Examination of Witness (Questions 180
- 199)
TUESDAY 29 FEBRUARY 2000 (Afternoon Sitting)
RT HON
NICHOLAS BROWN
180. There have been a number of complaints
by people who have given evidence to us about the speed at which
the consultation process originally went through. Are you able
to comment on that?
(Mr Brown) I will have to see what the complaint is
first. Were people complaining it was too slow or fast?
181. There was not enough time for them.
(Mr Brown) But it started in January last year. That
is a year ago.
182. Consultation moves amazingly slowly, does
it not, Minister?
(Mr Brown) So the complaint was it was too slow. There
were three distinct sets of consultation. There was the launch
of the consultation at the Queen Elizabeth II Conference Hall,
a really big launch before the negotiations that Spring around
the reshaping of the Common Agricultural Policy and we consulted
on the rural development element as well as what our objectives
should be in trying to reshape the first pillar. There was then
a further round after Berlin when the parameters of all this had
been settled and then we had a further round after that on the
details of the regulation and that was launched in August. I have
gone out of my way to make sure that we were talking to the Country
Landowners' Association and the National Farmers' Union very specifically
about all of this and also with the environmental groups who have
an interest in countryside stewardship, not just the Government's
professional advisers but the other large organisations that are
involved in this area. I took each of the interest groups through
the issues for a final time very carefully—just their leaders,
of course, I cannot talk to every individual member—before
decisions were made within Government and I was as candid with
them as I possibly could be without preempting the decisions that
I made with my colleagues and then on the eve of the announcement
I briefed them on what the Government was likely to do. In other
words, there has been extensive consultation with all of the interest
groups. More than that—and the other Ministers have done
the same—we have had a whole series of regional meetings
and made sure we kept the territorial departments properly informed
as well.
183. Would you take that view right up to submission
of the plan?
(Mr Brown) We were talking to people right up to the
key decisions on modulation and match funding, which is absolutely
crucial to doing anything ambitious in this area at all. We were
talking to the key players right up to the day the decision was
made.
184. As we move forward to the implementation
of the plan itself, what form will continuing discussions with
those who are involved to identify the necessary objectives take?
(Mr Brown) I have regular meetings with the key partners
in all of this. I am emphasising the cross-departmental administration
of it at regional level and other departments of Government are
represented as well alongside the Government's statutory advisers,
so it is pretty comprehensive.
185. Unless you think it is re-hashing an earlier
question which you were not able to answer, how will we in the
end be able to judge the success of the plan?
(Mr Brown) We are going over ground we have covered.
There are tests like the survival rate of farm businesses where
Objective 5b and Article 33 schemes have been invested in and
one would expect that to be higher than the average, but even
then there is a difficulty. Most farm businesses do not leave
the industry in a disorderly way and people wind businesses down
and sell the assets and capitalise them and leave, so even there
it is quite difficult to make a test but it would be objective
tests of that sort. If there were an easy answer to it, I would
be able to give it to you.
186. When you spoke to us in December when you
announced the scheme you mentioned a six month pause.
(Mr Brown) It is the gap between the closure of the
national schemes, all of which have been consolidated in the Rural
Development Regulations, not just here in the UK but right across
the European Union, and the case for that is pretty clear. Each
country has its own national measures, some involving early retirement
schemes which we discussed earlier, and the Commission, quite
rightly, take the view that it would be right to consolidate all
these measures in a single element of the Common Agricultural
Policy and use the opportunity to provide ministers with economically
rational instruments to help farm businesses get through on their
non-agricultural components.
187. I am really looking for a definition of
the word "pause".
(Mr Brown) I may have misled the Committee inadvertently.
The existing schemes do not close down to those who are currently
in them.
188. So they merge?
(Mr Brown) The funding scheme continues for the life
of the scheme. Clearly the stewardship schemes go into the successor
schemes. They do not suddenly lose their money but they are not
closed to new entrants.
189. That is fine. When do you anticipate the
new schemes, which are quite detailed, will be implemented?
(Mr Brown) It depends when we get the Commission approval
for our plan, but we anticipate getting approval if it proceeds
on time in July this year. Then, as the new money comes on stream,
we can open the schemes to the new applicants. The existing schemes
are protected because the two funding streams (a small amount
of European Union money which we got before and the base line
just for England) continue—subject to CSR, I suppose, but
a rational view is that they continue.
190. Geography is not always the same in government
departments, although I think it is improving. For instance, the
MAFF regional offices may not be the same as the regional offices
for other organisations.
(Mr Brown) This is a separate point but I am setting
out to alter that and trying to draw the work of MAFF at regional
level, which historically has been to administer the CAP schemes—these
are not policy outposts in the way they are in other government
departments—but with the changing way in which we are working
as a department I want to integrate our work more into the Government's
Regional Office structure, and we are actively looking at reshaping
the work of one of the divisions in the department so we can provide
policy secondments under the leadership of the regional directors
and make our input into the Government's work at regional level.
Also, particularly in the area covered by the second pillar of
the CAP, involving our partners in other government ministries
in all this work is incredibly important and there could be real
gains from trying to put a larger plan together which drew on
our different responsibilities and policy instruments and funding
streams. So it is quite an exciting area and we are marching down
that route pretty fast. Incidently, just for completeness, the
boundaries that are used for regions here are the Government office
of the region boundaries rather than the MAFF regions.
Chairman
191. We would like to follow that particular
process because I remember Objective 5(b) and the problems we
had initially because of the length of time that was taken for
things to come through and the fact that MAFF did not overlap
with the other offices.
(Mr Brown) That is a very fair point. We have learned
by experience and we are going to try and do better.
Mr Jack
192. Just a technical point, Minister, on the
way that the modulation exercise is to run. Will it mean that
effectively the Intervention Board will not have to go to the
Commission and ask for monies back because they will not have
paid out to farmers the amount of modulated expenditure? If that
is the case, would I be right in assuming that there will be a
saving to the Treasury because of that non-expenditure as a result
of the Fontainebleau arrangements?
(Mr Brown) I think the answer to that is no. However,
it is the compensation payments that were being modulated, not
the whole of the Common Agricultural Policy. In any event, I think
it is right to say to the Committee now that we are looking very
closely at this Price Waterhouse report which discusses the administration
of Common Agricultural Policy schemes in the United Kingdom and
particularly in England and recommends, as did Don Curry's review
group, that we try to draw the work of the Intervention Board
and the work currently spread around together, as you will remember
from your own time in the Ministry, and move towards an electronic
deliverance of service between the farmer and the trading companies
and those administering the schemes and that would have a profound
impact on both the future work of the Intervention Board, which
is declining anyway as it goes through the McSharry reforms and
the work of our regional offices.
193. I want to make quite certain I have understood
what you have said. In terms of the modulation, that will mean
effectively that certain monies are not going to farmers via the
normal Common Agricultural Policy schemes.
(Mr Brown) It is just the compensation payments. The
sum is £1.6 billion per annum out of £3.4.
194. That money will now no longer have to be
reclaimed from Brussels because you are going to respend that
money, are you not? What I am saying is that under those circumstances
and the way that the Fontainebleau Agreement works will there
not be a saving to the UK Exchequer?
(Mr Brown) No.
195. You are entirely certain of that?
(Mr Brown) I think not, but if I am wrong I will correct
it. As you know, the regime is permissive. Something like 71 per
cent of all the payments actually come from the United Kingdom
taxpayer.
196. Indeed.
(Mr Brown) I think the order is that payment is due
to the farmer as now. The modulation is done by us, not by officials
in the European Union, before the diminished cheque goes to the
final recipients.
197. That is precisely why there should be a
saving.
(Mr Brown) It is not. The money is also spent on farm
businesses but through the rural development regulation rather
than as a direct payment under the compensation rules which goes
to some farmers and not others depending on which area you are
in, arable, dairy and beef primarily.
198. I wonder if you would be kind enough to
reflect on what I have said and if there is a lack of clarification
in the point I have made I would be delighted to flesh it out
to one of your officials, but it would be very helpful to me if
you could look very carefully at what I have argued to see if
there is a saving. I suspect there is.
(Mr Brown) I heard the Leader of your party trying
to make a similar point on the sheep premium at the NFU conference
in the context of agri-monetary compensation and I think the answer
on this point is no, there is not a saving, but I will get the
officials to look at it and to write and if I am wrong, I will
apologise and come back and explain the true position, but I believe
it to be as I have just said. I believe it to be as I have just
said.
Chairman
199. Is the Price Waterhouse report available
for consumption, Minister, from the Regional Offices?
(Mr Brown) I am not sure it is yet. The Government
has not decided its response, so the answer to that is probably
not yet.
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