My Lords, I thank the Minister for his introduction to these regulations. The noble Baroness, Lady Hayman of Ullock, set out her arguments extremely well and I agree with the comments she has made. While the Government gave sufficient notice of their intention to delink payments from the BPS, there are some issues which need probing. Having said that, I support this SI. I am grateful to the Wildlife and Countryside Link, ClientEarth and the NFU for their briefings. I have also read the Secondary Legislation Scrutiny Committee’s third report, which covers this issue.

The whole thrust of the Government’s funding for agriculture has been to move away from BPS and on to ELMS. I welcome this, as a system which rewards farmers simply for the amount of land they manage does little to encourage innovation and environmental schemes. However, I was slightly concerned to find in the Explanatory Memorandum that delinking payments from ownership of land could, in Defra’s words, mean that:

“There will be no requirement for the recipient to continue to have land”.

I understand that the delinked payment relates to activity that has been conducted in previous years, but if the farmer does not have or rent any land, how is he or she contributing to agriculture and thus entitled to a payment into the future? The SLSC asked Defra the rationale for delinking financial assistance from ownership or use of land. Defra’s answer covered phasing out the BPS and referred to the consultation conducted in 2018. However, I am afraid I did not feel that the question asked by the SLSC had really been answered.

The Rural Payments Agency is calculating the delinked payments, as it has all the information to hand on what farmers have been paid during the relevant years. I was somewhat dismayed to see that, should a mistake in calculating the delinked payments be made, Defra would recover any overpayments with interest. It is not so long ago that farmers were really struggling to make ends meet, due to the RPA being extremely tardy in making payments to farmers, sometimes with extremely lengthy delays. I do not remember that farmers received any interest on their income which was delayed by the RPA, despite it causing severe hardship in many cases. While it is important to taxpayers for overpayments to be recovered, the mistakes are likely to occur with the RPA calculating the payments, not with the farmers. A level playing field is needed for this new system to operate fairly.

I turn to the removal of cross-compliance, which has been covered very adequately by the noble Baroness, Lady Hayman. This had been clearly trailed in the agricultural transition plan. However, there are concerns that there could be regulatory gaps in this cross-compliance, including soil, water, air and landscapes with hedgerows and stone banks. All these are key elements of the rural environment and farmland. I am sure the Minister will tell the House that the Majority of rules under cross-compliance are already in place in UK law. However, to quote the Wildlife and Countryside Link:

“‘Majority’ is doing a lot of heavy lifting in this explanation”.

Defra believes that the code of practice for plant protection and the sustainable farming incentive are sufficient to protect cross-compliance, but many of these do not apply to all farmers. While many farmers will wish to comply voluntarily with the code of practice, there will be others for whom their economic situation may mean they choose to ignore compliance. As Defra was not able to produce a full transition plan on farm regulation on upholding regulatory protections, can the Minister please tell the House just how environmental protections will be secured, especially when hedgerows and stone banks are key habitats for those species of mammals, reptiles and birds that are at risk and on the list of possible biodiversity loss?

The removal of cross-compliance could lead to regulatory gaps in environmental protections that are presently ensured via several good agricultural environment conditions—GAEC. This includes GAEC 1, on the protection of watercourses, which requires farmers to protect green cover and bans the use of pesticides near watercourses; GAEC 4, on soil protection; and GAEC 7, on the protection of hedgerows, again requiring the protection of green cover and not cultivating or applying pesticides or fertilisers on land near hedgerows.

The strategic environmental assessment regulations—SEA—and the habitat regulations have a role in ensuring cross-compliance and should be rigorously adhered to. Can the Minister reassure the House that this will happen? Unlike Defra, DAERA in Northern Ireland ensures that an element of cross-compliance is maintained and that all environmental assessments have been completed, as DAERA is legally obliged to do. Can the Minister give assurance that Defra will follow suit and do the same?

Finally, when reading all the relevant documents—the EM and Defra’s response to the Secondary Legislation Scrutiny Committee—I got the overwhelming impression that Defra is trying to encourage farmers to take a lump sum and leave the land, thereby encouraging larger co-operatives and conglomerates. I hope I have the wrong impression, because it is the rich pattern of both large and smaller farms, many specialising in rare breeds or growing different crops, that makes the English countryside such a jewel in the crown of the UK. I hope the Minister can tell me that I have the wrong impression.