My Lords, I hope it will be useful to your Lordships if I speak to all the instruments, beginning with the draft Direct Payment to Farmers (Reductions) (England) Regulations 2022, which were laid before this House on 3 February 2022. The matters in these instruments are closely related. Made using powers under the Agriculture Act 2020, they implement important aspects of our new agricultural policy, as set out in the agricultural transition plan published in November 2020 and updated in June 2021. The three instruments apply only in relation to England.
The Direct Payments to Farmers (Reductions) (England) Regulations 2022 apply progressive reductions to direct payments to farmers in England for the 2022 scheme year. By doing so, it continues the process of phasing out direct payments in England which began in the 2021 scheme year. The Government remain committed to phasing out direct payments in England over the seven-year agricultural transition period. We are doing so as area-based payments are unfair: they go primarily to larger landowners, artificially inflate land rents, stand in the way of new entrants to farming getting access to land, and offer little return for the taxpayer.
To help farmers plan, we initially committed in 2018 to phase out direct payments. The specific reductions provided for in this instrument were announced in November 2020. As was the case for 2021, higher percentage reductions will be applied to payment amounts in higher payment bands.
Although direct payments are reducing, total funding to farmers is not. We will make money from the reductions available to targeted schemes, which will increase farm productivity, improve the health and welfare of animals, and enhance the natural environment. In the coming year, that reallocated money will be used to meet the rising demand from farmers for countryside stewardship, our current environmental offer, which has seen a 40% increase in applications. That funding will also be used in the launch of the first of our new environmental land management schemes: the sustainable farming incentive. Further, we will also fund the initial wave of the landscape recovery scheme, with projects focused on supporting native species and restoring rivers.
We are also making available free business advice to farmers and will continue to offer a range of popular grant offers so that farmers can invest in their businesses and become more efficient and sustainable. We will also be offering a new suite of opportunities for farmers, supply chains and researchers to collaborate on researching and developing innovative but practical solutions to the challenges and opportunities that farming faces. This is an essential reform that puts England on track to meet its legally binding environmental and net-zero targets, while creating a thriving and self-reliant farming sector.
The Agriculture (Financial Assistance) (Amendment) Regulations 2022 amend the Agriculture (Financial Assistance) Regulations 2021, approved by this House on 22 March 2021. Those regulations put in place financial data publication and enforcement and monitoring requirements for four new financial assistance schemes established under the Agriculture Act 2020. This amending instrument extends the range of financial assistance schemes covered by the 2021 regulations to ensure that any new financial assistance scheme launched in 2022 and thereafter is subject to the same checking, monitoring and enforcement requirements that applied to the original schemes launched in 2021.
The 2021 regulations gave Defra the opportunity to test, refine and develop these new requirements. The amendments made by this instrument will now allow the Government to move on to the next stage of agricultural policy set out in the agricultural transition plan.
This instrument also strengthens the investigative powers in the 2021 regulations to ensure that where there are suspicions of offences in connection with financial assistance —for example, fraud offences—the Secretary of State can, where appropriate, fully investigate the matter. The amendment will allow the Secretary of State to investigate not only agreement holders but applicants, and in certain circumstances the employees or agents of an applicant or agreement holder. These investigative powers mirror powers Defra holds in relation to CAP schemes, while allowing Defra to use them in a more proportionate manner, reflecting the objectives of the Agriculture Act.
This instrument also removes a reference to grants in Regulation 13 of the 2021 regulations. The amendment will ensure that “financial assistance” is not limited to grants and can include other forms of assistance, as provided for in Section 2(1) of the Agriculture Act.
In drafting the 2021 regulations, Defra engaged with key stakeholders in a targeted consultation exercise between 4 August and 1 September 2020, giving stakeholders the opportunity to review Defra’s proposed approach and express their views. Feedback gathered during the consultation exercise was used to inform the content of the 2021 regulations and this amending instrument.
I turn to the Agriculture (Lump Sum Payment) (England) Regulations 2022. As part of our wider agricultural reforms, we want to support farmers who wish to leave the industry, as well as those who want to stay. We know that some farmers would like to retire or leave farming but have found it difficult to do so for financial reasons. That is why this instrument allows a scheme to be introduced in 2022 which provides lump sum payments to farmers in England who wish to leave the sector. These payments will be in place of any further direct payments to the recipient during the remainder of the agricultural transition. This is not new money and will not impact the funding of other schemes. This scheme should also free up land, creating more opportunities for new entrants and farmers who wish to expand.
These instruments implement provisions in the Agriculture Act 2020. They continue the transition away from the inefficient direct payments model of the CAP and they build upon the already implemented financial assistance framework to cover new schemes, in line with the agricultural transition plan. I beg to move.