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Agriculture Bill (Seventh sitting)

Debated on Thursday 27 February 2020

The Committee consisted of the following Members:

Chairs: Sir David Amess, † Graham Stringer

† Brock, Deidre (Edinburgh North and Leith) (SNP)

† Clarke, Theo (Stafford) (Con)

† Courts, Robert (Witney) (Con)

† Crosbie, Virginia (Ynys Môn) (Con)

† Debbonaire, Thangam (Bristol West) (Lab)

† Dines, Miss Sarah (Derbyshire Dales) (Con)

Doogan, Dave (Angus) (SNP)

† Goodwill, Mr Robert (Scarborough and Whitby) (Con)

† Jones, Fay (Brecon and Radnorshire) (Con)

† Jones, Ruth (Newport West) (Lab)

† Jupp, Simon (East Devon) (Con)

† Kearns, Alicia (Rutland and Melton) (Con)

† Kruger, Danny (Devizes) (Con)

† McCarthy, Kerry (Bristol East) (Lab)

† Morris, James (Halesowen and Rowley Regis) (Con)

† Oppong-Asare, Abena (Erith and Thamesmead) (Lab)

† Prentis, Victoria (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)

† Whittome, Nadia (Nottingham East) (Lab)

† Zeichner, Daniel (Cambridge) (Lab)

Kenneth Fox, Kevin Maddison, Committee Clerks

† attended the Committee

Public Bill Committee

Thursday 27 February 2020


[Graham Stringer in the Chair]

Agriculture Bill

I remind hon. Members to switch electronic devices to silent mode and that tea and coffee are not allowed during sittings. We shall now continue line-by-line consideration of the Bill. The selection list for today’s sittings is available in the room. Before we begin, I should tell the Committee that Sir David Amess and I have used our discretion to select amendments 63 and 64 and new clauses 23 and 24 for debate today, even though the usual notice was not given. We have done that because the circumstances were exceptional. A relevant policy paper was published by the Department on Tuesday, and we took the view that it was in the Committee’s interest to have the opportunity to debate amendments arising from that policy paper today. I am assured by the Clerks that our decision is well precedented.

Clause 2

Financial assistance: forms, conditions, delegation and publication of information

I beg to move amendment 63, in clause 2, page 3, line 25, at end insert—

“(1A) The Secretary of State must by regulations make provision for establishing any financial assistance scheme and setting out how it will be designed and how it will operate.

(1B) No motion may be made in either House of Parliament for the approval of any regulations under subsection (1A) unless—

(a) a draft of those regulations has been submitted for scrutiny by any select committee of either House of Parliament which, in the opinion of the Secretary of State, has a remit which includes responsibility for scrutiny of financial assistance under section 1, and

(b) any such committee has expressed a view on the draft regulations.”

With this it will be convenient to discuss amendment 64, in clause 2, page 4, line 3, after “subsection” insert “(1A) or subsection”.

It is a pleasure to continue under you in the Chair, Mr Stringer. I thank you and Sir David for exercising your discretion. I will make some points about that matter in a moment, but I shall start with amendment 63; amendment 64 is consequent to it.

The reason why we want to make this amendment and think it important is that we believe that the design and implementation of the environmental land management scheme that the Government have suggested should be subjected to proper scrutiny. Amendment 63, with amendment 64, would ensure proper parliamentary scrutiny by requiring the Secretary of State to make provision by regulations for establishing any financial assistance scheme and setting out how it will be designed and will operate. Under our amendment, those regulations must be considered and reported on by an appropriate Select Committee, of the Secretary of State’s choosing—we are very generous—before being brought to the House. Amendment 64 would ensure that a proper debate on the regulations could be held by subjecting them to the affirmative resolution procedure.

I apologise to you, Mr Stringer, and to the Committee for warning that I will speak at some length on this amendment to demonstrate why it matters. This goes back to our debate on Tuesday about the Government’s behaviour in relation to publication of the “Environmental Land Management: Policy discussion document”. I am sure that everyone has carefully read it and I advise everyone to have it to hand for the next hour or so, because I shall be referring in detail to various elements of it.

Just in case anyone thinks that this is somehow a diversion or distraction, the document itself says on page 7:

“The new ELM scheme, founded on the principle of ‘public money for public goods’, will be the cornerstone of our agricultural policy now we have left the EU.”

It would be very strange if the Committee were discussing that complicated new future and we did not have a chance to discuss what will be, in the Government’s own words, its cornerstone.

My hon. Friend is making an excellent speech. Does he agree that it is a shame that we got the ELM document—as he says, the cornerstone—too late to make meaningful progress on it on Tuesday? It is also a shame that the Prime Minister decided to take it to the National Farmers Union, rather than bringing it here first.

My hon. Friend is entirely right, and I will say more about that, as she can imagine.

This discussion is hugely important, and I hope that we will be able to give it the attention it deserves. As my hon. Friend said, the document was delayed until half an hour after the Committee had started our sitting, although I am grateful to Ministers for having the grace to look a little sheepish and to be apologetic—not their fault, I suspect. Frankly, however, it was a poor way to behave, although ironically the desired outcome was not achieved—for reasons that I am not entirely au fait with, the Secretary of State went to the NFU the day after anyway, and I understand that he had a fairly traditional welcome. It is not unusual for Ministers to go to industry events and get a bit of a roasting. I am opposed to all forms of cruelty—we will come to that later—but he clearly had a tough day.

More importantly, I fear that this has skewed the way in which we are discussing the Bill. Had we had the document in advance, we would have framed a different set of amendments to the key clause 1. I am grateful to you, Mr Stringer, and to Sir David for exercising discretion, which allowed us to table amendments to clause 2. That would not normally have been possible within the timescale. I put on record my thanks to the hard-working staff in our offices, who were up until late at night working on that, and to the Clerks, who were also up late working on potential amendments. People were under considerable pressure, and I hope to do justice to their work this morning.

I have to say that something made me cross and, when I came to read the environmental land management policy discussion document that we are talking about, at times it made me even crosser. It is a mixed bag. Some of it is excellent, and we will be supportive, but my overriding impression was that, despite detecting some extremely hard work and thought put in by officials, they had been hampered by some basic contradictions in the Government’s thinking. That is a political failing—not a policy failing—which I suspect partly reflects changes in personnel and thinking over time. The original architects—the unrepentant sinners to whom I referred on Tuesday—have moved on, and others have been left to figure out how to make a complicated set of ambitions work.

The thing that made me cross—we do not have to read far—is virtually in the opening line, although I understand that the prefaces to such documents are often bolted on at the end, possibly by eager-to-please special advisers. I will read the opening sentence:

“For more than forty years, the EU’s Common Agricultural Policy…has dictated how we farm our land”.

“Dictated”—think about that sentence. We were members of the European Union of our own free will—[Interruption.] I do not want to go over old ground, but I invite people to think about how that reads to those who might not share in support for the current situation, which is possibly half the country. It is a poor way to start the document.

As a farmer, I can only describe the three-crop rule as dictating what I can grow on my farm. I cannot see any other interpretation.

I am grateful to the right hon. Gentleman. I am sure we will have a to and fro this morning. We will come to the three-crop rule later. I have a suggestion for a more conciliatory word: “framed” is a more accurate term, frankly. “Dictated” is highly contentious and in some ways designed to rile, and I can say to whomever did that, it succeeded. Some of us take exception to the idea that the Government of our country seems to have become a Vote Leave franchise operation.

To add evidence, I have a Department for Environment, Food and Rural Affairs press release from 2013, when the then Farming Minister—different context, different time, obviously—who is now the Secretary of State, told us:

“The UK ensured that we have choices in how we implement the Common Agricultural Policy, rather than having to work with a one-size-fits-all approach from the European Commission…This gives us the flexibility to target funding in ways that will deliver real benefits to the environment, boost the competitiveness of our farming industry and grow the rural economy.”

I actually agree with him, but it does not sound like the policy has been “dictated” to us. I make a gentle plea to the Minister to change that one word, which might help people to be brought together.

Now that I have got that off my chest, we can move on to the substance of my argument. To be fair, there is something much more welcome a few lines later in the document, although it is not entirely reflected in the body of the document. It talks about the new system making it

“possible to meet the objectives of protecting the environment and producing food.”

That is a significant discussion within the document, and I will come back to that point. I appreciate that this is a framework Bill—as the Government constantly tell us—but there needs to be scrutiny as the framework is fleshed out. That is what we seek to do with our amendments.

As I will show in the next few minutes, these are complicated, interesting and important issues, which need scrutiny. I hope the Government will see sense and merit in our proposal. I hope the excellent Government Whip might consider allowing his side a little leeway, as we have considerable expertise present on the Government Benches today. Although he was gloriously successful in ensuring that people did not make contributions earlier in the process, it would be helpful if a little leeway could be shown at this point in our discussions on the Bill, because we are now getting into the real meat of it.

Some Members will have attended Second Reading of the Environment Bill yesterday. The interaction between these various Bills is really important, as was mentioned by the Chair of Select Committee on the Environment, Food and Rural Affairs, the hon. Member for Tiverton and Honiton (Neil Parish). I think many of us have come to the same conclusion. As so often happens, the debate yesterday strayed into the Agriculture Bill by mistake at one or two points. That is no surprise, because the Bill is important.

There are number of puzzles and contradictions in the policy discussion document that are worthy of discussion. I will come to some of the positive aspects, but one or two sentences jumped out at me. On page 6 —I suspect this is by the same author who wrote the opening remarks to which I referred—there is a sort of eulogy to our wonderful system at the moment. The document quite rightly praises our farmers for the wonderful things they do. However, one of them is

“supporting our supply of clean water”.

I think that will jar slightly, particularly with some of the water companies, which know that one of the unintended consequences of our current agricultural system is that they, and as a consequence all our constituents, have to pay considerable costs to clean up some of the water. Obviously, the hope is that our new system will have ways to deal with that.

Later in the document there are some very positive proposals, but there are also some big unanswered questions about the interaction between the documents. Again, that point was raised yesterday in the discussion on the Environment Bill. This is a particularly pressing issue, given our current situation with flooding in this country. Some things look in danger of falling between the cracks, particularly overall land use policy. Our amendment is designed to allow proper scrutiny of how the proposals will be developed. Given that this is a very long-term set of pilots in development, things will change and lessons will be learned. Having proper parliamentary scrutiny seems to be well worth while.

The document—as I said, I suspect it had various authors—is littered with problems and quite a few internal contradictions. On page 7, there is a hopeful claim that environmental land management schemes will

“help us maintain our food security.”

That feels as though it is a bolted-on, pious hope, given the tension between environmental goods, which we all support, and food production. Indeed, in the list of public goods on page 7 there is no mention of food. There are some non-sequiturs here, although if I were to be generous, the fact that some of these problems have not been entirely reconciled may explain some of the delay in producing the document.

It actually gets worse. On page 7, at the end of the introduction, it says that the goal is to “improve” existing standards, but later in the same sentence it says it is to possibly maintain them. This is one of the key conundrums of the legislation—what are we actually supporting? The document goes on to say a bit more about that, which I will come to later.

The key issue is whether we should support people who have already made improvements to get to a high standard or target resources on lifting others. That is an important and difficult point—we could call it additionality, if we want to get into jargon—but it is a profound issue. Page 8 defines two strategic aims. I do not have any issue with them, but there is no strategic aim for food production, so this running internal contradiction continues.

I have to say that this is quite a good document in many ways. It goes on to the lessons learned from previous schemes and lists a series of points. The first, on high uptake, is really important. This is another key issue, and I am afraid that I will address a few questions about it to the Minister; I fully understand that she may not be in a position to answer immediately. I will be happy to take interventions on some of these points, which I think will facilitate our understanding, because I am not sure that we fully understand what the Government are trying to do. My sense—the Chair of the Environment, Food and Rural Affairs Committee also made this point on Second Reading—is that a lot of farmers kind of think that they will get payments in the future provided that they make some environmental improvements, which is the way it kind of feels. The Government must have some idea of how many farmers they expect to make that transfer. I am not expecting a fixed figure, but it would be helpful to know whether it was around 10%, 90% or 50%. That is an important point, and up to now, so far as I am aware, we have had no indication. I hope the Minister can help us on that.

Among the lessons learned—which, again, are fair—point (c) is:

“Land managers must have access to effective advisory services”.

Of course, we completely agree, but there are questions left hanging. At what cost? Who pays? Who does it? Who has the capacity? Again, this will come up in further discussions, but it would be helpful to have some sense of where the Government think those answers lie.

A strong point made on page 9 is about recognising the success achieved in the past. It is all too easy to pocket successes, so I thoroughly welcome the suggestion that we celebrate what has been done well. However, going back to my earlier point, point (e) is clear:

“We need to balance delivering improvement with rewarding existing good practice”.

We absolutely do, but nowhere in the document does it say how to do that or what the Government’s view on it is. Surely we need to know, because as we have said, we are framing the most important piece of legislation for many years into the future. I will return to this point. People are asking for certainty, and for them to have it, they need to know the Government’s view on that.

Order. I understand that this is not a completely satisfactory way for the Committee to proceed with what would normally have been a starred amendment. However, the wording of amendment 63 relates primarily to

“establishing any financial assistance scheme”.

I understand that the hon. Member is trying to relate that to the whole paper. I will be grateful if he could not turn this into a debate on the paper, but relate the paper to the amendment and the design of the financial assistance schemes.

I am grateful, Mr Stringer, but I am slightly perplexed as to how to proceed because the case I am making is about the need for proper scrutiny. I am trying to explain why we think that is so important, and to do that I have to delve into the detail of the paper, which we were not given sight of before. I will do the best I can and I will keep trying to refer back to the point about the need for scrutiny overall, if that is acceptable to you.

I thank the hon. Member for that. It is not a satisfactory situation that the Committee has arrived in, so I am trying to be as flexible as possible while abiding by the correct rules of debate.

Thank you, Mr Stringer. I will try to take heed of that. I will not refer so closely to the paper and I will try to put my comments into the framework you suggest.

People would always want a more simplified financial assistance scheme. Looking back at parts of the common agricultural policy, I suggest that that has been an aim for a long time. From debates about the statutory instruments this week, some of us have had the opportunity to read closely regulation (EU) 1307/2013, in which paragraph 2 states:

“One of the core objectives, and one of the key requirements, of the CAP reform is the reduction of the administrative burden.”

So, in designing any financial assistance scheme, we are all trying to do that. The suggestions coming forward from the Government face exactly the same kind of problems we faced within the CAP now that we are without it.

As I have made clear, designing such assistance schemes and getting them right is a complex task. Any design will take time; to give the Government credit, they started on this path some 18 months ago. From our understanding, and from the National Audit Office report, it has not been an easy task. The suggestions about how financial assistance schemes should be developed make sense to me.

Referring back to the policy discussion document, there is a suggestion of a three-tiered approach that sounds remarkably similar to the system we already have. Looking at the suggestions for a financial assistance scheme set out under tier 1, many farmers—if they get that far in the document—would be encouraged because for those who do not want to see change, the scheme looks remarkably like the old basic payment scheme. Given that a three-tiered approach is suggested, what do the Government envisage to be the split between the three tiers? That is a reasonable question. It is similar to a pillar 1 or pillar 2 issue—12% or 15%—in that a lot could be put into either tier 3 or tier 1. It would help if we knew how that would be done.

It is correct that we do not want to repeat the mistakes of the CAP, but in designing any financial assistance scheme it is important to know what was the intention when the scheme was designed in the first place. The CAP was not designed as an environmental scheme but effectively as a food and rural support scheme, so we are undertaking a different task.

Clearly, the Government based those designs for a financial assistance scheme to some extent on the experience of the tests and trials. Of course, numbers are relatively low in tests and trials, but the National Audit Office—in a way, its report advises those of us who are trying to scrutinise the design of financial assistance schemes—was not particularly complimentary about progress so far. According to the NAO’s commentary on the numbers that DEFRA hoped would be signed up by different stages of the process, the Department initially wanted 5,000 to be signed up by the end of 2022, but that dropped to 1,250. I wonder whether the Minister can confirm what the numbers are now.

My contention is that such a system is not easy to create; it is hard. The right hon. Member for Scarborough and Whitby made the important point that, sadly, under the three-crop rule, parts of the country are now underwater, and farmers are rightly arguing for a derogation. On the design of financial assistance schemes, it has been suggested that payments should be based on outcomes. Many of us would welcome that, but I wonder how difficult that might be in a time of floods. There are outcomes over which we have some control and outcomes over which, sadly, it appears we have much less control. I think that is worthy of discussion in the context of how we design financial assistance schemes.

There is a kind of irony on page 22 of the environmental land management document, where the authors, in asking themselves how to design financial assistance schemes, rightly ask how we should define what it is we want. Lo and behold: up turns our old friend the good agricultural and environmental condition—GAEC—standards from the CAP years. Again, that seems in effect to be the CAP coming back—I suspect the Vote Leave checker had lost the will to live by that stage and did not scrutinise that paragraph—through the back door. I do not criticise that. Anyone would struggle with that, because however they tried to design a financial assistance scheme, they would have to design some definition of how public money was to be allocated. I am sure we can change the acronym, but the same conundrums will arise.

The paper also contains—this is absolutely relevant to the design of the schemes—innovative, interesting suggestions about how payments may be calculated, including some market-based price-setting mechanisms using tendering or auctioning. I am not convinced that that is addressed elsewhere in the Bill. There is not much detail about it, and it is important that we tease out the Government’s thinking. Of course, they conclude that it would not necessarily be appropriate in tier 1. I can see why. If we are talking about thousands and thousands of agreements—this goes back to my question about distribution across the tiers—that would look like a very bureaucratic mechanism indeed. It may make more sense for the higher level, but any financial assistance scheme will have to deal with some of these points.

I return briefly to how the advice under these schemes will be funded. I have to say that tier 3 looks good. It has some similarities with the pillar two LEADER schemes. It is also the first appearance I can see in the Bill of the idea of devolving down a bit and involving local communities in designing financial assistance schemes. That is a really important point, which I will return to. However, bringing people together, which is really important, requires resource. In the past local councils played that role, but I am no longer convinced that many of them have that capacity.

If that is to work, we must answer the key question about any financial assistance scheme: where are the resources going to go? One assumption is that it will be derived from the savings that result from not making direct payments, or reducing them bit by bit, but that question needs a light shone on it. At what pace will this be done, and how will we do it? Unless those things are specified somewhere within a financial assistance scheme, it will be unclear who will have the resources to lead it. There is a potential danger that those who know how to make these systems work for them, and have the resources and wherewithal to do so, will be the ones who will take up the scheme. Its resources may not necessarily go where they are most needed, or where they will produce the best environmental benefit—as, to be fair, the Government have referenced.

Finally—I am sure you will be grateful to hear that I am coming to a close, Mr Stringer—there are some interesting examples of potential public-private partnerships near the end of the document, which are very welcome. The other evening I was talking to one of the water companies, which explained how, by working with local farmers and with support from outside, it was possible to deal with some of the conundrums and unintended consequences arising from current farming practices for the benefit of everyone. That seems very sensible, and I would strongly support that.

This has been a lengthy diversion, for which I apologise. However, I hope Members recognise that these are really big questions, worthy of discussion in this Committee. If they are not resolved at a parliamentary level one way or another, they will probably be resolved by civil servants, who will have a difficult task and may well end up copping the blame for what will not always be popular decisions. When we are discussing such financial assistance schemes, we have a responsibility to at least engage with some of these difficult issues. As I said, I do not underestimate the difficulty of engaging with them, but we should be doing so. These questions should not be hidden away in discussion documents and resolved later in the day by means of quite complicated SIs. The document actually says that it is the “cornerstone” of the new policy, so we tabled the amendment—and I have moved it—to make parliamentary scrutiny possible.

It is a pleasure to serve under your chairmanship again, Mr Stringer. While dealing with some of the points that the hon. Member for Cambridge has raised, I will try to stick closely to the wording of the amendments.

However, I will start by saying that although this is a cornerstone document, as the hon. Gentleman was keen to point out, we are still at the beginning of this scheme’s development. We are planning a major change in the way that farmers receive money from the state. We have done a great deal of work, as he was kind enough to acknowledge, but we are currently running a programme of tests and trials. The priorities of that programme will become the building blocks for the national pilot, which does not start until the end of next year and will not conclude until 2024. At this point, we simply cannot answer many of the more detailed questions he asks, nor would it be right for us to fetter the development of policy by doing so. The national pilot will provide a real, living opportunity to test and refine the scheme design before we roll it out properly at the end of 2024. That is a careful, sensible way to make policy.

However, I listened to what the hon. Gentleman said. I know he thinks deeply about these issues, and it is important that, wherever possible, we work together on the development of these major changes. In that spirit, I thank him for the amendment he has moved, and agree that we must be transparent while establishing our future financial assistance schemes and make sure that Parliament can scrutinise the use of public money. We have introduced new duties into the Bill that do exactly that. As we said on Tuesday, these include the multi-annual financial assistance plans, which are a major change and, to my mind, an improvement—many thanks, once again, to those who sat on the Committee of the previous Agriculture Bill. We have agreed to provide an annual report setting out the financial assistance given under clause 1 and, importantly, reports on the impact and effectiveness of the schemes.

Those plans and reports give Parliament the ability to scrutinise the Government’s plans, to check that future funding decisions under the Bill powers are aligned with the Government’s strategic priorities as those develop, and to hold the Government to account on how much they are spending. Flexibility and collaboration are essential and we hope they will be embedded in future schemes. We do not intend to impose policy from the top down, but rather to work with farmers and land managers to develop schemes that can deliver achievable outcomes. The word the Secretary of State likes to use is “iterative”.

I fear that the amendment may unintentionally undermine that approach. Under the ELM scheme, we are planning a pilot that will enable us to learn and prepare for the full implementation of the scheme, once we have seen what works and what does not. Once the scheme is launched, we want to continue to have flexibility to improve the scheme and be responsive.

For example, our current thinking is that for tier 2 of ELMS, payments could initially be based on actions, potentially offering top-up payments when results are delivered. However, over time we might well want to move away from payments for actions and start giving results-based payments. We would want the scheme to be able to adapt to that as we see whether it is really achievable.

We also want the ability to improve the scheme as our understanding of the environment and technology develops. For example, we might wish to adapt how we monitor the delivery of environmental outcomes, taking advantage of new technologies such as remote sensing and geospatial data. Who knows where we will be going in the future? It is impossible for us to plan for everything at the moment.

The amendment as drafted would limit our ability to respond to what is effective and to what farmers and land managers tell us is working. It would put us back into CAP-type inefficiencies, where there was no opportunity to review or change things if they were not working. I am keen that we do not mirror that deficiency within our domestic policy.

When discussing these schemes, it is important to remind ourselves that farmers and land managers will be the people most affected by these changes. I would not wish them to be adversely affected by hold-ups in the parliamentary timetable. Looking at clause 1 as a whole, we are discussing the potential for a great number of financial assistance schemes.

If we were to pass the amendment, an appropriate Select Committee might need to consider a vast number of schemes in different areas, and then we would need to debate each one, no matter how broad or narrow they might be, which would place significant demands on parliamentary time. Should there not be enough time, I am concerned that farmers would ultimately suffer, as payments would not be made in a timely way. We will launch our pilot in 2021, as well as productivity grants and animal welfare grants. We do not want confusion, or farmers left in limbo for longer than necessary, because of problems with the availability of parliamentary time.

I agree with the hon. Gentleman that we must allow Parliament the chance to scrutinise our plans for providing financial assistance under clause 1. I hope I have set out where the Bill already provides for that. I therefore ask him to withdraw his amendment.

I thank the Minister for her response and I fully appreciate that it is difficult to respond to a series of questions that are only loosely related to the amendment. I listened closely to what she said, but I still think there is a potential problem. I do not think our intention is that every single local scheme would be subjected to parliamentary scrutiny; it is the overall financial assistance scheme that we are concerned about. I fully appreciate the notion of iterative and learning processes, but the difficulty in which we find ourselves is that for farmers, the change effectively starts next year—we have seen the Government’s announcement about the 5% and so on—so real people will start losing real money quite quickly. Although it is wonderful to have theoretical discussions about how best to develop policy, people out there need some certainty, as the Government keep saying, which may partly be why the Secretary of State ran into problems with the NFU yesterday. In the 40 minutes of this debate so far, we have seen that, far from there being any certainty, there are a huge number of uncertainties.

Obviously, if one is trying to make change and be ambitious in moving to a different system, uncertainty is almost inevitable, but the Labour party feel that there needs to be a little more clarity on some of those points to give people better opportunities to plan ahead, which is a point that many people in this room, who know far more about practical farming than I do, have made. The timeframes are not always easy for people, because they have to plan and will make decisions fairly soon, so not knowing even the most basic point about a financial assistance scheme and whether the Government expect it to apply to 5% or 95% of those who have been in receipt in the past, is disappointing, to put it mildly. I very much hope that we will get more clarity at some point in the future, in discussion, correspondence or written answers.

The discussion has demonstrated a weakness in our processes; I am not sure that many of the questions that I have asked this morning have been answered. It would be much more helpful if the Government had been able to have an open discussion—perhaps not in Committee, but at some point—that would have been facilitated by the existence of the Bill.

The amendment is a long, probing one, and it has largely achieved what I wanted it to by establishing that there is no clarity on the schemes. I will not press the amendment to a Division, but I ask for an assurance from the Minister that we will get answers to our questions through one means or another. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

I beg to move amendment 36, in clause 2, page 3, line 27, at end insert—

“(2A) Financial assistance may not be given to any person who is not compliant with standards set out in regulations made by the Secretary of State under section [Duty and regulations governing agricultural and horticultural activity].”

This amendment and NC9 provide a duty for the Secretary of State to set baseline regulatory standards governing agricultural and horticultural activity, which must be met by any recipient of financial assistance.

With this it will be convenient to discuss the following:

New clause 9—Duty and regulations governing agricultural and horticultural activity

(1) It shall be the duty of the Secretary of State to establish a regulatory framework relating to agricultural and horticultural activity for or in connection with the following purposes—

(a) the management of land or water in a way that protects or improves the environment;

(b) public access to and enjoyment of the countryside, farmland or woodland and better understanding of the environment;

(c) the management of land or water in a way that maintains, restores or enhances cultural or natural heritage;

(d) the management of land, water or livestock in a way that mitigates or adapts to climate change;

(e) the management of land or water in a way that prevents, reduces or protects from environmental hazards;

(f) the protection or improvement of the health or welfare of livestock;

(g) the conservation of native livestock, native equines or genetic resources relating to any such animal;

(h) the protection or improvement of the health of plants;

(i) the conservation of plants grown or used in carrying on an agricultural, horticultural or forestry activity, their wild relatives or genetic resources relating to any such plant; and

(j) the protection or improvement of the quality of soil.

(2) Regulations under subsection (1) must include provision about the standards to which activity for or in connection with all of the purposes in subsection (1) must conform.

(3) Regulations under subsection (1) may include provision about enforcement, which may (among other things) include provision—

(a) about the provision of information;

(b) conferring powers of entry;

(c) conferring powers of inspection, search and seizure;

(d) about the keeping of records;

(e) imposing monetary penalties;

(f) creating summary offences punishable with a fine (or a fine not exceeding an amount specified in the regulations, which must not exceed level 4 on the standard scale);

(g) about appeals;

(h) conferring functions (including functions involving the exercise of a discretion) on a person.

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

New clause 22—Consultation on regulatory framework: enforcement

(1) The Secretary of State must, within one calendar month of this Act being given Royal Assent, open a consultation on what body should regulate and enforce the regulatory framework under section [Duty and regulations governing agricultural and horticultural activity].

(2) The consultation shall seek views on whether an existing body should carry out the regulation and enforcement under subsection (1) or whether a new body should be created for that purpose.

(3) The Secretary of State must, in any consultation under subsection (1), consult with persons or bodies representing persons who he or she considers are affected by the functions of the proposed body.

(4) The Secretary of State must lay before both Houses of Parliament—

(a) in summary form, the views expressed in the consultation held under subsection (1), and

(b) a statement of how the Secretary of State intends to proceed, with his or her reasons for doing so.

We are moving on to a complex set of issues on baseline environmental standards. Amendment 36 reads:

“(2A) Financial assistance may not be given to any person who is not compliant with standards set out in regulations made by the Secretary of State under section [Duty and regulations governing agricultural and horticultural activity].”

New clause 9 reads:

“(1) It shall be the duty of the Secretary of State to establish a regulatory framework relating to agricultural and horticultural activity for or in connection with the following purposes—

(a) the management of land or water in a way that protects or improves the environment;

(b) public access to and enjoyment of the countryside, farmland or woodland and better understanding of the environment;

(c) the management of land or water in a way that maintains, restores or enhances cultural or natural heritage;

(d) the management of land, water or livestock in a way that mitigates or adapts to climate change;

(e) the management of land or water in a way that prevents, reduces or protects from environmental hazards;

(f) the protection or improvement of the health or welfare of livestock;

(g) the conservation of native livestock, native equines or genetic resources relating to any such animal;

(h) the protection or improvement of the health of plants;

(i) the conservation of plants grown or used in carrying on an agricultural, horticultural or forestry activity, their wild relatives or genetic resources relating to any such plant; and

(j) the protection or improvement of the quality of soil.”

Some will have noted that that reflects the wording elsewhere in the Bill.

“(2) Regulations under subsection (1) must include provision about the standards to which activity for or in connection with all of the purposes in subsection (1) must conform.

(3) Regulations under subsection (1) may include provision about enforcement, which may (among other things) include provision—

(a) about the provision of information;

(b) conferring powers of entry;

(c) conferring powers of inspection, search and seizure;

(d) about the keeping of records;

(e) imposing monetary penalties;

(f) creating summary offences punishable with a fine (or a fine not exceeding an amount specified in the regulations, which must not exceed level 4 on the standard scale);

(g) about appeals;

(h) conferring functions (including functions involving the exercise of a discretion) on a person.

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

Order. I am grateful to the hon. Gentleman for reading out the whole of new clause 9, but all members of the Committee have the new clause before them, so it is unnecessary. I would prefer it if hon. Members did not take up the Committee’s time by reading out new clauses and amendments.

My apologies, Mr Stringer. I quite appreciate your direction.

The purpose of new clause 9 is to set baseline environmental standards across all farmed land, regardless of whether the land manager has chosen to receive financial assistance for any of the clause 1 purposes. To some extent, that follows on from the discussion about the previous amendment. There is a genuine concern about the systems—it was referenced in the document about the design of the schemes, to which I referred. Uptake is a key issue, as we saw in relation to stewardship. The worry is that if the systems are too complicated, difficult and onerous, there will not be the levels of uptake that we hope for. I asked the Minister about the numbers that the Government anticipate will take up under tier 1 because that is absolutely vital to our discussion. I do not want to press the point, but I cannot believe that there has not been some discussion in the Department about where we hope to get to. There must have been some discussion; there must be some idea of the scale that is expected. I would welcome a response on that point.

As part of the common agricultural policy, our farmers had to meet cross-compliance standards on EU environmental management, animal welfare and traceability to qualify for payments. Its onerousness and the fact that, to many, it seemed a bureaucratic system was the cause of justified complaint, but it is actually quite difficult to design compliance systems that do not end up in that situation. That is not to say that we cannot do better. Again, had we had the opportunity to discuss the ELMS policy paper in detail, we would have seen that there were some innovative suggestions in it. I will have to continue to try to refer to them tangentially.

We have left the European Union, and our worry is that there is a gap. We might well find that the Bill has unintended consequences that will leave much more of our countryside relatively unprotected. A point that I had hoped to make in the debate on the previous amendment, but which I will make now, is that there was an astonishing statement in that document about whether tier 1 payments should be dependent on regulatory compliance. I cannot think of any other sector in which there would be an issue about regulatory compliance. I may be missing something here—the Minister is a learned lawyer, so I shall be careful—but it seems pretty odd to be paying people to obey the rules. In any other sphere of life, I think people would find that surprising.

In the slightly odd world of the common agricultural policy, the payment was an accepted part of the way we did things, but it is certainly worth raising the question now, when looking at potential compliance issues, and debating it. All members of the Committee, depending on their point of view, either enjoyed or winced at George Monbiot’s evidence last week. He put it pretty forcefully. I think many of our fellow citizens and constituents would want to ask the question, too. It is a reasonable point.

The Bill includes provisions to move away from cross-compliance, with clause 14 giving Ministers the scope to simplify and amend the horizontal legislation that facilitated the operation of the CAP, including farmers’ compliance with EU laws on environmental and animal welfare standards—I apologise for diverting into eurojargon, but I am afraid the debate is constantly beset by it. I do not think that we have yet seen any long-term plan from the Government to replace that system, flawed though it may be, with the robust regulatory baseline that we believe we will need to ensure that environmental and animal welfare standards are met across the board in land management.

There is an irony in that. The Committee on Climate Change issued a report in January titled, “Land use: Policies for a Net Zero UK”, which is a useful document to inform our discussion. It includes a handy chart on page 80 that outlines the current proposals for the replacement of the common agricultural policy. If people want a one-pager, it is pretty good. The only problem is that its opening line says that the Department for Environment, Food and Rural Affairs proposes:

“The development of a new regulatory baseline reflecting the ‘polluter pays’ principle.”

I am not sure that that is, strictly speaking, accurate. We are looking for it, but we do not think that it exists, without our amendment.

The concern is that farmers may decide not to participate. When I first looked at this brief, one question that struck me was what percentage of people currently do. Most do, of course, because public money is on offer; it would be foolish not to. However, it was a simpler system—a direct payment system—and people were happy to take the money. If they are asked to do more to get the money, it will be a different decision. I suspect that some will decide that it all looks a bit difficult and complicated, going back to my point about uncertainty, and will operate outside it.

Returning to my point about numbers, a few farmers operating outside the system may not be a problem, but many doing so certainly would be. We would have to rely—this goes back to my point about the interrelationship between this Bill and the Environment Bill—on having some pretty strong legislation. Again, it is difficult for the Committee, because many would argue that the Bills are being considered in the wrong order. It might have been better to pass the environmental legislation first. We do not know what it will include. On the basis of what we have seen so far, as my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard), the shadow Secretary of State, said last night on Second Reading, we support much of it. We did not vote against it, but we think it needs to be greatly strengthened. Not knowing whether it will be leaves us in a difficult position.

Some of a cynical disposition might say that the Government are left in almost a win-win position. They have burnished their green credentials, setting up a fantastic new environmental scheme, and have even got the money for it, which is quite unusual in politics; but the scheme is such that most people will not take it up. Far from being a greener, pro-environment Bill, it will therefore have the unintended—or possibly intended—consequence of saving the Government a lot of money and making them look good, but doing nothing to improve the environment. That is a really serious issue, which is why the amendment is so important.

Part of the solution relates to the points I raised about take-up in the ELMS document. If there is mass take-up, which is the suggestion, everything is possibly fine. If not, as I said, the downside is direct payments through the back door, and not getting the environmental lift we are looking for. I know the Government will not agree with that, but it is a risk. If we do not go that route and instead go the tougher route, there is also a danger of damaging the environment.

I do not deny that it is a difficult conundrum; it is one that I would love to be dealing with as a Minister, rather than as shadow Minister. I suspect that if I were in that position, the Opposition would be making exactly the same tough, robust points, because these are real-life conundrums. It is my job in the interim to make the points on behalf of our environment and our farmers.

We need to make sure that across all our agricultural land, the baseline is land management that recognises the huge challenge of climate change, protects our soils, guards against flooding, encourages resilience in biodiversity and prioritises high animal welfare. We believe that we have to set minimum standards across the board, so that the Bill—this goes back to a point I was making earlier—genuinely incentivises those that go above and beyond. I still think that that is probably what the Government want to do, but the contradictions and difficulties are being glossed over at the moment.

The Institute for European Environmental Policy, in its report, commissioned by a number of the witnesses that we heard from in the evidence sessions, said that there are a number of gaps in legislation, which will have real consequences, particularly for wildlife on our agricultural land. The interaction between EU retained law and our current legislation is tricky. The assumption that all these plans will necessarily work as we think they will could well be open to challenge. We will return to that wider point, but on this particular point we believe, and the institute believes, that there may be some gaps in legislation that will result in there no longer being protections for hedgehogs, nesting birds and hedgerow habitats, partly due to some of the potential changes in the 2 metre wide buffer strip rules. Given that we have already lost 97% of our hedgehog population since the 1950s—a point that was made yesterday by the right hon. Member for Epsom and Ewell (Chris Grayling) in the Second Reading debate on the Environment Bill—there is genuine concern. That is why we need to make sure that we are covered.

There is also the point—I certainly would not say this about the current Ministers—that in future some of the financial assistance that is being redirected could be moving towards productivity rather than environmental protection, and that, too, could compromise our environmental safeguards. That goes to the heart of what the Bill is really all about. The “Health and Harmony” DEFRA consultation paper for the Bill outlined that the Government wanted to embed the “polluter pays” principle throughout. As I have said, the danger is that we could end up, as George Monbiot explained, paying the polluter not to pollute, which is the other side of the coin. We do not want that to be the outcome, and we have heard from a number of key witnesses how important that is.

In conclusion, new clause 9 outlines that it should be a duty for the Secretary of State to establish a baseline regulatory framework “for or in connection” with the listed purposes. It outlines that the regulations “may include” provisions about enforcement and would be subject to the affirmative resolution procedure to ensure that we continue to have robust debate and scrutiny of the most appropriate baseline regulatory framework.

Amendment 36 would ensure that those who receive financial assistance under clause 1 public goods are meeting those baseline environmental standards as well, and will be rewarded for going above and beyond.

The amendments would enshrine in the Bill a legal duty to make regulations that govern agricultural and horticultural activity and to restrict financial assistance to those who are compliant with those regulations. In our view, the amendments are unnecessary, because we already have a regulatory framework that manages agricultural and horticultural activity and protects the environment.

In our view, the amendments are unnecessary, because we already have a regulatory framework that manages agricultural and horticultural activity and protects the environment. With this Bill, we will enshrine in law our commitment to the environmental purposes that matter so much to us all.

New clause 9 is unnecessary because it simply lists purposes, standards and enforcement mechanisms that are already contained in domestic legislation. I can offer the hon. Member for Cambridge another reassurance: we are reviewing the regulatory framework and we will work with farmers and land managers to consider where we can improve it to deliver on our environmental goals as the world moves on and we change our priorities. The challenge is that the current system is fragmented—I understand that criticism—and often appears complicated to those who use it. The new clause does not rectify that problem. I hope that our continued work to redesign our regulatory framework, in which I am happy to involve him if he wishes to have discussions about it, will deal with those issues in so far as it can. As he said, they are complicated matters.

On amendment 36, if we restrict access to financial schemes in that way, we might deter those who are unsure of their regulatory compliance. In addition, we might deter those who may use financial schemes for improvements and enhancements to environmental and welfare standards. We could end up deterring individuals from accessing the very support schemes that they might need to deliver on all the goals that we think are public goods.

Of course, the baseline is that we expect everyone to comply with the law, irrespective of environmental schemes access. We will put in place effective enforcement mechanisms to ensure that that is the case. Our new approach, however, aims to support people to achieve positive environmental outcomes, not just to punish them for failing to achieve, as was a failure of the previous regime.

We have left the EU and we now have the opportunity to transform our regulatory system. The amendment would keep us in the old familiar world of the common agricultural policy, which would stop us making those changes and, with help, doing things better. I therefore ask the hon. Gentleman to withdraw the amendment.

New clause 22 would require us to consult on the appropriate body to regulate and enforce our regulatory framework, and it would give us a month from the Bill’s Royal Assent to start to do that. We will already have an onus to consult when we consider creating a new public body—that is absolutely sure—so we do not require a duty to be placed on the statute book to require us to do something that we are already required to do.

We have taken a proactive approach to engaging with farmers and land managers on the measure. We will consult again on our vision and priorities for the future regulatory framework by the end of the year, as we continue to work in partnership with farmers and land managers. Our new strategy is being developed from the responses that we received to the “Health and Harmony” consultation and from the review led by Dame Glenys Stacey. As it is the first time I have mentioned her, I should say that she is my constituent and I worked closely with her on probation issues in a previous life.

In the fullness of time, that work may lead us to create a new body. If we decide to do that, it will be underpinned by consultation and collaboration with partners across the field. We do not need a duty to consult on enforcement bodies at this point. We have one, we will, and we are already working on a new approach to the new regulatory and enforcement system.

We want an effective regulatory system with a strong suite of requirements, and of course we want to be able to enforce it. We should not, however, consult on an isolated aspect of the system at the expense of considering the wider vision of what we are trying to achieve. There is no need to rush to produce what would be a hurried, potentially ineffective and partial consultation, creating a false sense of urgency when we already have a regulatory baseline.

I am grateful to the Minister for setting out the reasons why she does not believe we need the baseline. I neglected to make any comments about new clause 22 in my opening statement, so I shall weave those in to what I say at this point.

Of course we all agree that enforcement is critical. One of the things that has struck me in my relatively few years in this place is how often we pass legislation and then struggle with enforcing it. That does not do our reputation any good, and it certainly does not do our constituents any good. I have in the past reflected on the fact that all it does is to make good, law-abiding people cross. It does little to dissuade non-law-abiding people from their actions. As the Minister says, it is a conundrum.

I was impressed by Dame Glenys’s report on the farm inspection and regulation review and I echo many of the points that the Minister made. I am sure she did not need to know that Dame Glenys is her constituent to reach the conclusion she did. I will just point out one or two observations from the report that reflect what I have said. I think that she said that current enforcement is nowhere near effective, and I am told that of the 10,600 staff at the Environment Agency only 40 do farm inspections. That seems extraordinary to me. There is thus only a one in 200 chance of being inspected by the Environment Agency. Quite clearly it is pretty busy at the moment, so that is not a criticism of the agency, but it shows the scale of capacity that is needed. I gently go back to my earlier observations: it is great to be ambitious but the Government have to think through the enforcement mechanisms that go along with that, and ask themselves whether they are prepared to bear the costs.

Of course, there is quite a range of DEFRA-related bodies that deliver compliance with farm regulations, such as Natural England, the Forestry Commission, the Animal and Plant Health Agency and, sometimes, local authorities. It is not unfair to say that the Rural Payments Agency has not always covered itself in glory in the past. We congratulate it on its improvements in recent times, but we know the historical difficulties that it has had with, frankly, just doing the administration. I appreciate that it is assisted by others in that, and my understanding is that Natural England has a lot of the expertise behind it. Given some of the well documented pressures on that agency as well, however, the question arises of where the resource to make everything work will come from. Maybe it will come from the money that would have been going to farmers out of the direct payments scheme, but we do not know.

That is the problem with the entire debate. There is potentially £3 billion to spend: how will it be used? We need some clarity from the Government. Our suggestion was that the Secretary of State should, within a month of the Bill’s receiving Royal Assent, hold a proper consultation on the most appropriate body to enforce important baseline environmental regulations. We would then want to require the Secretary of State to bring before Parliament the decision on the consultation and tell us how it is intended to proceed.

We know from the Stacey report that the current punitive compliance measures often do not have the effect that we seek. We want not to punish people but to help them to do the right thing. One of the positive things in the paper “Environmental Land Management” was about finding a way in which help can be given. A common complaint about the previous system was that it was pernickety and that a minor transgression could cause a disproportionate response. Those are things we all agree on, and would all like to get changed.

The one thing I am nervous about is that a better system may require more people—or more technology, or whatever. The question is how it will be resourced. That is why we think we need a more comprehensive framework to deal with it. I appreciate what the Government have said about trying to implement the Stacey review’s recommendations, but we remain nervous that, without the resources needed, we may not be able to achieve what we are trying to do. We think that is key not only to supporting rural communities and people who work in producing food, but to achieving the environmental gains that we wish to see.

Our worry is that without a comprehensive compliance regulatory system behind it, this move could lead to unintended consequences and possible environmental degradation rather than improvement. We think that that is so important that we will press the amendment to a vote.

I beg to move amendment 48, in clause 2, page 3, line 30, at end insert—

“(3A) Financial assistance allocated to a scheme in a particular year but not spent within that year may be carried over to a future year for spending on one or more schemes.”

This amendment would enable Ministers to “carry over” any monies left unspent at the end of a particular budget year for spending in subsequent years.

This is a more probing amendment and one that we do not intend to put to a vote, so hon. Members can be at ease. Mr Stringer, you will be pleased to hear that I will not read out the amendment.

I may have misunderstood how DEFRA’s economics works, and I am ready to stand corrected. The Government have not put it in legislation but have indicated that the money will be available for the remainder of the Parliament. If not all that money is used in one year, what happens to it? All I am looking for is some explanation, as the amendment suggests, that it would be possible to carry over money into subsequent years. That point has been raised on a number of occasions by a number of people, and there may be a simple explanation.

When debating the statutory instrument on Monday and looking back at our old friend regulation 1307/2013, it struck me that the current system has quite complicated reserves that the CAP specifies for dealing with some issues around fines, compliance and so on. It goes into considerable detail about how that should work. A similar system may be envisaged for us. I asked some questions about the issue during the debate on the statutory instrument, so perhaps when there is a reply there will be some clarity.

Again, it has been said that this is a framework Bill. That is fine—we get that. But this is the opportunity for Parliament to ask these questions. The headline figure of money is a concern to some in rural communities, and it may not be available if is not within the right timeframe. I suppose I have a simple question.

Is the hon. Gentleman talking about money allocated to a scheme in general that is then not used, or money allocated to a farm that is not used due to some situation on that farm? Is he talking about the specifics of money allocated to farms or the generality of money allocated to a scheme?

That is a good point. Some of this discussion has conflated the two things, which may not be helpful for people. Actually, no money is allocated nationally. It is a political promise; it is not in legislation. Of course, no Parliament can bind future spending allocations. We will watch with interest what happens in the coming weeks, but the political promise has been given.

In answer to the right hon. Gentleman’s question, we are thinking of the headline figure. We hope that the £3 billion will be available each year for the next five years, as the Government have promised. Again—I am sorry to sound like a broken record—this is a key question: if the uptake of applications is not high enough, the money will not be drawn down, as far as I can see. As I said earlier, that could be a tempting position for any future Chancellor of the Exchequer.

Is that issue not covered by clause 8, which allows for the extension of the scheme? When I come to discuss my amendment 9, we can explore the matter. One could possibly freeze the switch from the basic payment scheme to ELM schemes. I guess that the hon. Gentleman is discussing the situation in which the uptake of ELMS is not very high, because we are fairly sure that the uptake of the BPS will be pretty much 100%. Is this not already covered in that clause of the Bill?

The right hon. Gentleman makes an important point, but I am not sure that the issue is covered; that is why I am seeking clarification. I am afraid these points are about a lack of certainty. We are looking ahead a long way—seven years, potentially—for the transition. We have some clarity on the 5% plus, capping and so on for the next year, but beyond that —I hate to go back to the ELMS document, but there are timelines in there—some of it looks a touch optimistic, frankly.

Given that the process was begun 18 months ago, I hope that it will become clearer through the trials and tests, but we would like to pin down the finances. That is what we are trying to achieve through the amendment. I understand why Government Ministers cannot concede, but I suspect that, as people look more closely, quite a lot of them would agree with this position; if we are going to embark on these ambitious environmental schemes, as we want to, we want as much money as possible to be drawn from the Treasury. It is a very unusual situation, politically, to have a pot of money that looks like it has been allocated before. Where does it go in the future? That is what we are trying to pin down.

As the hon. Member for Cambridge said, I suspect that many people in this room agree with a great deal of what he told us. On this side of the House, we are determined that UK farming should not see a reduction in Government support at this important and exciting time in British agriculture. That is why we have pledged to guarantee the current annual budget in every year of this Parliament.

As I said on Tuesday and again this morning, in response to the previous feedback from the Committee’s last sitting, we have now included clause 4 in the Bill. It requires us to prepare a multi-annual financial assistance plan covering the seven-year transition period. That shows our commitment to planning our future expenditure, part of which will include minimising the likelihood of any underspend from our financial assistance schemes. I am more optimistic than the hon. Gentleman: I expect very high take-up of our new scheme—that is definitely the aim. However, I recognise that underspends can happen despite the very best financial planning.

I am sorry to press the Minister on this point, but will she define “very high”? I would say it has to be more than 50%; maybe it has to be more than 75% to be “very high”.

For all the reasons I mentioned earlier, I cannot possibly give the hon. Gentleman any more detail than is in his favourite document, but I look forward to working with him over the next seven years or more while we develop this marvellous scheme. I thank him, because he is broadly supportive of many of the aims and objectives of the scheme, and he has been moderately polite about it. I agree with him: underspends can happen.

The concept that the hon. Gentleman describes in his amendment is, in principle, something beneficial that we would support. He has been kind enough to talk about my legal experience; I am not sure that this is a matter for primary legislation. I would rather discuss the matter first with the Treasury as part of the spending review process, which is the correct way to deal with it. I hope I have assured him of our interest in exploring the ability to retain financial spend across different financial years, and I therefore ask him not to push the amendment to a vote.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(James Morris.)

Adjourned till this day at Two o’clock.