Direct Payments Ceilings Regulations 2020 — House of Lords, 2020-07-01
Topic: Agriculture
John Eric Gardiner (Conservative, Centre-right): My Lords, I declare my farming interests as set out in the register. I hope it would be helpful to your Lordships if I speak to both the Direct Payments Ceilings Regulations 2020 and the Direct Payments to Farmers (Amendment) Regulations 2020, given the close connection between the two instruments These instruments amend retained EU law governing the 2020 direct payment schemes for farmers. That EU law became domestic law on exit day under the Direct Payments to Farmers (Legislative Continuity) Act 2020. The Direct Payments Ceilings Regulations 2020 are needed to amend the financial ceilings for 2020 direct payments. The Direct Payments to Farmers (Amendment) Regulations 2020 are needed to confirm the exchange rates to be used for the payments. These instruments also make other minor operability amendments to the retained EU law. These will ensure that the law can function effectively in the United Kingdom for the rest of the 2020 scheme year. These instruments maintain the status quo of the 2019 scheme. The Chancellor of the Exchequer announced on 30 December that funding for direct payments for 2020 would match the total funding for direct payments available in 2019. These instruments are consistent with that announcement The Direct Payments to Farmers (Amendment) Regulations 2020 are subject to the "made affirmative" resolution procedure. That procedure was specified in the 2020 Act because, under that Act, the EU law became domestic law on exit day and, therefore, operability amendments were also needed by exit day. This avoided a significant legislative gap in the direct payments schemes for claim year 2020 The two instruments before your Lordships today cover all four parts of the United Kingdom. We have worked closely with the devolved Administrations, and they have given their consent to the instruments The Direct Payments Ceilings Regulations 2020 amend the UK national ceiling and net ceiling for claim year 2020. These financial ceilings are in the retained EU regulation 1307/2013 and are used to calculate payments to farmers. The amendments to the ceilings made by this instrument take account of previous policy decisions made by the Government and devolved Administrations. This includes the transfer of funds from direct payments to rural development. Each part of the UK has decided to transfer the same percentage of its share of the ceilings as it did in previous years. This maintains continuity for farmers. The amendments also take into account the findings of the Bew review concerning the allocation of farm support funding in the UK. I have previously commended the noble Lord, Lord Bew, for his review, and I do so again today In line with the recommendations of the Bew review, the Government agreed that Scottish farmers would receive an additional €60.43 million and Welsh farmers an additional €6.11 million over the two-year period 2020 to 2022. The Welsh Government have decided to use the additional funds allocated to them for 2020-21 for their 2020 direct payments schemes. The UK national ceiling and net ceiling for the claim year 2020 have been increased by €3.055 million to account for this. The Scottish Government have decided not to use any of the money allocated to them following the Bew review for their 2020 direct payments schemes, but this money remains ring-fenced for farmers in Scotland The net ceiling has also been amended to take account of the decisions made by the Government and devolved Administrations on the level of reductions to be applied to large payments. Each part of the UK has maintained the same approach as for previous years. I want to emphasise and make clear that the existing reductions are not part of the phasing out of direct payments in England, which will not begin until 2021 The amendments made by this instrument mean that the UK national ceiling for claim year 2020 is €3.055 million higher than it was for claim year 2019. The UK net ceiling for claim year 2020 is €3 million higher than it was for 2019. These increases result from the additional funds for Wales arising from the Bew review The Direct Payments to Farmers (Amendment) Regulations 2020 amend six pieces of legislation, as described in sections 6.3 and 6.4 of the Explanatory Memorandum. The amendments confirm the euro-to-sterling exchange rate for payments under the 2020 scheme. The rate is the same as was used for the 2019 scheme, where 1 euro is worth just over 89 pence. This reflects the decisions made by the Government and the devolved Administrations about the exchange rate they wish to use. It provides farmers with certainty The other operability amendments made by this instrument are minor. The need for these instruments was identified after EU exit. These amendments include removal of some redundant cross-references, such as to articles which are not part of retained EU law. Other amendments include removal of references to the Commission’s budgetary management system of financial discipline, as this does not form part of retained EU law. Some amendments address other outstanding minor operability issues, such as removing references to the "Commission". These two instruments are important, as they provide certainty and continuity for UK farmers. I beg to move.