Common Agricultural Policy and Market Measures (Miscellaneous Amendments) (EU Exit) Regulations 2019

Lord Grantchester Excerpts

Wednesday 8th May 2019 Lords Chamber

[Lord Jones (Lab)]

My Lords, I thank the Minister for his helpful and honest introduction. I note that this statutory instrument is headed, “Exiting the European Union. Agriculture. Food”. It also refers to marketing and agricultural products.

My concern today is sheep farming, the sheepmeat industry and the upland communities of Wales and, indeed, across Britain. It is a truism to say that Brexit is a huge moment in our national history. My hope is that the sheepmeat industry, the farmers of our uplands and the scattered communities in which the farmers and their families live will not lose out as we leave the European Union.

I know that the Minister knows his agriculture—he farms—and the Secretary of State for agriculture is a lively participant in the agriculture and environment scene. I would like the department to assure us that government will make every effort to protect and advance the sheepmeat industry. Nobody in the upland communities of Wales, for example, is enriched by running their flocks across the scenic hills of Wales. It is a challenging and demanding life, and as well as being able to make a living, these able and experienced farmers make a major contribution to the landscape. Consequently, it is free of scrub, birch, gorse and bracken. If the industry falters, the far-flung, supportive villages of these handsome hills will also falter.

Here is a way of life. It is a culture and the heritage of many centuries. It is very supportive of the needs of the people of Britain. These communities are owed a great deal from any Government of the day. I hope that the Minister will boldly declare that across all the British Isles, but certainly in Wales, the Government will fight to make sure that this beleaguered industry, which faces major problems, can survive and be enhanced.

The Minister will know that when the magnificent, red-shirted XV take the field in the national stadium, they want to win, and they recently won against those in white shirts from England. In this instance, I am asking a Minister from England to be of service to Wales. I remind the House that many millions of sheep graze on the slopes of the hills in the lovely land of Wales. Sheepmeat is an industry, and we wish it to be kept. We hope Ministers will give us that assurance.

[Lord Grantchester (Lab)]

I thank the Minister for his introduction to the regulations. I declare my interests as set out in the register, being in receipt of EU funds. The House may well have thought it had dealt with the multitude of EU exit orders prior to the UK’s non-exit on 29 March, but they continue and will continue. With such a torrent, it is not entirely unexpected that there may well have been minor drafting errors to correct and technicalities to update and I appreciate the conciliatory way the Minister has addressed those issues today. Those issues will not detract from the praise due to him and his team for how he has handled the process and undertaken discussions around the House across a wide range of subjects in such a short period. I think his department probably comes second only to the Treasury in the number of statutory instruments it has to process.

These regulations amend five previously agreed EU exit orders to correct minor drafting errors and incorporate recent amendments made by the European Commission to CAP legislation relating to direct payments and marketing standards in the fruit and vegetable sectors, even those made as recently as 28 March. The main alteration is that member states are now able to make further inter-pillar transfers from Pillar 1 direct payments to Pillar 2 rural development for a further year until 31 December 2019. In the UK, decisions on inter-pillar transfers are devolved. The other pertinent amendments make it clear that marketing standards for mixes of fruit and vegetables apply to mixed packages and make a number of small changes to the general and specific marketing standards in order to align the UK marketing standards with the latest United Nations Economic Commission for Europe marketing standards.

Of note is that continuing updates are likely as negotiations continue around the UK’s EU exit as regards continuing changes made at EU level. While this is clear up to the date of exit, will the Minister confirm what this means in relation to any transition period? I note that the noble Baroness, Lady McIntosh, has concerns on these issues. When any divergence between the EU and UK could begin and the Government’s policy in any transition period are of great importance. Will the Minister confirm my understanding that during any transition period after EU exit day the Government will continue to incorporate into UK law EU measures to ensure the operability of the statute book? Again, I acknowledge that certainty will be maintained with regard to the existing regime through the Treasury’s guarantee to continue the status quo. The importance of that was highlighted by my noble friend Lord Jones in relation to sheep farming in Wales.

These regulations update EU regulation 1307/2013 to give effect to the new discretion for member states to continue to determine inter-pillar transfers of up to 15% up to 31 December 2019. It is worth reflecting that there is already divergence in the rate between the constituent parts of the UK, with Scotland, as noted by previous speakers, at 9.5%, England at 12% and Wales already at 15%. Can the Minister confirm what the position could be in relation to Northern Ireland and say who, in the present predicament, would make any decisions there? Can he also confirm that the devolved Administrations will still be able to decide their own flexibility for inter-pillar transfers? Does it concern him that the range between 9.5% and 15% is considerable and could affect food production and competition within the UK?

Paragraph 7.7 of the Explanatory Memorandum says:

“The impact of the amendments … is deemed to be negligible”.


I agree that this added year for any decision regarding transfers is in itself negligible but the decision to increase the transfer rate is certainly not negligible, and the monetary change can affect farmers, the food chain and the environment. Will the Minister acknowledge that a change in the rate of transfers between Pillars 1 and 2 is significant?

Perhaps I might also follow up with a concern. As the Minister knows, the Rural Payments Agency has had, and continues to have, problems with performance. What action are the Government taking to improve performance with the BPS while the UK remains part of the CAP and to ensure that the RPA’s structure is able to adjust to any new regime consequential to a new agriculture Bill?

It is important to the food chain that marketing standards in the fruit and vegetable sector continue to function effectively to protect the interests of consumers as well as businesses in the sector. Does the Minister agree, and the Government commit, to the continuation of common standards with the EU after Brexit? The continuation of close co-operation with the EU is imperative for agriculture, industry and consumers. Otherwise, I am very happy to approve the regulations before the House today.

[Lord Gardiner of Kimble]

My Lords, I acknowledge the generous thanks that have been expressed to the department. It has been a great privilege to work with lawyers and officials in Defra, and we will be attending to some other statutory instruments on Monday. I think that all your Lordships will agree that, whatever our views on the matter, we should acknowledge that officials in the department have worked literally through the night on many occasions, and we should be extremely grateful to them. It is also appropriate to point out that there are times when we all work together very well, and I want to place on the record the co-operation and understanding that there has been in this project to try to get the statute book in order. Whatever our views on the matter, we have all sought to get it right. Although we will be returning to the fray with other statutory instruments on Monday, I wanted to acknowledge that.

My noble friend Lady McIntosh of Pickering made the point that much of the guts of the inter-pillar arrangements is, like agriculture, as we all know, devolved. That means that each part of the United Kingdom has always made its own decision on these matters and indeed on whether to carry out an inter-pillar transfer. In the case of Northern Ireland, that has been its decision, but Northern Ireland was keen to be part of this statutory instrument on the basis that it gives the flexibility to consider that option if it so wishes. It is up to each UK Administration to decide what level of budgetary transfer they wish to make for the 2020 direct payment scheme. As I have said, that is the way I think it should be.