Direct Payments Ceilings Regulations 2020

Baroness Bakewell of Hardington Mandeville Excerpts

Wednesday 1st July 2020 Lords Chamber

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

My Lords, I also thank the Minister for introducing these two statutory instruments and for his time and that of his officials in providing a briefing in preparation for them. We have listened to an interesting debate that has ranged over a number of topics, some relating to the Agriculture Bill, which we will begin to dissect next week. The noble Lord, Lord Bourne of Aberystwyth, and the noble Baroness, Lady Ritchie of Downpatrick, both asked about the relationship between the four component nations of the UK in agreeing a division of the direct payments, and I will be interested in the Minister’s response.

Both these statutory instruments are straightforward, as the as the noble Earl, Lord Shrewsbury, said. The Direct Payments Ceiling Regulations 2020 allow the devolved Administrations to set their own percentages to be made available to support rural development measures. In this case, Scotland has set it at 9.5%, Wales at 15% and the Government at 12% for England. As a result of the Bew review and this instrument, that provides for an additional €60.43 million for Scottish farmers, and an additional €6.11 million for Welsh farmers over a two-year period, 2020-22, as the Minister has already set out. These payments are made under the Direct Payments to Farmers (Legislative Continuity) Act 2020 and can be made only with the consent of the devolved Administrations.

The Government and the devolved Administrations each decided to maintain the same level of reductions as in previous claim years, and the Explanatory Memorandum gives full details of the figures and calculations involved. Are these payments per applicant or per farm? There is a big difference between all the farms that the National Trust owns and an independent farmer who may be a tenant. I am sure the Minister can clarify that. My noble friend Lady Northover and the noble Lord, Lord Mann, raised the issue of tenant farmers.

The direct payments to farmers SI, as well as covering some tidying-up measures, sets the all-important exchange rate from the euro into the pound for 2020. I welcome the fact that it will be set at the same rate as that set by the European Central Bank during the months prior to 1 October 2019. Several noble Lords asked about that exchange rate during previous debates on direct payments in the Chamber earlier in the year. The Rural Payments Agency previously issued guidance to farmers in England on 12 March this year which explained how the Government plan to set the exchange rate, and I am sure that all farmers will be reassured now that that has been finalised. Will the Minister confirm whether setting the exchange rate at the October 2019 rate is more beneficial to farmers than setting it at today’s rate? The noble Baroness, Lady McIntosh of Pickering, also raised the exchange rate issue.

As we all know, direct payments were the main income source for farmers under the previous CAP regime. The Government have given a commitment to provide £2.852 billion for these payments in 2020, which is the same as for 2019. Noble Lords asked again today whether that will be carried forward into future years beyond 2020. Farmers are concerned that their income could become unstable as the land management schemes are rolled out. The noble Lord, Lord Liddle, welcomed the change and acknowledged the uncertainty for farmers, especially hill farmers, as did the noble Baroness, Lady McIntosh of Pickering.

The noble Lord, Lord Holmes, gave us an excellent list of produce and livestock, which helps us to appreciate the work that farmers do on our behalf. I look forward to the Minister’s response to questions raised in this debate, and I support these two statutory instruments.