Agriculture Bill (Twelfth sitting)

Deidre Brock Excerpts

Thursday 15th November 2018 Public Bill Committees

[Deidre Brock (Edinburgh North and Leith) (SNP)]

I beg to move amendment 67, in clause 26, page 20, line 36, at end insert—

‘( ) Regulations under this section containing provision that extends to Scotland may be made only with the consent of the Scottish Ministers.”

This amendment would require that the power to make regulations extending to Scotland can only be exercised with the consent of Scottish Ministers.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 119, in clause 26, page 20, line 36, at end insert—

“(1A) Regulations under this section containing provisions extending to Scotland, Wales or Northern Ireland that would ordinarily be within the competence of Scottish or Welsh Ministers or the Department of Agriculture, Environment and Rural Affairs in Northern Ireland and exercised by Scottish or Welsh Ministers or the Department of Agriculture, Environment and Rural Affairs in Northern Ireland may be made only with the consent of Scottish or Welsh Ministers or the Department of Agriculture, Environment and Rural Affairs in Northern Ireland, as appropriate.

(1B) This paragraph does not apply to regulations made by the Secretary of State under—

(a) section 35 or 58 of the Scotland Act 1998 (as amended),

(b) section 82 or 114 of the Government of Wales Act 2006 (as amended), or

(c) section 25 or 26 of the Northern Ireland Act 1998 (as amended).”

In order to preserve the principle that agriculture is a devolved matter, this amendment would ensure that the Secretary of State may only make regulations to secure compliance by the UK with the WTO Agreement on Agriculture with the consent of Scottish or Welsh Ministers or the Department of Agriculture, Environment and Rural Affairs in Northern Ireland.

Amendment 68, in clause 26, page 20, line 44, leave out from “support” to end of line 2 on page 21.

This amendment would remove the role of the Secretary of State as final arbiter in dispute resolution.

Amendment 69, in clause 26, page 21, line 26, leave out subsection (6).

This amendment would remove the requirement to provide information to the Secretary of State.

Amendment 96, in clause 26, page 22, line 2, at end insert—

“(8A) For the avoidance of doubt, nothing in this clause shall affect the devolution of any power under—

(a) the Wales Act 1998, the Wales Act 2014 or the Wales Act 2017,

(b) the Scotland Act 1998 or the Scotland Act 2016, or

(c) the Northern Ireland Act 1998.”

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[Deidre Brock]

Like previous amendments, amendment 67 is about tidying up the Bill to respect the devolution settlements. It is about allowing Scottish Ministers to exercise powers that are already within their purview. Amendment 68 would remove what I describe as the overseer powers of the Secretary of State in respect of devolved powers by taking away the role of final arbiter and encouraging instead an environment in which consensus and agreement become the norm, rather than a veto.

Similarly, amendment 69 would remove a provision in the Bill that gives the Secretary of State power over the devolved Administrations that is not necessary. Although I can predict that the Minister will argue that there is a need for information to be provided to demonstrate compliance with World Trade Organisation rules, I contend that his assumption is not correct. Again, we return to the issue of respect for the devolved Administrations and the desirability of finding consensus and moving forward together. Removing subsection (6) would facilitate that and remove the impression that the Secretary of State wants to gather power to himself, rather than seeking agreement.

I have sympathy with the amendments suggested by other Opposition Members and the way in which they are trying to secure the future of the devolved settlements. I urge the Minister to consider how he can best do the same.

[Dr David Drew (Stroud) (Lab/Co-op)]

We are all glad to be back in our places in Committee. This has been a fairly momentous day so far.

I wish to speak to amendment 119, and my hon. Friend the Member for Gower wishes to speak to amendment 96. I do not want to delay the Committee too much; I just want to make some observations. I concur with what the hon. Member for Edinburgh North and Leith has just said, and she might want to look at our proposal, because it incorporates everything, including Wales and Northern Ireland.

The point about this line of amendments is one that we have discussed before. We are trying to make the point that, when carrying through the WTO arrangements, we have to ensure that we fully consult the different territorial Administrations—in this case, Scotland, but also Wales and Northern Ireland.

Let me explain why we have tabled amendment 119. As I have said before, I visited Northern Ireland and Ireland last week, and the situation is clear. I will not say that completely different agricultural systems are evolving, but there is some difference between them. We have to recognise that. It will be something that we need to be aware of whenever we talk to the WTO if and when we leave the European Union—it will be interesting to hear whether the Minister has something to say on that, because clearly it is not a given.

We will have to apply to the WTO. Currently, we are part of the EU, so we will have to apply to the WTO in our own right. That will involve making sure that all four territorial Administrations are included in whatever appeal we make to the WTO, so in amendment 119 we are paying due regard to the devolution settlements. The situation is made more difficult, as I have said before, because there is no Administration in Belfast. We have to rely on the Department of Agriculture, Environment and Rural Affairs in Northern Ireland to take the appropriate measures on the say-so of the UK Government, but not necessarily to be completely dictated to by the UK Government.

I hope that the Minister can allay our fears that this will be a bit of a dictatorial measure if it is not amended. That is why we have tabled amendment 119. If the devolution settlements mean what they should—of course, agriculture, in this case, is a devolved matter—we have to be clear, however we subsequently work towards our own independent application to the WTO, that agriculture, which is a crucial part of any WTO arrangement, is included.

The WTO agreement is quite interesting. I hope that if I say a few things about it now, we will not have to do so again when debating clause stand part. Agriculture and horticulture are crucial parts of the WTO agreement. That means that we need to take cognisance of this, as clause 26 does, but in a way that gives due regard to the different territorial Administrations, as these amendments do.

The whole point of the WTO is to shut down agricultural loopholes,

“by binding and reducing tariffs, removing import bans or restrictions, and cutting subsidies that distort trade, both in domestic markets and on exports. As such, ‘Country Schedules’ of market access and national treatment commitments for products form an important legally binding component of WTO Membership.”

That is the specificity of the WTO agreement regarding agriculture. I could say more about how it affects agricultural trade, how it shapes agriculture policy, what the future direction of travel is and what it means for the United Kingdom, but I want to concentrate on the post-Brexit situation when we will be making this application. That is why these amendments are important. We have to ensure that all four countries are on the same page when we make that application. One of the underlying principles of the WTO is that members must not discriminate against one another. One would think that that immediately comes between the United Kingdom and other parties, but it would not be very helpful if we had discrimination within the United Kingdom, so it is quite important that we understand this in terms of the whole arrangement.

I raise that because the Minister rightly brought forward—at quite a late stage—the English votes for English laws arrangements, which lay down where the Bill affects England specifically. It is a pretty arcane document, which the Minister may wish to speak about. I will not spend hours trying to explain what the different bits mean, because I am not sure that I understand what the different bits mean. As we have tried to argue, however, this Bill has a major impact on England, much more than on the other Administrations. Wales is following England in due course. Scotland does not have a schedule. From my intimation, Northern Ireland is doing its own thing at the moment and will do so until it gets an Administration. That matters because we have to be sure that on the one hand England is not adversely affected by what is happening elsewhere, because that would look strange when we make the application to the WTO, and on the other hand that the other Administrations know that they must not discriminate against England, and they must be included in any negotiations, consultations and discussions on how we move this particular clause forward.

This clause is important. It is a part of the Bill that looks forward. It is not something we have done before, because the WTO did not exist when we entered the then European Community—the Common Market. This is a very different set of circumstances. I ask the Minister to allay some of our fears. First, will there be proper consultation, including with all the different Administrations, or with the appropriate actors if there is not an Administration, as in the case of Belfast? Secondly, to do a wee bit of pleading on behalf of England, will he make sure that England does not make all the ground running, or all the sacrifices, because we have not sorted out our own arrangements within the four countries?

The worst possible thing would be if the WTO sits on the application, leaving us in limbo land. None of us can pre-empt what will happen when we make that application. It may go through like night follows day, or it may be quite a difficult operation. Today is particularly apposite in regard to that, because we have a Bill, a discussion or a deal—whatever Members want to call it; I am not sure what form it will take when we get to the meaningful vote—that has really brought home to some Opposition Members, if not Government Members, how we have to nail this down carefully.

I hope that the Minister listens and understands why we feel so strongly about this, and why we need to get this right. I hope that he looks at these amendments—particularly amendment 119, in my name and that of other hon. Friends—because otherwise we could open up a very difficult scenario when we make that application.

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[George Eustice]

Given that it is a reserved competence, it is right that the Secretary of State should be the final arbiter, because somebody has to be. We do not have a federal system; we have a devolution settlement. It is different from a federal system of government and we have deliberately stopped short of a federal model with qualified majority voting.

[Deidre Brock]

The Minister talks about this being reserved, but we are quite clear that, as this concerns the implementation of international obligations, it is devolved and should be treated as such. I also remind the Minister that agriculture is considered to be within the competence of the Scottish Parliament because it is not a reserved matter under schedule 5 to the Scotland Act 1998. How does he address that and—I am sorry that this is rather a long intervention—the concerns of the National Farmers Union of Scotland that a future UK Secretary of State with these powers could have

“the ability to set limits on the amount of domestic support which could be targeted at specific measures that Scottish Ministers may seek to apply in Scotland to meet their objectives”?

[George Eustice]

Agriculture is devolved; we do not dispute that. That is why there are schedules for some parts of the UK that have asked us to do that, and it is open to other devolved Administrations, including Scotland, to bring forward their own domestic legislation on agriculture. However, demonstrating compliance with an international obligation through the WTO is a reserved matter. We do not dispute at all that agriculture is devolved—that premise runs right through the core of this Bill—but this is about demonstrating compliance with an international obligation.

Turning to the point that the hon. Member for East Lothian made about whether we could have a better way, as I said, we do not have a federal model. This system is one that we use a lot, through things such as the joint ministerial committees. Next month, hopefully, I will go the December council to discuss fisheries. When I do that, Ministers from all the devolved Administrations will join me in the trilateral with the EU presidency and the Commission. We work through our differences and work together on particular issues, but in the final analysis if there is a dispute about a priority or we have to make a judgment call about whether to support a final agreement, it is for the UK to make that final decision. That is right because it is an international negotiation.

Amendment 119 would make a similar provision on defending the devolved settlement. As I said, we are clear that the powers we outline in clause 26(1) are fully reserved—they do not encroach on any of the devolution settlement at all. Therefore, there is no need to restate some of these matters.

The hon. Member for Stroud asked what will happen when we lay our WTO schedule. We have already laid our proposals for that. We have been in a long discussion with the European Union. The plan is to split the WTO schedule both on tariff rate quotas and on the aggregate measurement of support—the so-called amber box. It has already been decided that it will be split using a method based on historical use or an appropriate allocation of the size of our agriculture. That schedule has already been logged with the WTO in draft form. We are currently going through what are called article 28 discussions with some countries about certain issues they have raised. The process is clear: the amber box—the AMS schedule—is split and, as I said, we get around £3.5 billion of that. We are already going through the process of laying that, with the agreement of the EU.

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[Deidre Brock]

Is the Minister saying that voluntary coupled support schemes, which only Scotland takes up the option of implementing, count not as amber box subsidies but as blue box subsidies?

[George Eustice]

That is correct, yes. There is a bit of a misconception there.

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That important issue has been highlighted several times in the debate, but I hope I have reassured the Committee that it is tightly prescribed around a reserved matter. I hope the hon. Member for Edinburgh North and Leith will withdraw her amendment on that basis.

[Deidre Brock]

I am sorry to disappoint the Minister, but I will press the amendment to a vote. We feel strongly that the matter requires the Scottish Parliament’s consent. It concerns the implementation of international obligations that are devolved. Ultimately, the Minister has described a situation where there is not agreement, but an imposition of the Secretary of State’s views whenever there is a dispute—and with the best will in the world, such things happen. I would like to see a mature approach, which is how the Scottish Trade Minister described the Canadian solution for its trade dealings with its territories and provinces yesterday in the Scottish Affairs Committee. That is what we should strive for, rather than looking to change a system.

Clause 26 contains provisions that affect the Executive confidence of Scottish Ministers as regards the exercise of functions concerning agricultural support in Scotland. We acknowledge that for some elements of the WTO obligations, decisions need to be taken for the whole UK, but that does not suddenly convert this into a reserved policy area, which is what I think the clause does. Establishing the UK-wide arrangements for allocating the financial ceilings under the WTO agreement concerns devolved matters and certainly requires the Scottish Parliament’s consent. I repeat that, although such decisions could be taken on a UK-wide basis, that should be done only on the basis of consent, as per the allocation of competences implicit in the Scotland Act 1998. I will press the amendment to a vote.

[Dr Drew]

We will support the amendment, but we would also like to press amendment 119 to a vote.

Question put, That the amendment be made.

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[Dr Drew]

I thank the Minister for that; that is very useful. It is just a strange world if we have already had a complaint before we have joined. They are getting their retaliation in first. These issues matter. Sheep will be an important variable if we leave the EU the way we could do, because we would be subject to the end of New Zealand’s quota arrangement. Australia, in particular, will want to send a lot more sheep into this country, because it thinks it can do it cheaper and better. That has a huge implication for Wales and Northern Ireland, although perhaps less so for Scotland. These issues matter, and we need to know what the full implications are.

I do not have anything more to add, other than—dare I say it?—caveat emptor. We need to be aware that what is potentially coming is quite complicated, and that we have got to keep lots of balls in the air, particularly for the devolved Administrations, which could lose out if we are not careful in how we draft the completed application to the WTO.

[Deidre Brock]

We are not happy with the clause. It gives the Secretary of State powers over the devolved Administrations that are not necessary or appropriate. It allows him to be the final arbiter in future disputes about the nature of domestic support. As I have said before, this is about respect for the devolved Administrations, which I find sadly lacking in this clause. I urge the Minister to revisit it, and we will be re-examining it on Report.

Question put and agreed to.

Clause 26 accordingly ordered to stand part of the Bill.

Clause 27

Wales

Question proposed, That the clause stand part of the Bill.

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[George Eustice]

I begin by paying tribute to the officials in the Department of Agriculture, Environment and Rural Affairs, which has some talented people working on its agriculture team. No one doubts that they face a difficult challenge. With all the changes we are going through as a country, they do not have an elected, political Administration in place. They are very conscious of that and, for that reason, they have been cautious in the powers they seek under this schedule.

It is also important to note that DAERA has not just sat back and decided that it can do nothing. In fact, DAERA produced the first report from any UK Administration setting out their broad thoughts on future policy. That report was drafted by stakeholders, bringing together the farming industry and others. DAERA shared a document with us that reflected the views that came from the farming industry, environmental non-governmental organisations and others about what the future direction might be. Even in the absence of that political Administration, it fed into this process with a paper that set out the views of stakeholders, to ensure that the interests of Northern Ireland farmers and agriculture were not overlooked.

Amendment 37 will ensure that DAERA is able to set ceilings to continue to make basic payment scheme payments after 2020. It is important to recognise how it has approached this. DAERA asked us to give it the powers to continue to make the basic payment scheme and existing legacy pillar 2 schemes and to take a power to modify those. It has not decided how it might use that power to modify, but if a new Administration came in who wanted to modify that, it has been clear that that future Administration should have that power. Crucially, it was clear that DAERA did not feel it appropriate for an unelected Administration and officials trying to steady the ship during this challenging period to take the powers outlined in clause 1, because those powers are clear about a direction of travel and a switch to a payment for public goods, rather than the existing direct payment scheme. Therefore, it thought it would be inappropriate to take such a power without there being an elected Administration.

It is equally important to note that DAERA chose not to take the powers to have a transition period and phase out direct payments, for the reasonable reason that that would be a political decision that a future Administration must take. Its job, as a DAERA administration without a political Administration, is to ensure that it can provide continuity and that whatever is done is future-proofed, so that a future Administration may take over.

In essence, DAERA intends to carry on with the scheme that we have now and not make any changes at all, and to await a future political Administration, who may then take decisions about the future direction of Northern Ireland policy. I believe that officials in DAERA behaved impeccably to protect the interests of Northern Ireland farmers, to ensure that they continue to make payments, that officials have the power to set ceilings and also to future-proof the policy, so that there are some initial powers to assist.

[Deidre Brock]

I am curious about how the accounts for Northern Ireland agricultural funding are signed off in the absence of Ministers. Is that included in the schedule or an aspect of it? What sort of public accountability will there be?

[George Eustice]

We already have an organisation called the UK co-ordinating body, which is hosted by the Rural Payments Agency and works in collaboration with all the devolved Administrations on auditing and accounting issues under those EU schemes. We envisage that a body such as that would continue anyway, but there are already established principles in place within the UK civil service. It is important to recognise that, while we have different devolved Administrations, we have one civil service for the entire UK; civil servants working in the Scottish Government are as likely to get a transfer to work in a Whitehall Department as anywhere else. We have a single civil service, which is important to give some cohesion to our system.

I conclude by saying that this is an important schedule to include. In my view, DAERA has taken the correct approach of ensuring that it can continue to make payments to its farmers, while putting some powers in place for a future Administration. The answer to the shadow Minister’s question is that, when there is another Administration, if they have bolder ambitions to change and transform their policy in the way we have outlined in clause 1 and that Wales has chosen to adopt on an interim basis, it will be open to them to introduce legislation through the Northern Ireland Assembly to give effect to their specific proposals.

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[Deidre Brock]

I rise to speak to clause 34 and new clause 6. The Radcliffe report recommended changes to the red meat levy in 2005, and successive UK Governments really should hang their heads in shame at its taking 13 years to get to the stage where the matter is finally being addressed. To be more exact, the preparation for putting in place a scheme for addressing the red meat levy is happening at last. I understand that discussions between the Department for Environment, Food and Rural Affairs and the Scottish Government continued right up to the wire, so I am very pleased that DEFRA Ministers have given ground on this. I congratulate them on their very good sense in listening to Scotland.

The pressure for this change came from farmers, whose levy moneys were not being spent to their benefit, and from the promotion boards, whose jobs were made harder by those funds not being properly distributed—a couple of million pounds a year taken from both Scotland and Wales. Quality Meat Scotland and NFUS, as well as their counterparts in Wales, deserve credit for their long-running campaigns to rectify this anomaly. Frankly, politicians should be ashamed that it has taken so long.

With that said, I welcome the Minister’s agreement to the amendment. Discussions between his Department and Scottish Government Departments might not always have been easy, but they have brought an agreement that we can all live with. I will withdraw my amendment—to give this one a clear path—if I can get a couple of reassurances from the Minister.

First, can we be assured that timescales will be specified to give certainty to the levy boards? Time lags clearly would be a difficulty for the boards, and regular, consistent income streams would be more beneficial to allow their work to carry on as it should, and also to allow forward planning to be conducted properly. Can we also have an assurance that the scheme will be reviewed on a regular basis, such as every five years or so, to ensure that it is operating properly? If I can have those assurances from the Minister, then he and I are on the same page—at least on this—and we agree on the way forward.

I welcome this change to the operation of the red meat levy and the Minister’s willingness to listen to the voices from Scotland and Wales that have been calling for it. That work with the Scottish Government is an example that one hopes the rest of the Departments in Whitehall can follow.

[Colin Clark]

I rise simply to thank the Minister for supporting the amendment and to echo the hon. Member for Edinburgh North and Leith—this has been called for for quite some time, and it is good that just over £1.5 million will be spent on promoting Scotland. We have to remember that the vast majority of red meat is exported south of the border, and we are very grateful that the promotion will continue for the entire country.