Plant Health (Amendment etc.) (EU Exit) Regulations 2019
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Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I thank the Minister for his comprehensive introduction to this very important matter for the UK. I am grateful to him and his officials for their time in providing a very helpful briefing.
Some of the language in this extensive SI is unfathomable to anyone not steeped in the science. As just one example, Regulation 4(6)(b)(ii) in Part 3 refers to,
“an official statement that it has been squared to entirely remove the natural rounded surface”.
This seemed an absurd statement to me and I am extremely grateful for the explanation that squaring a tree trunk removes the bark, which harbours many pests and diseases. This bark is then chipped or made into sawdust. The SI sets out regulations for how that by-product is to be treated, dependent on the country of origin, before importation, thus avoiding the transfer of disease.
The biosecurity of our native trees, shrubs and plants against pests and diseases is one of the most important aspects of ensuring that our countryside and way of life are preserved into the future. When and if we leave the EU, being confident that imported pot-grown oak trees are free from oak tree moth is vital. The oak tree is such a national icon that it would be devastating if it were to suffer the fate brought by Dutch elm disease and ash dieback. There appear to be a number of processionary moths attacking our trees, as the Minister has said, from oaks through to pines. It will be important to try to ensure that imports come only from areas and countries which are declared protected zones and to import at the time of year when the pests are known to have died off due to temperature or are dormant.
I turn now to cut flowers and pot-grown plants, some of which are seasonal. We are currently approaching the season when hundreds of thousands of poinsettias will appear in nurseries, florists and supermarkets. Some of us may even be given them as gifts. Poinsettias are grown under glass in cold climates, but in the open in warmer areas such as the southern states of the USA. Plants grown under glass are susceptible, as the Minister has said, to tobacco whitefly, which is undetectable to the naked eye. This pest spreads a virus which, if imported, could get into our salad crops, which are also grown in glass-houses. In an age where climate change is high on everyone’s agenda and in which we should be moving towards more self-sufficient, homegrown food production, the protection of salad crops is extremely important.
Another flower import is the cut rose. Most of these come from EU countries or east African countries such as Kenya. All come from protected zones, free from the rose rosette virus, which causes leaf curl and flowers to drop. India and the Americas are not protected zones and have the virus. It is obvious that importing cut flowers from across the world by air is not sustainable and doing little to help with climate change, but buying flowers only in season is a difficult message to get across to the public.
On 14 February and Mother’s Day, vast quantities of roses will be imported, especially long-stemmed red roses. Those coming from protected zones will be flown to airports close to our flower markets, such as the one in Bristol, in my own area. Can the Minister say how many flower markets there are in the UK and whether they receive roses and flowers imported from rose rosette-free zones? I regret that I can envisage a scenario where unscrupulous flower sellers and importers looking to make a quick buck will see the opportunity, especially around 14 February, to buy and import roses from unprotected zones such as Canada, America or India. This could be devastating for one of our country’s national treasures: the English rose. Will the Minister give assurances that there will be measures in place to prevent this happening? Will licences for importation be scrupulously checked around these sensitive dates in our calendar?
While it is very touching to receive a bouquet of red roses on Valentine’s Day, personally I would much rather have a bunch of UK-grown daffodils and tulips. These flowers bring such colour and hope to us all when they start to emerge in the spring, heralding the passing of winter.
Lastly, I understand that in the UK we have 24 protected zones. Will the Minister say where the protected zones are around the country?
This is an extremely important SI which will help protect our trees and plants. I fully support the measures we are debating this afternoon.
Lord Grantchester (Lab)
My Lords, I thank the Minister for his excellent introduction to the regulations before your Lordships’ House this afternoon. I am very grateful to him and his officials at the department for the detailed briefing they organised yesterday. I declare my interest as a farmer in receipt of EU funds.
As the Minister said, these regulations include the latest updates agreed at EU level. I commend his department for taking the lead in EU discussions on protection against the rose rosette virus and extra protection measures against the oak processionary moth. But that begs the question: what mechanisms do the Government envisage are necessary to continue the UK’s influence and the exchange of information should the UK leave the EU? What are the sharing arrangements around biosecurity post EU exit date? Under the withdrawal Bill, will the UK still have access to the surveillance notification systems of the EU? What contingency arrangements are in place in the event of there being no access, which would occur if the UK was so careless as to let a no-deal scenario come to pass? Will the Minister at least assure me that all future updates that the EU may undertake are being carefully monitored?
As the Minister explained, these new regulations follow the latest risk assessments to protect biosecurity while facilitating the exchange, trade and movement of plants and plant material. There are many reasons for such movement, from access to genetic material, research and development and commercial trade to the movement of plants and food for retail to the consumer. The overriding and most important factor is to reduce all risk to biosecurity. I approve these technical amendments as being necessary to ensure that all EU protective measures against the introduction and spread of harmful organisms are in place and effective on any EU exit date.
Controls must take precedence over and above commercial pressures. Nevertheless, the Government must ensure that trade is facilitated within these parameters. For example, one of the measures taken is against tobacco whitefly, which pose risk to greenhouse produce through the supply of poinsettias, which are much in demand at Christmas. The pest is endemic in regions that produce poinsettias. Is the Minister satisfied that the APHA will have the necessary resources available to cope with supply chains sensitive to such dates, whether it be poinsettias for Christmas, roses for Valentine’s Day or flowers generally for Mother’s Day? What contingency arrangements are in place to deal with seasonal spikes in demand?
One of the points of discussion yesterday involved protected zones whereby the UK recognises zones as free of certain risks to enhance exchange with biosecurity. Interestingly, many of these areas are in Ireland. Can the Minister say whether these zones will continue to be recognised and even increased to include areas outside of the EU? Will other defensive measures be taken to restrict areas and entry points? In the canopy of agencies and inspectorates, is the department developing strategies around controlling access to specific entry points, ports or airports, or even restricting trade to disease-dormant limited periods in the calendar, in order to spread not only the load of biosecurity but also the risks of any breaches? Are there any such restrictions in place at the moment and is the noble Lord confident that such controls are working and sufficient?
Rural Economy (Rural Economy Committee Report)
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Lord Grantchester (Lab)
My Lords, this is an excellent report and a credit to your Lordships’ House. I welcome this debate and am grateful for all the contributions on the wide-ranging issues generated by the report. I too thank the noble Lord, Lord Foster, for chairing the Select Committee and for his excellent introduction to the debate. He gave a very good synopsis and I agree with his conclusions. I also thank all members of the committee for their contributions, drawing attention to the rural economy. I declare my interest as a farmer in receipt of EU funds and, in previous times, as a director of the Cheshire & Warrington Economic Alliance—a sub-regional body under the North-West Development Agency—and other organisations.
Rural England faces significant and wide-ranging challenges, as demonstrated by the sheer size and breadth of the committee’s report. The committee is to be congratulated further in that the report brings with it reflections of the long tailback of different approaches and attempts by different Governments over many years to deal comprehensively once again with the challenges of the rural economy. I concur with the report’s conclusion that current government policy does not take enough account of the contribution that rural economies can make to the nation’s prosperity and well-being, or the specific needs of rural economies and the challenges facing them.
For too long, these issues have been sidelined and not considered in the context of wider policy-making, which has resulted in the application of policies devised largely for urban and suburban economies, which are often inappropriate for rural Britain. The report is timely and urgently needs to be responded to more adequately by the Government and by Defra in particular, as the UK has to regenerate from the misguided policies of austerity as it stands on the cusp of a decision on its future place in the world. There needs to be a concerted focus on putting the rural economy at the heart of policy-making. We have heard several proposals recently concerning whether this policy area should be separated from the current Defra brief. The Government and Defra need to consider carefully the language and names they give to policy initiatives if they are to embrace the right culture. This tends to have the bureaucratic straitjacket of the machinery of government and how that interacts with businesses and communities at all levels, whether central, regional or local. To talk universally about an industrial strategy is immediately to paint all areas with one brush. The word “industry” is not one that resonates with rurality or diversity. While there may be different interpretations of demarcations and structures, there is a need for a different tone and use of language to reflect the rural perspective with titles such as “rural enterprise strategies” or even “local enterprise strategies” rather than using the word “industrial”.
Some 72% of people in rural areas are employed in SME companies, compared with 42% in urban areas. There can be little embedding of new approaches and outcomes are unlikely to change if there is a lack of recognition in the Government’s approach, as characterised by their general complacency in their response, emphasising local authorities when they are highly constrained by central government financial statutory straitjackets and where public-private partnerships struggle with bureaucratic interpretations of what their areas need most. The report concludes correctly that there is a huge disparity and inconsistency between delivery in different areas. Devolution, regional authorities, city-based structures, development agencies and LEPs all face challenges in engagement, effectiveness and relevance. The restructuring tends to lead to tarnishing changes with a political hue. The report underlines the target of successful evidence-based outcomes in individual areas that work best for them.
Perhaps Defra as a whole should be the champion of the rural economy given that the nomenclature of “rural affairs” carries with it the downplay of the rural economy into an odd mixture of miscellaneous activities on the periphery. Being the champion of the rural economy does not mean that the department must be diminished by hiving off parts to the DCLG, the Cabinet Office or DCMS. A key undercurrent of the report is the emphasis it places on rural-proofing as a vital ingredient to embed the interests of the rural economy into government. This is fundamental and cannot be emphasised enough. I welcome the recommendations made in the report in this respect. It draws attention to the inclusion of a rural impact assessment in all legislation and providing an annual report to Parliament to include non-departmental public bodies, local authorities and all spending bodies.
Our rural towns and villages are home to 9 million people and the vital role of genuinely affordable housing in thriving rural communities must not be underestimated. An understanding of this, together with the report’s recommendation for adequate rural-proofing of our housing and planning policies is critical to the very survival of rural communities. They are feeling the pressure of the broken housing market as much as towns and cities are. A quality affordable home feels out of reach to so many, given that most such homes cost 8.8 times the average lower wages in rural areas as compared with 7.5 times in predominantly urban areas excluding London. I thank my noble friend Lady Warwick for her remarks on housing and its central role in rural communities.
The rural housing crisis has been exacerbated by government policies. Indeed, the report highlights that since 2012, of every eight homes sold under right-to-buy schemes, only one is replaced in the rural community. Unless action is taken now to replace the affordable homes that have been lost to right to buy and rocketing house prices, there is a real danger that living in the countryside will become the reserve of the wealthy and that the diversity of rural communities will be undermined. Access to affordable homes can enable generations to stay in close proximity, keeping families together and tackling the other scourges of rural living—loneliness and social isolation—as highlighted in the report. Affordable homes provide critical support for the rural economy, including the labour force needed for the farming and food businesses that contribute so much to the rural economy. The National Housing Federation and housing associations believe that genuinely affordable homes are the key to equipping rural communities to thrive.
Successful rural economies depend on a wide range of services and support to help individual businesses grow and attract people to work and prosper in our countryside. However, as local people struggle to remain in their communities due to the housing crisis, we are seeing the loss of vital services. Education and colleges were mentioned by the noble Baroness, Lady Humphreys. Schools in rural areas have made up 40% of school closures over the past decade, up from 20% in the decade before, while we are losing rural post offices at an average of three per month. Travelling to appointments further afield is made even harder due to the cuts in bus services in rural areas. This, together with cuts to rural post offices, banks and enterprise through the Plunkett Foundation mentioned by the right reverend Prelate, the Bishop of London, the noble Lord, Lord Cameron, my noble friend Lord Carter and the noble Baroness, Lady McIntosh, has made life for people in rural Britain extremely difficult, hitting the hardest those most in need of public services.
Any consideration of the rural economy and its needs is answered by the number one priority, that of digital connectivity. It is the cornerstone that shapes the transformation of all areas of rural life and success is dependent on it. All the contributions to this debate have mentioned it. The nature of the rural economy means that it is much more diverse, with challenges around costs and scarcity. This needs to be recognised in the targets for the delivery of broadband and mobile phone signals. Some 95% of premises in the UK have access to broadband, but this covers only 75% of rural businesses.
Figure 3 in the report gives the percentages of registered business units in rural England and portrays that the largest of them are, first, agriculture, forestry and fishing, and, secondly, professional and technical services at 15% each, with the accompanying food and tourism sectors at 5%. It also reveals that more than 35% of enterprises are SMEs. Development can only proceed in step with the digital economy. The revolution of computerisation and data management in agriculture is needed both at the cow side, as I can vouch for in dairying, and in the tractor cab, where precision farming is necessary for minimum tilling and the avoidance of soil compaction. It is not clear from figure 3 where transport and integrated supply chains for goods come in this appraisal, but necessarily professional and technical services provide vital support across all enterprises. Tourism, mentioned by the noble Lord, Lord Greaves, is crying out for a rural sector deal and is characterised by establishments all needing connectivity for their customers.
However, in the digital world, the government targets are too slow. Currently, 4G coverage is at only 67% of geographical UK coverage even though this may be at 98% in urban areas. For rural areas to benefit from the expansion of 4G, 2026 is too slow: 95% coverage is needed by 2024. Focusing on 5G fails to recognise that the basic infrastructure of 4G has to be in place for areas to be able to benefit from 5G. Treasury spectrum auctions need to recognise the payoff between price and a more ambitious, quicker coverage, with more capacity throughout rural areas. No modern business—certainly not a rural-based one—can exist without 100% coverage of fibre to the home.
In conclusion, I thank noble Lords for their contributions to this thorough and well-considered report, as well as all those who have participated in this excellent debate. While many of the challenges identified and discussed are not new, it would be remiss of me not to highlight the challenge Brexit presents to the rural economy. Indeed, the report acknowledges that rural economies and the farming sector in particular are significantly affected by the CAP, including its rural development pillar. Some rural areas have also received considerable support from other EU structural funds. The UK will lose access to such funding after its departure. Although the Government have committed to replacing these funds with a domestic shared prosperity fund, it is not yet clear how such a fund will be administered or how it will be delivered in rural areas, or even if the same total funding will be available.
With just three weeks until the Prime Minister insists that we will leave the EU—“do or die”—businesses remain very concerned about the prospect of a no-deal Brexit, which will have a catastrophic impact on the rural economy. I make no apology to the Minister for drawing attention once again—building on the remarks made by the noble Earl, Lord Devon—to the fact that farmers are particularly vulnerable to a no-deal Brexit. I hope that the Minister will take the opportunity to address these concerns and additional challenges in his response. I note that nearly every speaker today has expressed disappointment in the Government’s reply.
Peatlands: Commercial Exploitation
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Lord Gardiner of Kimble
My Lords, I am pleased to say, as I think I may have said before, that we have already allocated £10 million to restore nearly 6,500 hectares of degraded peatland. These projects started last year and are due to complete in 2020. They are about raising the water table and re-wetting peat, along with the revegetation of bare peat. A lot of work is going on and we absolutely recognise that we need to roll these large-scale projects out more widely.
Lord Grantchester (Lab)
My Lords, what work—and to what conclusion—has the Minister’s department undertaken on the application of a carbon tax on sales of peat?
Lord Gardiner of Kimble
My Lords, obviously, that is a possible action, but we want to find the alternatives that will make the use of peat redundant and unnecessary. Peat is a very important natural resource that we need for our ecosystems, which is why we want to pursue that route. However, the noble Lord is right: in the end, if we cannot get it done through this voluntary approach, we will have to look at all eventualities. That is where, with the peat strategy, we will need to be determined to improve the peatland situation.
Brexit: Plant and Animal Biosecurity
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Lord Grantchester (Lab)
My Lords, I also thank the noble Lord, Lord Teverson, and his committee for this excellent report on biosecurity in the context of the Brexit challenge. The report is part of a series of reports on different environmental, agricultural and trade aspects of Brexit that it is important to debate and consider together. I congratulate the committee on its work and the noble Lord, Lord Teverson, on his introductory remarks. This has been an excellent debate and I declare my interest as noted in the register.
The report highlights four strands to the inquiry: the biosecurity implications of leaving the EU in relation to animals and animal products, plants, food safety, and invasive non-native species. I thank the Minister and his department for the Government’s extensive 15-page response. I think this shows that the Government are by and large aware of all the issues and have covered the implications under a no-deal exit scenario through the immense number of statutory instruments brought before your Lordships’ House over recent weeks.
From recent experiences, Defra could be said to be well equipped to deal with the import and export of animals and animal products. I refer to the lessons learned from BSE, FMD, avian flu and potential zoonosis diseases. While the report highlights the dependence on EU systems, the UK in many regards shares and reciprocates the data and monitoring necessary. The debate has also shown that complacency must be guarded against. Veterinary scanning surveillance enables early detection and investigation of new or re-emerging animal diseases. The diagnostic service is the cornerstone of the scanning surveillance system. In England and Wales it is delivered by APHA’s network of VI centres and partner providers contracted by APHA. It will be important to ensure that the capacity and capability of the domestic surveillance system, which has been under financial pressure for many years, continues to work effectively. Can the Minister inform the House how many VI centres remain in the UK and whether they are still adequately positioned within an hour’s travel from farms, to ensure relevance for disease monitoring to be able to be fed into the national surveillance system and to improve detection and animal management on farms?
The Government state that UK laboratories that lose EU reference laboratory status have already been provided additional funding, and that this will ensure a strong level of expertise and research resource. However, the Government have no immediate plans to introduce an independent body to replicate the audit and advisory support of, for example, DG SANTE in Brussels to ensure biosecurity standards in non-EU countries. This new entity could reduce biosecurity risks posed by trade. Will the Government commit to review the situation in the light of any final outcome, not only to EU negotiations but to future international trade agreements?
Quite distinct from reference laboratories, biosecurity facilities will need to be developed further at entry points to the UK. What is the Government’s intention regarding entry and exit points for trade—ports and airports? Is it the Government’s intention that all ports for trade will be facilitated equally for inspections, certifications and monitoring, or will the Government concentrate on specific reference status points for enhanced protocols, such as may be required of the UK to abide by the new biosecurity phytosanitary certificates necessary following the UK’s change of status to that of a third country?
The Government are correct to recognise the importance of a balance between rights and responsibilities in international trade, underpinned by biosecurity being the definitive requirement that will not be compromised by any future trade deal.
The report highlights the staff requirements and underlines the reliance on vets from overseas. Can the Minister update the House on the shortage occupation list in the new immigration policy proposals? The reliance on EU veterinary surgeons is particularly acute in the meat hygiene sector, where 95% of the veterinary workforce graduated overseas. This inspection work is crucial to food standards and labelling, necessary to minimise the risks of food fraud in the international food chain, to promote animal welfare and to provide public health reassurance to consumers at home and overseas.
All biological trade is accompanied by documentation under TRACES. The Government’s preferred option is to retain access while developing a UK notification equivalent. It must be recognised that this applies only to commercial activities, and the protocols around the pet travel scheme appear to have been abused through the option to trade as non-commercial rather than under TRACES. Will the Minister commit to review the pet travel scheme of 2012 in the light of the undercover investigations by the Dogs Trust and others that reveal serious loopholes in biosecurity measures, highlighting ineffective border controls and negligible sharing of evidence, the falsification of data and treatments, and a lack of sufficient penalties?
Following ash dieback, first identified as resulting from imported nursery stocks in 2012, the Government have moved quickly to bring about plant biosecurity under a more robust system, commensurate with the standards pertaining in the animal sector. The spread of the disease in the UK, through the planting of infected nursery stock and wood, can also be enhanced by the wind-borne distribution of fungal spores, such that the disease could well have been in the country much longer.
I thank the Woodland Trust for its briefing on the report, and for its proposal to the Government that a wide assurance scheme be introduced for all plants on sale in the UK. The Woodland Trust created its UK-sourced and grown assurance scheme to ensure that all native tree stock is healthy and pest free. Assurance schemes are well understood and recognised in the animal sector, and I ask the Minister to take this idea back to his department and consider extending it to plants, alongside developing and providing best practice guidance on how to deal with affected trees and broader messages to the public.
The need for symmetry of controls for biosecurity across both plant and animal risks and threats needs to be recognised. The Government have committed to implement the new EU plant health law in the UK. The report also highlights the importance of similar clarity on the EU animal health law which is under development.
The last of the four strands concerns invasive non-native species, or invasive alien species. This is intrinsically a cross-border undertaking, given that organisms do not respect national boundaries and can enter the UK via land, sea or air. The UK will continue to need the benefits of EU data sharing, collaboration and cross-border liaison to keep indigenous flora and fauna safe in the future. The report urged the Government to ensure ongoing access to the EU IAS information system. The Government’s response did not answer this point. Will the Minister confirm that the Government intend to negotiate continued participation in as many of the EU’s notification and intelligence-sharing networks as possible, including continued access to the EU IAS information system?
The EU IAS regulation provides some preventive, reactive and management measures for tackling IAS, and includes the responsibility of restoring damaged and destroyed ecosystems based on the “polluter pays” principle. An amendment to the withdrawal Bill to enact this measure was not accepted by the Government. This measure, together with the creation of the environmental protection office, is due under the future environment Bill, as the UK faces a governance gap because there is no independent authority to which reports on actions on invasive species can be made or by which any UK biosecurity failings can be held to account. Will the Minister explain how the governance gap will be filled in the interim? Will a new biosecurity Bill be brought forward to prevent the introduction of unwanted invasive species with additional unknown pests and diseases? The Government’s response under paragraphs 43 to 186 of the report suggests that proposals are being developed to provide further clarification on this and on the land border on the island of Ireland being treated as a single epidemiological unit. That would be extremely timely.
The report also highlights the challenge to the UK framework from the devolution settlements and the various differences in approach. The need for a close working relationship between all parts of the United Kingdom is recognised, so that all parts can play a full role in developing a UK-wide biosecurity framework, where ecological and geographical differences that give rise to different solutions do not create either internal borders, vulnerabilities or trade distortions. While the Government’s response does not comment on this, I am sure the Minister may wish to underline its relevance in the debate.
With the backcloth of the Chatham House report on the threats to biosecurity against the imperative action needed on climate change, this report is timely in the consideration of threats to the UK ecology and recognised way of life.
Lord Grantchester
I am well aware of the timings. I thank the noble Baroness and I am drawing my remarks to a conclusion.
As the future trading relationships behind the glib phrase “global Britain” still need to be agreed and reconciled, this report has underlined the most important relationship of all—how the UK interacts with its nearest neighbours. The Minister has a long list of questions to address on a wide-ranging report with many serious risk management issues.
Common Agricultural Policy and Market Measures (Miscellaneous Amendments) (EU Exit) Regulations 2019
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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.
Upland Farming
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Baroness Jones of Whitchurch
To ask Her Majesty’s Government what steps they are taking to ensure the long-term viability of upland farming.
Lord Grantchester (Lab)
My Lords, on behalf of my noble friend Lady Jones of Whitchurch, and with her permission, I beg leave to ask the Question standing in her name on the Order Paper. I declare my interests as set out in the register.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, I declare my own farming interests as set out in the register. Upland farmers have been looking after exceptional landscapes, including national parks, for generations. They are responsible for a distinct farming and cultural heritage and the production of high-quality food. We will work with farmers to improve animal health, agricultural productivity and the environment, and support enhanced rural connectivity, to ensure an economically viable future for this and future generations of upland farmers.
Lord Grantchester
With their vulnerability of terrain, sparsity and remoteness, the upland areas need a range of measures underpinned by good delivery systems that keep farmers farming in a wider rural economy including forestry and environmental landscape management. Has the Minister’s department considered establishing a specialist high-value unit as a successor to SDA to champion strategic development, with a clear vision for the uplands?
Lord Gardiner of Kimble
My Lords, as a Government, we entirely accept that the uplands have an important connection to us all. After all, they provide 70% of our water. They have an enormous environmental benefit. Through the environmental land management system, which will replace the CAP, we are looking for ways to support and encourage the next generations to do this vital work on our behalf.
Common Organisation of the Markets in Agricultural Products Framework (Miscellaneous Amendments, etc.) (EU Exit) Regulations 2019
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Lord Addington (LD)
My Lords, I thank the noble Lord, Lord Gardiner, for briefing us and arranging meetings letting us know the intention behind the regulations. He has a deserved reputation for civility and courtesy in this House, and he has very much earned it in my case, as I am not a great expert in this field.
I gather that this is an attempt to enact a degree of continuity and certainty for the farming industry in the immediate case. If we are going to go through these radical changes, that is to be applauded. However, can the Minister indicate the limitation of the certainty that can be given? For instance, how far in the future are we thinking: is it merely to the end of this Parliament? According to the newspapers, that could be a month away or about three years; we do not know. What are the limitations? What is the ongoing philosophy, because the philosophy is also important? If the Government continue in power, what will they think of doing? That thinking and control will matter. That is the guiding light for what will go on. Some idea of what is happening there would be helpful.
I have a few other questions. The noble Baroness, Lady Byford, touched on a few of the things I was going to say, and one or two of the others seem to disappear into the middle distance given the lateness of the night and the importance of what is going on. If there is to be no great change, that is fine, but if change is unavoidable I encourage him to describe where he thinks there will be the greatest change, because the people involved will need as much warning as possible. If the Government have identified those areas, that would be helpful to know.
The regulations are not welcome but seem unavoidable in the current situation, so I thank the Government for at least getting a hard hat ready for the fall.
Lord Grantchester (Lab)
My Lords, I thank the Minister for his excellent introduction to the batch of regulations before the House and declare my interest, as in the register, as a recipient of EU funds. I also thank the noble Baroness, Lady Byford, and the noble Lord, Lord Addington, for their contributions tonight.
The regulations complete the framework of agricultural mechanisms needed to be transferred to the UK from the EU to maintain certainty and continuity on food. The House dealt with further tidying-up amendments yesterday to update the position from the alterations agreed at the EU level in January. The Minister, his team and his department can be congratulated on their achievements, perhaps with certain exceptions in other areas. Nevertheless, they have brought across many technical and policy areas of EU law into UK law through these instruments to maintain the necessary legal frameworks.
The Minister made other remarks signifying that further technical updates could continue. Can he go further and state whether all future developments in the EU will continue to be implemented in UK law until measures under the Agriculture Bill come into force, which would allow certainty of continuation until the end of this Parliament, and whether those developments will maintain full parity with what is happening in the EU?
As we discussed last week, these regulations need to be introduced to maintain continuity and consistency on the EU’s regime to bring about a smooth transfer to the UK’s new regime, proposed under the forthcoming Agriculture Bill. I am sure that, in response to the noble Lord, Lord Addington, the Minister can confirm that nothing will change from a regulatory standpoint in the entire food chain, from the farmer to the consumer, to the benefit of both and the food supply chain. I am certainly grateful to the Government for that clarity. To credit the Treasury for its guarantee, the food industry has a certain amount of certainty until the end of this Parliament—that is still believed to be in 2022, whether the UK has a transition period or not—when the new provisions under the Agriculture Bill are expected to take effect. Until that landscape, producers and consumers are protected. There are no guarantees after that.
As Parliament nears the end of the process to leave the EU with a fully functioning statute book, what consideration have the Government given to communicating these solutions, especially regarding the farming industry? I understand that the Minister’s department has already gone live with the online system for this year’s BPS, and that the guidance notes are not materially different; that is, they are essentially the same as last year’s. Do the Government have any plans? More pertinently, when does the Minister think his department will issue guidance to provide clarity for the industry?
We have dealt with rural development programmes and the common agricultural policy in recent weeks, but these regulations deal with CMOs, the common organisations for market structures, market measures, legislative functions and livestock regulation, as the Minister explained. Again, the Explanatory Memorandums do not provide enough clarity, or reveal with details enough of the consultations that have occurred throughout industry, including on the devolved Administrations and their separate industry structures. Can he outline the full scope of those consultations by naming the various food sector bodies that have been consulted on these CMO instruments? I recognise that, necessarily, the CMA will be involved as far as competition law is concerned, but how will specific industry issues be dealt with on a sector-by-sector basis?
For example, in yesterday’s debate, PDOs and geographical indictors were discussed in relation to the transfer of functions to the Secretary of State, but no mention was made of the UK policy and decision-making process, nor of what guidance there may be on future recognitions. Can the Minister outline the plans for that once the UK has transferred the various brands across from the EU list, including the ones discussed yesterday dealing with wine and US liquor?
My next general comment concerns the lack of impact assessments across the regulations. As these regulations merely bring existing schemes into being on a UK statutory basis, the Government say that nothing has changed, as the saying goes. I understand that, but there are often sufficient amendments to justify examination and explanation. I ask the Minister to clarify two situations. First, what is the position across the statutory instruments we have been discussing in the past few weeks on the various end-dates of differing programmes, new applications and their funding? I have discussed that with him and his team.
Although these regulations come under Pillar 1, the Minister will nevertheless recall the provisions on the interaction of farmers between Pillar 1 and Pillar 2 regarding these schemes. The RDP measures will continue for new applications until the end of the scheme in 2020, in contrast to the annual reopenings of environmental and countryside stewardship schemes, with all their lifespans running for many years into the future. Can he clarify the provisions and assure us that the overall framework will apply uniformly across the various regimes, whereby all new applications will close on the same date in 2020? If there are to be any changes, I contend that they would merit appraisal under the impact assessment, as they would breach the Treasury’s guarantee to continue its funding until the end of this Parliament.
The second area that may merit an impact assessment regards the policy changes to end the multi-programmes that operate across more than one member state, as the UK will no longer be a member state after exit. These multi-programmes are often important in recognising cross-border collaboration and value-adding marketing schemes. Although the schemes may end, will the Treasury continue its funding in all, only certain or no circumstances? What is its position regarding pertinent databanks and information under these programmes? I would be grateful if the Minister could clarify that. Will agreement with the EU be necessary to continue with, or possibly untangle, the provisions satisfactorily? An impact assessment on the effects of this change would have been helpful.
Regarding the complex nature of interactions with the devolved Administrations, can the Minister confirm that how these operate at present will be entirely consistent and continue with these regulations as well? In particular, can he clarify on which areas all four nations need to agree?
Paragraph 4.5 of the Explanatory Memorandum on legislative functions asks about the interaction of these SI arrangements with ongoing trade negotiations, provisions under the Trade Bill and the publication of the temporary tariffs announced recently. It needs to be recognised that these SIs, as was discussed in yesterday’s updates, transfer only EU functions and its latest position to the UK. I recognise that the Minister’s department was not the lead department in settling these possible temporary tariff quotas and levels, which could have a fundamental impact on industry, but I hope that he will be able to discuss the implications in due course. The role of Parliament and full industry consultation is paramount in determining tariff levels. Can he outline how such consultation will be undertaken in future?
Finally, it needs to be recognised that although the EU powers under certain provisions are being transferred into UK law, they are not necessarily being implemented —indeed, they may never be implemented. I refer in this regard to the questions asked by the noble Baroness, Lady Byford, on the powers to charge fees in relation to the livestock regulations. I know that the industry is grateful that fees are not currently enforced. Can the Minister confirm that this position will continue and that the Government will not commence with this provision, so that the status quo will continue?
I am grateful to the Minister and all his staff at the department for the constructive way they have engaged in discussions with all Benches in your Lordships’ House. In the new world of life outside the EU, it must be recognised that all trading blocs give support to their food and agricultural sectors, and that careful consideration therefore needs to be exercised regarding this fundamental and strategically important industry. I am pleased to approve the regulations today.
Lord Gardiner of Kimble
My Lords, I am most grateful to all noble Lords who have spoken. Like the noble Lord, Lord Addington, I have the disadvantage of being before my noble friend Lady Byford and the noble Lord, Lord Grantchester, who farm in a much more extensive manner than I do. I reiterate my commitment to the farming world as a farmer.
I thank the noble Lord, Lord Addington, and the noble Lord, Lord Grantchester, for acknowledging government support. I think I have been clear in previous debates—we have had a number of debates on this—about the government commitment to maintain the same level of support until the end of this Parliament, expected in 2022. This is certainly unique. In the European Union, for instance, no other member state’s farming sector has had that level of guarantee. This commitment includes all funding provided for farm support under both pillar 1 and pillar 2 of the current CAP. The noble Lord, Lord Grantchester, may recall from the debate that the point about the RDPE funding is that any agreements under pillar 2 that have already started will continue to be funded by the Treasury under that guarantee, even if they go beyond 2020.
The noble Lord, Lord Addington, asked about change. I entirely agree with the noble Lord, because at a time of change there is always much concern. Sometimes it is not quite as bad as we all imagine. I emphasise that there are no immediate changes for farmers and consumers due to the statutory instruments before us. Indeed, these instruments maintain the status quo, with amendments made to ensure that the existing regulatory regime continues to work properly and to provide a consistent regulatory framework.
I raise two areas where changes have been made. In both cases we have worked to ensure that the impact on farmers, businesses and consumers is minimised. The first is in the labelling of farmed goods, where minor changes are necessary to some labels as UK goods will no longer be able to be identified as EU goods. To allow producers and traders time to adapt and to use up their existing labelling stock and reduce waste, we have pragmatically introduced transition periods for these labelling changes until the end of 2020. Another pragmatic point I mentioned earlier was in the tagging of live bovine animals. Here EU legislation requires the retagging of all live bovine animals imported from third countries. We have exempted animals from the EU from this definition so as not to introduce a new requirement of retagging EU animals when we leave. As I said before, this is because the tags are fully compliant with our IT systems, and we thought that that would prevent unnecessary additional costs. These statutory instruments are absolutely designed to ensure continuity and stability for farmers by maintaining the current CMO and livestock frameworks. I think the noble Lord, Lord Addington, meant the complete range of regulations. On livestock movement, again I assure the noble Lord that there will be no changes on the ground. I reiterate that this livestock movements SI does not introduce new rules or new policies. The rules that livestock keepers and businesses must comply with will be unchanged by this SI.
My noble friend Lady Byford asked a number of questions. If I get all the answers, I will of course report on them. If I do not, it would be much better if I wrote in some detail. My noble friend asked about livestock fee charging and what this entails. There is a power in the retained regulation on cattle ID registration, regulation 1760/2000, to charge for controls in this area. It is not Her Majesty’s Government’s policy to charge for these controls and we have no plans to do so.
My noble friend Lady Byford asked about agricultural promotions and the specific questions raised by the SLSC about funding for agricultural promotions laid out in the Common Organisation of the Markets in Agricultural Products Framework (Miscellaneous Amendments, etc.) (EU Exit) Regulations 2019. The department provided a response and we confirmed to the committee that there is no funding from the Government for the continuation of these multi-programmes after exit until their completion in 2020 and that stakeholders have been informed.
On the question of livestock, the ESIC and SLSC’s sifting committees made similar points suggesting that the changes made by the SI conferred significant new powers on Ministers and provided for charging for cattle ID. As I say, they disagreed with the department’s original Explanatory Memorandum, which described the changes being made by this instrument as minor and technical. They took the view that 20 or so amendments being made by it had the effect of conferring functions on a Minister in their domestic ministerial capacity that EU regulations confer on the UK as a member state. As I said, we have no intention of charging.
My noble friend asked about price reporting. We have made operable the provisions to set up a system for price reporting in the sugar sector. If I have any further information on that, I shall write to my noble friend and provide a copy to all noble Lords who have spoken.
My noble friend asked a question on public intervention and crisis measures. We are retaining these measures, as it is not appropriate to revoke them under the European Union (Withdrawal) Act 2018. However, the economic case for market intervention is weak. In a global trading environment it can achieve its aim of increasing prices only in very specific circumstances. Where it does, there is a cost not only to the taxpayer but to consumers. The Government—I think this is the case across parties—have not historically supported the general use of public intervention and private storage aid in the EU, and the medium-term intention would be to phase out this policy.
My noble friend Lady Byford asked about a safety net and what assistance would be available if there were a crisis. We have already carried out significant no-deal preparations and have contingency plans in place to minimise disruption as much as possible. As part of this, we are in close contact with the devolved Administrations, all farming sectors and farming unions, including the livestock sector, and are looking at a range of possible options if we were to leave without a trade deal.
The noble Lord, Lord Grantchester, raised a number of matters on consultation and assessment. As I think the noble Lord is expecting me to say, there are no changes in policy except in the really limited areas I have described, which are all pragmatic. Where there are changes, they are largely minor and reflect the domestic context. I can say that Defra carried out targeted stakeholder engagement on these policy changes and, as I say, consulted extensively with the devolved Administrations. Where there is a possible impact on businesses, such as with labelling changes, a transition period will be implemented.
I want to take noble Lords back and embellish what I said about multi-programmes. The term refers to programmes that involve multiple member states. I think we all have to accept that there is no reasonable way in which we could make these schemes work domestically, given that they engage a number of other member states. I do not think that the UK’s share of the work and funding is variable. For simple programmes that require the participation of only one member state, as I have said, we have given a Treasury guarantee that they will be fulfilled. However, it would not be possible to operate programmes with multiple member states and so we will not be continuing with those.
Lord Grantchester
Can the Minister provide clarity on these multi-programmes? There are obviously implications for UK businesses that partake in those, and I understand the Minister’s remarks on that. However, will he clarify that none of these schemes has implications for government commitments and obligations to fulfil EU schemes as part of the £39 billion transfer of funds? Do they all fall outwith those obligations?
Lord Gardiner of Kimble
It is only reasonable that I answer the noble Lord precisely in writing to provide clarity. I would not want to assume the configuration of the £39 billion and whether schemes in this area may be implicated.
On consultation, the approach we have taken to engagement has been proportionate and fair, particularly given that the changes made by the statutory instruments are technical and operable in so many cases. We have worked closely with the farming world.
The noble Lord, Lord Grantchester, asked about the legislative functions SI. These provisions allow the Secretary of State to require export licences for the export of farmed goods. They are necessary to allow the UK to manage any new third-country export quotas that the UK may need to manage. Examples of current export quotas that the EU manages, and that the UK will therefore need to manage, include export quotas for cheese to Canada and the United States and for skimmed milk powder to the Dominican Republic. As I am sure the noble Lord knows, the administration of import tariff quotas will be subject to separate regulations made under the Taxation (Cross-border Trade) Act.
As I have said, Defra has consulted extensively with the devolved Administrations on all aspects of the SIs, and consent was sought and given for those that relate to devolved matters. In so far as the regulations make amendments to food law, we consulted in accordance with our legal obligations through representative bodies such as Dairy UK, the NFU and local councils. We received replies from numerous public bodies and organisations in England, and in all four constituent nations, expressing support for our proposed operability changes.
Where industry bodies requested longer transition periods for labelling, we took that into consideration and increased the length of transition to the end of December 2020.
On the livestock SI, my noble friend Lady Byford, and the noble Lord, Lord Grantchester, with his long-term dairy interest, will be pleased to hear that stakeholders—and I have been part of this—have played a leading role in helping Defra develop the principles and approaches that will underpin the delivery of its planned new livestock tracing services over the next few years, through its traceability design user group. Again, this is really important, and there is enormous buy-in from industry.
Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019
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Baroness Vere of Norbiton
Perhaps the noble Earl might speak to the Minister afterwards.
Lord Grantchester (Lab)
I am grateful to the Minister for his introduction to the bundle of regulations before the Committee today. I declare my interests as listed in the register and that I receive EU funds under the CAP schemes that we are discussing here.
Baroness Bakewell of Hardington Mandeville (LD)
I am sorry to intervene, but the noble Earl was sitting over there at the beginning of the debate.
Lord Grantchester
I may well bring up the points that the noble Earl intended to make, so I will hope to cover some of his anxieties. To continue, I am grateful to the Minister and his team for the very constructive way in which his department has engaged with Peers on these regulations.
By and large, the Explanatory Memorandums have commonality across the regulations, as the bundle today transfers the functions necessary to transfer the complexities of the CAP schemes, including the basic payment scheme, to the UK on the UK’s exit from the EU. Last week, the Committee examined and approved the statutory instruments pertinent to rural development that are also managed under the subject of this week’s regulations.
I certainly approve of the instruments, but it would be useful to have the Minister’s clarification and confirmation of several aspects of their provisions and some amendments give rise to the need for further explanation. I am very clear about the CAP schemes. I apologise if some of my queries go beyond the technicalities of the regulations, but to a large extent they expand on the queries already raised by other noble Lords.
The regulations have been introduced to maintain continuity and consistency and bring about a smooth transition to the UK’s new regime proposed in the forthcoming Agriculture Bill. Can the Minister confirm that the instruments will become operable in the event of no deal, whenever that might be, and, under the scenario that the UK leaves with any deal at the end of the transition period up to the end of the present Parliament, which is still expected to be in 2022, when the Agriculture Bill may be implemented?
In so far as there might be an extension of the date under Article 50, will this result in a commensurate end date for the transition period under the outcome with a deal? Would that then necessarily shorten the time when these regulations would operate before the new Agriculture Bill provisions became operable at the end of the Parliament? I assume that, because of these complexities, no end date can be written into these regulations. As further payments for the EU will continue under the extension of Article 50, will this be relevant to the £39 billion due from the UK to the EU on exit?
Turning to what the regulations mean for present practice, can the Minister confirm certain features? First, and very importantly—this might be the point that the noble Earl, Lord Erroll, wished to bring up—is the Rural Payments Agency capable of administering the added totality of these schemes, bearing in mind two aspects? First, it manages the schemes already from a UK perspective so, prima facie, it should. However, secondly, whenever there have been any fresh iterations of CAP regimes, the RPA has traditionally struggled to cope, with resulting delays and confusions. It is struggling now to incorporate the environmental schemes transferred to it last year. What can the Minister say to reduce anxiety over the management of these changes?
Rural Development (Amendment) (EU Exit) Regulations 2019
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Lord Grantchester (Lab)
I thank the Minister for his explanation of the instruments before the Committee today and declare my interests as stated in the register as being in receipt of EU funds. As the Minister said, these statutory instruments are amendments to retained EU laws to allow the rural development programmes and others supported by a combination of UK and EU funding to continue to operate after EU exit for the remainder of the 2014-2020 programming period.
The Government have guaranteed that projects will be funded for their full lifetime, and have gone further by pledging to commit the same cash total in all funds for farm support, including the common agricultural policy, until the end of this Parliament, expected in 2022. All the SIs were originally negative instruments that the sifting committees of either or both Houses of Parliament have recommended be debated by Parliament.
Sub-Committee B of your Lordships’ Secondary Legislation Scrutiny Committee, in its ninth report, expressed disappointment at the uninformative nature of the Explanatory Memoranda that provided no explanation of the instruments’ discrete functions. On my analysis, the first two memoranda on rural development are the same, verbatim, except for the title. In its 18th report, the committee also commented that the provision of more financial information would have been useful to inform debate.
The second two instruments on EU structural funds are similar but more informative, providing some detail on the value of EU funds to be replaced. While it is recognised and appreciated that the Government have accepted the committee’s recommendations, why has so little information being provided in the Explanatory Memoranda?
Other than funding originating from the UK Government and several Commission roles being domesticated, will any significant changes result from the enactment of these SIs in a no-deal scenario? Although they appear largely technical, it is difficult to appreciate the amendments from the legal text.
I have some questions to clarify exactly what is happening here. First, these instruments transfer obligations or discretions from member states to relevant authorities, and these will be pertinent to each devolved Administration. I am sure the Minister will confirm that each devolved Administration—probably excepting Northern Ireland—has discussed and support the orders, and that each devolved Administration has consulted with the programme monitoring committee, which is composed of stakeholder representatives, including non- government organisations. Under the rural development regulations, no further details are disclosed. Under the structural investment fund regulations, there is further information that Defra has met the Rural Payment Agency’s industry partnership group, and these stake- holders are named.
Can the Minister clarify the extent of the consultation and the full extent of the consultees at devolved level? Have the commencement stakeholders named in the IPG UK list been consulted at devolved level—the Welsh, Scottish and Northern Ireland representatives of farmers, consultants and agents? Although consultation may have been impossible with the Northern Ireland Office, it would be useful to know that stakeholders had been consulted in that region.
Under regulations pertinent to the European maritime and fisheries fund, the EMFF, no details regarding stakeholders are given, other than that there was “targeted engagement”. Can the Minister clarify what “targeted engagement” amounts to and specify exactly which stakeholders were involved? These details would be most informative as noble Lords prepare for the Fisheries Bill, which is promised soon.
Secondly, at paragraph 2.6 it is explained that some regulations are being addressed separately by the Department for Business, Energy and Industrial Strategy. The split between departments leads to confusion. Can the Minister clarify whether the European structural and investment funds under paragraph 2.8 come under his department or BEIS?
Further, an explanation regarding the European Investment Bank, which the noble Lord, Lord Teverson, mentioned, and its relevance to these instruments would be helpful, as it is stated at paragraph 12.1 that the UK’s involvement in the EIB will cease on EU exit. The paragraph goes on to say that,
“domestic finance mechanisms would still be accessible”.
Like the noble Lord, Lord Teverson, I would be most grateful to understand what this refers to. What are these mechanisms, how will they operate in regard to these instruments, and who might those finance providers be?
Paragraph 7.5 of the Explanatory Memorandum for the structural funds instruments mentions that projects under both the European agricultural fund for rural development, the EAFRD, and the previously mentioned European maritime and fisheries fund,
“whose funding has been agreed before the end of 2020 will be funded for their full lifetime”.
How long will that be? I am a little confused that projects post leaving the EU, especially under a no-deal scenario, that have not yet been endorsed at EU level until 2020 will still be guaranteed by the Government—let us stick to the convenience for now that we will be leaving in March 2019. Can the Minister clarify the apparent contradiction? The noble Baroness, Lady McIntosh, also raised queries in this regard: whose budget will be responsible and in which circumstances?
I am grateful to the Minister for the consultations he has undertaken with all Benches on these SIs. They have been most helpful, as have his written replies to our previous questions on other SIs. I apologise that it was not possible for me to meet him this week, and that consequently I was not able to give him notice of my inquiries today. How does his department intend to manage agricultural and rural development support through these exit regulations, and no doubt CAP regulations to come next week, with full funding to 2022 and subsequently to the provisions of the Agriculture and Fisheries Bills? These support measures are indeed vital across the rural economy.
His department has included features of this landscape at paragraph 7.5 of the Explanatory Memorandum to the rural development regulations. This explains that the new RDP will cease, while,
“the same cash total in funds for farm support”,
including the common agricultural policy, no doubt, will continue,
“until the end of this Parliament”,
which is still expected to be 2022—even though the noble Baroness, Lady McIntosh, is quite entitled to reflect otherwise. The CAP is at a total funding of £3 billion per annum, and paragraph 7.7 is not entirely clear what the total or annual value of the funding of the EU commitment to scheme holders will be and for what duration. I would be most grateful if the noble Lord could give any further explanation beyond those given in his introduction. That only three lines on this are included in the financial implications is much to be regretted.
I am sure the Minister will also be aware of modulation, whereby deductions from payments under Pillar 1 are made and subsequently transferred to Pillar 2—rural development—and that these sums must be matched by the Government. Will the full administration of all these features still operate under the CAP towards rural development and be guaranteed by the Government? It looks as though there may be a gap before rural development is reinvigorated through the Agriculture Bill. Once again, the noble Lord, Lord Teverson, has drawn attention to the fact that there could well be nothing for fisheries.
I may be asking for far more than the Minister can possibly undertake under the regulations today, especially if he was to answer the pertinent questions from the noble Baronesses, Lady Byford and Lady McIntosh. However, I am sure that his full explanation will be greatly welcomed across the industry. With that, I am pleased to approve the instruments before the Grand Committee today.
Lord Grantchester
I press the Minister to clarify that a little more. Is he therefore saying that it was the devolved Administrations’ responsibility to consult with their stakeholders rather than that of Defra, with its wider powers of consultation?
Lord Gardiner of Kimble
Defra has very good relations and dialogue with a number of rural and fisheries organisations across the devolved Administrations. It is right to say that there is sensitivity, if the responsibility is a devolved Administration’s, in that to appear to be overhauling that would not reflect well. It is a matter for the devolved Administrations, but clearly we wish to work collegiately.
Lord Grantchester
I ask the question only in terms of how it relates to how it is reported to us in explanatory memorandums, so we know that there has been full consultation in all the regions as well as on a UK-wide basis.
Lord Gardiner of Kimble
If I have any specific details, I will let the noble Lord know precisely. It may be helpful if I can glean some information on devolved consultations with stakeholders. I would say that when we have been engaged with key stakeholders, on fisheries, stakeholders we have been engaged with were supportive of the work being undertaken. On rural development, no concerns were raised by stakeholders, who expressed their appreciation of the work being undertaken.
I shall read Hansard, because my noble friend Lady Byford asked a number of points about youth and retirement projects, issues to do with contractors and other matters. All I would say is that the order is designed to continue with the arrangements that we have, but with the payment after we leave by our guarantee that we will fulfil the funding of any schemes that are applicable at the moment. Obviously, as my noble friend knows, this is not about future schemes, on which we will have all sorts of discussions. Whatever is appropriate now under these funds, people can apply for until the programme ends, and so forth. If there is anything further that I think would be helpful, I will inform your Lordships, but I recommend the instruments and I beg to move.
Equine (Records, Identification and Movement) (Amendment) (EU Exit) Regulations 2019
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Baroness Parminter (LD)
My Lords, I too thank the Minister and his officials for the helpful way in which they have outlined the impact of this statutory instrument and answered questions from those of us who brought them to their attention. I am particularly glad that we can reassure the general public. I feel that very few of them will read the statutory instrument, but it makes it clear that the status quo will be maintained with regard to equine passports. We do not want horse owners thinking that there will be changes in when they need to get their horses identified or in the status for selling feral ponies because although the SI removes those requirements, they are found elsewhere in domestic legislation. If you read the SI, you would not know that, but it was very reassuring to hear from the Minister that the status quo is maintained with regard to equine passports.
I add my voice to the voices of those who raised the issue of horsemeat entering the food chain. I understand from officials that the regulations with regard to the waiting time before that meat can enter the food chain are carried over in their entirety. Going on from what the noble Baroness, Lady Byford, said, it is not just horses going abroad. Horses are slaughtered in the UK. We have four registered slaughterhouses in the UK. I was amazed to find out that 2,800 animals a year are slaughtered in the UK for the food chain.
I do not oppose this statutory instrument but it highlights a number of concerns about what will happen to the trade in and moving of horses if there is no deal. As the noble Baroness, Lady McIntosh, said, this mainly concerns racing, competition and breeding, but individual horse owners take their horses to the continent, including younger people who might go to train to be great jockeys in the future, which would be fantastic. It is estimated that 42,000 such journeys are made every year, so if there is no deal, the impact will be great.
I have one question for the Minister. As the noble Baroness, Lady McIntosh, has noted, the Government’s technical note makes clear that the UK will need to be listed as a third country by 29 March. If we are not listed, we cannot move horses to Europe. Can the Minister confirm whether I am correct that if we are not listed by the EU as a third-party country, no horses will be able to move? That would have an incredibly big impact. The noble Baroness, Lady McIntosh, said that the impact assessment, such as it is, refers only to the impact of this tiny SI, which is less than £5 million, but if there is no deal and horses cannot move, that will have a massive impact on the industry and on individual horse owners. Have the Government made any estimation of the cost of that devastating outcome?
The second area I want to touch on is that if there is no deal but we are listed, there will be a need for the new ID document, as the Minister rightly identified. As he said, this should be for non-industry equines only. However, having listened to the debate in the Commons, it seems that there is the possibility that the Commission may not recognise our stud books; that is my understanding of the Commons debate. I would be interested to know whether there is a possibility of the Commission not recognising our stud books. In that case, all equines, including industry equines, would be required to have ID documentation. I know that the Minister has made it clear that the documentation, both the export certificate and the ID documentation, would be available at a minimal cost, but they will require extra blood tests which cost hundreds of pounds. As the noble Lord, Lord Trees, mentioned in the debate on an earlier SI, this will require vets. However, if we do not get a deal, we will not have the 50% of our vets who come from other parts of Europe. We could be under real pressure in terms of the number of vets we have. Again, that would put an extra burden on horse owners and it is possible that the industry might have to wait longer to enable the veterinary profession to undertake these extra requirements. All of that comes on top of the extra border inspections which may be required at ports. I believe that most horse owners are very caring and considerate; they do not want to see their horses stuck at borders, which would be the result of no deal.
This SI points to the fact that, at the very minimum, there will be extra costs, extra administrative requirements and undoubtedly extra time for horse owners if we have no deal. If we have no deal and we do not get listed as a third party, there will be no movement at all, which will have a massive impact. This is another statutory instrument which demonstrates the huge loss that this country will bear if we leave the European Union on 29 March.
Lord Grantchester (Lab)
I add my name to other noble Lords who have spoken today and thank the Minister for his explanation of the regulations. I declare my interests as set out in the register, but hasten to add that I have no connections with anything to do with horses. The Minister is correct to make clear that these regulations are being made in the event of a no deal outcome to the UK leaving the EU and it would be redundant should the UK leave with a deal. I thank the Minister once again for facilitating discussions earlier in the week on the SI.
While EU law is supported by UK domestic enforcement legislation after exit day with a deal, as EU legislation will then be retained under the withdrawal Act, the UK must still have an effective, operable statute book should the UK leave the EU without an agreement, as the Minister has explained. Labour recognises that the regulations largely make no changes to the current policy or enforcement, although there are one or two points I shall come to, and therefore does not oppose them. That is not to say that there are no significant concerns about the considerable impact that a no deal outcome will have on the equine industry as well as nearly every other industry. For this reason, the sifting committee of your Lordships’ House has recommended that the regulations be made under the affirmative procedure.
EU law requires equines to be identified by way of a passport. In most cases, equines born after 2009 must also be uniquely identifiable with a microchip. It is recognised and emphasised that this passport will contain important identity information and pertinent details of veterinary medicines administered to the animal and will define the animal’s current food chain status eligibility. The identification regulations have also been recently updated. The UK’s database was launched on 8 March 2018 and contains data about virtually every equine in the UK except those registered and listed as belonging to semi-wild and wild populations. It is to these populations that my attention has been drawn by World Horse Welfare and I thank that organisation for raising these issues. In his opening remarks, the Minister explained that the technicalities under the legislation withdrawing the UK from the EU might explain some of the anomalies the charity has raised. I thank him for that and I also thank the noble Baroness, Lady Parminter, who underlined this point. Some of the points that I am about to raise might be redundant, although, as World Horse Welfare has specifically asked these questions and I have given the Minister notice of them, perhaps I may outline them so that he can deal with them appropriately.