Draft Direct Payments to Farmers (Reductions) (England) Regulations 2023 Draft Agriculture (Financial Assistance) (Amendment) Regulations 2023

Kit Malthouse Excerpts

Tuesday 28th February 2023 General Committees

[Kit Malthouse (North West Hampshire) (Con)]

It is a great pleasure to appear under your wise guidance, Mr Hollobone. I have a few questions and challenges for the Minister. Before I get to them, I would just say that I broadly support the thrust of the Government’s policy, and I am already seeing the impact in my constituency. I represent 220 square miles of Hampshire chalk downland, which had not been ploughed in previous centuries, but much of which was then brought under the plough and was able to be productive with the application of chemicals. We are seeing more and more of that land now returned to its historical function, which is essentially as grassland for the cultivation of protein, in the form of sheep and cows. That is of great benefit to our landscape and our ecology.

I have a couple of issues. On the SI on reductions to direct payments, I feel—a bit like the hon. Member for Cambridge—slightly jammed into a decision today. As the Minister will know, there is a calculator online where farmers can work out what their reductions will be, and the rates were advertised beforehand. If we parliamentarians made some amendment to the SI today to change the rate of reductions either way, it would throw a spanner in the works for many farming businesses, including in my constituency. So I am not really being given a choice in terms of the vote on this, given the impact on farmers if we changed the regulations. I question whether that is the proper function of parliamentary scrutiny—we are making a decision, but we are not really making a decision.

Another issue I want to raise on this SI is about notice. As the Minister said, it is welcome that the Department published six new standards in January to go along with the existing three. However, reducing direct payments as farmers decide, singly or collectively—they can now operate in groups—which of those standards to pursue, whether that is hedgerows, pest management or whatever it might be, means that farmers will start to see reductions in their direct payments before they can demonstrate the benefits of those standards or claim under them. The Minister is a farmer, and he will know better than me whether somebody can put in place and comply with the hedgerow standard in time to fill the gap in cash flow caused by these reductions—whether they can procure hedgerow, plant it and make sure it is up to standard and is thriving, and not just go through the motions.

The Minister says there will be a reduction in bureaucracy, but I assume we will unleash an army of people in high-vis with clipboards across the countryside to ensure that all these standards are being complied with. That might be a one-off exercise, but nevertheless I presume there will be some confirmation of compliance in exchange for public money. If that is the case, timing becomes critical, because if compliance is about result rather than input, we obviously have a bit of an issue.

Another point is about the nature of the payments. I wrote to the Minister recently, as he may know, about the pest management standard. As I understand it—he may correct me—if I decide I am going for the pest management standard, I avoid the use of pesticides. If I avoid the use of pesticides for the season, I get my payment at the end of the season. However, if my crop is devastated by some pest halfway through the season, and I have no choice but to use a pesticide, I will lose my payment, at the same time as I lose my direct payment. There is no partial payment; we cannot say, “For six months, you didn’t use a pesticide; we will give you half the money.” Farmers face an all-or-nothing cliff edge. They will have to make a financial calculation about whether the crop price merits the use of the pesticide or merits them allowing the crop to be destroyed and taking the subsidy. That injects an element of jeopardy into the system at a point at which there are these final, significant reductions in direct payments, which may not be helpful. I, too, would be interested to know what is going to happen to the underspend. I wrote to the Minister about that recently as well, and I would be grateful for elucidation today.

I turn now to the financial assistance regulations. I am slightly concerned—perhaps the Minister can enlighten us—about the immense power the legislation gives him to create, close and amend schemes when that has previously required parliamentary consent. Paragraph 7.6 of the explanatory memorandum states:

“This will help future-proof the 2021 Regulations against changes to the name or design of specific schemes, and avoid the need for an increasing list of financial assistance schemes in the regulations. The instrument also omits the previous definition of the “farming investment fund”…the fund can be used more flexibly for any of the statutory purposes in section 1.”

Does that mean that, without parliamentary consent, the Minister can start or close a new scheme or quietly do away with things that are not working? Where will the accountability be for the expenditure of public money on new things? If the Minister says we are going to have a trampoline standard, does that mean that we will pay someone who starts a trampoline park on their farm and that if it does not quite work out, it will be quietly closed and nobody will be any the wiser? There is a transparency issue there that concerns me.

I understand the Minister’s desire in the financial assistance regulations to have the power not to publish in circumstances where disease or other matters might affect somebody’s business. However, in a world of social media and in a community that talks—and farmers do talk—I question how realistic that is. If there is an outbreak of disease in an area and we are attempting to control it, not publishing might protect one business, but it might also damage lots of neighbouring businesses, which will be unable to take the measures they need to to protect themselves from that disease. If the Minister is saying that that will be his judgment, that is fine, but the SI does not say that he will have regard to the overall surrounding businesses; it just talks about having regard to that particular business and to whether it will be damaged.

As the Minister would expect, I will vote for the regulations, but I seek reassurance on that point. To give an example, my constituency home is in the middle of an avian flu control zone. A captive hawk was taken to the vet because it was a bit poorly, and it turned out it had the flu. As a result, we are in the middle of a 3 km exclusion zone, where everybody has to keep their chickens in. Has publication damaged that person’s business? I do not know. Presumably, the hawk’s illness has damaged their business. However, I hope the Minister understands my point—that there is a wider responsibility, other than to just the business itself.

--- Later in debate ---

[Mark Spencer]

I was just coming to that, because it is a really important point to land, so I am grateful for the two interventions that have given me opportunity to do that. We want to move in a direction that is much less about enforcement and catching people out and more about supporting and encouraging people to do the right thing. Instead of inspectors, we will have assistants and people going on to farms to advise and support. People will not be turning up with a tape measure and saying, “Aha! You’re 50 cm short on that margin.” Rather, they will be saying, “This is what you need to do, and this is how it needs to work.” We want to help and support people to move in the right direction.

There is another side to that. With modern technology it is possible to monitor things via satellite. We can see cropping and improvements to hedgerows via satellites. If individuals take the mickey, do not do the right thing and try to commit fraud, we will of course go after them and prosecute them for defrauding the taxpayer. We aim to support the people who want to do the right thing, while penalising the very small number of people who want to take the mickey.

My right hon. Friend the Member for North West Hampshire made a point about pest management and the use of pesticides on a crop. The purpose of pest management buffer strips is to encourage the production and growth of natural insecticides—in other words ladybirds, lacewings and predators that will go and eat aphids, which are the pests we want to get rid of. We are encouraging people not to use insecticides. They can still use herbicides and fungicides, but they cannot use insecticides, which are the chemicals that will kill those ladybirds and lacewings. I accept that there may be a time where a farmer, having committed to not using insecticide, has to backtrack on that agreement because of a huge aphid infestation. They would have to make a commercial decision as to whether they wanted to stick to receiving taxpayers’ money for not using insecticides or wanted to backtrack on that, use insecticide and not receive payment for that crop.

[Kit Malthouse]

There is a third element to the decision that should surely be of interest, which is whether we want the food. For example, there are certain crops that are particularly prone to aphids—for example, beans. If someone grows beans, the risk is much higher, because that crop is much more likely to get aphids. As the Minister will know, there can be a massive infestation, and the farmer will have no choice—either they lose their crop or they spray it. If they spray it, they lose their subsidy. Quite a lot of farmers will say, “You know what? Beans are too much trouble. I am not going to grow beans. I will grow something else, because I know what is going to happen with beans. They are going to get aphids, because that is what they do.” We may see a migration away from the farming of some crops, because of that risk.

From the Government’s point of view, it is perfectly possible for the inspector in a high-vis jacket with a clipboard to come along and say, “Do you know what? On balance, we would rather have the beans, so we will give you a bit of flex on the pesticide. We recognise that you have a huge infestation that needs to be dealt with, and if we do not deal with it, we are not going to have any beans.” That is the conundrum that a lot of farmers with those particularly pest-prone crops are juggling.

[Mark Spencer]

I thank my right hon. Friend for that intervention. We are getting very much into the detail of the personal management decisions farmers will have to make. Farmers may be thinking that they need to use a chemical to kill those aphids, but there is quite a lot of evidence to suggest that if they have put in insect buffer strips and give the lacewings and ladybirds three or four more days, those lacewings and ladybirds will go and do the job for them.

If you will allow me to digress, Mr Hollobone, I spoke to a gentleman called Martin Lyons—I am sure he will not mind me giving his name—who farms in Cambridgeshire. He had such an event in a field of beans. He went to inspect the field, but on arriving he saw that the beans were swarming with aphids. When he got back to the yard, the sprayer—the machine he was going to use to apply the chemical—was broken. By the time he got the part, four or five days later, he thought he had probably lost the crop, but when he went to look at it before applying the chemical, he found literally tens of thousands of ladybirds all over the beans, and they had removed the aphids. He was able to return the chemical to the company that had supplied him and save the money.

We have become a little bit too dependent—I say this as a farmer myself—on chemical solutions, when nature often finds the solutions for us. We need to do more of that and to get back to some of the practices we saw in the ’30s and ’40s, working with nature rather than against it. That is what many of the changes we are bringing in will deliver.

To turn to the second part of today’s proceedings, there are two schemes to which the financial assistance regulations are applicable—he says, looking for inspiration from his officials to his left. It is really important that we understand that we want to motivate people to do the right thing. My right hon. Friend the Member for North West Hampshire referred to avian influenza, which is slightly different, in that it is a notifiable disease. There may be other examples, such as bovine viral diarrhoea in cattle. If people become aware that that disease is in a herd, they will not want to trade with it. Where farmers want to be part of the scheme and engage in data recovery, we do not want those who are being supported, who do not have BVD, to be penalised because people think their being on the list of those who have received support to prevent the spread of the disease means they have the disease in their herd—we do not want them to be blacklisted. Anecdotal evidence shows that if people are allowed to keep the matter private, they are much more likely to come forward and report any issue they have, rather than hide it.