Draft Agriculture (Delinked Payments and Consequential Provisions) (England) Regulations 2023

(Limited Text - Ministerial Extracts only)

Wednesday 6th December 2023 General Committees

[The Minister for Food, Farming and Fisheries (Mark Spencer)]

I beg to move,

That the Committee has considered the draft Agriculture (Delinked Payments and Consequential Provisions) (England) Regulations 2023.

These draft regulations were laid before the House on 7 November. I will start by drawing attention to my entry in the register of Members’ financial interests.

This instrument is part of England’s transition from the common agricultural policy to our environmental land management schemes. The instrument introduces delinked payments in 2024, which will take the place of the direct payments of the basic payment scheme in England. Delinked payments are similar. However, unlike the basic payment scheme, delinked payments will not be based on the amount of land someone has. Instead, they will be based on the basic payment scheme payments made in a reference period. That will reduce administrative burden as we phase the payments out by the end of 2027.

There will be no need for an annual application form, as the Rural Payments Agency will already hold the data needed to check eligibility for those payments. That will mean farmers having to spend less time filling in forms than under the current scheme, and that will provide flexibility for farmers. We are allowing reference amounts to be transferred between businesses during a transfer window from February to May next year. That will be particularly helpful for businesses that have changed in structure since the start of the reference period; for example, if two or more businesses have merged, a reference amount could be transferred from the original business to the current business. Special rules will apply in cases of inheritance.

The Government intend to reduce the payments each year by applying percentage reductions to gradually phase them out, which will continue to free up money to be reinvested in our new farming schemes. The reduction percentages will be set out in secondary legislation, which will be debated in this House. We intend to make the payments in two instalments each year to continue to help with cash flow and ending the basic payment scheme also means ending the associated cross-compliance system. When cross compliance ends, farm standards will be maintained through domestic regulations that protect the environment, the public, animal and plant health, and animal welfare.

Those regulations will be enforced in a fair, consistent and proportionate way by our existing regulatory authorities. The cross-compliance rules that are not in underlying domestic legislation will have cover through current and forthcoming guidance, regulation or incentives. We will deliver a fair, clear and effective system to regulate agriculture. The Department for Environment, Food and Rural Affairs is working with regulators to implement a more preventive, advice-led approach to monitoring and enforcement. The introduction of delinked payments is an important step in our transition to payments that deliver better environmental outcomes.

[Nigel Mills (Amber Valley) (Con)]

The explanatory memorandum states that a recipient will not actually need to have any land to continue to receive payments. Could the Minister explain the logic behind giving a farm payment to someone who has no farm? Would we expect the payment to then be transferred to the person had come into ownership of the land, or could they just keep receiving it for a number of years?

[Mark Spencer]

To be clear, that is not the case. An individual will have to have control of the land parcels associated with that business. If those entitlements are transferred to another business, that will be the case. It should not be possible for someone to retain the payments without having ownership or control of that land parcel. They would have to pass it to another person who was operating and farming or being in control of that land parcel. I am happy to come back to my hon. Friend later in the debate.

We will deliver a fair and effective system to regulate. For example, we have used the money that has been freed up from direct payments already to establish the slurry infrastructure grant to help livestock farmers tackle pollution from slurry. That includes committing to spend over £200 million on ongoing grant support for equipment and infrastructure. We are also funding our sustainable farming incentive, which rewards farmers for farming practices that help to produce food sustainably and protect the environment. Our expanded 2023 offer has already attracted more than 4,000 applications in the two months since the application window opened. That, of course, builds on the success of our countryside stewardship scheme, which now funds more than 32,000 agreements, which is a 94% increase since 2020.

Those are just some of the ways in which we are reinvesting the money from direct payments to deliver improved environmental outcomes and to support sustainable food production. As delinked payments are in place of the basic payment scheme, this instrument revokes the law governing the basic payment scheme as it applies in England. It also makes minor changes to other domestic and retained EU legislation that applies in relation to England. Those changes ensure that the legislation continues to work effectively once the basic payment scheme ends.

In conclusion, by introducing delinked payments, this instrument enables us to pay former basic payment scheme recipients for the rest of the agricultural transition, but without the bureaucracy associated with the current scheme.

--- Later in debate ---

[Mark Spencer]

May I start by clarifying the question asked by my hon. Friend the Member for Amber Valley. Delinked payments will only be made to farmers who claimed in the previous schemes in 2023. In the basic repayment scheme, there is not the necessity to hold that land in future, but in practice, if people take on lots of land from neighbours, those rights could be transferred if businesses are amalgamated and changed. Technically, it is possible for someone to receive payments without farming that land, but these payments are very much on a diminishing scale and will evaporate very soon, which is the whole purpose of this transition. This transition is to move away from that basic payment scheme to improve our environmental footprint, and to help farmers on that journey of improving our biodiversity and our environment as we move forward.

The hon. Member for Cambridge again asked me about the budgets, and as I have told him in the past, the budget is clear—it is ringfenced. It is £2.4 billion-worth of cash, and it is there to be invested in UK farming to get the outcomes that we want to achieve. If there is an underspend, such as if we spend £2.3 billion this year, we could spend £2.5 billion next year. That is agreed with the Treasury and we can roll that money forward and it will be invested. That is why we have been able to do some of the great schemes that we have been able to roll out to allow farmers to invest in slurry.

[Daniel Zeichner]

The Secretary of State confirmed only the other day at the Country Land and Business Association conference that only 800 sustainable farming incentive schemes are currently being paid out—that is compared to 80,000 basic payment agreements. There is a gap, and I wonder if the Minister would agree to write to me to explain where in the accounts that money is located.

[Mark Spencer]

Of course, I am more than happy to write the hon. Gentleman, but he fails to mention the doubling in the number of people that are receiving countryside stewardship agreements—a 93% increase. We now have slurry infrastructure grants, calf housing grants, beef housing grants, and investment in robotics and new technology. All of those were not available under the basic payment scheme, but farmers are now eligible to apply for those capital sums to invest in their own productivity going forward. Of course, I will write to the hon. Gentleman and try to reassure him again, but I fear that he may not want to be reassured, but instead wants to try to frustrate.

That leads me to the hon. Gentleman’s distrust of UK farmers and his worry that UK farmers are going to wreck our beautiful landscape following the loss of cross-compliance. I have to say that that is the environment and the landscapes that they created over generations. Let us just look at the landowners up and down the country who do not receive basic payments and who are not under obligations to meet these rules. Why is he not worried about local authorities that may cut hedgerows in May or June? Why is he not worried about the Coal Authority, which owns vast amounts of property and may go and commit those crimes, as he has indicated? Why is he not worried about golf courses, which may well go and cut their hedgerows in May and June? Why is he only worried about farmers—the people who have protected those landscapes and created them over generations? I trust those farmers. I believe in those landowners and farmers to do the right thing. They have done it for generations, and they will continue to. We are going to help and support them on that journey by investing in them and ensuring that they can do the right thing to improve biodiversity and their environmental footprint.

Question put and agreed to.