Direct Payments to Farmers (Legislative Continuity) Bill

Theresa Villiers Excerpts

2nd reading & 2nd reading: House of Commons
Tuesday 21st January 2020 Commons Chamber

[The Secretary of State for Environment, Food and Rural Affairs (Theresa Villiers)]

I beg to move, That the Bill be now read a Second time.

This is a Government who are backing Britain’s farmers. We will always recognise the importance of the work that they do to care for our countryside and our natural environment and, of course, to put food on our plates. We know that, if we are to level up the rural economy in the way we want to for our whole country, we must support the agriculture that is at the heart of our rural communities.

The Bill is a short technical piece of legislation with a simple purpose: to empower the UK Government and the devolved Administrations to pay basic payments to farmers for the 2020 scheme year. It therefore maintains the status quo for pillar 1 for this final period before we start to leave the common agricultural policy behind completely.

The core purpose of the Bill is enacted by clause 1, which puts direct payment legislation for 2020 on the domestic statute book. That provides a legal basis to make such payments for the 2020 scheme year. As hon. Members will be aware, almost all EU legislation was imported on to the domestic statute book by the European Union (Withdrawal) Act 2018, but funding for the 2020 basic payment scheme will come out of the 2021 EU budget. That would therefore have involved the UK in the next EU multi-annual budget cycle. In the negotiations, the EU and the UK agreed that they did not want that to happen, so the CAP provisions providing the basis to issue basic payments in the UK for 2020 were disapplied by the terms of the withdrawal agreement reached last year.

That policy decision has left a legal gap, which we are now proposing to fill. This legislation will provide clarity to farmers on funding support this year. If Parliament were to reject the Bill, no direct payments could be made by the UK Government or by the Administrations in Scotland, Wales or Northern Ireland. That would have serious consequences for farmers across the nation who have planned their businesses on the basis of continuity of direct payments for this scheme year.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

The next European multi-annual financial framework will run from 2021 to 2027, but this Bill will allocate funds for one year only. What is the British Government’s intention: will there be a multi-annual framework for farming support, or will the decision be made annually?

[Theresa Villiers]

In our manifesto, the Government set out our commitment to retain 2019 levels of support for farmers throughout the current Parliament. The exact basis of the allocation and division of those funds remains to be determined, but we will work closely with the devolved Administrations in taking decisions.

[Harriett Baldwin (West Worcestershire) (Con)]

I welcome the certainty given to farmers and food producers for 2020. What advice would the Secretary of State give to an estate agent in my constituency on how it should value a significant estate currently in receipt of quite a lot of common agricultural payments?

[Theresa Villiers]

It will be important for the estate agent in question to follow developments relating to the transition to a new system of farm support in England. I will outline that later in my remarks, but we view leaving the common agricultural policy as a vital opportunity to create a better system that more effectively supports our farmers and enables them to deliver crucial public goods, including for the environment and animal welfare.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

Further to the points raised by other Members, long-term planning is very important for farmers. They might, for example, plan to build a hay shed two years hence. Moreover, any lowering of the value of the pound would have an impact on farmers, because the price of fertiliser would go up and any machinery not made in the UK has to be imported. May I appeal to the Government, therefore, that the value of the pound be calculated into any sums as they are worked out for our farmers?

[Theresa Villiers]

The hon. Gentleman makes an important point about farmers’ need for certainty and continuity, which is one of the reasons why we have brought forward this Bill today. That is also why we propose a seven-year transition period to move away from the basic payments of the common agricultural policy and towards the new approach of environmental land management for England, which this House will have the chance to debate within the next few weeks.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

I echo the concerns raised about farmers’ need for continuity, but may I ask a slightly different question? What protections for vulnerable habitats does the Secretary of State envisage this Bill supporting?

[Theresa Villiers]

The Bill is a vital stepping stone to getting us to the transition period in 2021, when we will start to introduce our national pilot for the environmental land management schemes, which will replace the common agricultural policy in the United Kingdom. We have every expectation that those schemes will enable farmers to do even more than they presently do to protect habitat and valuable biodiversity.

[Neil Parish (Tiverton and Honiton) (Con)]

rose—

[Theresa Villiers]

I give way to the Chairman of the Select Committee on Environment, Food and Rural Affairs.

[Neil Parish]

I am the former Chairman at the moment. I very much welcome the Secretary of State’s statement. It is great to have continuity. I want to return to the point made by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) about the value of the payment. At present, the payment is made in euros; the rate used is the average rate in September. Does my right hon. Friend expect this year’s payment to be virtually the same as that for last year? In the past it was based on the value of the euro at the time of the payment, but I imagine that that will not be the case this time.

--- Later in debate ---

[Theresa Villiers]

My hon. Friend is correct to say that taking over domestic responsibility for the payments means that the currency fluctuation, which has had such a significant impact in past years, is not likely to affect payment levels in the same way. None the less, we have yet to decide the exact levels of basic payments, although the Chancellor has set out the overall spending envelope with which to fund such payments.

[Tim Loughton (East Worthing and Shoreham) (Con)]

As we move towards the transition period—more will be appearing in the Agriculture Bill—we obviously welcome the environmental sustainability measures. One thing that is not mentioned here is the fact that many farmers look after places of archaeological interests—scheduled monuments that have access for the public and need to be maintained. Does the Secretary of State envisage that the payment system will recognise that farmers are not just there to enhance agriculture and produce food; they are also stewards of historical and archaeological monuments, for which they need to be compensated?

[Theresa Villiers]

My hon. Friend will be pleased to hear that clause 1 of the Agriculture Bill, which Parliament will have the chance to consider very soon, does recognise the importance of access to the countryside, and to our culture and heritage, by listing that as one of the public goods that we can potentially support through our new farm support scheme. He makes an important point.

I am pleased to say that the Chancellor confirmed on 30 December that overall levels of funding available for direct payments for 2020 will be the same as those for 2019, so the Government will provide £2.852 billion of support, topping up remaining EU funding. That announcement from the Chancellor, combined with this Bill, provides reassurance to the devolved Administrations in Scotland, Wales and Northern Ireland that they will be able to issue basic payments to their farmers in 2020. All four Administrations have said that these payments will be made, and that is in addition to the £216.6 million of further funding secured in the summer for farmers in Scotland and Wales.

[Scott Mann (North Cornwall) (Con)]

I welcome the £3 billion announcement from the Treasury supporting our farmers, showing again that the Conservative Government support our rural communities. In the transition period from the current system to the new one, could this be done on a multi-annualised basis, so that some of our farmers can invest in some of their infrastructure to prepare themselves for the challenges that lie ahead?

[Theresa Villiers]

In setting out the seven-year transition period, we have recognised the concerns that my hon. Friend raises about the need for a multi-annual period. We will be providing further information on how the transition to environmental land management will work in due course. No doubt the debates on the Bill will give us a further opportunity to discuss and develop how the transition period will operate in practice.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

Will the Secretary of State give way?

[Theresa Villiers]

Yes, and then I need to make progress.

[Cat Smith]

I thank the Secretary of State; she is being very generous. One of the concerns that my constituents will have is around the payments from the Rural Payments Agency, which has received huge cuts since 2010. The civil servants who are working to deliver payments to farmers obviously work very hard, and I have some very positive stories in casework that I could show her. However, a huge proportion of farmers in Lancaster and Fleetwood are concerned about the delays in payments. She talks about maintaining the status quo. Will she change the status quo in terms of reforming and re-staffing the Rural Payments Agency to ensure that farmers can actually receive the money in a timely manner?

[Theresa Villiers]

I hear what the hon. Lady says. Clearly, there have been difficulties in the past, but I would say that the RPA’s performance in recent months has been better than for many years, with, last year, 93% of farmers receiving payments by the end of December. But there is always scope to improve, and I will certainly follow this matter very closely, not just in terms of the 2020 scheme year but in relation to the role of the RPA as we move forward with the reformed system.

The additional funding that the Government have allocated consists of £160 million for Scottish farmers to correct a perceived historical injustice in relation to past years’ allocations. The remainder was awarded following the recommendations of the Bew report. Neither commitment would have been secured without the strong campaign led by Scottish Conservative MPs to get a fairer share of agricultural support for their farmers. I pay tribute to all of them, including those who sadly did not retain their seats at the election: Colin Clark, Stephen Kerr, Kirstene Hair and Paul Masterton.

Provision for the uplift in funding resulting from the Bew report and the campaign by Scottish Conservatives is made in clause 5. What is more, as I have said, the Government have a manifesto commitment to match the current overall budget for farmers in every year of this Parliament, so the Bill is an essential mechanism to provide continuity and stability for our agriculture sector as the United Kingdom leaves the European Union.

The Bill is narrow in scope in terms of subject matter and duration. Its provisions are consistent with the approach agreed by Parliament in the European Union (Withdrawal) Act 2018. Clause 2 sets out the approach to be taken by the courts regarding the interpretation of EU law. Clause 3 will enable secondary legislation to make operability amendments and to allow us to keep pace with post-exit regulatory change concerning 2020 direct payments, should the UK choose to do so. For England, the Bill bridges the gap between the common agricultural policy and the start of the agricultural transition in 2021. It does not change our policy, nor does it alter our ambitious vision for the future of food and farming in England.

The next steps in our radical reform of farm support in England will be debated in this House on Second Reading of the Agriculture Bill. That legislation will finally enable us to break free from the common agricultural policy. It will ensure that we take back control of our farming policy and our farm support payments. That will enable us to replace the perversities and constraints of the deeply flawed CAP with a new system that pays public money for public goods. We will reward farmers for environmental stewardship and high standards of animal welfare. Our farmers have always played a crucial role in safeguarding our countryside and our environment. As we deliver this far-reaching transformation, that role for farmers will become even more pivotal in delivering goals such as cleaner air and water, healthier soil and better access to the countryside.

This will be one of the most important environmental reforms in this country for decades, and it is a major benefit delivered by Brexit. It needs to play a central role in tackling the two great environmental challenges of our time: reversing the disastrous decline of nature and biodiversity and protecting our climate.

[Duncan Baker (North Norfolk) (Con)]

I come from the rural constituency of North Norfolk, where farmers form one of the most important sectors. Does the Secretary of State agree that the Agriculture Bill brings an excellent opportunity to tackle climate change head-on and that, as an industry, the farming community has an important part to play in helping with our environment?

[Theresa Villiers]

My hon. Friend makes a strong point. We believe that our new system of farm support can work for farmers and our environment. We believe that we can do a thousand times better than has been the case under the CAP.

[Bill Wiggin (North Herefordshire) (Con)]

My right hon. Friend must surely agree that the purpose of subsidy is to ensure that British agriculture can compete with agriculture in the European Union and, indeed, the rest of the world. Will she therefore ensure that her Department does the necessary research, so that when we move from direct payments for acreage to public money for public goods, the money does arrive on the farm? We cannot afford for our farmers to be poorer because of these excellent intentions.

[Theresa Villiers]

We will be looking carefully at all aspects of the scheme. This is a hugely challenging thing to deliver, which is why we will phase it in over seven years. Of course, it is essential to get the funds to the farmers who are delivering the public goods that we want to secure. Because change always brings its challenges, to ease the introduction of the new system, we will adopt a seven-year transition period, and the Bill is a vital step in smoothing the path towards the start of that period.

This legislation may be less radical than the forthcoming Agriculture Bill, but it is still vital for the livelihood of farmers across our United Kingdom. I hope that Members will give their backing to this short but crucial legislation, so that we can give our farmers continuity, certainty and support as we move towards exit day and our departure from the European Union. The Bill provides a stepping stone to a more profitable, more productive, more resilient and more sustainable future for farming in this country, so that our hard-working farmers can continue to produce high-quality, high-welfare, iconic British food that is prized around the world and appreciated so much by all of us here at home. I commend the Bill to the House.