Outcome of the European Union Referendum

Lord Curry of Kirkharle Excerpts

Tuesday 5th July 2016 Lords Chamber

[Lord Curry of Kirkharle (CB)]

My Lords, I will try not to duplicate previous contributions to the debate. Unlike many of the comments I have heard over the past 10 days and again today, I am not going to indulge in spilt milk. I believe that we should accept the referendum result and move on. I should like to comment on two issues that arise as a consequence of the result, both of which are extremely important and relevant to the debate. The first is the impact on agriculture and the second is about legislation. My interests are as recorded in the register, but let me refer to three. I farm in Northumberland and I am a beneficiary of the EU basic payments scheme. I chair the Prince’s Countryside Fund and until the end of last year I was the chair of the Better Regulation Executive.

Some 40% of the EU budget is spent on supporting agriculture through the much-maligned common agricultural policy, so Britain’s farmers have a keen interest in the withdrawal process and life after the CAP. The common agricultural policy has dominated agricultural policymaking for almost 40 years and reforms have taken place every five years or so. The consequence of this process is that no sooner did we complete a round of reform than we began on the next. For those not familiar with the agricultural sector, let me explain why support from the CAP is so important.

We no longer subsidise food production in Britain, with a minor exception in Scotland. Farmers continue to receive an annual payment, which has certain obligations attached known as cross-compliance. The principle, which was promoted in a report I was responsible for in 2002, of justifying public support only for the public goods that farming provides which the market does not deliver is important. This principle was endorsed in the recently published report by EU Sub-Committee D of this House, of which I am a member, on the resilience of the farming sector in the light of commodity price volatility. Farmers care for the countryside and the landscape of Britain, they deliver environmental management and habitats, contribute to food security and are critical to a successful tourism sector. These are outcomes for which the market will not reward.

The basic payments scheme is the tool to reward farmers for these outcomes. Most farmers would prefer not to be dependent on this payment and accept that it will be diluted over time, but for now and for the medium term it is essential. As noble Lords will be aware, there is currently huge pressure on farm incomes due to prolonged low commodity prices, particularly for milk but for other commodities too. A recent report commissioned by the Prince’s Countryside Fund found that 20% of farming businesses are in fairly serious financial difficulty, with more than 50% dependent on other sources of income outside farming—and this with the benefit of the EU basic payment scheme. Without it, at present a significant proportion of farmers would have to shut up shop, so a sensible transition from the current system of EU support to whatever emerges from the negotiations as a domestic policy to replace it is essential.

Despite the red tape, the form filling and the bureaucracy, the funding is important. Farmers are rightly concerned that with the attitude taken by the UK Government in successive EU reform negotiations, this support could be at risk. The UK Government have led the pack of EU member states trying to drive down the costs of the common agricultural policy, so the concern is real. I am not demanding a continuation of subsidies for farmers, but I am requesting that future policy design is cognisant of the need for a smooth transition, otherwise we could seriously undermine confidence in what is a vital component of the UK’s largest industry sector by far, the agri-food industry. I understand that last night the candidates for the Conservative leadership did commit to continuing support for agriculture, which is very reassuring, so why do I still feel uneasy?

An additional factor which is of concern is the vital access to EU markets for our produce. Of course this is reciprocal and EU member states will want access to our market, but I should remind the House that approximately 40% of our sheep-meat is exported to other EU countries, particularly France. No other commodity is so dependent on EU markets. This market has been developed over a period of 20 years and is vital to our sheep farmers. Members of the House may recall that we have had a few problems in the past on this issue. We do not want a return to the dark days of lamb wars.

I am very encouraged that the response to the referendum by the National Farmers’ Union is to take a positive approach and begin to debate the key issues that should be considered within a new policy framework while we wait for the new Prime Minister to pull the trigger on Article 50. I have listened with keen interest to contributions from many wise Members of this House on this subject today.

I am, however, extremely concerned about the potential for delay in the timescales involved in the negotiations. This was commented on earlier by other speakers. The sooner we communicate the process, the better in my view. The scope for negotiations to become extremely complex, to miss deadlines and to drag on for years and years with continuing uncertainty for the entire business community, including the agri-food sector, is a real and unwelcome prospect. We need a plan with realistic but stretching deadlines as a discipline to frame our negotiations so that not only industry and institutions can plan and monitor progress, but the public can too. This is hugely important.

I also endorse the comments made earlier on the essential need for scientific funding which is currently available from the European Union for our research institutions. If we are to address the productivity challenge that we face here in Britain, we need to invest in science. We need a commitment that the Government will continue to meet that science obligation.

Let me address the concerns I have about the regulatory world, having only recently stood down as the chair of the Better Regulation Executive. Others have already expressed concerns about this subject. Approximately 50% of our regulation originates in the European Union and all of it will have to be reviewed and retained or replaced. Let us take the opportunity to try and reduce regulatory burdens in the process. One of the reasons for the support to leave was that of perceived intrusive EU regulations, so we now have a unique opportunity to design “fit for purpose” regulation that supports business growth and positions the UK as a great place to do business.

My second concern on this subject is that of regulation that is currently in the pipeline from the EU or likely to be progressed during the exit process; it is an interesting dilemma. Having read the helpful report of the EU Committee, chaired by the noble Lord, Lord Boswell, on withdrawal from the European Union, I note that it is silent on the subject of whether we as a member state have to adopt EU regulation that is introduced during the withdrawal process. It would seem bizarre that we should introduce regulation that we might conceivably abolish soon afterwards. I hope that the Government have a view on this subject.

I could go on but other speeches have covered areas of concern. Let me just emphasise a point made by the right reverend Prelate the Bishop of Ely. Immigration policy must recognise how important seasonal labour is to the agri-food sector. Our highly efficient food producers, processors and manufacturers will have to move production overseas if they do not have access to seasonal labour. We actually have a great opportunity to increase our self-sufficiency in food and to reverse the current downward trends, as well as to increase our exports, but only if the key components are in place, including seasonal labour. I hope that the Government will recognise these important issues.