Common Agricultural Policy

George Eustice Excerpts

Monday 7th July 2014 Commons Chamber

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (George Eustice)]

It is a pleasure to be in the Chamber with so many fellow farmers. I have heard many of them declare their interests this evening. I congratulate the hon. Member for Thirsk and Malton (Miss McIntosh) on securing the debate, and thank members of the Select Committee for their report.

Let me begin by saying a little about the approach that the Government took during the negotiations. My right hon. Friend the Member for South East Cambridgeshire (Sir James Paice) explained very clearly the difficulty that we experienced. We set out to secure a common agricultural policy that was simpler and greener, but despite the best endeavours of my predecessors and a very talented negotiating team, we have ended up with a CAP that is more complex because it was not possible to move the European Commission, or indeed sufficient numbers of other member states, to our position. Our view all along had been that we should keep pillar one—the single farm payments—as simple as possible, and that pillar two was the right option to deliver for the agri-environment.

There are two key issues about which farmers are expressing concern. One is the issue of the three-crop rule, which will affect at least 7% of farmers; the other is the issue of the environmental focus areas and some of the administrative burdens connected with them.

It is important to note the successes that my predecessors achieved in the negotiations. My hon. Friend the Member for Sherwood (Mr Spencer) asked what had been my achievements. I have to say that I was not involved in the negotiations, so the credit for what we achieved should go to my predecessors. However, when it came to the three-crop rule, we did manage to increase the threshold to holdings with 30 hectares or more. We did manage to get the Commission to accept that there should be a distinction between spring barley and winter barley, or spring wheat and winter wheat. And we did manage to move the Commission away from its initial proposal for action that would have been very intrusive—looking at farmers’ incomes to see exactly how much they were earning from agriculture—and, instead. to establish a negative list to remove, for instance, airports, railways and golf courses. So there were successes in the negotiations.

On implementing the CAP, however, we have tried to stay true to that basic stance that we adopted during the negotiations: first, we should keep the implementation of pillar one as simple as possible so farmers can implement this in the most flexible way that works for their own individual holding; and, secondly, we should take the environment very seriously, and we want to deliver for the environment through pillar two—through the agri-environment schemes for which this country has built up an admirable track record.

[Jesse Norman]

Does my hon. Friend share my surprise that the shadow Minister should be so strong in his condemnation of the position the Government have ended up with through these negotiations, without in any way spelling out what the Labour party would do on any of the issues?

[George Eustice]

Well, I think there was quite a degree of consensus. I suppose we have to recognise that the last Government gave up a chunk of our rebate supposedly in order to get CAP reform, but that did not work either. I want to stay on the substance of the issue before us this evening, however.

In terms of applying this basic approach of keeping the pillar one payments as simple as possible, when it came to greening we were clear we wanted to have the flexibility to allow farmers, for instance, to use hedges to count towards their environmental focus areas.

[Geoffrey Clifton-Brown]

The inclusion of hedgerows as being eligible for pillar two payments is one of the Government’s successes. On that point, while many areas of the country have hedgerows as field boundaries, there are other areas, such as the Cotswolds, that have stone walls as field boundaries. May I ask him to press the Commission hard that those sorts of landscape features should also be included for payment?

[George Eustice]

There were serious administrative difficulties in terms of allowing hedgerows and all landscape features to count towards the environmental focus area, because each one has to be mapped, and we took the decision in the end that hedgerows were so important to many parts of the country that in the first year we should include those hedgerows and endeavour to get the mapping done, and where it could not be done in year one—we have three years to complete the mapping— farmers would self-declare the hedgerows. We do not rule out adding things like stone walls in years two or three, once we have got hedgerows in place. The task of mapping every single individual feature on every farm is an enormous one, however, and we therefore wanted to start first with hedges, before moving on to things such as dry stone walls.

[Miss McIntosh]

Will my hon. Friend give way?

[George Eustice]

I am going to try to make progress, I am afraid, and I will address many of the points my hon. Friend made if I have time to get to them.

On the agri-environment schemes, we have been clear that 87% of the pillar two budget will go on the new environmental land management scheme. At the higher end, the scheme will be broadly similar to the existing higher level stewardship scheme, but we will also have an additional rate that has more requirements and obligations than the existing entry level stewardship scheme, and which is more proactive and is almost a middle rate. These will be more targeted, and my right hon. Friend the Member for South East Cambridgeshire raised concerns that this would effectively lead to white areas or deserts where there would be no such support. Alongside this scheme we intend to deal with the problem of so-called white areas by ensuring that there will be directed options right around the country so that whole areas of the country will not be excluded, and grants to support the planting of woodland, for instance, will be universally available.

Many Members touched on matters relating to the three-crop rule, which will cause difficulty for some farmers—up to around 7%, possibly more. We gave serious consideration to advancing what is called a national certification scheme—a nationally designed scheme that would achieve the same thing—because, as my right hon. Friend the Member for South East Cambridgeshire said, the three-crop rule does not in itself guarantee crop rotation. Indeed, there are all sorts of anomalies, not least that a cabbage and a cauliflower are regarded as the same crop botanically as far as the EU is concerned, and there will be lots of similar complications to work through. When we looked at the alternatives, however, we found that they were all more complicated and even more difficult to administer than what was already on the table.

A number of hon. Members have mentioned the uplift to the single farm payment, which is important. It recognises the value we place on upland and moorland farmers, not just as custodians of the countryside, as my hon. Friend the Member for York Outer (Julian Sturdy) mentioned, but as food producers. We are, therefore, equalising the basic payment for upland farmers and lowland farmers, and we will almost double the rate for moorland farmers to about €70 per hectare.

My hon. Friend the Member for Thirsk and Malton raised a number of issues, the first of which related to commons. We understand the concerns about the commons register, which has always been the starting point for the mapping of commons. There are disallowance risks in departing too far from the system we have had in place to date, but I can confirm that in addition to starting with that existing commons register, the RPA will utilise other information available to it, such as aerial photography, to help ensure that those who are entitled to claim on common land can.

My hon. Friend also mentioned the issue of disallowance, and I can confirm that we have set aside a figure of 2% to plan for that. It is our aspiration to get to zero disallowance, but the way in which the disallowance scheme works is incredibly complicated and convoluted. Frequently, the disallowance we get is through no fault of our own; it is often because the European Commission does not understand its own rules, and we can get into very protracted arguments. For instance, the fruit and veg scheme has been notorious as a cause of disallowance. The system is very complicated and I do not think we will ever be able to eliminate disallowance altogether.

A number of hon. Members, including my hon. Friend the Member for Thirsk and Malton, have highlighted the issue of the modulation rate—the inter-pillar transfer. We have made it clear that we will modulate at 12% initially and have a review in 2016. She asked what the criteria for that will be. There are two basic criteria, the first of which is whether there is sufficient demand for those agri-environment schemes to warrant an increase in that budget. That links to a question raised by my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman). The second is an assessment of the impact on the competitiveness of British agriculture.

Many hon. Members, including the hon. Member for Bishop Auckland (Helen Goodman), have raised concerns about the new IT system. The existing RPA computer system is simply not fit for purpose and we need a new system. The new common agricultural policy is far more complicated, and there are coefficients attached to some environmental focus areas. Somebody growing peas or beans will find that that counts for only 0.7% towards their EFA—0.7% of the area declared—whereas for hedges there is a coefficient of up to 10 times the area of the hedge. The idea that we could do this by drawing things on maps with pencil, as we do under the existing system, and sending that in to the RPA is simply not credible. We therefore believe that to cope with the new system we have to have a digital by default approach and to have everyone adding their data by computer, because that will be simpler.

I completely understand the point that many hon. Members have made about broadband access. We are investing £500 million through BDUK—Broadband Delivery UK—and a further £250 million in phase 2. We have a third fund of £10 million to pilot creative ideas for those really hard-to-reach areas. In addition, we will have an assisted digital package. We will send paper guidance to every farmer in year 1, so although they will not have a paper application form, they will have paper guidance. That guidance will include detailed information on our digital offer. The crucial thing for those lacking the computer literacy to complete their form online or those who have no broadband access is that we will be setting up a number of digital service centres right around the country, particularly targeted at those areas where there is a problem. Farmers will, thus, be able physically to take their information into an office, which will have privacy and be discreet, and work with an RPA agent to enter that information on the system. That is the right thing for everyone. It is right for those farmers, because it removes the risk of them getting penalties and disallowance.

[Helen Goodman]

rose—

--- Later in debate ---

[George Eustice]

I will finish now, because we are nearly out of time. My right hon. Friend the Member for South East Cambridgeshire highlighted the issues of appeals and a proportionate system. I can tell him that I am now the one who looks at those appeals, this issue is close to my heart, and we are examining it and reviewing it as I speak. The hon. Member for Brecon and Radnorshire (Roger Williams) talked about pillar two, and said that we still needed those single farm payments of pillar one. Part of the 2016 review will examine the competitiveness of agriculture.

In conclusion, we have introduced a CAP that is more complicated than we would have liked, but in the way that we are implementing it, we are staying true to the approach that we took in negotiations to make it as simple as possible

Question deferred (Standing Order No. 54 (4)).

The Speaker put the deferred Questions (Standing Order No. 54)

Estimates 2014-15

Department for Work and Pensions

Resolved,

That, for the year ending with 31 March 2015, for expenditure by the Department for Work and Pensions—

(1) further resources, not exceeding £45,438,318,000 be authorised for use for current purposes as set out in HC 1233 of Session 2013-14,

(2) further resources, not exceeding £74,721,000 be authorised for use for capital

purposes as so set out, and

(3) a further sum, not exceeding £44,850,071,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.

Department for Environment, Food and Rural Affairs

Resolved,

That, for the year ending with 31 March 2015, for expenditure by the Department for Environment, Food and Rural Affairs—

(1) further resources, not exceeding £968,601,000 be authorised for use for current purposes as set out in HC 1233 of Session 2013-14,

(2) further resources, not exceeding £371,350,000 be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £1,308,388,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.

The Speaker then put the Question on the outstanding Estimate (Standing Order No. 55)

Estimates 2014-15

Resolved,

That, for the year ending with 31 March 2015:

(1) further resources, not exceeding £256,135,013,000 be authorised for use for current purposes as set out in HC 1233, HC 1231, HC 1208, HC 1186 and HC 1234 of Session 2013-14, and HC 124 of this Session.

(2) further resources, not exceeding £32,926,583,000 be authorised for use for capital purposes as so set out, and

(3) a further sum, not exceeding £214,518,524,000 be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament—(Mr Gauke.)

Ordered, That a Bill be brought in upon the foregoing Resolutions relating to Estimates, 2014-15;

That the Chairman of Ways and Means, Mr Chancellor of the Exchequer, Danny Alexander, Nicky Morgan, Mr David Gauke and Andrea Leadsom bring in the Bill.

Supply and Appropriation (Main Estimates) Bill

Presentation and First Reading

Mr David Gauke accordingly presented a Bill to authorise the use of resources for the year ending with 31 March 2015; to authorise both the issue of sums out of the Consolidated Fund and the application of income for that year; and to appropriate the supply authorised for that year by this Act and by the Supply and Appropriation (Anticipation and Adjustments) Act 2014.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 33).