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

Lord Gardiner of Kimble Excerpts

Wednesday 20th March 2019 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, the matters in the five instruments are closely interrelated; I hope it will be helpful to your Lordships if I speak to all five together.

With a number of small exceptions, which I shall explain, these regulations make purely technical amendments, which are necessary to address European laws being brought on to the UK’s statute books in a partially inoperable form, and enable the policies behind the common agricultural policy, the Agriculture and Horticulture Development Board, and state aid legislation to continue to function as they do today. These instruments are not required solely in a no-deal scenario; in the event of an agreement—which of course the Government sincerely wish for—they will ensure that the current legislation remains operable at the end of any implementation period.

The instruments on the common agricultural policy make largely technical and operability changes to ensure that the UK Government are able to meet their commitments to funding in the agriculture sector. The Government have pledged to continue to commit the same cash total in funds for farm support until the end of this Parliament, expected in 2022; this includes all funding provided for farm support under both Pillar 1 and Pillar 2 of the current CAP. This commitment applies to the whole of the UK.

The UK Government have guaranteed that the current level of agricultural funding under CAP Pillar 1 will be upheld until 2020, as part of the transition to new domestic arrangements. The UK Government have also guaranteed that any rural development projects for which funding has been agreed before the end of 2020 will be funded for their full lifetime.

As noble Lords are well aware, agriculture and fisheries are devolved policy areas and are of special importance for all parts of the United Kingdom. We have worked closely with the devolved Administrations to produce these instruments; they place great importance on them and have given their consent to these instruments.

I will now outline the CAP statutory instruments. They enable the regulations to continue to operate effectively, do not introduce new policy and preserve the current regime for supporting CAP beneficiaries. The amendments in these instruments include omitting redundant references to the “European Commission” and “member states” and amending references to “Union law” throughout, so that the retained EU regulations continue to operate effectively as part of national law.

One purpose of these modifications is to ensure continuity and clarity as to who is responsible for the implementation and administration of the CAP schemes. The obligations and discretions placed on member states will continue to be exercised after exit by relevant authorities in the UK. In this context, “relevant authority” means the Secretary of State, Scottish Ministers, Welsh Ministers and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland.

The Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019 make operability amendments to domestic regulations made under the European Communities Act implementing certain provisions of the EU common agricultural policy.

First, I draw your Lordships’ attention to a minor correction which is needed to the Explanatory Memorandum for this instrument. In paragraph 4, “Extent and Territorial Application”, the amendments to the AHDB order 2008 are given as applying to the UK. In fact, while parts of the AHDB order 2008 apply to the UK, the amendments proposed in this instrument apply to Great Britain in relation to horticulture, and to England only in relation to the red meat levy. That reflects the territorial coverage that the levy body, the AHDB, has for those specific sectors. We shall withdraw and re-lay the EM in the coming days, with the territorial application of the AHDB order amendments corrected. Correcting this has no impact other than aligning the EM with the instrument we are debating today. I apologise for any inconvenience this causes to your Lordships, but when I heard of it, I wanted your Lordships to know immediately.

As well as operability changes to domestic regulations under the European Communities Act, this SI also amends one order concerning the Agriculture and Horticulture Development Board. This is to address two operability issues arising from the United Kingdom leaving. In one case, this has required us to make a small policy change. Currently, there is a minor levy exemption applying to livestock which is imported from “another member state” and slaughtered in England within two to three months of being imported. For continuity, we retain this exemption, and to ensure that we are then in line with WTO rules and are not favouring the EU, we also extend the exemption to cover any such livestock imported from the rest of the world. We expect this minor policy change to have little or no impact on the ground, given the very low levels of live imports from beyond the EU.

The Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Arrangements) (EU Exit) Regulations 2019 make technical amendments to the supplementary regulations which set out detail on the financing, management and monitoring arrangements for the CAP schemes. This instrument ensures the operability of five different pieces of EU law. These ensure that the management and monitoring aspects of the retained EU legislation maintain the current standards after exit. This includes setting out further detail on how checks to beneficiaries should be carried out and how penalties should be applied to those found to be in breach of the legislation.

The instrument also attends to five other pieces of retained EU law where references to EU audit and accounting systems would clearly no longer be appropriate. These would be replaced by the domestic system, which currently operates in parallel to the EU system, to provide equivalent assurances to our Parliament. Four of these are implicitly tied to EU audit and accounting systems, which, as I say, will be replaced with the existing domestic equivalent. The final revoked piece of EU law relates to the EU policy monitoring system, which, again, will be replaced by our existing domestic policy evaluation process.

I turn to the Common Agricultural Policy (Financing, Management and Monitoring) (Miscellaneous Amendments) (EU Exit) Regulations 2019. This instrument amends the retained EU law which sets out the overarching framework for how CAP schemes function, governing the financing, managing and monitoring arrangements which underpin schemes. It removes the EU audit and accounting regime, which, as I already mentioned, operates alongside the existing equivalent domestic regime and would no longer be required for Exchequer-funded payments. Current levels of checks and scrutiny over CAP payments will remain under the domestic system until domestic policy reform can be delivered through a new domestic agricultural policy.

I turn to the Agriculture (Legislative Functions) (EU Exit) Regulations 2019. They amend five different EU regulations which give the European Commission power to change existing legislation relating to the financing, managing and monitoring of the CAP; direct payments; the rural development programmes; and fisheries programmes funded by the EMFF.

These five regulations work together to provide the necessary powers to ensure the smooth functioning of the CAP and EMFF-funded fisheries schemes in the light of economic, scientific and environmental changes. For example, the Commission is currently empowered to make legislation adding to a list of practices equivalent to crop diversification in the light of developments in the sector. These powers also provide powers to, for example, update the model we use to estimate the net revenue of an EMFF or rural development project, if a more accurate model becomes available.

As its title suggests, this instrument makes amendments to confer existing legislative powers on the appropriate authorities: either the Secretary of State or the relevant Administration for each home nation. These amendments consist largely of replacing references to the “Commission” with “appropriate authority” or “Secretary of State”.

The instrument also contains operability changes relating to the EU financial discipline mechanism. The financial discipline mechanism ensures that the Pillar 1 budget, which comprises spending on direct payments and on schemes under the common market organisation, is not exceeded. It works by reducing the value of direct payments if forecast expenditure on Pillar 1 exceeds a predetermined budget.

This SI makes changes to make the financial discipline mechanism operable in England. As agriculture is devolved, each Administration has assessed what amendment is appropriate to remedy the inoperability. Devolved Administrations have chosen to omit the financial discipline mechanism, while England has chosen to use the powers contained in the withdrawal Act to make financial discipline operable on an England-only basis. For England, operability amendments are made to financial discipline provisions to ensure the mechanism will work properly in a domestic context and on an England-only basis. This does not constitute a new policy, as the mechanism currently applies in the EU.

I turn finally to the State Aid (Agriculture and Fisheries) (Amendment) (EU Exit) Regulations 2019. State aid rules govern the way subsidies can be given, and exist to stop companies gaining an unfair advantage over their competitors. This instrument amends specific retained EU state aid regulations relating to agriculture and fisheries. It does not make provisions for the broader domestic state aid framework. That is addressed in the State Aid (EU Exit) Regulations 2019, which were debated and approved by this House on Thursday 14 March.

Agriculture and fisheries schemes have long benefited from exemptions to the state aid rules. This instrument maintains these agriculture and fisheries exemptions, allowing government to continue to support these industries and provide stability as we leave the EU.

The instrument will have three main effects. First, it corrects references to state aid rules in some of the CAP regulations. This makes sure that the state aid exemptions, which flow from the agriculture and fisheries state aid exemption in the Treaty on the Functioning of the European Union, continue to apply to direct payments and rural development programme payments. This will allow these crucial payments to continue after exit.

Secondly, the instrument will continue to exempt certain categories of agricultural and fisheries aid which are deemed compatible with state aid rules. These are known as the “block exemptions”. For example, this will ensure that the Rural Payments Agency can continue to make payments for forest environment commitments covered by the agricultural block exemption regulation under the forestry elements of countryside stewardship. For fisheries, payments to the sector which support, for example, the sustainable development of fisheries, the protection and restoration of marine biodiversity, and innovation in aquaculture will continue to be able to be made under the block exemption regulation.

Finally, the instrument provides that funding under certain financial de minimis thresholds will continue not to constitute state aid. For example, the Calderdale natural flood management grant scheme, a critical flood defence project, is covered by this exemption, and this instrument ensures that we will be able to continue to support schemes such as that one.

--- Later in debate ---

I appreciate that the Minister’s department was not the lead department regarding the announcement last week of temporary tariffs that will come into force in the event of a no deal. However—perhaps this is for another day—further dialogue with the Minister and his department would be very welcome as it is his department that will have to manage the dialogue with the agricultural industry, and extensive consultation would be appreciated across the industry.

[Lord Gardiner of Kimble]

My Lords, I should have at the very outset declared my farming interests as well, as set out in the register. I should probably do that at every Defra occasion because of the interconnection with agriculture, the environment, and so forth, but I think all noble Lords know of my agricultural background and all that goes with it. I am most grateful to all noble Lords; it is so nice to see the noble Lord, Lord Beith, who has a Dispatch Box before him, and my noble friend Lady Byford, who is forensic. I will endeavour to answer as many questions as I can today, but for those that are intricate, perhaps a letter would be a more fulfilling experience. Some of them go slightly off the core of the discussions on these instruments, but they quite clearly go into wider agricultural matters, which are important.

First, your Lordships have agreed that these regulations are so important to ensure payments are made to farmers, land managers and fishers, to comply with state aid rules, and to have that operability. There are quite a number of questions, so it is important that I answer as many of them as I can. My noble friend Lady Byford asked about stewardship schemes and the issue of new applicants, and, in reference to paragraph 7.4 of the EM of the first statutory instrument, how our commitment fits in with this—the noble Lord, Lord Grantchester, also referred to these matters. The environmental stewardship scheme in this SI is closed to new applicants; current agreement holders will continue to receive payments under the Treasury guarantee following EU exit, which I mentioned in my opening remarks. The Countryside Stewardship Scheme has replaced environmental stewardship in England; this is open to applicants and is covered again by the Treasury guarantee. The noble Lord, Lord Carrington, raised this issue at Questions yesterday; indeed, I had an opportunity of raising this with the Minister of State today. We accept entirely that there needs to be an improvement in the level of payments experienced with both the environmental stewardship and Countryside Stewardship schemes. That is why we have transferred it from Natural England—rather than the EA, which was managing these matters —to the RPA because, candidly, we thought it is the organisation to deal with payments and the BPS payments following the first year of the change of CAP. We are at 90%-plus of payments on BPS and, as my noble friend said, the last few per cent are often because of probate cases, cross-border issues or inspections.

I will take back from today the very helpful remarks made at the beginning, which relate to Countryside Stewardship—I do not have to declare an interest in this particular point. I am well aware that farmers have paid money to engage in the Countryside Stewardship or environmental stewardship schemes and that they are now waiting for money. For some, that wait goes back to 2016, so I am not content about that matter. I am always prone to understatement, so I hope your Lordships will understand what I mean when I say that “I am not content” with the current arrangements.

[The Earl of Erroll]

I think I am allowed to intervene quickly. Maybe interest payments could be looked at, because real costs to farmers arise from non-payment.

[Lord Gardiner of Kimble]

I have heard the noble Earl and respect his tenacity in putting that point. I had better not say anything more on the record, but that is clearly one area where the question is how we get a better situation. That is why I assure your Lordships that the RPA is geared up to deal with this, and the Secretary of State and all the ministerial team are looking for progress.

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[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.

[Lord Beith]

It is indeed—that had not occurred to me. Do we conclude from this that the Government have no intention of doing anything other than bringing all five instruments into force on exit day?

[Lord Gardiner of Kimble]

Yes; I always have a safety valve. Picking up my noble friend’s point, it is why we thought that these SIs hung together as a package. From all the details that noble Lords have raised, I am relieved that we put them together because they are intricately connected.

The noble Lords, Lord Grantchester and Lord Beith, raised the question of funding a crisis without a crisis reserve. The 2018 crisis reserve payments are covered by Her Majesty’s Government’s funding guarantee, so farmers will receive reimbursement for the 2018 crisis reserve payments. After exit, clearly UK participation in the EU crisis reserve will become unworkable. Making the EU’s concept of the crisis reserve operable in the UK would mean taking the UK’s contributory share of the existing reserve—about £39 million—as the basis for a UK-only reserve. This would be likely to be of limited value in response to a crisis, especially when divided between England, Wales, Scotland and Northern Ireland. Removing the crisis reserve could also mean that more money could be paid out to farmers at the start of a payment window.

We are retaining CAP schemes governing the Common Market’s organisation in other retained EU legislation. This legislation will allow the UK to respond to a crisis in the agricultural markets in the same way that the EU currently can. If there is a crisis in the agricultural sector, the Government will consider how to respond, including whether to provide further funding in the usual way.

[Lord Beith]

This is not a theoretical situation. I do not wish to turn doom-laden, but if the events we are discussing led to a sudden fall and crisis in the sheep sector, then market intervention might be an option that the Government had to consider. I recognise, as the Minister indicated, that we have other ways to do that.

[Lord Gardiner of Kimble]

Yes, and I think it has been clear from the department that, like any responsible Government or department, we would act if issues arose. The noble Lord mentioned the sheep sector; in the temporary tariff regime we brought forward, we recognised the sensitivity and potential vulnerability of that sector. He is absolutely right: we need to be alive to, and ready to act on, issues of weather or markets. That point is well made.

The noble Lord raised the issue of the euro. Defra and the DAs have agreed to retain references to the euro in retained EU legislation at the point of exit. This is because, at the point of exit, the CAP will be part-way through making payments under current schemes. To minimise disruption and avoid a difference in sums paid to farmers before and after exit, we will retain the euro until an appropriate time when we can make the change to sterling with minimal disruption. We intend to bring forward regulations to amend euro references to sterling later. These regulations will of course be subject to normal parliamentary scrutiny. In addition, we will work with the devolved Administrations on any changes.

The noble Lord, Lord Beith, asked about retention. On implications for farmers, I reiterate that the Government have guaranteed that the current level of agricultural funding under Pillar 1 will be upheld until 2020 as part of the transition to new domestic arrangements, and that all CAP Pillar 2 agreements signed before 31 December 2020 will be fully funded for their lifetimes. The exchange rate for BPS 2018 is already set for the scheme year, meaning that farmers paid either side of exit day will be subject to an identical exchange rate.

The noble Lord, Lord Beith, asked how many state aid rules there will be after exit. The state aid regime will be rolled over by this statutory instrument, as will the whole architecture through the BEIS statutory instrument. We are not making any changes to the current EU regime beyond those required to make these matters operable.

The noble Lord, Lord Grantchester, asked whether the SIs will be necessary if the Agriculture Bill gains Royal Assent before the end of the current implementation period. If the current withdrawal agreement is agreed, these SIs will still be needed to ensure that the retained EU CAP legislation is operable in a UK context at the end of the implementation period. This will be the case even once the Agriculture Bill has gained Royal Assent. This is because the horizontal framework regulations, as amended by the SIs, will be required while we continue to operate legacy CAP schemes under retained EU law. Likewise, some CMO regulations will remain after the Agriculture Bill comes into force.

The noble Lord asked about the discontinuity in state aid: will DAs have their own rules and do they take effect at exit day or at the end of the implementation period? This is a reserved policy area, but, as with all the SIs I have had to deal with, there has been a close working relationship with the devolved Administrations. BEIS is working on a memorandum of understanding with the DAs, and my noble friend Lord Henley is working on this. If there is any further information I can bring forward from that, I will let your Lordships have a copy.

In a no-deal scenario—

[Lord Whitty (Lab)]

I intervene because I have been dealing with state aid provisions more generally. The European system regards state aid for agriculture as part of a block exemption. In other words, it does not regard it as state aid.

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[Baroness Vere of Norbiton]

I have written here: “Whitty (late)”.

[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.

--- Later in debate ---

[Lord Gardiner of Kimble]

I think that may be a matter of detail. I will write with a résumé of points I may not have covered, and areas where I think a little more detail would help. I am most grateful to my noble friend.

The noble Lord, Lord Grantchester, asked about the Treasury and the levy. The exemption is being extended to the animals slaughtered that come from beyond the EU. That covers very few animals, and the levy at stake is estimated to be less than £1000, while the levy income is £26 million a year. I therefore might put that in the de minimis bracket.

The noble Lord asked how the CMA and Parliament will enforce state aid. The CMA will be an independent regulator with enforcement powers, including requiring aid granters to claw back payments. Any changes to the state aid regime will be made in legislation.

I will pick up the noble Lord’s point about tariffs—because I too read Farmers Weekly and the Farmers Guardian. We will continue to maintain dialogue with the sector on this important issue. As I said in Questions yesterday, clearly one of the five principles on which we base this is whether it is in the interests of the consumer and the producer. It is why we came forward with what is, as I said yesterday, a temporary tariffs package, and one with which Phil Stocker, the chief executive of the National Sheep Association, was “extremely pleased”. I know one cannot please all sectors, but I think there was a very conscious recognition that the sheep sector was an area where we needed to have that extra support available.

I am conscious that noble Lords have asked me a number of other questions. I will of course write if I have not covered any points. I have already noted a number of questions that could do with a bit more detail, and I may be able to furnish the noble Lord, Lord Grantchester, with answers to some of his further questions.

These instruments are needed for our farming and fishing sectors, and I commend them to the Committee.

Motion agreed.

Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Amendments) (EU Exit) Regulations 2019

Lord Gardiner of Kimble Excerpts

Wednesday 20th March 2019 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Amendments) (EU Exit) Regulations 2019.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

Motion agreed.

Common Agricultural Policy (Financing, Management and Monitoring) (Miscellaneous Amendments) (EU Exit) Regulations 2019

Lord Gardiner of Kimble Excerpts

Wednesday 20th March 2019 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the Common Agricultural Policy (Financing, Management and Monitoring) (Miscellaneous Amendments) (EU Exit) Regulations 2019.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

Motion agreed.

Agriculture (Legislative Functions) (EU Exit) Regulations 2019

Lord Gardiner of Kimble Excerpts

Wednesday 20th March 2019 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the Agriculture (Legislative Functions) (EU Exit) Regulations 2019.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

Motion agreed.

State Aid (Agriculture and Fisheries) (Amendment) (EU Exit) Regulations 2019

Lord Gardiner of Kimble Excerpts

Wednesday 20th March 2019 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the State Aid (Agriculture and Fisheries) (Amendment) (EU Exit) Regulations 2019.

Motion agreed.

Insect Population

Lord Gardiner of Kimble Excerpts

Tuesday 19th March 2019 Lords Chamber

[Baroness Boycott]

To ask Her Majesty’s Government what plans they have to deal with the decline in the insect population.

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, I declare my farming interests as set out in the register. The Government recognise the importance, value and role of insects in ecosystems. There are over 24,000 species in Britain, around 1,500 of which are pollinators. Increasing habitats benefits insects. Since 2011, over 320,000 acres have been established for wildlife-rich habitat. We will introduce an environmental land management system to reward farmers for environmental outcomes. In addition, integrated pest management, zero tolerance of the Asian hornet and continued research make up our approach to addressing long-term declines.

[Baroness Boycott (CB)]

My Lords, I thank the Minister for that Answer. Unless an insect is a butterfly or a bee, it does not get a PR champion. Most of us think they are really annoying. However, three-quarters of all the food we eat is pollinated by this largely unsung army of trillions of bugs. They provide a service to the world that is estimated to be worth around $500 billion a year. It is a service most of us barely think about, but in the Maoxian valley in China, where insects have been entirely wiped out, workers now pollinate apple trees by hand at a cost of $19 a day, and they can do only five trees every day. We all know that this rapid and desperate decline, at a rate of 2.5% over the last 25 to 30 years, is because of the use of chemicals in farming. Will the Government set a date for phasing out the noxious chemicals that are destroying insects?

[Lord Gardiner of Kimble]

My Lords, I specifically mentioned integrated pest management, which is about finding a reduction wherever possible. Indeed, the area of land in the UK under integrated pest management has grown; by March 2017, there were close to 17,000 plans covering nearly 11 million acres. Farmers are helped with a range of chemical, physical and biological controls to manage pests in an economically and environmentally sustainable manner. Finding alternatives and continuing research is the way forward, but clearly we need to ensure that we also have food to eat.

[Lord Rotherwick (Con)]

My Lords, is my noble friend aware that oilseed rape suffered a loss of approximately 10% last year, owing to the cabbage stem flea beetle? It is forecast that these losses will be considerably greater this year, with the ever-increasing numbers of these insects, putting the viability of this crop into question. Oilseed rape is the most important arable rotational crop, producing edible vegetable oils, livestock feed and biofuels. As a farmer, I am aware of this.

[Lord Gardiner of Kimble]

My Lords, I declare that I have also had some losses on rape crop this year due to flea beetle, so I understand the noble Lord’s point. We have supported tough restrictions on neonicotinoid pesticides, for instance, following scientific advice. The overriding principle is that we have to sustain the environment, because it is the environment from which our food is grown. We will always act on the best scientific advice. We have a UK Expert Committee on Pesticides. Research is important, as it helps us to find better alternatives.

[The Countess of Mar (CB)]

My Lords, does the noble Lord agree that it is not just farmers who should look after insects? Every single person who has a garden should do so, by planting plants which attract insects and stopping concreting or tarmacking their front gardens.

[Lord Gardiner of Kimble]

My Lords, I entirely agree. That is why the department has supported the Bees’ Needs campaign and why Carnaby Street was renamed “Carnabee Street” last year. The owners of the street put up 720 window boxes to attract pollinators to our capital city. We all need to do something like that, whether with allotments, gardens or window boxes, or on large estates and the state estates. We need to do more to encourage the insect populations.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I refer to my entry in the register of interests. The Minister talked about how much land was now being farmed in a more environmentally sound way. A number of farmers are embracing that principle and working to create biodiversity on their farmland. However, we need the research; we need the evidence that backs us up in saying that this is the most effective way to increase farm food yields in the long term. Can the Minister say a little more about funding for research, so that it is not just niche farmers providing that biodiversity but is extended as good practice across the board?

[Lord Gardiner of Kimble]

My Lords, I referred to improving our evidence base: that is why we want to work with the scientific councils, which continue to fund research on insects. Our evidence base is improving because of that. For instance, the University of Bristol’s recent assessment has identified gardens and allotments as particularly good for pollinators; that refers back to the noble Countess’s question. Clearly, research is where we will learn more about alternatives to pesticides and ways to improve a habitat.

[The Lord Bishop of St Albans]

My Lords, will the Government’s environmental land management schemes specifically have a long-term strategy to address the decline in pollinators, particularly bees?

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[Lord Gardiner of Kimble]

Yes. One of the extremely important things in the agri-environmental packages is to make it easier for farmers to provide flowers on fields to support wild pollinating insects. Of course, in improving things for wild pollinating insects, we are also improving things for insects that may not be pollinating. It is important that we get this diversity, because that is the way our ecosystem survives.

[Baroness Parminter (LD)]

My Lords, the overuse of pesticides is a major contributor to the serious decline in our bees. Therefore, why are the Government not supporting pre-approval tests for bee safety in the pesticide approval process, unlike France and Germany?

[Lord Gardiner of Kimble]

My Lords, as I have said, we will always support the advice of our experts. That is why we have the Health and Safety Executive and the UK Expert Committee on Pesticides. We act on their advice.

[Lord Lilley (Con)]

My Lords, given that the use of pesticides is the principal threat to pollinators, can I commend the work of Rothamsted Research in my old constituency? It is developing new varieties of plants which do not need pesticides because they are immune to the bugs concerned and therefore protect the pollinators. It produces these new varieties by both conventional and genetically modified means. Will this country not be freer to use the latter, with appropriate regulation and protection, once we leave the EU?

[Lord Gardiner of Kimble]

My Lords, as I said in my answer to the noble Baroness, Lady Jones, we will always act on the best scientific advice at the time. I congratulate Rothamsted Research and other research institutes; it is research that will help us out of the mess that we have created.

Brexit: Farming Tariffs

Lord Gardiner of Kimble Excerpts

Tuesday 19th March 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, I declare my farming interests as set out in the register. In developing their tariff policy, the Government considered the interests of consumers and domestic producers. In agriculture, there will be tariff rate quotas for beef, poultry, sugar and rice, as well as tariffs for lamb, pigmeat, butter and cheddar-type cheeses. Further tariffs will be retained on products such as bananas, where preferential access to the UK market is important for developing countries. This tariff regime would apply for up to 12 months.

[Baroness McIntosh of Pickering (Con)]

I thank my noble friend for that Answer. While I welcome these protections, I ask my noble friend why beef, lamb and dairy have been included but not eggs, cereals and horticulture, and why whole-animal products have been included but not specified meat cuts, which is the norm. Could he confirm that discussions were held with the Irish Government before the tariffs were announced and that approvals have been obtained from the World Trade Organization?

[Lord Gardiner of Kimble]

My Lords, the Government have sought to bring forward a balanced approach, which in part follows the five principles set out in the Taxation (Cross-border Trade) Act 2018. The first two are the interests of consumers in the UK and those of producers in the UK. We were conscious in our considerations that this would be a temporary tariff regime in the event of no deal—which I emphasise we do not wish—and that there were areas where we wanted to get the balance right in protecting sensitive sectors, such as the sheep sector, while there were other areas where though that prices to the consumer were also important.

We will obviously take very seriously our obligations under international law. We have taken into account the unique social, political and economic circumstances of Northern Ireland. I was not party to any discussions because that would be for other departments, but it is clear that in the event of no deal there would have to be immediate contingency arrangements and urgent discussions with the Irish Government and the Commission.

[Lord Cunningham of Felling (Lab)]

My Lords, why have the Government specifically excluded eggs from the proposals? We have much higher welfare standards for egg production in this country than many other countries that will seek to exploit our market. It seems a very odd omission and could seriously damage egg production in the UK.

[Lord Gardiner of Kimble]

My Lords, domestic production in eggs is around 86% of UK supply. The noble Lord mentioned questions of lower quality. We remain committed to high standards of food safety and animal welfare. Existing UK import standards will still apply. The level of tariff applied does not change what can and cannot be imported.

[Lord Cameron of Dillington (CB)]

My Lords, can we assume that the Government are aware also of the serious dangers posed to agriculture by EU tariffs on our exports in the event of a no-deal Brexit? If, for example, our beef exports were to suffer the current EU tariff of 80% to 90% or our lamb industry were to export through a 35% to 40% tariff it would kill those two industries dead and undermine the agricultural economy of large swathes of our countryside.

[Lord Gardiner of Kimble]

My Lords, the Government take this very seriously. It is one reason why we have said that British farmers will have a higher level of certainty than anywhere else in Europe vis-à-vis total funds in farm support until the end of this Parliament. We have also provided farm support under Pillar 1 and Pillar 2 under the current CAP. However, we expect it to be one of the consequences of no deal that the EU’s most favoured nation tariff regime would apply to UK exports, which we think would cause disruption. It is why we have brought forward the tariff regime that we have and it is why we need to work to ensure that we do not have a no-deal scenario.

[Lord Trefgarne (Con)]

My Lords, can my noble friend confirm the broad outline of the subsidy arrangements which will apply to the British agricultural industry following Brexit and the ending of EU subsidies?

[Lord Gardiner of Kimble]

My Lords, as I have said, this country has gone further. The CAP finishes in 2020 and we have pledged to continue to commit the same cash total in funds for farm support until the end of this Parliament. If it runs until 2020—and of course no Parliament can bind its successors—that means a further two years of the same amount. This is why we are bringing forward our schemes for environmental land management, which will have the dual purpose of supporting farmers in their production of a good environment as well as good food.

[Lord Carrington (CB)]

My Lords, I confirm my interests as a farmer. I am worried about what has been said in terms of certainties and uncertainties. There should be one certainty for farmers—that the subsidies they have been promised on schemes they have entered into are paid on time. This is not the case and I would like to know why. In particular, under the Countryside Stewardship Scheme, payments of 75% were due in January and 25% are due in June. The subsidies for January have not been paid. I would be interested to hear how these things are dealt with. The farmers have made their commitments and paid the money necessary to claim under these schemes.

[Lord Gardiner of Kimble]

My Lords, the Secretary of State has said from the start that he is not happy about the manner in which payments for countryside stewardship and environmental stewardship have been paid. This is why they have been transferred to the Rural Payments Agency. Progress is now being made, but I agree that we have to do better in this area.

Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019

Lord Gardiner of Kimble Excerpts

Tuesday 19th March 2019 Lords Chamber

Moved by

[Lord Gardiner of Kimble]

That the draft Regulations laid before the House on 12, 13 and 14 February be approved.

Relevant documents: 18th and 19th Reports from the Secondary Legislation Scrutiny Committee (Sub-Committee B). Considered in Grand Committee on 13 March.

Motions agreed.

Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019

Lord Gardiner of Kimble Excerpts

Wednesday 13th March 2019 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the Environment, Food and Rural Affairs (Amendment) (EU Exit) Regulations 2019.

Relevant document: 19th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, these regulations group elements of six policy regimes: natural mineral waters, spirit drinks, food labelling, wines, genetically modified organisms and animal imports. The purpose of this statutory instrument is to make purely technical or operability corrections to ensure that these regimes continue to function as intended. These corrections deal with removing or amending references to EU directives, removing or amending EU references, converting EU procedures to UK procedures and transferring EU functions to the UK.

This instrument allows the recognition of existing natural mineral waters from the EU, Iceland and Norway to continue on a transitional provision for at least six months, thereby maintaining the status quo immediately before exit day. This instrument also provides power to the Secretary of State to withdraw recognition of existing EU natural mineral waters after a period of notice if the EU was not to reciprocate and recognise UK natural mineral waters. Of course, we hope that the EU will recognise our mineral waters in good faith, as indeed we are doing.

With the exception of the Secretary of State’s powers over recognition of natural mineral waters, this instrument makes no further substantive changes. Without this provision, existing natural mineral waters which obtained recognition in or by a member state in the EEA would not have the right to be legally sold in England, irrespective of the Secretary of State’s powers to regulate this field. That would lead to restricted consumer choice in the UK, where one in three bottles of natural mineral water are of EU origin, and changes to product prices due to market forces. We have therefore taken a pragmatic view on that matter, and it is necessary that we do so.

The statutory instrument will also ensure that we have a fully functioning scheme for spirit drinks’ geographical indications, allowing us to register and amend applications. This is particularly important for Scotch whisky, which in 2018 had a record £4.7 billion-worth of exports. Although these exports would not directly be put in jeopardy without this SI, the industry would lose the ability to amend the Scotch whisky technical file to better reflect industry practice. The technical file is the document which provides the technical specifications for products using the Scotch whisky GI name: for example, production process, geographical area, specific labelling rules and so forth. This SI amends the applicable regulation to transfer functions from the European Commission to the Secretary of State.

On food labelling, this SI transfers a series of legislative functions which are currently conferred upon the European Commission so that they will instead be exercisable here in the UK. Transferring the functions means that we can make important changes concerning how certain pieces of information can be presented to the consumer. These powers currently sit with the EU Commission and ensure that we would not require new primary legislation to, for example, update the list of allergens that must be labelled on prepacked food or change the way that nutritional values are presented.

The SI also transfers the power to make rules for the production processes used to make aromatised wines, as well as rules on methods of analysis and administrative and physical checks, and transfers powers on wine relating to GI applications from the EU to the Secretary of State. It allows us to update laws in relation to the production and analysis arrangements for aromatised wine by means of regulations. It will also enable us to consider applications for new wine GIs and deal with applications to amend and cancel wine GIs on the UK wines GI register. Without doing so, key aspects of our wine quality policy would become inoperative, which would put us in breach of the WTO provisions. It also rolls over the framework for how producers protect geographical indications for aromatised wines, as well as the mechanisms to control the production and use of those geographical indications.

For genetically modified organisms, the SI makes purely technical changes to keep legislation operable on exit. I emphasise that there are no policy changes. It makes operability changes to transfer existing powers from the EU to the Secretary of State, thereby allowing the Secretary of State to develop technical statutory guidance on sampling and testing for the presence of GMOs, to amend the threshold above which products must comply with traceability and labelling requirements, and to apply unique identifying codes to GMOs. This will ensure that we can continue to enforce the rigorous rules governing genetically modified organisms.

Finally, this SI amends animal health provisions. It makes operable provisions relating to the import of cattle semen, pig semen and horse semen, ova and embryos. These amendments are purely technical, and preserve the current regime for imports and for protecting the UK’s biosecurity. The SI also makes minor operability amendments to two other animal health provisions, one laying down a health certificate used to ensure the health status of certain imports of live animals and products of animal origin, and the other making provision for the appropriate UK authority to publish approved lists of border inspection posts relating to the movement of animals and animal products. In both cases, the amendments are minor and technical and do not introduce any new policy.

Defra has consulted the devolved Administrations on the amendments in this instrument and they have consented to its coming into force. The instrument concerns changes for the United Kingdom except as regards natural mineral waters—those apply only to England—and decisions on GMOs, which are a devolved matter for Wales, Scotland, and Northern Ireland. As the natural mineral waters amendments apply only to England, each devolved Administration would have to provide their own equivalent amendments to their respective natural mineral waters regulations. We expect the devolved Administrations to mirror the same policy position, but they have yet to lay their respective provisions in legislation.

Amendments made to Regulation (EC) No. 1830/2003 on the traceability and labelling of genetically modified organisms will apply to the UK. They respect that decisions on GMOs are a devolved matter.

The natural mineral water policy decisions were subject to a public consultation, which ran from 16 October to 13 November last year. Defra engaged all major stakeholders in the process throughout 2018, from individual companies to industry bodies. We have also written to the main stakeholders to explain the implications of the instrument.

These measures will ensure that the policy regimes for natural mineral waters, spirit drinks, food labelling, wine, aromatised wine, GMOs and animal imports remain able to operate. With the exception of natural mineral waters, where we have consulted extensively, this instrument makes technical or operability corrections ensuring that these regimes continue to function as intended. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I welcome the regulations, and given my heritage—born in Edinburgh—find particularly pleasing those concerning Scotch whisky exports, which obviously boost trade for the whole country.

From my Question earlier this week, the Minister will be aware of my interest in traceability and labelling. Unfortunately, we did not have time to explore it then. I am grateful to him for setting out the thrust of the statutory instrument. He went to some length to explain that this instrument is technical in nature and makes no public policy changes, but he will be aware of the fact that the 19th report of Sub-Committee B of the Secondary Legislation Scrutiny Committee states very clearly that the regulations give rise to issues of public policy likely to be of interest to the House. Therefore I am grateful that we are having the opportunity to debate them today.

North Yorkshire is still smarting from the fact that Shepherds Purse Cheeses used to produce a very popular cheese called Yorkshire Feta, which, not being produced in Greece, fell foul of the GI, and so for a time was called Yorkshire Fettle. To my embarrassment, I am unsure how it is marketed now.

Can the Minister provide an assurance that we will continue to follow the Cocoa and Chocolate Products (England) Regulations 2003? I do not necessarily blame the Government for the volatility of the pound, but we have seen changes to the pound since the result of the referendum was known, and, over the last two weeks, increasingly volatility. This has huge implications for cocoa and chocolate products. The Minister will be aware, for example—without naming a producer, because other products are available—that we tend to introduce milk chocolate here with a lower cocoa content and a higher oil vegetable fat content. I am seeking an assurance that we will continue to be aligned with the European Union rules regarding cocoa and chocolate products, and in particular, their content, insofar as these regulations relate to that.

--- Later in debate ---

[Lord Gardiner of Kimble]

My Lords, I am most grateful for all the comments that have been made. I agree that they cover issues beyond the statutory instrument, which, as I said, enables regimes to be operable. The subject matters are very important. I can say immediately to my noble friend Lady McIntosh and the noble Baroness, Lady Jones of Whitchurch, that, yes, we will continue to follow the Cocoa and Chocolate Products (England) Regulations 2003. Of course, the whole proposal for beyond this afternoon’s debate is that we are not seeking, with these SIs coming through the withdrawal Act, to have any policy changes at all. We will continue with that.

On the question of geographical indications, on which a number of points were made, I entirely agree with my noble friend Lady Byford that, perhaps of the 86, Stilton was definitely most worthy of comment. However, I think that all of us, and beyond, recognise that we have some extraordinarily wonderful produce from all parts of the United Kingdom. We should celebrate them. I assure your Lordships that the GI schemes that will come into force in the UK on the day that we leave the EU will guarantee that UK GIs will remain fully protected in the UK. There is absolutely no question that suddenly these extraordinarily important products would have to share their centuries-old heritage with others.

The forthcoming GI legislation will also ensure that the UK continues to comply with these obligations as a member of the World Trade Organization, including under the TRIPS agreement on intellectual property. That is vital in empowering the UK to strike new trade deals with other countries, a number of which are due to come into force on exit day. Yes, we wish to cherish the GIs that we have, but we also see every merit—I am sure that this is the case around the world—in ensuring that there is scope for new produce to be a celebration of wherever it comes, as in this country.

A number of points were raised on GMOs. Although this is about operability, a number of your Lordships raised the issue more generally. An important point was made about the ability to make changes to allow the UK to keep pace with technological advances and labelling requirements in the international arena. It is important that we are in a position, through this SI and beyond, to ensure that we can attend to any necessary changes. The devolved Administrations may make their own amendments or, as we have often seen with these SIs—I think that this will continue—the Secretary of State may do so on DAs’ behalf with their agreement.

The noble Baroness, Lady Jones of Whitchurch, asked about expertise in this area, as did the noble Lord, Lord Trees, my noble friend Lady Byford and the noble Baroness, Lady Bakewell. The current situation is that the European Food Safety Authority issues an opinion on an application. For the UK, the EFSA opinion is considered by the Advisory Committee on Releases to the Environment. ACRE is a statutory body of experts providing independent scientific advice to UK Ministers on potential risk to the environment caused by any GMO.

To emphasise the importance of the scientists involved, I can report that ACRE comprises nine independent scientists with expertise in a range of disciplines, including ecology, microbiology, entomology, soil biology and biochemistry, plant pathology, genetics and plant biochemistry, medical microbiology and human infection, molecular biology, genomics and systems biology and synthetic biology. The Food Standards Agency considers the application in terms of safety as food and feed. ACRE’s advice informs the UK’s vote from the environmental perspective. That is how it has been, with that statutory body of experts.

Going forward, EFSA’s opinions are publicly available, so we will continue to have access to them, and ACRE will continue to advise the UK Government on the environmental aspects of applications made for, for example, any GM crop. The final decision will now be made, as I say, in the United Kingdom, but I emphasise that the Government place the greatest importance on environmental protection, all of it based on independent scientific expertise of the range that I outlined—I am sorry that it took a little time, but I wanted your Lordships to know that the range of expertise covers almost every area that could be interconnected with these matters.

The noble Lord, Lord Trees, raised the question of inspections. On imports from the EU, we have decided that the risk will not change on day one. There may not be reciprocity but we will not change our arrangements, because we do not believe that there are any new risks to UK biosecurity. The only additional inspections that we will have for imports will apply to live animals, animal products and high-risk food and feed not of animal origin that originates from a third country and travels through the EU before arriving in the UK. We are considering options to minimise regulatory duplication for transits entering the UK via the EU, and I confirm that there will be no change to the level of expertise required at UK BIPs. We are conscious of the flow of trade, but we need to base all our judgments on biosecurity risk as well. The Chief Veterinary Office, who constantly advises me and the Government on such matters, is absolutely clear that there is no risk.

The noble Baroness, Lady Jones of Whitchurch, and the noble Lord, Lord Trees, raised a number of other points. I absolutely understand the sensitivities of the Northern Ireland issue. I emphasise that we remain focused on securing a deal that will guarantee no hard border. We have always been clear that the unique social, political and economic circumstances of Northern Ireland must be reflected in any arrangements that could apply in a no-deal scenario. In the event of no deal, we will do everything possible to avoid a hard border between the north and the Republic and to uphold the Good Friday agreement. Therefore, today we confirm a unilateral approach to checks, processes and tariffs. That approach will of course be temporary, but if there is no deal we will not introduce any new checks or controls on goods crossing from Ireland to Northern Ireland, including any new customs declarations for goods.

I obviously hope very much that the same will be reflected by the EU and the Republic but, as I said during Questions earlier this week, a deal involves two parties. In making that pragmatic decision, we have behaved correctly. We have been told that there will not be reciprocity on natural mineral water, but we took the view that we would continue to accept it from the EU. Yes, that recognises consumer choice but it is important to recognise our pragmatic approach. There is absolutely no intention to see some trade war or dispute emerge. We are clear that the Secretary of State has the ability to withdraw recognition but, in practical terms, with this SI and beyond we have seen a collaborative approach between all home countries. That is the point rightly raised by the noble Baroness, Lady Jones of Whitchurch. After the guaranteed first six months of rolled-over recognition, all the home countries would need to agree—I hope that it will not be the case, but this is the provision—that there might be a time to give notice, as stated in the instrument, and how long that notice would be. Again, I say that the UK has been pragmatic and certainly does not seek anything other than a meaningful and strong relationship in this case, the drinking of natural mineral water. I absolutely endorse what the noble Baroness said: I find it curious how much water we import. Think of the imported water miles, when we have Buxton, Highland Spring and Welsh water—

[Baroness McIntosh of Pickering]

And Harrogate Spring Water.

[Lord Gardiner of Kimble]

And Harrogate Spring Water; I thank my noble friend. I do not say this to encourage a feeling that I am against EU produce, but I think that the British Government have taken a very pragmatic approach to an issue that I very much hope does not transpire and that we can find satisfactory arrangements.

On the points raised by the noble Baroness, Lady Bakewell, on trade, I very much hope that EU companies would consider applying, if that were to be the case. The Government support consumer choice; that is very important. I am mindful, however, of what I have said about London tap water and other wonderful waters from all parts of the United Kingdom. Looking at the noble Lord, Lord Beith, I think of some very fine water from Northumbria. Around our country, we have these great examples. On the issue of labelling, as we know, following the death of Natasha, the Secretary of State embarked on a consultation so that people can know much more about what is in made-up food. A lot is happening, thank goodness, voluntarily, but we are having this consultation because we take very seriously the need for consumers to have all the information they desire and need.

The instrument does not amend food labelling rules—it is not intended to; it is about temporary fixes to operability. On the issue of Northern Ireland borders, only a limited range of goods will need to enter the UK, including Northern Ireland, through a border inspection post. The purpose is to protect human, animal and plant health after we have left. In a no-deal scenario, animals and animal products from countries outside the EU would need to enter Northern Ireland through a UK border inspection post, as is the case now. We will always keep our biosecurity analysed for risk.

Clearly, we are also committed as a Government to continue discussions with the Commission and the Irish Government to jointly agree long-term measures to avoid a hard border, which we strongly desire to avoid, and to limit the impact on life on the island of Ireland, which is crucial.

There may be other key points. The noble Lord, Lord Trees, asked about BIP capacity. It is considered sufficient. There are 25 UK BIPS. The estimate is for an extra 8,000 checks at UK BIPS. Port health authorities—I have quizzed this myself—have confirmed that they can meet that extra demand with existing food inspectors. Ports are developing more capacity to deal with it. I know that work is in progress at Calais, at Coquelles. A lot of work is going on.

I am looking for other key points that I should answer. On the issue of consultation on food labelling, raised by the noble Baroness, Lady Jones, Defra has raised stakeholder awareness of the food labelling technical notices of last September and of the amending of food labelling laws consultation, which I mentioned. Defra Ministers have engaged many times with key stakeholders externally to the consultation.

The instrument is about technical operability, with the exception of natural mineral waters. All these areas are technical, so on the precise instrument, the answer is that it was not necessary. However, I would like to say—and perhaps will write to noble Lords about this—that there are many instances of ongoing engagement on spirit and drinks, food labelling, GMOs, animal imports and working with importers. There has also been, to date, engagement with 300 stakeholders covering 50 events. Therefore, beyond these statutory instruments, a very considerable amount of consultation and working with others has been undertaken.

This may be the last point. The noble Baroness, Lady Jones, raised a question about separate food labelling across the devolved Administrations. Clearly we have to respect the devolved arrangements and food labelling is devolved, but it is fair to say that all four parts of the kingdom are working together very closely to ensure that there is no disruption to the UK internal market in the event of a no-deal scenario, or indeed any scenario. I think that there is a recognition among all parts of the kingdom that the internal market within the UK is tremendously important and that we should work collaboratively. The evidence I have from all the SIs, on these matters and beyond, is that sense and pragmatism is prevailing.

I will study Hansard again, because there may be some points in the many questions I have sought to answer that noble Lords would like more detailed answers on.

[Baroness Jones of Whitchurch]

I am sorry to interrupt the Minister as he gathers his final thoughts, but it was remiss of me, since we strayed into the science of GMOs, not to have declared as interest as the chair of Rothamsted Centre for Research and Enterprise, part of Rothamsted Research, which does research into GMOs.

--- Later in debate ---

[Lord Trees]

Perhaps by writing I could have an answer to the question on when the replacement for TRACES might be operational.

[Lord Gardiner of Kimble]

The successor to TRACES, IPAFFS, was launched on private beta on 14 February, for organisations with the greatest need. It will be operable for all third-country exports from the day we leave. We intend a separate system for imports from the EU, with IPAS coming into play in the summer, I think. I would not like to give a precise date, but obviously we want this working effectively, and I will write to the noble Lord—

[The Deputy Chairman of Committees (Lord Rogan) (UUP)]

My Lords, there is a Division in the Chamber. The Committee will adjourn for 10 minutes.

--- Later in debate ---

[Lord Gardiner of Kimble]

My Lords, I commend these regulations to the Committee.

Motion agreed.

Rural Development (Amendment) (EU Exit) Regulations 2019

Lord Gardiner of Kimble Excerpts

Wednesday 13th March 2019 Grand Committee

Moved by

[Lord Gardiner of Kimble]

That the Grand Committee do consider the Rural Development (Amendment) (EU Exit) Regulations 2019.

Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, it is appropriate that I declare my farming interests, as set out in the register. The matters in the four instruments are closely interrelated; I hope it will be helpful to your Lordships if I speak to all four together. These instruments amend retained EU law and domestic legislation to ensure that rural development payments and maritime and fisheries payments can still be made after exit day. These amendments will maintain the effectiveness and continuity of EU and domestic legislation that would otherwise be deficient following our exit.

These changes are necessary to enable rural development programmes, partially funded by the European Agricultural Fund for Rural Development, and the maritime and fisheries operational programme, partially funded by the European Maritime and Fisheries Fund, to continue operating effectively in the United Kingdom following exit, until their closure at the end of the 2014-2020 programming period. There will be an opportunity to consider the scheme-specific regulations for the European Maritime and Fisheries Fund at a later date, as these are made operable in the Common Fisheries Policy (Amendment etc.) (EU Exit) Regulations 2019.

There are currently four rural development programmes operating in the UK, one in each Administration, providing funding for rural businesses, farmers, land managers and applicants living in a rural community with the intention of growing the rural economy, increasing productivity and improving the environment. The maritime and fisheries programme is UK-wide and promotes growth in the sector by providing funding for sustainable fisheries, marketing and processing and sustainable aquaculture, among other matters.

There are two European funds relevant to these instruments: the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund. The former supports the delivery of rural development in the UK and is worth some £430 million per year over the programming period. The latter promotes a competitive, environmentally sustainable, economically viable and socially responsible fisheries and aquaculture sector, which is worth some £32 million per year. The UK Government have guaranteed that any projects funded from the 2014-2020 allocations from these funds will be funded for their full lifetime.

The changes made by these instruments are necessary to ensure that the Government guarantee can be honoured and payments can continue to be made to agreement holders using domestic funding in place of funding from the EU. They provide certainty to individuals and businesses currently receiving rural development and maritime and fisheries funding or considering applying for funding during the current 2014-2020 programming period.

The Rural Development (Amendment) (EU Exit) Regulations 2019 amend the EU regulation that provides the general rules and structures governing support for rural development, providing payments to be made to agreement holders and laying down rules on programming, networking, management, monitoring and evaluation.

The Rural Development (Rules and Decisions) (Amendment) (EU Exit) Regulations 2019 amend the implementing and delegated provisions made under the main rural development EU regulation and four implementing decisions approving the rural development programmes for each of the devolved authorities.

The European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019 amend the EU regulation that sets out the shared framework for all the European structural and investment funds, but only as far as applies to rural development and maritime and fisheries.

Finally, the European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019 amend the supplementary provisions for European structural and investment funds for rural development and maritime and fisheries that are not dealt with elsewhere.

I emphasise that all these instruments remedy the deficiencies in the regulations to ensure that they continue to operate effectively when we leave. They do not introduce new policy, are technical in nature and preserve the current regime for supporting rural businesses, environmental land management and sustainable fisheries, among other matters. The amendments include omitting deficient references to the European Commission and member states and replacing them with references to either the UK or the relevant authority, as appropriate. The instruments also amend references to “Union law” throughout, so that the relevant EU regulations continue to operate effectively as part of national law. Provisions that are deficient because they are time-limited and under which the relevant actions have occurred have also been omitted, such as provisions relating to ex ante evaluations that have already been completed and provisions relating to prefinancing paid out when the programmes were initially set up. In addition, references to European institutions such as the European Investment Bank are also omitted.

One purpose of these modifications is to ensure continuity and clarity as to which public bodies have responsibilities towards the programmes. The obligations and discretions placed on member states will continue to be exercised after exit by relevant authorities in the UK. In this context, “relevant authority” means: the current managing authority of the maritime and fisheries operational programme, the Marine Management Organisation; the Secretary of State in relation to the Rural Development Programme for England; Scottish Ministers in relation to the Scottish Rural Development Programme; Welsh Ministers in relation to the Rural Development Programme for Wales; and the Department of Agriculture, Environment and Rural Affairs in relation to the Northern Ireland Rural Development Programme.

As noble Lords are well aware, agriculture and fisheries are devolved policy areas and are of special importance for all parts of the kingdom. We have worked closely with the devolved Administrations to produce these instruments; they place great importance on them and have given them their full support. I repeat that these statutory instruments are required for the continued operation of the rural development programmes and the maritime and fisheries programme. Without them, there would be no legal powers to make payments to fulfil the promises that these important programmes will continue. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend for bringing forward this little group of statutory instruments. I shall pursue what was raised in Sub-Committee B’s report—the 18th report from the Secondary Legislation Scrutiny Committee. The Sub-Committee has invited this Committee to probe for more financial information. I have a series of questions and I shall try not to repeat myself.

There will be schemes that have finished, and new schemes that will commence but end after a key date—that could be 2021-22. What advice are my noble friend and his department giving to those who may be in a position to enter a new scheme but are reluctant to do so, since they are not sure whether it will complete and what the funding will be for it? My understanding is that there are schemes that fall into that category, and concern has been raised.

Paragraph 7.5 of the Explanatory Memorandum to the rural development regulations says:

“On EU exit, the UK will seek reimbursement from the EU for all CAP payments made to beneficiaries up to 29 March 2019”.


On what basis? We are still members of the European Union, so I would just like to know what the legal basis is for that. It seems very odd, because we are committed to the EU schemes between 2014 and 2019. It says “up to”, so I just ask for clarification, because I do not understand what the legal basis is. It goes on to say:

“Thereafter, such funding will be provided by HM Treasury”.


I know this is of great interest to the farming press and the farming community generally. What is the budget from which those funds will be provided, going forward?

The paragraph goes on:

“The UK Government has guaranteed that any EAFRD projects, where funding has been agreed before the end of 2020, will be funded for their full lifetime”.


Again, it would be helpful to know where these funds are coming from. It continues:

“The guarantee also means that Defra and the devolved administrations can continue to sign new projects this year and during 2020”.


What will be the duration of those schemes? Again, where will the money come from? It goes on:

“In addition, the Government has pledged to continue to commit the same … total in funds for farm support until the end of this Parliament, expected in 2022”.


This has been exercising me for some time. The Government have consistently said that we are committed to paying money until the end of this Parliament, which is expected in 2022. It begs the question: if a general election—heaven forfend—is held before 2022, possibly this year, does that leave the door open for a newly elected Government to cease to pay those funds for those three years, from 2019 to 2022, particularly if there is a change of Government? It is just not clear and it gives us the opportunity to clarify that this afternoon.

--- Later in debate ---

[Lord Gardiner of Kimble]

My Lords, I am most grateful for what has been a valuable debate and consideration beyond what are, as we all know, the technical requirements behind why we need to do this. I fully appreciate that many of us have been waiting and wanting to get on with some primary legislation, but that is not in my gift, alas. If it is my privilege to do so, I look forward to taking part in discussions, in the Chamber and beyond, on how we take forward fishing and marine interests and agriculture, and the produce we create in our waters and on our land, which is so important for domestic production and for export.

These instruments ensure that the rural development programmes and the maritime and fisheries operational programmes continue to operate effectively. As I said, the rural development fund is worth some £430 million per year and the maritime and fisheries fund is worth some £32 million per year. I am sure that, at this point, the noble Lord, Lord Teverson, is thinking that that looks like a big gap. It was very generous of him to raise the fact that the fund has been a good custodian of other people’s money.

I will try to give as much detail on this as possible. The Government have guaranteed that any projects funded from the 2014 to 2020 allocations from these funds will be funded for their full lifetime. Whatever is agreed up to 2020, and if thereafter those projects are to be funded, that will be honoured. My noble friend Lady McIntosh opened by asking where the money is coming from. The Treasury allocates to departments. My advice to applicants is that Her Majesty’s Treasury funding is a guaranteed cover of all rural development projects entered into before the end of 2020 for their full lifetime. I encourage those who are minded to think strongly of that Treasury guarantee.

My noble friend raised another point. I have declared my farming interests, and we all would like as much certainty as possible. That is precisely why there is a promise to, as far as is possible—I use those words deliberately, and will seek to clarify that—guarantee the same level of funds until 2022. Some noble Lords will wish completely the reverse, but I have no idea whether this Parliament will go on until 2022, and, as we all know, no Parliament can bind its successors. But this is a promise to the rural community, while this Government are in office and have that responsibility, to honour the level of funds until the end of this Parliament. None of us here is in a position to know precisely when that Parliament may conclude.

My noble friend Lady McIntosh raised the legal basis for reimbursement and the date. It is because the EU is bound by the regulations while they apply to the UK as a member state. Any commitments that the UK has entered into prior to exit are commitments made from the EAFRD. That is the basis, and it was why that was the date in Article 50 and why precisely the Treasury guarantee kicks in for anything after the date of us leaving.

Several noble Lords raised the issue of the link to the Agriculture Bill, including my noble friend Lady McIntosh and the noble Baroness, Lady Bakewell. These SIs are made under the withdrawal Act; they allow us to correct deficiencies. The purpose of the Agriculture Bill, for which we are waiting, is obviously to provide the opportunity to redesign our approach to agricultural support, so that if we wish to we can amend retained EU law. Therefore, any amendments that we make are, yes, probably for the short term, and they will probably be to see how we might improve the current arrangements and give better experience to agreement holders.

Under Clause 1 of the Agriculture Bill, the Secretary of State may provide financial support for managing land or water in a way that protects or improves the environment. Of course, as we design our agriculture policy, we will look to see—and this is a point that I would like to put to my noble friend Lady Byford—how we can support bringing together groups who work together in the agricultural sector. Clearly, as we look at how we can enhance the environment and how we deal with landscape, it is with clusters and the concept of catchment areas. I think of Slowing the Flow at Pickering, in regard to my noble friend Lady McIntosh. All this is where working together in schemes is going to be very rewarding in terms of enhancing the environment and producing very good food as well in that context.

To my noble friend Lady Byford, I say that I am delighted that the House of Commons said that we should have a debate on this. My understanding is that future funding is important to rural and marine communities. I say to the noble Lord, Lord Teverson, that on 10 December 2018, the Government committed to providing £37.2 million of extra funding for the UK seafood sector for projects approved for 2019 and 2020 to boost the industry as we become an independent coastal state.

On the Agriculture Bill, rural growth, which includes the LEADER scheme, is currently included in the rural development programme and will continue under the government guarantee until the end of the programme period. Beyond that, the expectation is that rural growth initiatives will be supported through the UK’s shared prosperity fund, which is intended to deliver for all parts of the country. Wearing the rural-proofing element, which is a strong one, I say that Defra is working with the Ministry of Housing, Communities and Local Government to develop the ways in which it will support the rural economy.

Perhaps I can immediately say to the noble Baroness, Lady Bakewell, on the rural strategy that I was fortunate enough to give evidence with the Secretary of State, and he has said publicly that he was looking forward to the report of our Select Committee and that it might be an occasion to respond. I think he was generously saying, as noble Lords who were in that committee will have heard, that this was something that was raised. I know that he and I will be very much looking forward to the rural economy report whenever it comes out.

The noble Baroness, Lady Bakewell, asked for reassurances about reporting. I assure your Lordships that the level of rigour currently applied to ensure that the rural development programme achieves value for money and overall public benefit will continue. Inspections will still take place. Annual implementation reports will continue to be produced and approved programmes can continue to be evaluated administratively by relevant authorities. The National Audit Office will continue to be involved to maintain existing levels of scrutiny and good practice. We have put in place arrangements to ensure that the Commission’s functions are now taken up by each devolved authority or the programme monitoring committee, which is composed of representatives of environmental, rural and agricultural stakeholders, including non-government organisations.

The noble Lord, Lord Teverson, raised the question of EMFF and how new replacement work schemes will work. In the Fisheries Bill, we propose a power to replace, modernise and broaden the existing grant-making powers in the Fisheries Act 1981. This will provide greater flexibility and ensure that new grant schemes can deliver value for money. Fisheries are devolved and once we leave the EU and on the closure of the EMFF grant scheme, devolved Administrations have indicated that they would want to run their own grant schemes targeted on their national priorities.

The noble Lord asked about fishing support after 2020. The Government have committed to replace EMFF from 2021 across the UK for the next two years, as I said. It was announced that that extra EMFF will be available to UK-licensed vessels.

The European Investment Bank was raised by the noble Lords, Lord Grantchester and Lord Teverson. It currently has no involvement in UK rural development programmes or the maritime and fisheries programme. Treasury funding will still be accessible to those seeking it. The impact on agreement holds will therefore be negligible. I am bound to say that the loss of access to the EIB is a result of exit, not as a direct result of the instrument.

[Lord Teverson]

My Lords, may I say that my fishers friends in Mevagissey did not have the European Investment Bank highest on their priorities, but I am glad he clarified that.

[Lord Gardiner of Kimble]

I thank the noble Lord. I have dealt with the issue of further financial assistance.

The noble Lord, Lord Grantchester, raised areas where different Governments are engaged in regulating the same area. We are working closely with the Department for Business, Energy and Industrial Strategy in developing the instruments. The European rural development fund and the European social fund have domestic power to continue making payments following exit. This is not the case for the European agricultural fund for rural development or the European maritime and fisheries fund, which rely on the spending powers in the EU regulations. That shows the distinction. A different approach is therefore necessary to allow funds to continue operating under the Treasury guarantee.

The noble Lord also asked why the provisions do not apply to the European rural, development, social and cohesive funds. They are being addressed in a separate SI by the Department for Business, Energy and Industrial Strategy. That SI and others will be developed in your Lordships’ House on 14 March.

--- Later in debate ---

[Lord Grantchester]

I press the Minister to clarify that a little more. Is he therefore saying that it was the devolved Administrations’ responsibility to consult with their stakeholders rather than that of Defra, with its wider powers of consultation?

[Lord Gardiner of Kimble]

Defra has very good relations and dialogue with a number of rural and fisheries organisations across the devolved Administrations. It is right to say that there is sensitivity, if the responsibility is a devolved Administration’s, in that to appear to be overhauling that would not reflect well. It is a matter for the devolved Administrations, but clearly we wish to work collegiately.

[Lord Grantchester]

I ask the question only in terms of how it relates to how it is reported to us in explanatory memorandums, so we know that there has been full consultation in all the regions as well as on a UK-wide basis.

[Lord Gardiner of Kimble]

If I have any specific details, I will let the noble Lord know precisely. It may be helpful if I can glean some information on devolved consultations with stakeholders. I would say that when we have been engaged with key stakeholders, on fisheries, stakeholders we have been engaged with were supportive of the work being undertaken. On rural development, no concerns were raised by stakeholders, who expressed their appreciation of the work being undertaken.

I shall read Hansard, because my noble friend Lady Byford asked a number of points about youth and retirement projects, issues to do with contractors and other matters. All I would say is that the order is designed to continue with the arrangements that we have, but with the payment after we leave by our guarantee that we will fulfil the funding of any schemes that are applicable at the moment. Obviously, as my noble friend knows, this is not about future schemes, on which we will have all sorts of discussions. Whatever is appropriate now under these funds, people can apply for until the programme ends, and so forth. If there is anything further that I think would be helpful, I will inform your Lordships, but I recommend the instruments and I beg to move.

Motion agreed.