Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019

Baroness Byford Excerpts

Wednesday 20th March 2019 Grand Committee

These statutory instruments provide important and necessary continuity for stakeholders and beneficiaries. They will provide guarantees for the future by ensuring that farmers, fisheries and land managers continue to receive payments that support their vital work. I beg to move.

[Baroness Byford (Con)]

My Lords, I thank the Minister for introducing these five statutory instruments, but I must admit that I was slightly thrown as I thought that we were going to take them separately. I have prepared for them to be taken separately, so I hope noble Lords will forgive me if I have rather a long list of things to raise. It would have been easier for me if we had taken them separately. However, we are where we are, so I beg everyone’s forbearance.

I thank the Minister for introducing these instruments. They are a very necessary and welcome step in enabling a smooth transition. I declare my interest as a family farmer and as benefiting from the basic farm payment scheme. My farm was in the environmental stewardship scheme many years ago.

It might be simpler if I take the instruments one at a time. I gather from the first one that stewardship schemes will no longer be open to new applicants and that intervening schemes will overlap and be covered by payments in the normal way. However, paragraph 7.4 of the Explanatory Memorandum says that Pillar 2 projects submitted before the end of 2020,

“will be funded for their full lifetime”.

I welcome that too. Defra and the devolved Administrations can continue to sign new projects during 2019 and 2020, but I am not clear how that fits in with the earlier statement that environmental stewardship schemes will no longer be open to new applicants. I might have misread the SI, in which case I apologise. However, I welcome the basic provisions.

The AHDB has a duty to raise the levy, and that will continue to be done. However, I wonder whether the AHDB will review the way in which it operates that levy, because there will perhaps be opportunities in the future to look at different and better ways of using levy income, which is a considerable amount of money coming in from businesses. As I said, this instrument will deliver a smooth transition and give farmers, land managers, rural businesses and communities certainty. I am very grateful to the Government, as that will help enormously. My specific queries, therefore, are on the existing environmental stewardship schemes, which I gather will no longer be open to new applications, and on paragraph 7.4, which refers to the possibility of signing up new projects during 2019 and 2020.

I also welcome the second SI on financing, management and monitoring. I agree with the Minister and other members of the Committee on the importance of the agriculture sector in our country today. As well as agriculture, I should mention horticulture, because the two go together. It is worth around £113 billion and employs some 3.5 million people in the food sector. With the growing population in this country, the challenges we face are more acute than they are for some of our colleagues in the European Union, where populations are in fact decreasing. There is a greater need to make sure we produce as much as we can in this country.

Paragraph 14 of the Secondary Legislation Scrutiny Committee’s report states that the NFU, one of a group of organisations that came together to consider this and advise the Minister, called for greater clarity. I refer to paragraph 8 of that document, which talks about a framework that,

“enables current agricultural support measures to continue to function effectively in the UK after EU exit”.

It goes on to say that payments will work,

“within a suitable financial framework”.

I wondered what was meant by “suitable framework”; perhaps “effective” would have been better. Again, I would be glad of some clarification on that.

I welcome paragraph 10.2 of the Explanatory Memorandum, which says that Defra and the Rural Payments Agency’s industry partnership group came together on 25 September and again on 26 November, as I referred to earlier. Those working groups were very worthwhile and, on the whole, people were very happy with what came out of them. What reassurances can the Minister give that the payments will be paid on time? As he is well aware, I just sent him two Written Questions on the way the payments are made to English farmers at the moment. While 80% is quite good, and we are looking to 90%, late payments have a huge effect on many farmers. I worry about what the mechanism will be for holding the responsible statutory bodies to account when we leave, to make sure those payments are made on time. I did not see anything in this instrument that would cover that. Maybe I am being overanxious, but it would be helpful to the Committee to have a response on that.

In the past, the EU has fined us for late payments, with infraction payments. If that body no longer regulates us, who will hold the bodies responsible for those payments to account? At the moment, no environmental body has been set up; that will come in the future. If we leave without an agreement, we will have a gap between the end of March and whenever something else gets established. Like many others, I hope that an agreement will be reached and therefore these questions will be unnecessary. However, what assurances can the Minister give that those payments will be made? If I am right, the responsibility for those payments has been moved from the Environment Agency to sit totally within the RPA, so who will hold the RPA to account? I am not clear on that.

Is there any definite date for the possible future liabilities? For example, some of the projects in which we have been engaged in this country are social and rural economic projects that run for a five or six-year programme. From this legislation, I am not sure whether we could be held to account by Brussels in later years, although we will have left the EU—if the Minister follows my logic. In other words, can the EU come back to us on some of the existing projects which have been agreed, if it thinks they are falling short of what is expected? I cannot explain myself any better, because it is slightly complicated. I apologise.

On the agriculture environment schemes, who will hold us to account on making sure that payments are made correctly and on time? I am not asking about situations where there is a death, or transfer of ownership, as I know dealing with those takes time. However, many environment schemes are delayed, so I would like clarification on that.

I turn now to the third statutory instrument: miscellaneous amendments. The Explanatory Memorandum explains that this is a reasonable course of action—I am sure it is—to ensure that CAP programmes can operate properly, ensuring smooth transition. I am quite happy with that. But I am puzzled by the statement that standards of cases of discrimination, harassment and victimisation are included in this SI. I wondered why that was and what it means. I would be grateful for some clarification, because it seems extraordinary.

Reading through this SI, I have no problem with the change of wording from “member states” to “relevant authority”, because we are leaving the EU. However, on pages 6, 12 and 13, I have two queries. Regulation 4(10)(a)(i), talks about,

“the scheme for distribution to the most deprived in the UK”.

Is there a set-down definition of “the most deprived”? Is that something we would transpose from a European definition, or will we interpret it in our own way when we leave?

Regulation 5(28)(b), which amends Article 31, states that we are leaving an existing EU “small farmers scheme”. How many farmers in our country, if any, fell within that scheme? Are they currently in such a scheme and, if so, do the Government anticipate continuing such a scheme, or introducing one if they are not already included?

The fourth SI looks at the technical and legislative functions. Sub-Committee A referred that to us for our thoughts. If I picked it up right, provisions which have been carried out by the European Union will be transferred by regulation to public authorities to continue smoothly; I am more than happy with that. However, paragraph 7.2 of the Explanatory Memorandum talks about preventing having to make primary legislation every time a technical change is required. Can we have a little clarification? I am sure it is a good thing, but sometimes we need primary legislation rather than just secondary legislation, and I am not sure from the EM exactly what that is.

Paragraph 10.4 of the same EM, on the consultation outcomes, states Defra had its consultation between 4 July and 12 September on the fisheries White Paper. I am pleased about that; it was very helpful. While it states that the stakeholders were broadly supportive, did they have any specific major concerns?

Finally, I turn to the fifth SI, on state aid. Paragraph 2.6 of the Explanatory Memorandum states that if the UK,

“has exceeded its annual State aid budget, certain categories are then only exempted from State aid rules for a 6 month period”.

It goes on to say by how long this SI extends that—and here in my notes I put dot, dot, dot, because I am not sure by how long it will be extended. Will it be another six months or will it be for an indefinite period? Again, I seek clarification.

On emergency aid, I am grateful that the Minister mentioned flooding, something which sprang to my mind. The other issue is drought; we face great drought considerations in this country. The Minister knows, because I have raised it with him before, that the Environment Agency is a little slow—to be kind—in agreeing to some of the extractions that are needed, particularly in very dry areas such as East Anglia, Norfolk and into Lincolnshire, where they will not be able to continue producing crops in the same way unless they can gain water. I am well aware of the pressure that is put on water, and looking to the future, there will be even more pressure. There are ways in which we can save water—by plugging leaks, to say the least—but my thoughts turn to emergency aid for flooding and droughts, and there may be other things.

Finally, I welcome the direct rural payments, which I think are fairly clear. No doubt, other Members in Committee will want to raise those issues anyway. I am sorry my speech is so bitty—I thought we would deal with each SI individually. I apologise to other Members that it has been a bit round the houses.

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I think that I was asked to give a reassurance about payments being made on time. I have made it very clear that the RPA is now responsible for making payments to agreement holders. The Government have been clear that the current delivery of agri-environment schemes is not good enough, as I have said. On the issue of harassment, raised by my noble friend Lady Byford—

[Baroness Byford]

Reading through the instrument, I found that odd. I could not think of the context that it was referring to.

[Lord Gardiner of Kimble]

I can understand that. In signing the EM, Ministers have to declare that we have had due regard to the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Equality Act 2010.

I turn to the point raised by the noble Lords, Lord Beith and Lord Grantchester, about the red meat levy exemption. In continuing the existing exemption for imports from the EU, we were advised that we need to be in line with WTO rules, as I advised. I also advise that we expect this change to be minimal or nil. We believe that very few animals are imported into the UK live for slaughter. On average over the last five years, fewer than 500 cattle, sheep or bovines have been imported each year from beyond the EU into the UK. Their average values have been relatively high and our understanding is that they are imported mainly for breeding purposes. We believe that few, if any, are slaughtered in England soon after being imported—hence our belief that the impact of this change would be minimal.

The noble Lord, Lord Beith, raised a question relating to three of the instruments and concerning the legal wording coming into force on a date later than exit day. He asked why that is the case. The legislation is worded as it is because it was not clear whether the instruments would be debated, approved and made before exit day. The wording providing for the instruments to come into force on the latter of exit day or the day after making was a prudent contingency to account for this eventuality and to ensure that we did not purport to bring into force an instrument before it was made. I might need to think about that myself, but I wanted to put the position on the record. However, it is an interesting construct.

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[Lord Gardiner of Kimble]

Would it help if the noble Lord and I had a conversation after this debate on the statutory instrument? I am interested in hearing his point.

With your Lordships’ permission, I will conclude my point. In a no-deal scenario, the SI will take effect on exit day; in the case of a withdrawal agreement, it will come into force after the implementation period.

On the noble Lord’s question about Ireland, these regulations will ensure that the same state aid regime applies in the UK and Ireland, because obviously it is bringing back the same arrangements.

My noble friend Lady Byford asked how many farmers fell within the schemes. My memory is that for direct payments, it is about 85,000 farmers, but of course with countryside stewardship and environmental stewardships it is a much smaller sum.

[Baroness Byford]

My Lords, I know I got a bit confused when we went over the various instruments. My question was actually in reference to small farmers, as my noble friend will be able to see when he has a chance to look at Hansard—there is no definition. I agree with him about the total numbers, but my query was about the number of small farmers and whether they are in a small farmers’ scheme.