Draft State Aid (Agriculture and Fisheries) (Amendment) (EU Exit) Regulations 2019

Luke Pollard Excerpts

Tuesday 19th March 2019 General Committees

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Robertson. I welcome the Minister to his re-debut. As is normal when the Opposition respond in a statutory instrument Committee, I place on record our concerns about the speed and volume of statutory instruments being pushed through the Commons, and our fear that, within those SIs, there could be a little nugget that might otherwise have been caught with greater scrutiny and which could have severe consequences in the future.

[Thangam Debbonaire (Bristol West) (Lab)]

I thank my hon. Friend for giving way, unusually to his Whip, but on that point, does he agree that it is concerning that the Fisheries Bill and the Agriculture Bill appear to be missing in action? Will he join me in placing on record our concerns about those Bills being missing and about how they might relate to the SI?

[Luke Pollard]

My hon. Friend the Member for Ipswich (Sandy Martin) said yesterday that the Agriculture Bill is stuck in the long grass and the Fisheries Bill has sunk without trace. Notwithstanding the play on words, the mysteriousness is certainly true. Many of the SIs that we are considering are designed to fit into an administrative jigsaw alongside those two pieces of primary legislation, but they are nowhere to be seen. It would be good if the Minister, as the new Minister with responsibility for those Bills, confirmed on the record when he expects them to make a comeback. SIs such as this need to fit neatly with the provisions in primary legislation, and if we cannot see what the primary legislation looks like—especially if the cause of the Bills’ long delay is that the Government are rethinking large parts of them—it is uncertain how the implementation of the SIs will fit perfectly with it.

I appreciate that the Minister has said that the SI makes no new policy changes, but I have a few questions about how it will be implemented. Unfortunately, he dangled the hook of asking technical questions about the implementation, which I will take him up on, with apologies to him and his officials.

In a similar SI on state aid last week, the Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy, Lord Henley, said:

“The main practical change under the new regime is that the rules will be regulated by the CMA. To prepare for EU exit and its new state aid role, the CMA received £20 million for 2019-20. This is in addition to the £23.6 million it received for 2018-19. The Government are working to ensure that the CMA will be ready to take on this new role and have every confidence in its ability to do so.”—[Official Report, House of Lords, 14 March 2019; Vol. 796, c. 1146.]

That was a fine assertion from the Minister, but I would be grateful if this Minister also confirmed that he believes that the CMA has sufficient resources in place, and has hired sufficient additional staff to ensure that implementing the SI will not be put on the backburner, but will be done properly.

Concerns have been expressed by stakeholders in that regard. Dr Liza Lovdahl-Gormsen from the British Institute of International and Comparative Law talks about the significant challenges that the CMA will face at an administrative level, including the real risk of being under-prepared and under-resourced to take on the duties of the Commission. That is also our concern, as I will explain when I come to the SI’s implementation.

Dr Lovdahl-Gormsen sets it out that the challenges facing administrative bodies in the UK, particularly the CMA, can be understood as possessing three key dimensions: internal organisation issues, external co-ordination issues and substantive legal issues. She and her colleagues argue that, in many instances, those three dimensions will be in tension with one another, so the reality of reforming administration post-Brexit will involve trade-offs between questions of internal organisation, external co-ordination and substantive law. I would be grateful if the Minister addressed whether any of the challenges set out by Dr Lovdahl-Gormsen apply in relation to the powers contained in the SI.

The Minister will know—or if he does not, he will get used to it, because it happens quite a lot in SI Committees where I speak on behalf of the Opposition—that I remain concerned about there being no impact assessment. The explanatory memorandum states the SI has

“no, or no significant, impact”,

and also that no impact assessment has been done. The tension between confidently asserting that there is no impact, when there could be some, and saying that there is no impact assessment does not sit well with me. I know that in many cases the problematic tension comes from the text required by the House, but as the Government control the House—at least in theory—changes could be made to help hon. Members and those watching our proceedings to understand the distinction there.

In regulations 29 to 46, references to aid co-financed by the European Agricultural Fund for Rural Development —the EAFRD—are substituted with a loose ambition of “support for rural development”, which is not accompanied by any firm or tangible objectives. I would be grateful if the Minister set out how he intends to make that clearer. The EU framework for rural development programmes follows six priorities, and “support for rural development” in no way replaces the EAFRD’s objectives. Will the Minister set out how he intends to do that?

Those six objectives are good principles for rural stewardship. They are: fostering knowledge transfer and innovation in agriculture, forestry and rural areas; enhancing the viability and competitiveness of all types of agriculture, and promoting innovative farm technologies and sustainable forest management; promoting food chain organisation, animal welfare and risk management in agriculture; restoring, preserving and enhancing ecosystems related to agriculture and forestry; promoting resource efficiency and supporting the shift toward a low-carbon and climate-resilient economy in the agriculture, food and forestry sectors; and promoting social inclusion, poverty reduction and economic development in rural areas.

I hope that the Minister and members of the Committee realise that that is a much more comprehensive and important list of priorities than the simple phrase “support for rural development”. My concern is that some of the detail of those important programmes and priorities could be lost within such a vague, catch-all title.

Although Brexit presents an opportunity to re-write some of the rural objectives outside the CAP, Opposition Members have concerns about how that will be done without the firm commitments to supporting rural development I have just outlined, and which will be lost when the CAP moves off. I realise that some of those commitments may be contained within a refreshed agriculture Bill, but, as I noted earlier, without such a Bill it is hard to see the deletion from one set of principles and insertion into another that would greatly aid our scrutiny of the SI.

In the Fisheries Bill, we see that the Government have made no commitment to matching the current funding from the European maritime and fisheries fund, which is essential for so many of our coastal fishing communities and the facilities infrastructure they rely on. In Plymouth in my constituency, EMFF funding has been instrumental in providing a new ice plant at Sutton harbour, which has been important in ensuring that fishers have the ability to get good-quality ice, which enables them to sell their products. Without the commitment to replace every single penny of EMFF funding, there is a concern that state aid rules, however drafted, may cause problems, because less money will be available to those coastal communities. Will the Minister set out when he will be in a position to announce whether the EMFF funding will be cut? We have seen with the agricultural subsidies that rural communities could lose 40% of the current subsidy level under the new public goods scheme.

Also on EMFF funding, I would also be grateful if the Minister set out, in relation to state aid rules, what criteria will be used, what projects and beneficiaries might be identified, and what sums will be made available. Is it the Government’s intention in their negotiations that, if we are to leave the European Union, parts of the UK will be able to continue bidding into European-funded projects, as in Norway? The Minister’s predecessor had a particular penchant for the Norway option in relation to the promotion of Brexit; I have not yet got to the bottom of where this Minister stands, but the example of Norway is a good one in understanding how, or whether, our farmers would be able to access European funding.

What constitutes state aid is a deeply political issue that has been debated on the Floor of the House and in Committee Rooms more than once. My noble Friend Lord Stevenson of Balmacara, when debating the State Aid (EU Exit) Regulations 2019, said:

“It is generally recognised that state aid can do more than simply reduce distortions in competition. It can enhance public welfare, address inequalities, allow for investment in research and development for which there is no direct benefit to individual companies—which is probably therefore a public good—and address inequalities across various areas and regions.”

My noble Friend continued:

“Who has the power to set the framework under which the state aid is to operate? I have already mentioned that variable limits exist across the EU at the moment. There is no absolute limit on what you can spend. There are general rules. These are all matters which should surely have political rather than administrative control. Where will that lie? As I understand it, Parliament will not have a role in this. This matter is being devolved solely to the Secretary of State, who can issue guidance on what is or is not state aid. That surely needs some further check.”—[Official Report, House of Lords, 14 March 2019; Vol. 796, c. 1150-52.]

I would be grateful if the Minister set out what level of parliamentary scrutiny will be applied to any changes to the Government’s definition of state aid in respect of agriculture and fisheries, and what opportunities there will be for hon. Members to debate that to ensure that that definition is appropriate for all parts of our United Kingdom.

The Opposition do not intend to oppose the SI, but I would be grateful if the Minister provided clarity to ensure that there is good scrutiny of the provisions and that some of the concerns raised can be addressed.