Draft European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019 Draft European Structural and Investment Funds Common Provisions Rules Etc. (Amendment etc.) (EU Exit) Regulations 2019

Luke Pollard Excerpts

Wednesday 20th March 2019 General Committees

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

It is a pleasure to see you in the Chair, Mr Owen. It is also a pleasure to be back in another Committee for another Department for Environment, Food and Rural Affairs SI, which gives me an opportunity to ask the Minister similar questions to those I asked last time we were here, which was yesterday, about the missing pieces of primary legislation that are necessary to complete our exit from the European Union, namely the Agriculture Bill and the Fisheries Bill. Before I do so, I will talk about the SIs we are dealing with today, because all of those bits form a jigsaw that needs to be complete in order to ensure that those who work in farming and fishing have the correct regulatory environment and a working statute book.

As is usual when any Opposition Member responds to a statutory instrument, I place on record our concerns about the sheer volume and speed of SIs being pushed through. Personally, I fear that one of those SIs will contain a gremlin: a problem that will cause bigger complaints in the future, which the speed of this consideration does not allow us to spot and edit out. The Opposition will not be opposing these SIs, but these structural funds were recently debated in the other place. I will voice my concerns and reiterate some of the points made by my noble Friends.

The draft European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019 are a rare exception, in that minor consultation with the farming and fishing industries has taken place, for which the Opposition have called in relation to many of these SIs. Under regulations relevant to the European maritime and fisheries fund, no details regarding stakeholders are given, other than that there was “targeted engagement”. Will the Minister clarify what targeted engagement amounts to, and specify exactly what stakeholders, regions and nations were involved? As we are not dealing with one single fisheries industry, but with many different ones—from crabbing and scalloping all the way through to line hooks and big industrial fishers—will the Minister tell us which sectors were consulted? His answer will help determine whether the targeted engagement was sufficient to make this a credible consultation.

I also point out that the note says:

“In addition, a ten-week consultation was conducted through the Fisheries White Paper. Stakeholders were broadly supportive of the approach being taken.”

The fisheries White Paper was published a very long time ago, and I do not think it fair to suggest that the detail of this SI was somehow included in that, because it was not. Suggesting that that consultation is also a consultation on a far more detailed piece of legislation is a bit cheeky.

It is important that this SI fits seamlessly with the other SIs that the House is considering, as well as the Fisheries Bill and the Agriculture Bill. I asked the same questions yesterday. I hope the Minister has had the opportunity in the last 24 hours to update his answer, and that he will be able to tell us when the Fisheries Bill will come back to the House. There needs to be seamless implementation of the SIs and the Fisheries Bill, particularly in looking at how the EMFF fund will work in any new regulatory environment.

The SIs ensure the programmes of EAFRD and EMFF can continue to be domestically deployed, and remove obligations that relate to the European Commission. Will the Minister set out who will be taking over the obligations that were previously exercised by the Commission? How much additional funding will be allocated to those organisations to cope with the new workload? The explanatory note says that the amendments

“will maintain a status quo position as far as possible.”

Will the Minister clarify his assessment of that? Will the industry be better or worse off because of these changes?

The explanatory note adds that the delivery requirements for the EMFF will be dealt with in the upcoming Common Fisheries Policy (Amendment etc.) (EU Exit) Regulations 2019, but there is confusion, as some related responsibilities lie with the Department for Environment, Food and Rural Affairs and some with the Department for Business, Energy and Industrial Strategy. Will the Minister set out how that SI will deal with those two responsibilities? Will we have two separate SIs, or will the responsibilities be contained in one SI? If so, which Department will lead? Clearly, specialist scrutiny will need to be applied to make sure that it is proper.

It would have been helpful to have been able to look at all of the related SIs in the round. I know the Government are looking to pass many SIs, but it would make sense that SIs on a certain topic be considered together, or at least within the same broad window, rather than scattered around in the timetable as they seem to be.

The explanatory note states that

“the UK Government has guaranteed that any EAFRD and EMFF projects whose funding has been agreed before the end of 2020 will be funded for their full lifetime. This means that the UK Government will fund any remaining payments due after March 2019, ensuring continued funding for these projects until their end. The guarantee also ensures that new projects can continue to be signed under the current programmes after the UK leaves the EU during 2019 and 2020.”

Will the Minister confirm that those projects will still be funded regardless of whether the UK leaves with a deal—be that the Prime Minister’s or another that might command more support in the House—or in a no-deal scenario? That would provide certainty to those coastal communities and rural areas that depend on the funding.

We note that the amount of funding is calculated at £132.7 million for the remainder of the programme period for the EMFF, and between approximately £400 million and £450 million a year for the EAFRD, depending on exchange rates. Labour has called for every penny of EMFF funding to be protected, but we also want the Government to match the level of EMFF funding we would receive in the future. Will the Minister say whether we are on track to meet that commitment or whether, as we suspect, there will be a huge cut in the funding available for our coastal communities as we have seen with agriculture funding—Brexit has been a mask to cut 40% of funding for our rural areas? Is that also the case for our coastal communities? That was not in the prospectus on leaving the EU during the 2016 referendum campaign.

My colleagues in the other place echoed that point. On 14 March, in the debate on the draft regulations, Lord Stevenson of Balmacara said:

“The main point to make is that the Government are taking the opportunity to continue the existing funds either by paying through to the EU to continue with the existing schemes or by taking on the burden themselves. The problem is that of course the first approach is obviously right, given that these are contracts which are in place, commitments have been made, there are funding streams which are currently in process with recipients who are in urgent need of these moneys. Given that, it is right that they should be continued. However, the problem is that, as and when the Government take over responsibility for these schemes and for the payment of them, that will come under the cosh of the general economic situation at the time and the question of future budgetary opportunities for changing them. To what extent can the Government guarantee that the funding will be maintained at least at current levels and that schemes which need second and subsequent phases to complete will be considered fairly and on their merits as if the original arrangements were in place?”—[Official Report, House of Lords, 14 March 2019; Vol. 796, c. 1148.]

The latter point on phased funding streams is useful because, as we know, many of the funded projects take place over a number of years, both in terms of building capacity and building additional infrastructure. I would be grateful if the Minister could set out the certainty that can be provided to rural and coastal communities in relation to continuation of that funding.

The explanatory memorandum for the draft European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019 even suggests that it is more expensive for us to leave the EU:

“There may be a negligible increase in administration cost as notifications may go to responsible bodies within the UK rather than European institutions”.

How much is defined as negligible in relation to this?

Lord Teverson made a good point in the other place. He welcomes the continuation of funding, but there is again discrimination within that funding. Paragraph 7.6 of the explanatory memorandum states that there will be

“the same cash total in funds for farm support until the end of parliament, expected in 2022”.

That is farm support, but where is the fishing industry support in relation to those particular bits? Understanding the differences between our coastal and rural communities is important. Lord Teverson said that the fishing industry is

“funded only up to 2020. There is no commitment to fisheries for those final two years. Once again, I see discrimination for an agriculture industry that is, to be frank, pretty well off, against one, fisheries, where certain sectors are well off, but there is no government guarantee to continue that EMMF funding until 2022.”—[Official Report, House of Lords, 13 March 2019; Vol. 796, c. 254.]

I hope Lord Teverson has that wrong, and I would be grateful if the Minister could clarify that fishing and farming have different end dates for their funding, because that would complicate the situation. We know that coastal communities need to be funded properly, and certainty for long-term investment in our coastal communities is important, especially if they are to believe to promise made during the 2016 referendum that there would be more fish available after Brexit, of which I remain sceptical. If that opportunity is to be realised, it is important that the EMMF funding provides additional capacity, especially in our smaller ports, to enable the landing and onward sale of more fish, following the promises that were made.

Will the Minister confirm what will replace the provisions that the SI omits? There is a requirement for an annual review meeting to be held with the Commission in order to review the regulations. Will that be replaced with an annual review meeting in the UK context? The Commission is right to participate in the programme’s monitoring committee. What oversight will take place if there is to be such a committee in the UK’s implementation of the regulations? What support will be implemented to replace the Commission’s ability to initiate technical assistance to those two funding streams?

There is a requirement to submit an ex-post evaluation to the Commission for each programme. Will that evaluation work still take place and, if so, what scrutiny of the effectiveness of funding will be available to Parliament or other bodies? The Commission is right to increase payments for member states with temporary budget difficulties. That is an interesting one, because it looks at how decisions will be made in relation to economic conditions in our coastal and rural communities, and whether that will be at the whim of any Government in power, or whether there will be more long-term certainty.

I suspect the Minister will say that this is all part of taking back control, and that the provisions will somehow slot into place, but we need to understand that the domestic arrangements for our coastal and rural communities will be properly resourced and, importantly, have proper scrutiny. My concern about these SIs and others is that we are only getting one jigsaw puzzle piece at a time in the hope that piecing them together will make the larger picture visible. At the moment, I am not certain that all the jigsaw pieces fit together or that there will be a picture visible at the end of it. I would be grateful if the Minister could provide clarification.

--- Later in debate ---

[Mr Goodwill]

Thank you, Mr Owen. Your constraints are welcome, but I will briefly say that the one important piece of business that we need to get over the line in this House is the withdrawal agreement. That is why many other measures are on ice and unable to make progress.

The hon. Member for Plymouth, Sutton and Devonport is absolutely right: there is a jigsaw of statutory instruments, and these are two important pieces that we need to put into place. He asked whether there will be gremlins, and whether mistakes will have been made. I can honestly state that that is not impossible, and if we spot gremlins and mistakes they need to be fixed as soon as possible. Yesterday, I said that we spotted that the European Commission was increasing the de minimis payment level for fishing communities, and we made that correction before the matter came to Committee.[Official Report, 29 March 2019, Vol. 657, c. 6MC.]

The hon. Gentleman talked about consultation. There is no statutory requirement to consult, because no changes are being made to the operation of the schemes. However, we carried out stakeholder engagement separately for the rural development, and maritime and fisheries elements of the SI, and I can go into that in some detail if he wishes.

That engagement targeted stakeholders on the approach of the broad set of common fisheries policy EU exit statutory instruments, which included those related to the European maritime and fisheries fund. It included meetings with the DEFRA-led external advisory group, and other separate meetings with the fishing industry and non-governmental organisations, involving key stakeholders from the fisheries sector, the food industry, and environmental non-governmental bodies.

Additionally, as the hon. Gentleman said, a 10-week consultation was conducted through the fisheries White Paper, which described future fisheries policy as well as the legislative approach taken in these instruments. Stakeholders were broadly supportive of the approach outlined in the White Paper, and did not raise concerns about the way in which funds are being delivered, which might have had a bearing on these two provisions.

Some of the stakeholders who were present in those meetings and engaged with the White Paper had an interest that went wider than England. For example, the Scottish Fishermen’s Federation is very keen to make progress on Brexit, unlike the Scottish National party, and NGOs. DEFRA was also in contact with the devolved Administrations, which confirmed that they are engaging with their own stakeholders about these statutory instruments.

In terms of rural development, on 25 September 2018 DEFRA met the Rural Payments Agency’s industry partnership group to update farming and land management stakeholders on the Government’s plans for EU exit. At that meeting, stakeholders were informed of the plans to make retained EU CAP legislation, and existing domestic CAP regulations, fully operable at the point of EU exit. That will enable DEFRA and the devolved Administrations to continue to deliver ongoing CAP pillar 1 and pillar 2 commitments to the agriculture sector in 2019 and beyond, in the event of a non-negotiated EU exit.

Stakeholders present at that meeting included the Tenant Farmers Association, the Country Land and Business Association, the Farming Community Network, the Institute of Agricultural Secretaries and Administrators, the British Institute of Agricultural Consultants, and the National Farmers Union. A subsequent meeting was held on 26 November 2018 between DEFRA and the Rural Payments Agency to update stakeholders further on legislative progress in preparing for EU exit.

The Welsh Government did not undertake a formal consultation on the statutory instruments, which officials considered to be technical in nature. However, stakeholders in Wales, including farming industry representatives, were invited to a workshop to learn about the approach, and they have been kept informed of progress by the Cabinet Secretary for Energy, Planning and Rural Affairs, and officials at the established EU exit stakeholder roundtable and legislation sub-groups. Chapter 8 of the Welsh Government document for the “Brexit and our land” consultation proposed an orderly exit from the rural development programme. That consultation received more than 12,000 responses, which are still being considered by Welsh Ministers.

The Scottish Government published a consultation in June 2018 entitled “Stability and simplicity”, which invited comments on Scottish Government proposals about dealing with the implications of leaving the common agricultural policy. It explained that the first stage would be to retain EU law in domestic legislation. The consultation closed on 15 August 2018, with 137 responses received. Overall, responders were broadly content for support to continue it in its current form to ensure a period of stability for the rural economy. The Scottish Government have been and continue to be in regular contact with stakeholders in Scotland regarding the implications of leaving the EU, and the effect of the statutory instruments is consistent with the proposal set out in that consultation. Last week, I spoke to Fergus Ewing on the phone, and I look forward to my first face-to-face meeting with him.

Let me turn to some of the other points raised by hon. Members. I was asked about continuity and the responsibilities of the Department for Business, Energy and Industrial Strategy, which has tabled a separate SI that addresses the remaining funds. I was asked who takes responsibility for the roles currently held by the Commission. As I said in my opening remarks, the relevant authorities will be the Secretary of State in England, Scottish Ministers in Scotland, Welsh Ministers in Wales, and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. The relevant authority for fisheries is the Secretary of State in England, with the role delivered by the Marine Management Organisation.

There was some talk about how we will fund taking over these roles, but that exposes a degree of misunderstanding because the European Commission does not deliver those projects in the UK, and they are delivered by the UK Government on behalf of the Commission. For example, the environmental schemes were delivered by Natural England and are now delivered by the Rural Payments Agency. There will be no change in the way that happens, and it is similar for many of the fishing schemes.

[Luke Pollard]

My point was about not the implementation, but the scrutiny and overview. The Commission provides an overview function, which is being removed by this SI. What resources are being given for the overview functions contained in the SI, rather than the implementation?

[Mr Goodwill]

Farmers and fishermen will understand that scrutiny and checks are carried out not by the European Commission but by my Department, in order to ensure that rules are complied with. That will not change, but we will still have our homework checked nationally by the National Audit Office, for example, which will take on that role, and the MMO and DEFRA will publish a quarterly report on fisheries funding.

I was asked whether there will be any cuts to agricultural funding and what guarantees the Government can give. The EU funds will be replaced—£137.4 million for the remainder of the programme period of the EMFF and between £400 million and £450 million a year from the EAFRD. Those figures depend on the euro-pound exchange rate. The EMFF figure is higher than the figure in the explanatory memorandum. It is a more accurate figure, based on the most recent returns from each of the intermediate bodies. The Treasury has guaranteed funding to cover all European structural and investment fund projects entered into before the end of 2020 for their full lifetime, and I hope the hon. Gentleman takes that reassurance on board.

The Government have pledged to continue to commit cash totalling the funds for farm support until the end of this Parliament, and that includes all funding provided for farm support under the EAFRD. On 10 December 2018, the Government committed to provide £37.2 million of extra funding for the UK seafood sector for projects approved during 2019 and 2020, so as to boost the industry as we become an independent coastal state.

The hon. Gentleman asked whether fisheries will be better or worse off. There will be four schemes after 2020, when the EMFF ends. Those will be comparable to the EMFF, but designed for the UK fishing industry, alongside the devolved Administrations, and that will be detailed in the next spending review. The fisheries White Paper, which was published in 2018, asked the industry for its opinion on future funding and how it wants the industry to be reformed. Our approach was always going to be long term, and it will not change in several months.

I hope I have answered hon. Members’ questions. If they have any specific questions about the detailed financial information and funding—I would not want to mislead the Committee by winging it—I would be more than happy to give them that information. Indeed, it would be great to see the Labour party’s long-term plans for funding agriculture and fisheries. There seems to be a bit of a vacuum, which might need funding before farmers consider how they will cast their vote at the next election.

These statutory instruments are required for the continued operation of rural development programmes and the maritime and fisheries programme, and they will ensure that farmers, land managers and fishers are able to be paid after we leave the EU.

Question put and agreed to.

Resolved,

That the Committee has considered the draft European Structural and Investment Funds Common Provisions (Amendment) (EU Exit) Regulations 2019.

Draft European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019

Resolved,

That the Committee has considered the draft European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019.—(Mr Goodwill.)