Draft Direct Payments Ceilings Regulations 2020 Direct Payments to Farmers (Amendment) Regulations 2020

Daniel Zeichner Excerpts

Monday 29th June 2020 General Committees

[Daniel Zeichner (Cambridge) (Lab)]

It is a pleasure to serve under you in the Chair, Mr Robertson, and a pleasure to continue this fascinating, if occasional, dialogue with the Minister about how we ensure a regular and healthy supply of food to our fellow citizens by helping our farmers financially. I am sure that the Minister enjoyed as much as I did going back to EU regulation 1307/2013 over the weekend, which is where we started the conversation some months ago.

We are of course in a transitional phase, and it may be lengthy. It struck me, in preparing for this Committee, that we could be coming back year after year to discuss such statutory instruments—in 2021, ’22, ’23, ’24—who knows? But I am sure each iteration will prove yet more illuminating.

May I say how pleased I was to see that the environment land management scheme consultation is back open? That is relevant to today’s discussion, because of course it is the potential replacement system. However, I am slightly disappointed to see that the closing date remains the end of July, so the consultation period has effectively been halved. Could the Minister comment on that and explain the thinking? We are talking about a major change—as the Government says, the cornerstone of the system. I suspect that the reason for the closing date is probably that there is now some urgency because, as the Opposition warned earlier this year, things do not always go as smoothly as one hopes.

My next question for the Minister follows from that. I want to check that my understanding is correct, and that we will indeed repeat this exercise each year until basic payments are completely removed from the system. Today’s statutory instruments are for scheme year 2020. As I recall, clause 10 of the Agriculture Bill outlines what happens for future years, and as I understand it, measures under that clause will also be subject to affirmative resolution. While we continue to struggle with applying what is now considered an out-of-date system, the EU of course has moved on—to an ambitious goal of 25% organic by 2030. I fear that while it is doing that, we will be in the slow lane, toiling away at those “oven-ready” basic payments.

Be that as it may, today we have two fairly routine items to consider, which would formerly not have required decision and would have been handled in the normal structures of the European Union: a decision on the exchange rate to be used to calculate payments; and the distribution of those funds between the nations, and allocations between pillar one and pillar two, essentially to fund rural development programmes. As has been said, there is also an adjustment to take account of the recommendations of the Bew review.

All this ties back to EU regulation 1307/2013, which we enjoyed back in January, and the Direct Payments to Farmers (Legislative Continuity) Act 2020, which we also enjoyed discussing earlier this year. I am sure that hon. Members will be relieved to hear that these measures are not controversial and we will not oppose them. But I am duty bound to note, as I have done before, that for all the Government’s claimed green zeal, the opportunity to divert funds from pillar one to pillar two in England has once again been passed over. Control may be taken back, only for us to carry on as before. The area payment system that the Government are so keen to dismantle in the Agriculture Bill carries on unchanged for another year in England.

Meanwhile, the environmental and social schemes funded under pillar two, the stewardship-type schemes that the Government rightly wish to promote, get no additional funding. Labour Wales uses the maximum 15% allowed; Conservative England does not. Perhaps once again the Minister could explain why the Government continue not to take the opportunities on offer.

The ceiling has been adjusted to reflect the outcomes from the Bew review, as the explanatory memorandum helpfully explains at paragraph 7.6. The Welsh Government have opted to pass money on to their farmers, but, as the Minister has explained, it appears that the Scottish Government are taking a different path. I noted her comments, but would be interested to hear her views on how the additional €60.43 million is to be further allocated.

We also see from the helpful explanatory note, at paragraph 7.7, that although caps apply to basic payments in Scotland above €600,000, in Wales above €300,000 and in Northern Ireland above €150,000, there are no such caps in England, but merely the 5% over €150,000 required by the EU. Happy days continue for some. Perhaps the Minister can explain what thought was given to moving some funds from those very big payments into more environmentally and socially friendly schemes, and will she confirm that it could be done now? It is a political choice.

I appreciate that modulation has long been unpopular with influential farmers in England, but I would also gently reflect that we will see something remarkably similar introduced under ELMS; based just on the information for next year, we can see that some of the larger payments will indeed be reduced substantially. I am bound to ask: why is that right for ELMS, but not for direct payments? And also the converse: will there be similar scope to ensure that payments under ELMS can be capped, as effectively happens now in Wales, Scotland and Northern Ireland?

SI 2020 No. 576 mainly establishes the mechanism to be used for calculating the exchange rate to be used. It also tidies up some minor points that I suspect were left over from earlier changes. It is not controversial, although I am puzzled—I do not expect the Minister to have the answer today—as to why paragraph 6 of article 46 in regulation (EU) No. 1306/2013 needs to be taken out. Perhaps I am being over-suspicious, but the fact that it refers to intervention measures makes me wonder whether the Government are quietly removing one of the tools that may yet be needed if times get tougher ahead. Will the Minister clarify? I am also struck that this SI seems to be in some cases amending the amendments made in SI 2020 No. 90, which makes some of this quite hard to follow. That certainly seems to be the case for regulation 2, in which regulation (EU) No. 1306/2013 is being further revised.

Mr Robertson, you and the Minister will no doubt be glad to hear that I have no further substantive queries on the remaining amendments, although I cannot help wryly noting that one or two of the tidy-ups to regulation (EU) No. 639/2014 had to do with points that were raised when we discussed SI Nos. 91 and 90 earlier this year. It is good to know that our time here discussing these things is not wasted. We are content for the regulations before us to proceed, and we look forward to the next round.