Common Agricultural Policy

Debate between Jesse Norman and Huw Irranca-Davies

Monday 7th July 2014 Commons Chamber

[Huw Irranca-Davies]

Yes, indeed. That is why it is essential that the framework works in respect of what CAP reform has always set out to do—to break the link between pure production subsidy and the targeting of the subsidy at public goods, increased innovation and productivity, and not just production. It cannot be a one-size-fits-all model. The framework has to be there at an EU level, but the implementation at the level of the nation state is critical. We should not be afraid to take the lead on that and to try to get our balance right as between the environment, farming and food security.

The conservation director of the Royal Society for the Protection of Birds, Martin Harper, observed that the proposals

“failed to maximise the amount of money that it could have invested in wildlife-friendly farming and now it has made the greening measure meaningless.”

So we have “meaningless” and “useless” from the perspective of environmental organisations; and “deeply disappointed” and “a missed opportunity” from the perspective of farming unions. A change is needed in Europe and in the UK on how CAP is done. We need to show real leadership and real direction on both farm productivity and sustainability—it is not happening.

The key question is whether the more than £15 billion annual subsidy payment to farming in the UK—and £11.5 billion in England specifically—provides the best value for taxpayers’ money. A study last year suggested that sensitively adjusting the focus of the subsidy in the UK to enhance environmental and public goods, including things like flood alleviation, rather than purely units of production, could produce annual additional benefits of over £18 billion in the UK. The study did not take into account the additional benefits of cleaner air and cleaner water, which would further improve the net gains.

The Secretary of State—one would think he would find favour with that sort of approach—said last year:

“I do believe there is a real role for taxpayer’s money in compensating farmers for the work they do in enhancing the environment and providing public goods for which there is no market mechanism.”

He also said specifically last year:

“I believe that transferring the maximum 15% from Pillar 1 to Pillar 2 would be the right thing to do where we can demonstrate it would deliver worthwhile and valuable outcomes for farming and society and contribute to rural economic growth and enhance the environment”.

He was quite specific on that. When the Secretary of State said that repeatedly, wildlife and environmental groups had every right to be optimistic at least on pillar two funding, even with their disappointment on the greening elements of direct payments. As the RSPB said in its response to the consultation earlier this year:

“We…welcome the Secretary of State’s assertion that Pillar II ‘unquestionably represents the better use of taxpayers money’”,

and it went on to urge the Government to

“follow through on their intention to maximise the benefits that Rural Development can deliver.”

The Secretary of State, then, was unequivocal, unyielding and unbowed all the way through—until he crumbled, U-turned and settled on 12%. I have to ask why he was outflanked and outgunned by other forces; what happened to his unequivocal stance?

The Government have signalled that they will review the situation in 2017, but I have to say that this looks like a smokescreen to cover the Secretary of State’s embarrassment at being forced to retreat from the repeatedly stated 15% modulation that he had repeatedly promised. That is not the only sign of weakness either, as the decisions on degression and capping of CAP are also spectacularly lacking in ambition and vision.

[Jesse Norman]

Will the hon. Gentleman give way?

[Huw Irranca-Davies]

I cannot, I am afraid; I do not have time.

The Secretary of State’s minimalist position, choosing to go no further than the bare minimum prescribed by the European proposals, shows a worrying lack of leadership as well as a depressing lack of ambition for the best use of public money. Farming unions and landowning associations must understand—I hope they do—and have to engage with the growing public discontent of hard-pressed people and families who face a cost-of-living crisis at public money going to some of the wealthiest and most powerful landowners in the country on the basis of the size of land that they farm.

Last year, more than 35 of the wealthiest and most powerful landowners in the UK claimed over €1 million each a year in farm subsidies. A couple of hundred others claimed in excess of €300,000 a year. That is divorced from the reality of what we have heard about today—the reality of small-scale upland farmers struggling to get by; the reality of medium-sized mixed, traditional family farms that are vital to the fabric of our rural economy struggling to compete; or the reality of tenant farmers struggling to get their first foot on the rung of purchasing land against a backdrop of rising land prices fuelled by lucrative subsidies. It is certainly a world away from squeezed UK consumers facing rising food bills, and the exponential growth in food banks in every town and village in the country.

There might be some rationale if the biggest payments were tied to additional investment in agricultural innovation, to productivity improvements, to encouraging new entrants to farming, to pioneering environmental improvements in large-scale arable agri-businesses, or indeed to any marginal improvement. However, those payments are not for “additionality”; they are for scale and units of production, pure and simple. They are a reward for being big, and the bigger you are, the more European money—I am sorry; public money—you get.

As long as there is still subsidy flowing through the common agricultural policy to farmers across the EU, we must ensure that the right share of that funding comes to our farmers in the UK, but placing rigorous demands on the highest CAP payments is about demanding more—in productivity, environmental innovation and entry to farming—for the public money that is spent on the very biggest of the biggest subsidy recipients.

This is a value-for-money argument, and a fairness argument. I am talking about fairness for smaller and tenant farmers who lose out as the big money goes to the biggest landowners, fairness for the public who want real and transparent value for the money that they pay out each year, and fairness for this and future generations who are concerned about the environment, about the countryside that they love, and about sustainable agricultural production.

It is time to challenge the accepted wisdom, and to shake off any sense of the cosy complacency adopted by the Secretary of State. We must not assume that this is the way it must be. We can change things for the better for farmers, for the public, and for the good of the nation. If we do not do so, the voices of discontent over CAP payments will grow and grow. We need to do better than this.

Let me end by again thanking the Select Committee for the very good report that was introduced by the hon. Member for Thirsk and Malton. I am sure that the Minister will respond to the detailed points that have been made.