Agriculture Bill (Seventh sitting)

Baroness Chapman of Darlington Excerpts

Thursday 1st November 2018 Public Bill Committees

[The Minister for Agriculture, Fisheries and Food (George Eustice)]

It is a pleasure to begin the day by responding to this particular amendment. At its heart is an attempt to put into the Bill a requirement to have something akin to the existing cross-compliance regime. I will come back to that later.

There are two key points I would make about the amendment. Clause 2 and clause 3, which we will come to later, as already drafted, make allowance and provision for a Government to create such conditions through an affirmative statutory instrument should they feel that that is the right thing to do. Under clause 2(2) it is open to the Government to say that there are conditions attached to entry into these schemes and that there may be, under clause 3(2)(g), penalties for breaches of the regulatory baseline.

There is already an option, given how the Bill is drafted, for a Government to bring forward proposals of that sort through an SI. My argument is that the detail spelled out in amendment 84 would be the appropriate level of detail that might be in a particular SI brought in under, for instance, clause 2, and probably addressed through anything brought in under clause 3 as well. We could do that, if we wanted, through the SI and that would be the appropriate place to do it.

However, my general view is that we should separate out as far as we can the regulatory baseline, which should apply to everyone equally whether they are in or out of a scheme, and conditions that we attach to financial schemes to support farmers to go above and beyond that regulatory baseline. The danger of the amendment here, as I see it, is that the very first thing it says, in 3A, is:

“It shall be a condition for receipt of financial assistance…that the person in receipt can demonstrate”,

that they abide by all those things.

We want people to feel good about entering these schemes. When a farmer phones up the Government, Natural England or whichever agency is administering the scheme to say, “I am really keen to enter your new agri-environment scheme,” if the first thing that happens is that they say, “Well, we’ll send out an inspector from the Rural Payments Agency with a clipboard to try to find fault and see whether your ear tags are wrong, or there is a trivial problem of that sort that will disqualify you,” it will put people off entering the scheme.

We already have this problem with the cross-compliance regime. I explained on Tuesday that, having wrestled with the cross-compliance regime as a Minister for five years, I can confirm that it is completely dysfunctional. The regulations set out in EU law and the penalty matrix mean that incredibly disproportionate penalties are sometimes applied to farmers that have no bearing whatever to the scale of the breach in question.

We already have problems with, for instance, large arable farms that might have a small pedigree herd of cattle that they keep going as a labour of love. If they have some trivial ear tag problem—an ear tag goes missing and they have not managed to replace it yet—and are unlucky enough to be inspected, they can end up with penalties of £40,000 or £50,000 for such small things. I remember many cases in this area. I remember a farmer who once had a dispute with his neighbour. The neighbour padlocked the gate on the footpath, and the farmer ended up with a £45,000 penalty, such is the nonsense of the existing scheme.

We do not want to replicate that. The danger of accepting the amendment is that a trivial error or mistake on something like an ear tag could lead to somebody’s complete disqualification from entering a scheme, or to an onerous financial penalty that would not fit the breach incurred. Something of this type could be introduced through an SI under the Bill’s provisions, should someone wish to. We should abide by the principle that regulations apply to everyone, that we should not have more inspection on people who enter schemes than those who do not, and that inspection regimes should be consistent and apply to people across the board, whether or not they are in a scheme. For those reasons, the amendment is not appropriate.

The hon. Member for Stroud asked about the Dame Glenys Stacey review. That is now well under way. She is keen to move to what she terms a better, more modern approach to regulation, in which things are better joined up and there is less reliance on an arbitrary rulebook, with people coming around with clipboards and ticking boxes. She wants a more holistic approach to the way we manage compliance on farms and a better understanding of, as I explained on Tuesday, the grey area between incentivising better husbandry and good practice, which can go a long way to achieving environmental and animal welfare outcomes, and accepting that a clear regulatory baseline must be enforced.

We are keen to start moving towards a different culture around regulation that is less about a complex rulebook, which often has lots of unintended consequences and disproportionate penalties, as characterised in our current scheme. We want it to be more about discretion for officers on the ground, whether they be from Natural England, the Rural Payments Agency or the Animal and Plant Health Agency, to exercise judgment in respect of a given farm, and about having a better understanding of the linkage between things that we can incentivise to get better outcomes and the need to adhere to the regulatory baseline.

[Jenny Chapman (Darlington) (Lab)]

I am interested in what the Minister says, and he makes a fair point. However, my concern is that this scheme needs to be transparent, fair and rigorous in the eyes of taxpayers. As we said on Tuesday, the closeness of these decisions will change, and taxpayers will want to know that their money that goes to this scheme, and so not on policing, health or other important issues, is carefully spent, and that the scheme is robustly inspected and monitored. We need to be careful about where that balance lies.

[George Eustice]

I understand that. As I said on Tuesday, we accept the “polluter pays” principle. It is important that we have a clear regulatory baseline. At the moment, in areas such as livestock ID, we have a hotch-potch of different regulations that have come from the EU, and there is lots of inconsistency. We have an opportunity as we leave the EU to tidy up the rulebook and to have a clear and consistent regulatory baseline, and to then build on that with financial incentives.

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[George Eustice]

There can be lots of issues like that.

[Jenny Chapman]

That is a completely wrong analogy. The right analogy is perhaps with the financial support given to parents. If parents do not comply with the rules and the terms of that agreement with the Government, then the finances are removed and they might even find themselves going to prison. It is a completely different situation and it appears to me that the Minister—with the best will in the world—is making this up as he goes along. It is like, “We could do this, we could do that, we might do something else”. I do not get the impression that the Government have properly thought this through.

[George Eustice]

I disagree; I have thought it through. If the hon. Lady and a future Labour Government want to do precisely what they set out in amendment 84, the right place to do it would be under an affirmative resolution under sections 2 or 3.

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[George Eustice]

That is not our intention at all. Anyone who knows me knows that I am not a big fan of management consultants. I often come across very talented local agronomists who really understand the landscape and the soil type. If we set them free and gave them the opportunity to work in partnership with farmers, the schemes would work far more smoothly than in the central, bureaucratised system that we have now.

[Jenny Chapman]

The Minister is asking us to believe that a scheme will administer substantial amounts of public money and will be run by some very impressive and worthy organisations—LEPs, national park authorities and the RSPB. Can he point to any other area of public policy or significant Government spending where that kind of approach is permitted?

[George Eustice]

It is permitted now. The Soil Association can authorise organic farmers, and there are a number of other accreditation bodies.

[Jenny Chapman]

They are not spending £3 billion.

[George Eustice]

If someone is accredited as a member of the Soil Association, they are able to claim a top-up to their basic payments scheme. So, yes, there are areas. In terms of clause 2(5), there is already precedent for that in the way that the EU schemes operate—EU regulations create the power for that to happen. We think it is a good model. Engaging people such as the Soil Association in some schemes could be really powerful.

Likewise, if we are to move to a system where we may want to pay farmers who sign up to something like an RSPCA-assured scheme or another scheme, it is important that we have a legal basis to be able to recognise those schemes. They will have to be UKAS accredited—we must have confidence in those schemes. UKAS has existed for many years. The last Labour Government introduced UKAS-accredited schemes in many areas. It is a successful model.

On that basis, I hope I have been able to reassure hon. Members that our intention in clause 2 is to address a concern that the shadow Minister raised earlier in the debate about how we will administer these schemes. I hope, therefore, that having put down this probing amendment, he will withdraw it.

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[George Eustice]

Scotland has no plan for its future agricultural policy. It will be for Scotland to ask us to add a schedule on its behalf or to bring forward its own legislation. A point was raised on Tuesday in a discussion on clause 1 whether we will make available details of how much money had been spent on delivering certain purposes. The answer is that, as well as publishing the recipients of support, this power would also enable us to publish the purposes and the broad intention of what we are delivering with that power.

[Jenny Chapman]

Representing a constituency in the north-east, I am mindful of the situation of businesses and farms that cross the Scottish border. Will the Minister help the Committee to understand what would happen if Scotland failed to ask for a schedule or do anything between now and exit day? What would be the situation of support for farmers in Scotland in those circumstances?

[George Eustice]

Scotland has one of three options: it can bring forward its own primary legislation or it could add a schedule. Its content could range from something similar to what Wales has done, which is a full suite of powers, or it could take the approach of Northern Ireland, which is broadly the powers to roll-over the existing scheme and make modifications but not to make changes beyond that. Finally, it could pass legislation or ask us to add a schedule that gave it the power to continue to make payments but nothing else—not even to modify. There is a range of options, but Scotland needs to do something and have primary legislation or its power to make payments will fall down at the end of 2020.

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[Dr Drew]

We have made good progress on an important clause, but we now come to one of the central points of the Bill: where is the money? When will the money be paid and over what period?

The Government are clear that the commitment to fund agriculture in its existing form will remain in place until 2022, or whenever the general election comes, when things may change. The scheme starts only in 2021, so there is a dislocation, which will be important. No Government can fetter their successor, but they can—this is what our new clause seeks to do—put in place a mechanism so that any successor Government know what is implied on how the money should be forthcoming. That is an important part of the Bill. Alongside our argument about powers requiring duties —we lost that one, but we might revisit it—the financial arrangements are crucial. I make no apology for saying that we shall spend a little time on this.

Interestingly, there is unanimity among all the organisations, whether farming ones or green groups, that they want new clause 10. They want a clear mechanism in the Bill so that, whatever happens after 2022, or before that, when the new arrangement comes into place, there is an understanding that future Governments know exactly what is required of them. That is important.

The Minister probably has his 1947 Act in front of him on his table—look how long that lasted, and it was cross-party. There was no attempt to interfere with the 1947 Act. The Conservatives agreed when they came back in 1950 or 1951 that they would continue on the basis of that farm system payment. We are asking the same and we expect this piece of legislation to last 60 years. That might be ambitious, but if we get it right, that is the period we are talking about.

We know and support the direction of travel, but we want to know how it will be funded in due course in terms of a mechanism. That is crucial to the industry. It needs to know the longer-term requirements for food production, forestry, heritage and landscape. They will change dramatically over the next 60 years as they have done over the past 60 years. We hope they will change for the better because we would argue that we have done enormous damage. The problem is that the Bill is silent and has no mechanism.

Those of us who went to the lobby last Tuesday saw many organisations—there are too many logos on my bit of paper to fit any more on there—but they are as one in support of new clause 10. I hope the Government treat it with enormous seriousness. If they are not willing to accept it, there will be a lot of disappointed organisations and I would argue that the Bill will lack its central tenet, which is, as always, where and how the finance will be locked into place.

The new clause is about certainty and the predictability of the Bill. There is a degree of understanding that no Government can say how much money there will be and where it will come from, but we can have a mechanism to be reviewed every year. The Government could then say: “There will be money available to do all the wonderful things we have all signed up to.” That is why it is so important. Although the new clause is being debated early, it has to be debated at considerable length.

We ask the Government to consider the new clause very seriously. They have obviously been lobbied by all those different organisations, which effectively are the countryside—no organisation would not sign up to it. NC10 sets a duty on future Governments to report annually on how much money has been spent to meet the policy objectives set out in the purposes of clause 1(1), and whether this was sufficient to meet these objectives. Again, we support this important direction of travel, but it must say how it will work, which is entirely dependent on where the money comes from. There must be a mechanism in place to say how it will operate in future. No, we cannot say what money, but we can say how any future Government goes about trying to report on what the money should be available for and where it should go.

Greener UK, an interesting amalgam that spent a lot of time talking to the Government, is largely very pleased with the Bill, but pointed to an independent assessment commissioned in 2017 that estimated the minimum costs of the environmental land management commitments at £2.3 billion. That is down on the current £3.2 billion, but it is the minimum—the baseline. Some of us would argue that it must be higher than that, at least at the current level, certainly in the early days because we do not know how it will work.

If the Minister does not accept the approach set out in new clause 10, what approach will the Government take given that they have won over a lot of the green organisations on the basis that this is what could and should be happening? It is about making a commitment. As I say, a Government cannot commit to money future Governments will spend, but they can commit to the mechanism. We ask the Government to look very closely at the new clause and hope they listen to us and all those organisations.

I could tell the Committee of countless organisations—I will not because we are short of time and I would rather finish before the 1 o’clock break. The Minister has received the same words. I hope they meant something and that he is willing to respond. Otherwise, there will be an awful lot of very disappointed organisations.

[Jenny Chapman]

The organisations to which my hon. Friend refers are probably the same organisations the Minister mentioned. If they are willing to be held to account to ensure that this is done well, it makes sense to us that the Government ought similarly to be willing to have that security and accountability as we implement the scheme.

[Dr Drew]

My hon. Friend is right. Again, that is the basis on which this Bill has been brought forward. There has been a degree of consensus—we have tabled probing amendments that have not necessarily gone with that consensus, but at this stage there is unanimity. The organisations want to know what the mechanism will be and want it in the Bill. Otherwise, it is all just promises. I am afraid the Government will have to listen and either accept the new clause or come up with a better alternative. We will be listening very carefully, presumably this afternoon, to what they say. Otherwise, it will be impossible to believe that the Government can deliver on their commitments.

Ordered,

That the debate be now adjourned.—(Iain Stewart)