Report on agricultural payments to the Scottish Ministers

Agriculture Bill – in a Public Bill Committee at 3:45 pm on 20th November 2018.

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“(1) The Secretary of State must, no later than one month before exit day, lay before Parliament a statement of his policy on whether sums will be made available to Scottish Ministers each year after exit day which are at least equivalent to the sums made available to Scottish Ministers in the year prior to exit day for the purpose of expenditure under—

(a) the European Agricultural Guarantee Fund, and

(b) the European Agricultural Fund for Rural Development

as established under Article 3 of Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy.

(2) “Exit day” shall have the meaning given in section 20 of the European Union (Withdrawal) Act 2018.”.—

Brought up, and read the First time.

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

I beg to move, That the clause be read a Second time.

The new clause will simply allow Ministers to measure their progress in implementing a promise made during the Brexit campaign that moneys available to support Scottish farmers will not decline in real terms as a result of our no longer being in the EU. The leave campaign made some real promises, which should be honoured. There will be plenty of hot air and confusion over the coming days, weeks, months and eternities, but can we at least get some clarity on how progress on this pledge will be measured?

Photo of Jenny Chapman Jenny Chapman Shadow Minister (Exiting the European Union)

I have a few questions on this. It makes an awful lot of sense to me, and it matches what the First Minister of Wales has said repeatedly, which is that he wants all support to be matched penny for penny in the future, as was committed to by various voices during the referendum campaign. I do not think that there is anything unreasonable about that. If we agree to the new clause, it would open the door to similar amendments being made for the other devolved Administrations.

All the new clause seeks is transparent reporting that we would all benefit from being able to monitor, including in England. Agricultural payments will be something that we make decisions about, and doing so in the most up-front and clear way possible will help all of us. It is clear that the agriculture sector requires certainty going forward, and this is one way that we can assist in that. One key concern raised by stakeholders, particularly the farmers unions, is the continuation of funding that will be made available, particularly to the devolved Administrations.

Another key concern raised by the farmers unions is the ability of the devolved Administrations to make payments to farmers in 2020, due to the way that the Bill is structured. It would be helpful to hear the Minister’s thoughts on what will happen, particularly for Scotland. As Members will know, the Scottish Government’s continuity Bill is currently being considered by the Supreme Court. If it is deemed unlawful, what will happen to the payments to Scottish farmers? The Scottish Government intend that Bill to provide the vehicle by which payments could continue. What does the Minister consider the implications will be if that is not the case? It would be helpful to us all if we could use the consideration of this new clause to try to understand that issue.

I would like to ask the hon. Member for Edinburgh North and Leith about the progress the Scottish Government are making with their own agriculture Bill, which the Scottish Government’s Cabinet Secretary for the Rural Economy, Fergus Ewing, has said that they will implement. Scottish farmers need to know what the future holds for them.

Is there a requirement for clarity from the UK Government as to the level of funding available to Scottish Ministers prior to that legislation being implemented? Obviously, we would like it in any case, but particularly considering that legislation, which we expect to see. In the absence of this clause and the continuity Bill, and not knowing when the Scottish legislation might come forward—or perhaps even a schedule, if it is not too late—Scottish farmers are still in the dark at this stage.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 4:00 pm, 20th November 2018

I am grateful for this opportunity to set out our position on the funding of agriculture. As hon. Members will know, we have a manifesto commitment to keep the cash total spent on agriculture for the UK at exactly the same level until 2022—the end of this Parliament. That commitment goes further than the current spending review period. Not every other Department has that, but we made that commitment, because we recognise the importance of giving farmers clarity and certainty that the Government intend to still support them financially during this transition from the old system to the new.

Our manifesto also made a commitment that after 2022 we would roll out a new agri-environment policy, which would be funded. The Bill is explicit that there will be a transition period of seven years until 2028, as we gradually wind down the single farm payment—or basic payment scheme. It is implicit in the Bill and our manifesto commitment that there will be a funded agriculture policy after 2022. We have not put a precise figure on that, but we have done more than we do for most other Departments, which is to give a guarantee until 2022.

As the hon. Member for Edinburgh North and Leith will be aware, the allocations for Scotland have been a contentious issue as a result of the convergence uplift and debates around that. For that reason, we have asked Lord Bew to lead an independent review of intra-UK allocations. That review is now underway. The outcome of that review will inform allocations for 2020 onwards.

The answer to this particular new clause is that this work is already being done and it is being led by the review that Lord Bew is undertaking, which will inform intra-UK allocations after 2020. That will enable us to take account, for instance, of severely disadvantaged area and to take account of the emerging policies that we have in different parts of the UK, but also to have regard for the fact that probably every part of the UK will want to have a transition from the old system of the basic payment scheme to the new, so there would need to be some understanding of how much money people will need as they move in transition from the old scheme to the new.

The hon. Member for Darlington made points about the ability of the Scottish Government to make payments. We covered that in an earlier debate, but to clarify, we introduced new clause 3 to the Bill in Committee, as well as subsequent equivalent clauses for the schedule for Wales and the schedule for Northern Ireland. The purpose of new clause 3 and those two connected provisions for Wales and Northern Ireland was to give the Government the power to set financial ceilings, so that the legacy schemes that come across through retained EU law could still be paid. Unless the power exists to set financial ceilings, the existing financial ceilings that underpin the payment legislation in the EU scheme will fall away. Therefore, unless the Scottish Government took action to introduce a clause such as new clause 3, they would not have legal authority to make payments in 2020.

Photo of Colin Clark Colin Clark Conservative, Gordon

May I seek clarification? Have the Scottish Government approached the Department to introduce a new clause 3, and is the Minister aware that NFU Scotland is supportive of a new clause 3 for Scotland?

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

Yes, I am aware that NFU Scotland has now said that it believes that, as a minimum, there should be something like new clause 3. I discussed the issue with Scottish Ministers yesterday at the meeting that we had in Wales, where it came up. We established that it is relatively easy to rectify. This is a single clause. We could put it in a schedule to this Bill if it were the wish of the Scottish Government for us to do so. We could add a schedule to the Bill that replicated new clause 3 for Scotland but did nothing else, and we could do that at later stages of the Bill, or of course it is open to the Scottish Government to add new clause 3 to an alternative piece of primary legislation, going through the Scottish Parliament. The issue is not complicated to fix; it does not necessarily need a fully worked-up, fully detailed Bill, but they do, as a minimum, need something equivalent to new clause 3. I think that they understand that now, and they are considering whether it is best to do it as a schedule to our Bill or as an addition to one of their own Bills.

I hope that I have been able to explain that we have a review under way that is looking at intra-UK allocations, that is designed to address the needs of every part of our United Kingdom as we consider funding the provisions in this Bill and provisions that other, devolved Administrations might bring forward in the future.

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

In response to questions regarding Scotland not taking powers through this Bill, I will repeat once again that that is because, in short, we do not need to do so. We do not need the Government here to legislate for us on devolved matters. We have been producing our own legislation in those areas since the Scottish Parliament began in 1999. There is no question of our not being able to make payments immediately after Brexit, because the existing common agricultural policy rules will become retained EU law; that has already been provided for.

If there is no deal, then in conjunction with the UK we are preparing the necessary adjustments, through statutory instruments and Scottish statutory instruments, to ensure that we will be able to continue to make payments under the existing CAP rules. If there is a deal, then along with what happens in the rest of the UK, provision will be made to ensure that we can continue to make payments during the agreed transition period. Whatever scenario we face, there will be provision to make payments and administer schemes from next March.

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

I agree that it is possible for the Scottish Government to include a clause similar to new clause 3 in primary legislation going through the Scottish Parliament, but the hon. Lady needs to understand that it requires the setting of a financial ceiling; that does not come across in retained EU law. That is why we have introduced those new clauses to the Bill for every other part of the UK. The hon. Lady is right: we are not saying that we have to legislate through this Bill. There is an offer if the Scottish Government would like us to include something equivalent to new clause 3, but if they would rather not have that, it is for them to add the provision to one of their pieces of primary legislation.

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

Indeed, and given that the withdrawal agreement, the European Union (Withdrawal) Act 2018 and the Scottish continuity Bill all give Scotland a legal basis on which to continue to make payments and administer schemes, we see no need to rush into the development of new legislation, but we are of course always open to that.

In our consultation document, “Stability and Simplicity: proposals for a rural funding transition period”, we have explained that the point at which we propose to start evolving our farm support arrangements is 2021. At that point, we will need new powers to amend the relevant retained EU law, and we are looking actively at all available options for taking those powers, including the possibility of legislating in the Scottish Parliament.

I hear what the Minister says about the review that is ongoing, but we want some certainty that an ability to check the promises that were made is hardwired into this Bill—as the hon. Member for Darlington said previously, that is in the interests of transparency—so I will press the new clause to a vote.

Question put, That the clause be read a Second time.

The Committee divided:

Ayes 8, Noes 9.

Question accordingly negatived.

New Clause 31