Direct Payments to Farmers (Legislative Continuity) Bill

Baroness Jones of Whitchurch Excerpts

3rd reading & 2nd reading & Committee negatived & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard): House of Lords & 2nd reading (Hansard) & 3rd reading (Hansard) & Committee negatived (Hansard)
Wednesday 29th January 2020 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

My Lords, I am grateful to the Minister for setting out the purpose of the Bill so clearly today and for arranging a helpful briefing with officials beforehand. As he said, the Bill has a simple intent, which is to continue the direct payments to farmers scheme for a further year until 2021 to ensure continuity of payments. As this is a money Bill and will provide important guarantees of funding to farmers, we will not oppose it today.

However, I want to comment on how we have ended up here today. This Bill should never have been necessary—a point made by the noble Baronesses, Lady McIntosh and Lady Bennett, among others— because the Government have had more than enough time to prepare for the transition from CAP payments. It is nearly four years since the Brexit referendum, when so many promises were made to farmers about the sunny uplands, post CAP, and it is 14 months since the Government halted consideration of the previous version of the Agriculture Bill, which began to set out the details of a post-CAP regime and which we are having to revisit again today.

Since then, farmers have been left in limbo, uncertain about their entitlement to payments in the short term and desperate for a clear understanding of the payments regime that will apply from 2021. It goes without saying that commitments on the application of funds for individual farmers are crucial for their long-term planning and investment, so it is unsurprising that they are frustrated with and angry about the delays; a number of noble Lords, including the noble Earl, Lord Devon, and the noble Baroness, Lady Bennett, have reflected that frustration this afternoon. It has resulted in a degree of paralysis, which is unhealthy in a sector that thrives on innovation and introducing new farming applications.

By any measure, Defra has not handled this well. This was confirmed in a National Audit Office report last year, which criticised the department’s handling of the replacement of CAP as lacking proper planning, lacking support for farmers to prepare for the change and lacking a proper analysis of the impact of the change on the overall economy. Again, these issues have echoed around the Chamber this afternoon. For example, the noble Earl, Lord Caithness, asked—quite rightly—whether farmers have been properly advised about what is going on, whether they understand the detailed discussion we are having here and whether they understand the legislative process that will follow from that, since they may think that they are dealing with more important issues on a day-to-day basis.

Although we accept that the need for this Bill is now inevitable, we certainly do not accept that it is ideal. It is of course welcome that the Government have agreed to maintain the total pot of £3.2 billion during the transition to 2025. However, questions arise. I was interested in the questions asked by the noble Lord, Lord Teverson: what will happen if all the money is not spent year on year? Will it go back to the Treasury? What is the implication of that? Can the Minister clarify whether that commitment to £3.2 billion, however it is worded, is inflation-proofed? Can he reassure farmers as to what payment pot is envisaged from the end of the five-year Parliament in 2025 to the end of the seven-year transition, because there is a payment gap for the last couple of years? How will that be calculated? Can he also clarify whether the Bill has any impact on the Pillar 2 payments, which are not part of the CAP basic farm payments scheme? Again, a number of noble Lords raised this issue. Will those payments be claimed separately in the usual way until 1 January next year? Can he reassure noble Lords who have struggled with the Rural Payments Agency that the current payments will be made in a timely manner?

In terms of the wording of the Bill, we have another specific concern. As it stands, the Bill allows for the extension of the basic farm payment scheme for one year only, as the Bill includes a sunset clause. So we may be legislating for a new cliff edge on 1 January 2021, after only another 12 months of certainty for farmers, before the new Agriculture Bill is due to come into effect. What certainty can the Minister give that we are not just going to move from one regime to another and that there will be a smooth and proper handover for these two pieces of legislation?

I would say that we are all enthused about the opportunities that the new Agriculture Bill offers in shaping the payments scheme based on public money for public goods, and I agree with the noble Lord, Lord Teverson, that we probably have something to thank Michael Gove for about that. He certainly raised the game on how we might face the challenges ahead. I also agree with my noble friend Lady Young that this is one of the real opportunities post Brexit which we should grasp with both hands. The new Agriculture Bill places a welcome new emphasis on improving the environment, adapting to climate change and protecting the welfare of livestock, but the Minister will know that passing the Bill is only the first step towards a new regime. It is in effect an enabling Bill. The detail is yet to be set out in regulations which will need to be drafted and approved before farmers can be sure about what the payments system will mean for them, so with the best will in the world, as we stand here now in January 2020, it is hard to see that all that work will be completed before the end of this year, particularly if farmers and stakeholders are to be properly consulted along the way. There is also the added frustration that the regulations that we are promised but have not seen will come in the form of secondary legislation which we will be unable to amend. Given that, I agree strongly with my noble friend Lady Young that consultation on these SIs in advance of them being laid would be extremely helpful. I would be grateful if the Minister could explain whether that is being considered.

At the same time, it is unclear how the outcome of the pilot environmental land management schemes, which of course should provide the basis for future payments, can be properly rolled out and evaluated in time to determine the rules for the next seven years, a point that has also been made by the noble Baroness, Lady McIntosh. Again, we would feel more reassured if the Minister could clarify that because, for the pilots to have any merit, they need to roll on for a considerable period of time. How is that going to influence the starting point of the schemes?

All this is intensely frustrating. We support the principle of public money for public goods, with all the environmental advantages that that implies, and we want to move on to the new regime as quickly as possible. However, we want to ensure that the new scheme is robust, properly monitored and measured, and transformative. We need to be somewhat persuaded that the transitional payments as envisaged in the Agriculture Bill will be ready for implementation on 1 January next year. If that is the case, why is the Bill before us today restricted to one-year payments when it could have retained more flexibility? Can the Minister also explain why the Agriculture Bill itself seems to give the Secretary of State the flexibility to extend the basic payments scheme for future years rather than including that option in this Bill?

Finally, the Bill does include some good news. All noble Lords have expressed their gratitude to the noble Lord, Lord Bew, for his report into the allocation of farm support across the UK. He has recommended that a greater share of the direct payments should be allocated to Wales and Scotland, and he is right to note that Labour definitely supports that proposal. I pay tribute to him for his detailed work and the great acts of diplomacy that he has had to carry out in brokering a deal—congratulations on doing that.

We are pleased that the Government are implementing the recommendation of topping up these payments while the allocations to England and Northern Ireland are maintained, but can the Minister clarify how that recommendation will apply in future years? Can he confirm that this will not just be a two-year top-up, but will be a principle that is carried forward into the new payments scheme? Further, as the noble Baroness, Lady Byford, asked, will it be ring-fenced in the future? Again, that is another challenge. I look forward to his response on these issues.

While I am on my feet, I thank the Minister and officials for the careful and considerate way in which this Bill has been stewarded through this House. I am sure it sets a good precedent for the much greater challenges ahead when we come to debate the Agriculture Bill.