Market Measures (Miscellaneous Provisions) (Amendment) (EU Exit) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the draft Regulations laid before the House on 13 March be approved.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)
Agriculture (Legislative Functions) (EU Exit) (No. 2) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the draft Regulations laid before the House on 13 March be approved.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)
Livestock (Records, Identification and Movement) (Amendment) (EU Exit) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the draft Regulations laid before the House on 10 January be approved.
Relevant document: 14th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
Plant Health (Amendment) (England) (EU Exit) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Plant Health (Amendment) (England) (EU Exit) Regulations 2019.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B)
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, I declare my farming interests as set out in the register. I hope that it will be helpful to your Lordships if I speak also to the Plant Health (Amendment) (England) (EU Exit) Regulations 2019, with which this instrument has been grouped.
These two regulations amend existing domestic legislation implementing the EU’s plant health directive and provide the basis to maintain plant biosecurity when we leave the EU. The plant health directive is implemented in England by the Plant Health (England) Order 2015 and, in relation to forestry matters, by the Plant Health (Forestry) Order 2005, which extends to Great Britain. The existing orders set out obligations for the control and management of plant health risks arising from the import from third countries and movement within the EU single market of plant material, in order to protect biosecurity.
It is our responsibility—particularly mine in my role as Minister for Biosecurity—to protect biosecurity across plant and animal health and the wider ecosystem. It is also important that we have a robust process of ongoing review to strengthen biosecurity protections where this is possible and necessary. The regulations debated today are specifically about protecting plant biosecurity. The amendments address technical deficiencies and inoperability issues relating to retained EU law on plant health that will otherwise arise when we leave.
I should make it clear that although businesses will see some changes to import arrangements, they are risk-focused and avoid unnecessary new burdens while, importantly, preserving the current plant health regime’s overall aim of preventing and managing pest and disease threats. They do not diminish our controls in this important subject area but seek to protect biosecurity while continuing to facilitate trade in plant material.
The main purpose of the Plant Health (EU Exit) Regulations 2019 is to set out the list of harmful pests and plant material that will continue to be regulated in England, Wales and Northern Ireland from exit day. This is the same list of pests and plant material from the EU plant health directive, which we have transposed into our existing legislation, and includes harmful pests that we want to stay free from, such as xylella fastidiosa. The instrument also sets out amendments to deal with technical deficiencies in retained, directly applicable EU legislation to ensure that plant health legislation operates effectively. For example, it provides for the existing derogations to facilitate the import of specified material, such as bonsai plants from Japan, to ensure that this trade can continue under the same stringent quarantine conditions after exit.
Similarly, the instrument sets out the actions required by UK plant health authorities in England, Wales and Northern Ireland to control certain pests in the event of outbreaks. The provisions cover matters such as official surveys and eradication measures that currently apply to competent authorities under EU emergency legislation. For this instrument, the plant health authority is the Secretary of State in relation to England and Welsh Ministers in relation to Wales, with delivery in both countries undertaken by the Animal and Plant Health Agency. In Northern Ireland, authority and delivery currently rests with the Department of Agriculture, Environment and Rural Affairs. For timber and forest pests in England, the Forestry Commission is the relevant authority.
In addition, plant pest and disease experts in Defra, the Animal and Plant Health Agency and the Forestry Commission, with support from Forest Research and Fera, will continue to work together, providing an exceptional capability to advise Ministers, manage risks and control outbreaks. As part of EU exit planning, we have increased our capability and capacity in the Animal and Plant Health Agency, which is nearly doubling the number of plant health inspectors from 118 to 227. The new inspectors are currently being trained to be ready for when we leave. We continue to keep under review whether we need to strengthen further our capacity in this important area of biosecurity protection.
Plant health is devolved. The devolved Administrations have worked closely together in developing their EU exit legislation to ensure a co-ordinated approach. As a result, these regulations apply to England, Wales and Northern Ireland. Scottish Ministers have decided to introduce separate legislation in Scotland, and their equivalent legislation will give effect to UK-wide arrangements. In practice, this means that we have a common list of regulated pests and plant material across the United Kingdom.
One of the main purposes of the Plant Health (Amendment) (England) (EU Exit) Regulations 2019 is to correct technical deficiencies in our domestic legislation after exit. For example, they remove references to EU legislation and revise definitions to be UK-based instead of EU-based. The instrument also transposes provisions in certain Council directives in relation to the control of relevant potato pests, adding to the provisions already transposed in our existing domestic plant health legislation. These additional provisions mainly cover official activities that competent plant health authorities are required to carry out under these directives, such as official surveys and monitoring for the presence of the pests. The aim is to provide clarity to third countries that, following exit, the UK will continue to maintain the same rigorous control over the production of potatoes.
In relation to the changes to import arrangements I highlighted earlier, there are two aspects in this instrument. First, regulated plant material, such as ornamental plants in pots intended for commercial planting and certain trees and shrubs, that currently enters the UK from the EU or Switzerland with an EU or Swiss plant passport will in future require a phytosanitary certificate. This will be issued by the official national plant protection organisation in the EU member state, or Switzerland, in line with international obligations. This applies mainly to plants for planting and will ensure that we maintain the biosecurity assurances currently provided by the EU plant passport regime. Regulated plant material from the EU or Switzerland will not be subject to routine physical checks at the border. This recognises that biosecurity risks from such material do not change immediately on exit. However, we will always be vigilant about such imports and, where necessary, take additional measures to stop the introduction of harmful plant pests into the UK.
Lord Gardiner of Kimble
My Lords, I thank all noble Baronesses who have contributed to this debate. I suspect that we are united in every particular of the essentials. I stress again that as the Minister with biosecurity in his remit, I could not place a higher importance on keeping our country safe from pests, disease and invasive non-native species, all of which cause immense damage to our natural ecosystems.
As a farmer in the Vale of Aylesbury I was very scarred myself, as a boy, by the loss of all the elm trees on the farm. Now, having planted ash trees over the years and seeing them depleted, no one could be unhappier about that situation. However, in 2012, when it materialised that all sorts of extraordinary things were happening, whereby ash seeds—I think it was even small saplings as well—were going to other parts of the EU to come back and bring Chalara with them, that precipitated a change in Defra and an understanding that, while animal health had rightly been given a very considerable priority, plant health needed to buck up and become as rigorous and as sharp. I could mention many names, but the appointment of the chief plant health officer, Professor Nicola Spence, was one repercussion of an understanding that we needed to do a lot better.
On the issue of bonding and sealed, or whatever word may be used, I say to the noble Baroness, Lady Young, that I was absolutely clear in the early stages of this situation that I too wanted reassurances. I am well aware that pests may arrive at a port and we may find them going all around the country because we have done something utterly stupid. I was assured, and I will go into further detail on the assessments, about why this was a sound and sensible thing for us to do.
I will go through the points in no particular order. My noble friend Lady Byford asked about existing fees and any changes. Existing fees will apply to these import inspections at inland premises, so we will follow the existing fee arrangements.
The noble Baroness, Lady Parminter, asked about the estimated number of consignments and inspections. I want to be clear that by inspection we would mean physical inspection of a consignment of plant material, rather than simply checks of the documents associated with it. In a no-deal scenario the majority of plants and plant products imported from the EU, including fruit, vegetables and cut flowers, will continue to enter the UK freely without physical inspections, as currently. Those goods managed under the EU plant passport regime, such as certain species for planting and shrubs, will require an internationally recognised phytosanitary certificate. There will be no physical inspection of the goods at the border, although our risk-based inland surveillance system will continue. A documentary and identity check will take place remotely, without requiring that goods are stopped either at the border or inland awaiting checks. The importer will be required to pre-notify the Animal and Plant Health Agency about details of a consignment of regulated plant material. At this stage we are, in a sense, keeping what we have for certain regulated plants from within the EU—in other words, the phytosanitary certificate.
The important area—if the Committee does not mind my setting this out, because it is terribly important to establish the sequence—is that material originating in third countries that enters the UK via the EU without being checked in the EU will require a physical inspection in the UK, in the same way as we currently physically inspect material coming directly from third countries. So whether or not the material enters the UK at the ro-ro ports, we will inspect the goods at trade premises inland that have been authorised in line with biosecurity requirements. At this stage we do not have data on the current number of plants and plant products entering the UK from third countries via the EU which will require an inspection, but we estimate that there will be around 14,500 consignments per year.
My noble friend Lady Byford asked about the location of inland premises. They are located across the United Kingdom. We do not have to hand the exact locations of the 33 premises currently being organised but I can provide that information in due course. I should say, and this issue arose in another connection, that a lot of the current facilities are around Heathrow because obviously a lot of the plants from third countries come in there. I know that there have previously been considerations about the fact that it is London-centric; that is because often the bulk of plant material from third countries has come in that way. I have been to the excellent inspection unit alongside Heathrow, where so much of the biosecurity protection takes place with imports directly from third countries.
My noble friend and the noble Baroness, Lady Young, asked about the costs. It is the Government’s policy to charge fees for many publicly-provided goods and services. The standard approach is to set fees to recover the full cost of service delivery. This relieves the general taxpayer of the costs so that they are properly borne by users who benefit from the service. Charging for plant health services is consistent with the principle that businesses using these services should bear the cost. The costs incurred in any 12-month period are recovered by fees levied in the following 12 months. For example, fees for 2019-20 will be based on the costs incurred in providing services for the period from April 2018 to March 2019.
My noble friend Lady Byford and, I think, the noble Baroness, Lady Parminter, raised transporting, moving inland and the biosecurity risk. As I have said, experts both from the APHA and within Defra have made it clear that in their assessment, under the containerised, sealed and bonded arrangements, these materials will be secure until they are inspected.
The noble Baroness, Lady Parminter, asked about the volume of the imports from the EU that would be subject to the new process. We estimate that around 0.75 million tonnes of regulated plant products from the EU, out of around 7 million tonnes of total annual imports, will require a phytosanitary certificate. On the question that she also raised on concerns about blockages at points of entry, we are seeking to do this because the paramount concern is that we keep the country biosecure. Clearly, though, where inland premises have been inspected and are both suitable to the inspectors and secure, we have been advised that there is no biosecurity risk from that.
I want to respond to another point raised by the noble Baroness, Lady Parminter. She asked about the dangers of spreading pests. It is clear that we must ensure that that does not happen; that is the whole point of our carrying on with the EU system of requiring pre-notification with phytosanitary certificates for certain EU plant products. That is an important pre-notification system to enable APHA to be aware of arrivals. Moreover, part of the regime is that random checks are made of plant materials. We place the greatest importance on this area.
My noble friend Lady McIntosh asked about the risks. She talked about ash dieback; the outbreak has precipitated an enormous amount of research—here I am moving away slightly from the statutory instrument before us. Research now being undertaken into tree health is remarkable for both its public and private funding, through universities. The John Innes Centre has undertaken research into the genome of the ash tree which gives us hope that perhaps 15% to 20% of the trees may have some tolerance. We can ensure the future of the ash tree from them. This is an important area and we will work with evidence to develop a risk-based, proportionate approach to plant health measures.
In the past we have introduced precautionary national measures to protect the UK against threats. For example, the UK produced stronger national legislation against xylella in response to the situation elsewhere in the EU. We have also introduced national legislation to protect against oak processionary moth. In fact, during my early months in this post I am afraid that I made myself unpopular with our very nice Spanish friends when dealing with the Epitrix potato pest by requiring further washing because we were concerned about the arrival of unwashed new potatoes at certain times. Moreover, of course we will work with the devolved Administrations to ensure there is protection across the United Kingdom.
I turn to the question of Northern Ireland. As we have discussed in a number of debates, the island of Ireland is an epidemiological entity for obvious reasons. In fact, when we looked at aquaculture, we found that there are fewer fish pests in the island of Ireland than there are in Great Britain. It is terribly important that the all-Ireland concept is seen in that context because pests and diseases are not respecters of borders. It is intended that a similar SI will be made for Northern Ireland. The specific legislation will align with our own legislation to ensure a consistent approach to plant health. It will be laid before day one.
Lord Deben (Con)
Can my noble friend explain how we will keep that legislation in line with what happens in the south?
Lord Gardiner of Kimble
As I said to my noble friend, the whole point in raising the single entity is that is why it is so important that there is close co-operation. If my noble friend had seen our earlier consideration of Northern Ireland matters, he would have heard about the very strong relationship between bodies in the north and the south on almost the whole of the natural ecosystem area. That is tremendously important.
My noble friend Lady McIntosh asked about changes to the list of regulated pests. A plant health risk register is publicly available and I am afraid to say that currently we have 1,000 pests recorded on it. That somewhat bears out what the noble Baroness, Lady Young, said. I have regular meetings with Grown in Britain, and which side of the argument on the European Union one might be on is, frankly, irrelevant. We need to be more biosecure within the United Kingdom. We all need to be more biosecure around the world because our laxity in these matters has already caused enormous problems around the world and we need to attend to it.
Baroness Byford
I thank my noble friend for clarifying the extra money that has been allocated. Will that money be clawed back from importers and people who are buying the products, or will the Government put the money up and make no attempt to get recompense? I thought from the conversations we had earlier that there would be a charge.
Lord Gardiner of Kimble
The fees are for the costs of inspection or whatever. The additional costs for people will partly be borne by the Exchequer. I think I had better have complete clarification on that. As far as I am concerned, the fees cover the cost of inspections and we will have to upscale them. It might be helpful if that £7.4 million is allocated in a way that my noble friend and other noble Lords can appreciate, so that we get it right and I get it on the record right.
The noble Baronesses, Lady Young and Lady Parminter, mentioned the 33 premises. There are obviously other businesses. Officials are engaging with export businesses and encouraging applications. We look forward to being helpful because it is important that these premises are inspected, secure and fit for purpose. Then we can help to ensure that these products come to the inland premises as swiftly as possible.
The noble Baroness, Lady Young, asked about future plans. The policies in regulations are risk-based and proportionate, and will apply temporarily from day one until we develop our future plant health regime. This will include consideration of the extent to which we implement aspects of revived arrangements to be introduced in the EU from December 2019 through its new regulations on plant health and official controls, given their significant influence in shaping these new arrangements. Clearly what we in this country want to do is to have the highest possible standards of biosecurity. We will be looking at the advantage of available technologies to facilitate trade that is as frictionless as possible, but the paramount importance is to have high standards of biosecurity. Defra and the Food Standards Agency are working closely together to develop proposals for this and plan to consult on them this year.
The noble Baroness asked about Scotland. By chance, I met Mairi Gougeon, the Scottish Biosecurity Minister, along with Lesley Griffiths from Wales only about three hours ago as they were in for other meetings at Defra. I requested that the three of us meet, perhaps when this particular hiatus is over, so that we can work positively together. For Scotland, the Plant Health (EU Exit) (Scotland) (Amendment etc.) Regulations 2019 were laid in draft on 13 March and were debated and passed scrutiny unchallenged on 14 March, while similar regulations for Wales were laid in draft on 19 February.
I am going to have a close look at Hansard regarding other points. My noble friend Lady Byford mentioned climate change. Obviously, this is an area where we all need to work collaboratively across the world. Because of climate change, plant diseases and pests have, in my view, become much more alarming. The issue of physical and windborne is absolutely the case. I am afraid that we would have got Chalara even if we had not done the unwise things that we did because, as my noble friend Lord Deben and others will know, Essex, Suffolk, Norfolk and such eastern counties are suffering because of it being airborne. That leads to a much wider issue: whatever our arrangements with our friends in the EU 27, this is an area where we all have to collaborate. I am afraid the challenge that I would put back to Europe in this area is that a lot of things are coming here because when they arrived in Europe, there has not been zero tolerance. I mention the oak processionary moth and the Asian hornet as examples of where arrivals in Europe have not been dealt with, so we are having to seek to deal with them here. We do not have enough sea to match the ambition of New Zealand or Australia; it is only 22 miles wide. We all need to do very much more.
On the question from the noble Baroness, Lady Young, about the maximum penalty, I might not have a note from the Box but I think the fine is limitless. All I can say is that if someone transgresses, I hope the fine is substantial because the disasters that can befall our country due to these pests and diseases is very grave. I will study Hansard. I will write if there are embellishments or further details that I can supply.
Plant Health (EU Exit) Regulations 2019
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Lord Gardiner of Kimble
That the Grand Committee do consider the Plant Health (EU Exit) Regulations 2019.
Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee B).
Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the draft Regulations laid before the House on 21 January, 13 February and 4 and 11 March be approved.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A). Considered in Grand Committee on 20 March.
Baroness Vere of Norbiton (Con)
My Lords, in the absence of my noble friend and with the leave of the House, I beg to move the five Motions standing in his name on the Order Paper.
Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019
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Lord Gardiner of Kimble
That the Grand Committee do consider the Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)
My Lords, the matters in the five instruments are closely interrelated; I hope it will be helpful to your Lordships if I speak to all five together.
With a number of small exceptions, which I shall explain, these regulations make purely technical amendments, which are necessary to address European laws being brought on to the UK’s statute books in a partially inoperable form, and enable the policies behind the common agricultural policy, the Agriculture and Horticulture Development Board, and state aid legislation to continue to function as they do today. These instruments are not required solely in a no-deal scenario; in the event of an agreement—which of course the Government sincerely wish for—they will ensure that the current legislation remains operable at the end of any implementation period.
The instruments on the common agricultural policy make largely technical and operability changes to ensure that the UK Government are able to meet their commitments to funding in the agriculture sector. The Government have pledged to continue to commit the same cash total in funds for farm support until the end of this Parliament, expected in 2022; this includes all funding provided for farm support under both Pillar 1 and Pillar 2 of the current CAP. This commitment applies to the whole of the UK.
The UK Government have guaranteed that the current level of agricultural funding under CAP Pillar 1 will be upheld until 2020, as part of the transition to new domestic arrangements. The UK Government have also guaranteed that any rural development projects for which funding has been agreed before the end of 2020 will be funded for their full lifetime.
As noble Lords are well aware, agriculture and fisheries are devolved policy areas and are of special importance for all parts of the United Kingdom. We have worked closely with the devolved Administrations to produce these instruments; they place great importance on them and have given their consent to these instruments.
I will now outline the CAP statutory instruments. They enable the regulations to continue to operate effectively, do not introduce new policy and preserve the current regime for supporting CAP beneficiaries. The amendments in these instruments include omitting redundant references to the “European Commission” and “member states” and amending references to “Union law” throughout, so that the retained EU regulations continue to operate effectively as part of national law.
One purpose of these modifications is to ensure continuity and clarity as to who is responsible for the implementation and administration of the CAP schemes. 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, Scottish Ministers, Welsh Ministers and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland.
The Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019 make operability amendments to domestic regulations made under the European Communities Act implementing certain provisions of the EU common agricultural policy.
First, I draw your Lordships’ attention to a minor correction which is needed to the Explanatory Memorandum for this instrument. In paragraph 4, “Extent and Territorial Application”, the amendments to the AHDB order 2008 are given as applying to the UK. In fact, while parts of the AHDB order 2008 apply to the UK, the amendments proposed in this instrument apply to Great Britain in relation to horticulture, and to England only in relation to the red meat levy. That reflects the territorial coverage that the levy body, the AHDB, has for those specific sectors. We shall withdraw and re-lay the EM in the coming days, with the territorial application of the AHDB order amendments corrected. Correcting this has no impact other than aligning the EM with the instrument we are debating today. I apologise for any inconvenience this causes to your Lordships, but when I heard of it, I wanted your Lordships to know immediately.
As well as operability changes to domestic regulations under the European Communities Act, this SI also amends one order concerning the Agriculture and Horticulture Development Board. This is to address two operability issues arising from the United Kingdom leaving. In one case, this has required us to make a small policy change. Currently, there is a minor levy exemption applying to livestock which is imported from “another member state” and slaughtered in England within two to three months of being imported. For continuity, we retain this exemption, and to ensure that we are then in line with WTO rules and are not favouring the EU, we also extend the exemption to cover any such livestock imported from the rest of the world. We expect this minor policy change to have little or no impact on the ground, given the very low levels of live imports from beyond the EU.
The Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Arrangements) (EU Exit) Regulations 2019 make technical amendments to the supplementary regulations which set out detail on the financing, management and monitoring arrangements for the CAP schemes. This instrument ensures the operability of five different pieces of EU law. These ensure that the management and monitoring aspects of the retained EU legislation maintain the current standards after exit. This includes setting out further detail on how checks to beneficiaries should be carried out and how penalties should be applied to those found to be in breach of the legislation.
The instrument also attends to five other pieces of retained EU law where references to EU audit and accounting systems would clearly no longer be appropriate. These would be replaced by the domestic system, which currently operates in parallel to the EU system, to provide equivalent assurances to our Parliament. Four of these are implicitly tied to EU audit and accounting systems, which, as I say, will be replaced with the existing domestic equivalent. The final revoked piece of EU law relates to the EU policy monitoring system, which, again, will be replaced by our existing domestic policy evaluation process.
I turn to the Common Agricultural Policy (Financing, Management and Monitoring) (Miscellaneous Amendments) (EU Exit) Regulations 2019. This instrument amends the retained EU law which sets out the overarching framework for how CAP schemes function, governing the financing, managing and monitoring arrangements which underpin schemes. It removes the EU audit and accounting regime, which, as I already mentioned, operates alongside the existing equivalent domestic regime and would no longer be required for Exchequer-funded payments. Current levels of checks and scrutiny over CAP payments will remain under the domestic system until domestic policy reform can be delivered through a new domestic agricultural policy.
I turn to the Agriculture (Legislative Functions) (EU Exit) Regulations 2019. They amend five different EU regulations which give the European Commission power to change existing legislation relating to the financing, managing and monitoring of the CAP; direct payments; the rural development programmes; and fisheries programmes funded by the EMFF.
These five regulations work together to provide the necessary powers to ensure the smooth functioning of the CAP and EMFF-funded fisheries schemes in the light of economic, scientific and environmental changes. For example, the Commission is currently empowered to make legislation adding to a list of practices equivalent to crop diversification in the light of developments in the sector. These powers also provide powers to, for example, update the model we use to estimate the net revenue of an EMFF or rural development project, if a more accurate model becomes available.
As its title suggests, this instrument makes amendments to confer existing legislative powers on the appropriate authorities: either the Secretary of State or the relevant Administration for each home nation. These amendments consist largely of replacing references to the “Commission” with “appropriate authority” or “Secretary of State”.
The instrument also contains operability changes relating to the EU financial discipline mechanism. The financial discipline mechanism ensures that the Pillar 1 budget, which comprises spending on direct payments and on schemes under the common market organisation, is not exceeded. It works by reducing the value of direct payments if forecast expenditure on Pillar 1 exceeds a predetermined budget.
This SI makes changes to make the financial discipline mechanism operable in England. As agriculture is devolved, each Administration has assessed what amendment is appropriate to remedy the inoperability. Devolved Administrations have chosen to omit the financial discipline mechanism, while England has chosen to use the powers contained in the withdrawal Act to make financial discipline operable on an England-only basis. For England, operability amendments are made to financial discipline provisions to ensure the mechanism will work properly in a domestic context and on an England-only basis. This does not constitute a new policy, as the mechanism currently applies in the EU.
I turn finally to the State Aid (Agriculture and Fisheries) (Amendment) (EU Exit) Regulations 2019. State aid rules govern the way subsidies can be given, and exist to stop companies gaining an unfair advantage over their competitors. This instrument amends specific retained EU state aid regulations relating to agriculture and fisheries. It does not make provisions for the broader domestic state aid framework. That is addressed in the State Aid (EU Exit) Regulations 2019, which were debated and approved by this House on Thursday 14 March.
Agriculture and fisheries schemes have long benefited from exemptions to the state aid rules. This instrument maintains these agriculture and fisheries exemptions, allowing government to continue to support these industries and provide stability as we leave the EU.
The instrument will have three main effects. First, it corrects references to state aid rules in some of the CAP regulations. This makes sure that the state aid exemptions, which flow from the agriculture and fisheries state aid exemption in the Treaty on the Functioning of the European Union, continue to apply to direct payments and rural development programme payments. This will allow these crucial payments to continue after exit.
Secondly, the instrument will continue to exempt certain categories of agricultural and fisheries aid which are deemed compatible with state aid rules. These are known as the “block exemptions”. For example, this will ensure that the Rural Payments Agency can continue to make payments for forest environment commitments covered by the agricultural block exemption regulation under the forestry elements of countryside stewardship. For fisheries, payments to the sector which support, for example, the sustainable development of fisheries, the protection and restoration of marine biodiversity, and innovation in aquaculture will continue to be able to be made under the block exemption regulation.
Finally, the instrument provides that funding under certain financial de minimis thresholds will continue not to constitute state aid. For example, the Calderdale natural flood management grant scheme, a critical flood defence project, is covered by this exemption, and this instrument ensures that we will be able to continue to support schemes such as that one.
Lord Gardiner of Kimble
My Lords, I should have at the very outset declared my farming interests as well, as set out in the register. I should probably do that at every Defra occasion because of the interconnection with agriculture, the environment, and so forth, but I think all noble Lords know of my agricultural background and all that goes with it. I am most grateful to all noble Lords; it is so nice to see the noble Lord, Lord Beith, who has a Dispatch Box before him, and my noble friend Lady Byford, who is forensic. I will endeavour to answer as many questions as I can today, but for those that are intricate, perhaps a letter would be a more fulfilling experience. Some of them go slightly off the core of the discussions on these instruments, but they quite clearly go into wider agricultural matters, which are important.
First, your Lordships have agreed that these regulations are so important to ensure payments are made to farmers, land managers and fishers, to comply with state aid rules, and to have that operability. There are quite a number of questions, so it is important that I answer as many of them as I can. My noble friend Lady Byford asked about stewardship schemes and the issue of new applicants, and, in reference to paragraph 7.4 of the EM of the first statutory instrument, how our commitment fits in with this—the noble Lord, Lord Grantchester, also referred to these matters. The environmental stewardship scheme in this SI is closed to new applicants; current agreement holders will continue to receive payments under the Treasury guarantee following EU exit, which I mentioned in my opening remarks. The Countryside Stewardship Scheme has replaced environmental stewardship in England; this is open to applicants and is covered again by the Treasury guarantee. The noble Lord, Lord Carrington, raised this issue at Questions yesterday; indeed, I had an opportunity of raising this with the Minister of State today. We accept entirely that there needs to be an improvement in the level of payments experienced with both the environmental stewardship and Countryside Stewardship schemes. That is why we have transferred it from Natural England—rather than the EA, which was managing these matters —to the RPA because, candidly, we thought it is the organisation to deal with payments and the BPS payments following the first year of the change of CAP. We are at 90%-plus of payments on BPS and, as my noble friend said, the last few per cent are often because of probate cases, cross-border issues or inspections.
I will take back from today the very helpful remarks made at the beginning, which relate to Countryside Stewardship—I do not have to declare an interest in this particular point. I am well aware that farmers have paid money to engage in the Countryside Stewardship or environmental stewardship schemes and that they are now waiting for money. For some, that wait goes back to 2016, so I am not content about that matter. I am always prone to understatement, so I hope your Lordships will understand what I mean when I say that “I am not content” with the current arrangements.
The Earl of Erroll
I think I am allowed to intervene quickly. Maybe interest payments could be looked at, because real costs to farmers arise from non-payment.
Lord Gardiner of Kimble
I have heard the noble Earl and respect his tenacity in putting that point. I had better not say anything more on the record, but that is clearly one area where the question is how we get a better situation. That is why I assure your Lordships that the RPA is geared up to deal with this, and the Secretary of State and all the ministerial team are looking for progress.
Baroness Byford
Reading through the instrument, I found that odd. I could not think of the context that it was referring to.
Lord Gardiner of Kimble
I can understand that. In signing the EM, Ministers have to declare that we have had due regard to the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited under the Equality Act 2010.
I turn to the point raised by the noble Lords, Lord Beith and Lord Grantchester, about the red meat levy exemption. In continuing the existing exemption for imports from the EU, we were advised that we need to be in line with WTO rules, as I advised. I also advise that we expect this change to be minimal or nil. We believe that very few animals are imported into the UK live for slaughter. On average over the last five years, fewer than 500 cattle, sheep or bovines have been imported each year from beyond the EU into the UK. Their average values have been relatively high and our understanding is that they are imported mainly for breeding purposes. We believe that few, if any, are slaughtered in England soon after being imported—hence our belief that the impact of this change would be minimal.
The noble Lord, Lord Beith, raised a question relating to three of the instruments and concerning the legal wording coming into force on a date later than exit day. He asked why that is the case. The legislation is worded as it is because it was not clear whether the instruments would be debated, approved and made before exit day. The wording providing for the instruments to come into force on the latter of exit day or the day after making was a prudent contingency to account for this eventuality and to ensure that we did not purport to bring into force an instrument before it was made. I might need to think about that myself, but I wanted to put the position on the record. However, it is an interesting construct.
Lord Beith
It is indeed—that had not occurred to me. Do we conclude from this that the Government have no intention of doing anything other than bringing all five instruments into force on exit day?
Lord Gardiner of Kimble
Yes; I always have a safety valve. Picking up my noble friend’s point, it is why we thought that these SIs hung together as a package. From all the details that noble Lords have raised, I am relieved that we put them together because they are intricately connected.
The noble Lords, Lord Grantchester and Lord Beith, raised the question of funding a crisis without a crisis reserve. The 2018 crisis reserve payments are covered by Her Majesty’s Government’s funding guarantee, so farmers will receive reimbursement for the 2018 crisis reserve payments. After exit, clearly UK participation in the EU crisis reserve will become unworkable. Making the EU’s concept of the crisis reserve operable in the UK would mean taking the UK’s contributory share of the existing reserve—about £39 million—as the basis for a UK-only reserve. This would be likely to be of limited value in response to a crisis, especially when divided between England, Wales, Scotland and Northern Ireland. Removing the crisis reserve could also mean that more money could be paid out to farmers at the start of a payment window.
We are retaining CAP schemes governing the Common Market’s organisation in other retained EU legislation. This legislation will allow the UK to respond to a crisis in the agricultural markets in the same way that the EU currently can. If there is a crisis in the agricultural sector, the Government will consider how to respond, including whether to provide further funding in the usual way.
Lord Beith
This is not a theoretical situation. I do not wish to turn doom-laden, but if the events we are discussing led to a sudden fall and crisis in the sheep sector, then market intervention might be an option that the Government had to consider. I recognise, as the Minister indicated, that we have other ways to do that.
Lord Gardiner of Kimble
Yes, and I think it has been clear from the department that, like any responsible Government or department, we would act if issues arose. The noble Lord mentioned the sheep sector; in the temporary tariff regime we brought forward, we recognised the sensitivity and potential vulnerability of that sector. He is absolutely right: we need to be alive to, and ready to act on, issues of weather or markets. That point is well made.
The noble Lord raised the issue of the euro. Defra and the DAs have agreed to retain references to the euro in retained EU legislation at the point of exit. This is because, at the point of exit, the CAP will be part-way through making payments under current schemes. To minimise disruption and avoid a difference in sums paid to farmers before and after exit, we will retain the euro until an appropriate time when we can make the change to sterling with minimal disruption. We intend to bring forward regulations to amend euro references to sterling later. These regulations will of course be subject to normal parliamentary scrutiny. In addition, we will work with the devolved Administrations on any changes.
The noble Lord, Lord Beith, asked about retention. On implications for farmers, I reiterate that the Government have guaranteed that the current level of agricultural funding under Pillar 1 will be upheld until 2020 as part of the transition to new domestic arrangements, and that all CAP Pillar 2 agreements signed before 31 December 2020 will be fully funded for their lifetimes. The exchange rate for BPS 2018 is already set for the scheme year, meaning that farmers paid either side of exit day will be subject to an identical exchange rate.
The noble Lord, Lord Beith, asked how many state aid rules there will be after exit. The state aid regime will be rolled over by this statutory instrument, as will the whole architecture through the BEIS statutory instrument. We are not making any changes to the current EU regime beyond those required to make these matters operable.
The noble Lord, Lord Grantchester, asked whether the SIs will be necessary if the Agriculture Bill gains Royal Assent before the end of the current implementation period. If the current withdrawal agreement is agreed, these SIs will still be needed to ensure that the retained EU CAP legislation is operable in a UK context at the end of the implementation period. This will be the case even once the Agriculture Bill has gained Royal Assent. This is because the horizontal framework regulations, as amended by the SIs, will be required while we continue to operate legacy CAP schemes under retained EU law. Likewise, some CMO regulations will remain after the Agriculture Bill comes into force.
The noble Lord asked about the discontinuity in state aid: will DAs have their own rules and do they take effect at exit day or at the end of the implementation period? This is a reserved policy area, but, as with all the SIs I have had to deal with, there has been a close working relationship with the devolved Administrations. BEIS is working on a memorandum of understanding with the DAs, and my noble friend Lord Henley is working on this. If there is any further information I can bring forward from that, I will let your Lordships have a copy.
In a no-deal scenario—
Lord Whitty (Lab)
I intervene because I have been dealing with state aid provisions more generally. The European system regards state aid for agriculture as part of a block exemption. In other words, it does not regard it as state aid.
Lord Gardiner of Kimble
Would it help if the noble Lord and I had a conversation after this debate on the statutory instrument? I am interested in hearing his point.
With your Lordships’ permission, I will conclude my point. In a no-deal scenario, the SI will take effect on exit day; in the case of a withdrawal agreement, it will come into force after the implementation period.
On the noble Lord’s question about Ireland, these regulations will ensure that the same state aid regime applies in the UK and Ireland, because obviously it is bringing back the same arrangements.
My noble friend Lady Byford asked how many farmers fell within the schemes. My memory is that for direct payments, it is about 85,000 farmers, but of course with countryside stewardship and environmental stewardships it is a much smaller sum.
Baroness Byford
My Lords, I know I got a bit confused when we went over the various instruments. My question was actually in reference to small farmers, as my noble friend will be able to see when he has a chance to look at Hansard—there is no definition. I agree with him about the total numbers, but my query was about the number of small farmers and whether they are in a small farmers’ scheme.
Lord Gardiner of Kimble
I think that may be a matter of detail. I will write with a résumé of points I may not have covered, and areas where I think a little more detail would help. I am most grateful to my noble friend.
The noble Lord, Lord Grantchester, asked about the Treasury and the levy. The exemption is being extended to the animals slaughtered that come from beyond the EU. That covers very few animals, and the levy at stake is estimated to be less than £1000, while the levy income is £26 million a year. I therefore might put that in the de minimis bracket.
The noble Lord asked how the CMA and Parliament will enforce state aid. The CMA will be an independent regulator with enforcement powers, including requiring aid granters to claw back payments. Any changes to the state aid regime will be made in legislation.
I will pick up the noble Lord’s point about tariffs—because I too read Farmers Weekly and the Farmers Guardian. We will continue to maintain dialogue with the sector on this important issue. As I said in Questions yesterday, clearly one of the five principles on which we base this is whether it is in the interests of the consumer and the producer. It is why we came forward with what is, as I said yesterday, a temporary tariffs package, and one with which Phil Stocker, the chief executive of the National Sheep Association, was “extremely pleased”. I know one cannot please all sectors, but I think there was a very conscious recognition that the sheep sector was an area where we needed to have that extra support available.
I am conscious that noble Lords have asked me a number of other questions. I will of course write if I have not covered any points. I have already noted a number of questions that could do with a bit more detail, and I may be able to furnish the noble Lord, Lord Grantchester, with answers to some of his further questions.
These instruments are needed for our farming and fishing sectors, and I commend them to the Committee.
Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Amendments) (EU Exit) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Common Agricultural Policy (Financing, Management and Monitoring Supplementary Provisions) (Miscellaneous Amendments) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)
Common Agricultural Policy (Financing, Management and Monitoring) (Miscellaneous Amendments) (EU Exit) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Common Agricultural Policy (Financing, Management and Monitoring) (Miscellaneous Amendments) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)
Agriculture (Legislative Functions) (EU Exit) Regulations 2019
Lord Gardiner of Kimble Excerpts(7 years, 4 months ago)
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Lord Gardiner of Kimble
That the Grand Committee do consider the Agriculture (Legislative Functions) (EU Exit) Regulations 2019.
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)