The Brian Pack report proposed, given the importance of the livestock sector to Scotland and the need to support genuine agricultural activity, that we seek to use up to 15 per cent of our overall budget for coupled support schemes for beef and, potentially, for sheep.
Generally, in Scotland we agreed—the Government, stakeholders, and I hope most of the political parties—that we should consider continuation of coupled support schemes and seek further coupled support because it is a means of supporting livestock production with a link to supporting activity, to some degree. That was, therefore, what we tried to negotiate with the UK Government and in Europe.
Members will be familiar with the well-rehearsed arguments why the UK Government was not keen on coupled support. Its original position was that there should be zero per cent coupled support. We in Scotland did not want less coupled support—we wanted more. The UK Government position then changed to 5 per cent because it became very clear from other member states in Europe that the UK was going to be outvoted. It tried to limit coupled support to 5 per cent; the final deal, of course, gave us 8 per cent.
During the consultation, I said that if we were to have 8 per cent as the regulations allow, we anticipate that we would use it all for the beef sector. However, as a result of the overall impact of the budget changes and the move from the historic payment system to area-based payments in the beef sector, we are looking for other ways to help the sector. In addition, we are looking at linking payments to genuine activity in Scotland, which would also support the sheep sector.
We wanted to get as close as possible to the original 15 per cent that we wanted in Scotland, and we asked the UK Government to allow us to use more of the UK’s flexibility, as we did with the current CAP policy, because the UK Government refused to negotiate more than 8 per cent for Scotland. We feel that the UK Government should now allow us to have more than 8 per cent, using the UK flexibility, so we have asked to be allowed to use 13 per cent, which is the maximum that any other European country would have. It would be great to have 15 per cent, but it has been difficult enough for us to persuade the UK to go above zero per cent. My view is that we should at least match the best that any other European country has: 13 per cent, which is what I have asked for.
The UK Government has given out many mixed messages on the issue, and there is a lack of clarity. We got the message that there was no appetite for supporting more coupled payments in Scotland than in the rest of the UK, but at the point when the UK Government took the decision not to pass on the conversion uplift to Scotland, it indicated that it was willing to go further than 8 per cent—perhaps up to 10 per cent. Since then, the UK Government has signalled that it has not ruled out going up to 13 per cent, but it has made it clear to the Scottish Government that there will, if it goes above 8 per cent, be strings attached.
We have tried to find out the details of those strings. Owen Paterson has said that he does not want an increase in coupled payments to increase production in Scotland; I am trying to work out what that means. He has also said that we would have to take responsibility for any disallowance, and for other issues around misuse. Those are my words, not his. We do not understand quite what he means. I assume that he means that we would have to carry liability for anything that went wrong with using coupled payments that resulted in penalties or disallowances. I would have expected that to be the case anyway, but apparently that is a string. We are trying to understand the situation better.
Owen Paterson has also said that we would have to go to Europe to ask for permission. I have said to the UK Government that it is a UK internal decision and not a European decision, but the UK Government has maintained that it is a European decision and that we would have to go to Europe. As the committee will be aware, I, along with George Eustice, who is a parliamentary under-secretary of state from the Department for Environment, Food and Rural Affairs, spoke to the relevant commissioner at one of the councils a few weeks ago. The commissioner gave us a verbal green light and reiterated that it is—as I thought—an internal UK matter. He is content for Scotland to use 13 per cent coupled support if the UK is happy to do that internally. He is interested only in ensuring that the UK, as a member state, does not breach 8 per cent.
That response was slightly contrary to the UK Government’s belief that we had to get specific permission from Europe, but we went through the rigmarole and got that verbal commitment. However, the UK Government has still not given us a commitment to use the 13 per cent, because it now wants from the commissioner written confirmation reiterating what he said to us at the meeting.
I am slightly concerned about that, because I think that the commissioner will begin to lose patience with the UK, and our stock of goodwill is in danger. However, we are still demanding that the UK Government take the decision to support 13 per cent. If the UK Government wants written confirmation from the commissioner, it is up to it to do so, but the decision is an internal one. The UK Government should just say to us that it is at least willing for us to have 13 per cent if it gets the written permission from the commissioner, but we do not even have that yet.
In other words, there are two separate decisions. The UK could say to us, “If we get the go-ahead from Europe, we are willing to go with 13 per cent.” That would at least let us know that we would get 13 per cent, but it is not even going that far yet, which is frustrating. I am concerned that the UK keeps going back to ask the commissioner to reiterate what he has already said, which is causing him to lose patience. However, we are where we are, and at some point soon I will have to take a decision.