With this, it will be convenient to take:
Amendment 81, in clause 11, page 8, line 19, at end insert—
“(5) Before making regulations modifying legislation under this section, the Secretary of State must consult persons who, in his or her opinion, are representative of the sector to which the regulations will apply, or who may otherwise be affected.”
This amendment would ensure that there are checks and balances on the use of Ministerial powers in relation to rural development that would be granted under Clause 11.
It is good to be back after our week’s rest last week. Clause 11 concerns support for rural development and I am afraid, looking back at our previous deliberations, I must rerun some of the arguments we applied to previous clauses. The issue that runs through the Bill is what the Secretary of State may want to do with the powers, and the inadequate definition of that. In the present case, the Minister wants the powers to be subject to the negative resolution procedure, which we went over in some detail the week before last.
Clause 11 states that the Secretary of State “may by regulations modify”
“retained direct EU legislation relating to support for rural development” and
“subordinate legislation relating to that legislation.”
That is quite a broad power. Subsection (3) sets out some of the measures that the Secretary of State would be able to modify. It begins:
“In this section “retained direct EU legislation relating to support for rural development” includes in particular—” but it is not clear to me, and I should like the Minister’s view, whether the list of measures that follows is intended to be exhaustive, or whether the Secretary of State would be able to add to it. If he could add to it, and could use the powers in other ways, too, would the use of the negative procedure be appropriate in all circumstances, and not just the instances specified in the list? I should like the Minister to enable the Committee to understand the aim of the clause properly.
Amendment 79 relates to the Secretary of State’s power, under the clause, to simplify or improve the measures. The amendment would make the quite modest but important change of replacing the words “simplifying and improving” with
“making a change or changes which the Secretary of State believes to be necessary to”.
Would the hon. Lady rather give powers to the Secretary of State to complicate legislation or make it worse? It seems she is opening a door for that to happen.
I agree, yes. The change we are seeking in the amendment is to include “necessary”, because the Secretary of State has powers under the clause to make changes that he or she thinks would simplify or improve, but that is so subjective. The power that the Government seek would be through the negative procedure, so any change ought to be needed and not just used for things that the Secretary of State desires to do, for motives that we could not discern.
If the Secretary of State wishes to change the scheme in ways that today we can only guess at, we want to know more about how that power can be used. It could be said that it is very generous to allow the Secretary of State to make changes that, in his or her opinion, simplify or improve—he or she could say that just about any change was an improvement if he or she wanted to.
All amendment 79 seeks to do is to place a duty on the Secretary of State to ensure that any future changes are really needed: these measures will potentially have a significant impact on rural communities. The Secretary of State may decide to do nothing in this policy area, despite having the powers. People watching our deliberations will want to know an awful lot more about what will happen as a consequence of the clause.
I move on to amendment 80, which subjects regulations under the clause to the affirmative procedure—not the negative procedure, as the Secretary of State desires. We went over this point at length last time when we discussed the difference between the two processes. I do not see any benefit in going over all that again. It would be helpful if the Minister justified why he thinks the affirmative procedure is not appropriate in this instance.
As we discussed at some length previously, amendment 81 requires the Secretary of State to consult persons who,
“in his or her opinion, are representative of the sector to which the regulations will apply, or who may otherwise be affected.”
The Opposition believe that that is a necessary safeguard. We want the amendment on the face of the Bill because the clause affords such great power and discretion to the Secretary of State.
We know, because he said it last time, that the Minister has good intentions to consult, but the majority of consultations conducted by his Department take place because they are required in legislation. We talked about there being several hundred consultations—could he tell us how many of those come about because they are required in legislation? How many happen because the Department feels that it is the right thing to do?
There is no requirement at all in the clause to consult, but perhaps there ought to be. The Minister is asking us to rely just on his good will and the custom and practice that he says exists in the Department, but I question whether that is the case and whether the consultations that take place in the Department for Environment, Food and Rural Affairs are by and large required by legislation. They are often required for very good reasons and are an important safeguard that ought to apply when we are talking about support for rural development.
As we discussed last time and as is worth repeating, done correctly, consultation improves decision making and avoids costly mistakes and unintended consequences. Why does the Secretary of State believe it is not appropriate to require consultation in this case?
I am delighted to be back, Sir Roger. I spent much of last week in Northern Ireland and Ireland, and will no doubt be referring to that in Committee.
A couple of points are important to the clause. We need to understand that the Bill should encompass pillar 2 of the common agricultural policy. I am not sure whether it does, although this is the closest that we get to it. I am aware that in due course we will be debating my amendment 115, so I am not going to talk about timetables.
I want to talk about the substance of rural development: it is very important that we understand that although agriculture is crucial to rural development, it is not the totality of it. I would argue that the Government have not got a rural policy, and they need one. Things are going on in rural England, to which the Bill largely refers, that are not good at the moment. Anyone who has read the material that has come out about the relative decline of market towns should be very clear that we need to invest in those communities and the villages around them.
The worry is that the Government not only do not have a rural policy, but they have no one to speak on a rural policy. They dismissed all rural advocacy. I am not saying that new Labour was wonderful in this area, although we did have a good rural policy between 1999 and 2004—principally around the countryside White Paper of 2000 and what the £1 billion earmarked for rural areas implied. It made a significant difference. Sadly, that has all gone: we have lost the rural tsar and the Commission for Rural Communities. That worries me when it comes to this Bill; I do not know how pillar 2, which largely invested in rural communities through the CAP, transfers into the Bill.
I will be interested to hear what the Minister says. We are back again to the usual game of powers and duties. The Minister and Secretary of State do not need to do anything. They can make lots of warm noises about rural areas, but the reality is that unless we have vibrant rural areas, we will not have a vibrant farming sector because those are inextricably linked.
It is important that we get clarity from the Government on how pillar 2 is embedded in the Act, to make sure that rural areas are not forgotten. The Agriculture Bill is the nearest we will get to being able to talk about rural areas and their need for investment and support through the nature of farming—obviously, a lot of the people who get the benefit of rural development are farmers or farm businesses along the food chain.
Will the Minister clarify what guarantees there are in respect of pillar 2? It was never perfect, but a lot of the academic and support work that goes into rural areas came through that channel. We all know that that sort of funding is highly questionable at the moment. I hope the Government will make some real statements today about how they intend to fund rural development.
I want to begin by addressing the shadow Minister’s over-arching point about rural development and the pillar 2 scheme. I will respond to that specific question, which is not directly relevant to this clause but is picked up in other parts of the Bill.
Pillar 2 and pillar 1 are an EU construct: that distinction will no longer exist, but the policy objectives, currently delivered under pillar 2, will be delivered in the following ways. Clause 1(1) is all about the farmed environment and supporting farmers to farm in a more sustainable way and enhance the environment. The objectives delivered by the current countryside stewardship schemes and the previous entry level stewardship and higher level stewardship schemes, which account for the lion’s share of the funding in pillar 2, will be picked up in clause 1(1).
We had a long debate about the drafting protocols that we have always had in this country, and “may” is the wording that has been used in a number of Acts, including the Natural Environment and Rural Communities Act 2006 and a number of other Acts that Opposition Members are passionate about, such as the 1947 Act. We covered that in detail last week when we debated this issue.
I want to return to the point that clause 1(2) enables us to make grant aid and loans for farm productivity, and that picks up a number of the other components of the pillar 2 schemes—notably what we currently call countryside productivity schemes, which are all about supporting farmers to invest in new equipment.
Finally, as I also made clear in earlier debates, there will also be a shared prosperity fund with a rural dimension, which will pick up some of the other objectives currently delivered in pillar 2, such as the LEADER scheme. We have a clear plan, both in the Bill and the development of a shared prosperity fund, to deliver rural development and support.
This clause, in common with clauses 9 and 10, is all about the power to modify retained EU law. That is very important because our frustration at the moment with the bureaucracy around the current schemes is horrendous. The amendment seeks to change “simplifying” or “improving” the operation of the scheme to saying simply to make
“changes which the Secretary of State believes to be necessary”.
I am not sure that the hon. Lady’s amendment narrows the scope—it might, in fact, give more discretion to the Secretary of State. We are clear we want that power to be used to simplify and improve. A number of people have asked what “simplify” and “improve” mean. I think that is understood: it is to simplify and improve. As my right hon. Friend the Member for Scarborough and Whitby made clear, we would not want to make the situation worse and more complex.
It is not sufficient to say that people have asked what “simplify” and “improve” mean and then to say that they mean to simplify and improve. It might help if the Minister gave a couple of examples so that we have a clearer idea of what he intends.
Yes, I was coming on to do just that. One frustration at the moment is having LEADER groups up and down the country regularly complaining to me about the process that they have to go through in the application. The current regime has been made more onerous with the number of checks and the amount of paperwork required.
We have had problems in the past when people with relatively small grants have been told that they have to get three or four quotes for the job to be done. There is nothing wrong with that in principle but, if there is a slight modification to their plan and they have to make an adjustment to their investment, they have to go out to the market again and get a whole new set of quotes. They find that kind of bureaucracy deeply frustrating. This provision would enable us to improve that.
Another example comes from the countryside stewardship schemes. People get deeply frustrated about the amount of photographic evidence they have to send in; we have even had complaints that people have had to send in photographs of invisible boundaries because that is a requirement of the scheme rules. Again, that has all been done because of pressure from the IACS regime, as it is called: the integrated administration and control system, enforced by the EU. The provision would give us the ability to take off some of those rough edges.
At the moment, we get about £100 million of disallowance fines a year from the European Union, and a large amount of that is for trivial points around the way something is recorded. One example that I remember particularly well is that we ended up with fines from the European Union because it did not like how we had recorded how we checked whether companies were VAT registered; they were large companies with grants under the fruit and veg regime in that instance. We had checked that they were VAT registered. The check took place and was recorded through an email exchange, but the EU said we should have recorded it on a particular type of form.
That is the monstrous complexity and bureaucracy that bedevils all these schemes, and that is why it is right that we strike down that unnecessary bureaucracy and administration, as we seek to do in clause 9.
I was in the European Parliament for some time, and it strikes me that the way EU regulations are drafted makes the assumption that every farmer is a crook who is trying to dodge the system; in the UK, we have a long tradition of great honesty from the agricultural community in the way they work through these schemes.
I will answer that important point first. The regulations are drafted in a way that assumes guilt—often, it is worse than that. For example, farmers might have made a number of innocent and minor record-keeping errors and we might have chosen to write warning letters instead of imposing fines. Under the penalty matrix, the EU auditors take the view that there almost has to be a quota for guilt: if we were to be more lenient on some farmers because they had made innocent errors, we would have to apply higher penalties to other farmers, deeming them to be guilty. It is an EU process that is completely inconsistent with British notions of justice and the rule of law, but it is a system that we have had to endure for many years.
People watching this will be astonished that we are being asked to assume that one group within society is somehow to be treated differently when they are in receipt of public funds, because they have a tradition of honour and not being misleading and should be viewed differently from other people who are getting support. There will have to be rigorous procedures around all this. The Government are in for a huge shock if they think that the scrutiny and pressure from the EU will not be replaced by pressure from constituents and taxpayers.
That was not my point at all, and it was not my right hon. Friend’s point. The point was that we should allow farmers and other landowners to be treated the same as everybody else; apply the principles of justice and rule of law that we have in this country; and not have an arbitrary system of penalties coming from the EU.
To come back to my point about the areas in which we can improve, clause 9 will be an important area for some of our evidence requirements and rules on deadlines and dates; we would be able to show more flexibility. The powers in clause 11 will probably be more modest, but they enable us to sort out some of that unnecessary administration—on the LEADER scheme, in particular. They would enable us, for instance, to vary the length of agreements when we thought that was appropriate, particularly if we wanted to extend and roll forward some of the legacy agreements for a few years.
The problem with the LEADER scheme is that it is pan-European. With exit from the EU, will there be the opportunity to allow institutions in this place, and communities, to indulge themselves in a pan-European sense because of the nature of that rural development? We have always learned from other parts of Europe and they have learned from us. Will that be possible or will this expenditure be very constrained?
The LEADER scheme is probably the most devolved of all the EU schemes, in that we literally have local action groups—LAGs, as they are called—which are local committees that appraise individual local projects for small grants. The scheme does not require a pan-European architecture; it has just ended up that way. In fact, those types of local grants, which are often administered or certainly appraised locally, lend themselves to a more national scheme.
I hear what the Minister says, and that will be all right from the UK’s perspective, but we will be dealing with countries that are subject to the CAP and continuing LEADER obligations. Do the Government intend to negotiate with the EU post March to ensure that those cross-country arrangements can continue? Otherwise we will be precluded. Whatever money we choose to put into a new LEADER, we will not be part of LEADER, so what is the Government’s plan?
Our plan is to leave the European Union, which means leaving the common agricultural policy and LEADER, but also putting in place superior schemes that we will design nationally. That is what we intend to do.
If I can take the Minister back to his comments about the duration of existing schemes, perhaps he can take this opportunity to inform the Committee that he will have the powers to continue to pay under the existing higher-level, entry-level and countryside stewardship schemes, which in many cases run for up to 10 years. As I understand it, we had commitments from the Treasury that that amount of money would continue to be made available. Will he confirm that he will have the power to ensure that those existing agreements will be honoured?
That is a very important point. I can absolutely confirm that existing schemes will be honoured for the lifetime of those projects. I know that we will probably come to this when we consider later amendments, but the grant agreements between the Government and individuals will be honoured even after we leave the European Union. The Bill, together with the European Union (Withdrawal) Act 2018, gives us the power to bring across retained EU law and to continue to make payments under it.
Yesterday morning, I met an organic farmer in my constituency. His is quite a small farm, and his question about the stewardship scheme, and others through which he receives payment, was whether size will be important when determining who receives money and how. LEADER+ and other types of support system are important, but there is an anxiety that the small and beautiful smallholding, as it were, is likely to miss out as people look to scale up. Can my hon. Friend assure me that there will be a range of support within the new system that he proposes, irrespective of the size of an operation?
Yes, I can. We discussed this when we touched on clause 1, which is about the way in which we will support people. We heard representations from people engaged in small projects, such as agroecology projects, about whether they could have support. They are often not entitled to support under existing schemes, but I absolutely said that clause 1 will enable us to support those. Indeed, this is an area that we are looking at closely. Clause 1(2) gives us the power to award grants to some of those smaller businesses, including new entrants.
Following the question from my hon. Friend the Member for Ludlow, the Minister mentioned that the schemes and their financing will continue. Can he reassure me and colleagues from across the various borders that the devolved nations will also continue to have the money over the period of the schemes?
Yes. The devolved nations have that retained EU law through the EU withdrawal Act. We have discussed previously that Scotland requires some kind of clause to be able to continue to make payments after we leave the European Union, but that is relatively easy to remedy. A combination of this Bill and the EU withdrawal Act gives us the power right across the UK to honour all those commitments that have been entered into.
Returning to clause 11, the hon. Member for Darlington asked whether subsection (3) is an exhaustive list or whether we can add to it. It is not exhaustive but it covers the bulk of the regulations. I will explain why we drafted it in that way. The regulations listed under subsection (3) are effectively all the current in-force rural development regulations. However, we have kept open the option to broaden the list slightly because we have some legacy schemes—older agreements under previous countryside stewardship or productivity EU schemes that are no longer technically in force—and we might still want the ability to modify and tweak them. The best way to describe it is to say that the list is not exhaustive, but is close to being exhaustive. It covers all the regulations currently in force, but we need just a slight amount of room to capture the previous legacy schemes that are no longer in force.
The problem with EU regulations is that they are often chopped and changed all the time. We can capture the snapshot of what is there at the moment, but some of these regulations will have repealed and replaced elements of previous ones, but often not all elements. This is a complex area. Often there will be a grant agreement in place where there are binding requirements between the two, but where the initial regulation under which it was made has lapsed and, sometimes, been partially—but not fully—replaced by new ones. There is a constant churn of EU regulations, so we have tried to capture the vast majority of those in force now, but we need that movement to cover areas that might have been missed.
Amendment 80 proposes that regulations under this clause should be made under the affirmative rather than the negative resolution procedure. We discussed this issue in debates on earlier clauses where we are seeking to modify retained EU law. We are talking about technical changes and improvements to legacy schemes that are going to be wound down anyway, and it is not appropriate to have lots of affirmative resolutions for that type of change. We envisage making a single sweep of changes to improve and simplify these schemes in one point, and that would be the end of it.
However, I can give the hon. Lady some reassurance on her amendment 81. As I explained earlier in relation to a similar amendment, DEFRA needs no encouragement to hold consultations. We love consultations. My constant refrain to officials is: “Are we sure we really need a consultation on this?” We often hold consultations where we have just a couple of dozen people who can bear to respond to them. While we do not need to put this requirement in legislation—the only legislative requirement for consultation in the DEFRA sphere, for obviously good reason, is for food safety, which is in the Food Safety Act 1990—I can give her an undertaking that, before making changes to the scheme under the powers of clause 11, we would hold a consultation to ensure that all relevant parties could be engaged.
I have such concerns about this, because it could become a free-for-all, where the Government can do what on earth they like. We cannot sit back and allow that to happen. Minette Batters said in evidence that she did not wish this kind of support to become politicised. I do not blame her for that, and I would not wish that in her position either, but the fact is that it is going to be politicised, and the Government have no idea what they want to do. I am not accusing the Government of having some sort of sneaky plan up their sleeve that they wish to inflict on rural communities, but I do not think they know what they want to do. They have therefore decided to come up with this clause, to give themselves as much flexibility as possible. I accept the Minister’s undertaking on consultation. I take him at his word and will be holding him to that, but the Government have not been clear. I do not think they know what they want to do. The list is not exhaustive, as we would have hoped.
I will not push each amendment to a vote—aspects of this issue will undoubtedly be dealt with in the House of Lords—but we have genuine concerns. We are not just trying to make a point; it is a real problem for Parliament and, potentially, rural communities that the Secretary of State is being allowed these kinds of sweeping powers under an inadequate procedure, which cuts out parliamentary scrutiny and Members’ ability to voice their concerns. I will therefore put amendment 80 to a vote.
“(3A) Regulations under this section must make provision for any schemes entered into under the retained direct EU legislation relating to support for rural development prior to the date of enactment of this Act to continue until those schemes come to an end in accordance with their specific terms.”
This amendment would ensure that existing agri-environment and rural development schemes, and those entered into prior to the Agriculture Act coming into force, remain in place and continue to operate.
The Minister will be pleased to know that I will be a bit quicker on this amendment, which is about timing. Although we have debated the substantive meaning of the changes to rural development, the amendment deals with how they will work in practice, which we are still a little confused about. Let us see if we can tease out from the Minister at least whether existing schemes will continue.
The amendment is clear: it asks what happens to the retained direct EU legislation on rural development from before the Act and how schemes can continue when people have signed up. Farmers are affected, but so are communities, because they may be part of the LEADER scheme, which the Minister has intimated will be no more. There may be a new scheme, but it certainly will not be LEADER unless we can have some relationship with other European countries. The amendment is about the functionality of these schemes. Many of us know them and feel strongly that they have considerable merit. The question is how we take them forward post-Brexit—if that happens.
Many of the schemes have gone on for a long time; they should have a proper run down, or perhaps they can be reinvented in a different guise. Farmers have made heavy investment in time and money in the existing arrangements, but it is important that rural communities also have certainty and security in the knowledge of where those schemes will go. It would be unfair if Ministers were to force the end of the schemes before they would have ended anyway—they are all time limited—and, more particularly, the existing agreements must be met with the full benefit of money and support from DEFRA and other agencies that have been crucial to the schemes coming about. The amendment is designed to maintain continuity, so we have genuine knowledge. People have invested a great deal of their time, and they are very good schemes.
We have done the work on how to develop a revitalised rural community. I hope the Minister looks favourably on the amendment. It may be that today is not the time, but we will be happy to consider a Government amendment, either on Report or in the other place. If the Minister is not prepared to give us that assurance, what assurance will he give to farmers and communities that want the schemes to continue? The worst thing possible would be if people were to start dropping out of them now. That would be a total waste of money. It is important, because we need to know where these types of scheme will fit in the transition scheme. Will there be an understanding that money will be available to keep the schemes going for a period of time, as intended?
I am grateful for the opportunity to clarify our intentions regarding the current schemes—the higher level and the entry level stewardship schemes—and, more importantly, some of the countryside stewardship schemes that are being entered into now. My hon. Friend the Member for Ludlow also spoke about the importance of continuity for existing schemes. I am grateful for the opportunity to clarify that the UK Government have already guaranteed that all pillar two agreements signed before
The amendment is unnecessary, because the current regulations do not in fact set an end date in EU law. Had the EU regulations stipulated a cut-off point for agreements, of course we would have needed to address that in the clause, but they do not. We have agreements that are binding under the public sector grant agreements protocols that we have in government. Effectively, that is akin to contract law: we have entered into public sector grant agreements with agreement holders, and that is legally binding for the duration of those agreements.
The underpinning EU regulations set out only limited circumstances in which we could terminate an agreement. First, and quite reasonably, the agreement can be terminated if there is a massive breach of the agreement—for instance, if the agreement holder is not doing any of the things that they said they would. Secondly, if there is a transfer of land and the agreement does not go with the new owner of the land or they do not agree to abide by the agreement, for similar reasons it is right to discontinue the agreement. Thirdly, an agreement can be terminated early by mutual agreement—that is, if the parties choose to do so. That is important in terms of transition to the new order and the new types of schemes.
To answer the shadow Minister’s question about how we envisage moving from these legacy schemes to the new schemes, it may be that in the later years of some of these schemes, agreement holders opt voluntarily to convert their agreement into one of the new environmental land management agreements. They will not have to do so if they choose not to: the agreement that they have will be legally binding. However, if they were to choose to convert their agreement into an environmental land management scheme and both parties thought that was the right thing to do, we would be able to have that option.
I hope that I have reassured the hon. Gentleman. Although he highlights an important point, our intentions are clearly set out, and we are already bound by the public sector grant agreements. The amendment is therefore unnecessary and I hope that he will withdraw it.
I will not press the amendment to a vote—obviously, that would be nonsensical—but I am worried about the tenor of what the Minister is saying. It is easy to find fault with the existing arrangements, but we have to give people confidence that what they have been doing is right. The biggest hurdle arises when the schemes are coming to an end. No one is going to invest time and money then, so ending the schemes early is quite possible, not because farmers and communities necessarily want them to end early, but because they see no future in them.
We need to give a great deal of encouragement to those who have entered into these schemes. They are more than farming schemes: they are to do with the development of our rural communities. It is vital that the Government get the message that the sooner they say what will replace LEADER in particular—all of us with rural constituencies could hold up LEADER as wonderful practice—the better. The sooner we can get some clarity about what will replace it and the degree to which it will allow flexibility to work with other communities and countries, the better for all concerned. I beg to ask leave to withdraw the amendment.