Leaving the EU: Agriculture — [Mr Peter Bone in the Chair]

Part of Backbench Business – in Westminster Hall at 3:00 pm on 1st February 2018.

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Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Northern Ireland) 3:00 pm, 1st February 2018

I beg to move,

That this House
has considered the policy framework for agriculture after the UK leaves the EU.

As ever, Mr Bone, it is a pleasure to serve under your chairmanship.

Before I start, I should say that I am very grateful to the Backbench Business Committee for having allowed the House the opportunity to debate this subject today. I see a reasonable number of Members in Westminster Hall, so I shall try to keep my remarks fairly short, to ensure that everybody gets a chance to have their say.

First of all, however, it is worth noting the context for this debate. For the 40-plus years that the United Kingdom has been a member of the Common Market, the European Economic Community and ultimately the European Union, the common agricultural policy has been the dominant force in shaping agricultural policy in the United Kingdom. As is often the case when there is such a dominant force, we can get dragged down into the weeds. We can lose sight of the higher purpose—I suspect that, if pressed, any of us could come up with lots of things that we dislike about the CAP.

The moment of our leaving the European Union will be, of course, an opportunity to change much of that and to do things differently, if that is what we choose. However, it is worth reminding ourselves about the context of what has been achieved and the nature of the agricultural industries—I use the plural advisedly—that we have had for the last 40 years as a consequence of our membership of the EU.

Some would say that this is a moment for moving away from financial support for agriculture completely—the New Zealand “cold turkey” approach. That is a respectable view; it is not one that I happen to share, for reasons that I will explain. However, it is a statable case, and if we are sensible it is one that we should address. When the Secretary of State recently made a speech at the Oxford Farming Conference, he spoke about the CAP being a mechanism for subsidising inefficiencies. One man’s inefficiency may be another man’s lifestyle, so I listen to terms such as that being bandied about with some caution, shall we say.

What would be the consequence, though, of ending the support there has been for agriculture? The most obvious consequence, in my view, would be food price inflation. There is a cost attached to maintaining an agricultural business, and if farmers are not to get the money they need through the mix of what they get at the farm gate and financial support from Government, then of course a higher price will have to be paid by the consumer in the supermarket.

In fact, earlier today it was put to me that the most obvious victims of the end of the era of cheap food—the era in which we have lived and continue to live—would be those on the lowest and fixed incomes. That is a good point: people on low incomes spend a higher proportion of their disposable income on food than on anything else. Ending support would also have very profound implications for our countryside. Many of the things that we value most about our countryside come about because people live there—because they can work there and make a living there. The countryside is not just a glorified retirement home.

I have seen a lot of farms’ books in my time as a Member of Parliament, for a whole variety of reasons. When it comes to farmers in my constituency and throughout the highlands and islands—and doubtless those in other parts of the country—there simply would not be a living to be made without the farm subsidy payment coming into their businesses every year. We would lose the farms, then the shops and the post offices. The country schools would close, which would lead to the loss of professional support, such as the lawyers, accountants and the vets. With that loss, we would start to lose the mix that a rural community needs to sustain itself. Thereafter, it is pretty easy to see where we would go.

The alternative to food price inflation, of course, would be to import cheap food from other parts of the world. However, I caution hon. Members about that. One of the reasons why our costs of production are high in this country, relative to other parts of the world, is that we maintain very good standards of animal welfare, traceability and biosecurity. Those all come at a price. We are told that such things are valued by the consumer, and there is a price attached to that. If our farmers are to compete on a level footing, we should expect the same standards in those countries from which we would envisage importing food. At that point, one would wonder whether the price difference between food produced here and imported food would be as marked as it is now.

In that context, the CAP and support for agricultural industries have given us considerable stability in recent decades. There is then the question of what will follow the CAP. If we take away the framework that we have had since the mid-1970s—the CAP—we will inevitably have to replace it with some other sort of framework: a UK-wide one, if that is to be the extent of our regulation. I am pleased to note an emerging consensus between the UK Government and the devolved Administrations: that the creation of a UK-wide framework is a desirable and necessary event, which will have to be taken seriously.

To my mind, there are something in the region of four different objectives that such a new framework would need to have built into it. First, and most importantly, it would need to preserve the functioning and integrity of the UK internal market. That is important for consumers and producers across the length and breadth of the country. Secondly, it would need integrity, to ensure that the UK was in a position to enter into trade agreements with other countries. Thirdly, it would have to ensure that the United Kingdom could continue to meet its existing international obligations, never mind those that we may seek to take on. Fourthly, it should provide for effective management of common resources. As I say, the first of those four objectives—preserving the integrity of a UK internal market—is the most important.

As the National Farmers Union Scotland has put it in one of the many briefings that have been provided for today’s debate,

“animal welfare and traceability, public health, pesticides regulation, and food labelling” should all be part of a “commonly agreed ‘framework’”. That is in the interests of all parts of the United Kingdom.

Of course, once an overarching framework has been agreed, everything else that remains should be devolved to the constituent parts of the United Kingdom. For the purposes of England, that would obviously be the Department for Environment, Food and Rural Affairs; the Scottish, Northern Irish and Welsh Assembly Governments would have control and responsibility for their own respective jurisdictions. The thinking that needs to be done now about how we design that framework is important. We need something that will allow each Administration to implement it as is appropriate for their area.

As one who was always a keen supporter of the idea before it happened, I think that devolution since 1999 in Scotland has been very good for Scottish farmers. They say that the administration of agricultural policy from a dedicated Department in Edinburgh has been better for them: it is closer to their needs and better able to design a system that is suitable for the farmers in our constituency.

I am sure that that is true across the whole United Kingdom, so the framework must provide a structure without tying the hands of the devolved Governments. They should be able to continue to do as they currently do: look after the less favoured areas such as the highlands and islands, and perhaps then the beef farms and dairy farms; I am thinking not only of Orkney and such places, but the north-east of England—I see Mr Jack from the south-west of Scotland—or the south-west of England.

There are upland farms in Yorkshire and Cumbria. All the different industries have needs that are best met by devolved Administrations delivering policy in their own jurisdictions. For that reason, when the framework is constructed, it has to deal with those matters in a way that that can be commonly agreed. If the Minister has not already had representations from the NFUS, although I suspect he probably has, he should consider its proposal for the creation of a strengthened joint ministerial Committee. The mechanisms of devolution already make provision for that sort of thing, but as we move to the next phase of our constitutional change, it is pretty clear that something of that sort will be necessary.

The idea posited to get a commonly agreed mechanism is that something such as qualified majority voting, as is often used in the Council of Ministers, could be engaged. The advantage would be to create something that was genuinely a common agreement, rather than a top-down approach where control would still be vested in DEFRA and in London.

Inevitably, one comes on to the question of finances. Currently the United Kingdom remits money to Brussels, which then pays the respective Administrations money that goes in a dedicated way to farm support. Obviously, after our departure from the European Union, that supply line will be significantly shortened and we shall look to the Treasury. I do not see any other mechanism than that the money should come from the Treasury, but perhaps the Minister has other ideas about how that would work. More importantly even than that, we need to know the mechanism by which that funding will be distributed across the different parts of the United Kingdom. For most public spending purposes, we currently have the Barnett formula, but that takes into consideration a whole range of different matters that would not really be relevant, so some sort of thinking at this point will clearly have to be done.

On the brass tacks of this, when the Minister comes to reply to the debate today—I realise we are in the early stages of the thinking and we can look only for broad principles—will he confirm that the pie that we will slice up by whatever mechanism we devise will remain the same size as the one we currently have? The one thing that consistently comes through to me, from talking to farmers and crofters in my constituency and to the farming unions, is that at this stage our objective should be continuity and stability. Farmers really need to know what the future holds for them. If we do not have early confirmation of what the future holds, we cannot expect them to have the confidence to keep investing.

A whole range of imponderables will come from our decision to leave the European Union. Access to export markets, the terms on which imports will be allowed from other countries, and the availability of labour for both the production and processing of food are just a few of them. All those matters are outwith our control, but the creation of a UK-wide framework is one element entirely within our own control; more than anything else, it will give our farmers the opportunity to continue their planning for future investment.

In his speech at the Oxford Farming Conference, the Secretary of State guaranteed support payments to 2024. That was a welcome announcement and I do not want to diminish the importance of it in any way, but in doing that he prayed in aid the need for long-term certainty.

I speak as a farmer’s son. I know two things about farming. First, I knew I was never going to be one; that is partly why I am here today. Secondly, I know that six years for a farmer is nothing like the long term. The long term is what agriculture is built on and what our farmers and crofters need to hear about. I hope the Minister will at least give an indication that we have started the process of giving it to them.