My Lords, this has quite clearly been an extensive debate; it has been most rewarding for me to hear such a range of views on Clause 1 and financial assistance. I say to the noble Lord, Lord Judd, that I have thoroughly enjoyed this debate. I agree with the noble Baroness, Lady Jones of Whitchurch: there will be disagreements along the way—I have no doubt—but I think we should all be enthusiastic about the opportunity that we have.
I open by declaring my farming interests as set out in the register. I also say to the noble Lord, Lord Whitty, that I agree with the sound comments he made in many respects. That is precisely why there is an agricultural transition period of seven years and why we are working with farmers on tests and trials, so that we get this right.
Turning to the amendments, as I must and will, I may ask for your Lordships’ indulgence and support in my discussion with the Chief Whip if I go a little over time, because I want to address all the amendments properly.
On Amendment 1, we have chosen to use the term “may” rather than “must”, which is entirely consistent with other legislation. Free from the constraints of the common agricultural policy, the Government need the flexibility to reprioritise and adapt in response to changing environmental circumstances and new evidence. “May” also gives the flexibility to establish and fund schemes for a range of different purposes. The Government set out their long-term vision for what we will use public money to fund in the 25-year environment plan and the policy document published alongside the Bill. I emphasise to all noble Lords and absolutely confirm that there is no doubt that we will introduce new financial assistance.
I agree with the noble Baronesses, Lady Young of Old Scone and Lady Jones of Whitchurch, and my noble friend Lord Trenchard that the construction of the Bill is deliberately broad so that we can embrace almost everything raised on many of the matters. I will have to say that the Government are very clear on some amendments. If, when we come to it, I mention ponies and other breeds, that is the context in which the Government have problems with some of the amendments. We want to ensure that we have it broad deliberately, so that many of the points noble Lords have made are embraced.
On my noble friend Lord Dundee’s Amendment 74, the Government recognise that farms should be incentivised to deliver multiple purposes. However, it will be very hard, if not impossible, to separate farms into single-purpose or multipurpose farms in this way. To take an example, if financial assistance is given for
“managing land or water in a way that protects or improves the environment”
under Clause 1(1)(a), many of those actions are likely to contribute to other purposes, such as mitigating or adapting to climate change in Clause 1(1)(d), reducing environmental hazards in Clause 1(1)(e) and so forth. This would tie the Government into creating systems that attempt to unpick the complexity of the natural environment to meet a bureaucratic requirement—albeit, I accept, a well-intentioned one. I think this was a point the noble Lord, Lord Whitty, made from his experience: beware of creating a bureaucratic monster by trying to have a perfect form.
In Amendments 4, 16, 21, 91 and 236, the noble Earl, Lord Devon, seeks to limit the scope of the purposes for giving financial assistance to the management of land by removing “water”, thereby narrowing what the Government can pay for under future financial assistance schemes. There are critical actions related to the management of water, and indeed of livestock, that the Government would want to pay for, particularly through ELM. For example, the mitigation of and adaptation to climate change can be supported by encouraging farmers to manage their livestock feed, to help reduce emissions that are emitted from livestock. Protecting and improving our environment or our cultural and natural heritage may involve the management of water. For example, creating, maintaining and restoring water-based habitats on farms can support a healthy ecosystem and ensure that we meet our commitments to biodiversity. This may involve the management of ponds, lakes and ditches, which would not be included in a definition of agricultural land.
I take this opportunity to refer to the point made by the noble Lord, Lord Chidgey, about nitrates. The Government have taken action to mitigate nitrate pollution by placing farmers under regulations and providing them with grants. Farmers in nitrate-vulnerable zones are bound by the nitrates regulations.
The requirement of
“managing land or water in a way that maintains, restores or enhances cultural or natural heritage”
includes the management of our wetlands. Just to clarify, the marine environment is not in scope of the Bill, but I was very pleased that the noble Lord, Lord Blunkett, mentioned curlews. A much longer conversation with the noble Lord is required on crayfish. I have worked on this, and there are difficulties. At a later time I will perhaps spend some time explaining the issues.
Clause 1(1)(j) provides for financial assistance to be given for the protection and improvement of soil. This assistance will further aid in meeting this ambition for sustainably managed soils. Soil is clearly one of our greatest natural assets and the Government are committed to having sustainably managed soils by 2030, as set out in our 25-year environment plan, under which we are developing a healthy soils indicator. I also say to the noble Earl, Lord Devon, that the Reduction and Prevention of Agricultural Diffuse Pollution (England) Regulations 2018 define environmental outcomes that land managers must take account to avoid, including soil run-off and erosion. Indeed, civil sanctions are available.
On Amendments 5, 17, 89, 27 and 28 from my noble friend Lord Lucas, the Bill already allows funding for the management of land and water in a way that conserves the environment or our cultural or natural heritage, which could include “conserve” habitats. On the amendment that would expand the definition of “conserve”, Clause 1(5) already includes creating, protecting and maintaining.
Clause 1 allows support for the conservation of species and habitats if it contributes to protecting and improving the environment or maintaining, restoring and enhancing cultural or natural heritage. For example, ELM could support farmers to manage moorlands using traditional grazing techniques and native breeds or provide funding for the creation of new woodlands or flood plains. Clause 1(1)(g) and 1(1)(i) could be used to incentivise farmers to rear rare and native breeds or support measures to utilise crop wild relatives, thereby safeguarding those genetic traits that may offer a way to sustainably increase food production or improve our capacity to adapt to the emergence of new animal or plant diseases. I say to the noble Baronesses, Lady Mallalieu and Lady Jones of Whitchurch, the noble and learned Baroness, Lady Butler-Sloss, and my noble friend Lord De Mauley that the Government are wedded to the current drafting of the Bill. I say to my noble friend Lord Lucas that the Bill already caters for support for the conservation of newly established crop species that contribute to the provision of public goods.
Amendment 45 touches on existing work taking place to support the development of the UK’s domestic animal feed production. We are already funding research in this area through the Pulse Crop Genetic Improvement Network, a project due to end in 2023. A key part of our programme looks at how to produce better-quality animal feed and potential alternatives to imported soya protein.
On Amendment 76, the Government’s current proposals for the ELM scheme already include a significant space for the direct involvement of local groups. Local nature partnerships would be ideally placed to apply their expertise and ensure that tiers 2 and 3 of ELM are designed to support land managers in the delivery of environmental outcomes by providing the right things in the right places. The Government are already working closely with many of the organisations involved with local nature partnerships.
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Turning to Amendments 86 and 7, the Government support the generation of heat and power from low-carbon technologies, including those using crops and forestry biomass, helping to deliver the net-zero greenhouse gas emissions target for 2050. We are presently consulting on future support for low-carbon heat, which includes proposals for a green gas support scheme and a clean heat grant with support for heat pumps and, in some instances, biomass. I should also say that although this is work that is already under way, Clause 1(1) includes provision for the Secretary of State to give financial assistance for managing land in a way that mitigates the effects of climate change. Clause 1(2) will support farmers and foresters in England in their contribution to existing and emerging markets. The Government
are consulting on the England tree strategy, which includes questions on how best to support energy forestry, such as short rotation coppicing.
Turning to Amendments 8, 22, 25, 31 and 50, in the name of the noble Baroness, Lady Jones of Moulsecoomb, reducing air pollution remains a cornerstone of the Government’s plans to enhance our natural environment and mitigate climate change, through the clean air strategy published in January 2019. The 25-year environment plan cites clean air as one of its key priorities. Clean air is captured by the purposes in Clause 1(1) and will be part of ELM. A range of actions to reduce air pollution is being considered as part of the scheme, including such activities as planting trees, the creation and maintenance of buffer strips and supporting more efficient nutrient management—for example, through targeted fertiliser application—all of which can help reduce the concentration of ammonia in the atmosphere.
Turning to Amendment 24, in the name of my noble friend Lady McIntosh, there are many ways in which actions taken by land managers could reduce the risk of, and enhance our resilience to, flooding. For example, ELM could incentivise the creation of leaky dams that slow the flow of water and good soil management practices that improve water retention in soils. As well as flooding, Clause 1(1)(e) will also allow us to address the other side of the coin, which is drought. ELM could pay farmers and land managers for land and water management practices that help to reduce the impacts of, and enhance resilience to, drought. Farms may include ponds and rivers, and it is important that these water assets are included in the Bill, to provide the Government with the greatest possible flexibility to deliver public benefits.
Turning to Amendment 37, in the name of my noble friend Lady McIntosh, the Government are committed to supporting the delivery of environmental public goods, including our landscapes and our biodiversity, provided for in Clause 1(1)(a) and (b). The purposes already in the Bill will allow the Government to do just that, for example, through Clause 1(1)(a), which allows us to fund the management of land in a way that protects or improves the environment, and Clause 1(1)(c), which allows for funding to maintain, restore or enhance our rural and cultural heritage, which includes landscapes, such as—among many—the beautiful grazed fells of the Lake District. The new ELM scheme will offer farmers across a variety of land and farm types, including livestock and uplands farmers, public money in return for delivery of these environmental public goods.
Turning to Amendment 104, in the name of my noble friend Lady McIntosh, currently, only large raised reservoirs are regulated by the Reservoirs Act 1975, as amended by the Flood and Water Management Act 2010, which made provision for the threshold to be reduced and regulate small raised reservoirs—those between 10,000 cubic metres and 25,000 cubic metres in volume. Consideration will be given to how farm water storage is best managed alongside reservoir safety regulation. Indeed, proposals will be consulted on later this year and next, which may lead to the amendment of regulations made under the Reservoirs Act 1975, the principal legislation on reservoir safety. Clause 1(2) allows us to
fund reservoirs through productivity grants. In the interests of time, I confirm that my noble friend Lord Goldsmith of Richmond Park wrote in some detail to my noble friend on the subject of reservoirs. The letter did not say that a copy would be placed in the Library, but I shall ensure that one is for noble Lords.
Turning to Amendment 51, in the name of the noble Lord, Lord Greaves, the Government recognise the valuable contributions rural areas make to our national life, economically, socially and culturally. As set out in our manifesto, the Government intend to introduce the UK shared prosperity fund to replace EU structural funds. Defra officials are working closely with the Ministry of Housing, Communities and Local Government, which leads on the fund’s development, to ensure that its design takes account of the dynamics of rural economies and the particular challenges faced by rural communities and farmers.
Turning to Amendment 83, in the name of the noble Lord, Lord Greaves, and Amendment 67, in the name of the noble Lord, Lord Teverson, as the Government develop schemes under Clause 1, we will take into consideration local and regional circumstances. Local nature recovery strategies are a new tool that will be created by the Environment Bill, designed to drive more co-ordinated, practical and focused action to help nature. The Government are seeking to resume the passage of that Bill as soon as possible. I think all noble Lords will understand that the passage of legislation has been interrupted, but the Government clearly want to return to the Environment Bill. These strategies will map valuable existing habitats, make proposals for creating or improving habitats and wider environmental goals, and agree priorities for nature conservation. By engaging with stakeholders, we want to ensure that tiers 2 and 3 of ELM are designed to support land managers in delivery—I underline the point raised by the noble Lord, Lord Teverson—of locally targeted environmental outcomes, enabling delivery of the right things in the right places to reflect societal and environmental priorities.
Turning to Amendment 78, in the name of the noble Lord, Lord Bruce, my view is that farming communities are the backbone of the countryside. I agree with my noble friend Lord Caithness; these schemes will work only if they are the farmers’ schemes as well. That is key. Hill farmers, I take the opportunity to outline, already provide many environmental benefits, such as clean air and water, and help maintain some of our most iconic landscapes. I strongly believe that ELM will enable hill farmers to receive payment for the vital environmental public goods they provide. Indeed, Clause 1(5) specifies that
“‘cultural or natural heritage’ includes uplands and other landscapes”
so I say, particularly to my noble friend Lord Inglewood, whom I have met in his capacity as chair of Cumbria LEP, my noble friend the Duke of Wellington, the noble and learned Lord, Lord Morris of Aberavon, and the noble Baroness, Lady Jones of Whitchurch, that this is a very important feature of our support for hill farmers.
Turning to Amendments 78 and 93, in the name of the noble Baroness, Lady Meacher, and Amendments 80 and 81, in the name of the noble Lord, Lord Greaves, Clause 1 does not limit financial assistance to a specific
land type, and thus does not exclude any land from being eligible. However, I emphasise that, given that approximately 70% of land is agricultural, we are confident that financial assistance will be primarily focused on managing agricultural land. I emphasise this so that there is no concern from farmers about what the Bill is intended to support. Because of time, I will write to the noble Baroness, Lady Meacher, about the green belt. The green belt is clearly very important in preventing urban sprawl and we updated the National Planning Policy Framework to say that where green belt boundaries are redrawn, there should be compensatory improvements to the environmental quality and accessibility of green belt land.
Turning to Amendment 83, in the name of my noble friend Lady Neville-Rolfe, the Government published two evidence and analysis papers in September 2018 to support the introduction of the Bill in the last Parliament: first, Agriculture Bill: Analysis and Economic Rationales for Government Intervention; and secondly, Agriculture Bill: Analysis of the Impacts of Removing Direct Payments. These documents provide evidence on the high-level costs and benefits of government intervention in agriculture, and an analysis of the impacts of removing area-based direct payments. The department also regularly updates The Future Farming and Environment Evidence Compendium, which brings together existing statistics on agriculture to summarise the current state of the agricultural industry in the United Kingdom.
On Amendment 234, we will return to food in later groups, but I say to the noble Baroness, Lady Bennett, that the UK has a high degree of food security, built on access to a wide range of sources, including robust supply chains across a number of countries to supplement our excellent domestic production. I will elaborate further and set out details of the independent review that the Government have commissioned Henry Dimbleby to undertake, when we discuss Clause 17. The Government are committed to maintaining and improving environmental standards. As set out in Farming for the Future: Policy and Progress Update from February this year, the Government are developing their vision for a future regulatory system, which we will keep under review to ensure that we meet the ambitious goals under the 25-year environment plan.
I well understand the importance of Amendment 66 in the name of the noble Lord, Lord Wigley. This issue was raised by the noble Lords, Lord Foulkes of Cumnock, Lord Thomas of Gresford, Lord Empey, Lord Adonis, Lord Campbell, the noble Baroness, Lady Bryan of Partick, and the noble and learned Lord, Lord Morris of Aberavon. The Government understand the importance of collaborating with the devolved Administrations on agriculture policy to ensure that it is well co-ordinated and does not undermine a functioning internal market.
Good progress has already been made by the United Kingdom Government and the devolved Administrations in developing an administrative framework for co-ordinating agricultural policy on the basis of co-operation and mutual consent. The UK Government shared a first draft with officials from the devolved Administrations in February this year. Talks continue
with the devolved Administrations on common UK frameworks, including the agricultural support framework, in order to have formal mechanisms for co-operation in place for the end of the year. Co-operation and co-ordination continue constructively at official and ministerial level. There is no requirement to fund the framework as it is an administrative arrangement. The UK Government’s election manifesto guaranteed the current annual budget in every year of the new Parliament, giving significant certainty on agricultural funding for the coming years.
I should have said to the noble Lord, Lord Empey, that our priority for Northern Ireland will be to ensure that nothing negotiated through our EU FTA in any way disadvantages its people—in fact, quite the reverse. The work being carried out aims to deliver on the commitment to ensure unfettered access for Northern Ireland’s businesses to the whole UK internal market.
This has been a brisk gallop. If I look at Hansard and feel that any points have not been properly covered, I will come back to noble Lords. But I have tried to explain that all the important points noble Lords have made are eminently possible within the broad framework of the Bill. I pick up what was said about bureaucracy by the noble Lord, Lord Whitty, and about why this clause has been deliberately designed as it is, by the noble Baronesses, Lady Young of Old Scone and Lady Jones of Whitchurch, and my noble friend Lord Trenchard. It has taken a lot of consideration. We can all argue about different words and so forth, but I am confident that the key points noble Lords have made are eminently compatible with how the Government have brought forward the Bill and particularly this clause.
With what I hope are genuine reassurances as to the opportunities the Bill provides, I hope my noble friend Lord Dundee will feel able to withdraw his amendment.