Common Agricultural Policy Single Payment and Support Schemes (Cross-compliance) (England) (Amendment) Regulations 2006

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Baroness Byford
rose to move, That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 8 December, be annulled (SI 2006/3254) 5th Report from the Merits Committee.—(Baroness Byford.)

The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. The single payment cross-compliance instrument that we have before us upgrades the previous regulations. The key amendments that it makes are the designation of a competent control authority as an enforcement body for the new animal welfare standards; changes to the competent control authority designations for existing standards; and revisions to the requirements for the soil protection review.

While we on this side of the House realise that we must comply with the regulations when they are set down, we have concerns about them. I know that the noble Lord, Lord Rooker, could not be here today and kindly expressed his regret. I have therefore given the noble Baroness, Lady Farrington, advance notice of the issues that I shall raise. I am grateful to other noble Lords who I hope will participate in this short but important debate.

The changes proposed by the regulations have been looked at by the Merits Committee. It stated in its summary of instruments reported:

“These Regulations amend existing arrangements for securing cross-compliance by those receiving direct payments under the Common Agricultural Policy. We continue to be concerned that these arrangements may be unduly complex”.
 

It stated that that was why the regulations have been drawn to the attention of the House.

Paragraph 13 of the summary states that,

“the Regulations (‘the 2006 Regulations’) amend the Common Agricultural Policy Single Payment and Support Schemes (Cross-compliance) (England) Regulations 2005 (SI 2005/3459: ‘the 2005 Regulations’), notably to designate a competent control authority (enforcement body) for the new animal welfare standards; to make changes to the competent control authority designations for existing standards; and to revise the requirements for the Soil Protection Review”.

It goes on to describe this more fully in paragraph 14:

“In our report, we commented that the 2005 Regulations demonstrated the complexity of the arrangements (standards, conditions, rules etc.) which apply in these areas, and that they underlined the importance of providing clear and effective guidance to farmers required to comply with them”.
 

So very clearly the committee recognises that previous ones were complex.

We had hoped that perhaps, in looking forward, we would have some slight reduction in complexity. I understand that the 2007 cross-compliance handbook for England has been issued in three separate tranches which total a mammoth 140 pages. Will the Minister tell us how those 140 pages have ballooned from the original mere 13 lines regarding good agricultural and environment conditions that are specified in the appropriate European regulations? Certainly the noble Lord, Lord Bach, when Minister, recognised the need to keep the regulations to a proportionate number, and at that stage we were looking to simplify and reduce regulation whenever we could. But clearly, going from 13 lines to 140 pages begs the question as to what is happening.

Will the Minister comment on the relative competent authorities? I appreciate the changes that have taken place since the Natural England Act was passed and that Natural England is now set up and will be the competent authority. The Environment Agency will have a greater inspection role, especially on water and soil. What surprised me was that, in addition to the Secretary of State, the Rural Payments Agency could make recommendations directly, with regard to this statutory instrument. With the record that the Rural Payments Agency has not enjoyed this year and still continues to try to put right, I wondered why it was included, given that we already have the Secretary of State, the Environment Agency and Natural England.

While I am on that point, will the inspection person be one person to represent all bodies or will someone come to do inspections from the Environment Agency, the RPA and even Natural England? That would surely run counter to what we were trying to do in keeping things simple.

Regulation 6 deals with the soil protection review. That part of the regulation has been rewritten and extended. I understand that it is now 70 per cent longer than the equivalent in the 2005 regulation. Some of that is due to better and more careful explanation and the removal of any ambiguity, but it makes it clear that the soil protection review is not just a paper exercise but a plan that the farmers must undertake on a regular basis. Further, in the last resort, it appears that the Secretary of State can require a farmer to manage land in a particular way. That is new and could result in an official telling a farmer that a particular field must not be ploughed or put down to grass at any specific time. If my memory serves me correctly, when we debated that point before with the noble Lord, Lord Bach, we looked at access through muddy gateways to get crops off the land. But that is a minor point.

I return to one or two specific points. First, there is nothing in the regulations that would simplify cross-compliance or reduce its bureaucracy. I refer noble Lords to our debate on 10 January when the Minister said that the average reduction that it was hoped to achieve was 15 per cent of the paper work. Nearly a year on, has any of that been achieved?

Secondly, perhaps the Minister could tell me how a farmer will lodge an appeal. I may have missed that point but I am not sure about it. I should be grateful to know what happens when there is a dispute about the actions of state officials.

Thirdly, the measure states that an authorised person can remove anything, which presumably includes property and animals. If that is the case, what becomes of them in the mean time? I assume that the measure applies also to computer records.

The amendments will result in greater responsibility being handed over to the Environment Agency. What check will Defra have on the Environment Agency or will it act in a totally free manner? Will the authorised person have any training, background or competence, or will they just be someone who is sent round to do the inspection?

Under these regulations the Government will be able to rely on Natural England to carry out some of the spot checks for cross-compliance. Will an Environment Agency person also be involved or will a sole visit be made? When more modern methods of farm inspection were being considered, it was hoped that one visit would do for the whole range of tasks that a farmer had to undertake. It is equally important that the information gained from the various forms that farmers have to fill in is shared across all sections of Defra.

I return to my concern that, in being so specific, the Government could, if they are not careful, be accused of micro-managing and imposing measures on farmers in an overbearing way. I accept that some things have to be stated and I do not dispute that, but the real worry is that the Government might want to micro-manage in such a way that they make practical farming that much more difficult. What happens when somebody fails to comply? Is time given to put matters right or is a failure certificate issued straight away? Is there a right of appeal?

In principle, we do not oppose the thrust of the compliance regulations. But, as I said, to move from 13 lines to 140 pages of detailed regulation seems to me a little over the top, to put it in modern language. Can the Minister tell us how these regulations, which are obviously laid down by EU diktat, are being interpreted in other EU states?

Moved, That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 8 December, be annulled (SI 2006/3254) 5th Report from the Merits Committee.—(Baroness Byford.)

Lord Greaves
My Lords, I thank the noble Baroness, Lady Byford, for introducing the Prayer against the regulations and congratulate her on it. This short debate follows a long debate about reoffending. When it comes to praying against regulations on cross-compliance, the noble Baroness has form, and good for her. These are important matters and it is right that they should be debated.

These amendment regulations are not in themselves earth-shattering. The Explanatory Memorandum suggests that their changes are minimal. That is perhaps a little understated but is more or less right. But the 2005 cross-compliance regulations, which they amend, are far from minimal; they are at the very heart of the whole system of the single farm payment and the cross-compliance regime.

I shall range a little wider than the noble Baroness, who asked some extremely pertinent and interesting specific questions. I look forward to hearing the answers to those questions. I want to focus on the basic issue raised by the Merits Committee in its fifth report of the 2006-07 Session, to which the noble Baroness referred. Paragraph 14 points out the complexity—and I would say the quantity—of these regulations for the farmers and growers who have to implement them. The Merits Committee, in discussing this, went beyond the specific proposals and matters dealt with in the regulations to talk about the Cross Compliance Handbook for England 2006 edition. It pointed out that there had already been a supplement in 2006 and there is now a 2007 supplement. There were three separate documents relating to cross-compliance and the regulations, and together there are 147 pages.

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There are two issues here; are the regulations too complex, or is the presentation and the explanation to farmers too complex and too difficult to understand? The Government have a medium-term objective of reducing and abolishing the single farm payment, if we are to believe what we read in the papers. It is interesting to consider the future of cross-compliance if there is no long-term future for the single farm payment. A great deal of the change of emphasis of the payments that go to farmers is away from producer subsidies, towards payments for public benefits and public goods and for better animal welfare and so on. The whole thrust of that depends on the single farm payment continuing to exist. If it does not, a whole new system will have to be developed in the future. It is interesting that these incredibly detailed regulations are all based on the concept that cross-compliance is going to continue because the SFP is going to continue.

Another interesting question is how far cross-compliance should apply to things that are legally required anyway. The press statement put out in November by the Rural Payments Agency pointed out that the three new statutory management requirements would not actually make any difference to farmers because they were already the law of the land and farmers already had to carry them out. Yet there is an interesting relationship. How much of the cross-compliance regulations are actually law anyway and have to be carried out anyway, and how many of them are add-ons? I am not saying that all the add-ons are necessarily a bad thing by any means. They include, for example, not removing stone walls and not removing hedges, which are otherwise not illegal in most places. Nevertheless, it is not clear at all to lay people, and I suspect it is not clear to farmers either, how much of what is being imposed through cross-compliance is being imposed because the law is not being adequately enforced anyway. It is what I call the ASBO mentality; if you cannot enforce the law through the law, find other ways of doing it.

Nevertheless, there is a great deal of good in the regulations, but the complexity and quantity of the material sent to farmers is extraordinary. I do not know whether they thought it was Christmas in November when this great pack of stuff plopped through their letterboxes or over the farm wall, or wherever it goes. It arrived just after bonfire night, and that is probably a good thing, otherwise it might all have gone on the bonfire. The Merits Committee did not discover the half of it. It discovered the Cross Compliance Handbook for England and the two supplements, which add up to 147 pages, but there is a lot more, all of which is essential under cross-compliance. There are the single payment scheme brochures, as they are called, which is an interesting term for them, of which I believe four are still in existence dating from July 2004 to October 2005. They add up to 126 pages between them. There is the Cross Compliance Guidance for the Management of Habitats and Landscape Features, a very good document in many ways, which was issued in 2005. That is another 51 pages. There is the Cross Compliance Guidance for Soil Management, which is another 40 pages.

Then there is the whole question of set-aside. This is not the debate in which to talk about set-aside and the absurdity of set-aside continuing to exist in a situation in which subsidies and payments have been decoupled from production. There is no sense in set-aside in the traditional sense any longer. It may have environmental benefits, but if so it should be incorporated in the normal cross-compliance regime and not have a whole separate regime of its own. The Government have announced that they will try to get rid of set-aside and we wish them the best of luck, although it may not be easy. There is a handbook on set-aside guidance for England 2006 of 44 pages, and another 10 pages of a new set-aside supplement that came as a little extra in the pack that farmers received in November. All of that, if my addition is correct, comes to 500 A4 pages of solid reading. I am not suggesting that farmers nowadays are all role models for Walter Gabriel and are not capable of dealing with this, but this is first-year honours degree-level stuff. It is the sort of thing that you might have to do an essay on in your first year at university. Farmers are being asked to do this on top of everything else that they do.

They are also receiving supplements, which were a very good thing and necessary in the days when everything had to be type-set and printed. But computers have been invented, and the Minister might take that message back to her department and say that it is no longer necessary to produce a major document and then produce lots of supplements. You can easily produce an amended version of the main document, because it is all on computer.

The handbook on the document that we are discussing states that the supplements can be kept in the flap provided inside the back cover of the handbook. I wonder why we are giving that sort of advice to people. The handbook provides a useful chart of the information available. For example, it states that if you want to discover the regulations on SMR11—food and feed law—you need to look at paragraphs 187 to 194 on pages 45 to 47 of the handbook, paragraphs 5 to 37 on pages 3 to 9 of the 2006 supplement, and paragraph 107 on page 26 of the 2007 supplement. This is nonsense. In this day and age, Defra should be able to get its act together to consolidate all this information, initially to reduce a huge amount of duplication and bring that down to a sensible, manageable level that ordinary farmers and ordinary people like me can understand a bit more easily.

Lord Grantchester
My Lords, I am pleased to be able to offer some reflections on cross-compliance in the debate on the Motion to Annul proposed by the noble Baroness, Lady Byford. I remind your Lordships’ House of my interests as a Cheshire dairy farmer, a director of Dairy Farmers of Britain—a co-operative of some 3,000 dairy farmers in England and Wales—a past president of the Royal Association of British Dairy Farmers and a past chairman of Cheshire County CLA, as well as a member of both the NFU and the Country Land and Business Association.

Traditionally, farmers have always been brought up with regard for good agricultural practice, appreciating that it is their responsibility to future generations to leave their farm in better heart than when they received it. In principle, there is no quibble. With the changes introduced by the reforms of the CAP, whereby farm payments are separated from production and linked to environmental benefits, cross-compliance has created a new base-line standard for agriculture to meet since January 2005.

My understanding is that this statutory instrument does not introduce any new requirements. Rather, it establishes inspection and enforcement arrangements for the animal health and welfare statutory management requirements necessary for inclusion in cross-compliance. It makes improvements to inspection and enforcement arrangements. It makes clarifications and reflects changes made under domestic legislation. Importantly for farmers, it introduces new flexibilities for post-harvest management of land. As cross-compliance is linked to EU directives supporting the single farm payment regulations, I understand that, without these, arrangements are necessary to avoid the risk of disallowance. Can the Minister spell out the scope of that risk and what sort of money could potentially be at risk of disallowance, which would fall to HM Treasury to fund?

Farmers generally have an acute sense of fairness and are sensitive to market distortions vis-à-vis the regulations on their competitors. As agriculture is a devolved matter, England, Scotland, Northern Ireland and Wales have taken slightly different approaches to defining cross-compliance conditions, reflecting their particular environmental and agricultural characteristics. Will the Minister confirm that these differences are monitored and reviewed? Are mechanisms in place to correct any material differences?

The Government are to be commended for their commitment to reducing the administrative burdens placed on farmers by their regulations. The Cross Compliance Handbook for England Supplement for 2007 has been welcomed by the industry, including the NFU and the CLA, as a tool to help to direct farmers to the information that is key to them. Setting out in one document the requirements in full—a one-stop shop—would seem an eminently sensible path to take. Will this handbook be subject to regular reviews within the industry, with the objective of improving its format, clarity and detail?

Cross-compliance sets out the baseline in standards of good agricultural and environmental conditions for the protection and maintenance of soils, habitats and landscape features. Further enhancements are provided for through various schemes, such as entry-level stewardship, higher-level stewardship, hill farm allowance and so on. These schemes are undergoing integration and rationalisation. I understand that researchers from the University of Reading have concluded that the entry-level scheme would not deliver the targets for biodiversity or achieve a reversal in the decline in some species of farmland songbirds. Will my noble friend state whether this research was commissioned by Defra? Has it been critically appraised for its accuracy or is it merely a consultation submission commissioned by the Royal Society for the Protection of Birds? I know that there is general unease at some of the policies and approaches of the RSPB, and we must be mindful that the work of lobby groups does not result in unnecessary, burdensome additions to cross-compliance—so-called gold-plating.

Will my noble friend say what the reporting structure is for the systematic review of the success of cross-compliance and environmental schemes in meeting their objectives? There are some excellent independent organisations, such as FWAG, that could undertake such reviews. I can report that, at Dairy Farmers of Britain, all suppliers are inspected annually to comply with farm assurance standards as a prerequisite of supply. These standards are maintained by all milk buyers to ensure that all products are safe, wholesome and produced according to good agricultural practice.

The Earl of Erroll
My Lords, I would like to make a few remarks from the point of view of what this means to the poor old farmer trying to struggle with it all. I agree with everything that has been said so far. The technical points have been highlighted extremely well.

When I was thinking about this, I picked up some of my old Hansards and noticed that the noble Lord, Lord Rooker, had made one of his early Statements in the middle of a debate on work/life balance. I thought, “How ironic”. If there is one thing that these regulations do not give the farmer, it is work/life balance.

When I rang the whole-farm approach helpline, I said that I needed it online at three in the morning so that it could help me. I was asked, “Why can’t you do it before five?”. I said, “Because I’m working before five, trying to make some money to try to help to support the place. I’m afraid that paperwork gets done late at night, so you need to reverse the working hours for your helpline”. The man grunted and said, “Well, we pack up at five”.

My poor wife groans when, every month, yet another thick handbook, guidance note, supplement or something hits her desk. I am not up to date with them; I shall have to do it in the next couple of weeks to try to help her with this. One thing that really gets me annoyed is the lack of an index. There is no index at the end of each document. Apparently, there is going to be a cumulative index, but how do you know whether you have the latest one or the latest supplement?

In order to try to help with compliance, as it was said that inspections would be minimised if we took part, we decided to enter for the whole-farm approach. I would like to know how many farmers have actually done it, because we have had a lot of trouble with the website. It loses submitted data. Last weekend early in the morning, when I was trying to do the December census, I found on about my fifth attempt that half the details were missing. Two or three of the pages seemed to have been amalgamated into one, so we could not continue.

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The other problem is that the advice is not kept up to date. It includes a little note saying, “Use whole-farm approach”, and there is some interesting material on cross-compliance. How do you find what you need without going through every single page on what is a very laborious site? It is fine if you are sitting in an office with a high-speed internet connection, but when you are 6.75 kilometres from the exchange with a dickey ADSL line running at quarter-speed and you are in contention with about 50 other people, you do not get adequate response times. The trouble does not lie entirely with the line; part of the problem comes from the Defra website. It takes about a minute to load each page and, two hours later, you are tearing your hair out. If you try to untick anything, you find that everything has been unticked and you have to go through every single page and resubmit every question. An example of the questions is, “Have you got animals—yes/no?”. It is a nightmare.

Why do we get so upset about all this? It is because we know that the inspectors are out there to find fault. They are there to remove the money. One has heard stories or three, four or five inspectors arriving at estates and sitting there for a week, going through everything. I know of one large estate where one margin was found to be six inches out and the owner was fined 1 per cent of the single farm payment, which is a lot of money. The agent said, “I don’t think it’s worth complaining about it”, but, to be honest, I think they should take it to Europe on grounds of proportionality. However, the family in question is wealthy and they do not have the time to take the matter up as we would.

The trouble is that there is not enough money in the system, and it looks as though the inspectors are there to reduce the amount of money going to farmers. The attitude is completely the opposite of that found in France, and it is very worrying. Things such as the fertiliser recommendations—is it FB209 or RB209?—used to be advisory, but now you have to justify exactly why you have not complied. Because soil nitrogen levels are very variable, you cannot be certain about things, and sometimes calculations have to be made by eye, by experience or by local knowledge. However, you are not allowed to do that any more.

Then there is the issue of whether people are co-operating. With regard to the RPA, we did our best to complete the SFP5 forms correctly. We could not do so for 2005 because the maps were not approved by the RLR at that point. In 2006, they were. We got the maps through just in time and I was able to correct various figures on them. I included a note saying, “You had better put these back into 2005”. Having looked at the entitlement statement, I suspect that they have not done so because we seem to have a floating 0.75 hectare entitlement which I cannot account for.

Of course, there is no explanation; nor is any complete information sent by the RPA so that you can reconcile your figures. I transposed two tiny figures—I may have put 0.24 rather than 0.42—relating to the tail-end of a field. I wrote saying that the figure appeared the wrong way round, and back came a very stroppy letter saying, “You didn’t spot this before we did. You are not in compliance. On the standards, we could prosecute you”—which they cannot, because the level is below the allowed limit. The whole point was to bring matters into line with the RLR maps, but the RPA has now forced us to be out of line for another year. Is that intelligent? I thought that the idea was to co-operate and to try to get the information to tally with the maps. As a result of the RPA’s attitude, we now do not tally with RLR base maps, so how do we proceed? I do not want to rattle on for ever, although I could easily do so.

I want to jump back to a previous point. There is a problem in trying to keep the SFP5 form in balance with the census forms and energy crop areas. Different things are deducted and different things have different classifications, so it is very difficult to get things absolutely right. It is not clear where you should be putting things—particularly small things, such as margins around the edges of fields and so on. The RPA needs someone to sort things out. I should be delighted to do it as it might make my life a little easier.

Ultimately, a lot of what happens is insulting to the farmer. My wife looked at the soil management material and said, “For goodness’ sake, I’ve been farming for years and years.”—it is about 30 years—“This could be a child’s handbook”. Some farmers may have been doing things badly but, when you listen to the debate, you would think that Britain had gone to rack and ruin or that the soil was completely destroyed and had no health left in it. But some of the advice is counter-productive. You forget that, when you plough back in and incorporate stubble and so on, which sometimes you have to do, that releases toxins as it decays and you therefore put more nitrogen on. Some of these things have other adverse consequences.

I sometimes wonder if a lot of this has not been written by students with environmental studies degrees, taught by professors who have never left their university. They may have done one farm walk in their life. Reality, however, is about the weather, raining at the wrong moment or being sunny for too long. It is about machinery breakdowns at just the wrong moment. It is about people going sick; on farms, you cannot afford to employ lots of people. It is about contractors letting you down despite the contract and not fitting the right equipment to do the monitoring. What do you do? Tell them they cannot harvest the fields so that they lose their crop?

The reality is that sometimes you must get on with the job. I am not talking about things that are dangerous or will do any long-term damage. On the whole, nature heals itself relatively well if you do not abuse it badly. There is no acknowledgement of that in the attitude of any of this stuff currently coming out of the Government.

I shall finish in half a second but, on the SMRs and cross-compliance, I understand that fewer farmers are now putting in for single farm payments, because they think they will not have to cross-comply. They do not realise that they are still subject to statutory management requirements, but there is a huge difference. A statutory management requirement must be prosecuted in the courts, and the department will have to extract money from the farmer. With the single farm payment, they just remove the money up front and the farmer must somehow appeal. The burden of proof is the other way around; the ministry suddenly has the whip hand. That is the big difference.

I am worried that there is not enough money to do any of this. We are supposed to do all these things. My wife put a huge amount of money, effort and time into doing an entry-level scheme. We managed to get there just in time, but, hang on, it is blocked. Where is all the money going? I suppose that the department has now got so large and bloated, with all the various agencies spawned by Defra, that there is no spare money to go out to the environment and the farmer at the end of the day. It has been totally absorbed by all the employees, civil servants, agency workers and consultants. That worries me. That is not what the purpose of the money was or what the purposes of this move were. I hope that they can get their act together and change things. Perhaps we will get some money out to where it is needed, on the front line.

Lord Marlesford
My Lords, we owe a debt of gratitude to my noble friend Lady Byford for giving us the chance of having a word on this matter. I declare my interest as a farmer. I am particularly glad that we have this Merits of Statutory Instruments Committee. I was a member of the old statutory instruments scrutiny committee, which was extremely boring because all we looked at were vires, so it is a great improvement. With the avalanche of secondary legislation produced by Governments—particularly this one, I am afraid—it is crucial that there should be proper parliamentary scrutiny of its merits as well as its vires. I congratulate the committee on producing this short report highlighting these important points.

There are two patterns to the backdrop of this debate. First, the much-repeated mantra from Her Majesty’s Government about deregulation no longer excites the soul when we hear it. To that must be coupled the commitment of the Barroso commission, appointed in November 2004 with a mandate to deregulate and simplify, to try to make the EU a little less unpopular among member states in the hope, vain as it turned out, that the new EU constitution, agreed at the Brussels IGC in June 2004, would be ratified. We should note in passing that one reason both Holland and France voted down the constitution was the discontent of farmers there.

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The second part of the backdrop is the serious cash- flow problem facing our own Chancellor of the Exchequer as he strives to find resources for the many demands that matter: better services in education, the NHS, law and order—as we heard in the last debate—and the fight against terrorism. The need to see that our Armed Forces are adequately equipped and paid to fight the wars on several fronts to which our Prime Minister sends them is as important as any.

However, let me say something about the home front. One of the few Ministers who I would trust to be effective on deregulation is the noble Lord, Lord Rooker. We are sorry that he cannot be here today, but quite understand why. I know that he will read, mark, learn and inwardly digest every word that has been said. All I would ask of the noble Baroness, who is so kindly standing in for him today, is to undertake to ensure that the Secretary of State, Mr Miliband—for whom I also have quite a lot of time—and, more important in this instance, his part-time Permanent Secretary, Helen Ghosh, take the time to read the debate.

It is clear that the RPA, which has made such a mess of administering the payments, is now gearing itself up to administer the RPA cross-compliance with a heavy hand. The RPA employs more than 3,000 people, of whom 200 are inspectors who undertake the cross-compliance inspections. The RPA deals only with England, but there are about 200,000 farms, of which more than half are smallholdings; that is, they are smaller than 50 acres. I am not a member of the NFU, and I have not always praised it, but in the excellent evidence it submitted to the EU in November 2006 it stated:

“‘Cross-compliance’ has taken on the dimensions of a huge spectre that hangs over every SPS claimant and bedevils even the simplest agricultural operation or land transaction. In short, it has grown from an instrument that seeks to assure good agricultural practice to one that increasingly prescribes agricultural activities and precludes flexible land use”.

That is a serious thing for such a body to have to say, and it is a terrific condemnation. Helen Ghosh should be very ashamed that it should be written because it is the bureaucrats who, despite the excellent efforts that the noble Lord, Lord Rooker, is making, must be asked to do something about it.

I had an interesting letter from the noble Lord, Lord Rooker, which he did not sign himself. If he had read it, I think he might not have signed it. I raised a point, which does not affect me at all, about blackthorn and the worry that farmers have when it encroaches into field margins that they are not allowed to cut by mechanical means in certain months to keep them in good condition. The letter was an example of the bureaucracy that we want to avoid. I am sure it was very carefully written and that somebody took a lot of trouble, but it illustrates the problem. I shall not read great chunks of it, because it is quite long. Instead of giving the sensible answer—which would be to let farmers cut the blackthorn down when it encroaches and, provided they do not do something silly, support them—the letter states that a derogation has to be applied for in every instance and photographs have to be supplied. Think of the cost, not just to the farmer who has to do it all, but to the civil servants, who could be doing something for someone who needs a new kidney machine. That is the opportunity cost and is what the Government must get a grip on. They must recognise that this sort of thing is unacceptable and intolerable and makes people very angry.

It played its part in causing a revolution against the EU constitution. I warn the Government that they must take this matter seriously and do something about it because it makes people angry. The final conclusion that this letter comes to is, “Well, you could always allow the two metres to become a bigger hedge”. What an incredible idea. Of course that sort of thing does not only apply here, it is a big problem in Brussels.

Gold-plating has been referred to. Whether the gold is made in Brussels or in Whitehall I am not sure—probably some in both. I went with the EU Select Committee to Brussels in July 2005. We had a very interesting conversation with Vice-President Gunter Verheugen, whose job it was to try to reduce the bureaucracy. He made the most interesting comment. He said that when he was trying he found that senior officials in his Commission saw their main role in life as—and I quote his words—to keep the “chauffage going”; in other words, to keep themselves in their jobs. That is the danger of bureaucracy. That is what the Government have to get a grip on, and that is what I ask the noble Baroness to take back to her department as a message, at least from me.

Baroness Farrington of Ribbleton: My Lords, I begin by stressing the reality that about £1.6 billion per annum of public money is being put into an industry. In response to the noble Earl, Lord Erroll, the cost of administering the agri-environment scheme is met by Defra and its agencies, and none of it comes from funds available for farmers.

As noble Lords have recognised, this amending statutory instrument does not introduce any new standards. It establishes inspection and enforcement arrangements for the animal health and welfare statutory management requirements that we are required to include within cross-compliance from 1 January 2007. There is a serious risk of disallowance if we do not enforce those.

We need to make changes to inspection and enforcement arrangements for existing standards to deliver more efficient and better-targeted checks and controls. We need to clarify cross-compliance requirements to provide for the unusual circumstances and—this has been welcomed by the industry and was referred to by my noble friend Lord Grantchester—to give additional flexibility to farmers especially in connection with the soil protection review and soil management requirements for 2007 onwards. The provision also reflects changes resulting from newly implemented domestic legislation, so that, for example, farmers do not have to meet two different standards as a result of recent changes to the law on SSSIs—an interest of the noble Lord, Lord Marlesford—and as a result of the establishment of Natural England.

This is an EU requirement that all farmers must meet in order to qualify for their single payment. Most of cross-compliance is existing law or good farming practice—a point that was particularly recognised by the noble Lord, Lord Greaves, my noble friend Lord Grantchester and the noble Baroness. There are two elements that farmers comply with: the first is statutory management requirements comprising obligations under a number of EU articles from 19 directives and regulations applicable to all farmers across the EU. These are legal requirements, and, from 2005, have been subject to a rolling introduction, culminating in the introduction of the first three SMRs—the animal welfare SMR, for which the statutory instrument appoints the State Veterinary Service as the competent control authority. These are baseline standards.

Many noble Lords in this House recognise, as did the noble Earl, Lord Erroll, that much of it is good farming practice. Indeed, some organisations promoting responsible farming have been advocating many of those measures for years, including LEAF, with which the noble Baroness is closely involved. Its introduction to integrated farm management recommends leaving buffer strips. So there are occasions on which we cannot please everyone.

I made a note of the point made about blackthorn raised by the noble Lord, Lord Marlesford, but, without seeing the letter, I am unable to take it further. Perhaps he could send me a copy.

Much has been made of the complexity of standards introduced previously. Many are requirements under existing law and they are reasonable. By comparison with some assurance schemes, there is a light touch. For example, the red tractor scheme contains 150-plus standards to be met. It is worth noting that the instrument also introduces flexibility on post-harvest management of land, which reduces burdens on farmers without negating any of the environmental gains of cross-compliance.

My noble friend Lord Grantchester and other noble Lords recognised that this is part of wider efforts to reduce the administrative burden on the farming industry. The debate is not about the cross-compliance handbook, but I will deal with the comments of the Merits of Statutory Instruments Committee on that. The cross-compliance supplement for 2007, for which we consulted stakeholders and took care to ensure the use of plain English, reduces burdens by helping to direct farmers to information key for them. I note the point made by the noble Lord, Lord Greaves, about updating computers and supplements and will look further into that.

There is additional signposting of information—calendars of important dates, for example—and those efforts have been welcomed by the industry, including the NFU and the Country and Land Business Association. At this point, I assure my noble friend that although we welcome contributions from organisations such as the RSPB, they are considered carefully alongside the many other representations that we receive.

The noble Baroness, Lady Byford, may like to know that although the total number of pages in the handbook and supplements runs to 137, 58 of those are advice, explanation and appendices. The 74 pages of requirements referring to the SMRs—such as animal welfare—go in to considerable detail, but we have been working closely with the industry.

It seems that whenever we set out informal requirements, we are criticised for so doing, but we regard that as a responsible approach that saves farmers having to refer to a wide variety of legal texts and publications. That has been welcomed as a helpful mechanism. In recent research, 75 per cent of farmers surveyed said that their knowledge of cross-compliance had improved in 2006, and 70 per cent found the handbook useful.

We are consulting the farming industry to ascertain how we can improve any future publication. We have to balance two conflicting industry requirements: for greater detailed information on specific standards, kept up to date; and the request that I have noted from noble Lords all round the House to keep it as short and simple as possible.

Unless we have the measure in place, we will be at serious risk of disallowance of EC funds for not having the appropriate mechanisms in place to administer and enforce the new 2007 animal welfare SMRs, which are now a mandatory requirement for the single payment. We are obliged under EU regulations to sample 1 per cent. In answer to the query about loss, the deductions that we are looking at in the context of the very large amount of money to which I referred are 0.035 per cent.

The RPA is currently carrying out the majority of inspections, with appropriate training from specialist bodies, and will continue to do so in 2006-07, with minor exceptions where the RPA cannot be trained in highly specialist fields. I note the comment on how helpful it would be to have one person carrying out the inspections, but there are different areas to be covered in different specialisms.

The noble Baroness, Lady Byford, and the noble Lords, Lord Marlesford, Lord Greaves and Lord Granchester, mentioned gold-plating. The implementation of the SPS means that several of the restrictions and the bureaucracy associated with the old CAP have been swept aside, and farmers now have greater freedom to farm to meet the demands of the market. To receive their subsidy in full, claimants are required to meet only the minimum standards of cross-compliance, which are derived largely from existing legislative requirements or are based on good farming practice. I remind noble Lords that we are dealing with a large amount of public money.

The noble Baroness asked about the role of the Rural Payments Agency. Responsibilities are not being transferred to the agency; they are being transferred from the RPA to the Environment Agency. The Environment Agency was previously a delegated agent, and carried out inspections for SMRs 2, 3 and 4 on groundwater, sewage sludge, and nitrate vulnerable zones. EA is now the competent control authority for these standards. It is also the domestic inspection body, which means that it can conduct its own risk assessments and can target inspections more effectively.

We believe that the regulation is a key tool for Defra in providing high standards in environmental, human and animal health. We have made a commitment to reduce the administrative burdens, as the noble Baroness recognises, and I will write to her on the stage that we have reached in working towards that target. We are optimistic that cross-compliance will fully deliver its part of that programme by the start of 2008.

Noble Lords also referred to other countries. There is a wide variation in approaches. Many member states do not include existing legal requirements, or expect claimants to access some requirements electronically or via multiple cross-references. The noble Earl and others talked about reducing the number of pages, but that would of course increase the amount of the work that the farmer has to do to access other relevant information.

The Commission is due to report on cross-compliance by December 2007 and, as part of this process, may propose amendments to standards and/or the framework used by member states to develop their good agricultural and environmental conditions. Appeals can be lodged through the appeals process and considered by three independent persons. Decisions by the Secretary of State are subject to judicial review.

On competent authorities, Natural England can be asked to carry out inspections for the RPA, and we provided this. The only competent control authorities are the RPA, the Environment Agency and the State Veterinary Service.

18:00:00

The Merits Committee may not have been aware that while the total number of pages in the handbook and supplements runs to a high level, the majority refer to existing SMRs. The RPA inspectors are fully trained and briefed. On the point made by the noble Lord, Lord Greaves, about the three documents and where the regulations are placed, the 2007 index is an important help. The GAEC monitors and reviews the process regularly to ensure we are as up to date as possible. The competent control authority is the Voluntary Medicines Directive.

To my noble friend Lord Grantchester I would say that we are dealing with a very large amount of money: 10 per cent of the £1.6 billion is considered to be at stake if cross-compliance is not properly enforced. Commission authorities apply rates of reduction—5, 10, 25 or even up to 100 per cent. I reassure noble Lords that we are talking about those who deliberately set out to go against the rules, not those who may have a claim due to illness or other problems. We are dealing with intentional negligence.

I have sought to answer the points raised as comprehensively as I can. We are obliged to inspect the 1 per cent and are working as closely as we can with the industry to ensure that we do this work as effectively as possible, which is in their interests. I will not follow the noble Lord, Lord Marlesford, down the route of discussing general Treasury problems, which I do not think he would expect. However, I am utterly convinced that the Treasury would not be happy with Defra were Defra to ignore the rules that allow us to be able to access this source of funding.

Competent control authorities, include RPA, SVS, EA and the Veterinary Medicines Directorate. I thought I has said that but obviously did not. We will work hard to ensure that we do all we can. The aims are extremely good.

Quite frankly, I think to sweepingly attack all bureaucrats in Defra, when we have many professional people who work very hard and share all noble Lords’ aims about the environment and the interests of the farming community, is a little unfair.

Baroness Byford
My Lords, I thank the Minister for her response and I am grateful to all noble Lords who have spoken with regard to this statutory instrument. I am also grateful to the Minister because I know that this is a very full statutory instrument to consider. She said that the cost of £1.6 billion would be borne by Defra. In that equation she did not—which was perhaps an oversight—acknowledge the farmer’s time that goes into reading, complying and adjusting. For those of us who employ farm secretaries, we know how they have to get everything right; otherwise those payments are in jeopardy. She also suggested that no new work was involved, but paragraph 6, “Soil Protection Review”, is now 70 per cent longer than its equivalent. Obviously, there is new work. She said that the RPA would do the inspections, which I am glad to have clarified, and that the Environment Agency would have inspectors too. I am not asking for a response today. Clearly, the Minister has done very well.

Baroness Farrington of Ribbleton
My Lords, there are many points that I was unable to cover in the time available, and that is one of them. I will write to all noble Lords who have taken part in the debate.

Baroness Byford
My Lords, in fact I wanted to acknowledge that. We want to ensure that there is no overlap where it can possibly be avoided, but I accept that we are obliged to inspect 1 per cent.

At the end of her remarks, the Minister said that if we are not careful and do not accept the regulations and implement the cross-compliance, we could lose 10 per cent of the available money. The Minister knows very well that I have no intention of dividing the House on this Motion, but it is important to debate it fully, and we have done so. I should also like to place on the record our great concern that at the moment the European Commission is blocking our voluntary modulation, which may well add to the difficulties the Government are facing. It has been blocked by the European Parliament and is not likely to be cleared until the end of March and therefore may well not kick in until September or October. That is an additional worry for our farmers.

We continue to ensure that we do not seek gold-plating. However, I should say to the Minister that at a meeting of the Family Farmers’ Association held earlier today, a Defra civil servant attending it was challenged with the question, “Should you not be questioning some of these things on our behalf?”. While it does not go amiss to record that we value the work of the Civil Service, I wonder whether occasionally its members do not stand back and ask, “Is this right? Could it be done in a different way?”. If the message from today’s debate has highlighted that issue again, I am happy to have raised it.

Once again I thank the noble Baroness for stepping in and I hope that sending my notes in advance was helpful to her. I know that her noble friend Lord Rooker will read the proceedings of our debate carefully, and that he is a champion in the effort to reduce bureaucracy and red tape, something which we all applaud. I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.