Draft Rural Development (Amendment) (EU Exit) Regulations 2019 Draft Rural Development (Rules and Decisions) (Amendment) (EU Exit) Regulations 2019

Robert Goodwill Excerpts

Thursday 21st March 2019 General Committees

[The Minister for Agriculture, Fisheries and Food (Mr Robert Goodwill)]

I beg to move,

That the Committee has considered the draft Rural Development (Amendment) (EU Exit) Regulations 2019.

[The Chair]

With this it will be convenient to consider the draft Rural Development (Rules and Decisions) (Amendment) (EU Exit) Regulations 2019.

[Mr Goodwill]

It is a great pleasure to serve under your chairmanship, Mr Gapes. As a farmer myself, and given that my family business participates in an agri-environmental scheme, I should mention my entry in the Register of Members’ Financial Interests.

The two statutory instruments are closely interrelated and I thank the Committee for taking them together. They amend retained EU law to ensure that rural development payments can still be made after exit day. The amendments will maintain the effectiveness and continuity of EU legislation that would otherwise be deficient after our exit. The changes are necessary to enable rural development programmes, particularly those partially funded by the European agricultural fund for rural development—the EAFRD—to continue to operate effectively in the United Kingdom following exit, until their closure after the end of the 2014 to 2020 programme period.

[Sir Oliver Heald (North East Hertfordshire) (Con)]

With his background, the Minister will know the importance of the rural development programme for England. Can he confirm that the effect of the draft instruments will be that that programme will continue unimpeded and unchanged and that there will be proper funding for it if we have a no-deal Brexit?

[Mr Goodwill]

I thank my right hon. and learned Friend for his question. I can absolutely confirm that—it is vital if we have a no-deal Brexit. If, as I hope, we do not have a no-deal Brexit—I hope Opposition Members will think about that before next week’s vote—the regulations will come into force when we leave, following the implementation period.

Four rural development programmes operate in the UK—one for each Administration—providing funding for rural businesses, farmers, land managers and applicants who live in a rural community, with the intention of growing the rural economy, increasing productivity and improving the environment. The European fund relevant to the instruments is the EAFRD, which supports the delivery of rural development in the UK and is worth £430 million a year over the programming period.

The UK Government have guaranteed that any projects funded from the 2014 to 2020 allocation will be funded for their full lifetimes, to repeat the point that I made to my right hon. and learned Friend. The changes that the draft instruments make ensure that payments can continue to be made to agreement holders, using domestic funding in place of EU funding. That will provide certainty to individuals and businesses who receive development funding or who are considering applying for funding during the current 2014 to 2020 programming period.

The draft Rural Development (Amendment) (EU Exit) Regulations 2019 amend the EU regulation that provides the general rules and structures that govern support for rural development, provide payments to be made to agreement holders and lay down rules on programming, networking, management, monitoring and evaluation. That includes the countryside stewardship and environmental stewardship schemes, which improve the environment; the countryside productivity fund, which supports productivity improvements in farm and forestry businesses; and the growth programme, which supports rural business development, food processing, tourism and broadband. Let me give examples of the sort of projects that the latter two funds might support. The countryside productivity fund might fund a fruit-growing business to increase the storage capacity of a reservoir to include water security during the summer months. The growth programme might support a company that grows salad leaves and specialist vegetables to invest in new equipment to keep up with demand and grow the business.

The draft Rural Development (Rules and Decisions) (Amendment) (EU Exit) Regulations 2019 amend the implementing and delegated provisions made under the main rural development EU regulation. They also amend four implementing decisions that approve the rural development programmes for each of the devolved Administrations. We are omitting powers to submit and implement an information and publicity strategy, and actions relating to it. That includes the requirement for agreement holders to publicise EU participation. We have all seen the big billboards around the country where EU funding has been used. As we are no longer using EU funding, putting up those big billboards, with those blue flags with yellow stars on, will no longer be a requirement. I am sure that that will be a great relief to many of those travelling around the country, and will emphasise that we have left the European Union.

I emphasise that the instruments remedy deficiencies in the regulations that are a direct result of the UK leaving the EU, to ensure that they continue to operate effectively when we leave. They do not introduce any new policy, and simply preserve the current regime for supporting rural businesses and environmental land management, among other things. The amendments include omitting redundant references to the European Commission and member states, and replacing them with either the UK or the relevant authority as appropriate. The instruments also make references to “Union law” throughout, so that the relevant EU regulations continue to operate effectively as part of national law. Provisions that are deficient because they are time limited, under which the relevant actions have occurred, have also been omitted—such as the provisions relating to ex-ante evaluations that have already been completed.

One purpose of the modifications is to ensure continuity and clarity regarding which public bodies have responsibility towards the programmes. The obligations and discretions placed on member states will continue to be exercised after exit by relevant authorities in the UK. In this context, “relevant authority” means the Secretary of State in relation to the rural development programme for England, Scottish Ministers in relation to the rural development programme for Scotland, Welsh Ministers in relation to the rural development programme for Wales, and the Department of Agriculture, Environment and Rural Affairs in relation to the rural development programme for Northern Ireland, where we do not currently have an Administration operable.

As hon. Members are well aware, agriculture is a devolved policy area, and is of special importance for all parts of the UK. We have worked closely with the devolved Administrations to produce the instruments, and they place great importance on them. They have given their full consent for them.

I repeat that the statutory instruments are required for the continued operation of the rural development programmes. Without them, there will be no legal powers to make payments to fulfil the promises that those important programmes will continue.

--- Later in debate ---

[Mr Goodwill]

I am very pleased to respond to the hon. Gentleman’s points, which I have to say are precisely the sort of questions that I have been asking as a new Minister in the Department. It is constructive that we seem to be on the same page about the exciting opportunities available to us as we leave the European Union. I will expand on that in due course.

The two draft instruments will ensure that the rural development programmes funded by the EAFRD continue to operate effectively in the United Kingdom following EU exit. As I said, the development fund is worth some £430 million a year, and the UK—I repeat—has guaranteed that any projects funded from the 2014 to 2020 allocations from the fund will be funded for their full lifetime. The instruments provide the legal basis for continuing to make payments to agreement holders, providing certainty to farms and land managers, and for preserving the existing regime for supporting rural businesses and environmental land management, among other things.

The hon. Gentleman started his remarks by saying that this SI is the one that concerns him most. I have to say, there is nothing to see here. These are not changes; this is maintaining the existing situation so that we can continue the current regime. It is business as usual. The debate gives me another opportunity to reassure right hon. and hon. Members that that is indeed the case.

The hon. Gentleman has not fully grasped the opportunities that life outside the European Union may present. Having sat in the back row in the Agriculture Bill Committee, I know of the tremendous opportunities and the innovative new schemes that will come forward. No doubt those schemes will build on our experience of existing agri-environmental schemes. On my own farm, for example, we are planting nectar plants—the first time that we have ever encouraged weeds, rather than killed them. We need to build on such schemes.

[Kerry McCarthy (Bristol East) (Lab)]

My recollection of the Agriculture Bill Committee is that the right hon. Gentleman disagreed with rather a lot of the Bill. Now he has been promoted to the Front Bench, has he had something of an epiphany so that he agrees with the Government line?

[Mr Goodwill]

If the hon. Lady analyses everything I said in that Committee, as I have done, it was absolutely in line with the objectives and ambitions of the Bill, and the reassurances that I received from my predecessor established the fact that we are on the right page and that we need to move forward. She must revisit the points that I made—I asked some searching questions during the debate, and I was pleased with the answers that I received. Indeed, I was happy to vote for that piece of legislation.

[Kerry McCarthy]

I assure the Minister that I have gone through what he said in the Agriculture Bill Committee with a fine-toothed comb. I have a very long list of where there might now be some inconsistencies, but we can return to them at a future date.

[Mr Goodwill]

I look forward to that robust exchange of views. Indeed, it might be that, given my particular take on some aspects of that Bill, we look at some amendments. Who knows!

The hon. Member for Stroud made a valid point that not all the funds have been drawn down. That is a great disappointment, because the funds are important to develop not only our rural economy but the public goods and the environment that people wish to see. We need to analyse why that was not done. In the case of some of the capital grant funding for improvements to businesses, the EU structure was often very much based on giving money to co-operatives. Many European Union countries have a much wider co-operative structure among their farmers, particularly in areas where there are small farmers, who can work together only if they co-operate. In the UK, we do not have that same history of co-operatives, which in some cases has prevented farmers from applying, say, for better storage facilities.

Secondly, as the hon. Gentleman mentioned, many EU schemes are complicated and over-bureaucratic. We need to look at how to simplify them. Given the egregious exploitation of schemes in some parts of southern Europe, I can understand why the European Union came to the view, in some cases, that every farmer was out to exploit the system in a way that was not intended. My view is that farmers in this country are much more likely to comply and engage with our common objectives.

I met several landowners and farmers at an event last week. The point has been made that we have not made payments as effectively as we should—there have been delays, particularly in the agri-environmental schemes. Many such schemes involve up-front investment, such as buying seeds or hedging plants, so we need to improve our performance to encourage more people to feel that they can invest in them.

The hon. Gentleman talked about funding. There is the small matter of our contribution to the European Union budget, which we will be able to deploy for our own interests. As net contributors, we will be in a better position to make sure that the money is adequately spent. We will certainly be engaging in the spending review and with the devolved Administrations to make sure that we have a fair share of the available money and that it can be deployed as intended and not top-sliced in some other way.

[Dr Drew]

Obviously we will not replicate pillar 1 and pillar 2, but is the Minister saying that the pillar 2 moneys will be secured? So far, he has mentioned agriculture and land, but not rural communities. A key thing about the pillar 2 moneys was that they were ring-fenced for particular rural developments, which may have involved farmers and landowners, but did not have to. What will the Government do to make sure that the pillar 2 moneys are secured, as they were under the EAFRD?

[Mr Goodwill]

As the hon. Gentleman well knows, the direction of travel in policy is to switch funding from pillar 1 to pillar 2, so direct funding will be reduced at the same time as the schemes that the Agriculture Bill facilitates are delivered. I am ambitious and optimistic that we can continue to build on such schemes and that the money will be there, because we will be directing it for the public goods that farmers will be keen to deliver. The general public will also feel more content, perhaps, that taxpayers’ money is being spent in those directions rather than how it was spent in the past.

The hon. Gentleman talked about the consultation. There was no statutory requirement to consult, because we are not making operational changes. We met the Rural Payments Agency industrial partnership group in September 2018 to update farming and land management stakeholders about the Government’s plan for EU exit. A number of stakeholders were present, including the Tenant Farmers Association, the Country Land and Business Association, the Farming Community Network, the Institute of Agricultural Secretaries and Administrators, the British Institute of Agricultural Consultants and the National Farmers Union. A subsequent meeting was held on 26 November 2018.

The hon. Member for Dundee West is concerned about Scottish participation. I spoke to Fergus Ewing last week to reinforce my wish to work with the Scottish Government. Their consultation, “Stability and Simplicity”, which was published in June 2018, invited comments on their proposals for dealing with the implications associated with leaving the common agricultural policy. It explained that the first stage would be for EU law to be retained in domestic legislation. The consultation closed in August 2018 and there were 137 responses. At least so far as that aspect is concerned, the Scottish Government are engaging.

[Chris Law]

Will the Minister confirm that, when the Agriculture and Fisheries Bills are introduced, the powers that belong to Scotland will be devolved back to it? On funding for the highlands and islands, it looks like we will be £160 million short from 2021 to 27. He might not be able to give me the numbers just now, but will he look into that and write to me about what he will do about that shortage?

[Mr Goodwill]

The hon. Gentleman is absolutely right to make the case on behalf of not only his constituents but his nation. We certainly look forward to robust exchanges about the way funding is brought forward, but I repeat that, as we leave the European Union, the money that we previously paid into the coffers in Brussels will be available for us to deploy here. England is embracing the opportunities of leaving the European Union, and the Agriculture Bill is one clear example of that. The Scottish Government need to engage more widely in those opportunities and must not be in Brexit denial. Many of the hon. Gentleman’s right hon. and hon. Friends seem to think that it is not going to happen. It is important that they realise that the result of the referendum in the United Kingdom was to leave the European Union. The Government of the United Kingdom are determine to deliver our promise.

As further changes to the way we deploy and deliver the agri-environmental and other schemes in this SI emerge, we will of course consult. We will evaluate the way that schemes have worked in the past. We will need to see how we can balance and incentivise new schemes, particularly in connection with the environment, to ensure we get the balance right between rewarding those who were in the vanguard of delivering these environmental schemes and incentivising new entrants. Getting that balance right will be one of the important challenges for us.

[Dr Drew]

Given how small the rural team is in DEFRA—people now just call it “DEF”, because the “RA” has dropped off—who will do this? These schemes, such as the ones through Erasmus, have not necessarily directly involved DEFRA. It may have had some sign-off, but it has not been directly involved with some of the rural initiatives. Who will do that? We are talking about dropping out next week, so this is pretty urgent stuff. What mechanism is in place to undertake this evaluation?

[Mr Goodwill]

I thank the hon. Gentleman for his question. We will only drop out next week if the Labour party votes against the agreement that will allow us to leave in an orderly way, and allow the implementation period to be delivered. We are preparing for a no-deal Brexit, but it is not a particularly palatable prospect, in terms of turbulence in the land market. The documentation required for, say, fish exports will need to be delivered in a very short time. The Labour party needs to think long and hard about the game it is playing in this regard.

[The Chair]

Order. Can we get back to the instruments before us, please?

[Mr Goodwill]

I apologise, Mr Gapes.

As we move forward, we are looking to ensure that these schemes are adequately funded. We will need to consult if changes are to be made in future. The Agriculture Bill is the perfect foundation on which to build new, innovative and exciting schemes that will not just deliver for agriculture and food production, which is the primary role of agriculture, but provide important public goods.

On highlands and islands funding, and Scotland’s missing out on EAFRD funding, we have committed that the Barnett formula will not simply be applied to DEFRA’s agriculture budget in 2022. That means that farmers in Wales, Scotland and Northern Ireland will not just be allocated funding according to the population size in each nation, which in each case is significantly smaller than England. I hope that provides some reassurance that we will look at the needs of agriculture, rather than per capita funding.

I hope I have answered all the questions that were asked. These statutory instruments are required for the continued operation of the rural development programme, and will ensure that farmers and land managers are able to be paid after we have left the EU.

Question put.