three weeks ago and the deadline for starting to provide that information is moving pretty rapidly forwards for developers, leaseholders and commonholders, it is particularly important that the Secretary of State has set those deadlines. I do not disagree with them, by the way; it is vital that this is tackled. When will that information be available, because it is really important to make it work in practice?
Secondly, how does the key information in these regulations relate to the information that will still need to be sent to building control in local authorities to ensure that the building, remediation or adaptation processes are happening correctly? While there will be some overlap of information, it will not all be the same, and nor should it be. This is particularly relevant to Dame Judith’s wanting to ensure that running all the way through is that golden thread of key common information. I cannot see anywhere in these regulations what local authorities will get, either through building control or, at an earlier stage, planning applications. If an interested member of the public—perhaps not even a leaseholder but a tenant—were trying to find out if the work had been carried out appropriately, would they be able to do so? Would the information held by the regulator, supplied by the AP and PAP, also be replicated locally? Can the Minister confirm that that information will be held by local authorities, because it is vital?
Paragraph 7.3 of the Explanatory Memorandum says,
“the Regulator can carry out an initial triage of the potential risk levels in the existing 13,000 higher-risk residential buildings. The Regulator will require building assessment certificate applications as a priority for the buildings where, based on the information provided and other sources of intelligence from other regulators, the Regulator assesses the building’s potential for a building safety risk materialising to be higher than others.”
My question to the Minister on this point goes back to the timescale to get that information from what amounts to a standing start.
I will not go on to what I will say later on the Statement that is coming before your Lordships’ House, but I think that we are coming to a real crunch time of deadlines, to which we are rightly committed, for individuals who may be an AP or a PAP but are not the individuals responsible for the remediation or adaptations required. If there is a delay by the people who are or should be doing or identifying that remediation, the AP would be the person responsible—including criminally—if things are not provided. I am grateful to the Minister for setting out how she saw some of that working; my concern is whether all the different parties understand that. Do tenants, leaseholders and management agents, who may or may not be APs, all understand where those boundaries lie? Will the regulator in particular have resources available for this urgent and essential triage to be carried out?
I am also grateful to the Minister for her reference to fire safety; as she knows, it is something in which I am particularly interested. If the detail is not available to commonhold owners and APs, how does holding that set of information work? Will building control have sight of it, or will it be under the fire safety order and therefore fire services will have it? I am not even going near PEEPs today, or whatever they will be called in future, but I am raising these issues because I am concerned that people who live in these high-risk, high- rise buildings are still extremely concerned.
These Benches think that these regulations are a step forward. We hope that that golden thread that Dame Judith asked for is evident to everybody who needs to take part in this process and that those who are not responsible for delivering the change, but may have some regulatory responsibilities, do not end up paying the price should developers not do the job that they are required to do.
Baroness Wilcox of Newport (Lab)
My Lords, I note my membership of the LGA as a vice-president, which is noted in my details. I thank the Minister for her introduction to this statutory instrument.
We understand that these regulations have two key purposes. They specify what information must be provided to the Building Safety Regulator on higher-risk buildings and which parts of a building certain individuals are responsible for. We believe that this is part of the implementation of the Hackitt review of building safety, which recommended a new regulatory regime to improve accountability after the dangerous and destructive mistakes of the past, notwithstanding the tragedy at Grenfell which is still unresolved in so many areas after such a long time.
Labour welcomes these regulations and sees the instrument as uncontroversial, but we would like the Minister to offer greater clarity on the new building safety regime, especially for those with new responsibilities. I pose the following questions to the Minister; if an answer cannot be produced at this time, I would welcome a written response in due course. Given that the related consultation was in summer 2022, has the department engaged with relevant groups since then? Are the Government monitoring the new building safety requirements being introduced by the Mayor of London, such as for all planning applications for new buildings above 30 metres, which must now have second staircases before going to the Greater London Authority for final sign-off?
These fire safety measures have been brought in with immediate effect in London. This follows the Government’s launch of a consultation in December last year on requiring developers to include second staircases in blocks above 30 metres, which I believe is around 10 storeys high. This move has long been called for by the RIBA despite not being a recommendation in the Hackitt review, so is this monitoring taking place and will the Government extend these measures elsewhere? Furthermore, will the Minister update the Committee on the implementation of the Higher-Risk Buildings (Descriptions and Supplementary Provisions) Regulations 2023, laid in Parliament on 19 December 2022, which define higher-risk buildings?
My final question is about timescales and the mandatory information that duty holders will be required to provide to the new regulator, which must be submitted within 28 days of an application to register. The Government have announced that the registration of existing buildings is expected to begin next month. What will they do if there is non-compliance? Is there a plan in the department to tackle these organisations and companies? We need to know what the penalties will be and how these regulations will be enforced by the Government.
Baroness Scott of Bybrook (Con)
I thank both noble Lords for their input. I thank the noble Baroness, Lady Brinton, in particular because I know that this issue, especially PEEPs, is a huge passion of hers. When she last caught me in the corridor, I went back and started to chase, but huge pressure is being put on the Home Office—as she knows, this is a Home Office issue. We will get an answer; I will make sure that I keep niggling away because this is important. For me, although quite a lot of this legislation is going well, this is the one thing that seems to be holding us back, as something that came out of the inquiry’s first report. We will keep working on it.
The noble Baroness brought up a number of things. I was scribbling away; I will have to go through Hansard and will write if I have missed anything. One of the first issues was about funding. The Building Safety Regulator will work with local regulator partners, including building control and fire and rescue, to deliver the new regime; obviously, it cannot do it on its own. It is important that they are not in silos and work together. We are working particularly closely with the Building Safety Regulator to ensure that the skills capacity and training are in place for it to deliver these programmes. That means quite a lot of recruitment because, as has rightly been said, this is a lot of work.
On 9 March, the Government gave £42 million grant funding to support the recruitment and training of building control and fire inspectors working with the Building Safety Regulator. The Government absolutely understand that this cannot be done for nothing; if we want more and better regulators and inspectors, we need to recruit and train them. That will cost money, and the Government are putting money in for that to be performed effectively. That was the first point.
Baroness Brinton (LD)
I thank the noble Baroness. I was asking for something slightly different. I am sorry; it is complex and I was not clear. It is really important that the information that the regulator has to hold is the same information, even if there is more information at building control and fire service level. I should have said, and probably did not, that it could be something like Companies House, where details of accounts and so on are available, including to the public; that is why I asked about the public. That is the golden thread; that is the core information, although there may be other information. Is that how it is envisaged?
Baroness Scott of Bybrook (Con)
I am not aware that that is how it is envisaged. I have not had any conversations about how the regulator will work with local authorities, but it is an interesting concept. I will take it back and find out for the noble Baroness how that golden thread is being joined up.
There was a query about paragraph 7.3 on the timescale of information. I do not have 7.3 here with me so I do not have the answer to that; I will have to write. On communications, of course communications are important, particularly to the almost silent people—the residents, agents and people who will talk to residents. For me, it is important that the department does some of that communicating about how the new regime will work. I am sure that we will because we have done an awful lot on the ombudsman service and such things. The new regulator has various roles and responsibilities and I would hope that the department will do this. I will probably get told off for saying that but, as a Minister, I think it very important that the people most affected—the residents—understand how that is going to work. I do not have anything else here but I will look again to make sure that there is nothing further.
I move on to the questions from the noble Baroness, Lady Wilcox, and thank her for her support. Indeed, I thank both noble Baronesses for their support for these regulations; they are important. The noble Baroness, Lady Wilcox, wanted to know how the regime is being phased in. The Building Safety Regulator was established in shadow form within the Health and Safety Executive in January 2020. The statutory functions of the Building Safety Regulator are being phased in and are planned to be fully established by April 2024.
The Building Safety Regulator is already working and engaging with residents, building owners, the industry and professionals about how the regime will operate, so by the time we get to next April everybody should understand—this comes back to the communications issue—how the system works, and it should be up and running very quickly.
There was a question on how these regulations relate to information required as part of building control under local authorities. We have answered that, I think, but I will write on it because I do not think even the officials know. We will work on that one.
Regulations will be laid around October that will make clear what information will be in that golden thread during building control and later held by accountable persons in occupation. There will be further regulations this autumn that I think will probably answer some of the questions, if not all of them, but I will make sure that we answer the questions and let the Committee know what those regulations will include. They are a bit further along the line. We talked about the timeline for the scheme and I think it is important.
The noble Baroness, Lady Wilcox, asked what happens if someone does not register their building. The regulator will undertake further investigations and cross-check against information held by government to identify any high-risk buildings that have not been registered. Where a resident has concerns that their building does not appear to be on the public register, there will be mechanisms for that resident to report that directly to the regulator, so it can investigate. So there will be two ways: there will be cross-checking by the regulator and also it is important that anybody who checks up and sees that their building is not on the register can get in touch with the regulator as soon as possible.
Baroness Wilcox of Newport (Lab)
I thank the Minister for that answer but, on the point that the resident can inform the regulator, I would like the Minister and the department to be mindful of consequences for that resident. We hear dreadful stories these days of difficult landlords and so on. I would like my concern about that noted and the department to look carefully at it, because it is very difficult for individual tenants to report in that way.
Baroness Scott of Bybrook (Con)
We know that. Perhaps the type of landlord who does not register might be the type who could cause trouble. However, there is surely a way in which someone can remain anonymous with the regulator when checking. The regulator will pursue principal accountable persons who fail to come forward with information when it wants them to provide the information it requires. From October 2023, the regulator will be able to take enforcement action against principal accountable persons who fail to register their occupied higher-risk buildings. If found guilty, the penalty could be an unlimited fine or up to two years’ imprisonment. The noble Baroness might remember that, when the Bill went through, they were considered quite high tariffs.
I was asked how the regulator will make sure that all principal accountable persons come forward as well as fill in the forms. Over the next few months, the regulator will be leading a communications campaign and will be engaging with the sector with targeted messages to ensure that principal accountable persons are aware of the requirement for them to register their building and to come forward as that accountable person.
Lastly, the scope regulations, which were laid just before Christmas on 19 December, will come into force on 6 April. I perhaps have not answered all noble Lords’ questions because I was scribbling them down very fast, but I will look through Hansard and we will answer any that I have not answered.
Again, I thank the noble Baronesses for supporting the principle behind these regulations. They clarify the parts of a building for which individual accountable persons are responsible and set out the high-level information that must be provided to the Building Safety Regulator. Together, these measures support the Building Safety Regulator in creating a new, proportionate building safety regime that protects the safety of residents in higher-risk buildings.
Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023
(1 year, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023.
Relevant documents: 32nd Report from the Secondary Legislation Scrutiny Committee. Special attention drawn by the Joint Committee on Statutory Instruments, 29th Report.
The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
My Lords, in moving the Alternative Fuel Payment Pass-through Requirement (England and Wales and Scotland) Regulations 2023, I will speak also to the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023. These instruments were laid on 21 February and 23 February respectively and were debated last week in the other place.
The purpose of these instruments is to ensure that the financial benefits from the alternative fuel payment and the non-domestic alternative fuel payment schemes are passed through to end consumers. The non-domestic regulations also contain an amendment that corrects a drafting error in the Energy Bills Support Scheme and Alternative Fuel Payment Pass-through Requirement (Northern Ireland) Regulations 2023.
Before I begin, I thank the Joint Committee on Statutory Instruments, the Secondary Legislation Scrutiny Committee and the other place, all of whom provided helpful advice and feedback on these regulations. Time has not permitted us to incorporate everyone’s views into these regulations. None the less, we are grateful for the feedback that we have received. We will continue to explore and consider the comments that both the committees and Members of both Houses have given us, and we will consider how they can be reflected in the design of future regulations as well as current and future schemes.
The SLSC asked three questions. The first was on whether the effectiveness of the pass-through requirements of the other energy support schemes has been monitored. The second was whether there is any evidence of misuse of the application of “just and reasonable” by intermediaries to withhold the energy support from end-users. The third was whether there were any end-users recovering the energy support from their intermediaries via the courts system.
As my officials have now shared with the Committee, on the effectiveness of pass-through requirements, there is a diverse range of energy contracting structures, with many different forms of the supplier/intermediary/end-user relationship. The Government do not have visibility on the granular detail of these contracting structures and relationships. To our knowledge, this type of data does not currently exist in any aggregated verified source. Instead, we are monitoring the uptake of the energy support schemes where possible and putting in place evaluation of the pass-through requirements.
On the committee’s second question, we do not have evidence that the concept of “just and reasonable” is being misused by intermediaries to withhold support from intended beneficiaries. However, we will continue to monitor through our extensive stakeholder networks to make sure that the pass-through requirements are being met. On its last question, we are not aware of any tenants or businesses seeking recovery of support from their landlords through the courts where landlords have failed to pass on support. We will look into this as part of our evaluation of the effectiveness of the pass-through requirements.
The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)
My Lords, I hesitate to interrupt the Minister when he is on his feet but I am afraid there is a Division in the Chamber.
Lord Callanan (Con)
My Lords, I was just moving on to the issue of enforcement. The approach in these instruments is consistent with other energy schemes. If an intermediary does not pass on the benefit to an end user who is entitled to it, that end user will be able to pursue recovery of the benefit debt through civil proceedings. Should a court rule in the end user’s favour, they would be entitled to the payment plus interest. The interest is set at 2% above the Bank of England’s base rate.
The Government have published guidance on the GOV.UK website to ensure that requirements are clear to all parties. The guidance includes template letters to support end users, such as tenants, which they can use to contact their landlord should they be concerned about their energy bills. We are of course mindful of the concerns that this House and the other place have raised with us about enforcement. The Government will continue to keep the scheme under review. We will continue to work with a wide range of stakeholders to ensure that these pass-through requirements work for everyone who is in scope, including vulnerable groups. We want them to receive what they are entitled to.
In conclusion, these instruments are vital to ensure that support reaches the people it is designed to help. They are essential to the effectiveness of the alternative fuel payment scheme in Great Britain and the non-domestic alternative fuel payment across the United Kingdom. They will ensure that intermediaries pass on the support to those who really need it: those households and non-domestic energy customers who are most vulnerable to high energy costs. It is for all these important reasons that I commend these regulations to the Committee.
Baroness Blake of Leeds (Lab)
My Lords, I thank the Minister for a very full explanation of the SIs before us. I am pleased that the Government have fully caught up with the need to support consumers; I slightly disagree with the suggestion that this was done in a timely manner, but we and many others out there know about that. There was concern over a rather difficult period for the Government over the summer months but, on the back of this, I can underline that we will not oppose these SIs. We welcome them and want to see the help and relief that we have been discussing passed on, through the pass-through arrangements, so that people get the relief when they do not get the upfront sums directly.
Lord Callanan (Con)
I thank the noble Baroness for her valuable contributions to the debate. I reiterate that these instruments are necessary to ensure the effective implementation of the AFP scheme in Great Britain and the non-domestic alternative fuel payment schemes across the UK, by allowing support to reach those who need it. These schemes are already in place and are delivering support to organisations across the UK.
The domestic AFP scheme is delivering £200 to households that use alternative fuels such as heating oil, LPG, coal or biomass. The vast majority of eligible households received the payment automatically via their electricity supplier during February. A small proportion of households will need to apply for AFP support—for example, if they do not have a direct relationship with an electricity supplier and cannot be paid via that route. The non-domestic alternative fuel payment is delivering £150 to non-domestic customers who also use alternative fuels for heating, helping premises in Great Britain and Northern Ireland to meet their energy costs this winter. It will also deliver a top-up payment to the highest users of kerosene heating oil.
We are meaningfully engaging with stakeholders across the UK to promote and disseminate requirements for these schemes. Of course, we will continue to seek views and feedback from those impacted by all the pass-through requirements.
To respond directly to the point made by the noble Baroness, Lady Blake, about providing timely support to customers, I agree with her. The Government have moved at pace to develop what has been a very complex scheme to implement, bearing in mind that we are talking about significant sums of public money. We need to make sure that procedures are put in place to ensure that there is no fraud or gaming of the system.
The launch of the domestic and non-domestic AFP schemes follows months of close work with stakeholders across the country to deliver the Government’s help with the cost of living to customers. As I said in my introduction, we continue to listen to consumer groups such as MoneySavingExpert, housing associations, charities and others.
On the noble Baroness’s question about the requirement to notify end-users and the lack of any enforcement mechanism, we will of course continue to monitor the effectiveness or otherwise of the pass-through requirements. We acknowledge that these requirements have been stood up at pace, and we will continue to review them for the future.
In response to the noble Baroness’s point about letting customers know what they are entitled to, we are running extensive publicity schemes about the different benefits available to those who are eligible to apply for help with their heating bills. As I said, we continue to engage with stakeholders, including third-sector organisations, to reach communities who may be eligible, as well as regularly communicating through those same consumer groups. We are continuing to use social media during this period and encouraging stake- holders to amplify this message through their channels.
Finally, of course—the noble Baroness will appreciate this—we work very closely with local authorities, which are also able to promote the scheme on their own websites, through their own social media and through councillors and others who know their communities well. We also have online guidance for end users to understand their entitlement better. We really do want to see this help getting to all those people who need it, and we encourage parliamentarians, councillors and others to spread awareness through their own networks. We want to see this help getting through.
In response to the noble Baroness’s questions regarding how information resulting from the review will be communicated to Parliament, we would be very happy to write in due course to interested Peers, and the noble Baroness herself, on our monitoring of these pass-through requirements.
Domestic prepayment customers have been provided with a voucher that they are able to redeem within three months. Of course, prepayment customers on smart meters have their bills credited automatically. It is only those on old traditional meters who need to receive their prepayment vouchers. Some can get them on their mobile phones; some are sent them through the post. Non-domestic prepayment customers will instead be provided with a £150 cheque. Customers who have not been provided with this automatically will, of course, be able to apply directly through the alternative fund, which opened for domestic customers on 6 March.
I hope that this has dealt with all the noble Baroness’s questions, and I commend these regulations to the House.
Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023
(1 year, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Callanan
That the Grand Committee do consider the Non-Domestic Alternative Fuel Payment Pass-through Requirement and Amendment Regulations 2023.
Relevant documents: 32nd Report from the Secondary Legislation Scrutiny Committee. Special attention drawn by the Joint Committee on Statutory Instruments, 29th Report.