Agriculture Bill

Lord Grantchester Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Thursday 17th September 2020 Lords Chamber

[Baroness Scott of Needham Market (LD) [V]]

My Lords, in 2016, before the referendum, I chaired the EU Energy and Environment Sub-Committee. We carried out an inquiry into resilience in agriculture, so I can say from the beginning that I agree with the noble Lord, Lord Carrington, that insurance is quite often not an appropriate solution for farmers, however it might appear to be so superficially.

Having said that, I find these amendments somewhat problematic. I will explain why. First, it is because the Bill as drafted talks about the disturbances being acute. The amendments would add “chronic” to the description of the disturbances, but all the interventions have been about the results of that disturbance. To my mind, that is quite an important distinction, because you could have a short-term problem with a long-term impact. I am not clear whether, as drafted, this talks about the original problem or the impact.

I am also genuinely unsure why existing provisions are not good enough. I heard with some interest what the noble Baroness, Lady McIntosh of Pickering, said, so I look forward to the Minister clarifying that, but this is one area where I feel the Government have farmers’ backs in the event of these sorts of disturbances. I do not recall seeing anything from the NFU on this so I am not sure it regards it as a big issue, but perhaps when he winds up the noble Lord, Lord Carrington, will enlighten me on that.

I am reassured that the amendment would provide a power, not a duty, because a duty to continue to offer support for a “chronic” disturbance could be for years and years. I do not think that would be appropriate; I would be pleased to see it as a power and not a duty. Nevertheless, the Government can move quickly when they need to, as they did in bringing in the furlough scheme, for example. I am not entirely convinced by these amendments, I am afraid.

[Lord Grantchester (Lab)]

I thank the noble Lord, Lord Carrington, for returning to the subject of crisis management in his amendments. The clauses in Chapter 2 bring further into domestic legislation the powers that the European Commission exercised to provide emergency assistance in extreme market circumstances. The Secretary of State may modify the retained direct EU legislation from the withdrawal Act. This would usually involve intervention on storage. At this stage, once again, as I join another day’s proceedings on the Bill, I declare my interest as recorded in the register as being in receipt of funds from existing systems derived from the CAP.

We noted the Minister’s reply in Committee that

“farmers already manage the effects of fluctuating everyday weather conditions”,

and that the existing powers contained here and elsewhere

“are sufficiently broad to ensure that agricultural producers will be covered”

should it be necessary to provide emergency financial assistance

“due to exceptional market conditions”—[Official Report, 21/7/20; col. 2184.]

brought about by unforeseen economic, environmental or welfare factors.

The term “chronic conditions” is interesting, as this would suggest exceptional circumstances becoming endemic and longer lasting. This would suggest that the market would need to adapt on a wider basis after any exceptional market disturbances caused by economic or environmental factors had been provided. It would suggest that the adverse effect on the price achievable for agricultural products may not return to normal. This circumstance would become subject to far more extensive dialogue and analysis, and when such a situation may warrant the actions wanted by the noble Lord, Lord Carrington, needless to say it would be controversial and subject to much debate.

We understand that Welsh Ministers are aware of these details and have not drawn attention to any aspect with which they are uncomfortable. The Minister has advised the House that the Welsh Government have agreed to these provisions; that would be our position also. We are generally content with the current drafting. I thank the noble Baroness, Lady Scott, for her remarks, which reflect many of our thoughts.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank noble Lords for their contributions to this short debate.

I recognise the concern to ensure that farmers in England and Wales are protected against acute and chronic disturbances, including those caused by natural phenomena. The exceptional market conditions powers could be used to address acute and severe market disturbances caused by natural phenomena, such as extreme weather, so long as there is an adverse effect on the price achievable for one or more agricultural products. I hope that that reassures my noble friend Lord Northbrook.

The UK Government and Welsh Ministers are confident that the existing powers are sufficiently broad to ensure that agricultural producers will be covered should they need financial assistance due to exceptional market conditions caused by economic, environmental or other factors. The current Covid-19 pandemic is a disturbance caused by environmental factors and is exactly the type of exceptional circumstance that these new powers are intended to address. We could not have foreseen that this pandemic would be as wide-ranging or prolonged as it has been, and farmers could not have been expected to prepare for the disturbances in daily life that it has caused. I feel confident in saying that if these exceptional market conditions powers were at our disposal now, the Government could have used them to support farmers during these difficult times.

The particular powers in respect to England, in Clauses 18 and 19, and in respect to Wales, in paragraphs 6 and 7 of Schedule 5, are framed to deal with unforeseen short-term shocks to agricultural markets rather than chronic conditions. These powers allow Ministers to act swiftly to deal with a crisis situation. These amendments would lower that bar and risk creating open-ended powers that allow the Secretary of State to make payments to farmers in much wider and undefined circumstances.

In most cases, farmers already manage the effects of fluctuating weather conditions. There are also powers in existing legislation that allow the Government to act in exceptional circumstances to support farmers in the event of extreme weather conditions. For example, the Natural Environment and Rural Communities Act 2006 could be used to make one-off payments to farmers affected by extreme weather. In response to recent flooding, as my noble friend Lady McIntosh acknowledged, the UK Government launched a new farming recovery fund for England, using powers under the NERC Act.

I have some details about the fund because I was interested to find out why some claims were not being met. I am afraid that I do not have the numbers here for my noble friend but I commit to writing to her with the details of the scheme, which are quite complex, and to furnish the numbers on how many grants have been made available. When I write, I will of course let noble Lords have a copy.

The Government want to encourage farmers to manage their own risk and become more resilient to foreseeable and longer-term disturbances. Elsewhere in the Bill, there are provisions to support farmers to improve their productivity, as well as to provide financial assistance for the delivery of public goods. For example, the Government will help farmers to invest in equipment, technology and infrastructure, and will support high-quality research to promote innovation and productivity in agriculture, horticulture and forestry. Part 3 also sets out powers to strengthen fairness and transparency in the supply chain. This will enable food producers to respond more effectively to market signals, strengthen their negotiating position at the farm gate and seek a fairer return.

I hope that I have given sufficient reassurance and that the noble Lord will feel able to withdraw his amendment.

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[Baroness Scott of Needham Market (LD) [V]]

My Lords, I had an exchange of emails yesterday with the noble Lord, Lord Empey, to make sure that I understood his amendments correctly. He basically put it to me that he wishes to place an obligation on government rather than for it to have a discretion, which is as the Bill is drafted, to make regulations on fair dealing. I have told him that I support the fair dealing provisions in the Bill—I said so in Committee—particularly with regard to food waste, which is often in effect forced on farmers, making them less competitive and environmentally more wasteful, by the requirements of supermarkets, which I do not think is fair dealing. I am all in favour of that, but I am less convinced about the placing of such an obligation on Ministers. However, these issues can be well discussed in the next set of amendments, about the role of the Groceries Code Adjudicator.

[Lord Grantchester (Lab)]

I thank the noble Lord, Lord Empey, for his amendments, for the significance in which he holds them as necessary for the Bill, and for leading the House in returning to Clause 27 on fair dealing obligations. I am sorry he has not been able to stay tonight to make his case due to personal circumstances, and I hope all continues well. Nevertheless, I thank the noble Baroness, Lady McIntosh, for stepping in and moving his amendment. I concur with much of what she said. The distribution of market returns from food between the primary producer and the rest of the supply chain, especially in regard to the retail sector, certainly appears unbalanced. The proportion returned to the farmer has steadily declined over many years.

That regulation is needed to ensure further provision to introduce a greater measure of fair dealing obligations on the supply chain is recognised in Clause 27. Following the establishment and workings of the Groceries Code Adjudicator, the specific task of monitoring relationships between the UK’s largest supermarkets and their direct suppliers has proved very effective. I would go so far as to say it has proved critical in delivering effective change down the supply chain.

We would not be able to support the noble Lord should he wish to press his amendment. The specific details of each statutory code are being developed in consultation with industry and will be set out in secondary legislation. It will be extended across all sectors of agriculture. This is already in progress.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I am grateful to my noble friend Lady McIntosh for introducing this amendment on behalf of the noble Lord, Lord Empey. I confirm that my noble friend Lord Gardiner has agreed to meet the noble Lord, Lord Empey, at the earliest opportunity.

There is no doubt that the Government will use these powers. The introduction of fair dealing obligations is vital in the creation of a more equitable supply chain. This is a point on which there is wide agreement. However, the Government believe it is equally important that these obligations are appropriate and proportionate and produce the right outcomes.

To ensure this, the Government intend to consult industry before regulations are made, to ensure that they are properly tailored for the issues at hand. In this regard, a UK-wide consultation exploring contractual issues in the dairy sector has recently been concluded. The consultation invited a broad range of views about future regulations, asking specific questions about various issues. Some of these issues, such as contractual exclusivity, are almost unique to the dairy sector. The Government intend to repeat this approach for any future exercise of the powers in Clause 27, allowing the views from industry and other stakeholders, often about very detailed sector-specific issues, to inform final decisions.

The introduction of blanket obligations across the whole of UK agriculture would hinder the ability to reflect the specific nuances of each sector and potentially fail to address the specific problems experienced by particular types of producer. Also, given that certain agricultural sectors are far better integrated than others, comprehensive obligations could ultimately lead to provisions being introduced into sectors where they are simply not required.

I hope I have given sufficient reassurance and ask my noble friend to withdraw the amendment on behalf of the noble Lord, Lord Empey.

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Moved by

[Lord Grantchester]

63: Clause 27, page 23, line 15, leave out “a specified person” and insert “the Groceries Code Adjudicator”
Member’s explanatory statement
This amendment is intended to ensure that the role of regulating agricultural contracts is given to the Groceries Code Adjudicator’s office.

[Lord Grantchester (Lab)]

I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, the noble Lord, Lord Curry, and my noble friend Lord Whitty for adding their names to this amendment and to many of my following amendments, which introduce the office of the Groceries Code Adjudicator as the mechanism by which these fair dealing provisions under Clause 27 will be administered. At this stage I will mention that the noble Lord, Lord Curry, asked me to express his disappointment that he has had to leave tonight because of the late sitting of our proceedings; he cannot get home without leaving immediately. He would have liked to have been present to make his remarks on this important series of amendments to this clause.

I introduced these amendments in Committee as probing amendments to draw out from the Government how they expected to take these provisions forward. As with many features of this framework Bill, so much of the detail and the governance arrangements are not being made explicit in the Bill.

That these provisions have been recognised as needed and necessary to the better conduct of a fair market is something that the Government can be congratulated on. The debate in Committee underlined how effective the GCA Act has been in setting out and policing business practice in the GSCOP, which now regulates the behaviour of the retail industry, which must abide by it in its relationships with its direct suppliers. There was universal praise for Christine Tacon on how she, as the adjudicator, successfully encouraged effective change to become embedded down the supply chain.

In response, the Minister explained that his department, Defra, would be the lead department in delivering these obligations. The Government intended to commence these regulations agricultural sector by sector, starting with the dairy industry. This has already started, with a consultation on the operation of contracts that is drawing to a close next week, as I understand it, on 24 September—that is, three months after the opening of the consultation in June. However, I may be corrected, as on a previous amendment the noble Baroness the Minister said that it has already closed. That it is on the cusp of closing or has already closed is regrettable in that we are not able to deliberate on the consultation in our considerations on the Bill.

I table these amendments again to give the House a chance to debate these important provisions and reflect further on the Government’s approach. I state again that Clause 27 is a very bold and ambitious step that the Government have taken. I express concern that, although the groceries code has proved very effective in stabilising fair dealing provisions in the retail sector, difficulties remain regarding whether this was the appropriate mechanism to cover the whole of the supply chain: the service sector as well as the retail sector, the widespread diversity of food products in the supply chain and how they are delivered across many forms of enterprise and business practice.

The Government are undertaking a huge task and care must be taken, as a one-size-fits-all regulatory regime may not fit all in the appropriate manner. The problems and solutions in one sector and the relative merits in the behaviour of various participants may not be suitable to be applied across the board to all sectors, each with differing market imperatives, regarding how the various markets may be made to work more effectively. That there is an imbalance in negotiating power between the primary producer through the processing, manufacturing and product development supply chain and the end market is not in doubt.

I shall not press these amendments tonight, nor support other amendments, including Amendment 87 should it be pressed. The Government have set out on the task and already started a consultation with the dairy sector. As I set out in Committee, I was concerned that these provisions had a narrow focus on contracts. Indeed, Clause 27(1)(a) specifically addresses contracts. Fair dealing provisions should examine the business relationship in its widest implication and interpretations that encompass many various circumstances that arise in primary production. However, it must be recognised that a first step is being taken, and it is starting at a very pertinent point—the contract.

In the interval between Committee and Report over the Summer Recess, I spoke to many in the dairy sector, especially those at the foot of the supply chain—the dairy farmer and his or her processor. I can tell the Minister that the department’s consultation has been widely promoted among the many sections of the industry: the farmer, the producer group representing the farmer’s suppliers, and the processing industry. Many have shared their submissions with me, and I am sure that the Minister’s department will receive a widespread response. Here and now is perhaps not the place to debate this further; I will add merely that the voluntary code of practice—VCOP—in contracts, introduced in 2012, has proved ineffective in improving fairness and transparency on a wider scale and, as has been experienced during this pandemic, urgency is needed to tackle the problem more extensively and in a comprehensive fashion.

I also note that this is a widespread problem throughout the industry that now extends across borders, with the overseas ownership structure covering the dairy industry in both the UK and Europe. The EU is also pressing on with its solutions, through directive 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chains. Can the Minister make any comment, even though the consultation has barely closed, on the progress of the consultation, concerning the numbers, extent and general features beginning to become clear? Even in the immediacy of the lockdown, the retail relationship with the supply chain is today much better than it has been, due to the activities of the Groceries Code Adjudicator.

Will the department be separating out submissions from the retail sector and the service sector from this consultation? The consultation does not mention the wider farmer-processor relationship with the ongoing supply chain, and specifically with the retailer. Will the Minister give a commitment that further inquiries will be conducted as the submissions are considered? It may prove difficult to make immediate recommendations. Reflecting across other sectors in the industry, can the Minister give any indication as to when further consultations will be progressed? Which sector has the department next in mind? Furthermore, how might the various sectors combine to find comprehensive answers to this very difficult problem of fair dealing in the industry, a problem that is now being tackled by the Bill? I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the noble Lord, Lord Grantchester, and the co-signatories for bringing forward Amendment 63 and others in this little group. Amendment 67, in my name and that of the noble Baroness, Lady Ritchie of Downpatrick—I thank her for supporting this amendment —seeks to achieve precisely the same ends. I join with the noble Lord, Lord Grantchester, in expressing regret that the noble Lord, Lord Curry, is not able to speak to this group, but I entirely understand the circumstances in which he felt he had to head north.

Again like the noble Lord, Lord Grantchester, I pay tribute to the Groceries Code Adjudicator, who has done a sterling job in regulating the relationships between the major retailers and direct suppliers. I was most grateful to have the opportunity to discuss this amendment with my noble friend the Minister, who I understand may be able to signify some movement in this regard. I look forward to that with great interest.

I hope that the Government are minded to widen the remit to cover the gap that needs to be plugged by including the indirect supply chain, such as dairy, which is currently excluded from the process. For dairy producers and fruit growers, many of whom are quite small in size, it is extremely difficult to bring a complaint to the Groceries Code Adjudicator. That is why I am very keen—and it is something that we concluded some seven or eight years ago on the Environment, Food and Rural Affairs Select Committee next door—that it should be incumbent on the Groceries Code Adjudicator to bring forward, on her initiative, investigations in this regard. The indirect supply chain, as well as the direct, is extremely important for these small suppliers, and things do sometimes go awry. We should not be entirely reliant on complaints from small producers and growers who can too easily be identified and may, as a result, lose their contract, livelihood and mainstay of their income.

I very much support the Groceries Code Adjudicator taking over this role. I understand the difficulties, as she reports to a different department. If there has been some movement and my noble friend is able to see a way forward in this regard, I think it would be very welcome to the House.

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[Lord Gardiner of Kimble (Con)]

My Lords, this has been an interesting debate, and I thank all noble Lords for contributing toward it. Of course, I regret that the noble Lord, Lord Curry of Kirkharle, is not with us. He sent me a note, and I will have further discussions and considerations with him, because I am very keen to hear what he would have said in this debate.

Turning to Amendments 63, 64 and 67, I would like to assure noble Lords that work is ongoing to determine the most appropriate mechanism of enforcement for the provisions under this part of the Bill. No decisions have been made about who will be appointed as the enforcement body for Part 3. It is important to note, with particular reference to Amendment 67, that while all the measures contained in this part of the Bill will collectively work to improve supply chain fairness, the Government believe enforcement will work best when each particular policy area in Part 3 can be addressed individually. I say that because it is very important that we get to grips with the issues in each sector, identifying those that are distinct as well as those that may be common. I think that would be a pragmatic consideration.

On the suggestion that the Groceries Code Adjudicator should be given enforcement responsibilities, it is important to note that one of the key factors in the adjudicator’s success is its targeted focus on the behaviours of the UK’s largest supermarkets with their direct suppliers. This has enabled the adjudicator to work closely with the industry in developing supply chain solutions. I join other noble Lords in acknowledging in the work of the Groceries Code Adjudicator. It has been a considerably successful tenure of office.

A government call for evidence in 2016 explored the possibility of extending the adjudicator’s remit beyond those directly supplying the largest retailers. The review found insufficient evidence of widespread problems further down the groceries supply chain and concluded that there was no justification to extend the remit. However, it did identify some remaining concerns. These were sector-specific and predominantly concerned with the first stage of the supply chain. Following on from this, we feel that such issues are best addressed with the appropriate and targeted interventions included in the Bill.

Preliminary analysis of the responses to the Government’s consultation on the dairy sector has shown that there are a range of views about appropriate enforcement. I emphasise that an adjudicator-style model is only one of many potential means to resolve contractual disputes and ensure compliance with any new regulations. Amending the Bill to appoint the Groceries Code Adjudicator as the enforcement body would serve potentially to tie the Government’s hands to only one of the many possibilities available. This would also preclude the ability to listen to the views of industry and respond accordingly, which is really important and, we think, critical in creating effective solutions.

The Government are, of course, aware of the issues that farmers face in the supply chain and that is not confined to the dairy sector. To answer one of the questions from the noble Lord, Lord Grantchester, the Government will carry out similar consultations to explore the issues facing other sectors in turn. Discussions with stakeholders have already begun, to look at the situation in the red meat sector and what sort of interventions could improve the position of producers in that supply chain.

On Amendments 65 and 66, I thank the noble Lord, Lord Grantchester, for highlighting the importance of a robust enforcement regime to ensure that the fair dealings obligations are effective and sustainable. It is important to state that no decisions have been made about the nature of enforcement, or the body responsible for enforcement. The reason is robust and strong: the Government want to work with industry and listen to its ideas and concerns before any final decision is made.

The noble Lord, Lord Grantchester, asked about the consultation on the dairy sector. To be precise, I can confirm that the consultation closed on Tuesday. The consultation included a specific question about dispute resolution and, while the detailed analysis is still being carried out, it is already clear—this is broad-brush, because I asked whether there are any indicators—that stakeholders have a broad range of views about the most appropriate form of enforcement and finding the best solution will obviously require some consideration. The Government aim to publish a summary of responses later this year, which will be very important and will provide greater detail about the views shared and the options available. I hope it will not be too long before there will be scope for that consideration. The Government will exercise due diligence in designing the enforcement regime and appointing a regulator.

I say to the noble Baroness, Lady Bakewell of Hardington Mandeville, that I do not recognise her description of the rigour with which I and other Ministers consider appointments to public bodies. It is a very serious matter; we recognise that it is a matter of people coming forward to help in the public service. I reassure her that it has no input other than that it must be done rigorously, and the right people need to be chosen.

The Government intend the fair dealing obligations to create positive change for the industry. That is why we are doing it and why this is such an important feature. I am very glad that the noble Lord and other noble Lords have raised this, because this is all part of the prism of this Bill. A lot of people are worried that we are talking too much about the environment, but a lot of the guts and detail of what will come out in the provisions of the Bill are designed to help the farmer in the great production of food, and so that we can help the farmer get fairer dealing.

I have a note relating to the remarks of my noble friend Lady McIntosh on the GCA launching its own investigations. The Groceries Code Adjudicator can launch its own investigations, if it has reasonable grounds to suspect that a large retailer has broken the code. Again, I think the adjudicator’s work has been essential. I think and hope that, in the spirit of this debate, the reason the Government would at this time resist putting forward a particular body, however successful the adjudicator has been in this area, is that the best way to deal with difficulties in certain sectors is to work with the sector to see what is the best mechanism for enforcement. Let your Lordships be in no doubt that these are provisions that we recognise must be attended to, and in short order, because they are the way that will help the farmer in this situation.

In that spirit, I very much hope that the noble Lord will feel able to withdraw his amendment.

[Lord Grantchester (Lab)]

My Lords, I thank all noble Lords who have come forward to speak tonight. I certainly appreciate the remarks of the noble Baroness, Lady McIntosh, in calling for the extension of the role of the adjudicator, and the various discussions with the Minister. I agree that the widespread experience of the Groceries Code Adjudicator should give rise to exploring how the role of that office may be extended.

I remind all noble Lords that agriculture can be characterised as unusual: it is almost unique in that producers invariably buy retail yet sell wholesale. I certainly appreciate the Minister’s comments and the gracious way in which he is going to include the noble Lord, Lord Curry, in further discussions. He has also come forward with a very helpful update on his department’s ongoing deliberations. I appreciate that the Government need flexibility to get the right solutions to each sector’s issues, and I look forward to clarity being provided in the publication of this consultation and to the debates we will have on that later. In the meantime, I beg leave to withdraw the amendment.

Amendment 63 withdrawn.

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[Baroness Bakewell of Hardington Mandeville (LD) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Inglewood. This is an important group of amendments, to which others have spoken eloquently. I added my name to Amendments 81, 82, 83, 85 and 86 in the name of the noble Baroness, Lady Rock. I congratulate her on her speech and agree wholeheartedly with her detailed comments.

The noble Earl, Lord Devon, moved Amendment 69 and spoke to Amendment 89, which would remove agricultural tenancies from the Bill. I listened carefully to his speech and I am afraid I cannot agree with him. Removing reference to tenant farmers from the Bill because insufficient importance is given to them is not the answer. Tenant farmers are a vital part of the patchwork of agricultural holdings across the country. If they are removed from the Bill, I am unclear on just how we can safeguard their survival. However, I agree that three years is far too short for a farm tenancy business.

The amendments I will speak to all apply to Schedule 3 and would ensure that those currently involved in agriculture on a tenancy basis can function effectively. I support the comments of the noble Lord, Lord Wigley, and those of the noble Baroness, Lady Rock, on financial assistance schemes. These must be open to all tenant farmers. It is unacceptable for their landlords to refuse consent for them to engage in these schemes. Those who work the land and do the back-breaking jobs involved should be able to reap the rewards. It is unacceptable for landlords to block the rewards, cream them off for themselves or alter the tenancies to the disadvantage of the tenant, as the noble Baroness indicated.

I turn to the amendments that relate to the rights of succession to a tenancy on death. Many tenant farms will be run by extended family members. For some, the nephew, niece or grandchild of the farmer will have been helping to run the farm for some time and see it as the only way they themselves can get into farming. It is therefore imperative that they should be able to succeed to the tenancy. They have experience and expertise, often gained over many years, and the farm will be in safe hands. Similarly, those in civil partnerships or cohabiting should be able to succeed to the tenancy where they wish to do so.

We have on previous days on the Bill debated the importance of encouraging new entrants into farming. To shut out those who wish to carry on the family tradition by refusing succession to the tenancy would be both cruel and unwise. These are the very people the Government should be encouraging to take up the reins and carry on. They are also the ones likely to welcome a move to a more environmentally friendly way of farming. I disagree with the noble Lord, Lord Carrington: no one related to a farmer or his extended family could possibly think that farming is an easy option.

Lastly, I support the letting of longer farm business tenancies. In Committee, the noble Earl, Lord Devon, referred to the woefully inadequate length of farm business tenancies of three years. This is hopeless for anyone wanting to plan ahead and make the best use of the land.

While I accept that short tenancies mean that others can come on to the land, it is not likely to encourage proper management of the land if, at the end of three years, the tenant farmer has to give up and move on. Often, there are no farms for them to move on to, as the popularity of pony paddocks means that some farmers have sold off land piecemeal for this purpose. A longer tenancy agreement is vital if the Government are to ensure that ELMS are successful. The Government cannot insist that it will take farmers seven years to convert from CAP to the ELMS system and then legislate only for three-year farm tenancy businesses. These are all vital issues, and should the noble Baroness, Lady Rock, wish to test the opinion of the House, we will support her. I look forward to the Minister’s comments.

[Lord Grantchester (Lab)]

I thank the Tenant Farmers Association for its communications on these clauses. I also thank the noble Lords who have tabled these amendments for further consideration. They tackle many aspects of the two major Acts, the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995, following the Government’s consultations on their workings, on which there has been so much debate. I recognise the passion with which many speakers have spoken tonight. These relationships can certainly become fraught and I appreciate the experiences that the noble Baroness, Lady Rock, shared with the House. It is a difficult and complicated subject that has been deliberated on by the Tenancy Reform Industry Group over many years. The Bill delivers on many of its recommendations, and the Minister will see that they are drafted to balance the interests of tenants and owners.

I understand that many of the amendments were consulted on last year but did not receive enough support and that therefore further, more detailed work may be required. I understand that there remains an appetite in England and Wales to consider the situation further before coming to a conclusion by the enactment of these amendments. The amendments are certainly important and have our broad support, including Amendment 88 in the names of the noble Baroness, Lady McIntosh, and the right reverend Prelate the Bishop of St Albans. We agree that there should be parity between tenants under the 1995 Act and those under the 1986 legislation in objecting to a landlord’s refusal to enter into a specific financial assistance scheme. We wish generally that all farming operations, whatever the terms of their occupancy, should be encouraged to take up the various ELM schemes and make their contributions towards an environmentally sustainable agriculture.

We would also be receptive to the modern interpretation of relationships that could lead to wider inclusion in tenancies, in line with our general encouragement for new entrants to come into the industry, provided they can meet the various eligibility provisions. The noble Earl, Lord Devon, argues that these clauses should be excluded from the Bill, but we would not go along with such an approach. If improvements to the legislation have been agreed as part of the TRIG process, we would not wish to hold them up. However, regarding further amendments, we can see that these may not have received the more considered support as widely as may be necessary for enactment in the Bill. We await the outcome of a more comprehensive assessment throughout the industry.

[Lord Gardiner of Kimble (Con)]

My Lords, I thank all noble Lords. The noble Lord, Lord Grantchester, used the word “passionate”. It has been a passionate debate and I think that, whatever the tenure of ownership, tenancy or commonhold, the challenges of farming are very profound. Obviously, the Government need to work towards creating an environment in which all types of tenure are able to run a strong business.

Turning to Amendments 69 and 89, the noble Earl, Lord Devon, proposed that we should in effect decide not to take forward what we have banked in our work. The package of tenancy reforms included in Clause 34 and Schedule 3 were shown by public consultations in England and Wales to have broad support. They deliver on many of the recommendations from the Tenancy Reform Industry Group—TRIG. The noble Lord, Lord Grantchester, made that point rightly, because the Government have brought forward those recommendations which commanded broad support. These provisions will help to modernise agricultural tenancy legislation, providing tenants with more flexibility to adapt to change. That is why it is very important that they remain in the Bill, so that they can be delivered now.

I understand that the noble Earl, Lord Devon, would like to see tenancy reform delivered through a separate dedicated Bill, and I can assure him and noble Lords that both the UK and Welsh Governments are keen to engage in further discussions with members of TRIG to explore whether any further actions may be needed to ensure what we all want, which is a thriving tenanted sector.

On Amendment 84, the tenant farming sector remains, as the noble Lord, Lord Wigley, said, and as we all know, a crucial element of agriculture in Wales. Within last year’s consultation, the Welsh Government outlined their proposals for a new sustainable land management scheme in Sustainable Farming and Our Land. It also consulted on a series of measures to modernise the tenant farming sector in the agricultural tenancy reform consultation. Policy development on tenancy reform remains ongoing in light of the consultation responses received and is being carried out in conjunction with development of sector-wide proposals for future agricultural support.

The Welsh Government acknowledge the importance of ensuring that tenant farmers are able to access any new scheme, and their view is that a Senedd Bill would provide a more appropriate legislative vehicle for that purpose. Further consideration will be given to what provision is needed in due course. The Welsh Government intend to publish a White Paper later this year to pave the way for an agriculture (Wales) Bill to be introduced in the next Senedd term.

On Amendment 87, there can of course be benefits from tenants and landlords entering into a longer-term tenancy agreement. There has been a lot of talk of three years. As far as I am aware, the parties can, if they so choose, have any length of term they desire; in the same way as with arrangements with any other property, that is a matter for the parties. I was therefore a little concerned that there appeared to be among certain of your Lordships this idea that everything was for three years and there was no leeway. As far as I know, and from my experience, that is not the case.

However, when the Government consulted on this matter of longer-term tenancy agreements, the feedback gathered indicated that introducing shorter notices to quit would be unlikely to affect significantly landowners’ decisions about the length of tenancy to offer. Other factors such as the size, quality and location of the land, and personal motivations for owning land have a much greater influence on decisions about the length of the tenancy term offered.

It is also important to recognise that, while there are benefits to longer-term tenancy agreements, shorter-term tenancies can be more suitable for different business models. For example, short-term lets have been shown to be very often more appropriate for new entrants looking to rent land on a flexible basis to gain experience. They can also be more suitable for some seasonal horticultural businesses. However, I can assure your Lordships that the Government will continue to work with TRIG on this important issue. That includes exploring how the sector can encourage more landowners to offer innovative long-term agreements to tenants who would welcome them rather than defaulting to standard short-term agreements.

Agriculture Bill

Lord Grantchester Excerpts

Report stage & Report stage (Hansard): House of Lords & Report: 1st sitting & Report: 1st sitting: House of Lords
Tuesday 15th September 2020 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD) [V]]

My Lords, it is a great pleasure to follow the noble Lord, Lord Rooker. This is an extremely important group of amendments. The House spent a long time debating financial assistance in Committee and there was a thorough airing of all the issues, some of which have come back in this group.

The noble Baroness, Lady McIntosh, has raised the issue of food security, a subject which concerns us all. Access to healthy, affordable food is the right of every child and promotes good health and well-being. The right reverend Prelate the Bishop of St Albans raised the issue of food poverty, which is also extremely important. The noble Baroness, Lady McIntosh, raised biodiversity and the role that pasture-fed grazing stock can play in promoting it. It was clear from watching David Attenborough’s programme “Extinction” on Sunday that biodiversity has come into sharp prominence —a point also raised by the noble Baroness, Lady Jones of Moulsecoomb. I shall be listening to the Minister’s response on this amendment.

My noble friend Lord Teverson raised whole-farm agroecology and agroforestry systems—a subject he is, quite rightly, passionate about. Trees are the green lungs of any country and we destroy them at our peril. It is therefore vital that we encourage agroforestry and tree planting, and that the financial rewards match the level of investment and management required. My noble friends Lord Addington and Lord Greaves are pressing the case for joint health and well-being strategies to be included in the financial assistance provision. Given the current health situation of the nation, I would hope that they are pushing at an open door.

Domestic production of food and agricultural products to ensure sufficient food security is a key element of the Bill. Nearly every sitting day we have a question about the impact of Covid-19 on the population, both elderly and young. The longer the pandemic goes on, the more the scientists learn about its impact, how to treat it and who are the most vulnerable of our residents. We know that exercise and a healthy weight and diet, while not a total fail-safe protection against infection, make a tremendous difference to our ability to survive and make a full recovery. As we enter a possible second peak, it is therefore paramount that the Secretary of State should have available to them sufficient information to ensure that food supply is stable and sufficient, and that food is produced in an environmentally friendly way. The whole thrust of ELMS is to move agriculture on to a more environmental footing. However, ELMS is not exactly just around the corner, and it is necessary to act now to protect both food supply and the environment. Can the Minister give the noble Lord, Lord Northbrook, and the Chamber the reassurance that we are seeking?

I have added my name to Amendment 11 from the noble Earl, Lord Dundee, on new entrants. Many of our long-standing farmers are considering whether now is the time for them to retire—as the noble Earl said, a third of our farmers are over 65 years of age. As we move from CAP to ELMS, it is vital that everything possible is done to encourage new entrants and young farmers to take up the reins. Entering farming is a very expensive venture; buying land is likely to be well beyond the reach of many young entrants, even if there is land available. Encouraging existing landowners to make land available will be vital to allow new entrants. Start-up capital will be needed to make a success of the new venture, alongside training and qualifications. Just talking of the list is intimidating and could put off some would-be hopefuls. The noble Lord, Lord Carrington, set out the case eloquently and was well supported by the noble Baroness, Lady Boycott. Like the noble Earl, Lord Dundee, I am looking for answers from the Minister as to how the Government intend to deliver on this vital element of continuing successful land management on behalf of the rest of the country.

The Minister made it clear in Committee that he was keen to limit the list of activities attracting financial assistance, and he is supported in this by the noble Baroness, Lady Young of Old Scone. However, I fully support the noble Earl, Lord Caithness, in his quest to gain support for nature-friendly farming. The activities listed in his amendment are all vital and inextricably linked. We cannot have biodiversity if we do not have good soil health and good water and air quality. We cannot protect species if we do not have sufficient flood-protection measures and climate change mitigation. If the Minister is not minded to accept this amendment, can he tell us just how the Government intend the activities in the list to be achieved and protected?

Similarly, I support the noble Earl, Lord Devon, in including wetlands as well as uplands. The different types of species that can be raised on the various types of farmlands all add to the rich cultural and natural heritage of our countryside. Not all farmers will be blessed with grade 1 agricultural land, but all types add to the variety of produce and the rich diversity of our land. I thank the noble Earl for raising the issue of the wetlands in Somerset.

Lastly, my noble friend Lord Greaves has made a thorough case for the inclusion of common land, supported by the noble Lord, Lord Inglewood. I look forward to the Minister’s comments on this important element of land management, as well as on the rest of the amendments.

[Lord Grantchester (Lab)]

My Lords, at the start of my remarks on Report on amendments to the Agriculture Bill, I declare my interests as recorded on the register, including as being in receipt of funds from the CAP under the present system. As with the first group of amendments, I thank noble Lords for tabling their further thoughts after Committee with these amendments today. Once again, they highlight the very broad nature of agriculture, which, in many ways, interacts with economic activity from many sectors and interests in the rural economy. This in turn has a bearing on many government departments.

Several of the amendments focus on matters related to food security and, indeed, insecurity. We agree that these are important matters that we will come to later in the Bill. In relation to the Minister’s concessions—which are very much welcomed—and to Amendment 58 on the national food strategy commissioned by the Government, I can add that I too was very impressed with the initial report recently published by Henry Dimbleby.

We consider that the Government have a very clear focus on the issue without requiring the specific Amendment 12 so eloquently spoken to by the noble Lord, Lord Northbrook, which we are unable to support from the Labour Benches. However, we have regard to Amendment 11 in the name of the noble Earl, Lord Dundee, and others, which overlaps with Amendment 70 in the name of my colleague and noble friend Lady Jones of Whitchurch on the Front Bench. Ensuring opportunities for young farmers and new entrants is incredibly important and underlines the future prosperity of the sector.

In outlining the purposes for which financial assistance can be given, we consider that Clause 1 gives a fair balance and appreciation of the many options that may be developed over time. It provides a good way forward, rewarding the production of food while protecting the environment. I am sure that the Minister will be able to provide the extra information and assurances that we are all looking for, and that he has taken due note of all the important points raised for sustainable agriculture into the future.

[Lord Gardiner of Kimble (Con)]

My Lords, I thank all noble Lords for contributing to what I think has been an extensive and very interesting debate. I turn to Amendment 6, which I shall address along with Amendments 9, 10, 12, 17,13 and 20. I will say—particularly to my noble friend Lord Northbrook and as a fellow member of the NFU, but to all noble Lords—that the Government agree absolutely that the production of food is of critical importance and that this will not be overlooked in the designing of our future schemes. Indeed, this is precisely why the Bill includes a duty for the Secretary of State to have regard to the need to encourage food production and for food to be produced in an environmentally sustainable way. So I say, in particular to my noble friends Lady McIntosh of Pickering and Lord Northbrook, that Clause 1(4) as drafted recognises the strong interdependence of farming and the environment.

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Moved by

[Lord Grantchester]

29: After Clause 3, insert the following new Clause—
“Financial assistance: duty to provide advice
(1) The Secretary of State must make regulations to secure the provision of training, guidance and advice to persons receiving financial assistance under this Act, for the purpose of enabling those persons to deliver the purpose or purposes for which the financial assistance is given.(2) Regulations under subsection (1) may include provision for advice on matters which include but are not limited to—(a) the impact of any practice upon the environment,(b) business management, including the development of business plans,(c) the health and welfare of livestock,(d) the safety and health of workers in any agricultural sector,(e) innovation, including alternative methods of pest, disease and weed control,(f) food safety, insofar as it relates to the production of food or any activity in, or in close connection with, an agri-food supply chain,(g) the operation of any mechanism for applying for, or receiving, financial assistance under this Act, and(h) marketing of any product falling within an agricultural sector under Schedule 1.(3) Regulations under this section are subject to affirmative resolution procedure.”Member’s explanatory statement
This new Clause would require the Secretary of State to make provision for training, guidance and advice to be made available to persons receiving financial assistance.

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[Lord Grantchester (Lab)]

My Lords, I have retabled Amendment 29 from Committee, as it could be said to reflect very well on the wide-ranging debate we had on the many challenges and opportunities faced by the rural economy as the focus changes towards providing support for production to be recognised for its environmental and welfare impacts. I am grateful to the noble Lord, Lord Lucas, and the noble Earl, Lord Caithness, for adding their names to the amendment after tabling their amendments in Committee, and to my noble friend Lord Whitty, who has widespread experience of the sector from his excellent service as an Agriculture Minister in a previous Labour Government.

All sides of the House and all shades of opinion acknowledge that, as we move to new funding schemes, there will be a lot of new information, terminology and conditionality that farmers and land managers will need to become familiar with, all accompanied by complex administrative processes that will need to be complied with. Of course, it will be understood that there will be pilots and guidance available to participants but, given the relative speed of the transition proposed, it does not seem unreasonable to expect Defra to recognise the responsibilities it should perhaps take towards those wishing to take part in the schemes by playing a more active role in educating, clarifying, guiding, encouraging and assisting the sector.

Many pitfalls could be encountered. In Committee, discussion also covered the sometimes disproportionate punitive actions that can be taken against farmers when they act in good faith but fall short in some small regard. I was particularly struck by the words of the noble Lord, Lord Lucas, who spoke of

“the importance of allowing failure”.—[Official Report, 14/7/20; col. 1654.]

The Government are well placed to step in, whatever the circumstances, should it be necessary. They can pick up on bad experiences and eliminate misconceptions that could quickly deter applicants through social media.

Of course, it is understood that participation in schemes is voluntary. However, we would wish to see the full participation of the agricultural community to enhance our environment and to benefit businesses.

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[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I am grateful to noble Lords for their almost universal acknowledgement tonight of the importance of advice in a time of significant change to the industry. The rules of engagement have, indeed, changed fundamentally.

I reiterate the Government’s view that expert advice and guidance is critical to the successful delivery of future schemes. As currently drafted, the Bill already gives the Secretary of State the necessary powers to fund the provision of advice, guidance and other means of support to recipients of financial assistance under Clause 1. The Government certainly intend to use this ability; advice and guidance is one of the priority areas in the 40 live tests and trials that are feeding into this theme.

I will give some examples of how this could be done. For future tree health schemes, we are looking to refresh and improve our offer of plant health advice to ensure that land managers have the information they need to manage and respond to tree health issues. For animal welfare grants, these one-off payments could cover investment in equipment, infrastructure, technology and training. For animal health schemes, we are also looking at ways to increase advice given to farmers, both from vets and other agricultural advisors, to help them improve animal health. We also want to increase peer learning between farmers through, for example, facilitated farmer groups. The Government have also stated their intention to offer advice to those applying for productivity grants to help them decide which investments would achieve the greatest improvements in business performance.

In Committee, reference was made to the ongoing ELM scheme tests and trials. We are using these to identify the most effective means of providing advice and guidance to farmers and land managers, which will enable them to deliver on their funding agreements with confidence. Since then, the number of ELM tests and trials looking at the provision of advice and guidance has increased to 40, demonstrating the Government’s commitment to designing a scheme that works for farmers and land managers. Evidence shows that, for advice to be effective, it must be trusted, consistent, credible and cost effective. The Government are considering how these principles can be embedded into advice for all schemes and working with farmers and other land managers to do so.

The noble Lord, Lord Cameron of Dillington, asked specifically about the availability of training schemes. The ELM trials are exploring ways in which skills and qualifications for environmental land management can be improved.

The noble Lord, Lord Grantchester, also asked how agricultural colleges could be drawn upon to provide advice and dispense information. The Government are supporting the work of the skills leadership group in exploring ways to address the fragmented nature of the existing skills, education and advice landscape. Representatives of the agricultural colleges have been involved in these conversations.

Defra is currently running a £1 million grant funding project to explore how it could provide resilience support to farmers and land managers in England to help them prepare for reductions in direct payments in the transition period. The project, which is targeting some 1,700 farmers and land managers, aims to identify how, where and when they may need to adapt their business models and resilience as a result. Evidence coming from this project will help inform the design of a national scheme, which is currently in development for launch in early 2022.

I was asked about the availability of broadband in some areas. We are connecting some of the hardest-to reach places in the country, including through the SFB programme and the £200 million rural gigabit connectivity programme. We have also announced £5 billion of funding to close the digital divide.

I hope that I have managed to give some reassurance that advice and guidance are already considered in the scheme design, that the Government are committed to their provision and that we have the powers we need to deliver in this area. I hope the noble Lord, Lord Grantchester, will feel able to withdraw his amendment.

[Lord Grantchester (Lab)]

I thank all noble Lords who have spoken on this amendment, especially the noble Lord, Lord Lucas, and the noble Earl, Lord Caithness, for their additional reasons for supporting this amendment. As everyone has expressed, this is a fundamental change to the rural landscape and agricultural industries support.

The possible lack of an impact assessment, mentioned by the noble Baroness, Lady Neville-Rolfe, could be identified as a challenge of detail for what may be required for the successful launch and promotion of this scheme not being fully appreciated. We would want the scheme to be a success.

The amendment is not prescriptive on how the Government may go ahead and deliver that advice. The Minister’s confidence need not be at the expense of caution. My noble friend Lord Whitty drew attention to the withdrawal of advice that, as I was reminded, has reduced the level of the UK’s agricultural productivity in comparison to other EU countries.

The noble Lord, Lord Cameron, emphasised the importance of training to achieve farmers’ engagement. The noble Baroness, Lady Bennett, reflected on the quality of advice that could come from more commercial sources, which could be a further challenge. The noble Lord, Lord Carrington, mentioned the digital divide. The noble Baroness, Lady McIntosh, emphasised, if I am interpreting correctly, that advice must be part of participating in schemes. My noble friends Lady Young and Lord Judd also spoke of the importance of advice in expressing their support.

With all this support, I could be tempted to press this amendment. The Minister assures us that the Government have the power, under Clause 1, to provide advice. This intention should perhaps be promoted more clearly to the agricultural sector. I thank her for her remarks and wider explanations. However, in agreeing to withdraw this amendment, I call on the Government to keep it in mind as the Bill is returned to the other place for further consideration.

Amendment 29 withdrawn.

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We really must do better for our farmers, who are ensuring that the land is looked after and healthy food is produced. Given the extreme importance of this group of amendments, I hope that the Minister will have some encouragement for us.

[Lord Grantchester (Lab)]

My Lords, the lead amendment in this group, Amendment 36, in the name of the noble Baroness, Lady McIntosh, and others was subject to much debate in Committee. There were many alternative proposals for the transition period between the present system and the full implementation of ELMS being separated from landholdings. This amendment would delay its start for one year. I thank her for her amendment, as she has foreshadowed many of my remarks.

I will speak to my Amendment 41 in this group. However, before I do so I thank the noble Lords, Lord Carrington and Lord Curry of Kirkharle, for their Amendment 37. Further amendments to it have been tabled, in Amendments 38 and 39 by the noble Duke, the Duke of Wellington, and Amendment 40 by the noble Lord, Lord Carrington.

I understand the approach of the noble Lord, Lord Carrington, and his anxieties concerning cuts in direct payments. I appreciate the emphasis given by the noble Duke, the Duke of Wellington, to the organic sector by doubling conversion payments, and to the hill-farming sector in the less favoured areas by freezing their reductions below £30,000 per hill farm.

Amendment 40 specifies that the regulations in this amended clause are subject to the affirmative procedure. However, we could not consider supporting these amendments without extensive further information being available to apprise us of their merits.

I would also like to thank the noble Baroness, Lady Rock, for her amendment concerning the importance of cash flow and grants to the viability of farming businesses in today’s increasingly volatile business circumstances.

However, I propose an alternative approach to these amendments. Amendment 41 disapplies Clause 8. In Committee, amendments around a transition period and the multiannual plans were spread between groupings. This has been reflected today with the consideration of Amendment 32 from the noble Lord, Lord Teverson, and Amendment 33 from the noble Earl, Lord Devon, being in a previous group. This has meant that the debate has been at cross-purposes with Amendment 41, as these other amendments concern the length of multiannual plans only. However, I recognise that multiannual plans were subject to extensive consultation in the 2018 Bill and set for seven years in conclusion then. This has possibly overshadowed the merits of my Amendment 41. I thank the noble Lord, Lord Addington, for adding his name to this amendment and for his recent remarks. I also thank my noble friend Lord Judd for his remarks in support.

How the changes to the ELM system and the nature of each seven-year period between plans and a transition period interact can indeed be very confusing. This is why I have tabled my Committee amendment with a few changes. Having reflected on the debate, as well as on evidence both formal and anecdotal from recent trials and pilot schemes, we have revised our approach in a fair, common-sense way that is also flexible to circumstances. This is because so much is unknown and the results of any trials have yet to be considered. This appears to be recognised to some extent by the Government’s own Amendment 35.

Amendment 41 removes from the Bill the previous start date of the transition period and gives the Government a degree of flexibility by having a start date set in regulations. There is no need for the Government to define a start date in primary legislation which they could later regret, and which would set the legislation off into a period of uncertainty should ELMS not be adequately ready for implementation—as their Amendment 35 partially recognises. The amendment states that the start date would be set once the Government have confirmed that any scheme to operate in the first year of the transition was fully operable.

Everyone can agree that it is important to get started on the transition phase, but so much preparatory work is yet to be done. There is anxiety already that countryside stewardship schemes starting in 2021 can be withdrawn, yet schemes started this year, in 2020, cannot be withdrawn without penalty. There are also very considerable concerns being highlighted and heightened in relation to Covid-19 and the potential onset of any phase 2 consequences this winter.

I highlight that Defra’s plans are themselves being reconsidered in relation to the transition period. I understand that the department is now planning a new interim or stepping-stone scheme to bridge the gap that may appear between the BPS and the ELM scheme. The sustainable farming incentive, or SFI, will bring in limited elements of ELM tier 1, while avoiding the funding gap that will arise from the Government’s ill-considered cutbacks before full schemes are available. This is some- thing we drew attention to as early as Second Reading.

I understand that claimants are expected by Defra to have lost half of their payments by 2024, when full pilot schemes are expected to be rolled out. Can the Minister be transparent on this new scheme and the amount of cutbacks being envisaged? It is important to the credibility of the Government’s plans, so forcibly expressed by the Minister.

Is this SFI scheme under serious consideration, and where will the funding come from if funding cuts to BPS are to finance ELMS, as repeatedly expressed? Will the Countryside Stewardship entrants be excluded once again, as already mentioned? Surely Amendment 41 is preferable to the uncertainty, complexity and confusion that will arise if these reports are confirmed. I understand that the announcement is held up with the Treasury’s comprehensive spending review. It would be more than unfortunate if the Minister could not be forthcoming tonight when the House is considering this Bill.

[Lord Gardiner of Kimble (Con)]

My Lords, I thank all noble Lords who have contributed to this debate. I will be the first to say, coming from a farming background and being a farmer myself, that I know that change can present these great concerns, and that is why the Government are clear that they want to work with farmers to ensure we get the schemes right. I think we are doing that properly, and I would like to explain why.

On Amendment 36, with which I will also address Amendments 37, 39, 40 and 41, the Government are committed to introducing new schemes that will reward farmers for producing goods that are valued by the public. Our planned reductions for 2021 are intended to send a clear signal of reform. It is important that farmers have certainty about when the agricultural transition will begin. There may be some in this House who do not agree with this. But many people, including those in the farming community, will feel that direct payments are poorly targeted and offer poor value for money. This is something that I have been very seized of, as have many of us farmers who seek to farm well and look after our land. This is a conclusion we all have to draw from the current regime. Therefore, applying appropriate progressive reductions to these payments will free up money that can be used to support farmers better—I repeat, “to support farmers better”—and deliver public goods.

We believe it is important that this process is not delayed. The Government are on track to introduce new schemes from 2021 while continuing to fund new and existing Countryside Stewardship agreements which farmers can apply for until 2023. Signing a Countryside Stewardship agreement gives a viable, long-term source of income for providing environmental benefits. I assure the noble Lord, Lord Grantchester, and other noble Lords that no one in a Countryside Stewardship agreement will be unfairly disadvantaged when they move to new arrangements under ELM. I should also say to the noble Duke, the Duke of Wellington, that the Countryside Stewardship scheme includes a specific uplands wildlife offer.

We will also provide productivity grants to farmers for investments in equipment, technology and infrastructure, which will help their businesses to prosper while improving their productivity and enhancing the environment. These grants will be available from 2021. In addition, the national pilot of the future ELM scheme will also begin in 2021 and will be funded from the reductions in direct payments. The national pilot will be informed by the engagement with farmers, land managers and other stakeholders which is already well under way, including tests and trials.

I have to say again that I think we may sometimes be attending different webinars or whatever, because the impression I have been given is that many farmers have found it stimulating, particularly the younger ones, who have found talking about such matters, and the innovation of the new way forward, refreshing. As I have said before, they will be able to look the taxpayer in the eye and show that we are producing better for the public and better for farmers.

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[The Deputy Speaker (Baroness Finlay of Llandaff) (CB)]

I understand that the noble Lord, Lord Grantchester, wishes to ask a short question for elucidation.

[Lord Grantchester (Lab)]

My Lords, I apologise to the House for asking the Minister a follow-up question. I listened carefully to his remarks but, by the time the communication channels had reached the Deputy Speaker, she had already intimated to the noble Baroness, Lady McIntosh, that she could have her consideration of the amendments. I had not heard any reference in the Minister’s remarks to the sustainable farming incentive, but the noble Baroness, Lady McIntosh, repeated that question to him. I understand now and am very grateful to him for the fullness of the reply that he can give tonight.

[Lord Gardiner of Kimble (Con)]

My Lords, I have been very clear that the Government are bringing forward schemes of a countryside and environmental aspect, which will be funded through reductions in the direct payments. This is what we want: to start sustainable environmental and countryside stewardship schemes. This is all about what we want to do with farmers, as part of a major plank of this legislation. I am beginning to wonder whether it is me or whether noble Lords do not want to press the receive button for what I am seeking to say.

Agriculture Bill

Lord Grantchester Excerpts

Committee stage & Committee: 7th sitting (Hansard) & Committee: 7th sitting (Hansard): House of Lords
Tuesday 28th July 2020 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, Amendments 264 and 265 in the name of the noble Lord, Lord Foulkes of Cumnock, relate to the WTO Agreement on Agriculture. The noble Lord made the case for the Secretary of State to be required to consult with relevant stakeholders before making regulations for the purpose of securing compliance with the UK under the Agreement on Agriculture. As always, he set out his case with great clarity.

The second amendment removes the power from the Secretary of State to allow others to make the decision for him or her, or to delegate to others and any other person who might exercise discretion in this matter. The noble Lord, Lord Foulkes, does not believe that the reason for these powers is clear. There is no explanation of what they may be used for.

Amendment 269 in the name of the noble Lords, Lord Hain and Lord Wigley, would insert a new subsection at the end of Clause 42. As the noble Lord, Lord Hain, set out so clearly, this supports delivery of Welsh animal and plant health, food safety and environmental standards, which should not have the effect of lowering these below EU standards. The noble Lord is concerned about the large areas of Wales that are heavily dependent on agriculture. Food standards are extremely important for sustainable food production. The noble Lord, Lord Wigley, said that there are opportunities for agriculture in Wales and that building on food standards will be important. The products in Wales stand up against produce from the rest of the world.

The noble Baroness, Lady McIntosh of Pickering, supported these amendments—particularly Amendments 264 and 265 —and believes that this is a genuine oversight. The noble and learned Lord, Lord Hope of Craighead, also supported the noble Lord, Lord Foulkes.

My noble friend Lord Purvis of Tweed feels that the regulations are concerned with WTO compliance. Is this compliance of Scottish and Welsh farmers for their benefit or for the benefit of English farmers? My noble friend had discussions with the Trade Minister about continuity agreements but did not get reassurance. Can the Minister confirm that these regulations will not be used in negotiations with the US? We seek that reassurance.

[Lord Grantchester (Lab)]

I thank my noble friend Lord Foulkes for leading the debate on this group of amendments—relating to Part 6 and the WTO Agreement on Agriculture—by moving Amendment 264, to which the noble Baroness, Lady McIntosh of Pickering, added her name. As is customary on each day of the Committee’s deliberations, I declare my agricultural interests as recorded in the register.

The United Kingdom has been an independent member of the World Trade Organization, and was also a member as a member state of the EU, when it was one. On leaving the EU, the UK will continue to ensure that domestic support schemes are consistent with WTO rules. The Minister will correct me on this interpretation if needed.

The Bill’s Explanatory Notes remind me of the non-distortion trading requirements of green box designations and so on, which characterised the discussions on CAP reform of decoupled income support payments and environmental programmes many years ago. This will not be the issue at the WTO once the UK begins to “record”, if that is the correct terminology, the various trade deals that it seeks with other countries around the world. There will be many challenges over, for example, state aid provisions. As we know, the countries implicated in the various EU rollover deals that the UK seeks ratification of have already lodged objections with the WTO.

There are various angles to this, as other speakers referred to in our proceedings last week. First, as my noble friend Lord Foulkes explained, his amendment would require the Secretary of State to consult relevant stakeholders. That is necessary as agriculture and food are matters devolved to the other nations of the union. In Amendment 269, my noble friend Lord Hain and the noble Lord, Lord Wigley, are concerned about compliance and consistency with the Well-being of Future Generations (Wales) Act 2015 and the Environment (Wales) Act 2016, specifically with regard to the sustainable brand values of Wales.

In other parts of the Bill, we have expressed our concern at the quality of the Government’s discussions with the devolved Administrations and how that will translate into representations at the WTO. The noble Lord, Lord Purvis, expressed this point in his remarks. Last Thursday—I remind noble Lords that this was at 10 minutes to midnight—he asked the Minister to clarify the status of the legislative consent Motion from the Scottish Parliament with regard to this part of the Bill. Regulations could have a significant impact on the design and implementation of support schemes in Scotland and Wales—by the way, no one has yet seen the full details of those schemes because the Government are yet to finalise them. By what mechanisms will the Secretary of State resolve any disputes that may arise with the devolved Administrations, such that he or she can fulfil the functions of Clause 40? Can the Minister confirm that any regulations made under the powers at Clause 40 will be only with the express agreement of the Scottish Parliament and the Welsh Assembly by the affirmative resolution procedure, as in subsection (4)?

My noble friend Lord Foulkes also asked about subsection (3), which may have relevance in this respect. However, the power under Clause 40(3)(c) seems inexplicably wide and vague. I also have concerns about paragraph (c), which refers to provision for “a person”—unspecified—

“to exercise a discretion in dealing with any matter.”

No provision seems to have been given for any oversight or reporting publicly. Can the Minister explain what the Government have in mind in needing these powers?

The clause refers to the Secretary of State. It may be assumed that, as this is the Agriculture Bill and the responsibility of the Minister’s department, this will not be the Secretary of State for the trade department. Which Secretary of State will be responsible to Parliament on this matter? Where will the cross-over apply in relation to WTO engagement?

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[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to open the group of amendments leading off with that in my name and to thank the noble Baronesses, Lady Henig and Lady Ritchie of Downpatrick, and the noble Lord, Lord Krebs, for lending their support to this amendment.

It is very timely, as today we learned that the official launch of the new Trade and Agriculture Commission has taken place. We learned that the commission will report directly to the International Trade Secretary and will produce an advisory report at the end of its six months’ work. I congratulate my noble friend, his department and the Department for International Trade on recognising the wish for such a commission. I hope he will look kindly on the need for Amendment 270 and possibly some of the other amendments in this group.

A million people have signed up to say we would like to support our farmers. Since the Covid-19 pandemic, people care much more about where their food comes from and the standards to which it has been produced. In Amendment 270 I ask that the Government establish an international trade standards commission within 12 months of passing the Act. At the time I drafted and submitted this amendment, we did not think even in our wildest dreams that there would be such a commission, so obviously the name change is not reflected in this amendment.

My disappointment is that the trade commission is not permanent; its work will wind up after only six months. We were told at its official launch that it will function as an advisory board to the Department for International Trade and the Secretary. I make a plea that the advice and recommendations given by the international trade commission be as binding on the Government as those of the Migration Advisory Committee. We heard from our noble friend Lady Williams at the Second Reading of the immigration Bill that the Home Office follows the MAC’s recommendations very closely indeed. That is the sort of recommendation-following I would like to see from the new Trade and Agriculture Commission.

I believe that it should be permanent and that the model we should look to is that in other countries with which we seek trade agreements. For example, why not model it on the US International Trade Commission, which is independent, non-partisan and quasi-judicial? It is a federal agency fulfilling a range of trade-related mandates, providing analysis of international trade issues to the President and Congress and adjudicating on intellectual property and trade disputes. We could look to similar trade commissions that are also permanent and independent in New Zealand, Australia and other such authorities.

In proposed subsection (2) of Amendment 270, we say:

“The International Trade Standards Commission must establish criteria for maintaining standards as high as or higher than standards applied within the United Kingdom at the time of import for agricultural goods imported under a trade agreement between the United Kingdom and any other state.”


I congratulate and thank my noble friend the Minister, who confirmed on Thursday that Britain will not lower its high standards of animal health, welfare and environmental protection, but today I make a plea to my noble friend: we need fair competition and a level playing field. We need to give our farmers an assurance that they will not be undercut by imports of substandard farm produce and that their good husbandry will be recognised. It is good husbandry in particular that we should take cognisance of, rather than necessarily the processes.

A number of figures on stock density were bandied about on Thursday. I put it to the Committee that in the US—it is a matter of note—there are no federal laws on the control of stock density for pigs. In nine states, sow stalls are banned. In the remaining states, it is legally permissible to keep sows in stalls for the entire 16-week gestation period. Similarly, sow stalls are legally permitted in Brazil. I applaud the fact that in the UK we have a gold standard for stock density for pigs and that we currently have a relatively level playing field with our competitors in the European Union.

Proposed subsection (3) refers to:

“‘Agricultural goods’ under subsection (2)”,


which

“includes, but is not limited to, standards relating to … animal welfare … protection of the environment … food safety, hygiene and traceability, and … plant health.”

On a personal note, I will probably be accused of being protectionist. I am protectionist. I am protective of the chicken, the cattle and the lamb produced under potentially inhumane and intensive conditions that we would simply not tolerate in this country. Their production frequently bears no resemblance to ours, and those imports should not have any place against the produce we currently produce to our high standards in this country.

In proposed subsection (4), we go on to say:

“A Minister of the Crown may not lay a copy of an international trade agreement before Parliament under section 20(1) of the Constitutional Reform and Governance Act 2010 that contains provisions relating to the importation of agricultural and food products into the United Kingdom unless satisfied that the criteria established by the International Trade Standards Commission”—


now the Trade and Agriculture Commission, obviously—

“under subsection (2) have been met.”

That encapsulates my wish that the commission will give binding advice and operate independently and that the advice will be followed by both the international trade and agriculture departments. At the moment, it appears that every time a press release is issued by the new commission it is issued from the department, and that does not demonstrate any act of independence whatever. I hope my noble friend’s department, Defra, and the Department for International Trade will look at this.

You cannot have a perverse situation whereby farmers continue to meet our high standards of trade, welfare and environmental protection, only to be undercut by potentially substandard imports from third countries. I have a question for my noble friend. I understand that we have probably left the expert trade in agriculture group, which meets fortnightly under the auspices of the EU Commission. What will replace it? I hope the replacement will be the new Trade and Agriculture Commission but if not, which body will hold the Government’s feet to the fire as they set out the detail and criteria that will be followed in negotiating international trade agreements? In my view, the Trade and Agriculture Commission will be the best place to do so but should have sight of trade texts and provide detailed feedback, which is why Amendment 270 is so badly needed. If the commission is to wind up after six months, that is not satisfactory.

I will comment briefly on two of the other amendments in this group. Amendment 271, in the name of the noble Lord, Lord Grantchester, and other noble Lords, is well thought out, but my concern is that it does not set out the role of the international trade commission or who would draft criteria against which the international trade agreements being concluded would be measured. Subsection (5)(b) of Amendment 271 just refers to a take-note report submitted, presumably, to both Houses. I believe that there should be full scrutiny through the normal means of Select Committees, assuming that the trade commission will be a permanent body.

Amendment 279 again has been well thought out and is commendable, but I believe it is fatally flawed. Having read it, I wait with great anticipation to hear what the noble Lord, Lord Curry, says. It is not satisfactory that the report will have been submitted but we cannot revert to the Trade and Agriculture Commission because it will already have been wound up by then.

In summary, we must not have a credibility gap. I am enthusiastic about the launch of the Trade and Agriculture Commission today, but it must be allowed to do its duty. It must be a permanent body and accountable to the relevant bodies, particularly Select Committees of both Houses. It should have comprehensive terms of reference, which include current and future trade talks. Its recommendations should be mandatory, in the same way as those of the Migration Advisory Committee. I beg to move.

[Lord Grantchester]

If there is one strong theme running through many of the amendments, it is that of standards. I am grateful to all noble Lords who have raised concerns, whether on animal health and welfare, on husbandry methods in agriculture and horticulture, on environmental and climate aspects, on food, nutrition and labelling the final product, or on intra-UK relationships and international aspects at the WTO. They are all important, because they all matter.

This country has decided. The answer is that the UK wants to bring back control, so that decisions are made at UK level. This group of amendments determines how our standards will be set, at the outset of our EU exit, and how they will be maintained.

I shall speak to Amendment 271, and I am grateful to the noble Lord, Lord Cameron, and the noble Baronesses, Lady Hodgson and Lady Bakewell, for adding their names in support. This amendment is needed, as the Agriculture Bill is a domestic measure setting a new approach to food production support by setting new domestic standards in law. That includes all present laws and regulations that pertain in the UK. All food, wherever it comes from, must adhere to this basic threshold. It is important that domestic agricultural production is on a level playing field with all production of food available and sold to UK consumers. Let us be clear: these are food production standards, not just food safety standards. British consumers have constantly demanded high production standards even, at times, in excess of standards within the EU.

--- Later in debate ---

[Baroness Scott of Needham Market (LD) [V]]

My Lords, I confess that I have some sympathy with the Minister. He is universally admired and respected in this House but he faces a weight of opinion that I have rarely seen in my 20 years in the House of Lords. Members from all Benches and from right across the UK, including some of the country’s leading experts in their field—backed by the NFU, a coalition of more than 20 environmental and animal welfare groups, the British press and more than a million signatories to a petition—have major concerns about standards going forward after Brexit.

However, I have no sympathy at all with the Government, who profess to have an absolute, unwavering commitment to standards but refuse to put them in the Bill. If they thought that the creation and announcement of the Trade and Agriculture Commission was going to be a sop to noble Lords, today should have disabused them of that idea. As the noble Lord, Lord Curry, highlighted, this body is advisory only. If ever there were a time when we should have the lessons of advisory bodies foremost in our minds, it is now, when we have the recent experience of SAGE.

A number of noble Lords asked why the commission has been set for only six months. As the noble Lord, Lord Cameron, said, we are likely still to be negotiating trade deals in three to 10 years’ time.

Among many others, the noble Lords, Lord Trees and Lord Cameron, and the noble Baroness, Lady McIntosh, raised issues such as good husbandry and the way in which poor husbandry elsewhere can be used to undercut British farmers. They highlighted important issues, such as stock density and the overuse of antibiotics.

The noble Lord, Lord Krebs, and the noble Baronesses, Lady Young and Lady Boycott, highlighted the question of where this cheap food is likely to end up and suggested that it will be with the poorest in our society. I think that they are right. No one should have to choose between their health and conscience on one hand and their budget on the other. These standards should be guaranteed for everyone.

Many noble Lords commented that this is the most important sets of amendments that we face. I agree: they are important in their own right but they are also important when it comes to thinking about parliamentary sovereignty. It is of course correct that Parliament did not approve, or even properly scrutinise, trade deals negotiated on our behalf when we were members of the EU, but that was entirely our decision; other member states chose to do it differently. Now, having apparently taken back control, the Government still see no role for Parliament in negotiating future trade deals, including on the important issues that we have debated today and despite the enormous public interest in relation to not just food but health, environmental and safety standards.

In recent weeks, we have heard a lot about how these commitments are enshrined in the Conservative manifesto. Manifestoes are meant to be an indicator of the Government’s legislative programme—they are not an end in themselves. The noble Baroness, Lady Humphreys, commented that this is a question of trust in government. I absolutely agree. The Government have a problem here because they are telling business that, post Brexit, there will be a deregulatory bonanza and the creation of Singapore-on-Thames, yet in this regard, we are supposed to believe that these protections and such regulation are absolutely guaranteed. For many people, that is not credible, which is why we need something guaranteeing these standards in the Bill. My party has consistently called for the retention of high standards for food, the environment, safety and animal welfare after Brexit. We seek to ensure that this Bill and others will protect UK consumers and UK farmers.

The Minister has quite a job ahead of him on Report.

[Lord Grantchester]

This has been another very good debate on a key issue in the Bill. I thank all noble Lords who spoke on these amendments, which cover the key variances in opinion on approaches to food standards.

Amendment 276 in the name of my noble friend Lord Hain, which other noble Lords have signed, is essentially the amendment proposed in the other place by Neil Parish and others. Unfortunately, that amendment was defeated. I spoke on this in regard to my Amendment 271, which answers various deficiencies that that amendment encountered. However, I am very grateful to my noble friend for his remarks on the amendment, as he underlined the huge support that it secured with so many of the industry’s representative bodies, including the National Farmers’ Union.

If I may, I will group together Amendment 273 in the name of the noble Baroness, Lady Jones of Moulsecoomb, which other noble Lords signed, and Amendment 278 in the name of the noble Lord, Lord Empey, which the noble Lord, Lord Wigley, signed. Both approach the issue of food standards from the position that, after IP completion day, existing UK standards must not be undermined. Amendment 273 underlines the importance of equivalence of standards protecting food safety, the environment and animal welfare. It is clear in its objectives but, unfortunately, it does not provide for how this process will be conducted or implemented, including how the ratification—or denial of ratification—of any international trade deal will be endorsed or refused.

Amendment 278 specifies that the Secretary of State must produce a register of UK production standards, against which agricultural goods must be assessed, which must be updated annually. I do not know whether this is necessary when there is a statute book, or how this process will be judged. I thank the noble Lords, Lord Bruce and Lord Wigley, for Amendment 280, which is focused on the situation should the UK Government not conclude a satisfactory agreement with the EU in time. It requires that the Secretary of State report to Parliament on the impact of this on the beef and lamb sectors. There have been many debates on the no-deal Brexit situation and its impacts. Even after the Government’s announcements on the temporary tariffs that would apply in that situation, I share the amendment’s concerns. However, I remain confident that there will be an agreement between the UK and the EU in time.

A food and trade commission has been proposed by the National Farmers Union for some time. While we can support such a commission, it does not replace our Amendment 271. Depending on its terms of reference, membership and powers, it could become a welcome means to monitor ongoing improvement in food standards and production standards equivalence in all future trade deals, but only as a second step, having secured the importance of the provisions enshrined in Amendment 271. There was always an apprehension that any food and trade commission would just continue anxiety about whether it will be effective in maintaining the UK’s production standards.

I thank the noble Baroness, Lady McIntosh, who led on Amendment 270, and the noble Lord, Lord Curry, who spoke in support of the NFU’s Amendment 279. I have great regard for the comments of the noble Baroness, Lady McIntosh, coming as they do from a former chair of the important Environment, Food and Rural Affairs Select Committee in the other place. I also greatly appreciate what the noble Lord, Lord Curry, has achieved over many years. I have attended many conferences where he has spoken and have sought his advice on one or two issues in the past. However, both speakers struggled to reconcile their amendments’ proposals with what has now been set up. It was rather confusing: were they really promoting their amendments? On this side of the House, we would not be able to support the present proposals, or able to welcome the version of a food and trade commission launched today. That is a very disappointing position to be in.

The noble Lord, Lord Curry, spelled it out himself: it is not permanent and it does not follow any legislative step to enshrine UK standards. It is not independent; it is merely advisory. It has no formal powers and does not envisage any role for Parliament. His amendment makes no provision regarding wide representation of the many interests that need to be included on any commission. The obvious omissions of consumer interests, animal welfare and environmental organisations and others, have resulted in a crescendo of objections following the announcements. The British Veterinary Association, the RSPCA, Greener UK and Which? have all issued statements of disappointment.

This puts the National Farmers Union and proponents of the commission in a difficult position. Do they withdraw their amendments? They will feel embarrassed in farming circles. We do not need another talking shop for the NFU and its sister organisations in the devolved Administrations to debate for a few months. How does this differ from the trade advisory group that the noble Lord, Lord Purvis asked about? We need decisive and independent scrutiny, after having secured provision for our position. The co-operation between the commission proponents and the Government is interesting. Will the Minister confirm whether Amendment 279, in the name of the noble Lord, Lord Curry, was drawn up with his department’s help before it was agreed with the NFU? I understand that his department was taken aback when the Department for International Trade seized it as a method to buy off Back-Bench Conservative dismay at the Government’s position, so that Neil Parish expressed anxiety at the department’s approach to food production standards.

--- Later in debate ---

[Baroness Northover (LD) [V]]

Clearly, there are major risks with Henry VIII clauses, and we have more of them in this Bill. My noble friend Lord Thomas reminded us of the roots of the term, and that the tools were once weaker than those used by the Government today. Statutory instruments are unamendable and almost never voted down. These clauses use secondary legislation to amend primary legislation. We are getting more and more instances of their use.

The House of Lords Select Committee on the Constitution has been very critical of this. As the committee put it:

“A distinguishing feature of the Brexit bills was the extent of the delegated powers they contained. Many were skeleton bills, providing broad powers to ministers to create new policy regimes and public bodies for the UK after Brexit with little or no detail as to what policy would be implemented or the nature of institutions which would be created.”


The University of Bristol Law School has noted:

“It seems that the desire to ‘take back control’ from the EU has morphed into an altogether more sinister desire on the part of the Government to minimise scrutiny of its policy choices.”


The noble and learned Lord, Lord Judge, to whom other noble Lords have referred, has called for such clauses to be

“confined to the dustbin of history”.

He is surely right.

There was huge concern about this when the predecessor Bill was published in 2018. There have been improvements, but they are insufficient. It is still not clear what the policy will be in the coming years, with so many “may”s and so few “must”s in this Bill. All noble Lords who have lasted this long in the proceedings on the Bill to contribute to this group have expressed concern. The Minister is probably relieved that some stood aside, but I expect they would have said similar things. However, even that would not have tested the patience of the Minister, who richly deserves a summer holiday back in the English countryside. But he will have much to think about.

Despite the changes from the 2018 Agriculture Bill, the Delegated Powers Committee remains concerned, and these amendments reflect that. These amendments also reflect the NFU’s concern. Nothing is certain for British agriculture at the moment, and these powers need to be clarified and curtailed. I look forward to the Minister’s response.

[Lord Grantchester]

I am grateful to the noble Lords, Lord Carrington and Lord Greaves, and others for tabling Amendment 295 to Clause 47, “Regulations”, under Part 8, “General and Final Provisions”, and Amendment 298 to Clause 50, “Power to make consequential etc provision”. They are correct to look at every opportunity the Government may feel they need to extend their powers on what is essentially a framework Bill without a lot of detail.

The amendments made me check the 13th report of the Delegated Powers and Regulatory Reform Committee of your Lordships’ House. The committee’s oversight of each piece of primary legislation is always cogent and thoughtful. In consequence, any criticism is always considered and answered carefully by the Government. On rereading the report, I am slightly surprised that the Delegated Powers Committee did not flag up these clauses’ ability to make amendments to primary legislation by secondary orders. The House has usually argued that unless there are very good reasons for doing so, changes to primary legislation should come only from a new Bill.

I have now reread the clauses very carefully and wonder whether this provision was not flagged because the relevant subsections do not actually confer a delegated power to modify primary legislation but contain a provision that already modifies primary legislation, retained EU legislation or subordinate legislation; that is, something that is already delegated and clarifies how other powers may be used. I would welcome the Minister’s explanation.

I do not wish to prolong proceedings but, together with my noble friend Lady Jones of Whitchurch, I echo the remarks of other noble Lords in appreciating the uniformly consistent and fulsome answers that the Minister, the noble Baroness, Lady Bloomfield, and the whole Bill team have provided to all our inquiries. All responses have been comprehensive and expressed constructively in all our deliberations. The praise given by your Lordships is well deserved for the patience shown towards us. I have always found the ministerial answers most helpful.

After a very long Committee stage, I just add that I have not found the Committee essentially negative towards the Bill; rather, my impression is that as the Committee has proceeded with its inquiries, the ambitions contained in the Bill have become better appreciated.

[Lord Gardiner of Kimble]

My Lords, this has been a very helpful debate. I thank the noble Lord, Lord Carrington, for his amendments and for the opportunity to explain why the Government are seeking the delegated powers in Clauses 47(3) and 50(1) for themselves and, I should add, the devolved Administrations in Wales and Northern Ireland.

The Government’s request for delegated powers in this area is reasonable and proportionate. I am reminded of the noble and learned Lord, Lord Judge, and the discussions I have had with him on other Bills, so I understand—not only as a Minister but as someone who believes in proper scrutiny—the points that have been made. But here we are seeking provision to make technical changes for which securing further primary legislation would be cumbersome and far too slow. There would be paralysis if every change to primary legislation had to be made by further primary legislation, particularly during this period of change.

As Sections 7, 8 and 9 of the European Union (Withdrawal Agreement) Act 2020 demonstrate, delegated powers to amend primary legislation are an indispensable tool in ensuring that the law is updated in a timely and efficient manner.

It is certainly not our intention to compromise or circumvent appropriate parliamentary scrutiny. That is why Clause 47(5) ensures that any use of these powers to amend primary legislation would be subject to the affirmative resolution procedure. The flexibility provided by these delegated powers is needed, as it is not possible to anticipate every consequential, supplemental, transitional, transitory and saving provision that may be required at the end of the transition period.

At the moment, we do not know what the UK’s future relationship with the EU will look like. As soon as this becomes clear, the UK and devolved Governments will have to make quick operability amendments to ensure the body of legislation that governs the agricultural sector is updated where necessary. As I have said, we are also taking these powers on behalf of the Welsh Government and DAERA so that they can make appropriate operability changes as necessary.

I should perhaps declare my membership of the NFU—it is always interesting to hear “the NFU says this and the NFU says that”. I am a member of the NFU, and the inability to amend legislation where needed could cause considerable uncertainty; we believe it could disadvantage farmers, the agricultural sector and consumers.

I emphasise that the powers to amend primary legislation could be used only where the legislation relates to a specific provision of this Bill. One example of their use is to make savings provisions for the agri-promotion scheme to ensure that existing programmes are able to continue to their conclusion after CAP regulations cease to apply. We are unable to put the savings provisions on the face of the Bill as we do not currently know which schemes will be live at the end of the transition period and therefore which savings provisions would be required.

To my noble friend Lord Marlesford, I say that I absolutely understand the point he has championed about powers of entry without a warrant. Indeed, I have had discussions in the past with the noble and learned Lord, Lord Judge, about this as well. The Government have limited the powers of entry to make a distinction between the property that is occupied as a house—“dwelling”—and the property as a whole. I absolutely understand and appreciate that it is intrinsic to our arrangements that there is respect for a private dwelling place.

I emphasise that this is a measure that we think is proportionate and necessary given the circumstances. I understand what noble Lords have said about Henry VIII powers and, of course, the reason behind the nervousness or dislike, shall we say, of this sort of provision. However, I hope I have demonstrated adequately that this is no ruse or some back way of abusing Parliament; it is actually to serve those we serve better by enabling us to deal with such matters as I have outlined in an appropriate manner. With those assurances, I hope that the noble Lord, Lord Carrington, will feel able to withdraw his amendment.

Agriculture Bill

Lord Grantchester Excerpts

Committee stage & Committee: 6th sitting (Hansard) & Committee: 6th sitting (Hansard): House of Lords
Thursday 23rd July 2020 Lords Chamber

What will happen in new trade agreements? In all these amendments, a common theme runs: British agriculture is at risk in this new environment where the identity of its products and high standards may be undermined and undercut as we seek trade deals with countries beyond the major market of the EU. Those standards matter. I therefore look forward to the Minister’s response to this variety of amendments.

[Lord Grantchester]

I thank all noble Lords for their amendments in this group on marketing standards. The large number of amendments reflects many thoughtful contributions around the scope of the provisions in Part 5, Clauses 35 to 37. As previously, I declare my agricultural interests as recorded on the register. I congratulate my previous colleague and noble friend Lady Worthington on leading the group with her late amendment, Amendment 236A, on a consultation regarding the climate change impacts of agriculture. It is forward-looking and under proposed subsection (a), agriculture needs to be aware of its emissions if it is to become subject to a carbon levy on greenhouse gas emissions. However, a lot of analysis needs to be provided beforehand.

Agriculture takes its responsibilities seriously. As a member of the Tesco supply group, my carbon footprint of business operations is measured and assessed annually. I was happy to encourage and explore how accurate measurements from the initial development of the Dairy Roadmap many years ago could tackle this challenge. However, it will take many years of analysis to fully understand what is happening behind the statistics and how robust they may be. It is easy to overemphasise the role of agriculture in climate change, but that does not lessen the recognition of the need for agriculture to play its part in reaching net zero by 2050, mitigate its carbon footprint in its energy use and mitigate GHG emissions from the livestock sector with innovative schemes to redirect them to more positive outcomes.

Similarly importantly, agriculture can fulfil the desire to mitigate climate change through payments for schemes to reduce other industries’ and general impacts, as well as providing carbon sinks and upland water storage to reduce flood risk. The noble Baroness also makes a good point in the last aspect of her amendment, concerning drawing attention to the effect of food purchases from overseas and the need to recognise the impacts of their agricultural systems and production methods.

The noble Baroness’s amendment is echoed by Amendment 253A in the names of the noble Earl, Lord Caithness, and the noble Baroness, Lady Jones of Moulsecoomb. This amendment and Amendments 248, 250, 254 and 258 concern labelling and providing information to the consumer. Matching on a label the food contained within with an accurate description that does not mislead the consumer is heavily prescribed in legislation. Consumers are arguably the most well informed about food that they have ever been.

I congratulate the noble Baroness, Lady Jones of Moulsecoomb, and the noble Lord, Lord Holmes, on their Amendment 250, which suggested the use of quick-response QR codes as a way of supplementing physical labelling with additional digital content. This is perhaps something that Defra could look at as a way of bringing in the extra subject matter these amendments would provide to the consumer, be that carbon footprints, welfare standards, transportation methods, or methods of production and slaughter.

Traceability is already part of the food chain operations concerning livestock products. Labels are already challenged for space. On the regulatory side, it is important that we have clear rules that can continue to evolve as the information required becomes more sophisticated. To answer these demands fundamentally, altering existing requirements should proceed only on the basis of proper and widespread consultation with producers, the supply chain and the consumer to ensure an appropriate balance.

Consultations form the basis of Amendment 236A, as discussed, as well as Amendments 263A—in the name the noble Baroness, Lady Finlay—and 255, to which my noble friend Lady Jones of Whitchurch has added her name. The latter two are concerned with proper consultation with the devolved Administrations. I appreciate and thank the Minister for constantly reminding the House that his department has developed the Bill’s proposals in full consultation with the nations of the UK. However, we remain concerned about the quality of that dialogue. The areas of devolved competence also remain the concern of the noble Baroness, Lady Finlay, and were expressed by my noble friend Lady Wilcox of Newport in the debate on an earlier grouping of amendments concerning provisions with regard to Wales.

The noble and learned Lord, Lord Hope, asked questions about the operation of the internal market in food across the UK. Amendment 256 in the name of the noble Baroness, Lady McIntosh of Pickering, my noble friend Lady Henig and others is concerned that regulations and provisions may have the effect of lowering production standards below those already established in the EU and UK. We agree with this, and this is why we will be introducing amendments later to enshrine production standards in law around Amendment 271. The immediate priority is to ensure that the Government do not use their suite of delegated powers to water down the EU-derived provisions that consumers have demanded over so many years.

Amendment 247, in the name of the noble Lord, Lord Carrington, seeks to enshrine the wording of the CMO regulation—EU Regulation 1308/2013—into the legislation. The Explanatory Note to the Bill signifies that the European Union (Withdrawal) Act 2018 does that. The pertinent EU Council regulations are listed. But may I ask the Minister whether food information to consumers directives—FICs—notably Regulation 1169/2011, on labelling, are included in the list provided, and therefore also covered by the withdrawal Act?

The list of EU Commission-delegated acts covers the various product sectors, including wine, the subject of Amendment 253, in the name of the noble Lord, Lord Holmes. I thank him for highlighting the importance of the wine trade. These Commission-delegated regulations under the withdrawal Act also include country of origin, protection of designation of origin, geographical indicators and traditional terms—the subject matter of Amendment 263, in the name of the noble Lord, Lord Tyler. He and I had independently tabled similar amendments to the Trade Bill last year, when the noble Baroness, Lady Fairhead, confirmed the Government’s commitment to continue implementation of these PDO and PGI schemes.

Can the Minister reconfirm that, and also confirm that this will be a key part of the future trading relationship that the UK seeks with the EU? Producers in this country will be keen to understand whether this will be an agreement with the EU covering mutual recognition of brandings that will require only one application to apply in both the UK and the EU. The adding of value to local specialisms is a crucial element in encouraging niche products to be protected by branding IP. This encourages skills, pride and prestige in rural entrepreneurship.

Finally, I commend the diligence of the noble Baroness, Lady Jones of Moulsecoomb, in her examination of Clause 32, inserting traceability of animal produce into the context of the devolved Administrations in the Natural Environment and Rural Communities Act 2006, in her Amendment 248. Cross-referencing to other pieces of legislation can be very confusing. I thank her also for Amendment 266, which returns us again to the key concern of animal welfare standards, this time under the WTO provisions of the Bill. Under WTO rules, this will be very difficult.

The noble Baroness’s Amendment 248 seems potentially to contradict the noble Lord, Lord Lucas, in his Amendment 249, concerning poultry. I await the Minister’s resolution of this, and his many responses to all the issues that have been mentioned under this group. I wish him good luck.

[Lord Gardiner of Kimble]

My Lords, what an interesting discussion we have had. I will start with Amendment 236A. We have already debated the topic of climate change extensively. Robust measures to address climate change are already in place through other legislation. The Government recognise the importance of reducing emissions. The clean growth strategy and the 25-year environment plan set out a range of specific commitments further to reduce emissions from agriculture, including through environmental land management, strengthening biosecurity, controlling endemic diseases in livestock and encouraging the use of low-emissions fertilisers. Defra is exploring a number of policy mechanisms to contribute to achieving net zero by 2050 from its sectors, including by reducing emissions from farming practices.

Clause 21 of the Environment Bill will also establish the Office for Environmental Protection, which will be responsible for matters relating to climate change where these are included in the environmental improvement plan—currently the 25-year environment plan—and in environmental law. The Government agree whole- heartedly with the aim of implementing a payment scheme for farmers and land managers, with an objective of reducing greenhouse gas emissions and sequestering carbon.

Turning to Amendment 247, Clause 35(1) has been drafted to provide more flexibility to update the marketing standards than the existing EU rules, which allow for amendments to be made only in prescribed circumstances, such as improving the economic conditions for the production, marketing and quality of agricultural products, taking into account the expectations of consumers.

Agriculture Bill

Lord Grantchester Excerpts

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Tuesday 21st July 2020 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD) [V]]

My Lords, my noble friend Lord Teverson has tabled Amendments 130 and 142, which would reduce the transition period between farmers receiving direct payments under the CAP and moving on to the ELM scheme. He is concerned about the length of time that will elapse before the farming community has become fully environmentally aware and responds to the Bill’s ethos of public money for public goods. Both COPs 26 and 15 have been postponed. The number of species facing extinction is growing, and biodiversity, which includes pollination and soil quality, is very important. The current financial systems work against biodiversity. This is not satisfactory.

Most Peers are concerned that the period before ELMS becomes fully operational should be further away, giving farmers more time to adjust to the change. The noble Baronesses, Lady McIntosh of Pickering and Lady Jones of Moulsecoomb, and the noble Earls, Lord Devon and Lord Caithness, support this view. The noble Lord, Lord Carrington, spoke about the gap between phasing out direct payments and introducing ELMS, and said that no farmer should have more than a 25% cut in their direct payments until ELMS is introduced.

The funding of less favoured areas has again been raised by the noble Duke, the Duke of Wellington, and I fully support him in in his concerns. I ask the Minister to give a categoric undertaking that the so-called less favoured areas will receive funding. Unless he does, noble Lords on all sides of the House will continue to raise this important subject.

The noble Baroness, Lady Rock, has tabled a number of important amendments related to timescales, cash flows and delinked payments—all extremely important in reassuring the farming community of just how and when they will receive financial assistance—which the right reverend Prelate the Bishop of St Albans has supported. The noble Baroness, Lady Jones of Moulsecoomb, again raises the issue of animal welfare, supported by the noble Lord, Lord Randall of Uxbridge. We have debated animal welfare on previous amendments, and it is essential that that theme be a thread that runs through the Bill and thus be included in a number of clauses.

The noble Earl, Lord Devon, believes that Defra will not be ready in 2021 to move to ELMS, and so wishes to put this off until 2022, and he is supported by other Peers. I share his concern about Defra’s preparedness. However, giving it more time is unlikely to assist. Moving deadlines does not always produce results, as the noble Lord, Lord Naseby, said. The noble Lord, Lord Cameron, lets Defra off the hook for not having met the deadlines; I am afraid I am not quite so generous.

Finally, farmers are left in the dark on what is approaching, despite its being trailed well in advance. I fully support the move to ELMS, but I am very concerned that insufficient information is available to give your Lordships and farmers confidence that their future will be secured. The Minister needs to provide reassurance that Defra and the RPA can cope, because from what I have heard this afternoon, I do not believe they can.

[Lord Grantchester (Lab)]

This is an interesting group of amendments, the various areas of focus being multiannual plans and the transition period. As is customary, I declare my agricultural interests as recorded on the register.

The first cluster of amendments concerns the start date and duration of the multiannual plans. Amendment 130 and, consequentially, Amendment 142, tabled by the noble Lord, Lord Teverson, would reduce the initial multiannual plan to five years starting from 2021. Moving from a previous group to this group, Amendment 131, in the name of the noble Earl, Lord Devon, and the noble Lord, Lord Cameron, would extend the subsequent multiannual plans to seven years, in the opposite direction, but leave the start date at 2021. Amendment 143, in the name of the noble Baroness, Lady McIntosh of Pickering, and others, delays the start of the transition phase of seven years until 2022, but technically, this seems to leave hanging the oddity under Clause 4(3) that the first planned period of seven years—the transition phase—starts in 2021 and will give rise to two competing seven-year periods.

Amendment 146, in my name, appears to involve a similar anomaly to the amendment of the noble Baroness, Lady McIntosh, regarding Clause 4(3), by delaying the start of the transition phase to 2022. However, under proposed new subsection (4) in our Amendment 146, flexibility is provided to shorten the transition phase if this becomes necessary. The whole amendment, drafted to replace Clause 8, is designed to provide flexibility. Proposed new subsection (2) would provide that flexibility by accommodating the disruption caused by the coronavirus pandemic this year through a one-year delay. It would also accommodate the possibility of a subsequent further disruption should a second spike strike, as further misfortune, it has recently been argued, may well be a possibility or even a likelihood.

Is there Minister confident about the readiness to implement the first planned period as soon as 2021? Last year, the National Audit Office was concerned that the Treasury and Defra had not built in enough time to implement the new funding system. Certainly, there are doubts that farmers and land managers would be able to accommodate the change to the support system in order to start next year. However, it could be argued that it may not be necessary to require a further full seven-year period for the first planned period, having had a delay to the start. The planned period could be shortened by the flexibility provided by proposed new subsection (4).

I merely comment to the noble Lord, Lord Teverson, and the noble Earl, Lord Devon, that the first planned period being longer than subsequent planned periods would appear to make sense in order to allow the trials, pilots and designs of the new ELM scheme to be properly understood, responded to and taken up, in time for any reassessments to be thought through for subsequent planned periods.

I do not know whether we really need to be concerned about election cycles, debated last week, should the plans to change the five-year Parliament Act be taken up. Clause 4(4) of the Bill merely stipulates that subsequent planned periods must not be less than five years.

The Minister will be aware from the UK’s membership of the EU that one multiannual plan is often barely in operation before plans come forward to improve it to ignite responses in the member states.

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[Baroness Bakewell of Hardington Mandeville [V]]

My Lords, this group of amendments deals with financial assistance under exceptional market circumstances. I have put my name to Amendment 285. All four amendments deal with what may happen in the event of an acute or chronic disturbance in agricultural markets. As the noble Baroness, Lady McIntosh of Pickering, indicated, this is not currently covered in the Bill.

These disturbances may be caused by economic or environmental factors. The most recent occurrence of a disturbance due to environmental factors was reflected in the rules for direct payments being relaxed due to the appalling wet weather in February, which prevented farmers sowing a second crop on their land. The noble Lord, Lord Hain, spoke about exceptional market conditions caused by meeting the needs of the environment, and gave some excellent examples of the wide range of extreme weather. The noble Baroness, Lady Ritchie of Downpatrick, also referred to changing weather patterns and their effect on climate change.

In Amendment 176 the noble Baroness, Lady Jones of Moulsecoomb, has returned to the issue of producers who do not meet animal welfare standards not being eligible for financial assistance under Clause 19. She is supported by the noble Lord, Lord Blunkett. I and many other noble Lords support this amendment. It would be unpopular in the extreme with the public if those who do not look after their animals in a humane way were seen to profit due to exceptional market conditions. Does the Minister agree with this amendment and will he accept it? If not, will he say why not?

I have put my name to Amendment 285, which seeks to ensure that the farming industry in Wales is treated on the same basis as that in England when it comes to exceptional market circumstances. There can be no separate treatment for those across the Welsh border.

I imagine that everyone is in favour of this group of amendments. The only point of discussion is likely to be what actually qualifies as a serious economic disturbance and an environmental disturbance. The noble Lord, Lord Carrington, reminded us of the catastrophic effect on the farming industry of outbreaks of animal disease. Are these likely to qualify? It is likely that an environmental disturbance will be fairly obvious to everyone in the country. Severe flooding affects a number of areas and the television ensures that we all see its devastating effects. Severe drought is sometimes less obvious but as fields and crops brown and are scorched by the sun, realisation will set in. An economic disturbance might go unnoticed to start with, but it will soon manifest itself—again, through social media, radio and television. No matter how this is brought to the public’s attention, they will nevertheless be interested in how the farming community is going to cope. I look forward to the Minister telling us how that is going to happen.

[Lord Grantchester]

I thank noble Lords for tabling their amendments to Chapter 2 of Part 2, headed “Intervention in agricultural markets” under exceptional market conditions. These clauses—18 to 20—plus their application in Wales bring into domestic legislation the powers the European Commission had to provide emergency assistance in extreme, often weather-related, circumstances. The Secretary of State may modify this retained direct EU legislation by regulations and this would usually involve intervention on storage.

I am sure the Minister would wish to have these fallback provisions included in the Bill. Can she give any guidance as to how the Government might decide whether to intervene? While a member state, the UK was not noted for being eager to apply for these powers to be exercised and assistance to be provided. Do the Government have the inclination to utilise them and can the Minister give any general criteria?

I say to the noble Baroness, Lady Jones of Moulsecoomb, regarding welfare that in the wet weather period during the foot and mouth epidemic that struck the UK 20 years ago, the Government stepped in to provide welfare in buying up stranded animals that could not be moved because of the regulations. That was directly in support of welfare. I am not sure that all circumstances would pertain to the amendment she wishes to pursue.

In the past any support has been forthcoming only very late in an emergency and some considerable distance into a crisis. What assurance can the Government give about the exercise of these powers when a timely response to calls for support can be crucial to stabilise a market?

On the other hand, private storage can be notoriously difficult to bring into operation when required. Is the Minister sufficiently confident the UK has enough capacity in the various market sectors? Data on storage capacity could be included in the food security report. There was much debate and experience last year around storage in relation to stockpiling and the possibility, which still exists, that there could be no deal reached in time for the new trading relationship with the EU to be agreed. Can the Minister outline any conclusions and lessons learned regarding those circumstances?

[Baroness Bloomfield of Hinton Waldrist]

My Lords, I begin with Amendments 174 and 285, in the name of my noble friend Lady McIntosh. I recognise my noble friend’s desire to ensure that farmers are protected against chronic disturbances such as structural market changes and disturbances caused by environmental factors such as severe weather or the Covid-19 pandemic. Indeed, a number of other noble Lords mentioned their concerns. The existing powers are sufficiently broad to ensure that agricultural producers will be covered should they need financial assistance due to exceptional market conditions caused by economic, environmental or other factors. In most cases, farmers already manage the effects of fluctuating weather conditions.

There are also powers in existing legislation that allow the Government to act in exceptional circumstances to support farmers in the event of extreme weather conditions. For example, the National Environment and Rural Communities Act 2006 could be used to make one-off payments to farmers affected by extreme weather conditions. As we saw in response to recent flooding, the Government successfully launched a new farming recovery fund for England using powers under this NERC Act.

The particular powers in Clauses 18 and 19 are framed to deal with unforeseen short-term shocks to agricultural markets rather than chronic conditions. The Covid-19 situation is exactly the type of exceptional circumstance that these new powers are intended to address. Another example would be the dairy crisis in 2015, when the ending of EU dairy production quotas led to increased production, global dairy prices being low and rationed sanctions on imports of dairy products from the EU significantly reducing demand. This caused a sudden and significant drop in the price of dairy products across the EU. This event was unpredictable and caused a severe market disturbance, which had an effect on prices, and future circumstances such as these could be considered exceptional market circumstances.

The noble Lord, Lord Carrington, asked what we could do to support farmers when more long-lasting difficulties appear, including the after-effects of flooding. The Government want to encourage farmers to manage their own risk and become resilient to foreseeable disturbances. The Government will help farmers to invest in equipment, technology and infrastructure, which will support high-quality research to promote innovation and productivity in agriculture, horticulture and forestry to make farms more resilient. The Bill also sets out powers to strengthen fairness and transparency in the supply chain, enabling food producers to respond more effectively to market signals, strengthen their negotiating position at the farm gate and receive a fairer return.

The second aspect of the amendment seeks to ensure that disturbances caused by environmental factors will be covered by this clause. These powers are triggered by the effects of disturbances rather than by what has caused them. The exceptional market conditions powers could be used to address severe market disturbances caused by economic or environmental factors, so long as there is an adverse effect on the price achievable for one or more agricultural products.

The noble Lord, Lord Carrington, asked what is meant by “prices achievable” under Clause 2(b). The price achievable is to be given its ordinary meaning, and includes not having a product available to sell; in that case, the price achievable on the market would obviously be zero. The current Covid-19 pandemic is a disturbance caused by environmental factors and is exactly the type of exceptional circumstance that these new powers are intended to address. We could not have foreseen that this pandemic would be as wide-reaching or prolonged as it has been, and farmers could not have been expected to prepare for the disturbances in daily life it has caused. I understand that Welsh Ministers are content that the existing powers are sufficiently broad to ensure that agriculture producers in Wales will be covered should they need financial assistance due to market conditions.

Agriculture Bill

Lord Grantchester Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Thursday 16th July 2020 Lords Chamber

[Lord Grantchester (Lab)]

In speaking to this very extensive group of amendments, I will speak to Amendments 195A to 195F in my name, and to Amendments 197 to 200 in my name and that of my noble friend Lady Jones of Whitchurch, with implications for Amendment 207 in the name of the noble Baroness, Lady McIntosh of Pickering.

These amendments are primarily focused on Clause 27, which deals with the “fair dealing” of agricultural producers in the agri-food supply chain. They come from my experience—as shown by my interests declared on the register—representing mostly dairy producers and dairy processors, and my directorship of a farmers’ co-operative that processes members’ milk and markets produce in the supply chain, and, crucially, from my understanding and experience of the disruption of the food chain following the difficulties of the Covid-19 pandemic.

I very much welcome the “fair dealing obligations” introduced into the Bill in the provisions of Clause 27 and others. The relative imbalance in market power between primary producers at the foot of the supply chain and those at the top of the chain, selling the finished product or meal to the consumer, has long been understood. What happens in between can be a murky business of relationships, given the many channels to the market and the perishable, short-shelf-life product with its various, highly regulated processes.

This imbalance in bargaining power was recognised again as recently as February 2018, in the Government’s response to the call for evidence in the case of extending the Groceries Code Adjudicator’s remit in the groceries supply chain. The Government recognised examples of unfair terms and unclear contracts that led to a general lack of trust and transparency, discouraging good relationships across the supply chain. That the Government recognise that the problem is ongoing, and are now addressing it in the Bill, is to be welcomed.

Clause 27 gives the Secretary of State powers to make regulations “in relation to contracts”. My first amendment, Amendment 195A, is an amendment to the amendment of the noble Lord, Lord Empey—I thank him for his opening remarks—and the noble Earl, Lord Dundee, which seeks to replace “may” with “must” and to establish a timeframe of 12 months in which regulations must be introduced. Progress must be made swiftly; the problems are well known. The impacts of Covid-19 on the supply chain have also become well known and have been answered in the competitive legal structure in emergency regulations, but their effects have yet to be assimilated.

Amendments 195B, 195C, 195D and 195E are designed to be all-inclusive: first, across all business purchases; secondly, across all farming sectors listed in Schedule 1, and, thirdly, across all dealings between purchasers and sellers. Lastly, the Secretary of State must promote fair dealing outside of a contract, as well as within the terms of a contract.

A contract is often drawn up by the purchaser rather than the seller and may contain only necessary provisions around the supply and payment for an agricultural product. It is important that Clause 27 must not be interpreted only with regards to the dealings in a specific contract but encompass all dealings. It would be important for the regulations to address, as a baseline, good basic business practice of fair dealings, and then to address fair dealings in contracts. The regulations must go to the heart of the matter: an enforceable fair dealing code of practice.

Amendment 195 reflects on the disruption to supply relationships caused by the pandemic. The immediate closure of all food service sector outlets—canteens, restaurants, cafes, coffee shops and snack bars, which make up 50% of all food purchases made out of the home—cut off at a stroke all the supply lines. There was suddenly nowhere for food products in the food service sector to go. There was a relative rebalance to retailers and local outlets following this. The effect was for purchasers of primary products to push enterprise risk down to the producers and sellers of products—the farmer—citing force majeure as a reason to refuse contract fulfilment. I am pleased to say that retailers largely stood by their responsibilities to the supply chain.

This experience has severely affected the faith of sellers in fair dealings. Will provisions on fair dealings in Clause 27 be sufficient to deal with these experiences in the future? How will they deal with a similar possible disruption, whether in the extreme—as in the pandemic— or in many other examples which may be more localised and more specific to the food sector, as in Schedule 1, where purchasers may have difficulties making payments for produce? How will the balance of risk be assessed in these regulations? Will the provisions of the Bill cover the situation?

I think the Minister will agree that this is entirely different from circumstances covered under “Exceptional market conditions” in Clauses 18 to 20, in Chapter 2 of Part 2 of the Bill. These clauses give powers to the Secretary of State similar to those pertaining to the EU Commission: to step into the market to stabilise it where there are disruptions from extreme weather circumstances.

I turn now to Amendments 197 to 200, and my comments are also made in relation to Amendment 207, on the same issue, in the name of the noble Baroness, Lady McIntosh of Pickering. These amendments are made to probe the Minister on how these regulations will operate in the marketplace, how they will be governed and by what authority or office. Subsection 9 of Clause 27 states that powers under subsection 1(b), to make regulations for the enforcement of obligations imposed by fair dealings, can be conferred on “any person”

who will have

“discretion in dealing with any matter.”

I ask the Minister to explain who any such person may be, and how this discretion will be made effective. My noble friend Lady Jones and I have suggested the Groceries Code Adjudicator, to stimulate comment and debate.

The amendment of the noble Baroness, Lady McIntosh of Pickering, also suggests extension to the provisions of the Groceries Code Adjudicator Act 2013. I will not take up all the space on this subject, except merely to say that the exercise in the retail trade of fair dealing functions in relation to the 13 main retailers will be very different from what will be necessary across all sections and all sectors of the agri-food supply chain.

The remit of the Groceries Code Adjudicator came out of two Competition Commission inquiries and considerable debate over the course of at least a decade. I pay great tribute to Christine Tacon, the adjudicator. She has operated with a very small office and has brought, over the seven years since enactment, a large understanding of responsible dealing in the retail supply chain, which, to some extent, has been embedded further down the supply chain by large retailers with exposure to the stock market and a recognition of reputational damage through strong audit and risk committees. It would be a very different experience across the whole agri-food supply chain, with thousands of sellers in business relationships with possibly up to 10,000 purchasers.

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[Lord Grantchester]

I thank all noble Lords who have come forward with amendments and support; this is a daunting group of 44 amendments covering Part 3 of the Bill, Chapters 1 to 3, plus parts of Schedules 2, 5 and 6. It covers provisions on aspects of the agri-food supply chain; that is, the requirement to provide data and purposes for which data is provided, as well as enforcement of data requirements in Chapter 1. I have mentioned facets of fair dealing in Chapter 2, and Chapter 3 covers producer organisations and competition provisions.

Many amendments appear quite technical in effect; I applaud the assiduousness with which noble Lords have scrutinised these clauses. I welcome the provisions to make producer organisations more effective in legislation under the fair dealing provisions following their recognition under Clause 28. Regarding “competition exemptions” in Clause 29, can the Minister tell us whether the experiences of the Covid-19 pandemic caused any rethinking of the clause in the application of the Competition Act 1998? Given the opportunity to bring forward regulations in due course, with the consultations normally undertaken in that process, he may be able to confirm that the flexibilities around the framework are sufficient.

The importance of information and the collection of data in the supply chain has long been recognised. I thank the noble Lords who have pursued this in relation to how it is used with recognition of data protection legislation, to improve supply chain transparency and manage volatility. They have asked the Minister to clarify that the drafting of these powers will achieve this. I shall listen carefully to all the Minister’s responses to these amendments.

[Lord Gardiner of Kimble]

My Lords, this has been an interesting debate taking us through a range of issues. I thank the noble Baroness, Lady Bennett of Manor Castle, for tabling amendments relating to fungi. I listened to what the noble Baronesses, Lady Jones of Moulsecoomb and Lady Boycott, said on the matter. I declare my farming interests as set out in the register.

Clause 1(5)(b) already includes the conservation of fungi as conserving can relate to the restoring or enhancement of a habitat. In instances where it may be desirable to conserve wild fungi, or a rare species of fungi, this is possible through the power to conserve the habitat in which they exist. In Clause 22(6) and under Schedules 5 and 6, the definition of “agriculture” already includes fungi. In relation to Amendment 183, I assure my noble friend Lord Lucas that the current drafting includes wild plants, as well as wider aspects of farm-to-fork activity to be collected.

I turn to Amendments 177, 179, 180, 187, 191 and 192 on data collection. Some of the issues have been quite technical in this part of the Bill. I will endeavour to answer as many questions as possible but some might, perhaps, involve a more detailed response; I shall reply in writing on any outstanding points. The Government have taken deliberate steps to ensure that only information which fulfils a clear purpose can be collected. I agree with my noble friend Lord Caithness that this needs to be focused and proportionate—a point also made by my noble friend Lord Trenchard.

An exhaustive list of purposes is contained under Clause 23; the requirements for information must fulfil one of those defined purposes. Clause 24 sets out that, before an information requirement can be issued, the Secretary of State must publish a draft requirement and invite views over a four-week period from anybody who will be affected by it. Any views, including those about difficulties in meeting the requirements, will be considered by the Government before final publication. Clause 25(9) already ensures that, in circumstances where a proposal is made to disclose information in an anonymised form, consideration must be taken of how such a disclosure would affect commercial interests, including intellectual property rights. As regards information provided under a duty of confidence, a blanket provision would be inappropriate given that a duty of confidence could easily be established via a discretionary agreement between any two parties simply for the purpose of avoiding information requirements.

At Clause 21(5), the Bill includes safeguards to protect information subject to legal privilege. Clause 46(2) sets out that these powers cannot be used in ways that would contravene existing data protection legislation. The Government therefore believe that these safeguards are sufficient.

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Moved by

[Lord Grantchester]

105: After Clause 1, insert the following new Clause—
“Minimum level of financial assistance
Before exercising the powers under section 1 for the first time, the Secretary of State must lay before Parliament a statement confirming—(a) the total amount of financial assistance available in the first year in which the Secretary of State intends to exercise the power under section 1,(b) that this is no less than the total amount provided in the preceding financial year, adjusted for inflation,(c) provisional total amounts for the subsequent three financial years, and(d) the reasons for the amounts specified under paragraph (c).”Member’s explanatory statement
This amendment seeks to ensure that the transition to a new funding system does not result in a reduction in the overall financial assistance provided for agriculture and associated purposes.

[Lord Grantchester]

Amendment 105 is in my name and I thank the noble Lord, Lord Greaves, for adding his name to it. I will also speak to Amendments 107, 112 and 123 in my name, as well as Amendment 129 in the name of my noble friend Lady Jones of Whitchurch and Amendment 139 in the name of the noble Lord, Lord Krebs, to which my noble friend Lady Jones has added her name.

Amendment 105 is very important as it lays out the “Minimum level of financial assistance” that must be provided by the Bill to the new system of support. Under this proposed new clause, the level of support must be maintained from year to year at the level made available in the first year, adjusted for inflation, at least for the subsequent financial years. There has always been anxiety that the Conservative Government, in keeping with their austere inclinations, would not maintain support systems at the level of payments previously made under the CAP as a member state. Under the May Administration, the Government stated that they would maintain the level of support in any future scheme for one Parliament—at that time, at least until 2024. This suggested that reductions would be made thereafter.

This new Administration, resulting from the December election, have not made emphatic statements beyond the provision of the direct payments to farmers Act 2020, which operates for one year only as an interim continuity provision while the Bill, when it becomes the Agriculture Act, is implemented. Indeed, it has been decided to make cutbacks in financial support as soon as the next year—that is, in this first transition phase—even before any new measures could be set up, as trials, to make up that shortfall. The first experience that farmers and land managers will have under this new scheme will be a cut to funding—hardly a measure to build confidence and trust.

This proposed new clause gives the Minister the opportunity to be clear and put the Government’s intention forward, giving a measure of certainty to all agricultural businesses regarding the funding levels envisaged not only for the next three years but into the future, when the ELM schemes and their benefits can be brought forward. As was said at Second Reading, this is a framework Bill where many of the mechanisms and provisions are not transparent, or even finalised, from the discussions published to date by the department. If the Government want ELMS to be a success, as we all do, the maintenance of at least total farm support transposed into ELMS must be looked at to provide rewards well beyond those at present experienced under stewardship schemes.

I will quickly speak to my other amendments in this group. Under Amendment 112, I propose that any funding not taken up in one year is

“carried over to a future year”.

I thank the noble Baroness, Lady Bennett of Manor Castle, for adding her name to this amendment. It is important in the early years that farmers and land managers, as they assess and make plans for their businesses, have time to come forward with applications. It would be unfortunate if any delay in applications resulted in the budget being cut in a future year in response by this Government.

Under Amendments 107 and 123, I propose that the Government are mindful of the purposes of the Bill and that the costs of administration and advice do not become seen as overly bureaucratic and consume an expanding proportion of the overall budget. They would also ensure that the important advice to the industry from consultants, which we would also wish to see taken up, does not consume a large slice of any application, especially in relation to the larger catchment area schemes that will come forward under the higher proposed tiers 2 and 3. We would want to see farmers and land managers given the tools to perform their activities, putting a scheme’s cash for projects on to the ground.

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[Baroness Bloomfield of Hinton Waldrist]

As I think I said in my speech, we have built flexibility in to the planning stage, although it does not need to be five years, and in all cases there will be no gap between one plan and another.

[Lord Grantchester]

I thank all contributors to this debate for speaking to the various amendments. Even the negative comments were interesting.

If the Government commit to having multiannual plans, as stated in the Bill, it would seem conceivable that they would honour a package that financed the plan ahead in its entirety from the start through to the finish. The amendments scrutinise the Government’s plans around financial assistance in delivering outcomes that are sufficiently robust in their application—with the necessary oversight, as stressed by the noble Lord, Lord Blencathra.

I thank especially the noble Baroness, Lady Rock, for her amendment in sympathy with mine and the noble Baroness, Lady Neville-Rolfe, for her emphasis on a robust implementation plan being adopted by Defra. I am also grateful to the noble Lord, Lord Cormack, for adding his support.

As with so much in every group of amendments, the Minister has been exhaustive and considerate in responding to the many points raised. Along with other noble Lords, I will consider her reply carefully, but at this stage I beg leave to withdraw my amendment.

Amendment 105 withdrawn.

Agriculture Bill

Lord Grantchester Excerpts

Committee stage & Committee: 3rd sitting (Hansard) & Committee: 3rd sitting (Hansard): House of Lords
Tuesday 14th July 2020 Lords Chamber

[Baroness Bakewell of Hardington Mandeville [V]]

My Lords, the provision of advice to farmers at various stages of the Bill is essential. I listened carefully to the noble Lord, Lord Lucas, and the noble Earl, Lord Caithness, talk to Amendments 58 and 119. Agriculture is moving from one system to a completely different method of funding, and farmers will be uncertain about how this will operate and what is expected of them. I therefore completely agree that a system of advice-based support is needed.

The noble Lord, Lord Cameron, and my noble friend Lord Addington spoke in favour of an advice system. There will be a few farmers who are unwilling to make the necessary changes to ensure the protection of the environment and the restoration of land to encourage the return of bird, insect and plant species. For those, it might be necessary for a sanctions-based system to be coupled with advice to encourage them to conform. It will be at best unhelpful if there are one or two renegades who spoil the overall thrust of the Government’s measures.

The noble Lord, Lord Carrington, spoke of the difficulties and the digital divide. Rural areas are very poorly served by wi-fi and broadband, which are essential for farming communities.

I fully support Amendment 122, in the name of the noble Lord, Lord Grantchester. The list of measures to be taken into account in proposed new subsection (2) are essential, especially the impact on the environment, alternative methods of pest control, and food safety. To have this list on the face of the Bill will help farmers to have a much better idea of what is expected as they move towards the new system and, I hope, will remove the need for any sanctions further down the line.

The noble Lord, Lord De Mauley, and the noble Earl, Lord Caithness, have raised the plight of the county shows and all the good work they do. They are an essential part of the farming and rural communities, and I have visited many very many of them over the years. They need certainty for the future and funding.

I trust that we are not too far into the debate for the Minister to have become reluctant to accept the arguments made. Advice is absolutely essential.

[Lord Grantchester (Lab)]

My Lords, I declare my interests as recorded in the register. I thank the noble Lord, Lord Lucas, the noble Earl, Lord Caithness, and the noble Lord, Lord Addington, for their amendments defining that advice and support should be given to those in receipt of financial assistance in a more positive manner rather than the response being one of making sanctions and deductions to an application that one has submitted—as is too often the case. The receipt of applications would therefore need to have some supervision or opportunity for corrections to be included in the submission process. How far there will be explanations at the beginning of the transition to be implemented and under the new ELM scheme is an interesting call for the Minister. I am sure that the initial expositions about the new ELM scheme will be vital to achieve a confidence-based response from potential applicants.

I shall speak to my Amendment 122, which places a duty on the Secretary of State to include the provision of advice, training and guidance to those receiving financial assistance. Clause 3 is to enable good administration of the new payment system. As part of that good administrative system, regulations must also include the provision of advice across a wide area of important matters—this is in my proposed new subsection (2)—to look at how the running of a land-based system can encompass all the features necessary for success. This covers: business management; the welfare of stock; farm safety—on which farming does not have a particularly good record—and the welfare of land-based workers; and good agricultural practice, which are all necessary to encourage a thriving countryside that is aware of its responsibilities and positive in its outcome.

Good administration is not merely a mechanical process characterised as sanction based and without acknowledgment of responsibilities towards the people who will be undertaking activities we wish to promote. As my noble friend Lady Young noted, this has previously often been delivered in the past through ADAS and other services, but it is no longer provided.

Amendment 135 seems to follow in this vein and provides for advice on three main strands: strategic direction; compliance with the responsibilities of participants; and such compliance provided through encouragement. I would also encourage regulations to include those personnel-type administrative functions.

I thank all noble Lords who recognise the extent of the adaptability required of farmers and who have spoken on these amendments.

Agriculture Bill

Lord Grantchester Excerpts

Committee stage & Committee: 2nd sitting (Hansard) & Committee: 2nd sitting (Hansard): House of Lords
Thursday 9th July 2020 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD) [V]]

My Lords, this is a suite of amendments relating to financial assistance for additional purposes. Amendment 12 would amend Clause 1(1)(b), which currently reads:

“supporting public access to and enjoyment of the countryside, farmland or woodland and better understanding of the environment”.

This is vague and woolly. It gives no indication of the nature of the public access to be provided; nor does it give any indication or recognition of what the public want or expect from the access they are expected to pay for. Do people go into the countryside just to enjoy it? There are highly beneficial elements to the public through green travel, education, leisure, recreation and sporting opportunities. There are highly beneficial elements to landowners in the public having an improved relationship with food and farming. The noble Lord, Lord Curry of Kirkharle, set out the case for education extremely clearly. Amendment 13, to which the noble Earl, Lord Shrewsbury, spoke, seeks to insert “forestry” and stressed the importance of education to that.

The CAP farm support favoured intensive units and the big estates but considerable damage was done to the environment in the production of milk and wine lakes, along with grain, butter and cheese mountains, until measures were introduced to protect the environment. Areas that had never been cultivated were ploughed up; I well remember the grants to clear hedges and trees, and to drain areas never drained before. Then the mood changed and grants were given to replant those trees and hedges—too late to save vital habitats for wildlife. At the same time, this introduced the devastating tree diseases into the country which the Minister has debated with us on many occasions. I welcome the contribution of the noble Lord, Lord Carrington, on the various skills which a farmer will need to survive in today’s climate.

Amendments 32 and 33 would add financial assistance for agricultural technology, including robotics and genetics, and the research and development of improved farming systems. The noble Lord, Lord Blencathra, spoke on this theme and I was fascinated by the description by the noble Lord, Lord Cameron, of how robotics can assist farming and production. The Nature Friendly Farming Network believes:

“Society should support farmers to create a better system by encouraging them to use the best technology and providing more information to allow them to make targeted improvements to their land management plans.”


The Government need to lead or support research that brings clarity to these issues, such as how to maximize the carbon sequestration of pasture.

Amendments 43 and 54 seek to develop food strategies and infrastructures. Greener UK believes that:

“Small farms are just as well placed as larger farms to provide the public goods that the bill lists in clause 1. Large farms are, however, more likely to have access to business planning resources and expert advice; the bill must therefore include the provision of advice to help smaller farms adapt to the new system.”


I regret that the noble Lord, Lord Blencathra, thinks that larger farms are better than smaller ones. We need more innovation and local food production to help smaller farms. The noble Baronesses, Lady Bennett and Lady Boycott, have supported these two amendments and the noble Baroness, Lady Boycott, spoke passionately about the environment and animal welfare, as did my noble friend Lord Chidgey. I too support them and know that encouraging the public to eat more fresh and nutritious food—while encouraging its production on our local farms—would save the NHS millions of pounds as the population became healthier and less prone to life-threatening diseases, such as diabetes. The noble Baroness, Lady Bennett, reminded us that the production of cheap food is quite literally costing the earth. The noble Lord, Lord Cameron, explained the virtue of farmers’ markets. I agree totally with him and with the noble Lord, Lord Mann, about the uniform way in which supermarkets produce fruit and vegetables, which is not necessary.

There are some conflicts between these amendments. Amendments 43, 54, 61 and 62 look to encourage a wider interpretation of financial assistance for additional purposes. The noble Baroness, Lady Rock, and the noble Lord, Lord Holmes of Richard, pressed the case for this, along with others, whereas in Amendment 57 the noble Baroness, Lady Jones of Whitchurch—when we hear from her—and the noble Lord, Lord Krebs, seek to ensure that the productivity improvements which may arise from the additional measures do not undermine the provision of public good.

The noble Lord, Lord Krebs, gave examples of falling numbers of birds and decreasing biodiversity. I fully support this amendment, but we must ensure that there is no conflict in financial support between environmental protection and productivity. It is essential that, in the final Bill and its interpretation, we have the widest possible scope for financial assistance that protects the public good at the same time. The noble Lord, Lord Clark of Windermere, raised the very real worry that the right to roam on Forestry Commission land will be lost when some of it is possibly sold off. There will obviously be questions on the interpretation of public good as we further dissect the Bill. I look forward to hearing the Minister’s own interpretation of what public good might look like.

Before I sit down, as they say, I want to say that I am afraid I do not agree with my noble friend Lord Greaves or the noble Lords, Lord Cormack and Lord Naseby, about this current way of working. It suits me perfectly. My office is in Millbank. I do not have to rush down to Marsham Street to have a briefing with the Minister; I can have it in my office with others. I do not have to rush over to Portcullis House to take part in an APPG; I can do it from my house —I have all my notes in front of me and can participate fully. If we are trying to encourage farmers to adopt innovative ways of working and use new technologies, here in the House, we should practise what we preach.

[Lord Grantchester (Lab)]

My Lords, I declare my interest as being in receipt of funds as well as my other experiences in the rural economy, as recorded in the register. I thank all noble Lords for their amendments in this group, which probe the financial assistance arrangements and how far and for what purpose this finance could be applied. Whereas it should perhaps be stressed that care must be taken that the effects of financial benefits are not cast so wide as to diminish their impacts, it is nevertheless also important to enable as many as possible to contribute to the worthwhile merits in the new system, in ways that best suit their land and their perspectives. I welcome these amendments, which enable the Minister to clarify the Government’s position.

I speak on behalf of these Benches to Amendment 57, tabled by my noble friend Lady Jones of Whitchurch. I thank the noble Lords, Lord Krebs and Lord Greaves, for their remarks and for adding their names in support. This is an important amendment, as it seeks to clarify and emphasise that financial assistance is to be provided for public goods defined as providing environmental benefits in relation to agricultural, horticultural or forestry activities. We support the opportunity given in this Bill to link financial support to environmental outcomes, in contrast to the present system, whereby payments are made merely in relation to the amount of land each participant occupies, albeit that there are cross-compliance requirements to fulfil.

Where it is understood that productivity improvements would be included for assistance under Clause 1(2), these improvements must be consistent and not undermine payments made for public goods under subsection (1). In this regard, I am grateful to my noble friend Lady Young for her remarks about the conflicts that might arise and how these may be reconciled. Improvements must be mutually enhancing in promoting sustainable agriculture. Of course, the work of the agricultural colleges has been and will continue to be vital here, as will their role in providing an understanding of the countryside.

I pay tribute to the work of the noble Lord, Lord Curry of Kirkharle, in furthering the understanding of rural matters by hosting and encouraging visits to the countryside. I thank him for Amendment 12, the lead amendment in his group. I am also grateful for the other amendments, which make more explicit the various interpretations of furthering the “understanding of the environment” through the various ways financial assistance can be provided.

Agriculture Bill

Lord Grantchester Excerpts

Committee stage & Committee: 1st sitting (Hansarad) & Committee: 1st sitting (Hansarad): House of Lords
Tuesday 7th July 2020 Lords Chamber

[Lord Grantchester (Lab)]

I thank all Peers who have tabled their amendments in this group. At the start of each day in Committee when I am speaking, I shall declare my interests as at present receiving payments in relation to my interests, as declared in the register.

I will speak to one amendment in this group, Amendment 121, to which my noble friend Lady Jones of Whitchurch has added her name. I thank the noble Baroness, Lady Parminter, for proposing this amendment, which would require the Secretary of State to conduct a consultation on the strong regulatory framework for those in receipt of financial assistance under her Amendment 118. This must be a wide-ranging consultation with participants on the impact of the overarching approach of reward for public goods in relation to environmental impacts. It is important that the Government commit at this stage to consult on the overall framework and impact, not merely on the various regulations that will come as secondary legislation.

--- Later in debate ---

[Lord Grantchester]

I rise merely to press the Minister on his statements around the different levels of tiers and how payments may differ as the higher tiers are approached. I wondered whether this was going to become clear in the regulations or whether there is a bit of experience of how many people will be applying under the different tiers. Will it be defined in regulations?

[Lord Gardiner of Kimble]

Clearly, we know that there are 80,000-plus claimants under the BPS at the moment. Obviously, the range of opportunities, with regard to numbers, will depend on clusters and how many farmers will want to group together—as we have had with farm clusters in other schemes—and those that wish to have individual, predominantly tier 1 consideration. Again, clearly this is why the trials are going on; they will show how that is going to work with the varying tiers and indeed how they all interrelate.

I do not think I would feel comfortable taking it any further than that at this stage, only because this is work in progress. I should think it will go on beyond enactment, but what I will do is make sure that—obviously, there will be continuing work on this and regulations will be coming forward—when we get to further stages of how ELM is coming forward, noble Lords are kept informed.

Direct Payments Ceilings Regulations 2020

Lord Grantchester Excerpts

Wednesday 1st July 2020 Lords Chamber

[Lord Grantchester (Lab)]

I thank the Minister for his introduction to the regulations before the House today. I also thank him, the noble Baroness, Lady Bloomfield, and the department’s officials for having a short meeting with me and the noble Baroness, Lady Bakewell, to discuss these regulations. I remind the House of my being in receipt of payments, as recorded in the register.

I confirm that the regulations are necessary and hope that they are the last regulations and amendments needed under the Direct Payments to Farmers (Legislative Continuity) Act 2020. The regulations have UK-wide relevance. While one SI states that it was made with the consent of the devolved Administrations, the other merely states that it will be made UK-wide with consent. I am sure that there have been discussions with the devolved Administrations, but I stress to the Minister that this dialogue must be meaningful and two-way. I say that in light of the poor sharing of data and dialogue, not only between the Administrations but within the regions and between the city mayors of England, concerning health information on Covid-19 cases. Both SIs are peppered with references to the devolved Administrations and the individual policy choices made by them, and I echo the remarks of the noble Lord, Lord Bourne, in that respect.

The Direct Payments Ceilings Regulations 2020 make many amendments and adjustments that previously, while the UK was a member of the EU, would have been made by the European Commission. One of the adjustments takes account of the reallocations of payments between Pillar 1 direct payments and Pillar 2 rural development. I thank the Minister for confirming that these adjustments and many others are following the custom and practice of prior years and in this case are making redistributions of 12% in England, 9.5% in Scotland and 15% in Wales, with no transfers occurring in Northern Ireland. I recognise the importance of this to many regions, as noted by my noble friend Lord Liddle in his remarks.

I also take this opportunity to commend the noble Lord, Lord Bew, for his review of the distribution of EU funds between the Administrations of the UK, which has now awarded a further €60 million to Scotland and €6 million to Wales for the period 2020 to 2022. I understand that Scotland and Wales have yet to decide how these funds will be distributed. Will the Minister let us know in due course the decisions taken, if that is deemed appropriate?

I have several questions around paragraph 7.7 of the Explanatory Memorandum, where the level of deductions applied across the Administrations to payments under the basic payment scheme is addressed. That they reflect levels similar to prior years is recognised and appreciated, and that they differ in gradations, sizes and top-slicing ceilings between Administrations is further recognised. Can the Minister confirm that these differences do not amount to meaningful competitive distortions between the Administrations of the UK as a whole? How will this operate on a holding or holdings farmed across borders or in more than one Administration? Like the noble Baroness, Lady McIntosh, I would like to know how the transitional arrangements due to start next year will play out against these various clawbacks in terms of continuity of payments between the two systems.

The 100% reduction above a certain amount appears brutal and begs the question of how many applicants these top-payment amounts would be paid to. Bearing in mind the exchange rate and, for example, a top amount of €300,000, my back-of-an-envelope calculation does not suggest that a large percentage of funds would be going to a lot of big estates. The reduction of only €3.9 million in a total of €3 billion would seem to suggest that.

This is the status quo. It is important to reflect that to receive payment you have to qualify as an active farmer, and it seems to suggest that payments are going to farmers to encourage good agricultural practice, and landlord and tenant legislation at present reflects this. Next week, the Agriculture Bill goes into Committee. There seem to be government proposals that suggest a change in the criteria for payment away from the status quo—the active farmer. Will the Minister confirm that payments now and in future are aimed at rewarding farmers producing food for the nation for the public goods they provide by farming in a sustainable manner? Can the Minister provide the split of the total UK reduction of €3.9 million between the Administrations?

Finally, I return to the Direct Payments to Farmers (Amendment) Regulations 2020, merely to ask the Minister to confirm that this instrument’s many corrections to operability issues, to enable retained EU law to operate without ambiguity, mean that there is no likelihood of any more amending instruments to come, and that there are no changes in policy reflected in the amendments.

I hasten to add that one change is brought to our attention in the Explanatory Memorandum regarding the exchange rate used for the 2020 claim year. My understanding is that it will remain the same as in 2019—in other words, no change—but that to take a prior year’s rate is a change. In this situation, I am advised that the Government are being helpful in making this decision.

With that, I confirm our approval of the instruments before the House today.

[Lord Gardiner of Kimble]

My Lords, in many respects, the debate went beyond the instruments, but it was an interesting and important prelude. Let me say immediately that if, in the time I am allocated, there are any points that I have not addressed, I will write more fully.

Let us deal with devolution, about which a number of points were raised by the noble Lord, Lord Grantchester, the noble Baroness, Lady Ritchie, and my noble friend Lord Bourne of Aberystwyth. The first thing to say is that we have worked very closely with the devolved Administrations. As noble Lords will know, there are schedules relating to Wales and Northern Ireland, at their request, which we will deal with in due course.

We plan to have an agricultural support framework agreed and in place by the end of the year. This is currently planned to cover marketing standards, crisis measures, public intervention, private storage aid, data collection and cross-border farms. The aim is to have effective co-ordination and dialogue between the Administrations on how changes to legislation in one part of the UK could affect others. As I said, these statutory instruments cover all four parts of the United Kingdom, and I emphasise again that they are made with their consent.

My noble friend Lady McIntosh and the noble Baronesses, Lady Bakewell of Hardington Mandeville and Lady Northover, raised exchange rates. As we all know, exchange rates fluctuate on a daily basis. The rate we have set, which is not significantly different from today’s rate, maintains continuity with the 2019 scheme. The feeling across the piece was that it would be better to set the rate now rather than wait for a September rate, as has been done before, so that there could be certainty for the farmer as to what the rate would be. I am afraid I have no crystal ball to tell me what the exchange rate might be in September. All I can say is that we decided to keep continuity with the arrangement for the 2019 scheme, which I think is a better way forward.

I turn to the point of the noble Lord, Lord Mann, and other noble Lords. The Government are determined that farming in the UK should not see a reduction in government support at this time. That is why this Government have pledged to guarantee the current annual budget in every year of this Parliament. We recognise that farmers and land managers need certainty over future funding arrangements, and we have committed to a seven-year transition, starting in 2021.

It is already interesting to see the different strands that are coming out around that. I always think that, if the Government are in the middle, perhaps we might have it right: the noble Lord, Lord Liddle, mentioned the pace of change and said that the agricultural transition should be quicker, and my noble friend Lady McIntosh suggested that we should have a longer transition. The reason we have set this transition is that we do not want any cliff edge; we want farmers to continue to do the very important work that they do, at this time of change.

For me, there is no issue around whether you are a large farmer or a small farmer, and the noble Lord, Lord Mann, was right in what he said. All farmers play a very important role in the management of the environment and the production of food. We have all sorts and sizes of landholdings and tenure, and they are all part of the very important arrangements that we have to support the landscape, agriculture and food production.

On another point, which I think the noble Baroness, Lady Ritchie of Downpatrick, raised, if we look at the Agriculture Bill, we can see the Secretary of State’s powers to give financial assistance. Clause 1(4) says:

“In framing any financial assistance scheme, the Secretary of State must have regard to the need to encourage the production of food by producers in England and its production by them in an environmentally sustainable way.”


We want sustainable agriculture. With particular regard to Cumbria, I say to the noble Lord, Lord Liddle, that the new arrangements will be very appealing to hill farmers—farmers who have been looking after the landscape throughout generations. The ELM schemes will be an important part of the recognition that we, as a nation, should give to land managers for the really crucial role—with over 70% of our landmass farmed—that they will play in the mitigation of climate change, adaptation and so forth.

This concept of public money for public goods is important—again, the noble Lord, Lord Mann, referred to this—because it portrays to the British taxpayer what the British farmer will actually do to improve the environment. At the same time, we need farmers to have stability and certainty, along with a smooth transition to a replacement system. So, as I said, we will not be switching off direct payments overnight.

In connection with the ELM schemes, I should say to my noble friend Lady McIntosh that we did have to pause the response to the discussion document and supporting engagement. But as of 24 June, we have reopened this discussion and look forward to receiving feedback from stakeholders. We are doing those tests and trials across the land, with farms of different topography and size, precisely so that we have a range of schemes that will be successful for farmers; and so that farmers will feel that it is their own system, too. I also say to my noble friend that as part of that prelude, applications for the new countryside stewardship scheme are open. We continue to encourage farmers and landowners to apply, as we believe that this is the best way to start preparing for ELM. The ELM national pilot is due to commence in late 2021 and run until 2024, when the full ELM scheme is due to launch.

I also say to the noble Lord, Lord Liddle, that upland farmers play a vital role. As the Minister responsible for national parks and areas of outstanding natural beauty, and from my frequent visits to those glorious parts of the country, nothing could be clearer to me than that benign and pastoral farming is a key element of that. They will therefore be very well placed.

I think it was the noble Baroness, Lady Northover, and the noble Lord, Lord Grantchester, who raised the issue of cross-border farms. Where a farmer has land in more than one part of the United Kingdom, all their land must be included on a single basic payment scheme application. Guidance is provided to such farmers to explain how the scheme rules apply to them. The existing payment reductions for large farmers are worked out based on the proportion of the entitlement that the farmers have used in each part of the United Kingdom.

I turn to the matter of some divergence appearing in interpillar issues. For certainty, this Government, the Scottish Government and the Welsh Government—as I have said before, the Northern Ireland Government have decided not to make a transfer—have decided to take the same approach as was taken for the years 2014 to 2019. They will maintain the status quo precisely to ensure certainty and continuity. The claim for 2020 is around £386.4 million, to be transferred for rural development measures and important schemes in England, such as the Countryside Stewardship scheme and so forth.

The noble Lord, Lord Chidgey, mentioned maintaining the ecology of our rivers. That is hugely important. Clean water will clearly be covered by the financial assistance that is available for new schemes. There were some references to the Commission’s budgetary management system regarding financial discipline, and these have been admitted because they do not form part of retained EU law.

The noble Lord, Lord Addington, raised a clearly important point about errors and omissions. I have heard of many farmers who have had difficult conversations and discussions about this. We are determined that our successor to the CAP will not be so bureaucratic and that it will trust the farmer, although it will obviously have enforcement measures as well to ensure value for money. I say to my noble friend Lord Holmes of Richmond and the noble Lord, Lord Addington, that this will clearly be a very important feature when looking at how best to simplify matters.

Many other points were raised, but I understand that I have gone beyond my time and I apologise to noble Lords. We will be discussing food security. It is a very important part of our work and will be the subject of discussion next week. There is much more that I could say but, in view of the time, I will write to noble Lords on all the outstanding points.