Provision relating to Northern Ireland

Agriculture Bill – in a Public Bill Committee at 3:00 pm on 15th November 2018.

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Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 3:00 pm, 15th November 2018

I beg to move amendment 28, in schedule 4, page 44, line 39, leave out “paragraph 2” and insert “paragraphs 2 to 2C”.

This amendment is consequential on Amendments 36 to 38 which insert three new paragraphs into Part 1 of Schedule 4. The amendment provides that expressions explained or defined in paragraph 1 also apply in relation to those new paragraphs.

Photo of Phil Wilson Phil Wilson Labour, Sedgefield

With this it will be convenient to discuss Government amendments 29 to 40.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

This set of amendments, like previous ones, is largely about correcting drafting errors or making technical changes to reflect issues that we identified throughout the passage of the main part of the Bill.

Amendments 29 and 30 provide DAERA with powers to modify voluntary redistributive payments and areas of natural constraint payments, neither of which are currently made in Northern Ireland. Amendments 31, 32 and 38 define retained direct EU legislation related to the coupled support scheme and provide the option to continue and simplify or improve that scheme. That scheme is also not currently used in Northern Ireland, but the amendments ensure that a future Minister is not restricted on their choice of policy scheme.

Amendment 35 makes it clear that changes to basic payments—to improve or simplify—can include the continuation of taking steps towards reaching a flat rate of payment. Amendment 37 ensures that DAERA can continue direct payments after 2020 by enabling it to set ceilings after that scheme year. Amendment 36 allows DAERA to reduce the direct payments ceiling by up to 15% for Northern Ireland in 2020. Northern Ireland at the moment does not modulate at all between pillars 1 and 2.

All those amendments have been requested by DAERA because many of the policies are not ones that are used now—they are options in the CAP that have not been taken up under the Northern Ireland schemes. DAERA believes the powers to be permissive and that it is important for it to retain the option should a new Northern Ireland Administration be formed and decide that they want to take up those options. This is a sensible set of amendments to ensure that a future Administration in Northern Ireland will have the powers to pursue their policy choices.

Photo of David Drew David Drew Shadow Minister (Environment, Food and Rural Affairs)

I will speak to the amendments, although my comments will relate more directly to schedule 4 generally. I might as well put the two together.

I do not have any particular problems with the Government amendments as such. They are just tidying-up amendments. However, as I have on previous occasions, I will raise at least an amber flag—we are still on boxes—about the situation in Northern Ireland. There are two aspects. First, Northern Ireland has no Administration, so the schedule has been agreed not with elected politicians but with DAERA itself—the officials. That might be because we have to face up to the fact that there is no Administration, but that poses the question of what will happen if and when there is an Administration. They will inevitably want to revisit the schedule, because they will want some political input.

Secondly, Northern Ireland is clearly different. This morning, people have spent rather a long time trying to prove the point that Northern Ireland is different—it has our one land border with an EU country, the Republic. Therefore, whatever we do in the Agriculture Bill is contingent on what that relationship entails. I have talked before about Baileys liqueur. The milk used in it crosses the border seven times. Joe Healy, the president of the Irish Farmers’ Association, kindly told me that interesting fact—it is good for pub quizzes. There are all manner of other movements, such as southern pigs being slaughtered in northern abattoirs, or northern lambs being slaughtered and sold in the south. Such movements of animals and goods are integral to the way in which trade across the whole of that island has evolved since the Good Friday peace agreement, and given that we are both members of the EU and so have not had any borders.

I know—as the Minister will no doubt confirm—that there are absolutely no plans at all to put in a physical border. That is the reality of the situation. If there are to be such plans, they will have to made very quickly, because DAERA has confirmed that it has no plans to put in a physical border. The best that it could come up with at this short notice is more inspections, wherever they might take place.

I am asking the Minister what clarity there is about passing a schedule that has no political input because, sadly, there is no Administration in Belfast. What are the safeguards regarding whatever comes out of today’s EU agreement? Many of us would actually describe it as a non-agreement, because it is highly unlikely that this House will agree to the Prime Minister’s proposals—but that is speculation and for the future. More particularly, we must look at how to address the possibility of no agreement or an agreement that threatens the current freedom of movement between Northern Ireland and the Republic.

All the politicians I saw in the south thought a deal had been done two months ago—clearly, that deal has come back. They sought assurance that a customs union would be an absolute given, let alone some form of access to the single market. It will be interesting to know how that is affected by this schedule. That was the case across the five parties I met in the Republic. Speaking to the DUP here is slightly different; its members have made clear that this schedule does not have their consent. They feel strongly that they want to set their own agriculture policy, rather like Scotland, and they have not agreed to any reduction in direct payments because they do not sign up to the transition agreement. That is confirmed—dare I say it—by the officials, as I have said before in Committee.

We have a strange situation where officials cannot sign up to the schedule because they believe it is political, and the politicians say they do not want to sign up to it, yet the schedule implies that Northern Ireland has signed up to it. It is a confusing picture, to put it mildly. The schedule matters, because this is law—it could subsequently be changed or it could be subject to legal recourse if people feel that they have been done down. It is about money; both the politicians and the officials I have talked to say that they are not prepared to accept anything less than the £300 million that they had in direct payments, £195 million of which was in basic payments. That is out under the proposed scheme, which would move us towards environmental support.

My feeling and argument is that we have a differentiated agricultural policy coming into place in the United Kingdom. That will affect farmers here, in Northern Ireland, in Scotland and in Wales. We must know how this schedule will matter—its reality on the ground, not its theoretical legislative input as it is discussed in Committee. How will it operate on the ground? All the evidence I have is that Northern Ireland is not where we are in England. That is fine for Northern Ireland to say, but that has an impact on England. I am sure that English farmers will be very unhappy when other parts of the United Kingdom do completely different things to that which is expected of them. We can argue that we want them to move towards environmental support—that is the right thing to do—but there cannot be such a different system in one or more parts of the United Kingdom. That undermines what is happening in this part of the United Kingdom.

In the Northern Ireland Affairs Committee, all manner of questions have been raised by contributors to the various sessions it has had on the future of agriculture. Of course, in Northern Ireland it is a huge and important industry; it is not in England. One reads what they say and takes very careful note. People are very unhappy with the uncertainty; they are unhappy with some implications for land ownership, particularly tenancy arrangements. Hopefully, later in the Bill we will look at what security could be put in place for tenancy arrangements. People talk about the uncertainty they feel not just in general, but about how certain sectors will operate in future. They have had access to Michel Barnier to look at some of the agricultural issues, but they argue that they need more certainty.

Schedule 4 is fine in the sense that it has to be there. It puts in place a form of agriculture for Northern Ireland, but it has not been democratically agreed and it is not likely to withstand the test of time. I would be interested to know how the Minister intends to take this forward, if and when there is an Administration in Belfast, to see what degree of flexibility there is from the schedule as drafted.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 3:15 pm, 15th November 2018

I begin by paying tribute to the officials in the Department of Agriculture, Environment and Rural Affairs, which has some talented people working on its agriculture team. No one doubts that they face a difficult challenge. With all the changes we are going through as a country, they do not have an elected, political Administration in place. They are very conscious of that and, for that reason, they have been cautious in the powers they seek under this schedule.

It is also important to note that DAERA has not just sat back and decided that it can do nothing. In fact, DAERA produced the first report from any UK Administration setting out their broad thoughts on future policy. That report was drafted by stakeholders, bringing together the farming industry and others. DAERA shared a document with us that reflected the views that came from the farming industry, environmental non-governmental organisations and others about what the future direction might be. Even in the absence of that political Administration, it fed into this process with a paper that set out the views of stakeholders, to ensure that the interests of Northern Ireland farmers and agriculture were not overlooked.

Amendment 37 will ensure that DAERA is able to set ceilings to continue to make basic payment scheme payments after 2020. It is important to recognise how it has approached this. DAERA asked us to give it the powers to continue to make the basic payment scheme and existing legacy pillar 2 schemes and to take a power to modify those. It has not decided how it might use that power to modify, but if a new Administration came in who wanted to modify that, it has been clear that that future Administration should have that power. Crucially, it was clear that DAERA did not feel it appropriate for an unelected Administration and officials trying to steady the ship during this challenging period to take the powers outlined in clause 1, because those powers are clear about a direction of travel and a switch to a payment for public goods, rather than the existing direct payment scheme. Therefore, it thought it would be inappropriate to take such a power without there being an elected Administration.

It is equally important to note that DAERA chose not to take the powers to have a transition period and phase out direct payments, for the reasonable reason that that would be a political decision that a future Administration must take. Its job, as a DAERA administration without a political Administration, is to ensure that it can provide continuity and that whatever is done is future-proofed, so that a future Administration may take over.

In essence, DAERA intends to carry on with the scheme that we have now and not make any changes at all, and to await a future political Administration, who may then take decisions about the future direction of Northern Ireland policy. I believe that officials in DAERA behaved impeccably to protect the interests of Northern Ireland farmers, to ensure that they continue to make payments, that officials have the power to set ceilings and also to future-proof the policy, so that there are some initial powers to assist.

Photo of Deidre Brock Deidre Brock Shadow SNP Spokesperson (Devolved Government Relations), Shadow SNP Spokesperson (Environment and Rural Affairs), Shadow SNP Spokesperson (Wales)

I am curious about how the accounts for Northern Ireland agricultural funding are signed off in the absence of Ministers. Is that included in the schedule or an aspect of it? What sort of public accountability will there be?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

We already have an organisation called the UK co-ordinating body, which is hosted by the Rural Payments Agency and works in collaboration with all the devolved Administrations on auditing and accounting issues under those EU schemes. We envisage that a body such as that would continue anyway, but there are already established principles in place within the UK civil service. It is important to recognise that, while we have different devolved Administrations, we have one civil service for the entire UK; civil servants working in the Scottish Government are as likely to get a transfer to work in a Whitehall Department as anywhere else. We have a single civil service, which is important to give some cohesion to our system.

I conclude by saying that this is an important schedule to include. In my view, DAERA has taken the correct approach of ensuring that it can continue to make payments to its farmers, while putting some powers in place for a future Administration. The answer to the shadow Minister’s question is that, when there is another Administration, if they have bolder ambitions to change and transform their policy in the way we have outlined in clause 1 and that Wales has chosen to adopt on an interim basis, it will be open to them to introduce legislation through the Northern Ireland Assembly to give effect to their specific proposals.

Photo of David Drew David Drew Shadow Minister (Environment, Food and Rural Affairs)

The Minister has been very candid there in saying that, effectively, Northern Ireland stays as it is at the moment. That would be fine if we knew an Administration were coming in before the transition arrangements for our own relationship with the EU come to an end, but potentially—in the worst-case scenario—there will be no Administration in Belfast for a considerable period. That would mean the agricultural system staying in place for as long as there was no Administration. We have, as I have always feared, an increasing focus on England as the basis of this Bill. Scotland does not have a schedule and will do its own thing; Wales will follow England, but may choose to do so in quite a slow manner; and Northern Ireland will stay the same until politicians decide to pick up the mantle again.

While the direction of travel toward environmental support is quite right, it is a bit worrying as we have a single market within the United Kingdom: if we are subsidising sheep farmers in Northern Ireland by direct payments, sheep farmers in Cumbria, who will not be receiving that support, will begin to worry. I know the argument is that they can pick up support.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I understand the point the hon. Gentleman is making, but he has to understand a number of points here. First, the basic payment scheme single farm payment is already de-linked from production. Nobody has to produce anything on the land to qualify for that payment. It is a de-linked payment—a subsidy for owning or controlling land.

Secondly, the hon. Gentleman must recognise that in our provisions for England we have set out a transition period that will run for seven years and it is our intention gradually to phase down the direct payments. That will not be an overnight change, but a gradual divergence. I hope that at some point within that seven-year transition period we will at least see a new Administration in Northern Ireland, because in the absence of such an Administration we will have many more problems besides the fact that they have not been able to update their agricultural policy.

Finally, in the context of Northern Ireland specifically, it might well be the case that a future Administration choose to keep a closer eye than will other parts of the UK on future policy in the Republic of Ireland through the common agricultural policy, for the very reasons the hon. Gentleman pointed out: Northern Ireland shares a land border with the Republic of Ireland and there is a lot of transfer of goods across that border. Therefore, ensuring that there is some recognition of the type of farm support in the Irish Republic is more important for farmers in Northern Ireland than for those in other parts of the UK.

Photo of David Drew David Drew Shadow Minister (Environment, Food and Rural Affairs)

Again, I find that very instructive, and I do not disagree with anything the Minister says, but this is more and more a curate’s egg. The problem is that we are dependent upon an Administration being in place—at some time—who will follow where we are going in England; otherwise, there will be issues of conflict.

The Minister is right that payment is de-linked, but not to the extent that farmers in Northern Ireland will receive basic payments for whatever we choose, or whatever they choose, or whatever DAERA chooses, or whether that is—in a sense—a form of direct rule. We could impose them, but that would go back to the fact that, effectively, there was an imposition on a part of the United Kingdom by the UK Government into a territorial Administration. It opens up a whole can of worms in that respect.

There is no easy solution to this situation. We need an Administration back in Belfast. Again, however, what about the timescale? The Minister is right about the transitional arrangement, but he also said, of course, as was confirmed to me, that there is no transitional arrangement. There is no mechanism by which the payment system can be changed, because that is political. So, we have clearly laid out here—not so much in the schedule as in what the Minister has said—a differentiated agricultural system as between England and Northern Ireland.

Obviously, we have had the Godfray report this week, which we will no doubt revisit. That is because one of the points it makes about conditions within the cattle market, with cattle moving between auction marts and sell-on for very small sums of money, might be something we have to take account of in the relationship between Northern Ireland and the rest of the United Kingdom.

The Minister has to be aware of that. We cannot change the schedule, because there is no opportunity to do so, but I hope that he at least talks to the Democratic Unionist party, which has some clear views on what should be agreed. Again, the DUP is not in power in Northern Ireland, but its Members are here and they have some strong views. The Government seem to have worked with and through the DUP, or they did until today, and it might have been quite useful to have had a DUP Member on this Committee, given that Scotland and Wales are represented. We could have done with one of the DUP Members being here to clarify exactly what the DUP was prepared to accept in the schedule. As it is, we have to rely on what we have been told and—essentially—on what we speculate, but this is a difficult situation and one that the Bill might not help, but could make worse. We will have to see.

I have little more to say. Obviously, we will not demand that the schedule be withdrawn, because that would be completely counterproductive. However, I worry about where we have got to and I think that this issue will be one we come back to on Report and—dare I say it?—it will be looked at in the other place, which will carefully consider how the different territorial Administrations are affected by their own choices regarding the devolved matter of agriculture in relation to England.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 3:30 pm, 15th November 2018

I do not have a great deal more to add. I think that I have explained the rationale for DAERA requesting the powers it has requested, and this has been an interesting debate on that matter. Obviously, in the long term, the solution is to get a political Administration back up and running in Northern Ireland, but sadly that is not an issue we can address through consideration of the Bill.

Amendment 28 agreed to.

Amendments made: Amendment 29, page 45, line 5 [Schedule 4], leave out paragraph (a) and insert—

(a) a basic payment for farmers (see Chapter 1 of Title III),”

This amendment and Amendment 30 make clear that references in paragraphs 2 to 2B of Schedule 4 to the “basic payment scheme” include arrangements (if any) for direct payments to include a voluntary redistributive payment or payment for areas with natural constraints. Neither of these payments is currently made in Northern Ireland, but the amendments mean that if they are made in future years, the power to make provision for the purpose of simplifying or improving the operation of the basic payment scheme could include provision about these payments.

Amendment 30, page 45, line 8 [Schedule 4], at end insert—

( ) if a decision to make such payments is taken, a redistributive payment (see Chapter 2 of Title III), and

( ) if provision under paragraph 2(1)(b) is made, a payment for areas with natural constraints.”

See the Explanatory Statement for Amendment 29.

Amendment 31, page 45, line 8 [Schedule 4], at end insert—

‘( ) The “coupled support scheme” is the voluntary coupled support scheme under the Direct Payments Regulation as the Regulation applies in relation to Northern Ireland (see Chapter 1 of Title IV of the Regulation).”

This amendment defines “coupled support scheme” which is the subject of Amendment 38.

Amendment 32, page 45, line 18 [Schedule 4], at end insert—

‘( ) The “legislation governing the coupled support scheme” is—

(a) the following retained direct EU legislation—

(i) the Direct Payments Regulation so far as relating to the coupled support scheme,

(ii) any Council Delegated Regulation, or Commission Delegated Regulation, made under the Direct Payments Regulation and so far as relating to the coupled support scheme,

(iii) any other retained direct EU legislation which relates to the coupled support scheme, and

(b) any subordinate legislation relating to retained direct EU legislation falling within paragraph (a).”

This amendment defines “legislation governing the coupled support scheme” which is the subject of Amendment 38.

Amendment 33, page 45, line 19 [Schedule 4], leave out sub-paragraph (4)

This amendment removes the definition of “direct payment” because it is not needed: the only references to direct payments in paragraphs 2 to 2B refer to them as being payments under the basic payment scheme.

Amendment 34, page 45, line 32 [Schedule 4], leave out “II” and insert “III”

This amendment corrects a cross reference to the Direct Payments Regulation.

Amendment 35, page 45, line 40 [Schedule 4], at end insert

“(b) ensuring all payment entitlements, or all payment entitlements within a region, have, or over a period of time reach or move towards, a uniform unit value.

In paragraph (b) the reference to “payment entitlements” has the same meaning as in the legislation governing the basic payment scheme.”

This amendment makes clear that changes to the basic payment scheme made in order to improve or simplify the scheme can include making changes that will continue the taking of steps towards reaching a flat rate of payment.

Amendment 36, page 45, line 42 [Schedule 4], at end insert—

2A (1) DAERA may by regulations make provision for and in connection with reducing the national and net direct payments ceilings for Northern Ireland that would otherwise apply in 2020 by up to 15%.

(2) For this purpose—

the “national direct payments ceiling for Northern Ireland” is the sum representing the share allocated to Northern Ireland of the amount specified for the United Kingdom in Annex II of the Direct Payments Regulation (table of national ceilings);

the “net direct payments ceiling for Northern Ireland” is the sum representing the share allocated to Northern Ireland of the amount specified for the United Kingdom in Annex III of the Direct Payments Regulation (table of net ceilings).

(3) Regulations under this paragraph cannot be made after the end of 2020.

(4) Regulations under this paragraph are subject to affirmative resolution procedure.”

The new paragraph 2A inserted by this amendment makes the equivalent provision for Northern Ireland as that made by NC2 for England.

Amendment 37, page 45, line 42 [Schedule 4], at end insert—

2B (1) DAERA may by regulations modify legislation governing the basic payment scheme to make provision for and in connection with securing that the basic payment scheme continues to operate in relation to Northern Ireland for one or more years beyond 2020.

(2) The power conferred by sub-paragraph (1) includes power to provide for the direct payments ceiling for Northern Ireland for any relevant year to be determined, in a specified manner, by DAERA.

(3) Provision made by virtue of sub-paragraph (2)—

(a) must require a determination in respect of a relevant year to be published as soon as practicable after it has been made, and

(b) may confer functions on any person in connection with, or with the making of, a determination in respect of a relevant year.

(4) In this paragraph—

“the direct payments ceiling for Northern Ireland” is the national ceiling of the kind referred to in Article 6 of the Direct Payments Regulation that is applicable in relation to Northern Ireland for any relevant year;

“relevant year” means a year in respect of which direct payments under the basic payment scheme fall, as a result of provision under sub-paragraph (1), to be made in relation to Northern Ireland;

“specified” means specified in regulations under this paragraph.

(5) Regulations under this paragraph are subject to affirmative resolution procedure.”

The new paragraph 2B inserted by this amendment makes the equivalent provision for Northern Ireland as that made by NC3 for England.

Amendment 38, page 45, line 42 [Schedule 4], at end insert—

2C (1) DAERA may by regulations modify legislation governing the coupled support scheme for or in connection with—

(a) making provision for the continuation, in relation to Northern Ireland, of the option to make payments under the scheme after any time at which, without the provision, the option would terminate;

(b) making changes DAERA considers will simplify or improve the scheme so far as it operates, or could be operated, in relation to Northern Ireland.

(2) Regulations under this paragraph are subject to affirmative resolution procedure.”

The new paragraph 2C inserted by this amendment provides a power to make regulations modifying the Direct Payments Regulation and connected legislation, as it applies in Northern Ireland and so far as relating to the coupled support scheme, so that the option to operate a voluntary coupled support scheme may be continued into the future and the scheme simplified or improved.

Amendment 39, page 46, line 16 [Schedule 4], at end insert “(unless section 29(4A) applies)”

See the Explanatory Statement for Amendment 2.

Amendment 40, page 54, line 15 [Schedule 4], at end insert “(unless section 29(4A) applies)”—(George Eustice.)

See the Explanatory Statement for Amendment 2.

Schedule 4, as amended, agreed to.

Clause 29