Category: Policy & Business

Natural England

Natural England has published its action plan for 2020-2021.  Building Partnerships for Nature’s Recovery includes aims for the next five years.  The plan sets out this year’s steps towards its new 5 year corporate goals, includes support for a vision of a ‘thriving nature for people and plants’ and the committment to fulfil the Government’s ambitions for the natural environment in the 25 year Environment Plan.  The full plan can be found via https://www.gov.uk/government/publications/natural-england-action-plan-2020-to-2021

National Food Strategy: Part 1

The National Food Strategy has produced an interim, ‘Part 1’, report providing urgent recommendations to deal with the effects of Covid-19 and the looming end of the Brexit Transition Period at the end of the year.  The Part 2 analysis of the whole food chain will be published next year and will make more sweeping recommendations on how systems should evolve to meet the future needs of society.  The review is being chaired by Henry Dimbleby, the food entreprenuer (see article of last August for details).  In terms of Part 1, the recommendations fall into two parts;

  • measures to deal with the short-term effect of Covid on the availability of food to the most disadvantaged sections of society – especially poorer children.  This includes an expansion of schemes providing free school meals, school holiday food vouchers etc.
  • recommendations on how food is dealt with in future trade deals.  The report states that tariffs should only be cut on products that are produced to standards equivalent to those seen in the UK.  In addition, the Government should have a statutory duty to allow Parliament to scrutinise and vote on all trade deals and should publish an independent review of every proposed deal.

For full details see – https://www.nationalfoodstrategy.org/

Delinking

Last month the Bulletin included a (lengthy) article on the plans for future support in England and how delinking might affect Landlord / Tenant issues.  It was highlighted that delinking was still just an option.  However, it appears that Ministers remain keen on it.  Speaking during a debate on the Agriculture Bill in the House of Lords, Lord Gardiner stated that [our bold] “When delinked payments are introduced, they will replace the current basic payment scheme entirely and for all farmers.  The basic payment scheme and delinked payments cannot and will not coexist. … we may wish to move away from the current approach of making a single payment per year and issue payments more frequently instead”.  It seems clear that breaking the link with land is still a clear goal of Defra – being ‘when’ rather than ‘if’.

Trade Commission

The Trade and Agriculture Commission that is to advise the Government on food issues within trade deals is expected to report ‘within weeks’.  The Chairman of the Commission, Tim Smith, has stated that an interim report will be published in September, with the final report being produced in the New Year.

Scottish Policy

Legislation is currently passing through the Scottish Parliament to set the rules for farm support for the next few years.  Unlike the ‘Agriculture Bill’ in England, the Scottish equivalent goes by the rather less snappy title of the ‘Agriculture (Retained EU Law and Data) (Scotland) Bill’.  Also in contrast to the English legislation, the Scottish legislation is specifically designed to make little change to the current EU support schemes.  This is in line with the Stability and Simplicity consultation back in 2018 which foresees no major change to the BPS (and only tweaks to LFASS) before 2024.

The Scottish legislation has passed through Stage 2 – the Committee Stage.  It now only has to progress through Stage 3 to become law.  One important amendment was made at Stage 2.  This is effectively a ‘sunset clause’ that means a replacement for the current legislation has to be put forward before the end of the next Scottish Parliament in May 2026.  The Government could put forward plans before this date, but it means that the current schemes cannot carry-on indefinitely.  Also contained within the Bill are powers for the Scottish Government to set rules on standards for agricultural products.  As set out in other articles, this potentially sets up clashes with the UK Government attempting to set its own rules on the UK Single Market. 

As well as wanting the minimum change in agricultural support for political reasons (not upsetting farming voters ahead of next May’s elections) there is a more fundamental reason for Scotland’s ‘no change’ agenda.  The present administration obviously has a long-term goal for independence and for Scotland to rejoin the EU.  Keeping Scottish rules aligned with Europe would make this process easier.  This is not just the case in terms of farm support.  The same logic will apply to food standards which will be problematic if the Westminster Government moves away from EU regulations.  It even applies to environmental standards – potentially setting up conflict over pesticides authorisations and even GM.  

No Greening Requirements in 2021

Defra has confirmed the Greening requirents under the Basic Payment Scheme (BPS) will no longer be a requirement in England from 2021.  This will mean for 2021 BPS applications, Crop Diversification (two and three crop rule) and Ecological Focus Areas (EFAs) will no longer be a requirement in England.  There has been no announcement yet from Wales and Scotland, but these administrations will be under pressure to follow suit.  The removal of these rules are part of the Government’s plans to simplify the BPS during the English Agricultural Transition Period.  Originally Crop Diversification and EFAs were introduced to deliver environmental outcomes, but it has been found in practice they have delivered very little.

There will be no change to the overall payment as the ‘Greening’ element of the payment will be added to the main BPS payment.  For many, the simplification probably won’t make too much difference to ‘in field’ operations as most would have three crops in their rotation and, recently, many have been meeting the EFA requirement via hedgerows and margins.  However, at the least, it should make the BPS ‘form filling’ simpler.

Business Rates Review

In the Budget 2020 the Government announced it would conduct a ‘fundamental’ review of the business rates system in England.  As part of this it is has now launched a ‘Call for Evidence’ and is seeking views on a number of questions from businesses and business representative organisations, local authorities, ratings agents, others involved in the operations of the system and anyone else interested in the business rates or the wider tax system.  Repsonses to the ‘reliefs’ and ‘multiplier’ section need to be made by 18th September, with views on the other sections by 31st October.  Preliminary conclusions on the the more urgent questions will be made in the autumn, with final conclusions expected in spring 2021.  Further information can be found via https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/903429/Business_Rates_Review_-_CfE.pdf 

 

 

Groceries Code Adjudicator

Mark White has been appointed the new Groceries Code adjudicator.  He takes over the role from Christine Tacon who was meant to step down on the 24th June, but has had her contract extended by 6 months as a result of Covid disruption.  Mr White will act as deputy GCA for the next few months.  He has a legal backgound and has previously worked for the Compass Group in the food service sector.

UK Trade Bill

On 20th July, the House of Commons voted to reject an amendment to the Trade Bill at the 3rd Reading, by 263 votes to 326, that would have given Parliament the right to approve future trade agreements.  Some fear that this will undermine the farming and food sector given the UK Government’s eagerness to agree trade deals with the likes of the US.  However, some trade experts claim that ultimately Parliament will have to be given a say in UK trade policy as trade agreements are too controversial to be left to prerogative powers.  They cite arrangements under the Constitutional Reform and Governance (CRAG) Act in 2010 as a means to do this.  However, invoking this mechanism is not straightforward as technically the ratification of a Bill (e.g. on a future Free Trade Agreement (FTA)) could only be delayed by 21 days, but the mechanism can be invoked repeatedly, provided the Government makes sufficient time available.  It would have been much more straightforward to give Parliament the right to scrutinise and approve trade deals directly, as is the case in the US Congress and numerous other Parliaments globally. 

The passing of any trade deal, particularly a UK-US FTA would have major implications for British farming.  There are likely to be many twists and turns ahead in this debate and it will be interesting to see the interplay between the Trade and Agriculture Commission’s findings and the position(s) ultimately taken by Parliament on these issues.

The UK Internal Market Post-Transition

The UK Government has published a White Paper on how the UK internal market (UKIM) will operate in the future.  Due to devolution, some policy areas (e.g. fiscal and monetary policy, State Aid) are ‘reserved’ for the UK Parliament whilst some 160 others, most notably agri-food and fisheries, environment and planning as well as product standards for agri-food products are devolved competences.  When the UK was a part of the EU Single Market, it provided the legal framework to enable goods and services to flow freely.  However, with Brexit, policy-setting powers will be ‘returned’ to the devolved administrations, leaving open the scope for greater divergence within the UK.  The UK Government’s White Paper seeks to address this and forms part of a four-week consultation period and the UK Government aims to fast-track legislation from September.  In developing the UKIM system the UK Government aims to:

  1. Continue frictionless trade between all parts of the UK
  2. Continue fair competition and prevent discrimination
  3. Continue to protect business, consumers and civil society by engaging them in the development of the market.

To achieve these aims, the white paper proposes a four main types of measures:

  1. Common UK Frameworks: designed to support the functioning of the UKIM, the management of common resources and the UK’s ability to negotiate, enter into and ratify trade and other international agreements. This includes setting a baseline of regulatory coherence across the UK.
  2. Market Access Commitment: would enshrine into law two key principles:  ‘mutual recognition’ and ‘non-discrimination’ which would enable UK companies to trade unhindered across the UK.  This could mean that products supplied in one part of the UK (e.g. England) which are produced to different standards than other parts of the UK, could still be offered for sale across the entire UK market.  This proposal has ignited tensions.  The SNP for instance fears that if English standards are lowered, it will erode Scottish standards.  Furthermore, as Northern Ireland will be applying EU regulations, products deemed not to be meeting the EU’s standards will not be permitted to enter.  The Paper acknowledges Northern Ireland’s commitments under the Irish Protocol but re-emphasises that Northern Ireland will have ‘unfettered access’ to the GB market.  Whilst the UK Government is seeking to make NI’s access to the GB market as frictionless as possible, the reality is that additional regulatory requirements will need to be adhered to (e.g. Summary Declarations).  Some business groups are seeking compensation or mitigation measures the impact of such friction but are awaiting further details from Government on how to do this.
  3. Uniform subsidy control regime: legislated for in the UK Parliament (as State Aid is a ‘reserved’ matter).  That said, EU State Aid regulations would continue to apply in Northern Ireland with respect to goods as a result of the Protocol.  Services would be applied based on the UK regime.
  4. Independent advisory group and intergovernmental responsibilities: whilst the evolution of the UKIM will be overseen by the UK Parliament, the White Paper stresses the scope for expanded intergovernmental arrangements.  These will help to monitor the health of the UKIM and will help to gather evidence for its future development.  There is also the possibility of an independent advisory body being set up to examine how the UKIM should evolve but these ideas are not fully developed yet.

Although the Paper emphasises the UK’s commitment to maintain its high standards, like a lot of Government publications, its language could be open to differing interpretations (e.g. “committed to promoting robust food standards nationally and internationally, to protect consumer interests”).  On the one hand, this could mean upholding the current standards inherited from the UK’s EU membership.  Alternatively, it could signify a move to evolve standards so that they are more aligned with those applicable elsewhere internationally if that is what (some) consumers want.  Whilst it acknowledges that any changes to food safety legislation would need to be brought before the UK and devolved Parliaments, the Market Access Commitment arguably leaves open the possibility the products deemed acceptable for import into England could be placed on the market in Scotland or Wales.

The White Paper cites a coherent UKIM system as being particularly important for future Free Trade Agreements (FTAs).  This is because it would make the UK as a whole more attractive for countries to do business with it and claims a coherent framework would ensure that the UK as a whole would benefit from such FTAs and would enable UK businesses to compete internationally.  

Finally, it must be emphasised that without the proper regulatory framework, the coherence of the UKIM could easily unravel.  From 2021, one part of the UK (i.e. Northern Ireland) will be applying a different regulatory framework.  The greater the divergence between the UK and the EU in the future, the more challenging it will be to maintain UKIM coherence.  This will present significant hurdles for many aspects of agri-food regulation such as food standards and GM.  Until the post Brexit regulatory framework has bedded in and a new ‘steady state’ emerges with respect to the UK-EU trading relationship, it would be sensible for the UK to choose to have ongoing regulatory co-alignment with the EU.  This could then be reviewed in a few years’ time if required.