Direct Payments to Farmers (Legislative Continuity) Bill

Debate between James Cartlidge and George Eustice

Committee stage & 3rd reading: House of Commons & Committee: 1st sitting: House of Commons & 3rd reading & Committee: 1st sitting
Tuesday 28th January 2020 Commons Chamber

[George Eustice]

My hon. Friend will remember the debate that took place in 2016. The UK has typically received back roughly half of what it put into the EU budget, and our contribution to the common agricultural policy on average has been double what we have received from it, historically.

[James Cartlidge (South Suffolk) (Con)]

Further to the intervention from my right hon. Friend the Member for Wokingham (John Redwood), and so that I understand this point, am I right that in this transition year we effectively pay as if we were members, but we are also funding domestically this farming payment under the Bill? Is it netted off, or are we in effect paying more for this year overall? Does that make sense?

[George Eustice]

It is complicated—as ever—with the common agricultural policy, but I tried to explain this point in my opening remarks. It is a quirk of the way that the EU budget works that the EU borrows the money for the pillar one payment—the BPS and area payments—from next year. Because the payments are made typically from December onwards, the money comes out of the 2021 budget. The pillar two payments come out of the 2020 budget—the year in which the money is spent. Put simply, we have not contributed to the 2020 capped budget because it is borrowed from 2021. I know that is complicated, but in essence we are not paying twice.

--- Later in debate ---

[George Eustice]

Yes, my hon. Friend makes a very important point, and that is why we have set a very different course with our future agriculture policy, though it is based on payment for public goods. It is important that we support our farmers and properly reward them for the work they do for the environment.

[James Cartlidge]

Farming in South Suffolk is fairly horizontal—fairly flat—so I welcome these regulations. On a key technical question, under all those regulations the top level of payment awarded at EU level is in euros, whereas, of course, the allocation for the payment in UK law is in pounds sterling. Is there therefore any currency risk through the year to the payments that will ultimately be received by our farmers?

[George Eustice]

There is no currency risk for British farmers in this year, because the total size of the budget has already been set by the Treasury, and it has been set at the same level as last year. Under the regulations, we have to go through the formal process of setting the exact payment rate, but, because the budget has been guaranteed and it has been guaranteed that the payment system will be the same, farmers have a high degree of confidence that—barring any minuscule changes—their payment will be the same as it was last year.

My hon. Friend has put his finger on an important problem with the common agricultural policy. It introduced an entirely unnecessary exchange rate risk for our farmers, in that money was sent to the European Union in pounds and was then denominated in sterling at a fixed point in time, typically in September each year. That meant that if the pound had had a good year and had rallied against the euro, farmers found that their payment would be lower, whereas sometimes when the pound fell, as it did after the 2016 referendum, they had an early Brexit dividend and received a higher payment than they might otherwise have expected. That unnecessary exchange rate risk has now gone, and the budget is set for this year.

I do not want to bore people too much with these regulations. I have listed them all in detail, and there is a reason for that. In the European Union, particularly in the context of the CAP, there are three types of regulations. There are the basic regulations, which the Council of Ministers has quite a bit of involvement in shaping, and on which, through working groups, the member states have a vote. There are delegated Acts or regulations, in which there is far less involvement for the member states. They collectively have a kind of veto power, but have less of an amending role. Then there are the implementing Acts or regulations, which the Commission pretty much just makes up without any particular involvement of the member states.

That said, I am conscious that Members will never have debated any of these regulations. Ministers will have been aware of debates and discussions taking place in working groups as the basic regulation was formed, and they will have received submissions letting them know that something alarming had been handed down in an implementing Act and we could not do anything about it. Obviously, as we make regulations in future, the scrutiny of the House will be brought to bear, and Members will be able to engage in and scrutinise every bit of the detail of future agricultural policy.

The regulations that I read out earlier may have seemed like a list of rather meaningless numbers, but I can tell Members who are interested in what they mean collectively, in terms of what the farmer is required to do, that basic payment scheme rules are published annually by the Rural Payments Agency. Let me give Members a flavour of those.

The publication “Basic Payment Scheme: rules for 2019” sets out the key dates during that scheme year to which farmers must have regard. It includes, for instance—and all this is born out of the regulations that are being brought across today—the setting of 1 January as the official start of the year. The period between 1 January to 30 June is regarded as the

“EFA period for EFA fallow land” .

That is the period during which land must be fallow if farmers want to claim it. On 13 March, the “window opens”, and farmers can start sending in their applications. Between 1 May and 30 June, the so-called three crop rule kicks in, along with the

“EFA period for nitrogen-fixing crops”.

During that period, farmers must demonstrate that in that window and that window only, they have three crops on their farms. Another rule states that one of those crops can be fallow land, but the qualifying period for that type of fallow land is different from the one for the type that is covered by the EFA period.

There is a deadline of 15 May for farmers to submit their BPS application forms. They are then given a couple of weeks’ grace during which they can make changes, and they have until 31 May to do that. There is then a “late application” deadline, which means that farmers are effectively given 21 days to submit late applications, but will lose, typically, 1% of their payment for each late application day.

Food and Farming: Employment Opportunities

Debate between James Cartlidge and George Eustice

Tuesday 25th April 2017 Westminster Hall

[George Eustice]

And, let us not forget, Yorkshire. The sector is a particularly significant employer in Cornwall; indeed, I have a number of important food manufacturing businesses in clotted cream and fisheries in my own constituency. Farming alone employs about 64,000 people in the south-west, and the Food From Cornwall website lists more than 330 businesses producing quality Cornish food and drink. Cornwall is, of course, famous for Cornish clotted cream and Cornish pasties, but also for Cornish sardines, or pilchards, and Fal oysters.

Sardines and oysters lead me on to another sector that is important in parts of Cornwall, including, of course, in Newlyn in the constituency of my hon. Friend the Member for St Ives. The UK seafood industry offers a wide variety of careers, including in fishing, aquaculture, processing, retail and food service. There can be no doubt, therefore, that across the food, farming and fisheries sector there are fantastic opportunities for our young people to build exciting, challenging and successful careers.

I want to talk a little about the industrial strategy and the post-16 skills plan. To secure the skilled workforce that the food, farming and fisheries sector needs for the future, Government and industry must work in partnership to prioritise training and skills. It is crucial that there are clear entry routes into the sector to help young people embark on their careers, and that employers invest in recruiting, training and developing their staff. The Government have introduced a number of policies on skills. The industrial strategy Green Paper, published in January this year, includes skills as one of its core pillars and has a particular focus on STEM. The post-16 skills plan, published in July 2016, aims to reform technical education by introducing 15 routes, or T-levels. These will include agriculture, environmental and animal care; engineering and manufacturing, which will include food manufacturing; and catering and hospitality. T-levels will provide technical education to equip students for skilled occupations, creating clear routes into the sector.

Reforms to apprenticeships will create fresh opportunities for people to develop new skills and progress their careers. The apprenticeship levy, which came into force this month, provides a new incentive for employers to invest in training. Many employers in the sector are rising to the challenge, and the number of apprenticeship starts in agriculture, horticulture and food manufacturing increased by more than 20% in 2015-16 compared with the previous year.

The Department for Education is exploring options to allow up to 10% of apprenticeship funds to be transferred down the supply chain from 2018, bringing the benefits of apprenticeships to even more businesses. We were keen to promote that idea in DEFRA because it means small farm enterprises within a supply chain could find it easier to benefit from the apprenticeship levy.

Apprenticeships provide great opportunities both to train new entrants and to upskill and develop existing members of staff. I am delighted that exciting new apprenticeship standards for butcher, advanced dairy technician, and food and drink maintenance engineer have now been approved for delivery. Many more are currently in development.

[James Cartlidge (South Suffolk) (Con)]

The sharing of the apprenticeship levy down the line is welcome, although I have one point. In Suffolk, a lot of the businesses involved in the sector are small and medium-sized businesses. What will the Minister do to ensure that the discussions he has on T-levels and maintaining quality are not dominated by the larger sector, and that small and medium-sized enterprises that need the staff have their input?

[George Eustice]

That is an important point. We have experienced people from the food sector involved in the development of the new apprenticeships. The idea that I had came when I visited a McCain factory, which manufactures chips from potatoes. It was clear to me that it had a well-resourced and well-managed apprenticeship programme within McCain, but there are 300 potato farmers in its supply chain. In most cases, those farmers do not have a human resources director to take care and look after an apprenticeship programme professionally. There was an opportunity to use the organisation and the skill sets that companies such as McCain have to foster apprenticeships on farms in Norfolk and Suffolk and wherever potatoes are grown.

I have been privileged to meet apprentices as the Minister responsible for agriculture, fisheries and food at DEFRA, and I know what great careers can begin from an apprenticeship. For example, I recently spoke alongside a former apprentice at a Feeding Britain’s Future event for unemployed young people interested in careers in food and farming. The young man had decided to do a mechanical engineering apprenticeship instead of following a conventional university degree, and after four years of training was earning more than £40,000 a year. Apprenticeships are a brilliant alternative to university because they allow apprentices to earn while they learn. New apprenticeship standards are being developed at degree level. Apprenticeships provide fantastic learning opportunities by allowing apprentices to develop their new skills on the job.

Employers benefit from apprentices. It has been calculated that the average person who completes their apprenticeship increases business productivity by around £214 a week through increased profits and productivity, and better-quality products. Small employers provide fantastic opportunities for people to get on the career ladder. Some 96% of the food manufacturing sector are SMEs, which can also benefit from hiring apprentices. SMEs have to pay only 10% of the costs of training their apprentices—the Government pay the remaining 90%.

Oral Answers to Questions

Debate between James Cartlidge and George Eustice

Thursday 13th October 2016 Commons Chamber

[James Cartlidge (South Suffolk) (Con)]

When the former Secretary of State for Environment, Food and Rural Affairs, the current Lord Chancellor, visited my constituency in May, she visited the Orwell food enterprise zone and heard about the skills challenges faced by local small and medium-sized businesses in the food sector. She said that the Government were considering a proposal to allow large food businesses to share their apprenticeship levy with the local supply chain to encourage local buying of food and local skills. Has there been any progress on that?

[George Eustice]

My hon. Friend makes an important point. I have been arguing for that to happen for some time, because some large food producers are caught by the levy but would rather use it further up their supply chain. In August, the Department for Education published proposals for funding apprenticeships in England from May 2017, which propose that from 2018, employers will be able to transfer up to 10% of their levy funds in any year to another employer with a digital account. That deals with this issue.