Rural Economy and Connectivity Committee

Meeting date: Wednesday, August 26, 2020

Official Report 769KB pdf

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Agriculture Bill

Under agenda item 2, we will take evidence on the Agriculture Bill, which is United Kingdom Parliament legislation, specifically in relation to legislative consent memorandum LCM-S5-38a. I welcome the witnesses, who are giving evidence remotely. Fergus Ewing is the Cabinet Secretary for Rural Economy and Tourism, and George Burgess is deputy director of food and drink for the Scottish Government.

Before we move on, I ask whether any members wish to declare an interest. I will start. I have an interest in a farming partnership.

Likewise, I declare an interest in a farming business in Aberdeenshire.

I am the owner of a very small registered agricultural holding, but I derive no income from it.

I ask the cabinet secretary to provide a short opening statement of up to three minutes.

Good morning. Thank you for the opportunity to appear before the committee today. I am to give evidence on the supplementary legislative consent memorandum on the UK Agriculture Bill.

On 13 May, I gave evidence to the committee on the initial legislative consent memorandum for the bill, which was lodged on 4 May 2020. The initial memorandum identified a number of provisions contained in the UK Agriculture Bill that alter the executive competence of the Scottish ministers, that fall within the legislative competence of the Scottish Parliament and for which the Scottish Government recommended consent. Provisions relating to food security, fertilisers and the red meat levy were consented to because they appropriately respected devolution and, in the case of the red meat levy, had been promoted by the Scottish Government.

The initial memorandum confirmed that the Scottish Government could not, at that point, recommend consent for provisions relating to organic products and the identification and traceability of animals, and that we would pursue further discussions with the UK Government there anent. Scottish Government officials have worked hard with their counterparts in the Department for Environment, Food and Rural Affairs. Following that work, the addition of statutory consent locks to the provisions on organic products and the identification and traceability of animals means that the Scottish Government is now in a position to recommend that the Scottish Parliament grant consent to those provisions. I am pleased that that good work has taken place between officials and ministers.

However, the committee should note that the Scottish Government is not content with three parts of the bill: the provisions relating to the World Trade Organization, fair dealing in the supply chain and producer organisations. Although the UK Government has tabled amendments to the WTO provisions in the bill, the Scottish Government’s intention remains to recommend that Parliament withhold consent to the amended provisions. The UK amendments remove clauses 42(4) and 42(5), which would have allowed the secretary of state to impose requirements on the Scottish ministers to provide information. Those were the provisions that the UK Government conceded required the consent of the Scottish Parliament.

Although the Scottish Government is content with the amendment to clause 42, it does not affect the need for the Scottish Parliament’s consent to part 6 of the bill as a whole. As no further amendments to that part of the bill have been proposed, the Scottish Government’s position remains unchanged. The draft LCM set out in our supplementary memorandum clearly identifies the specific provisions that the Scottish Parliament is being asked to consent to, and it confirms that we are not consenting to the whole bill. I felt it useful to outline those facts for your benefit, convener, and for the benefit of members.

Given the limited time available, I will conclude my remarks there. My senior official, George Burgess, and I are happy to take questions from members.

Thank you, cabinet secretary. Quite a lot of members want to ask questions. We will start with Peter Chapman.

Cabinet secretary, as you rightly said in your introduction, one of the previous issues of contention was livestock traceability. I am interested to see how traceability systems will work in practice and whether the new livestock information service and any border that is established under clause 32, with the consent of the Scottish ministers, will be practically co-ordinated with the existing ScotEID system that is in place. It is very important that any system here is compatible with systems across the UK, so I am keen that that is thought about as we go forward.

Each livestock system in the UK will work independently and will gather cattle identification, registration and movement data in its area, as well as the movement data of other livestock species such as sheep, goats and pigs. It is expected that the systems will exchange data electronically when an animal or animals move across a border—for example, from Scotland to Wales. For cattle, the data would include the animal’s full history: its date of birth, the identity of the mother and the identity of the sire—the father—along with every holding that the animal was moved to in Scotland. As Mr Chapman says, and as we know from past experience, that information is necessary to prevent disease or, if disease occurs, to be able to deal with it effectively and trace where animals have been throughout their whole lives.

It is absolutely essential that the systems, albeit different in each devolved Administration, speak to one another and exchange information. I am satisfied that they do, and I hope that that answer is satisfactory to Mr Chapman.

We will move on to the next question, from Angus MacDonald.

With regard to the WTO agreement on agriculture, and further to your reference to it in your opening remarks, will you update the committee on discussions between the UK and Scottish Governments on the provisions regarding the WTO agreement on agriculture and on whether the Scottish Government feels that the provisions as drafted will directly or indirectly affect Scottish competence in agricultural policy?

It has been a long-running show. I am mindful of the fact that I have discussed those matters in person with both Michael Gove and George Eustice over a number of years. The Agriculture Bill has quite a long provenance, and it was clear from the outset that the WTO rules were a sticking point. Initially, we argued that the way in which they were originally drafted in the Agriculture Bill impinged on devolution. Mr Gove resisted that argument, but I am pleased to say that common sense prevailed and it has been accepted that one part of the WTO provisions in the bill did impinge on devolution. That part has been corrected, and I welcome that. However, as I pointed out in my introduction, some clauses still allow the UK secretary of state to carve up the UK’s allowance of overall financial support for farmers—for farming support and rural policy—under the WTO agreements without the need for the agreement of the devolved Administrations.

During the Brexit referendum campaign, pledges were made that, post-Brexit, the total sum of support to rural Scotland and rural Britain would be at least matched. However, the WTO provision, at least in theory, gives the UK Government unilateral power, without consulting the Scottish Parliament at all, despite the fact that farming has been a devolved policy for 21 years, from the outset of devolution. The provision drives a coach and horses through that. It is somewhat worrying and very disappointing that, having gone so far as to admit that it was wrong initially, the UK Government has not gone further to respect the Scottish Parliament and devolution.

That is, indeed, disappointing.

Cabinet secretary, can you clarify a point that you made about the funding being matched? Were you expecting it to be matched for the length of that parliamentary session or for ever?

Those statements were made by Michael Gove and George Eustice in the course of the referendum campaign, and the promises were not restricted in any way or time; they were open ended. People were asked to vote in the referendum on European Union membership on the basis of pledges that, if Brexit happened, the UK Government would provide at least the same level of support for rural Britain in perpetuity.

I am not saying that the UK Government will necessarily depart from that pledge but that the provision gives the UK Government the power to exercise WTO powers without reference to us, if it so chooses.

The UK Government has clearly said that it wants to scrap the basic payments by 2027. That means a radical departure whereby the direct income support payments that were enjoyed by farmers and crofters in Scotland could be at an end, and the UK Government has not said what would replace direct basic payments.

Bear in mind the fact that, without the basic payment and other payments that they get, most farms and crofts in Scotland would make a loss. A majority of farmers and crofters in Scotland rely on that money to survive; I think that it is nearly two thirds of them, although I can check that. The issue could not be more serious, because it goes to the heart of the future funding for the poor in Scotland and Britain.

Thank you for clarifying that, cabinet secretary. I note that, at the same time as that process is going on, an EU review of farm payments will be carrying on in the background, so EU payments might be cut as well.

Good morning, cabinet secretary. I am looking for an update on where we are with the development of common frameworks and the working arrangements on the clauses in the bill that apply to areas that are reserved to Scotland, such as organics, animal health and fertilisers. I am also looking for an update on an issue that you have talked about already—agricultural support and how the changes in the UK bill will impact on Scotland, what that will mean for agricultural support in Scotland and the policy direction that we are likely to take. Obviously, there is still a lack of detail on that.

On the contrary, “Stability and Simplicity: proposals for a rural funding transition period” gives more clarity in Scotland than anywhere else in the UK—up to 2024. I have made that point before, so I will not labour it. In legislative terms, organics policy is mostly devolved, although an agreement has existed that allows the secretary of state to act on a UK-wide basis as the competent authority on organics with the consent of the devolved Administrations—that is the key point and the concession that we won. Of course, it is a point of principle for us.

The framework is a mechanism to manage future UK-wide organics policy and sets out joint decision-making mechanisms between DEFRA and the devolved Administrations. Our officials, led by Mr Burgess, will complete a light-touch review to allow the framework to move into phase 3, which will allow for further policy development specifically regarding the internal market and the Northern Irish protocol, as well as stakeholder consultation and parliamentary scrutiny.

On animal health and welfare, it is the intention that the framework will respect devolution while being able to manage any divergence that might impact on the internal market. The framework will also allow for a dispute mechanism when no agreement can be reached between the Administrations. Those are positive developments.

08:45  

The third part of Mr Smyth’s question was about financial support. The bill does not prescribe financial support, and, as I understand it, that is not the purpose of the bill. The UK Government will make executive decisions on those matters. In my answer to a previous question, I explained the risk that exists in theory. I will not overstate the risk, because it might not happen in practice, but it could. As I understand it, the bill does not provide clarity about how money will be deployed in the future, post-Brexit; it is designed to set out a framework and legal mechanisms to deal with all the various matters.

I would normally go to Emma Harper next, but Stewart Stevenson has asked to come in on the back of Colin Smyth’s questions.

I am looking for a brief answer or a long written response. Is what the cabinet secretary has described the common framework that covers the agriculture policy area? We now understand that, as we leave the EU, common frameworks will not necessarily have a big badge on the front saying that they are the common frameworks in different policy areas. Is other work still to be done to develop a common framework on agriculture?

I will ask George Burgess to answer the technical flavour of that question. Mr Stevenson is always ready to surprise us, and he has not let me down this morning. Suffice it to say that, as you would expect, the work on the frameworks is at a fairly early stage, because we have not passed the bill that would formally create the mechanism. The horse should come before the cart, and the cart has not left the shed. I ask George Burgess to add to that.

If George Burgess wants to help the cabinet secretary with Mr Stevenson’s ambush question, he should go for it, but I ask him to keep his answer short, please.

I think that the suggestion of a long written answer is a very good one. I will give a brief—[Inaudible.] There is a mixture. As the cabinet secretary has said, work is on-going on frameworks on organics, animal health and welfare and fertilisers. That work is fairly well advanced.

In relation to the WTO agreement on agriculture and the limit that that imposes on agriculture support, the UK Agriculture Bill and the regulations that will be made under the bill are a statutory framework. There will be associated agreements between the Administrations on the administrative practices with which we will support that. I understand that DEFRA has been working on a draft, but we are yet to see it. Despite the difference of view on the WTO clauses, we have nevertheless been working hard and closely with DEFRA and the other devolved Administrations. As a result, we are getting the draft regulations into a rather better space than they might otherwise have been in.

I think that your answer has just excused you from providing the long written answer that Stewart Stevenson suggested.

Cabinet secretary, you commented on fair-dealing obligations and producer organisations in your opening remarks. Are discussions on those issues continuing with the UK Government? Where do you want the provisions on producer organisations and fair-dealing obligations to end up? I am sure that we need to ensure that the Scottish Parliament consents to those processes, rather than their being imposed on us.

We simply want to have the same principle enshrined in relation to fair dealing and POs as has been enshrined in relation to organics, animal health and welfare and other issues—namely, that nothing will happen without the consent of the Scottish Parliament. That is the golden thread that runs through all these discussions. It is a matter of principle.

I think that this supplementary LCM shows that the two Administrations have worked constructively, ministerially and with officials. We have made progress, thanks to a lot of elbow grease, but we have not quite got there. I am a bit baffled about why not. I have perfectly amicable exchanges with Michael Gove and George Eustice, so it is baffling why the UK Government will not go the extra mile to deal with these matters.

Producer organisations have been devolved for 21 years. I think that their role in how we support future rural development will be key, not least because they can bring together services for farmers, such as provision of machinery; provision of labour; Ringlink, which is a great scheme that provides training, and one that would not happen without the involvement of producer organisations; and getting a better deal for farmers for their grain, which happens with Highland Grain, for example. Producer organisations are absolutely at the heart of future policy, not least with regard to how we support farming financially as a whole. Therefore, this is an issue that could be of practical importance.

The answer is yes, we are still working with the UK. I can say to Emma Harper that we are still trying to persuade them. As an optimist, I hope that we will succeed. However, for the moment, we have not succeeded.

I very much welcome the opportunity to highlight these issues this morning.

Does the Scottish Government see a risk of a race to the bottom in agriculture as a result of the UK Government’s proposals for an internal market?

There is a risk to the protections that are afforded to consumers and the general public in relation to, for example, high-quality food produce, the humane way in which animals farm animals are cared for and for how abattoirs are regulated. Those high standards exist for a purpose, and it is increasingly important to consumers that those standards are maintained.

There are concerns about the diminution of those standards leading to unfortunate results, and we are worried that the UK will perhaps engage in trade deals that might jeopardise those high standards, particularly in respect of various aspects relating to farming in the Americas, and the importation of cheap meat that does not meet the high standards that we have here.

It is no exaggeration to say that we are not discussing a theoretical issue. Increasingly, the farming community is apprehensive—at least; and very worried, in some cases—about what might happen with regard to the undermining of the commercial market. Of course, the cost of meeting those high standards means that there are higher unit costs here than might be applicable in various other countries. This is not a matter for textbook debate; it is very much a practical concern, and I think that Mr Lyle is quite right to raise it.

I have a brief question. I have been listening with great interest to what you have said. Is there still time left to sort out your disagreements with the UK Government?

The answer to that question depends on the parliamentary procedure in Westminster, but I think that the answer is yes. If it is not, George Burgess should contradict me right now. However, I think that it is not too late to sort this out. The bill has not completed its passage through Westminster. Simple changes are all that is required. I understand—although I have not researched this—that there is still time to correct those issues before the completion of the passage of the bill. If I have got that completely wrong, George Burgess will come to my rescue—not for the first time.

It does not sound like you need rescuing, cabinet secretary, unless George Burgess wants to come in.

It would be useful if we could have the answer on that point.

I will be brief. The bill has completed the committee stage at the House of Lords, so it has two more amending stages: the report stage and the third reading in the House of Lords. There are still opportunities for the bill to be amended. The Scottish Government has already prepared the necessary amendments—they were published at an earlier stage. It would be a relatively easy exercise to take those off the shelf and lodge them as amendments at the next stages of the bill.

The cabinet secretary talked about US food standards. I know that there is a difference between production and processing and that the US has started to deregulate meat processing. The US also has a higher use of antibiotics, which can lead to antimicrobial resistance, and uses hormones in rearing its beef and pigs. I am interested in promoting standards and protecting the provenance of Scottish products. In the UK internal market proposals, does Scotland have a say in the future trade deals or negotiations? Do we have the ability to say what we want?

We can make representations, but we are not in the room and we are not involved in the discussions. The UK has been very bullish—particularly in my exchanges with Michael Gove and George Eustice—about those matters. We do not really have a voice in those issues. Emma Harper is articulating the concern felt by many that things will be done to us and without our consent. That is a real risk.

It is important to put on record that, during our fairly amicable conversations, Michael Gove, when asked by me whether the UK would legislate in the Agriculture Bill to prevent our standards being undermined by any trade deals and whether it would require, for example, any imported meat suppliers to demonstrate by provision of evidence that the meat had been produced in accordance with standards that are at least equivalent to those applicable in the UK, he said, “We won’t do it in the Ag Bill, but we will do it in the Trade Bill.”

Michael Gove stated categorically in the formal meetings of the interministerial group that I attended that he would prevent such a scenario from arising by law, through the UK Government introducing a trade bill to ensure that there would be no undermining and to guarantee equivalence. As far as I know, convener, that promise has not been implemented as yet—as far as I understand it, there is no intention to implement it.

Emma Harper mentioned the possibility of a lowering of standards in relation to US trade. We are led to believe that the EU is sticking strictly to the principle that standards must continue to be met when trading with the EU. From your contacts with the EU, are you concerned that the EU might reduce that, or will standards continue to be strict in relation to EU trade?

09:00  

I am not a constitutional legal expert and I cannot say that I have studied the matter closely, but I understand that the EU will insist that there will be no importation of produce from the UK unless it meets EU standards. In other words, the EU will insist on equivalence to it standards, which are the ones that we presently support and implement. Therefore, were we to go down the route of deregulation, in theory, it could jeopardise the export markets to the EU.

As members will know, the export markets to the EU for farming are critical. A substantial proportion of lamb exports go to France, for example. We are worried that no deal at the end of the transition period will lead to the imposition of tariffs of 40 or 50 per cent on lamb. The UK has promised that a compensation scheme will be prepared. I raised that issue at the previous two IMGs. I hope that the Treasury will sign up to that, as Michael Gove promised that it would.

The risk that Maureen Watt identifies is real and she is right to raise the matter. It is another question in the Brexit debate to which there has been no answer as yet from the UK Government. It would be helpful, for the sake of farming across the UK, if that particular matter were clarified.

Thank you, cabinet secretary. Before we move on, I record the committee’s thanks to the Delegated Powers and Law Reform Committee for producing its report so quickly after its consideration of the LCM yesterday. Its report was circulated to members late last night. It is always helpful to have the DPLR Committee’s comments in advance of our meeting, and I want to acknowledge the work of the committee and its clerks in ensuring that we had that information.

Are members content to recommend in the committee’s report that the Parliament agrees to the draft motion set out in the LCM?

Members indicated agreement.

There are one or two questions that still remain unanswered. I suggest that, as with previous LCMs, the clerks submit those questions to the cabinet secretary so that we can get the answers on record. Is the committee content with that approach?

Members indicated agreement.

I thank the cabinet secretary and George Burgess for attending the meeting.

09:02 Meeting suspended.  

09:04 On resuming—