Power to provide for phasing out direct payments and delinked payments

Part of Agriculture Bill – in a Public Bill Committee at 3:45 pm on 1st November 2018.

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Photo of David Drew David Drew Shadow Minister (Environment, Food and Rural Affairs) 3:45 pm, 1st November 2018

I am not sure whether that helped or hindered. [Laughter.] We will move on.

Amendments 107 and 108 really try to tease out how this process is going to work in practice. I do want to say some things that are effectively for the stand part debate, but they link in directly with the clause. The issue is the way in which this phasing-out of direct payments and the de-linked payments will work. This is the clause that, if you like, executes that, so we need to look at it quite carefully.

A number of important issues arise, some of which have already been identified through the EFRA Committee, where I gather the Minister had quite a difficult time in answering questions about exactly how this process was going to work. It is important that he puts on the record again how he thinks it is going to work.

We are talking about considerable sums of money. We are talking about considerable sums of money. If three years’ worth of payments for a reasonably sized holding are wrapped up into one, we are talking about tens of thousands of pounds, so we have to get the accountability of the process right. The average direct payment in 2016 was £20,000, but 10% of recipients received something in the order of £6.5 billion. The bigger landholders have traditionally received quite large sums of money through the single area payment scheme, so the mechanism through which we make that change is very important. Multiplying that over seven years, which is what the transition period will be, we are talking about large sums of money. It would be useful to know that in accepting this use of public money, the Minister can justify the larger sums involved.

As I referred to, the policy statement explains how the tapering down will operate. It would be good to know that there will be some further explanation of what that means for particular holdings. Let us look at some figures from real holdings, rather than the rather abstract figure that we have at the moment. What can those lump sum payments be used for? One can understand a tenant needing to acquire property, or to have sufficient money to pay the rent. Will recipients be limited to some use or reuse of the land, or will they basically have a free choice about what they do with that money? My notes refer to Lib Dem pensions Ministers and Maseratis; I think Steve Webb will always regret having made that point.

I have quite a lot of interesting evidence from the Landworkers’ Alliance and from the Tenant Farmers Association. Those are the people who represent smaller farmers and new entrants. The Landworkers’ Alliance is keen to know what that lump sum can be used for, how much flexibility there will be in the purposes outlined in clause 1(1), and whether—dare I say it?—the payments will be linked to the productivity of the farm or farmland. Could farmers, for example, put that money into a community land trust and collectivise those payments? That is an interesting point, because there are those who do not want to farm a holding in isolation, but want to do so on a more collective basis. Is the scheme flexible enough to allow that to take place?

The Tenant Farmers Association has written to me to support the concept of de-linking, because it thinks that farmers should be able to retire. However, although the money is of significant assistance to farmers who wish to retire, the question of what subsequently happens to that money, and any bar on what they can do if they have taken the money, are of keen interest. Those farmers might want to re-invest that money in another holding, or enable another member of the family to take that money and start a new holding. These things matter, because people have to start planning their businesses now. I know that I have stretched the Chair’s patience by moving away from the amendments, but my comments are part of our stand part contribution. We are asking the Minister to spell out in a little more detail what, in practice, these de-linked payments are and are not available for, because people are going to have to plan for that.