Financial provision

Agriculture Bill – in a Public Bill Committee at 3:45 pm on 15th November 2018.

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Photo of Philip Dunne Philip Dunne Conservative, Ludlow 3:45 pm, 15th November 2018

I beg to move amendment 109, in clause 33, page 24, line 39, at end insert—

“(2) Payments made by virtue of this Act must be paid pursuant to regulations made by the Secretary of State to implement a multi-annual financial framework determining the monies available under this section.

(3) Prior to any payments being made under this section, regulations must be laid before the beginning of the agricultural transition period.”

The Agriculture Bill should establish a multi-annual budgetary framework that provides certainty for farmers and allows them to plan and invest for the future.

I stress at the outset that this is a probing amendment, and I am looking for the Minister to give me some comfort that what I am asking for is in line with current practice and widely supported by the industry. I urge the Minister to have discussions across Government to consider whether something along the lines of this amendment could be incorporated in the Bill at a later stage. I have tabled the amendment because under the scheme that we are currently looking to replace—the CAP scheme—multi-year support packages have been agreed, and all farmers across the UK have been operating according to those packages and are accustomed to them. That is my first point.

Secondly, the Government have already acknowledged the importance of a multi-year settlement in the transition arrangements that they have announced and the Minister has secured from the Treasury, with a commitment to 2022, which is a significant development. I give full credit to the Minister and his colleagues in the Department for Environment, Food and Rural Affairs for securing a commitment from the Treasury that takes us ahead of the comprehensive spending review period—outwith that—in order for farmers to have confidence in the way in which the current scheme will transition into the new one.

Thirdly, the new scheme is intended to be a multi-year arrangement for the period from 2021, as we move from an area-based payment to a public goods-based payment. The Government have clearly recognised that multi-year arrangements are required for this industry, not least because—as we have heard previously in this Committee—many tenancy agreements and stewardship arrangements are undertaken by farmers on a multi-year basis. That is not always the case: some tenancy arrangements, such as grass keep, last for only one season, but many last for many years.

Photo of Sandy Martin Sandy Martin Shadow Minister (Waste and Recycling)

I have visited a farm in Suffolk at the NFU’s invitation, and seen the various improvements that the farmer wanted to make to his farm. However, he was not sure whether he would be able to claim money for those improvements in future. Does the hon. Gentleman agree that it is extremely difficult for farmers to make improvements to their farms when they do not know the future shape of the financial settlement?

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

I agree with the hon. Gentleman. This is not just about farm improvements, of course; it is about the rotational nature of farming. Arable farming relies on an assumption of continued occupation for a period of years, in order to adopt an appropriate rotational pattern for the use of the land over a number of years. For all those reasons, it is entirely appropriate that the Government should consider a multi-annual scheme.

Perhaps I may refer to some of the external support that I have received for the amendment, which I am sure other members of the Committee have seen as well. I am sure that it is no coincidence that during the passage of the Bill we have had the benefit of presentations elsewhere on the parliamentary estate from a large number of groups interested in agriculture, and in what happens in the environment on and around our farms. I am sure that many hon. Members will have gone to yesterday’s presentation by the wildlife trusts. There have been presentations in the past couple of weeks from Greener UK, an umbrella group of 14 organisations, all of which are supportive, including the NFU, the Country Land and Business Association and the Woodland Trust, which has also organised presentations in Parliament recently.

Also in Greener UK is the National Trust, which I visited on Friday in my constituency, and which is particularly concerned about some of the conservation measures it is introducing across its estate. I think it is the largest private sector landowner in the country, with something like 1,800 tenant farmers operating around the UK. While on the subject of the National Trust, I commend to the Minister the Stepping Stones project, in which it seeks to link together landscapes across the Shropshire Hills area of outstanding natural beauty. As he has not visited my constituency to see that work in action, I am keen to invite him to do so, because the trust wants to bring forward an environmental land management scheme, and I was impressed by what I saw last Friday. It wants multi-annual arrangements, as do the other organisations, and I strongly encourage the Minister to recognise that that is how farming in this country functions, so it is appropriate at least to consider a scheme of that nature.

The amendment would also insert a provision about having a scheme in place at the outset, not as an afterthought during transition. Whenever we move from one scheme to another, things should be set out clearly in advance, to give farmers the confidence they need to undertake projects that, as I have explained, take several years, as well as confidence that they will be able to farm appropriately in the future.

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

The amendment is similar to new clause 10, which we debated previously. I congratulate the hon. Gentleman on tabling it. Finance is at the centre of the Bill. Unless we get some clarification, the Bill will not, despite all the powers in it and all the good intentions, really provide certainty and security—whether to farmers or environmental organisations, which all signed up to it.

We are dealing with pretty important stuff. Although there has been some variance between the farmers’ organisations and environmental organisations, they speak with one voice on the amendment, as they did on new clause 10. We pay attention or lose their valuable support, which is a shame, because the Bill has a degree of cross-organisational support and we have made it clear that there are good things in it, which we support. We are just carrying out our Opposition role of trying to improve it.

I congratulate the hon. Member for Ludlow on the amendment. It is important that we have a further debate about it, and that we recognise that the money is crucial. Otherwise, the warm words will not satisfy those who feel strongly about what they will be expected to do when and if the Bill comes into force. It involves a huge cultural change in the way we support those who work on the land.

As the hon. Member for Ludlow rightly said, the proposal has received a wide range of support. I hope that that matters to the Government, and that the Minister will respond to it. It includes other things that we might want to do on the land, which is not necessarily what we have done in the past. For example, we could look at transport infrastructure or social housing, which may be a sequitur to the things we want to do to improve the environment. If people cannot live in the countryside, they cannot work in it and carry out the environmental improvements that we want. The Government have a whole raft of environmental schemes in mind, including planting woodland and alleviating flooding, but those who want to do it need to have some knowledge of the funding arrangements that will be in place. Unless that is done annually, we will not know how serious it is. We are saying that it could be done over a number of years. The Government need to report to Parliament, which means that there will be a public document showing exactly what money is being made available and what the restrictions are. We talked earlier about the devolution settlement. It is important that the Administrations outside England know exactly what moneys they will have and the purposes to which they can be put.

Greener UK pointed to the need for an independent assessor. The amendment in the name of the hon. Member for Ludlow does not do that, but Greener UK argues that it would be helpful to know the minimum and maximum amounts that might be forthcoming from the Government to do the sort of things that are necessary. The idea of multi-annual funding is that it allows the money to be vired from one year to another if it cannot be spent in the year originally intended.

I hope the Government see the benefit of the amendment. We will support it wholeheartedly. We see it not as a probing amendment, but as a very important part of the way in which the Government should be doing their business. It would mean that our countryside is healthier and funded more appropriately and transparently than would otherwise be the case.

In evidence to us, Andrew Clark made it very clear why the NFU supports the amendment. It sees it as part of the long-term commitment to allow farming to continue contracting around the environmental and land-management arrangements that the Government have in mind. He was clear about why we need the power to vire money between annual budgets. Knowing what those budgets are is absolutely crucial. The hon. Member for North Dorset, in cross-examining him, seemed quite sympathetic to that idea—as, indeed, is the hon. Member for Ludlow and, I hope, other Conservative Members.

I hope that the Government have heard clearly why it is important that we support the amendment. We wanted them to accept new clause 10. That did not happen, but they have another opportunity to listen, learn and act on something that is incredibly important. It is about the way our national infrastructure is shaped by the moneys that are made available. The Tenant Farmers Association, in written evidence, said that the lack of financial clarity was a major weakness that the Bill did not overcome. There is no mechanism for how the money will be forthcoming. That is important, because then we can have debates in Parliament—we can scrutinise the annual budgetary settlement and the way in which that money can be passed over into other years. It is right and proper that Parliament has a say on that, and that is what these organisations are saying. The Country Land and Business Association said that it needed

“urgent clarity on the funding plans post 2022” which is when the current arrangements start to run out. It goes on:

“A long term and robust budget is needed to meet the Government’s ambitions for the environment and high food production standards, with a multi-annual review framework outside of the political cycle.”

That is again very clear.

This would have interested my hon. Friend the Member for East Lothian, who is no longer in his place, and will interest the hon. Member for Brecon and Radnorshire. The Confederation of Forest Industries considers that funding should be planned as part of the 25-year environment plan, so that we know what moneys are available for forestry, particularly given the Government’s good intentions to plant a lot more trees. That is covered by the amendment.

I hope that the Government are listening and will consider the matter, so that we do not have to press the amendment to a vote. We feel very strongly that the money has to be clearly identified, scrutinised and made available. That is what the amendment would do, as new clause 10 would have done. I make no apologies for going on at length; if there is no money, or no certainty about the money, all the good intentions will disappear into the ether.

Photo of Colin Clark Colin Clark Conservative, Gordon 4:00 pm, 15th November 2018

I will be mercifully brief, as other hon. Members have covered many of the matters.

I have been a farmer and been involved in agriculture for a number of years. We work in cycles of five, seven or 10 years. As the hon. Member for Stroud has just said, a multi-annual financial framework is an essential part of agriculture. As we mentioned in earlier debates, it is particularly important that we do not allow the agricultural budget to become politicised and subject to annual discretionary spending decisions, and that parties of all colours are able to recognise the long-term commitment to agriculture.

The Scottish NFU is supportive of the amendment. The Minister is obviously influenced by the Treasury, which influences everything, and I hope that we give power to his elbow. It is important that the Treasury understands that the long-term commitment, as in many other industries, is very important for the farming industry.

We are not going to press the amendment to a vote, but it is noteworthy that a Welsh colleague, an English colleague and a Scottish colleague support it. In seeking to represent Scottish farmers, I reiterate that I very much want to see a multi-annual framework.

Photo of Chris Davies Chris Davies Conservative, Brecon and Radnorshire

I am sure that there is a good story in there somewhere about a Welsh MP, an English MP and a Scottish MP, but we shall not go down that route at this moment. [Interruption.] It is after lunch, after all.

I am delighted to support the amendment. My hon. Friends the Members for Ludlow and for Gordon have made very convincing cases, and I am pleased to see the hon. Member for Stroud also making a convincing case. Farming, as we all know, is a long-term measure, and there are many farmers among Conservative Members. We have not just visited a farm on the recommendation of the NFU; we are involved in farming on a daily basis. I know that my hon. Friend the Minister, who is from a farming family, will be well aware of the need for long-term funding, which is important in farming for breeding and planting.

I am chair of the all-party parliamentary group on forestry, and long-term funding is vital for the future of the forestry sector and the wood industry. With softwood, the period from planting to profit is probably 40 years. With hardwood, it is 80 to 100 years. It is very important that schemes are in place to ensure the correct funding. I am delighted to support the amendment and I am sure and very much hope that the Government will look on it positively.

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

Like my hon. Friends the Members for Ludlow, for Gordon and for Brecon and Radnorshire, I understand that this is a critical issue. I agree with the sentiment that we can put into the Bill all the powers we like and come up with all the creative policy we like, but that they will not mean anything without money to underpin them.

For reasons that the Committee will understand, I will not support the amendment. Before I come on to that point, however, it is important to recognise what we have already done to acknowledge the importance of clarity on funding. At the last general election, we made a commitment to keep the total cash spent on agriculture at the same level for the duration of this Parliament until 2022. That breached and went beyond a Treasury spending review period, but the Conservative party took the decision that it was right and proper to prejudge the spending review process so that we could give clarity and certainty to farmers.

The challenge, as I understand it, is that the scheme is currently funded in a roundabout way by our sending money to Brussels and then getting it back. The concern that some farmers will have is whether the Government will be willing to support the scheme. My view is that the approximately £3 billion that we currently spend every year on agriculture and the farmed environment is relatively modest in the context of other areas of Government spending. Some Departments—perhaps including a Department that my hon. Friend the Member for Ludlow is familiar with—regularly accidentally overshoot their national budget. Given what it delivers for the farmed environment that covers 70% of our land, for habitats, for water and air quality, and for our important environmental objectives, £3 billion is a fairly modest sum.

As the policy returns home and we take back control, there will be a responsibility on Parliament—and on political parties in their manifestos—to demonstrate their commitment to our farmed environment and wildlife. We know that wildlife organisations have huge memberships: the RSPB and the Wildlife Trust each have between 1.7 million and 2 million members. We know that the British public are passionate about their countryside, wildlife and environment and want us to give them due priority and support.

We have therefore not only committed to keeping the cash total the same until 2022 but made a manifesto commitment to implement and fund a new environmental land management scheme after that. We have not described the total quantum of funding after 2022, but there is an absolute commitment for there to be a funded policy. We have also made it clear that agreements entered into by the end of 2022 under the existing pillar 2 schemes—some of which will run for a decade—will all be funded for the duration of their terms. I believe that we have done a lot in the area already.

As a former Minister, my hon. Friend the Member for Ludlow knows that in the long term these matters are ultimately dealt with through the spending review process. A spending review process is under way, and we expect it to conclude next year. By their very nature, spending reviews are multi-annual; they tend to set a financial envelope within a period such as five years. Departments also have other processes, such as single departmental plans and Supply estimates applied at departmental level, so that we have some continuity and multi-annual understanding in our approach to funding, rather than a stop-go process from year to year.

Finally, our new environmental land management scheme is predominantly designed around multi-annual agreements. There will not simply be one-off yearly payments; we envisage farmers entering into an agreement for three, five or possibly 10 years. It is implicit in the design that we have outlined for the scheme that a multi-annual understanding of funding will be needed.

I hope that I have been able to reassure my hon. Friend that I share his view that this matter is important and that I view the current spending on agriculture and the farmed environment as a relatively modest sum of money. We could deploy it far more effectively to achieve far more, but the spending review process is the right place to identify funding post 2022. I am sure that he and other colleagues will be making representations to the Chancellor and the Treasury on this matter.

Photo of Philip Dunne Philip Dunne Conservative, Ludlow

I have heard what the Minister said. I indicated that this was a probing amendment. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 33 ordered to stand part of the Bill.

Clause 34