Draft Direct Payments to Farmers (Reductions and Simplifications) (England) (Amendment) Regulations 2021 Draft Agricultural (Financial Assistance) Regulations 2021 DebateFull Debate: Read Full Debate
Victoria PrentisMain Page: Victoria Prentis (Conservative - Banbury)
(2 months ago)General Committees
Before we begin, I remind hon. Members to observe social distancing and to sit only where it is clearly marked that they should be sitting. Mr Speaker has stated that masks should be worn in Committee, and Hansard colleagues would be most grateful if Members sent their speaking notes directly to firstname.lastname@example.org.
I will call the Minister to move the first motion and to speak to both instruments. At the end of the debate, I will put the question on the first motion, then ask the Minister to move the second motion formally. I call Minister Prentis.
With this it will be convenient to consider the draft Agriculture (Financial Assistance) Regulations 2021.
It is a pleasure to serve with you in the Chair, Mr Paisley, for what I think is the first time, and, of course, a pleasure to continue the ongoing dialogue with the Minister. As ever, she has laid out the measures clearly. As she would expect, I have a critique of them, although I can assure her that we will not be opposing the SIs, because we have no desire to bring an unnecessary number of people into the Committee Room. However, we do have some concerns. We are, as she rightly said, a year on from the discussions on the 2020 Act. We now finally have the tables of reductions that we were considering over a year ago in the legislation, which is a start.
I am interested in the fact that both measures relate to England—paragraphs 3.2 to 3.5 of the explanatory memorandums for these regulations make that clear. I think the wording is quite interesting: it almost lays down a challenge for devolved institutions to follow. Of course, different strategies are being adopted in different parts of the United Kingdom, and English farmers might well feel that they are immediately put at a disadvantage and might wonder why, especially in a week in which Sainsbury’s has followed Tesco in demanding lower prices from suppliers. With all the problems facing people at the moment, some might feel that they are not so much being squeezed as strangled.
However, perhaps the key point in the Minister’s opening comments, as is now clear from the documents, is that this is the 2021 scheme year—that is, one year only. The Minister will remember discussing what I used to describe as my favourite document. I still have a dog-eared copy here, from a day I will never forget: the rushed-out photocopied versions to give the Secretary of State cover at the Oxford farming conference, as I recall.
In that document, we had the implications for, or what would happen in, subsequent years, and, as the Minister has rightly said, late last year we saw the figures for subsequent years. I wonder why we are doing this one year at a time. The EU used to have a seven-year budgeting period. It seems to me that we are in danger of regressing to annual short-termism, which I do not think is welcome, so I wonder whether the Minister can confirm that—other issues permitting—we will be back here this time next year discussing the 2022 figures, and I suspect in subsequent years, too.
However, that is only half the story, because this is about the reductions. What many people want to know is where the money is going, and how it is to be used. Will all the money being saved go to farmers? I note that the Minister’s words were, as ever, carefully chosen, in that it would be used within this Parliament. That is an interesting point, because she is probably much more expert than me on how departmental budgets are managed, but is there a roll-over facility, and if so, where is it? Can we see it? Can we question it? How much do we expect to be spent this year, and how much to be carried over into following years? That matters, because if the money is not spent, I fear that in the current financial climate there may be eyes in the Treasury looking to recoup some of it. The Minister shakes her head knowingly, but I suspect that there are.
Part of the reason I am concerned is that when the SFI was announced last week—I think that was the latest announcement—a few hundred pilots were suggested. A few hundred is very different from the 80,000-plus who receive basic payments. The Country Land and Business Association tells us that, using DEFRA’s own figures, 75% of farming enterprises are unprofitable without direct payments. The problem seems pretty clear to me: there is a major mismatch.
What was also disappointing about last week’s announcement is the fact that those on stewardship schemes at the moment do not seem to be eligible to apply for the pilots. While that is perhaps not a departure from a specific promise—clearly, they will be able to transition at some point—people could rightly feel disadvantaged. I worry about where the money might be.
I want to be clear that we want the environmental land management scheme to work. We understand the need to do pilots, and to learn, but it seems very slow and I must remind the Minister that I asked many of the questions I am asking today a year ago. A certain amount of vagueness at that point might have been reasonable, but we need to move on. I hardly need tell her that farmers have to make decisions. The cycle is long, and people need to look ahead, but it is hard to make business decisions when they are uncertain about levels of support.
The Minister might remember that on one or two occasions I was quite cross about some of the language used in my favourite document. I thought that we had got past that, but on the policy background, paragraph 7.2 of the explanatory memorandum to the direct payments regulations contains this assertion:
“Direct payments are untargeted, can inflate land rent prices and can stand in the way of new entrants.”
All that is true, but it could also be said that they are universal, relatively simple to administer and a vital lifeline for tens of thousands of farmers, with key knock-on benefits for many rural communities. Would it really be so difficult for those who draft such points to acknowledge, when other things are also true, that the issues are complicated?
The document also says, revealingly:
“Phasing out Direct Payments will free up money to support agriculture in different ways, including paying farmers to improve the environment.”
Why “including” when the word could have been “by”? It is reasonable to suggest that there are questions to be answered. Has there been a casual oversight in the wording, or does the document, as I suspect, suggest that money will leach out, away from farmers? Quite possibly it will be well spent, but farmers deserve to know.
May I query why the 5% reduction with respect to payments over £150,000 is being omitted? How much money will that save, where will it go and what will it be spent on? The suggestion is that it is complicated to do the calculation, but I am sure that the Department has a spreadsheet somewhere that could do it. I wonder whether there will be an effect on the overall amount that others receive, because my recollection is that calculations start and work back from the overall financial ceiling. That may have an impact.
Wales and Scotland used capping to divert funds to environmental and rural development measures. We have had that discussion before, and I gently remind the Government that when they were criticising the EU scheme for failing on environmental grounds there was the opportunity to use those mechanisms, but they chose not to do so.
The Minister frequently accuses me of being too gloomy, so I should say that there are some positive things. Clearly, simplifying the overpayments system and doing calculations in sterling make sense, as does changing the percentage to calculate young farmer payments to reflect the changes already made with respect to the removal of the greening payment. However, I must draw attention to the phrase
“no…significant…impact on business”
at paragraph 12 of the explanatory memorandum. Really—when money is being taken away? Maybe that is now the Conservative line. I look forward to the Conservatives taking the same view when Labour redistributes resources in future. I suspect that there is an impact, and we all know it.
The second SI is, I think, more straightforward. It concerns measures to ensure that there is proper oversight of financial assistance. I have to say that this is interesting: where is the environmental equivalent? Perhaps the Minister will tell us, because it looks as though the integrated administration and control system and cross-compliance system are being gradually dismantled. It is telling that it is the money, not the environmental concerns, that seems to be the priority. Yet again, this measure is England-only. We really are becoming a very disunited kingdom.
Four schemes are outlined. I quite understand that, but it seems that we may have different rules applying to different schemes. This seems to be only for the environmental land management scheme pilots, so presumably it will have to be revisited at the various stages of ELMS, and we will probably have a countryside stewardship system running alongside the current EU countryside stewardship system. So, there is quite a lot of complexity. I am sure farmers will welcome advance notice being given on some of those checks, but where is the assessment of potential downsides? We all hope there is not abuse out there, but are we sure? This is quite a lenient approach. Given that enforcement is already an issue, is there some naivety here?
The virtual inspections sound intriguing and could be a good model for the future. It would be interesting to hear a little more from the Minister about how they will work.
I have a query about paragraph 10.5 of the explanatory memorandum, which says:
“Land Management Plans… will not be published.”
I recognise that that might be a response to representations made, but as I asked during consideration of the Act, where is the public voice in that? I think taxpayers and local residents have a role. I am disappointed and would like to hear the reasoning behind that.
Finally, the plan outlined remains through to 2027. Frankly, when we were discussing it in this room a year ago, no one could have anticipated the year we were about to have, and there is a question whether we plough on regardless or move at a pace that reflects the difficulties of the past year.
The schemes were all supposed to be about simplification. I was talking to someone the other day who pointed out that CAP effectively had three schemes, but, by their reckoning, we are already up to 14 and counting. We might well need a new dictionary for our conversations as we sort our ELMSs from our SFIs and our ATPs. It is all getting very complicated.
I reflect on the fact that this country has many virtues, but self-knowledge is useful, and we sometimes tend to over-complicate and over-bureaucratise. In the past, we blamed that on Brussels. It is now down to us, so my plea is, can we ensure that these schemes are simple enough to deliver the outcomes we all want? In particular, we do not want funding being taken from farmers and going not to the environment—we do want funding there—but ending up in a sea of bureaucracy.
I would dearly like to come to see one of those—that is part of the problem of the past year—but, while I understand that those engaged in the process are probably positive about it, my worry is not for them, but for the huge number who are not engaged. That is where my concern lies.