Baroness Redfern

Under the Coronavirus Large Business Interruption Loan Scheme (CLBILS) to ensure that loans backed by taxpayers’ money are being used in the right way to support businesses and jobs through this difficult time, loans come with restrictions on dividend payments:

• For facilities of up to £50m, dividend payments can continue but may not be increased for as long as any facility under CLBILS remains outstanding.
• For facilities of more than £50 million businesses must agree to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan. These restrictions were introduced on 26 May, when the maximum loan size under CLBILS was extended to £200 million.

For facilities of more than £50 million, until the facility has been repaid in full, borrowers and members of their group cannot:

• Make dividends or other shareholder payments that were not declared before the borrower entered the facility other than in very restricted situations.
• Pay any cash bonuses to senior management, or award any pay rises to senior management except where such pay rise was (i) agreed in writing before the facility was taken out, or (ii) is in keeping with similar payments made in the preceding 12 months, and (iii) does not have a material negative impact on the borrower’s ability to repay the facility. The restriction does not need to apply to pay awards or cash bonuses to be paid to new members of senior management joining the group after the date of the facility but must apply to any subsequent cash bonuses or pay rises awarded to such persons after they have joined the group.

Under the Future Fund, loans advanced under a Convertible Loan Agreement (CLA) cannot be used to pay dividends, pay bonuses or discretionary payments that are non-contracted or not in the ordinary course of business for 12 months, or pay advisory, placement or similar corporate finance type fees in relation to that CLA.

The Bounce Back Loan Scheme (BBLS) has been introduced to help small and medium-sized businesses to borrow between £2,000 and £50,000. Businesses are not required to bank with a lender in order to apply for a Bounce Back Loan with them.

There are now 18 accredited lenders of the scheme and the British Business Bank is working at pace to accredit more lenders to further extend the Scheme’s reach and provide more choice for businesses. A full list of accredited lenders can be found on the British Business Bank website.

The Bounce Back Loan Scheme (BBLS) was launched on 4 May to help small and medium-sized businesses to borrow between £2,000 and £50,000.

More than 69,000 Bounce Back Loans worth over £2 billion were approved during the first 24 hours of the scheme. As of 24 May, this has increased to 608,069 loans issued to businesses, worth £18.49 billion.

In order to apply for the scheme, businesses complete a short, simple, online application form, meaning that applications can be submitted and processed rapidly, and loans can be accessed within a matter of days. The Government is providing lenders with a 100% guarantee on each loan to give them the confidence they need to support the smallest businesses in the country.

Over the course of this Parliament, the government will provide an extra £2.5 billion (£3 billion including indicative Barnett consequentials) for a new National Skills Fund. The Fund is part of a dramatic rebooting of our skills system and will help workers to have the skills they need to flourish and fulfil their potential.

To decide how best to develop the National Skills Fund, the government is planning to consult widely on the National Skills Fund, to ensure the fund provides the best return on investment.

The insights gained will help to build an understanding of how to target the fund and what types of training it should cover, to ensure it best supports people to learn new skills and prepare for future changes to the economy.

The Government encourages the highest standards of animal welfare at slaughter, and legislation sets out the main requirements to protect the welfare of animals when being slaughtered.

Following publication in 2021 of the Post Implementation Review of the Welfare of Animals at the Time of Killing (England) Regulations 2015, and as part of the Government’s Action Plan for Animal Welfare, we are considering a number of ways in which the welfare of animals at the time of killing could be further improved. As a first step, last year we introduced The Protection of Animals at the Time of Killing (Amendment) (England) Regulations 2022 which made the non-penetrative captive bolt device available as a killing method for neonate piglets, lambs and kids (within certain parameters), providing an effective method for humane culling on-farm.

Stimulating market demand for higher welfare products is a key strand of the Animal Health and Welfare Pathway. We are continuing to work with industry to explore how we can harness the market to improve food information to consumers and build on our high standards of animal welfare, while aligning with wider food labelling priorities such as eco-labelling.

Alongside this we are investigating where additional regulatory tools may be required to ensure that effective enforcement of our high animal health and welfare standards is maintained.

The annual health and welfare review opened to all eligible keepers of cattle, sheep and pigs in February 2023, giving farmers access to a fully funded visit to their farm by a vet of their choice. In the coming months we will continue to iterate the service by further simplifying the application process. Further iterations will allow more reviews to take place, by opening the offer to livestock keepers who are not Basic Payment Scheme recipients and to those who keep multiple species or multiple herds and flocks of the same species.

As part of the fully funded annual health and welfare review eligible cattle, sheep and pig keepers are able to access bespoke advice from their choice of vet alongside access to diagnostic testing for key endemic diseases and conditions. This advice includes recommended actions to take and signposting to further support available. This will support farmers to continually improve the health and welfare of their livestock and the increases in productivity that comes with this.

We are carefully reviewing the evidence gathered both from our Call for Evidence and wider engagement with the fur trade and stakeholders, and a summary of responses will be published in due course.

We will use the evidence gathered to inform any future action on the fur trade in Great Britain, in line with HM Government’s commitment to improving animal welfare standards.

Food supply is one of the UK's 13 Critical National Infrastructure sectors. Defra and the Food Standards Agency (FSA) are joint Lead Government Departments (LGDs), with Defra leading on supply and the FSA on food safety. As such we work closely with the Cabinet Office and other LGDs ensuring food supply is fully incorporated as part of emergency preparedness, including consideration of dependencies on other sectors.

The Government Food Strategy was published in June 2022 setting out a plan to transform our food system to ensure it is fit for the future. The Food Strategy is a cross-departmental strategy. Therefore, Defra actively collaborated with and engaged with other Government departments in its development.

Responding to recent events, the Food Strategy puts food security at the heart of the government’s vision for the food sector. It included a commitment to broadly maintain the current level of food that we produce domestically and boost production in sectors where there are the biggest opportunities.

Setting this commitment demonstrates that we recognise the critical importance of domestic food production and the role that it plays in our food security. Domestic production figures have been very stable for most of this century. We produce 61% of all the food we need, and 74% of food which we can grow or rear in the UK for all or part of the year, and these figures have changed little over the last 20 years.

Food production is the primary purpose of farming and always will be. Our agricultural reforms in England aim to support a highly productive food producing sector, meeting our commitment to broadly maintain food production, alongside environmental improvements that benefit us all such as improving water quality and species abundance.

Balancing and integrating food production with our environmental land management will support an efficient and sustainable land use without offshoring harms associated with lower production standards. We have a legal duty to assess the impact of all environmental land management schemes, such as Sustainable Farming Incentive and Landscape Recovery, on food production.

Defra are aware of the challenges some tenant farmers face when seeking to enter our schemes, such as not having sufficient duration of management control to enter long scheme agreements, being limited by the terms of their tenancy agreement as to what actions they can carry out on the land and struggling to obtain their landlord's consent to enter such schemes.

We are aiming to remove barriers to tenants entering these schemes where possible and have already done so in the Sustainable Farming Incentive (SFI). Tenants can enter SFI without their landlord's explicit consent and tenants with annually renewing tenancy agreements can enter if they expect to have management control for the duration of their 3-year agreement. Furthermore, if a tenant unexpectedly loses management control of the land, such as when the landlord serves them a notice to quit, we do not require the tenant to pay a penalty to Defra for ending their SFI agreement early.

The recently published Rock Review led by Baroness Rock acknowledges that our policy on agreement length and no penalty exits when there is an unexpected loss of management control have made the scheme more open to tenant farmers. We are currently considering the Rock Review's recommendation that Defra must continue to design the future SFI standards so that they are open to tenant farmers and will formally respond to this recommendation in due course.

The prevention measures introduced through the Avian Influenza Prevention Zones, including addition of mandatory housing measures and changes to bird gatherings general licence, are introduced in a phased and escalating manner proportionate to the escalating risk to an area and may be introduced on a regional or national basis depending on the epidemiological situation.

We continue to monitor the current situation both in Europe and globally, as well as the effectiveness of any disease control measures taken. Any future decisions on disease control measures will be based upon the latest scientific, ornithological, and veterinary advice.

Egg Marketing Standards provides a 16-week derogation period during which the free-range description can be retained on eggs even if hens have been housed.

Defra currently has no plans to review this derogation period. However, in recognition of the pressures the egg sector is currently facing, particularly rising input costs alongside the impacts of Avian Influenza, Defra has granted a concession which will apply if the housing orders that are currently in place in England exceed the 16 week derogation period. This concession will allow producers and packers, on a one-off basis, the option to use either direct print to pack or an affixed label on free-range boxes. Accompanying clear and transparent point of sale signage should also be in place to ensure consumers are not misled and to avoid undermining consumer confidence in the free-range industry.

HM Government welcomes the robust regulatory response from Ofwat to incentivise water companies to deliver for their customers, the environment and wider society.

The financial penalties imposed for missing performance commitments will rightly be returned to customers in the next financial year. There is no requirement from HM Government for companies to itemise these reductions on individual customer bills and individual company billing practices will differ.

As the Secretary of State requested, we have received letters from all water companies on how they plan to make improvements, and we are now working with them to establish where they can do more and opportunities to speed up delivery.

We will respond shortly regarding Potential infrastructure projects and opportunities.

I refer to the Written Statement HLWS449 made on 16 December 2022 and Written Statement HCWS456 made on 19 December 2022.

HM Government considers that the interests of both the environment and consumers are best protected with separate bodies for environmental and economic regulation. There are regular discussions between Ofwat and the Environment Agency to facilitate regulation of water companies, as well as with the Drinking Water Inspectorate and Defra.

Ofwat’s price review process incentivises and penalises companies in relation to their performance, resulting in companies having to return money to customers where they fail to meet relevant performance commitments. Ofwat and the Environment Agency work closely to agree those performance commitments related to environmental performance.

Enforcement action against water companies is strengthened because of Ofwat and the Environment Agency having differing routes and tools for sanctions.

Ofwat can take enforcement action where companies either fail to comply with their statutory duties and licence obligations or are likely to do so. Ofwat’s enforcement sanction options include enforcement orders, and it can directly impose financial penalties, secure formal undertakings from companies (that previously included money being returned to their customers in respect of their failings) and fines paid to the Treasury’s Consolidated Fund.

The Environment Agency’s enforcement powers are focused more on individual incidents and sites and include intervention orders, civil sanctions and criminal proceedings, when fines can be imposed as part of the sentencing. Since 2015, the Environment Agency has brought 54 prosecutions against water companies, securing fines of almost £140 million.

In June 2019, Ofwat imposed a penalty package on Southern Water of £126 million for spills of wastewater into the environment from its sewerage plants and for deliberately misreporting its performance, which contravened both statutory obligations and licence conditions. £3 million was paid as a fine, while £123 million will be reimbursed to Southern Water’s customers. They received a £17 rebate in 2020/21 and will receive an £11 rebate in each of the following four years.

In parallel, the Environment Agency brought a criminal case against Southern Water for widespread and long-term breaches of environmental law. The case saw pollution offences from 16 wastewater treatment works and one storm overflow brought together in a single prosecution. The £90 million fine was the largest imposed against a water company, because of a prosecution bought by the Environment Agency.

In November 2021, the two regulators launched the largest ever criminal and civil investigations into water company operation of their sewage treatment works, considering over 2200 treatment works. This followed new data coming to light because of increased monitoring programmes the Environment Agency and Ofwat had required and funded. To date, Ofwat has opened enforcement cases with six companies, whilst all other water and sewerage companies in England and Wales remain subject to its ongoing investigation.

HM Government will always consider the learning and outcomes of reports and inquiries to ensure effective regulation and enforcement in the water sector. This will include the outcomes of the House of Lord’s Industry and Regulators Committee’s current inquiry ‘The Work of Ofwat’, which is considering the regulator’s relationship with HM Government and the other regulators.

We want the Environmental Land Management schemes to be user friendly, and easy to access and engage with, so that advice can focus on where it will really add value.

The Sustainable Farming Incentive (SFI) is a simple, menu-based scheme which is largely self-service, supported by high quality, very accessible technical guidance – freely available to all farmers and land managers whether in schemes or not. This is being tested during pilot and early rollout and we are responding quickly to the feedback.

The Local Nature Recovery and Landscape Recovery schemes are expected to need a greater level of advisory support than SFI. We are exploring through our tests, trials and ongoing detailed policy design work the need for advice in these schemes, how best it could be delivered, and who is best placed to provide it.

We have also been clear that we intend to support collaboration in these schemes. We found in our tests and trials that local facilitators can really help people work together effectively. We plan to work with farmers and other experts to set up a new facilitation offer that builds on the successes and lessons to be learned from the Countryside Stewardship Facilitation Fund, which remains open to anyone eligible for agri-environment schemes.

In addition, through our Landscape Recovery pilots we will test how we can best support groups of land managers to deliver large-scale land use change projects, including through our funded project development phase.

The Future Farming Resilience Fund has been developed to provide free business support to farmers and land managers during the agricultural transition. ALB advisers will also provide targeted support to encourage good engagement and ensure high quality agreements.

We are working with existing providers to support development of environmental skills and accreditation in the commercial advice sector. The Chartered Institute of Ecology and Environmental Management have developed a competency framework for environmental advisers and BASIS have set up an Environmental Adviser Register which requires a qualification to entry or demonstration of knowledge and experience, coupled with an ongoing continuous professional development requirement.

These various advice and information pathways should result in land managers taking better account for the environment in their business, leading to innovation and improvements in land use and management practices.

The success of Environmental Land Management Schemes will be evaluated using a range of indicators and metrics. Area of land under management is just one of the indicators that we will be using to evaluate the success of the schemes. We have specifically set out a number of size-based goals that we will be monitoring, further details are available in the policy paper Environmental land management schemes: outcomes published on 6 January 2022 (GOV.UK), including the aim that by 2028, at least 70% of farmers, covering at least 70% of farmland, will take up Sustainable Farming Incentive agreements. We have also committed to deliver at least 10 Landscape Recovery projects covering over 20,000 ha between now and 2024.

We have recently seen a greater interest in our Countryside Stewardship schemes with a 40% increase in scheme applications in 2021 compared to 2020. Alongside the new Environmental Land Management schemes these increases should help to contribute to many of our most important key targets and ambitions.

We are building on our experience of delivering, monitoring and evaluating agri-environment schemes over the last few decades, working closely with farmers, land managers and wider industry stakeholders to test, trial and pilot our approach to scheme design and delivery, including monitoring and evaluation.

We are in the process of establishing our monitoring and evaluation plans for each of the Environmental Land Management schemes. To ensure strength in design of our monitoring and evaluation we are using a mixed methods research approach, this includes consideration of how to compare between sites that our participating in schemes and those that are not. This will help us to understand what additionality and impact our schemes are delivering.

More specifically, in the Sustainable Farming Incentive pilot, land managers will be supported through monitoring and site visits to track how they are delivering their outcomes. Similar to our approach to monitoring Countryside Stewardship, we are using a combination of physical and virtual site visits, remote monitoring, and desk-based administrative checks. We are still designing our monitoring and evaluation plans for Local Nature Recovery. In the first round of Landscape Recovery, each project will be responsible for developing their monitoring, evaluation, and learning strategy. There will also be scheme-level monitoring, evaluation and learning which will help us learn about how the scheme is working and make improvements for later rounds of Landscape Recovery projects.

We have produced early assessments of the potential impact of all land management actions being considered by the ELM schemes on environmental outcomes (including biodiversity), how these are relevant to our environmental priorities and outcomes (as published in Environmental Land Management: Outcomes, January 2022), as well as what the potential impact on food production may be.

We have a legal duty as per the Agriculture Act 2020 to consider the impact of our schemes on our ability to produce food in a sustainable way. We embed that duty into all elements of our scheme development. In addition, as the design and content of the schemes mature, we will draw upon modelling to refine our understanding and quantify the full impact of the schemes. This modelling will bring together an ongoing commissioned project to understand the environmental, and associated societal, impacts of land management actions across England over space and time with a project exploring the structure of the farming population and agricultural sector.

On 5 October 2021, a sewage discharge was made from Broadstairs Waste Water Treatment Works operated by Southern Water Services through the Short Sea Outfall to the sea at Joss Bay, Broadstairs. The Environment Agency investigation into the incident is ongoing.

The Environment Agency has been working closely with partners including Thanet District Council and Southern Water Services to mitigate the effects from the discharge. Thanet District Council, in consultation with the Environment Agency, issued advice against bathing at ten designated bathing waters and other non-designated bathing waters on the North Kent coast. Southern Water and Thanet District Council have undertaken daily inspections of the Thanet beaches since the spill, and advice against bathing has now been lifted on all bathing water beaches.

It is the responsibility of Southern Water Services to ensure that such releases do not occur and that in the event of any technical failure that they have resilient back up plans in place.

Improving water quality is a Government priority and we are clear that incidents of this kind are unacceptable. The Government is working across a range of measures to crack down on water pollution, including through implementing and enforcing regulation, working closely with Storm Overflows Taskforce - chaired by Defra - and a new package of commitments in the Environment Bill.

We have made it crystal clear to water companies that they must significantly reduce sewage discharges from storm overflows as a priority. The draft Strategic Policy Statement to Ofwat sets out our expectation that companies work to significantly reduce storm overflows for the first time and we expect funding to be approved for water companies to be able to do so. We have announced that we will put that instruction on a statutory footing with a new duty on water companies to progressively reduce impacts of sewage discharges.

The Government has also committed to publish a plan by September 2022 to address the harm caused by sewage discharges from storm overflows and reduce their impact on the environment.

The Environment Agency will work closely with Southern Water Services to both support and regulate their activity and to monitor improvement works to the waste water infrastructure around the North Kent coast. Failure to make improvements or comply with environmental permits in line with Environment Agency procedures may result in enforcement action.