Direct Payments to Farmers (Reductions and Simplifications) (England) (Amendment) Regulations 2021

Baroness Jones of Whitchurch Excerpts

Monday 22nd March 2021 Lords Chamber

[Baroness Jones of Whitchurch (Lab) [V]]

My Lords, I thank the Minister for his helpful introduction to these SIs and thank all noble Lords who have contributed to this debate this afternoon.

As the Minister said, the SIs represent an important step in the transition from the old CAP regime to the new financial assistance proposals based on public money for public goods, which we spent many happy hours debating during the passage of the Agriculture Bill. Undoubtedly, the Government have taken on a huge task in attempting to draw up the details of a new funding regime, which needs to be robust in its systems of accountability but also fair to those who have to navigate it.

The Path to Sustainable Farming, published last November, and now of course the launch of the sustainable farming incentive pilots, are useful first steps. However, as many noble Lords have illustrated in this debate, as each building block of the transition is announced, it answers many questions but raises even more. With that in mind, I have a number of questions which flow from these SIs.

First, the direct payments to farmers SI provides for the reduction in direct payments of between 5% and 25% in 2021. I think it is fair to say that this announcement last year was received with some dismay by the farming community, given that they were being asked to take a payment cut without any chance of claiming under the new sustainable funding regime until 2022; in other words, it is an absolute cut. I would be pleased if the Minister could explain why it was necessary to proceed on this basis rather than to run down access to one fund and increase access to the new fund on a balanced basis. It seems rather provocative at a time when the good will of the farming community to embrace the new regime is absolutely essential. Can we be clear: have those savings gone into a ring-fenced pot of money, and can we be assured that they will be used only for funding the three tiers of ELMS as they are rolled out in the coming years?

Also, as the Minister knows, the details of the sustainable farming incentive pilots announced this month have only eight categories of activities for which payments can be made via the pilots. These seem quite limited in scope. Can the Minister update us on whether the timetable for the rollout of other schemes, which might provide other new opportunities for farmers to access grant funding, is still on track? In particular, given the economic hardship being experienced by many farmers, can he confirm that details of the farm resilience scheme—phase 2—which was announced earlier, will still be provided this month, with a start date of May 2021?

Also, as has been said, this SI deals only with the reductions in direct payments for the year 2021. We know that the original plan was for this to be a progressive reduction year on year. Is it still the plan that future years’ reductions will come before us each year as the transition continues to be rolled out, rather than allowing it to be done on a more obvious long-term planning basis, perhaps grouping a number of years at a time?

The Agricultural (Financial Assistance) Regulations 2021 set out the principles on which financial payments will be administered. I think it is fair to say that this is an enabling SI which puts all the onus on the Secretary of State to devise a scheme with more flexibility and fairness than was perceived to be applied by the CAP regime. However, the devil is in the detail, and we do not have that detail before us today. There is a great deal of trust resting on the shoulders of the Secretary of State to create a less bureaucratic and less burdensome system for applying and checking claims. In fact, as my noble friend Lord Rooker pointed out, rather worryingly, it says on page 4 of the EM:

“The instrument does not impose duties that are significantly more onerous than before”.


I hope that the opposite will be the case and that people applying for financial assistance will find the regime more accommodating and user-friendly. However, if I am honest, the track record of Defra does not bode well on this, and the recent experience of hauliers and exporters to the EU is testament to that.

Also, I think I am right to say that the Rural Payments Agency will administer the claims. Can the Minister explain what extra training and support it will receive to ensure that the envisaged light-touch regime is actually in place? Does it have sufficient staff to make individual determinations of claims on a more flexible and common-sense basis? Who exactly will provide the independent appeals process for those who feel that they have been dealt with unfairly? Can we be assured that they will be truly independent? Is the “public-facing Defra database” of payments already in existence, or will this require a new database separate from CAP, with all the ensuing problems that we have had with databases in the past?

Finally, as the noble Baroness, Lady Bakewell, says, we are told that the consultation on the SI ran from 4 August to 1 September 2020. By any stretch of imagination, this was a short consultation, of about three weeks.

I hope that the Minister can assure us that the proposals before us today have the confidence of the farmers and land managers who will be expected to roll out the new regime and make it a success. I look forward to his response.