Agriculture Bill (Eighth sitting)

Martin Whitfield Excerpts

Thursday 1st November 2018 Public Bill Committees

[George Eustice]

I understand my right hon. Friend’s point, but of course we must view all this in the context of a seven-year transition period, at the end of which it is our objective and our vision that there will be no basic payment scheme as it is known today. What we would envisage happening in those scenarios is that we would free up land for new entrants to come in, who would get used to working in a different way from the start.

It would be quite possible, for instance, to prioritise the roll-out of a new scheme to those new entrants coming on to land that had been exited and was no longer eligible for the BPS payment. I would also envisage that some of those new entrants coming on to that land would also be likely to qualify for the productivity support. We have to see all this in the context of the fact that we do not want a single farm payment to be carrying on forever. We have set a clear pathway to move to a different approach over a seven-year transition period.

[Martin Whitfield (East Lothian) (Lab)]

Is not the situation that the Government envisaged one where, by using this de-linking, some farmers may release themselves from land that they see as being less profitable in the future, take advantage of the de-linking, retain land that is more profitable and then continue to claim for that—in other words, make a profit by reducing their business to shape it for what will make money for them again in the future?

[George Eustice]

Broadly speaking, although, as I said, one of our key thoughts behind the concept of de-linking is that it will be a tool to assist people with retirement. Because we do not want multiple systems—a new system emerging, a legacy system and a de-linked system—we have drafted this in such a way that, once someone takes the decision to de-link, it will apply to everyone and we will not have that problem. It will be a bold policy to help to support structural change and give farmers the freedom to invest that money as they deem right.

Government amendment 91 is another technical amendment that simply reflects the way the current direct payment regulations operate. There has been no change to our policy of trying to de-link payments, but the current direct payment regulation only contains financial provisions known as “ceilings” until the end of the 2020 scheme year. Introducing de-linking in 2021 means that ceilings under the direct payments will not be set for 2021. The existing basic payments will therefore automatically end in 2020 and we will not need to terminate such payments. The amendment reflects that. Other than that, the intent is exactly the same as originally drafted, but the amendment makes it clear, crucially, that de-linked payments cannot be made alongside the direct payments under the basic payment scheme, in line with clause 7(3)(b).

This is a technical amendment simply to deal with a similar point to the one I addressed with respect to one of the new clauses, which is that the ceilings expire and we might want to be able to make those de-linked payments based on a direct payment and not necessarily on the old BPS payment. Again, this is a technical issue that has its genesis in the way that EU payment ceilings and budgets are wired. I hope I have given the Committee a good explanation of what we seek to achieve through the amendment.

--- Later in debate ---

[Sandy Martin]

I do not particularly want to address the amendments or the whole de-linking scheme in detail, but we need to bear in mind one or two basic principles. Obviously, if we support the movement to payment for public goods, and a tricky transition, people who have farm businesses that will be involved in that transition need to understand what will happen to them before they get there.

We do not want large numbers of farmers to move out of the business involuntarily. Subsection (7) provides the opportunity for support for somebody who has voluntarily decided to leave the business. However, there is a problem with small farmers in particular, who might have extremely delicate finances. They need to know before they get to the year in which they might find themselves unable to continue financially—indeed, they would need to know three or four years before—whether they are going to get there. They need to know that before deciding whether to take the lump sum payments under subsection (7). If they do not know whether they will be financially viable under the new payments regime more than three years before, that might become a fatal position for them. They might take the payment and go anyway, even though it might turn out that they would have been better off and happier continuing to farm under the new payment for public goods system, rather than the current system.

[Martin Whitfield]

To return to a point mentioned in evidence that we have raised a number of times, this is very much a situation where we see scaffolding but nothing underneath it. The problem for the farmers is that they have no certainty about what is coming down the line. We are approaching the transition period very quickly and they need the time to decide.

[Sandy Martin]

I totally agree. Whether or not we can see what will go around the scaffolding might be annoying to us, or it might feed our fears that an awful lot of work will be done without any democratic control or oversight, but it is far more important for those involved in farming to know what will be put on that scaffolding, because they might well be making decisions without knowing.

Subsection (7) is like an offer that those farmers cannot refuse—not because they know that the consequences of refusal will be dire, but because they do not know and will therefore just go for the easy option. We do not want large numbers of smaller farmers to face going out of business or choosing to take payments under subsection (7), leaving the field clear for those with more money and resources and a better understanding of the complicated regime that the Government are thinking of introducing.

--- Later in debate ---

[Dr Drew]

Whatever is happening with England and Wales, we have Scotland and Northern Ireland. This is going to be quite a complicated issue. There will be farmers in Northern Ireland who farm on both sides of the border; they will have whatever the common agricultural policy is and whatever the Northern Ireland policy is within the framework of the United Kingdom policy. That will greatly determine what they intend to farm, how they intend to farm and whether they wish to stay in farming.

[Martin Whitfield]

Obviously, in the schedule for Wales, de-linking is discussed, but we do not have a schedule for Scotland.

[Dr Drew]

That is absolutely true, but I am not sure that that helps me.