House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Memorandum submitted by Department for Environment, Food and Rural Affairs

FOLLOW-UP EVIDENCE FROM DEFRA REGARDING PREVIOUS INQUIRIES

This paper contains responses from Defra to questions from the Committee requesting follow-up to selected reports from the Committee in the 2001-05 Parliament, on the following subjects:

AGRICULTURE
A    CAP reform
B    The "whole farm approach"
C    Bovine TB
D    Veterinary services
E      Gangmasters
RURAL AFFAIRS
F      Rural broadband
G      Rural Payments Agency

ENVIRONMENT
H The marine environment and the proposed Marine Bill
I The Water Framework Directive

July 2005

(A) CAP REFORM IMPLEMENTATION IN THE UK

Relevant report: The Mid-Term Review of the Common Agricultural Policy (Third Report, Session 2002-03, HC 151, 21 January 2003) (Government Reply: Fourth Special Report, Session 2002-03, HC 615, 8 April 2003).

"The Committee would be grateful for a general update on progress in implementing CAP reform in the UK and more widely across the EU. The Committee would also be interested to hear what further steps are being taken to reduce CAP production-linked support, in accordance with Defra's PSA target 5."

Defra response

Process

1. Implementation of the June 2003 CAP reform agreement is being delivered through a CAP Reform Implementation Programme. This is a "policy to delivery" programme which is managed using state of the art project and programme management techniques. As a key Departmental policy, significant resources have been devoted to the programme, which is overseen by the Permanent Secretary and benefits from the close involvement of Ministers. A key element has been partnership working between policy officials and the delivery agent (the Rural Payments Agency, RPA) and close liaison with the devolved administrations to ensure a coherent approach across the UK. Regular discussions with stakeholder groups have also provided invaluable to the process.

Non-Single Payment Schemes

2. While the introduction of the Single Payment Scheme (SPS) formed the heart of the 2003 CAP reform agreement and the UK decided not to take up any of the options for re-coupling aid, one of the first main tasks was to introduce the mandatory coupled aids from 2004. In the UK, this meant:

— Area Payment for Nuts;

— Aid for Energy Crops;

— Protein Crop Premium; and

— Dairy Premium (for 2004 only).

All four schemes were successfully introduced in 2004 and, in order to provide maximum simplification, a single application form covering the three remaining schemes and the SPS was introduced in 2005.

Single Payment Scheme

3. The June 2003 CAP reform agreement provided a range of discretionary elements for Member States. The main decisions were taken by the UK by the time the Select Committee's report was published and can be summarised as follows:

— the Single Payment Scheme would be implemented at the earliest possible date ie 2005;

— the dairy premium would be decoupled at the earliest possible date ie 2005;

— none of the options to re-couple aids (with the exception of the national envelope provisions in Scotland) would be taken up;

— the "flat-rate" model of the SPS would be adopted in England, based on three English regions and with a transitional phase through to 2012. A "static hybrid" model would be adopted in Northern Ireland and the "historical" model adopted in Scotland and Wales.

Legislation

4. Separate EU Commission Regulations covering the SPS and the Integrated Administration and Control System (IACS) were published in April 2004.[3] As experience of implementing the Scheme has evolved across the EU, those Regulations have subsequently been amended, three[4] times and twice[5] respectively. While the additional clarification in these amendments has proved to be generally helpful in ensuring we have coherent framework for the SPS, some have amounted to a change in requirements for the IT delivery systems which has impacted on the RPA's delivery timetable.

5. At the domestic level, statutory instruments have been introduced across the UK to give effect to policy decisions by Defra and the devolved administrations and provide for necessary enforcement provisions in relation to the SPS, including appeals, IACS, cross-compliance and set-aside[6].

Further Policy Announcements

6. Since the Committee published its report, Defra has made a series of policy announcements affecting implementation of the reforms in England, most significantly:

Communications

7. Lord Whitty, then Farming and Food Minister wrote to all farmers in May 2004 to provide an initial explanation of the reforms that were to come into force in 2005. Following policy announcements and development of legislation, a dedicated section of the Defra website was updated regularly and a series of brochures were published in July and September 2004 and February 2005. At the end of 2004, Handbooks were issued on cross-compliance and set-aside, along with two cross-compliance guidance notes on the Management of Habitats and Landscape Features and on Soil Management.

8. Communication efforts were stepped up in 2005, with 32 roadshows attended by 8,500 people; seminars for intermediaries and agents; distribution of 12,000 videos, CD-Roms and DVD and an extensive media campaign, including "key points and dates" advertisements in the press.

Rural Payments Agency (RPA) preparations

9. Details of the RPA's progress on IT systems over the past year are covered in a separate update that the Committee has requested. In addition, it is worth recording that:

— through the autumn of 2004, the RPA undertook a "data cleansing" exercise with some 90,000 farmers to determine the value of their historic subsidy which forms part of the calculation of their Single Payment "entitlements";

— The bulk of the application forms and associated scheme literature were also issued ahead of schedule in March to allow farmers as much time as possible to complete their applications.

SPS applications received

10. 115,196 applications were received by the 16 May deadline. Late claims, subject to penalties determined by EU legislation, were allowed up to 10 June and the RPA has received approximately 5,000 of these. These figures are in line with RPA projections and indicate that all those who wanted to claim have been able to do so.

Next steps

11. A number of significant challenges remain before the first payments can be made, including removing a backlog of over 30,000 requests for map changes (a plan is being developed that should see this cleared in advance of January 2006) and further releases of the main SPS IT system (RITA), combined with a significant amount of manual work to be done in validating claims and undertaking inspections. The RPA's assessment is that it should be able to start making payments by February 2006.

Update on progress in implementation across the EU

12. Member States vary significantly in respect of the information they have made publicly available on implementation of the reforms. However, the Annex to this note provides a series of tables summarising information known to date.

Further steps being taken to reduce CAP production linked support, in accordance with Defra's PSA target 5

13. This Public Service Agreement target was set for the period 2003 to 2006 and carries forward previous Public Service Agreement targets which sought to cut the cost of the CAP to consumers and taxpayers.

14. Since the target was set, two major reforms of the CAP have been agreed within the EU. The agreement of June 2003 achieves the following:

— decoupling of the bulk of EU subsidy from production;

— cross-compliance to make subsidy dependent on farmers meeting environmental, food safety and animal health and welfare standards;

— EU wide compulsory Modulation, diverting a proportion of subsidy towards environmental and rural development schemes;

— financial discipline, putting an upper limit on the CAP budget until 2013; and

— cuts in price support for some commodities.

15. A further agreement was reached in April 2004 on similar reforms for some of the sectors not covered in 2003. That includes a phasing out of the EU's tobacco subsidy regime, the decoupling of the bulk of subsidy for the cotton, olive oil and hops sectors and the introduction of cross-compliance in those sectors.

16. The combined effect of those two reforms will contribute substantially to the achievement of this Public Service Agreement target. Figure 1 includes actual data up to the 2001-02 marketing year and its projections based on the CAP reforms which have been achieved.

Figure 1

CAP PRODUCTION-LINKED SUPPORT
H3 Cost of production linked support

17. In the context of the EU's future financing negotiations, the Government has called for a fundamental review of the EU budget, including the CAP. More specifically, the Government is working within the EU to take decoupling even further, focussing first of all on the sugar sector, which is currently the subject of negotiation in the EU, and looking forward to the opportunities which may arise from the outcome of the WTO negotiations, an EU review of the dairy regime in 2008 and a review of decoupling in 2008 or 2009.

18. The European Commission published its legislative proposals for sugar reform on 22 June which the Secretary of State has welcomed. The UK will use its Presidency of the EU in the second half of the year to try to reach agreement on reform ahead of the WTO Ministerial meeting in Hong Kong in December. Defra is also working with the Department for International Development to support the European Commission in its proposed action plan to address the potential negative impacts of EU reform in African, Caribbean and Pacific countries which currently have preferential access to the EU market.

19. Defra is working closely with Department of Trade and Industry, Department for International Development, the Foreign and Commonwealth Office and HM Treasury to prepare the ground for significant progress to be made in the Doha Development Round at the WTO ministerial meeting in Hong Kong in December. Defra has been engaging within the EU and with third countries to help pave the way for a liberalising outcome. Some good progress has already been made on agriculture, but there are still difficult hurdles to overcome. The Chair of the Agriculture Special Session is due to produce an assessment paper in July. Defra hopes this will be a stepping stone on the way to ambitious outcome at Hong Kong and that the details of the Round will be completely concluded by the end of 2006.

20. Defra has also been negotiating this year for improvements to the EU's Rural Development Regulation which was agreed unanimously on the 20 June 2005 by Agricultural Ministers in Luxembourg. During 2005 reports are also expected from the European Commission on the CAP regimes for fresh and processed fruit and vegetables, bananas and fibre crops (flax and hemp). The Department will press for reform of these regimes as proposals are presented.

Annex

SUMMARY OF IMPLEMENTATION DECISIONS ACROSS THE EU

Table 1

TIMING OF IMPLEMENTATION OF THE SPS

Member States implementing SPS in 2005	Member States implementing SPS in 2006 (and pre-reform coupled aids until then)	Member States implementing SPS in 2007 (and pre-reform coupled aids until then)	Member States implementing the Single Area Payment Scheme (SAPS) in 2005 until further notice
Belgium Denmark Germany Ireland Italy Luxembourg Austria Portugal Sweden UK	Greece Finland France Netherlands Spain	Malta Slovenia	Czech Republic Estonia Hungary Latvia Lithuania Poland Slovak Republic Cyprus

Table 2

RE-COUPLING OPTIONS ADOPTED BY THOSE MEMBER STATES INTRODUCING THE SPS IN 2005*

Schemes	Suckler Cow	Add Suckler Cow	Beef Special	Slaughter (adult)	Slaughter (calf)	Sheep and goat	Sheep and goat (LFA)	Hops	National Envelope
Member States
Belgium (Wallonia)	X	X
Belgium (Flanders)					X
Denmark			X			X
Germany								X
Italy									X
Austria	X	X		X	X			X
Portugal	X	X		X	X	X	X		X
Sweden			X						X
UK (Scotland)									X

Table 3

MODEL OF SPS ADOPTED FOR THOSE MEMBER STATES INTRODUCING THE SCHEME IN 2005*

Historical Model	Flat rate or hybrid models
Belgium Ireland Italy Austria UK (Scotland and Wales)	Denmark Germany Luxembourg Sweden UK (England and Northern Ireland)

* Those Member States implementing the SPS in 2006 and 2007 have until 1 August of the year preceding implementation to notify the Commission of their decisions regarding the model of the Scheme to adopt and the options for re-coupling of support.
(B) THE "WHOLE FARM APPROACH"

"In 2003, Defra told the Committee that the Government was `developing the whole farm approach to improve outcomes in all areas including administration, business planning, management and enforcement'. The Committee would welcome an update on progress in introducing the whole farm approach."

Defra response

Background

1. We will create a single set of core data on farms and farming activities. This will be accessible to the widest audience, and shared with other regulatory partners through the most appropriate channels possible. This will:

— reduce bureaucracy and duplication of requests for information;

— allow the targeting and coordination of risk based inspections;

— provide an evidence base for the streamlining of regulation;

— enable farmers to recognise where there is a regulatory requirement and help them to plan for compliance;

— provide targeted advice to individual farmers.

Progress to date

2. The Whole Farm Approach has been developed in close contact with a range of key stakeholders and partners including the Rural Payments Agency, the Environment Agency, the Food Standards Agency, the Health and Safety Executive and the National Farmers' Union.

3. We have also been working with industry and other stakeholders to establish the most effective means of delivery to maximise its availability, including the use of intermediaries and a range of different channels.

4. Our development process has involved a series of interactive pilots with industry followed by usability testing and feedback. The evidence gathered in this way has been fed back into the design and development of the Approach.

5. The CD version of the Appraisal is well developed and has received positive feedback from stakeholders. A prototype portal has been developed and has been tested by a number of farmers as part of the development process. Feedback from these review groups is being used to further enhance the look and usability of the portal prior to release in the Autumn.

6. The programme of work underwent a Gateway 1 review by the Office of Government Commerce in April and received an Amber assessment with no significant problems identified.

Timetable for delivery

7. Phased delivery of the Approach will begin with a controlled system preview from September 2005 which will help us to deliver a positive experience for participants and ensure that WFA provides real benefits for farmers. We will be inviting farmers to participate by inputting core data into the new system, providing evidence of compliance with a range of requirements and obtaining targeted guidance and help linked to cross compliance and other key areas of interest to them.

8. There will be further releases beginning in February 2006 which will add new functionality. Our vision is that the Approach includes more transactional benefits to farmers, such as the ability to notify the Environment Agency in order to register an exemption from waste licensing, registration under food and feed hygiene regulations and application for the Single Payment Scheme. Over time the service is expected to provide a channel to access the full range of Defra services. This will include a Farm Advisory System, which is linked to cross-compliance standards and will provide both on-line and face-to-face advice on how farmers might adapt their practices to meet them. The system will be in place by 1 January 2007.

Relevant reports: Seventh Report, Session 2002-03, HC 432, 9 April 2003, and Thirteenth Report, Session 2003-04, HC 638, 13 July 2004 (Government Replies: Eighth Special Report, HC 831, Session 2002-03, 24 June 2003; Seventeenth Special Report, Session 2003-04, HC 1130, 20 October 2004).

"The Government published its TB Strategy on 1 March 2005. The Committee would be grateful for a note on the next steps the Government plans to take."

Defra response

  The Strategic Framework, published on 1st March, replaces the 5-point plan of action and applies the principles of the Animal Health and Welfare Strategy to bovine TB (bTB). It sets out a new vision for the future, including twelve strategic goals and a number of new government commitments (chapter 2.3); these are set out in the table below with a brief summary of progress to date.

  New Commitment
Delivery progress

1.      Develop a transparent process for making policy decisions on whether badger culling may form part of future policy in light of existing evidence and new evidence as it emerges. This will take into account modelling and cost-benefit analysis where work is under development. We expect to have a validated model in 2006, although analysis of the significance of the Irish trial results to the GB situation will commence straight away. This process will also take account of welfare and conservation issues. The Strategic Framework identifies the issues that needed to be taken into account in determining whether badger culling has a role to play in overall TB controls (cost effectiveness, practicability, sustainability, humaneness and public acceptability). Work on developing our evidence on all these is already under way. The cost benefit analysis using existing and emerging data (including data from the Republic of Ireland Four Areas Trial) has begun and should be able to help inform policy by this autumn.

2.      Build into the policy making process a better understanding of public opinion on bTB policies. We are considering how this can best be achieved.

We are liaising with a potential contractor regarding a detailed assessment of public opinion, initially focusing on badger controls.

3.      Establish by the end of 2005 a new national bTB stakeholder body to advise on the development of bTB policies including how best to ensure regional focus.

Work is in hand to establish a new national bTB stakeholder body. Progress will be reported to the TB Forum on the 30 June (the last Forum meeting before it is replaced, see commitment four) and similarly to the next meeting of the Core Stakeholder Group on 14 July 2005.

4.      Improve communications with stakeholders, replacing the TB Forum with an annual conference and direct contact with stakeholders on specific issues. We envisage the first conference being held in late 2005.

Preparatory work has already started. We will be inviting views on the content of the conference at the TB Forum's last meeting on 30 June 2005 and the TB Core Stakeholder Group at their next meeting on 14 July 2005. We envisage the first conference being held before the end of the year, probably in central England to make it accessible to a GB-wide audience.

Consistent with the Animal Health and Welfare Strategy, Government intends to work in partnership with stakeholders. This will help us arrive at policy decisions that reflect a robust, fair and cost effective approach taking into account and balancing stakeholder perspectives.

5.      Review and publish on an annual basis the evidence base for bTB, to help inform policy development. The first review is likely to be in mid-2006.

As part of the review of the 5-point plan of action Defra commissioned a summary report of the current scientific knowledge relating to bTB. The report was specifically written for the layperson. The report was published on Defra's website on 1 March 2005.

6.      Review and establish by the end of 2006 new arrangements for securing independent scientific advice that are consistent with wider Government policy on scientific advice and the establishment of advisory groups.

A sub-group of the Department's Science Advisory Council was set up to recommend how independent scientific advice should be secured. We aim to establish a new bTB science advisory group with an independent chair before the end of 2006.

7.      Improve availability of information on bTB; raise awareness and understanding of bTB issues amongst all stakeholders.

This is an ongoing commitment. The bTB webpages of Defra's website are currently being reviewed to better reflect customer needs and make the information more accessible. We aim to relaunch the webpages by the end of the year.

Bovine TB has also been one of the main themes at Defra's stands at various agricultural shows throughout the year; Defra and SVS staff have been on hand to answer queries and gain a greater understanding of stakeholder views.

In addition to the progress outlined in the table, the Select Committee may be interested in recent developments on strengthening cattle controls (pre-movement testing), proposals for a new cattle compensation scheme and vaccines:

Compensation

Defra is analysing concerns raised by the farming industry following a consultation on proposals to introduce a new compensation scheme for four notifiable cattle diseases. Responses to Defra proposals for a table valuation based compensation system for bovine TB, BSE, brucellosis, and Enzootic Bovine Leukosis, highlighted particular concerns in relation to some of the proposed cattle categories. Once we have completed our analysis of consultation responses, we will invite key stakeholder groups for discussions before providing more detail on how we propose to move forward.

Defra remains committed to introducing a new cattle compensation system, based on table valuations, that provides fair compensation and protects taxpayer interests. It aims to put the new system in place during 2005.

Pre-Movement Testing

On the 1 June Defra published a report making detailed recommendations for implementing pre-movement testing of cattle to combat the spread of bovine TB. The document was produced by an independent stakeholder group, whose members come from farming, veterinary, livestock market, State Veterinary Service and enforcement backgrounds.

Defra will now consider the recommendations with colleagues in Wales and Scotland before going out to public consultation on a detailed proposal later this year.

In the meantime the advice from Defra continues to be that cattle farmers do not need to wait until the Government makes movement testing compulsory. Farmers should take steps now to reduce the risk of spreading TB, which is increased by moving cattle within Great Britain.

Vaccines

Defra announced on 9 June that we would be starting a small-scale three year vaccine field study in badgers as part of its ongoing research to control bovine TB. Research into the use of a vaccine for badgers has been underway since 1999. It has now reached a stage where field trials are necessary for the next phase of the vaccine licensing procedure.

The study will primarily gather safety data, but will also attempt to assess the protective effect of the vaccine. The vaccine used, BCG, is the same one used in man. The proposed field study, which will take place in a high bovine TB prevalence area in the South West of England, should start in mid 2006. We are now seeking landowner permission and evaluating improved diagnostic tests to support the study.

We have also announced further work looking at new vaccine candidates and delivery protocols in a natural transmission study in cattle at the Veterinary Laboratories Agency. A naturally infected herd will be used to compare the effectiveness of several vaccines.

(D) VETERINARY SERVICES

Relevant report: Vets and Veterinary Services (Sixteenth Report, Session 2002-03, HC 703, 23 October 2003) (Government reply: Eleventh Special Report, HC 974, 28 July 2004).

In its reply to the Committee's report, Defra stated:

"The Government is . . . committed to regularly monitoring the supply and retention of large animal veterinary surgeons in partnership with the RCVS and ensuring these conclusions are available to the Animal Health and Welfare Strategy Steering Board . . . We agree that we need to keep the impact of changes to farm incomes through CAP reform, and the impact of animal health and welfare policies strategies on the veterinary profession under review. We would need to be clear whether or not that there is a market failure in the provision of veterinary services, and if so whether there is a case for Government intervention, but we would not rule out action if a case can be made."

"The Committee would be grateful for an update on the Government's monitoring of the supply and retention of large animal vets, and the impact of changes to farm incomes, and animal health and welfare policies, on the veterinary profession".

Defra response

1. The monitoring of the supply and retention of large animal veterinary surgeons is just one aspect of a far wider agenda. The research and reports which Defra commissioned last year pointed to the need for a more strategic and on-going dialogue, on a partnership basis, with the veterinary profession and the livestock industry.

2. Some in the veterinary profession have been critical of the Government's response to the Committee's report. There have also been mixed views on the range of ideas contained in the Working Group report which we published last year. Rather than press ahead with our original proposal to develop an action plan, we have listened to the profession's concerns and tried to build a stronger basis for consensus.

3. Whilst it is fair to say that some reservations still exist, we have recently secured the agreement of the Presidents of the Royal College of Veterinary Surgeons and the British Veterinary Association to establish a Vets and Veterinary Services working group. Terms of Reference have been agreed as follows:

"To establish a more effective working partnership between the veterinary profession, Government and livestock keepers, taking account of the challenges that face the profession and the changing needs of its customers."

"To develop a shared and prioritised approach to help ensure that farm animal practice has a sustainable future. To monitor the veterinary profession's contribution to the Animal Health and Welfare Strategy."

4. As a first step, we have asked the RCVS, BVA and NFU to nominate people who can work with us to provide an overview of the various recommendations and ideas to have emerged from last year's reports. This small group of nominees will work over the summer to provide the Working Group with prioritised suggestions on which issues to take forward at its next meeting.

5. We have had an informal exchange of views with the BVA on the question of whether there has been market failure. They are considering how best to pull together further anecdotal evidence from their territorial divisions, which they can put to the next meeting of the Vets and Veterinary Services working group. We have advised them to work with the NFU so that any difficulties experienced by livestock farmers in securing veterinary services can be clearly identified. We will also be working with the RCVS to help them prepare the next manpower survey of the profession.

6. The Vets and Veterinary Services working group will be able to discuss the wide range of issues raised in the Committee's report. For example:

— we have started work on developing a pilot veterinary sentinel surveillance network. This ambitious and innovative project will concentrate initially on populations of cattle and pigs in selected areas. It will seek to maximise the utilisation by Government of the knowledge and expertise of farm animal veterinarians, as well as providing local practices with information that they can use to develop disease prevention based advice to local farmers. The study is being planned collaboratively with representatives from various branches of the veterinary profession, the livestock industry and academia, in order to ensure that it is scientifically and logistically sound, and will meet the needs of the various stakeholders;

— we are building a number of partnerships with the livestock industry and their vets to encourage proactive approaches to improving animal health and welfare, and thus the financial sustainability of farms. We are developing ideas for pump-priming farm health planning within these partnerships, and the veterinary profession has been invited to be involved in shaping how these schemes will work;

— a pilot exercise for the proposed contingency Local Veterinary Inspector scheme has recently been completed and decisions will shortly be taken on how best to develop a full scheme which would aim to provide 100 LVIs trained in exotic animal disease contingencies to support the State Veterinary Service in an outbreak.

7. The Vets and Veterinary Services Working Group is being operated on a GB basis and its members have been briefed by the Scottish Executive on its proposal for a Land Management Contract Scheme which includes the option for farmers to undertake an Animal Health and Welfare Management Programme. Whilst the Working Group will take a strategic overview on veterinary issues, it will also develop close links with the Implementation Groups in England, Scotland and Wales which have been established to take the Animal Health and Welfare Strategy forward.

8. We are working hard to develop a partnership approach to overcome the concerns of the profession. Debby Reynolds (Chief Veterinary Officer) holds quarterly meetings with the Presidents of the RCVS and the BVA to discuss issues of joint concern. We have formed a new Vets and Veterinary Services team within the Animal Health and Welfare Directorate General of Defra. They are working closely with the profession and farmers to develop a better understanding of the issues affecting farm animal veterinary practice. Their remit also includes responsibility for the Veterinary Surgeons Act and building stronger links between Vets who work for Government through Debby Reynolds role as Veterinary Head of Profession in Government. This should improve our ability to work strategically with the wider profession. There are encouraging signs that these changes are already having a positive effect although there is clearly a lot of work ahead.

(E) GANGMASTERS

Relevant report: Gangmasters (follow up) (Eighth Report, Session 2003-04, HC 455, 20 May 2004) (Government Reply: Twelfth Special Report, HC 1035, 14 September 2004).

"In its reply, the Government stated:

"The Government welcomes the support of the Committee for Jim Sheridan's Private Member's Bill on the licensing of gangmasters and it agrees with the Committee on the need to introduce secondary legislation as soon as possible in order to implement the licensing scheme. Now that the Bill has received Royal Assent the Government will be working closely with non Government organisations and the industry to set up the Gangmaster Licensing Authority by April 2005 so that it can commence issuing licences to Gangmasters."

"The Committee would be grateful for a progress report on the work of the Gangmaster Licensing Authority and the future that is envisaged for it, following the acceptance by Defra of the recommendations of the Hampton Review, which proposes incorporating the Authority into the Health and Safety Executive."

Defra response

1. The Gangmasters (Licensing) Act 2004 establishes the Gangmasters Licensing Authority (GLA) to set up and operate a licensing scheme for gangmasters operating in the agricultural, shellfish gathering and associated processing and packaging sectors. The Authority will also be responsible for ensuring licence holders comply with the conditions of licences issued to them. It is intended that these arrangements should be self funding through licence fee income.

2. Once the licensing arrangements are in place, it will be illegal to operate as a labour provider in the specified areas without a licence. It will also make it an offence for a person to enter into an arrangement with an unlicensed labour provider. The Act applies to work done anywhere in the United Kingdom. The Department of Agriculture and Rural Development Northern Ireland is responsible for the application of the Act in Northern Ireland.

3. Regulations establishing the Authority were approved by Parliament in March and the Authority commenced work on 1 April. Premises have been secured in Nottingham. The Authority is run by a Board of 29 members including the Chairman. The Board has 19 members nominated by stakeholder organisations and nine ex-officio members appointed by Government Departments involved in enforcing legislation affecting gangmasters. Paul Whitehouse has been appointed as Chairman and Mike Wilson has been appointed as Chief Executive. Members of the senior management team have been appointed and most took up their posts during March.

4. One of the Authority's early tasks will be to establish the conditions attached to a licence. It will be consulting on this over the Summer. In parallel the Authority will develop the arrangements for vetting applicants and the operational aspects of the licensing scheme. This will include a public register of licence holders. It is anticipated that gangmasters will be invited to apply for licences in Spring 2006. It is expected that it will take until mid 2006 to vet applicants and issue licences. If the Authority meets this target it will become illegal to operate without a licence from Summer 2006 onwards.

5. The Secretary of State will be responsible for enforcing the criminal offences under the Gangmasters (Licensing) Act. A new team of enforcement officers will be established to undertake this work. It has been agreed that GLA officers will be appointed to fulfil this role on behalf of Defra. However, enforcement activity will be funded by Defra and the costs involved will not be recovered through GLA licence fee income. This team will be created progressively from mid 2005 onwards and will be co-located with the GLA to establish a one stop shop approach to licensing, compliance and enforcement. The Authority will provide helpline facilities for labour providers and labour users and a "whistle blowing" facility for workers who are concerned about their treatment. New information sharing provisions in the legislation will provide for Government information to be passed to the Authority and vice versa. Information gateways are currently being established to underpin the licence approval, compliance and enforcement aspects of the Authority's work.

6. Defra is responsible for putting the remaining elements of the Gangmasters Licensing legislative framework in place. We are currently consulting on regulations to establish an appeals process and regulations to exclude certain activities from the scope of the licensing arrangements. The definition of a gangmaster was drawn deliberately wide when the Act was drafted to avoid scope for unscrupulous gangmasters to circumvent the legislation. This was linked to a power to fine tune the scope of the licensing scheme through regulations. To help inform decisions on exclusions Defra is conducting further research to establish how far the incidence of serious worker exploitation and illegal activity extend up the food chain particularly into second stage processing activity.

Ethical Trading Initiative Code of Practice

7. Defra is working closely with the Ethical Trading Initiative Temporary Labour Working Group to improve business standards amongst labour providers in advance of the introduction of licensing. We have been working with the supermarkets, Association of Labour Providers and other key stakeholders to promote the Voluntary Code of Practice prepared by the Temporary Labour Working Group as a business development tool. To date over 550 labour providers have registered their intention to be audited against the code. Defra is supporting this process through a subsidy payment to help reduce the cost to labour providers.

8. The detail of the new licensing arrangements will be for the Gangmasters Licensing Authority to determine. Its proposals will be made public when it consults on the detail of the licensing arrangements later in the year.

Hampton Review

9. The Hampton Review published on 16 March recommended that over the next two to four years, 31 regulatory bodies be consolidated into seven, structured around simple thematic areas. More specifically, the Hampton Review recommended that an expanded Health and Safety Executive (HSE) should be created and that the GLA should become part of that expanded body. The Government has accepted the Hampton recommendations in full.

10. While many stakeholders accept the guiding principles set out in the Hampton Report, some have voiced concerns about the Hampton recommendation in respect of the GLA, both in its rationale and timing. Like stakeholders, the Government is keen to ensure that implementing the Hampton Report recommendations does not distract the Authority, compromising the introduction of the new licensing arrangements.

11. Defra and HSE officials are exploring with the Better Regulation Executive of the Cabinet Office the scope for achieving the GLA/HSE merger within the timetables for implementing Hampton as a whole. There will be a public consultation on the way forward before the Hampton recommendation and associated legislative changes are implemented. We will try to minimise the burden this process places on senior GLA staff in order to ensure that they are free to concentrate on the development and introduction of the licensing scheme.

(F) RURAL BROADBAND

Relevant report: Rural Broadband (Eleventh Report, Session 2002-03, HC 587, 15 July 2003) (Government Reply: Twelfth Special Report, Session 2002-03, 16 September 2003).

"Defra told the Committee in 2003 that Ministers wrote to BT on 16 October 2003, putting forward the view that it was in BT's interests as well as in the local public interest, for them to be open and transparent about trigger levels for all exchanges. What progress has been made on this specific point; and more widely in rolling out rural broadband?"

Defra response

1. Stimulating broadband across the whole of the UK is one of the Government's top priorities. The Government wants to see every community, irrespective of location, having access to an affordable broadband service from a competitive market.

2. Availability—The overall availability of mass market broadband in the UK currently stands at 94%. In urban areas availability stands at 99%; suburban areas 97% and rural at 73%. The UK currently has the most extensive broadband market of the G7 countries and by summer 2005, broadband will be available to over 99% of all households.

3. Rural coverage will increase as BT's roll out programme nears completion in July 2005, as the last exchanges on the programme tend to be the more remote ones.

4. As of the beginning of June 2005 BT had enabled over 4,500 of the 5,000 exchanges on their programme. The latest figures will be released later this month in the UK Broadband Report by DTI.

5. Unviable exchanges—In addition to these exchanges BT considers around 550 exchanges in the UK to be unviable for upgrade. The exchanges tend to be the most remote exchanges that serve a low number of customers.

6. The Scottish Executive made an announcement that they will intervene to enable the remaining exchanges. In England, the Regional Development Agencies are taking a lead on responding to potential gaps in coverage -for example Advantage West Midlands, the South West Development Agency, Yorkshire Forward and others have already announced their intention to fill any gaps in the market by publicly funding exchange upgrades and/or other solutions.

7. In addition, Defra is providing a small amount of funding to support the Community Broadband Network in their provision of mentoring and support services to help rural communities find their own solutions to access broadband. To date, over 500 communities have come together to purchase community broadband networks—in many cases using innovative wireless technology solutions to provide much higher bandwidths than would otherwise be available.

8. Defra has also supported community broadband projects through the Rural Enterprise Scheme. An excellent example is the North Yorkshire Parish of Austwick where assistance from the Defra grant has successfully brought affordable, high-speed broadband access to more than 500 residents and small businesses spread across a 50-square mile area.

9. Take-up—At the beginning of January 2005, Ofcom estimated over 6 million high-speed broadband users in the UK, new subscriptions adding over 60,000 a week. In April 2005 BT announced their Estimates also suggest over 4,000,000 DSL connections and over 1,800,000 cable modem connections. Over 150 Internet Service Providers offer ADSL products through the UK.

10. Policy focus is now moving towards stimulating effective take-up and use of ICT by individuals and addressing the digital divide that currently excludes some groups from benefiting from access to the internet, as set out in "Connecting the UK: the Digital Strategy", which was launched on 1 April 2005.

(G) THE RURAL PAYMENTS AGENCY

Relevant reports: Sixth Report of the Environment, Food and Rural Affairs Committee, HC 382, Session 2002-03, 8 April 2003; Government Reply: Seventh Special Report, HC 830, Session 2002-03, 24 June 2003.

"What progress has the Agency made in preparing its IT systems for implementing the Single Payment Scheme under the reformed Common Agricultural Policy regime?"

Defra response

Background

Following the CAP Reform agreement in summer 2003, the pre-existing RPA Change Programme was refocused to prioritise the delivery of the Single Payment Scheme (SPS) for the 2005 scheme year.

The RPA IT Application (RITA) is being delivered via Accenture, as the lead supplier.

Progress Update

The early implementation phase was supported by an extensive communication programme to promote awareness and understanding of the SPS and appropriate action from farmers.

Progress on the IT developments has seen the introduction of:

— a new finance system (Oregon);

— digitisation of 1.7 million parcels of land;

— the digitised map database (Rural Land Register);

— a new customer registration system;

— the Customer Service Centre (call centre); and

— the high volume data capture (HVDC) system (the first part of the SPS processing functionality).

Two key areas subject to difficulties have been:

1. Customer Service Centre (CSC)—there were particular issues with regard to the large increase in volumes of enquiries. In February the CSC received 900 calls per day but these increased to more than 7,000 per day in April and May, peaking at over 10,000 calls daily. These sustained volumes exceeded planning assumptions and required the implementation of contingency plans which increased call answering capacity to 20,000 calls per day. In addition, to enhance customer service, RPA extended the hours that the CSC was available, adding two hours to weekdays and making it available at weekends during the application period when the CSC handled more than 200,000 calls.

2. Rural Land Register (RLR)—RPA has experienced unprecedented demand for mapping changes this year with many additions and/or amendments to fields being requested, resulting in a year on year increase now exceeding 1,000%. The increased demand has created a backlog of land registrations and modifications to land already registered. A joint set of recommendations from RPA and RDS were sent to the Minister on the 27 June and subsequently approved. These were:

— To further enhance productivity on the RLR.

— Maintenance of current priority of processing IACS 22s supporting Entry Level Scheme (ELS) applications until the circa 4,000 outstanding cases have been cleared.

— 15 July milestone for offering first agreements to ELS applicants is used as the cut off date for priority action on any associated IACS 22s. Thereafter the focus will switch to processing IACS 22s associated with SPS applications.

Two communication measures are being undertaken:

1. A Technical Briefing Note on the SPS and ELS processing steps was discussed with stakeholders and media interests on 12 July. A News Release explaining the shift in emphasis was subsequently released.

2. Discussion is planned with farmers and stakeholders on the digitisation process and how it impacts on SPS and ELS processing.

Remaining IT (RITA) schedule

In line with best OGC practice, the IT system (RITA) supporting the implementation of SPS is being delivered by Accenture in incremental steps, or releases, which together will deliver the processing payment and accounting of 2005 SPS applications. The remaining IT systems required to deliver SPS are being delivered in following stages:

— Release 3A0—high volume data capture (HVDC): to enter the data from the SPS applications forms went live in May.

— Release 3A1—validation and inspection selection: is now being piloted in one site and due to be rolled out to all sites by the end of July.

— Release 3A2—entitlements calculation, national reserve and payments: is due to go live in September, and is on target.

— Release 3B—2006 scheme requirements and system enhancements and is due to go live in stages between January and May 2006.

Contingency

A contingency, based on a development of the legacy IT systems, exists and can be invoked in the event of the failure of one of the remaining RITA system releases.

(H) MARINE ENVIRONMENT AND THE PROPOSED MARINE BILL

Relevant report: Marine Environment (Sixth Report, Session 2003-04, HC 76, 2 March 2004) (Government Reply: Tenth Report, Session 2004-05, HC 706, 23 June 2004).

Recommendation: As soon as possible after the conclusion of the two marine reviews now underway, the Government should produce a paper outlining what changes are needed to the present regime, and to what extent these changes can be made within the framework of existing legislation. If the changes cannot be made within the existing framework, the Government should publish a consultation paper exploring the desirability of a Marine Act. (Paragraph 43)

Response: The Government will take a decision on whether new legislation is needed, and what form this should take, once it has seen the recommendations of these reviews. If these reviews conclude that new legislation is required, a comprehensive Marine Bill would be one option that the Government would want to consider. The Government would wish to consult on any proposed changes before bringing forward any legislation.

In oral evidence to the Committee on 9 February 2005, the Secretary of State, in answer to a question about the timing of a Marine Bill, told us: "We are at a stage where there has to be some consultation . . . I would hope later this year". The Committee would be grateful for an update on the state of play regarding the likely scope of the Marine Bill and the timing of its publication."

Defra response

1. As the Committee is aware, this is a complex area. It is difficult at the present time to say in detail what the scope of a Marine Bill will be, possible approaches for a number of elements are still under discussion with other Government Departments, and the extent to which our proposals will cover UK waters and coasts will need to be considered further in consultation with the Devolved Administrations.

Objective

2. The underlying principle however is that the Bill will have sustainable development at its core, so that we can deliver our economic, social and environmental objectives.

3. Our aim is to deliver a Marine Bill that will establish an integrated system for the streamlined planning, management and protection of our coastal and marine natural resources and that delivers improved speed, quality, accountability and transparency in development decisions.

Issues

4. As the Committee is already aware, the recommendations from a number of recent reviews will shape our proposals for the Bill, and we have work to do to follow up these recommendations in order to develop evidence based integrated legislative proposals. Significant areas we are working on are:

Marine spatial planning

— a literature and evidence review to identify possible approaches to implementing marine spatial planning;

— development of a simulated regional plan for the eastern half of the Irish Sea, plus a more detailed sub-regional plan in the Liverpool Bay area; and

— an initial Regulatory Impact Assessment of the costs and benefits of implementing marine spatial planning.

The project is focusing on practical issues that will need to be resolved if marine spatial planning is to better manage and protect the seas. These include data availability, how cumulative impacts can be addressed, how the land-sea interface should be managed and how potential conflicts might be resolved. A stakeholder advisory group has been set up to obtain input and views from a wide range of stakeholders in developing and testing the robustness of the plan. The literature review has been completed. The project is due to complete by the end of the year.

Consenting arrangements for marine and coastal development

Coastal management arrangements

The legal protection for marine biodiversity and ecosystems

— National marine protected areas—to enable us to protect areas of national importance and meet our international obligations on marine protected area networks.

— A framework of marine ecosystem objectives, which are consistent with healthy, functioning and resilient ecosystems and the maintenance of biodiversity.

Fisheries management and related environmental and marine resource issues

We are working with stakeholders to identify areas where marine protected areas might provide a range of benefits including conservation of fish stocks and wider biodiversity, as we take forward our international commitments to establish networks of these areas to maintain and restore marine biodiversity.

Marine Agency

In line with the EFRA Committee's recommendation for a coordinating marine agency following its recent marine inquiry and sixth report of session 2003-04, we are considering the further functions that such an Agency might take on. As well as fisheries management and enforcement, it could take on as a minimum the marine consents for which Defra is responsible. We are also considering the wider role of such an Agency, including the possibility that it could have a role in implementing marine spatial planning.

Timetable

5. In view of the complexity of the issues, and the extensive work still required to develop well founded proposals on some central elements such as marine spatial planning, we believe that we will be able to publish a draft Bill towards the end of the current session of Parliament. We are conscious of the need to balance our desire to make progress as quickly as possible against the need that our proposals are appropriate, well founded and proportionate. Introduction of the Bill will follow later in this Parliament, once we have considered the outcome of both a public consultation and pre-legislative scrutiny of the draft Bill.

(I) THE WATER FRAMEWORK DIRECTIVE

Relevant report: The Water Framework Directive (Fourth Report, Session 2002-03, HC 130-I, 19 March 2003) (Government Reply: Sixth Special Report, HC 749, Session 2002-03, 10 June 2003)

"In 2003 Defra supplied a general update on progress made in implementing the Directive. The Committee would welcome a further update on progress."

Defra response

Transposition

1. The Government brought into force the laws, regulations and administrative provisions necessary to comply with the Directive (article 24). Regulations to transpose the Water Framework Directive in England and Wales in December 2003 and the Regulations entered into force on 2 January 2004. An updated RIA was published at the same time. Two further sets of Regulations covering the two river basin districts which cross the Scottish border (Northumbria and the Solway Tweed) were laid before Parliament in January and entered into force on 10 February 2004.

The Directive has also been transposed in the rest of the UK—Scotland, Northern Ireland, and in Gibraltar.

Article 3

2. The list of competent authorities and information about the river basin districts for which they are responsible (required under Article 3 of the Directive) was submitted to the Commission on 22 June 2004.

3. It identified the Environment Agency as the competent authority for England and Wales. The EA has general responsibility for ensuring the Directive is given effect and has to approve environmental objectives, programmes of measures and river basin management plans.

Characterisation

1st Phase

4. Article 5 of the WFD requires Member States to carry out, by 22 December 2004, an analysis of the characteristics of each river basin district, a review of the impact of human activity and an economic analysis of water use. The reports were duly completed and reported to the European Commission by the deadline of 31 March 2005.

5. In England, the Environment Agency, as competent authority, identified water bodies by type and carried out an assessment of the pressures on them from human activity. This was informed by the economic analysis, led by Defra, that looked at economic trends and explained how they might influence the extent and nature of water use in the future. The economic analysis also calculated the extent of the recovery of the costs of water services in each river basin district.

2nd phase

6. There are many areas of uncertainty in the assessments of risk to water bodies from human activity and these will be refined, as envisaged by the Directive, through targeted monitoring and further research. This process, which is at an early stage, will draw on expertise from industry, nature conservation bodies and other environmental organisations.

River Basin Planning

7. Defra has been working with the Environment Agency and stakeholders on draft guidance to the Agency on river basin management planning. It aims to publish draft guidance for consultation in the next few months.

Economic Analysis

8. Defra carried out economic analysis on cost recovery, economic importance and dynamics of water use and the preparation of a methodology for cost effective analysis.

9. An Economics Steering Group (ESG) was set up in 2003 with the purpose of coordinating the work going forward in England and Wales, Scotland and Northern Ireland in relation to the economic analysis required by the Directive. It commissioned three initial research projects, which reported in May 2004:

Economic importance and dynamics of water use

Cost recovery and incentive charging

Cost effectiveness analysis and developing a methodology for assessing disproportionate costs

10. Since, the ESG established a Collaborative Research Programme on River Basin Management Planning Economics. A major work programme has been started and will run till 2008, eventually providing the tools necessary for the economic analysis for River Basin Management plans.

11. The format and contents of a draft register of protected areas (which contains details of a provisional list of designated) was reviewed in the Ribble pilot catchment (see below), and feedback has been incorporated into the register which was completed by the deadline of 22 December 2004.

Measures to address diffuse pollution

12. A consultation entitled "Developing Measures to Promote Catchment Sensitive Farming" was launched in June 2004 to ask for views on a wide range of possible measures including regulation, use of economic instruments and supportive approaches for tackling DWPA. Following the close of this consultation, the Government announced that we will continue to work with stakeholders raising awareness, promoting voluntary action and best practice (CSF Delivery project).

13. We are also looking into the use of stronger measures, such as regulation and economic instruments to tackle DWPA. We will work with stakeholders over the next year to develop an effective package of measures for tackling DWPA and will consult formally in 2006. This will ensure that effective measures for tackling DWPA (including necessary powers if required) will be available for inclusion into draft River Basin Management Plans by 2008-09.

14. In the meantime we have put in place a comprehensive advice contract (worth £2.5 million) on pollution minimisation, and we are encouraging farmers to take up Environmental Stewardship options which will contribute to tackling DWPA. In addition, we are developing proposals with stakeholders to spend £10 million in 2006-07 and £15 million in 2007-08 on tackling DWPA.

15. Defra has led work in the EU to promote better linkages between the water framework directive and the Common Agricultural Policy. This takes as its starting point that work to date across the EU, including that on characterisation of water bodies referred to above, shows that diffuse pollution from agriculture is one of the main causes of water bodies being at risk of not achieving the ecological objectives in the directive. A UK-led strategic steering group has been established under the EU Common Implementation Strategy to progress this work.

Stakeholder engagement and public participation

16. Defra has continued to chair a stakeholder forum on the directive, which has met regularly to consider a range of issues relevant to the implementation of the directive. This has been supplemented by regular informal contact between Defra, the Environment Agency and stakeholders.

17. The EA consulted on River Basin Plan stakeholder engagement strategy in December 2004 and are currently considering the responses.

18. The Environment Agency undertook to test European guidance on ensuring public participation in the implementation of the WFD. A project to carry out this work in the Ribble was launched in June 2003 and formally tested European guidance on the Planning Process and Public Participation. This reported to the Commission in May 2004.

19. The pilot continues to work closely with regional stakeholders to explore methods and techniques for engaging regional and local stakeholders in the river basin planning process. Key stakeholders, including regional representatives for business, industry, wildlife, environmental and farming organisations, are closely involved in the development of the pilot project. The prototype plan for the Ribble will be finalised as part of the draft River Basin Management Plan and Programme of Measures for the North West River Basin District.

20. The Ribble will formally pilot work on agriculture and the WFD and make an input into the work being led by the UK and the Commission within the Common Implementation Strategy (see above).

A Ribble website was launched in December 2003.

Daughter Directives

Groundwater

21. In 2003 the European Commission made a proposal for a new groundwater directive. Work has been needed under the Netherlands and Luxembourg Presidencies to develop the proposal into a practicable and risk-based measure which is consistent with WFD. The Luxembourg Presidency is hoping to achieve political agreement on a text at the Environment Council on 24 June.

22. The European Parliament had its First Reading on the proposal in April. The Parliament rejected the notion of more common European standards for groundwater but its amendments on this complex dossier are not consistent and it is unlikely that First Reading agreement with Council will be achieved.

Priority Substances

23. The WFD required the Commission to propose a list of "Priority Substances" presenting a risk to or via the aquatic environment, and such a list was adopted in 2001. The Commission is also required to propose environmental quality standards and emission controls for these substances. Member States and other stakeholders have participated in informal discussions aimed at preparing a daughter directive for this purpose, and a formal proposal is currently expected in October 2005, significantly behind the schedule set out in the WFD.

Department for Environment, Food and Rural Affairs

July 2005

3 Commission Regulation No 795/2004 of 21 April 2004 laying down the detailed rules for the implementation of the single payment scheme and Commission Regulation No 796/2004 of 21 April 2004 laying down detailed rules for the implementation of cross-compliance, modulation and the integrated administration and control system. Back

4 Commission Regulations No 1974/2004, 394/2005 and 606/2005. Back

5 Commission Regulations No 239/2005 and 436/2005. Back

6 SI 2004 No 2689 The Common Agricultural Policy Single Payment and Support Schemes (Appeals) (England) Regulations 2004, SI 2004 No 3196 The Common Agricultural Policy Single Payment and Support Schemes (Cross-compliance) (England) Regulations 2004, SI 2004 No 3385 The Common Agricultural Policy Single Payment Scheme (Set-aside) (England) Regulations 2004, SI 2005 No 218 The Common Agricultural Policy Single Payment and Support Schemes (Integrated Administration and Control System) Regulations 2005, SI 2005 No 219 The Common Agricultural Policy Single Payment and Support Schemes (England) Regulations 2005. Back

7 Defra News Release 294/04. Back

8 Defra News Releases 439/2004, 441/2004 and 462/2004. Back

9 Defra News Release 524/2004. Back