Farming in the Uplands - Environment, Food and Rural Affairs Committee Contents

Examination of Witnesses (Question Numbers 163-235)

James Paice MP Jeremy Eppel and Dan Osgood

17 November 2010

Q163   Chair: Good afternoon. Minister, may I welcome you on your first visit to the Select Committee? You're most welcome. Would you like, for the record, to introduce your two officials?

Mr Paice: Yes, thank you, Miss McIntosh. On my right is Jeremy Eppel, who heads up our overall Uplands team, and on my left is Dan Osgood, who specialises in RDP issues and things like that, which are very relevant.

Q164   Chair: Excellent. Thank you very much indeed. You'll be aware this is the first time in about 10 or 15 years that the Committee has actually had a chance to look at upland issues. We're looking at this in the context of the Commission for Rural Communities Report around high potential, and looking to see how we can progress the recommendations there. Just as a general point, could I ask the Minister whether you believe that you're hampered in your work by the lack of a statutory definition of "uplands"?

Mr Paice: "No" is the short answer to that. I don't know whether it's convenient to you, Miss McIntosh, but I have a few notes. I would quite like to make a few opening remarks about our approach to the issue.

Q165   Chair: It will answer my first question, which is about your commitment to rural affairs, uplands and hill farming.

Mr Paice: Perhaps, as you say, it will do that. Thank you very much. I'm grateful to the opportunity to answer any of the Committee's questions. I start by apologising if, during the course of the proceedings, I burst into a coughing fit—I've got some sort of lurgey sitting on my lungs.

The Government does fully recognise the value and the significance of the uplands. By way of partly answering your initial question, when we refer to "the uplands", we tend to mean the areas called the Less Favoured Areas. It's not an absolute precise term, but it's fairly close and the one we tend to work to. We're very committed to promoting not just the economic but the social and environmental wellbeing of the uplands. As you'll be very much aware, the coalition Government attaches great importance to a sustainable future for the upland areas of England—of course, we are only talking about England—including the role they can play in a range of Government policies, not just pure agriculture, to the extent that, in the Government's Defra Structural Reform Plan, we clearly state that we intend to develop affordable measures of support for hill farmers and, indeed, the Coalition Agreement refers to that. We are very supportive and welcome the contribution to the debate from the Commission for Rural Communities Report, to which you refer. We are, ourselves, carrying out a wide-ranging review of policies that affect the uplands, including the hill farming dimension, and so seriously, genuinely look forward to the outcomes of your deliberations. We plan to issue a ministerial policy statement on the uplands early next year.

I think it's worth remembering that hill farming provides an important combination of environmental, landscape and social benefits alongside pure agricultural produce. It has helped to shape the uplands landscapes and their communities, and it's an important source of stock for lowland livestock farming—the old strategic approach. As the memorandum that we submitted to your Committee made clear, all the evidence from Defra's experts and others tells us, unsurprisingly, that the economics of hill farming are extremely challenging, and that the numerous social and environmental benefits hill farms provide are not fully rewarded by the market for livestock goods, hence the difficulties. A sustainable long-term future for hill farming will require the economics to become more favourable, one way or the other. We want to identify ways where we, as a Government, can work with hill farmers to put them on that more secure economic footing, but we think that hill farmers will certainly need to focus on improving their own efficiency and margins, and on making the most of the income-generating opportunities that are open to them.

The work that Richard Macdonald is doing on farming regulations may provide some pointers about barriers that may be in their way, perhaps developing of leisure activities or whatever. As I implied earlier, Rural Development Programme funding through Axis 1 is very relevant in supporting businesses to become more competitive.

Q166   Chair: Could I stop you there, Minister, because we will cover a lot of these points, and I'm very conscious of time? As regards Defra being one of the Departments that deal with rural communities, and there are a number of other departments involved, do you believe that you will have sufficient influence in steering the Government through the work on rural communities?

Mr Paice: Yes, we do. My colleague Richard Benyon leads on the wider rural issues in the Department, but we work obviously very closely together, and one of the reasons, as I'm sure the Secretary of State has already explained to you, why we decided we didn't need the Commission for Rural Communities any more is because there is a great wealth of knowledge within the ministerial team, for a start, but also within the Department and on the Government benches in the House of Commons—indeed, much of it in this room this afternoon. We feel that the understanding of the problems of rural areas is there already. Yes, we're determined to take forward the rural agenda and I know that Richard Benyon is in close conversation with other Departments.

Q167   Chair: On the actual proposal that the Commission for Rural Communities gave in oral evidence to the Committee, they would be quite keen to have a Cabinet-level post coordinating rural communities that they thought would be best placed in the Cabinet Office. Do you think that would be a useful addition or identification in Government?

Mr Paice: Obviously the structure of Government is not for me to comment on; it's a matter for the Prime Minister. As I said, we believe that we have the competence within the Department to do that.

Q168   Chair: As regards absorbing the staff of the Commission for Rural Communities into the Department, how is that being undertaken and do you believe that it might dilute the work that they've been doing on rural communities, which has been so welcome?

Mr Paice: I certainly don't believe that it will, to use your word, dilute the work that has already taken place. I can give you the precise situation as far as the absorption of the staff, etc. We announced, as you know, the intention on 29 June. Part of the reasoning behind it is the fact there is already a Rural Communities Policy Unit within Defra, as well as the CRC. That Rural Communities Policy Unit will be expanded and shared with staff from the CRC. We're not able to absorb all the staff from the CRC; we never expected that to be the case. The new Unit will have a total of 33 members of staff, as well as another three members who are operating the RDPE National Network, who will transfer from the CRC. We have about 17, in fact a bit more because of some vacancies that are already there, so 17-plus posts vacant that will be open to members of the CRC, and they will be interviewed in the normal, conventional way. That's the latest situation, as far as that process is concerned.

Q169   Neil Parish: Good afternoon, Minister. The CRC recommended the development of a national integrated strategy for the uplands. In February, do you intend to produce a rural strategy, an uplands strategy, a hill farming strategy or all three?

Mr Paice: Uplands.

Q170   Neil Parish: Uplands, okay. The Defra memorandum stated the issues facing hill farmers were common to all grazing livestock enterprises. Do you think then that hill farmers are deserving of extra support?

Mr Paice: Yes, I do, and I made that clear in Opposition and remain of the view. Hill farming is particularly challenging. Obviously the climatic conditions can be pretty severe, with some very high levels of rainfall, and that impacts on the direct economics, because you tend to be using breeds of sheep and cattle that are hardier but slower growing and perhaps less suitable for their meat, hence the origin of the uplands being a source of breeding stock for the lowlands. Of course, they're often far more remote areas than other grazing livestock sectors, so there are a series of challenges there that make it a particularly unique thing. Then there's also the issue of actual farm structures. There are still a lot of basically very small single-person units in the uplands, which again provides challenges. One other factor I would add is that not all uplands are the same. The uplands in the north of England are very different, for example, from those in your part of the world. I was on Dartmoor last week.

Q171   Neil Parish: Being blunt with you, where do you see that money coming from?

Mr Paice: It's going to have to come out of existing resources, if we find any more. The precursor to that is to find the channel by which you can get the resources into the uplands. My original proposition was that we would try to put more money into the issue that I'm sure you'll want to talk about—the Uplands Entry Level Stewardship scheme. In fact, because that stewardship scheme is required by European regulations to be based on the concept of income forgone, it actually makes it very difficult to put any more money in, because it would be doing more than income forgone. Obviously post-2013 CAP reform, the picture may change but, in the short term, we're stuck with that. Assuming that we can find the right vehicle, it will have to come out of the Rural Development Programme money and, yes, that means something else will be cut. Ask me what; I'm afraid I can't tell you at this stage, but I do believe that it is deserving of more support, if we can find it.

Neil Parish: There is a special case.

Mr Paice: I believe there's a special case, if we can find a fair mechanism to do it, which doesn't contravene either UK or, more likely, European regulations.

Q172   Chair: Which aspects does income forgone include? I understand in other European countries you can have opportunities granted within the income forgone.

Mr Paice: Opportunities?

Chair: Yes, opportunity costs.

Mr Paice: Opportunity costs, yes. Certainly extra costs involved can be incorporated. The methodology of calculating income forgone is quite challenging. Maybe Dan can add a little bit to this in a second, with your consent, but the fundamental point is that, because the economics of upland farming are pretty thin anyway, the income forgone tends to be very thin. Indeed, some calculations have actually shown the reverse because, if the farmer, as some do, is making a loss then, arguably, the income forgone is a negative figure as well.

Dan Osgood: Just to add to that, under EU rules we're able to pay for the income forgone from an activity and also for any additional costs that the farmer may incur as a result of carrying out the activity, and also, in some cases, for transaction costs involved in the kind of management that we're looking for. That's essentially the limits of what we are permitted to do under the EU rules.

Q173   Chair: Would that change at the next stage of CAP reform?

Mr Paice: I've already said to commissioners that I would like to see that changed. If we genuinely value public goods, then personally I don't have a problem with the farmers being able to make a margin out of that, just as much as any other activity. Obviously I can't tell you what the outcome will be.

Q174   Richard Drax: Your policy, so far as uplands are concerned, is it to maximise food production and concentrate on that element of it, or will it be to manage the land for environmental and other reasons? I may just add that, as you know, there's a feeling among many farmers, not least hill farmers, that they're turning into park keepers. What will your strategy be so far as the hill farmers and the uplands are concerned?

Mr Paice: We have to find the right balance. There is no doubt, I'm sure from your own knowledge, Mr Drax, you know that some areas of the uplands have been overgrazed and have suffered in the past. There is now increasing evidence that some areas are being under-grazed. We are seeing bracken spreading in the uplands because of a reduction in stocking rates. We have to find the right balance, and I don't believe we have it yet. I've mentioned the Uplands Entry Level Stewardship scheme, which the previous Government brought in and we're continuing to introduce. In principle, I think it's the sensible way forward, but I'm not absolutely wedded to all the individual criteria. I think we need to look at the minimum stocking rates incorporated within it.

I think we need to understand that, if we are as a country opposing, as we do—and all political parties seem to share the view—subsidising production per se, and we're going to work on the issue of public goods, then it's not just a question of making the farming profitable in terms of the cost to produce a lamb or bullock or whatever it may be.

We have to look at the public benefits in terms of the water retention in the uplands, the carbon sink that is in the peat bogs, obviously the flora and fauna of the uplands—all those things. Indeed, the water retention feeds through to reducing flooding risks further downstream. I think we probably need to do more to put better values on those public benefits, as the means of channelling more funding in. I don't think we can go back to the days when farmers were persuaded or encouraged financially simply to fill the hills with whatever stock they could find and as many as possible. I don't think it was helpful to farming and it certainly wasn't helpful to the uplands but, certainly, you can't maintain the uplands and the benefits of the landscape, etc—I mentioned the bracken encroachment, for a start—without adequate stocking rates. There is evidence that certainly in some part of the uplands stocking rates are now too low.

Q175   Neil Parish: Suckler cows are one of the big problems, because they're not terribly profitable on the hills, but you're not considering direct payments for suckler cows, are you?

Mr Paice: No, we're not considering direct payments for any individual production, because that goes completely against the trend of CAP development since the mid-term review, back in the early part of the decade. As you may be aware, the Scots are looking at that; they've actually had an element of it for some time. The latest report by Brian Pack, as far as the Scottish CAP is concerned, is considering an extension of that. I don't believe that's the right way forward. Certainly if you're going to talk about stocking rates, then that creates the opportunity to stipulate a balance of stock between cattle and sheep, and that might be the right way to do it.

Q176   Neil Parish: I think the Irish have a particular type of grazing, which they link to suckler cows and make the payment on the type of grazing needed. I don't know whether you'd consider that at all. I don't think the Commission likes it a great deal, but it was accepted by the Republic of Ireland.

Mr Paice: I'm not aware of it, sorry.

Q177   Chair: Could I just ask the Minister, do you think there's a disproportionate cost to upland farmers, particularly dairy producers, in meeting the slurry requirements of the new EU directives? I only ask because one farmer showed me what he's had to put in.

Mr Paice: This is for the Nitrate Vulnerable Zones (NVZ) regulations.

Chair: Yes.

Mr Paice: I haven't seen any evidence that it's disproportionate. I appreciate that the NVZ regulations are putting a lot of extra cost on a lot of livestock producers. I'm not aware of any evidence that it's worse in the uplands. There may be examples, I don't know.

Q178   George Eustice: You touched earlier on the fact that there's quite a difference between different upland communities. How easy is it to reconcile a national strategy on the uplands with the Government agenda of localism and allowing local communities to lead policy on things like the economy, with the Local Enterprise Partnerships and things like that? Have you thought about how that will integrate with the new localism?

Mr Paice: In so far as Local Enterprise Partnerships are concerned, you'll appreciate it is very early days. The answer is we're thinking about it, to use your phrase. We haven't actually got very far down that road yet, about how we integrate with them. You're absolutely right to address the apparent conflict between national policy and localism, but I don't think it is a real one. I think we need probably to improve our framework, and that's the substance of the statement we'll be making in the spring, from a national perspective. Then you can allow greater flexibility in local areas. For example, the issues that we've just been talking about, such as stocking rates, seasonality of grazing will be very different on Dartmoor, Bodmin or Exmoor compared with the Yorkshire Moors, Northumberland or Durham. I think we need to look at some of the Stewardship schemes with a view to greater local flexibility. I know for example that the Dartmoor farmers are working, with Natural England, on developing a wider spectrum of choice within the scheme so that they can find options that are more suited to them, but you need to move away from national prescription, so that schemes can be devised that are more appropriate for the local area. I don't think there's a direct conflict but, on the issue of LEPs, it's too early to respond.

Q179   George Eustice: One of the things we've picked up in evidence from the NFU, CLA and others was a sort of weariness of endless strategies for the uplands, and lots of questions but quite often not answers, and lots of people who can identify the challenges but, when it comes to the actual policy solutions. Can we expect the strategy that you are going to announce in February to have really concrete legislative proposals to offer the solutions or will it largely be statements of intent?

Mr Paice: I hope I didn't use the word "strategy". If I did, I didn't intend to, because I share the cynicism about the use of the word. It's a statement of what I'm proposing, a statement, to use your words, of intent, not necessarily legislative intent. I feel very strongly in this role that legislation is not the first tool that you reach for, because we all know how long it takes and it's difficult, and it tends to be rather broad-brush. I think there's a great deal we can do without legislation, in terms of change of culture, approach, localisation of decision-making and things like that. I can't pre-empt what we're going to say, but it will be a statement of intent. Because I share that scepticism, I will certainly want to make sure it contains serious action points that we can deliver on.

Q180   George Eustice: Have you got a view on timescales, in terms of getting early wins and things you might try to change quite quickly?

Mr Paice: I'm looking at UELS as one example where I think we might be able to make some changes relatively shortly. I don't know precisely a timescale, but that's an early win, as you rightly say. The issue I've talked about is stocking rates. That may be something that we can deliver quite early. Other issues will take longer. I think it's important to say that we're not just looking, in answer to Mr Parish's question, it's not just hill farming but the uplands community, farming communities. Issues like broadband and many other factors come into play, as well as pure Stewardship schemes, the price of lamb or whatever it may be.

Q181   Chair: On the localism agenda, the NFU recommended a sort of local panel, an uplands panel, which would include representatives of the industry. Would you consider that favourably?

Mr Paice: I'm not going to respond instantly by saying I'd consider it favourably. I would certainly consider it. It may well end up being favourably, but I'm always a bit dubious about setting up more panels and taskforces and things like that. I know I've done it, but I think we need to look at them all very carefully before we set up just another one, because it sounds good.

Q182   George Eustice: Clearly budgets are tight at the moment; there's no money. Is it sensible to try to spread that money very thinly to try to protect all of the communities, or do you think it could be better targeted, so that you either protect certain areas properly or focus the funds that we have in really making a difference in one or two key areas?

Mr Paice: I'm going to take issue slightly with the use of the word "protect", because I don't want to protect; I want to enable, encourage and stimulate, so that local communities can evolve and respond to the constant challenges. I certainly agree that we can be using money more effectively. Certainly if it's coming out of the Rural Development Programme, it has to be targeted at public goods. That's the principle of the programme. I don't believe that the current way it's being done through the Regional Development Agencies has been very effective at all. It varies slightly region to region, but overall I think it's generally accepted it has been pretty poor in terms of addressing the wider rural needs, not just uplands. I'd certainly agree there's huge potential for improvement there. I don't, at the moment, believe we should be looking at targeting particular areas, and saying, for the sake of argument, "Dartmoor is more important than Exmoor". I don't think that's the right way forward. We need to create the opportunities for rural communities and, in this context, rural farmers, to make the applications and make sure that the money's being used in the most effective way.

Q183   Dan Rogerson: When the Commission for Rural Communities gave evidence to us they picked on two issues in particular as being of importance—broadband and affordable housing. That certainly resonates with me, coming from the upland areas of North Cornwall and Bodmin Moor. However, responsibility for those two areas doesn't rest directly with Defra, so what influence does the Department have and what methods can it use to ensure that those things are given sufficient priority by other Departments?

Mr Paice: In both cases, quite a lot. In the wider rural issues, we have referred to our own objective about delivering broadband, and it's essential, not just in terms of pure farming, although it's important there if we're expecting people, as I do, to want to move towards, for example, all the Single Farm Payments being claimed online. Clearly, if you're not on broadband, it can't be done. It's also for other rural businesses as well. The direct answer to your questions is that not just our officials but, again, Richard Benyon is working closely with the Department in terms of broadband and, as you know, they've announced four pilot areas for the extension of superfast broadband in the rural areas, Cumbria and North Yorkshire being two of them. I can't remember the other two off the top of my head, but I'll come back to them. In that respect, the link is there.

Rural housing is an area of huge importance for me, from a personal interest. I was very involved with Grant Shapps in developing the policy that is now being worked up by DCLG for local community development, moving on from Community Land Trusts to the ideas, which you'll be aware he's working on, of communities being able to develop and give themselves planning consent, as long as a certain percentage—I believe it's now looking at 75% or whatever—are in support, and where the community can actually have equity in that property, whether it's shared equity, to rent or whatever. There's much more localised control. They are both very important issues to us and, out of genuine personal interest, it comes back to my earlier point about the wealth of knowledge in the team.

Q184   Dan Rogerson: That's very encouraging; the Coalition Agreement included a number of these sorts of issues for us to work on, which is great. However, further down the line, as the other Departments are getting to grips with their own priorities, spending pressures and so on, how will you maintain those relationships and that drive, and make sure that these rural issues are not lost?

Mr Paice: Simply by constant engagement and, as I say, genuine personal commitment and involvement from Ministers. I don't think any of us, even those of us like myself who have been shadowing for some years, fully appreciated the extent of the financial challenge we were going to face in Government. There's no getting away from it, as I know you discussed with the Secretary of State yesterday. There's no getting away from the impact of that, not just in terms of what we can do but of our own work schedules. The first six months have very largely been taken up with addressing it. As we've now got the Spending Review, every Department knows and is now working out the detail, and we're going to be in a much better position to pursue our policies and our approach. The bottom line to your answer is: personal commitment.

Q185   Richard Drax: Perhaps I should know this, but what is the commitment you have made to install the necessary pipe work, the necessary whatever it is, to get broadband out to rural areas? Where are we on targets, figures and money?

Mr Paice: The Spending Review committed £530 million of funding for broadband through the organisation called Broadband Delivery UK, BDUK, working closely with the private sector. BT and Virgin Media have already announced major network upgrades. As far as the particular rural issues are concerned, as I said, there are four pilot locations. I mentioned Cumbria and North Yorkshire; the other two are the Highlands and Islands of Scotland, and Herefordshire Golden Valley. That will help to establish commercial costs and challenges that are involved in rolling out superfast broadband. That £530 million will be used, some of it, for those pilots, and then clearly we will take forward those lessons.

I think the real answer to your question is there is no particular blueprint. In some cases, it will be possible to do it by rolling out fibre optics. In other cases, it may require radio or satellite transmission. A number of communities are already developing it; in Cumbria, again, there's a lot of work that has already been done to develop it. I have a small example in my own constituency where the BT exchange is just too far away. I don't think there is a particular blueprint; we have to provide the basic framework, within which local communities can find the right system for them.

Q186   Chair: Can I turn to Uplands Entry Level Stewardship, Minister? We were told by the Tenant Farmers Association that there are 9,000 potential applicants for the UELS, but so far only 3,000 have joined the scheme. What assessment have you made of the number of tenants and commoners having problems with the UELS and their landlords?

Mr Paice: We're working through them. I'm not going to pretend everything is coming up roses, but certainly the latest statistics, as of 8 November, show that there were already 3,000 live agreements covering 377,000-odd hectares. Although it may only be 3,000 agreements, it's actually 75% of the target area that we had hoped for, and is well ahead of the planned profile. We've had a total of 573,000 hectares as applications, or 3,600 if you want the number of applications. Within that, there are 108 shared common agreements. We are making progress.

There have been some issues. I had a meeting this morning about issues. This was in Yorkshire, but it applies elsewhere, where, for example, traditional estates already had agreements with the Treasury for relief on inheritance tax. There was the issue that you couldn't then claim UELS on features that were reasons for not paying inheritance tax. Therefore, we had to find—and our officials have found—ways around that. That, I think, has been resolved, certainly in the cases that we had. We're being innovative in trying to find solutions.

There are a few—but, despite hearing lots of anecdotes, I find it difficult to nail them down—issues to do with disputes between landlords and either commons graziers or grazing tenants who may not be commons graziers. As you know, the person signing an agreement has to have management control for a minimum of five years. Obviously, people who are only taking a grazing lease or who are commons rights holders don't have that and, therefore, the commitment of the landowner is important in that. I hear anecdotally of stories where landowners are being difficult or taking all the money and not reducing the rent. First, I don't actually get the chapter and verse, and nobody has yet come to me with a case of, "This is Landlord x and this is the problem." I'm not saying they don't exist, but I haven't had them. Secondly, it poses the question as to how far Government should go in actually intervening in what is a commercial relationship between landlord and tenant.

Q187   Chair: I will seek to make private representations to you, if I may. We've had cause to discuss previously a particular example in my own constituency, where agreement has broken down. Now because of the suspension of the scheme until, I understand, April, the graziers who were receiving Hill Farm Allowance stand to gain nothing in this financial year. I will raise that separately with you. Are you looking at possibly altering and weakening the management control over the land to allow the tenants to benefit, where it can actually in many cases be a lifeline in their survival?

Mr Paice: It's an issue that has caused me a lot of vexation, because I take the view that, from the farmer's perspective, although it may not be the case from that of the taxpayer, the Uplands Entry Level scheme is effectively an income replacement for the Hill Farm Allowance. I know we're asking them to do different things and it's all based differently but, from the farmer's perspective, that's what the cheque's for. I fully endorse the idea that, therefore, it should be going to the practising farmer. We are stuck with this requirement from the EU that you have to have management control. That's not something I have to alter because it's an EU rule, and I can't decide directly on who has management control. If you have occupancy for only a grazing season, nobody could realistically argue you have management control of the property.

Q188   Chair: From previous discussions I've had with commissioners, they don't seem to understand the position, and they think tenants are being treated in this country on the same basis as tenants in other European countries. I would argue that clearly they're not.

Mr Paice: That's perfectly reasonable, yes.

Q189   Chair: Was this something we'd have to take up in the context of the CAP review?

Mr Paice: It certainly is an issue for CAP review, but it's an issue that we, as we develop the statement I've been referring to, may well want to pursue ourselves.

Q190   Chair: In the short term, in particular the example of the case in my constituency, would you look at a dispute mechanism such as mediation to try to reach an agreement? At the moment, it has to be an agreement signed by the landlord but, if they withhold agreement, then the tenant cannot claim. That cannot be right.

Mr Paice: Obviously emotively, I tend to agree with you entirely that it can't be right but, equally, I don't think Government should be heavy-handed and go in and start interfering in that commercial relationship. I don't think it's the job of Government to set, to create or to intervene with a mediation approach. We have discussed this with the Tenancy Reform Industry Group and obviously separately with the CLA and the Tenant Farmers Association to try to find ways of mediation happening, rather than the Government imposing it, and I think that frankly is the best way forward. I'm happy to talk to you at a later date about your individual case.

Q191   Richard Drax: Minister, we touched on landlords and inheritance tax, two aspects of the next question. Have you discussed anything with the Treasury about improving the tax situation in some way, to encourage the agricultural landlord to offer longer leases to tenants?

Mr Paice: "No" is the direct answer. Frankly, all discussions with the Treasury over the last few months have been on the other side of the balance sheet.

Q192   Richard Drax: How do you feel personally? Is there scope here?

Mr Paice: I don't pretend to be a tax expert, but I'm not sure that there's anything tax-wise that would directly impact on the length of a tenancy. If there is, yes, I'm more than happy to look at it. Obviously we will be making our representations to the Treasury in terms of next year's and ongoing finance bills in the future. I'm happy to look at any representation. I'm not sure that there is an issue directly but, with your knowledge, you may have more experience, Mr Drax, of where we could create that incentive.

Q193   Neil Parish: Carrying on with Upland Entry Level Stewardship, how are you going to monitor the environmental benefits, especially given the cuts likely to be made to Natural England funding?

Mr Paice: Let me firstly deal with that last point—the cuts. The Chairman referred earlier to "the freeze". Yesterday, we announced that the freeze is over, for want of a better phrase. The situation is—if I may digress for a second, but I think it's illustrative—the Higher Level Stewardship scheme has been a great success, no doubt about it, and that's good. When Natural England agrees a scheme and signs up to it, the budgetary impact of that is in the following year, because that's when the farmer gets his first payment. What happened was that, because of the uncertainty until the Spending Review of next year's budget, this year's approvals had to be frozen until Natural England knew how much money there was for HLS next year, when the bills would be paid.

We've now sorted that out and it does mean—I'm brutally honest, we've made a statement about this—that there isn't as much; it wouldn't allow Natural England to go on approving schemes in the rest of this financial year at the rate they did to start with, because long before that, they'd have hit next year's budget, even though it's for considerably more than this year. They are going to be able to approve a few more, mainly ones that are probably on their desk, but they haven't signed off. Then there will be a stall before any can be formally approved until 1 April, so that those payments then fall into the following year's HLS budget. I need to emphasise the point that we've made repeatedly: by the end of the remaining three-year programme of spending for Stewardship—that's the end of the whole RDPE period—there will be an 80% increase in the amount of money for HLS compared with the current year.

Neil Parish: Part of the Defra business indicators is to monitor whether it's good or negative to agriculture on these schemes.

Mr Paice: There's absolutely no doubt, even the NAO has made this point, that of the Stewardship schemes, indeed all RDPE money, HLS is probably the most cost-effective. I have to use the word "cost-effective", because we can't even be particularly precise about that. We are looking at all Stewardship schemes—and, indeed, other things—to see how to improve the cost-effectiveness for the taxpayer and value for money through introducing an element of output-related funding; in other words, what you're actually achieving in improving biodiversity, water retention or whatever the objective may be. In doing that, we are expecting Natural England to work much more closely than they have in the past with all the NGOs, the voluntary bodies, such as FWAG, such as the Game & Wildlife Conservation Trust, maybe the Wildlife Trust, etc, which we believe have credibility on the ground generally with farmers; they have a huge volunteer force as well as paid advisers. We think, if you like, it is part of the Big Society; it's involving the whole of the NGO sector much more in achieving outcomes for the taxpayer.

Q194   Neil Parish: If I can press you a bit further on that outcome-based approach for delivering agri-environment schemes, how would this work in practice, especially when it comes to stocking rates? Who are you going to take advice from on the level of stocking rates—the commoners, the environmentalists, who? As you probably know, up on Dartmoor and other places, there is a huge issue on who is right about the stocking levels and what they should be.

Mr Paice: The one person who won't be making that decision is me, because I don't pretend to have that detailed knowledge.

Neil Parish: Very wise, Minister.

Mr Paice: It's back to the earlier question about localism. It has to be a matter of local knowledge. It's why we need to move away from national prescription, from the idea that the stocking rate for the Durham Moorlands is the same as for Bodmin or wherever. There has to be much more local decision-making. What we're trying to work towards, and we're not there yet—I'm not going to pretend we are—is the idea that your local NGOs, working with the conservation bodies I've talked about, working with the local farmers or commoners, whoever they may be, and of course Natural England—they can't be removed from the equation—will come to an agreement about the appropriate one for that area.

If I may come at it from a slightly different way, it's a very clear example of where we need to move away from prescription to outcome. A lot of HLS agreements, and I speak as somebody who is actually an owner of or signatory to an HLS agreement, specify grazing dates: "You can't start grazing land before x and you have to stop by y." First, those dates should vary depending on what part of the country you're in. Actually, it's the wrong approach anyway, because in different years the season's different. Also, usually in the agreements, it has to maintain a minimum of 4cm of sward length, for example. Actually, that's the outcome. If that's the figure, 4cm of sward length, you, the farmer, the grazier, the commoner, should be trusted to put on whatever stock is necessary to have a constant sward length of 4cm, if that's the figure. That's what I mean by much more outcome, because that's what you want. For whatever reason, it has been decided 4cm is the right length, and that's what you want. You don't need to go into the whole prescription that you have to have your stock off on 1 November, or whatever it may be. In some years that would be too late; in some, it would be too soon.

Q195   Neil Parish: How are you going to stop your overzealous Defra officials and Natural England marching in and telling the farmers and commoners they have to do x, y and z?

Mr Paice: Part of the challenge I have given Richard Macdonald is to change this whole culture. Obviously, restrictions on resources are going to influence that as well, but I'm absolutely determined to drive this culture change through, because it's so pervasive in agriculture and probably other sectors as well. We have to stop treating farmers and graziers as potential criminals, and assume that the vast majority will do the right thing and want to do the right thing. We have to be much tougher on the tiny minority who let the rest down.

Q196   Richard Drax: Can I just also ask about the environment lobby? While it should be respected, do you feel it has a very powerful voice, to the point now that farmers, many of them are feeling completely hidebound by all the regulations that you want to get rid of?

Mr Paice: That's very true and it's why I referred earlier to the need to involve the voluntary sector, because I think generally organisations like FWAG have far greater credibility on the ground with the farming community than state bodies like Natural England. That's a big step forward. I have to emphasise I'm not advocating that we stop looking after the environment; it is hugely, hugely important. We just have to find the right balance, and we have to find that in a way that involves those who are managing the land in that decision, rather than it being done to them, which is often the impression that's given at the moment.

Q197   Chair: You yourself have said, Minister, that the Government needs to do more to monitor whether environmental benefits under a UELS scheme have been delivered.

Mr Paice: Any Stewardship, yes.

Chair: You mentioned just now voluntary bodies. Which ones—Natural England, FWAG?

Mr Paice: Natural England isn't a voluntary body; it's a state body.

Chair: Which are the others?

Mr Paice: I mentioned FWAG, the Game & Wildlife Conservation Trust, maybe the RSPB, the British Trust for Ornithology, Buglife. There are many, many voluntary bodies in the conservation field, often with employees—I'm not saying they're all unpaid, but they're in the NGO/voluntary sector—who have a lot of particular expertise that may be relevant to a particular site.

Q198   Chair: How will you measure the environmental benefit and whether it's produced value for money? Have you set a baseline?

Mr Paice: We can't set a baseline from here. The baseline would have to be set in the area where the scheme was going to operate, and it would depend entirely on the farmer or farmers agreeing with Natural England, ultimately, but also through the others, what we are trying to achieve. Is the objective of this scheme to improve water retention? Is it to increase the population of a particular bird or a plant? At the end of the programme, have we achieved it? That's at its simplest.

Q199   Neil Parish: The proposals on CAP reform are widely expected to move LFA payments into Pillar 1. If this does go though the final legislation, do you see the need to maintain the Uplands Entry Level Stewardship scheme?

Mr Paice: I don't think I'm in a position, to be honest, to forecast what view we will take of a possible decision in three or four years' time. We will find out tomorrow, when the Commission publishes its proposals for the CAP, whether they are sticking by this idea of moving LFA payments into Pillar 1. Our view is probably that that's not the right approach, because Single Farm Payment is complicated enough without adding any more bells and whistles to it. We will obviously consider whatever proposition comes forward. I'm afraid I'm not going to be drawn into speculation about what we may decide in three or four years' time, based on an unknown result.

Q200   Neil Parish: I can understand that, but we want to press you— because we all agree that we need to get more money into the uplands—on whether you see the Uplands Entry Level Stewardship scheme as very much part of keeping that money in the uplands.

Mr Paice: It's certainly part of it, yes. Whether it's the sole solution I'm not yet certain, but it's certainly part of it, because it is doing what certainly the Government believes is right, which is targeting payment for public goods—all the things related to managing the uplands, for which there is no direct market. Therefore, the taxpayer, through UELS, is actually funding that market.

Q201   Neil Parish: I think it could be argued quite clearly that the CAP reform, especially in England under the Defra proposals for spreading the payments, has actually meant that hill farmers have lost significant payments, because their payments were on cattle and sheep. They've lost a lot through payments being spread across the rest of England. I know you can't cure all those problems in one go, but I think that needs to be looked at.

Mr Paice: It certainly does need to be looked at. I'm absolutely convinced that the direct payment will continue post 2013 and, as you know, in England it will be entirely based on area by then. As at the present time, I suspect there will be probably two or three different levels of payment depending on land type, maybe more. These are areas we need to look at. It's what the Scots have been looking at quite carefully. There may well be scope within that to shift some balance of payments but, again, we're into the realms of speculation at the moment.

Q202   George Eustice: In the evidence we had from the Tenant Farmers Association, they were very clear that what they really wanted was a return to some sort of headage payment, and they stressed that they felt concerns about overgrazing in the past had been overstated—it wasn't as serious as some said—and that actually we were maybe ducking the issue here, because returning to a headage payment was the single most important thing that would improve the viability of these farms. Do you think that that's something that we could return to despite the trend away from decoupling? Around about half of member states do still have some payments, under Article 68, which are coupled to production in vulnerable sectors. Is that something that you'd be willing to consider here?

Mr Paice: Not in the short term, no. I think it would be a retrograde step, and I'm afraid I don't entirely go along with the view that the problems of overgrazing have been overrepresented. I think they were quite serious in some areas but, nevertheless, they are largely behind us and it's historical now. No, we as a Government don't support a return to any production-linked subsidy. That's the direction we should be negotiating through the next few years, for the future of the CAP to do away with Article 68 or whatever might come forward as an alternative option. We want to see an end to the current level of coupling, rather than start turning the clock back.

Q203   George Eustice: You talked at quite a bit of length earlier about income forgone payments, and this principle that you can compensate only for income lost or additional costs. I wonder if you could just explain what the barriers are to changing that. Clearly, you want to. Are other member states standing in the way? Also, is it purely an EU issue or is it a WTO issue that is monitored by the EU?

Mr Paice: I'm pretty sure it's purely EU, but I'm going to ask Dan.

Dan Osgood: It's both—it's EU and backed up by the WTO rules.

George Eustice: What would have to happen? If you have a consensus within the European Union, because other countries thought this was reasonable, is that something that can just be changed?

Dan Osgood: I would imagine you would have to secure change at the WTO level. If, at EU level, we were to adopt something that other countries felt was not compliant with WTO rules, they would take necessary action.

George Eustice: Which member states wouldn't want this to happen, either of the WTO or the EU?

Mr Paice: In the WTO, it's not so much the member states, but the risk is that America or Australia or any of the other countries in the WTO might challenge Europe if we adopted it. That's the point. The challenge on WTO would be outside Europe.

Neil Parish: It's trade distortion.

Mr Paice: It's trade distortion, yes. It's which box the payments or system is put into, the blue, amber or the green box. At the moment, Stewardship is all clearly in the green box.

George Eustice: Would I be right in saying that, realistically, there's just not much hope of changing that rule?

Mr Paice: There isn't much hope of changing it in the very short term, no. When we get to the 2013 discussions, it's one of the numerous things in our portfolio that we will want to pursue. Clearly, it's—I hate to use the phrase again—a matter of balance. If you were to dramatically increase it, clearly you are running into the WTO problems. If you were to be sensible about it, then maybe we can finesse it to a level that is still acceptable within the green box, but does make it more advantageous to the uplands.

Q204   Chair: You alluded earlier, Minister, to the adverse weather conditions. Obviously, in the north of England, my old constituency of the Vale of York seemed to appear in more news bulletins than any other constituency in the country. Are you confident that, in the Commission's redrafting of Less Favoured Areas, we will not lose out in terms of weather conditions being reflected in the EU negotiations?

Mr Paice: I'm not sure I can really respond to that constructively. I'm never confident of anything that's being considered by the EU until it's been finally decided and we know what it looks like. I'm confident in our ability to do our best to ensure it doesn't, that Britain is not disadvantaged by it. Are you able to add anything to this, Jeremy?

Jeremy Eppel: Not really. Certainly it's an ongoing discussion that we're obviously keeping an eye on, but I don't think there's anything I can add at this moment.

Q205   Chair: Historically I remember that there's a small pocket of hill farms that used to benefit from Objective 5a, and then I think that changed under the redrafting of the rules. I understand that Luxembourg is about 98% designated Less Favoured Area, which, in the definition I referred to earlier, wouldn't come under our definition of uplands or Less Favoured Area. Are you internally looking at how we would plead the case to the Commission, in terms of your Department's negotiations with the Commission in this regard?

Mr Paice: I think I'd like to, if I may, write to the Committee when we've had a chance to think about this a bit more.[1] As I understand it, the reason why the Commission entered into a review of LFAs was the sort of Luxembourg absurdity that you spoke about, with a view that it should really apply only to the really remote upland areas. We would have lost out, because they were looking much more at the high Alpine areas than perhaps Dartmoor or some of the moors that may not be actually very, very high in that respect, but we know are remote and difficult. If I may, I'll write to you.

Q206   Chair: In the CRC's definitions, they put, in percentage terms, Halifax, High Peak and Calder Valley as the three most—94%, 93% and 91%—uplands constituencies. The lawyer in me feels that, if we had a definition in this country, it would help our negotiations within the EU that we knew what we were talking about, either in terms of uplands or Less Favoured Areas.

Mr Paice: I would be quite worried if we did it all on the basis of height, because we all know that there are some areas that we classify as uplands, hill farms, LFA, which are not that high up.

Chair: I think height, remoteness, rural deprivation—

Mr Paice: That's the trouble. Once you start moving away from a single point, and I don't think height would be the right one, you are into all sorts of other qualifiers. It's a bit like an elephant; it's difficult to describe but you know it when you see it. That's probably the best way of describing them.

Q207   Chair: Returning for a moment to the issue of tenanted land and looking at the EU definition, how do you hope to protect the interests of tenants and commons in this country, in the context of the CAP reforms? I'm mindful of the fact we won't know until tomorrow what the final version of the CAP reforms will be. It's just to come back to that fact that, at the moment, we seem to be disadvantaging our tenants in this country in comparison with tenant farmers in others.

Mr Paice: I have to come back at you: we will not know the final form of the CAP tomorrow; we'll know the first shy by the Commission as to what they think. I suspect the final result may be extremely different from that. In terms of looking after the interests of our commons and our tenants and everybody else, I can only give the Committee the assurance that both the Secretary of State and I are totally committed to our agricultural industry, and to achieving the very best outcome that fits all parts of it, whether you are a commoner, a milk producer, a grain farmer or anything else. We will be looking to achieve the best outcome for the UK, and I'm afraid that's the best assurance I can provide to you. I can't be more specific, because we don't know what the issues are going to be.

Chair: We stand adjourned, but we'll reconvene at 16.14.

Sitting suspended for a Division in the House.

  On resuming—

Chair: Minister, welcome back. We're going to turn to a different issue.

Q208   Tom Blenkinsop: Good afternoon, Minister. The issue is rural development funding. Vince Cable said on 28 October, when he announced the LEP structure, that it would include investment priorities for transport infrastructure, coordinating project delivery, coordinating proposals on bidding directly for the Regional Growth Fund, high-growth business, new growth hubs, strategic planning applications. He didn't actually mention RDPE, but I know you've recently said that the LEPs would be coordinating RDPE bids. Is that the case?

Mr Paice: No, that's not the case and I'm not aware that I've said anything to imply it. There are two aspects to the RDPE. We have the remains of the current programme, the last three years. This is the money that's currently being spent. Axes 1 and 3, and what some people call Leader Axis 4—I call it part of Axis 3, but it's the non-environmental stuff—are currently distributed through Regional Development Agencies. Most of that money is already allocated, and we frankly have taken the view that it is not worth spending a lot of time and effort setting up new distributive structures all over the country for what is actually a relatively small sum of money left in that programme.

Q209   Chair: Sorry, Minister, could I just be absolutely clear on this? You say most is allocated.

Mr Paice: Yes, because this programme's been going four years, and most of it is ongoing expenditure. The RDAs, although they got off to a very, very slow start and hardly spent any in the first two years, have picked up and now a lot of funding, like Leader Group funding, is to a local partnership for the delivery of a series of purposes. The money is committed, so the spare money, unallocated, is relatively small, and therefore it's just not worth the effort of setting up widespread distribution systems for small sums of money. We're going to take the remainder of this programme back in-house. We'll be taking a small number of people back in from RDAs to deliver the remainder of this RDPE.

If we assume that there will continue to be an RDPE post-2013, and I personally believe there will be, it is at that point that we need to have an alternative system. Obviously, LEPs become very relevant at that stage because they'll be up and running, they'll have got themselves sorted out, and we know some of them are already saying they would like to take it on. I can't give you that as a clear decision, because it is too early. We have three years probably to work out what is the best way of distributing the non-environmental money and how we deliver the competitiveness agenda and the other issues to do with RDPE. At the moment, it will be coming back in-house for the remaining three years of the current programme.

Q210   Tom Blenkinsop: Okay, that's cleared that point up but, in terms of the Regional Growth Fund, if a farming business wants to diversify in any direction, Regional Growth Fund money is to be coordinated by Local Enterprise Partnerships.

Mr Paice: Yes.

Tom Blenkinsop: I'll give you a "for instance". My constituency's in the new Tees Valley LEP, but five miles down the road we have Scarborough and Whitby constituency and other North Yorkshire constituencies that are not currently in a LEP. Now, LEPs coordinate Regional Growth Fund applications. One farm in my constituency, five miles down the road from another constituency, could apply for that money now, technically, whereas the other farm in a non-LEP-covered area couldn't. Doesn't that offer problems?

Mr Paice: On the face of it, yes. It's more a question you're going to have to, I'm afraid, put to BIS, which is responsible for Regional Growth Funds and, indeed, LEPs. Certainly I can undertake to write to you with some more information on it, if you would like me to, but that is not Defra money. That money is not RDPE; it is not Defra money. Therefore, for obvious reasons, I'm not directly responsible for it.[2]

Q211   George Eustice: One of the criticisms I've heard about the RDPEs is that, although it's intended to be for rural business development—certainly that's the way it's drawn up at a European level—Defra has added additional guidance, which drives it down a focus towards agri-environment schemes, which makes it harder for farmers to access it for business development purposes. Is that something you recognise? Do you have any plans for that?

Mr Paice: It's certainly something I recognise. Forgive me if I venture into a teach-yourself lesson about RDPE but, as devised at European level, there are these three Axes. The first Axis is about the whole competitiveness of agriculture agenda, and a bit of diversification, possibly. Axis 2 is the environment. Axis 3 is what I tend to call "socio-economic rural community development", that sort of thing, and Leader is a part of that, linked to it. At European level, there is a whole raft of subsection issues, which can be assisted through each Axis. The previous Government decided to allocate 80% of the total amount of money to Pillar 2, the environment, and 10% to each of the other two. Not only did that automatically dramatically reduce the amount of money available for, if you like, competitiveness and access to farmers, but, at the same time, because the previous Government then chose not to adopt a number of the specific options, they narrowed it a bit more. Just to crown it, some RDAs then narrowed it a bit more.

Actually, to come back to Mr Blenkinsop's question, although from a different perspective, different RDAs will allow you a grant on different things. Some things that are in scope in some RDAs are not in another. All that is highly confusing. There is a lot of truth in what you say, that not every farmer can access it. The percentages have now changed a little bit away from that 10/80/10 scenario, but not dramatically, and certainly if we were to succeed in 2013, as I would hope so, in getting a bigger share of the Rural Development Programme, which the UK should have, I would want to revisit those percentages.

George Eustice: What do you think would be a fair split going forward?

Mr Paice: I don't think I frankly want to be drawn on it, because we haven't really got to the bottom of that. Certainly I think there are things that the previous Government chose not to have as options. For example, one option under Axis 1 at European level is the option to fund measures necessary to comply with European directives, the Nitrates Directive being a very good example. The previous Government chose not to adopt that option, so no English farmer can apply for money under that sort of thing. It's not just the totality of money in the split. I can't argue the split until I know what the size of the budget is, because I'm not going to sit here and say we're going to reduce spending on the environment. I don't want to do that anyway. I hope we can get a better overall package so that we can maintain or enhance spending on the environment and increase the competitiveness.

George Eustice: Is there any chance of changing it in year two?

Mr Paice: We can't change the amounts of money, no.

George Eustice: The split, sorry.

Mr Paice: We can in terms of agreement with Europe. Yes, we could go to Europe and say, "Yes, we want to change the split." The reality, given that we've just been through the CSR process and all these programmes have been under immense scrutiny, is we're not going to try. We've already had to cool down spending across the piece, and I don't think there's any real scope now, for the remainder of these three years, to change the picture, as much as I might like to.

Q212   Mrs Glindon: Minister, can I just go back to what you were saying about post-2013 and the localism issue? You said LEPs are a possible way of distributing funds. If that didn't happen through LEPs, the thing with the RDAs now is that they use local knowledge, which is important. I have an example in my own constituency, where the local abattoir just received £200,000 through One North East. It's managed by Natural England, and the Forestry Commission has also okayed that money. That means we're now going to have an EU-standard abattoir, and animals won't be slaughtered out of the area as they have been for a while now. It's about that localism issue. Is that not really an important part of distributing the funds to farmers? If LEPs aren't the people to manage it, how will you hold on to that very local knowledge for the production industry as a whole?

Mr Paice: LEPs may very well be the right vehicle. All I'm saying, or meant to say—I hope I did say it—was that we haven't made those decisions yet, because that will be for post-2013. We can't do it at the moment because, as Mr Blenkinsop was saying, there aren't LEPs in every area. As I say, because of the relatively small amount of money left unallocated, it's just not worth the huge investment that would be involved in setting up new structures. Post-2013, yes, LEPs are clearly in probably the primary position. All I'm saying is that we haven't given a definitive answer, but they may well be right.

Your point about an abattoir is extremely valid. There's been one in Suffolk helped by the eastern region one in the last couple of years, from the same funding. They are very important and very relevant. If anything, I have a concern that LEPs may almost be too small in some cases. Some LEPs are going to be huge and some are going to be very small. You then face the issue of how rural individual LEPs are. One of the criticisms of even RDAs has been, in some areas, that they have frankly not faced up to the rural aspects of their region. That could be even worse with smaller LEPs. As I say, no decision has been made. I certainly haven't come to any personal view on the subject, and LEPs are clearly a major opportunity.

Mrs Glindon: What I wanted to clarify was whether local knowledge will be an important factor. RDAs have local knowledge and can work with local communities. Will that be a factor? I think it's important to upland communities—to any community—to know that the people making the decisions have the local knowledge. That's the key thing I was trying to hint at, Chair.

Mr Paice: That's the big achievement of the Leader programme, which I referred to. Leader programmes are where funding is allocated sub-RDA to a partnership in a particular area. That may involve local authorities, the local agricultural societies in some cases, all sorts of local groups—parish councils, etc. They will then be allocating. That really is driving localism right down to a very, very small area—much smaller than a LEP area. That's working now. That system is there and they've already got large sums of money out of most RDAs, and they are spending it locally. I used the example of the agricultural society, because I happen to know that, in the North West RDA, there are some agricultural societies, particularly the Cumbria Agricultural Society if my memory serves me right, which are leading the Leader programme, and actually making the really local decisions that we all think should be the basis of it. There is a lot of it already happening under Leader.

Q213   Tom Blenkinsop: The NFU's Head of Policy Services, Andrew Clark, said, "Reading through the initial proposals," regarding LEPs, "it is apparent that farming and food are recognised as key sectors by only a handful of LEPs." You were talking about in-scope issues of RDAs being equally applicable to LEPs; I think you alluded to that in your comments. Given that the minimum threshold for bids to the Regional Growth Fund is £1 million, and given the small size of upland farming enterprises, realistically, how will upland farmers benefit from the fund, especially now as we also know—

Mr Paice: Sorry, what fund are you saying is a minimum of £1 million?

Tom Blenkinsop: In order to tap into the Regional Growth Fund via the LEP, you have to put in a minimum bid of £1 million. That was supposed to be for England excluding the South East; we now know, since Vince Cable's recent announcement, that South East companies can apply for that fund as well. Do you think that will lessen the amount of money that farmers and agricultural businesses can tap into?

Mr Paice: I'm not going to pretend to you that I'm an expert on the Regional Growth Fund and how much money is in total available to it. Obviously it stands to reason that the wider any fund is spread or potentially spread, the slightly lesser chance there is for individuals. If your point is about a threshold of £1 million, clearly the agricultural industry—as I find in doing this job and going around the country—is a vast range of things. There are some cooperative ventures that are spending millions of pounds. For them to put up a million pound application to the Regional Growth Fund wouldn't be a big problem. For the small guy who wants to put up a £30,000 slurry store, clearly it's not going to be appropriate, but then maybe RDPE is.

Q214   Tom Blenkinsop: The point I'm getting at is that originally the Regional Growth Fund was supposed to be for areas excluding the South East. It now includes the South East. It's been increased to £1.4 billion but, as you said or alluded to, there are bigger businesses or corporates that have the capital there to apply for that fund, but the small- and medium-sized businesses are getting excluded, especially as that Regional Growth Fund has to pay for roads. Now we know it's going to start paying for housing as well. That cash seems to be getting smaller by the day, doesn't it, for those small- and medium-sized businesses?

Mr Paice: Obviously it's going to be harder for those businesses to access that fund. As I say, and I'm not an expert on that fund, my objective is, over a period of time, to open out the opportunities within RDPE for those sorts of farming-related businesses, yes, as an alternative fund to the Regional Growth Fund. I think it might be best if I agreed, Madam Chairman, to write to the Committee on this to try to thrash out the finer detail.[3]

Q215   Chair: A couple of concerns: there should be a spread between urban and rural funding in this Regional Growth Fund; if the Committee could have a reassurance in that regard. The other thing that follows from the evidence we took from the NFU and the CLA is the lack of clarity surrounding what procedure and process is going to be over the period between the RDAs going and the LEPs—Local Enterprise Partnerships— coming into effect. I just think it would be helpful if Defra could clarify more and publicise more, what the process is going to be.

Mr Paice: That's a perfectly fair comment, Miss McIntosh. I'm happy to agree to that. As I say, we've only been in office six months and we've had a lot to do. We are working on developing all these processes. The announcements about LEPs were made only a very short time ago. Not all the country is being covered by them, so there's a whole range of uncertainties but, as soon as possible, we will be publishing the details of what we're going to do with the RDPE money for the rest of the current programme, and the process by which applicants can make their bids.

Chair: In the context of this inquiry, it would be very helpful if you would, Minister. Thank you very much.

Mr Paice: Yes.

Q216   Mrs Glindon: Minister, you've already mentioned affordable housing and the planning process in relation to communities making decisions, but could you perhaps tell us a bit more about what progress has been made on the Home on the Farm scheme?

Mr Paice: A little but, as I said, this is very much a responsibility of the Department for Communities and Local Government and Ministers there but, as I understand it, Andrew Stunell announced the proposal for Home on the Farm three weeks ago. It wasn't, as I understand it, designed to be the only solution; it was just one more option. There are some parts of the country like my own where, frankly, there are no redundant farm buildings because they've already been converted into offices, studios, houses or light industrial workshops, but there are parts of the country where that isn't the case. In those cases—this links to a manifesto commitment that the Conservative Party made before the election—we would start to consider farm premises as brownfield sites, so we'd ease up the planning constraints on them. It always struck me as daft that we considered a garden as a brownfield site, but a farmyard as a greenfield site, which is a bit contradictory. We're sorting that out with a view that farm buildings, either direct conversion or indeed possibly just the site, can be used for, as you say, Home on the Farm; for housing.

Q217   Mrs Glindon: Would that entail increasing the Home on the Farm idea for perhaps not just someone working on the farm but in relation to retirement or the whole spectrum of buying a home if you need it?

Mr Paice: It's not about accommodation for farm workers, no. It's about residential accommodation, full stop—housing. It could be for retired farmers; it could be for young people. It's one part of trying to increase the stock of available housing in rural areas apart from grand new executive build, which clearly means most people coming into the area. It's about local needs. It is an opportunity for farmers to work with communities; it could fall under the example I used earlier of Community Right to Build, which DCLG is working on, or it could fall under direct development as a registered social landlord. There is a whole range of options. I'm not really empowered to speak on behalf of DCLG, but basically they're just trying to create the opportunities to free up the system for localism to work for local communities, local landowners, farmers and so on to find a solution that suits their particular circumstances—that fits their farm premises and their farmyards. These will tend to be ones that are no longer working farmyards, for obvious safety reasons, though not always. It's to free up the planning arrangements so that they can make those choices. It's not about a blueprint dictated from on high.

Q218   Mrs Glindon: When we were speaking with the Tenant Farmers Association last week, one of the things we were talking about, in relation to extending existing premises, was succession. It seems from what you were just saying that we could be moving away from the actual premises being used to keep a community in farming. Could they end up as second homes? I'm a bit confused here.

Mr Paice: I understand why you're confused, because I perhaps misunderstood where you're coming from. The issue of succession and tenancies I've always considered as hugely important, and nothing we're proposing gets in the way of that. A tenant farmer trying to make the most of their farm business and involve an element of diversification, may convert a property for a holiday let, for example. The previous Government did this work, to their credit, through the Tenancy Reform Industry Group that I referred to earlier, to change practice. Perhaps I need to write to the Committee to get this absolutely precise, but I think they changed some minor regulation to ensure that that sort of diversification didn't stop the inheritance—[4]

Chair: Was it Annex to Planning Policy Statement number 7?

Mr Paice: No, I don't think so; I think it was in agricultural tenancy legislation rather than planning. The problem was that, if a tenant diversified and the landlord said, "You haven't got consent to do that," it was deemed a breach of the tenancy and they could lose the tenancy. The rules for succession of tenancy require that the applicant for succession has over 50% of their income from the farming business over a period of—I'm not sure—three, five years. There is a precise period. This is part of the 1975 inheritance of tenancies legislation. What has happened is that there have been a few cases where the landlord has said, "Yes, but you haven't had half your income from farming on this farm, because some of your income has come from the diversification that has taken place on the farm, which isn't farming income," and they've lost the tenancy succession on that. I hope I'm making myself clear. This is what I think the Tenant Farmers Association is worried about: that the whole issue of diversification, which could include Home on the Farm, could actually deprive the next generation of succeeding to their tenancy.

I'm pretty sure, and I will again write to the Committee on the detail, that the previous Government and certainly the Tenancy Reform Industry Group came up with a solution to this problem, because it was clearly unjust. I will write with the finer detail, but I'm pretty sure that has been addressed and that, therefore, Home on the Farm is not a direct issue.[5]

Mrs Glindon: I think it's that we need to draw out more detail about Home on the Farm, because it's something we're not clear about in relation to other issues around development.

Q219   George Eustice: Just on this point, I think it's a very valid point that gardens are treated as brownfield and farmyards not, but how far down the scale do we go? You talked about generally these will be farmyards that aren't used any more. Are you thinking of 19^th century old barns than can be altered into things, or of a whole load of, for example, sheds put up in the 1960s or 1970s, where the farm's since moved on and is no longer a livestock farm? Might those also be considered?

Mr Paice: These are issues which DCLG will be putting forward in the planning framework. I'm very hesitant about second-guessing what DCLG will say, but certainly the intention was it could be anything. Most of the really attractive, very old buildings have already been converted. There are examples that haven't, but the countryside is littered with old Atcost barns, corrugated iron sheds and things like that, which are effectively brownfield sites, yet they haven't been classified as one.

George Eustice: They're quite often quite unattractive.

Mr Paice: They're very unattractive, and yet they're going to sit there forever and a day because nobody's going to bother to do them up and they'll become more dilapidated as the years go by. It's that sort of objective that this approach is trying to address.

Q220   George Eustice: Will there be a timescale? You might have the problem of people saying they want to put up a shed spuriously to say that they need it agriculturally and then, five years later, go for housing on it.

Mr Paice: I can't answer that; that's something I presume the DCLG are looking at, but I'm afraid I don't know. It's obviously an issue that has to be addressed.

Q221   Tom Blenkinsop: On the National Parks now, Minister, the CRC recommended that National Parks should give equal priority to conservation, and economic and social wellbeing. Why did you not consider this option in your consultation document?

Mr Paice: I'm going to be honest with you, Miss McIntosh, this is Richard Benyon's responsibility and I had nothing to do with the National Parks consultation, but Jeremy has helped Richard on that, and may be able to answer the point.

Jeremy Eppel: I've had a little involvement in this. I'm not directly responsible for it. I think you're talking about the review of governance that was released quite recently, which is really looking at how each of the National Parks might find a more broadly based regime for their own governance. I think the question that the CRC posed is not excluded from that discussion, but it's a slightly separate question, and one that I think, Minister, can be considered as part of the work we're doing under the overall review of the uplands. They're linked but they're not identical things.

Mr Paice: That equal balance of responsibility is, if my memory serves me right, something that the Scottish National Parks have. I know Richard Benyon is sympathetic to it, but, as I say, we'll have to come back to you with the detail and look at it in terms of our statement. I know he's very conscious; he's actually been criticised, as you know, recently in the press, partly because he seems to want—it is alleged he wants—to add more economic aspects to a National Park, which some see as negative to the interests of a National Park. You're saying that he doesn't.

Tom Blenkinsop: No, I'm just wondering whether you'll be coming back to it and reviewing it.

Mr Paice: Yes, we will.

Q222   Tom Blenkinsop: Following that, the National Farmers Union told us that the rigidity of planning guidelines, rather than the lack of support from the National Park Authorities, was the main barrier to development in National Parks. What do you think of this view and will it resolve the issue of affordable housing and opportunities for economic development of National Parks?

Mr Paice: I certainly think there is some evidence that the National Park Authorities in some cases have been far too rigid. There's certainly evidence that, as you say, local needs housing, social housing and, indeed, housing for farm workers and farmers' sons has been a big difficulty for them. This crosses several issues. It crosses the issue of governance and the review that Richard has begun and Defra has already announced about the whole issue of what you can do to improve local involvement in governance. It also crosses into the wider issue of the planning framework, which will apply to National Parks as much as anybody else, and then of course, as you say and we touched on earlier, the issue of the balance of the importance of economic development. We are very much aware that there are concerns in some National Parks that local needs housing has not been given the priority that it deserves.

This whole issue is very much one of perception as to what you believe a National Park is for. Is it to be a "chocolate box" image, if I may use the analogy? Or is it to be, as the countryside is, a constantly dynamic changing environment, but where there is a particular element of natural environment, which is the reason it is a National Park, which obviously has to be protected and enhanced? Sometimes the balance isn't right.

Q223   Neil Parish: Can I press you on that, Minister? I think a lot of public money goes into National Parks to conserve them, but we also need public access, so tourism is also very essential. There are arguments sometimes that the National Parks are too restrictive, and we're not actually allowing enough diversification for people to be able to actually enjoy those areas. What's your view on that?

Mr Paice: I'm not sure it's right for me to have a particular view, over and above to report what I've just said, which is there is a view that the economic significance or the importance of economic activity within the National Park isn't always recognised by the Park Authorities. It is open to individual colleagues and the Committee itself, if it wishes, to respond to the consultation that was launched a couple of weeks ago, to make that point. I don't think it's right for me to sit here and say one answer is wrong, when we're out to consultation.

Q224   Chair: I was very taken, Minister, by what you said about the carbon and water market, in a positive way. You referred to the public benefits, and water retention in uplands and carbon sinks in peat bogs. Just in terms of encouraging water companies to work with the agricultural sector to improve water quality at source, how would this work, and have you identified any barriers that are currently preventing this happening at the moment? It might be more Richard Benyon's area, but we have you before us today.

Mr Paice: Yes, I appreciate that. It's both of us. I don't think there are huge barriers as such at all. At the moment, we know that some water authorities are already working with farmers in their catchment areas to develop the management of the uplands in a way that helps the water companies. It's a win-win situation because, if it reduces flooding, if it reduces pollution—I use the word "pollution" advisedly; I don't necessarily mean chemicals, sometimes it is soil particles or whatever—and the amount of money they have to spend on cleaning up the water, that's to their advantage. We know that United Utilities particularly are heavily involved in that. We have some research going on that will help to answer some of the other questions, like timescales. How long does it take between a farmer doing something and the benefit being seen in the water supply? The issue of carbon sequestration is an even bigger issue, where we're doing some research. Any barriers would be knowledge barriers, rather than legislative, as far as I know.

Q225   Chair: Just on the peatland restoration and my question to you at oral Question Time on the use of trains, BBC News actually carried the story of the Pickering pilot project in the constituency of Thirsk, Malton and Pickering, where, to prevent Pickering from flooding in the future, they are looking at a whole catchment area scheme. It's very imaginative, and it involves planting trees and creating bogs, which I suppose you call "peatlands", politely, and also little bungs along the North Yorkshire railway line. There is a concern that if the Forestry Commission, which is heavily involved in this project, has to sell off some of the trees, this type of pilot project will not be threatened in that way. It's a very imaginative project and, if it works in Pickering, not only will we benefit but obviously it will be able to be rolled out in other parts of the country.

Mr Paice: That is an ideal local-decision scheme, with local people, local organisation (or the local arms of national organisations) working together to develop a flood-prevention or flood-alleviation scheme, and that's eminently sensible and fits entirely with our approach. We would not want to do anything that prevented that. As far as the Forestry Commission itself is concerned, I'm not going to be drawn on our proposals, because we're going to put forward a consultation document in the next few weeks, as I've already announced to honourable Members via a letter. I can say it will not be in the consultation: we will not be proposing to abolish the Forestry Commission, which seems to be the root of your concern.

Chair: No, it's the sale of land. Until we see the Public Bodies Bill, we don't know what you're proposing.

Mr Paice: You can see the Public Bodies Bill, because that's published and is being debated in the other place, but that doesn't give you the information you seek, because all we're seeking in that are the powers to do what we may decide to do in time. It's a vehicle to get it right.

Chair: To be clear, it's the sale of trees; it's the sale of large bits of land. The Forestry Commission at the moment has a very large presence in my constituency, as in others, and obviously they will want a bit of security to know.

Mr Paice: Flood alleviation is a public benefit, and I have made it repeatedly clear in the letter I sent to every Member of the House, and indeed in oral Questions that, whatever we decide to do, if anything, we are determined to protect all the public benefits that currently exist. Indeed, part of the consultation will be actually looking at ways in which we can enhance those or guarantee their retention, so I really don't think Pickering need worry.

Q226   Chair: Thank you. In developing markets for carbon, could you state how you intend to facilitate peatland restoration through the development of carbon markets?

Mr Paice: No, I'm afraid I can't. That's a DECC issue. Carbon markets and how they operate would be a matter for DECC. Jeremy, have I got that wrong?

Jeremy Eppel: No, DECC is obviously responsible for climate change policy overall, but we have a considerable interest in the land management aspects of it. Defining how you account for the carbon is an issue on which considerable further work is needed. It's certainly something that's of importance and interest, and I think will potentially get some further consideration in the Natural Environment White Paper next year. Establishing precisely on what basis you can be sure that carbon is being either fixed in a peat bog or retained in a peat bog, for instance, would be important. It's an important area for further development, but we haven't found a solution yet.

Q227   Chair: We heard last week that the uplands are being mapped for carbon storage and water storage, but that's at a very early stage, I understand.

Jeremy Eppel: Yes.

Mr Paice: Yes.

Q228   Richard Drax: On succession and new entrants, the CRC said that it was "essential that [succession] is given prominence within our proposed uplands strategy". Do you think it's for the Government to get involved proactively to ensure this happens by changing the law, changing tenancy agreements or is it something for the Government to keep out of and allow the existing system to continue? How proactive should we be?

Mr Paice: As you're well aware, the general Government approach is to keep out of things unless it's really necessary. There have been many previous Ministers of agriculture who've entered into agricultural tenancy legislation and lived to regret it. It's a minefield. It's how I got into agricultural politics a long, long while ago. It's not something to be entered into lightly, which is why the previous Government was quite wise to set up what they call TRIG—the Tenancy Reform Industry Group—which brings together the various bodies, not just landowners and tenants, but also land agents and land legal specialists, to try to thrash out all the wrinkles of land farm tenancy legislation, etc, and wherever possible to avoid the need to change the law.

That group is operating; Defra sponsors it but that's the limit of it. They have not come forward with any clear recommendations on that front. If they do, clearly, we'll look at them very carefully and with a lot of sympathy, because I think it's a really worthwhile forum to thrash out these problems. If they've all agreed that something has to be changed, clearly, we need to look at it very positively. I'm not actually sure that it's the legal issues to do with succession that are the problem. Obviously, in my constituency, I don't represent any hill farmers, but I spend a lot of time on the uplands, and my understanding is that the issues of succession are more to do with the viability of the business, and the younger generation just don't want that very tough lifestyle for a pretty menial income.

Q229   Mrs Glindon: Will you be monitoring the sale of the county council farms and their impact on new entrants?

Mr Paice: Monitoring, yes; interfering, no. This is part of localism. County councils have to make their own financial judgments. Personally I think it's extremely sad if a county council decides to sell some or all of its land. I think I've encouraged them publicly before to think more widely—to think out of the box about it. It's not just a question of selling it, but of whether there are other mechanisms, or other institutions that might be able to take on a county estate or some of it, with a view to retaining the concept of holdings for new entrants. I think there has been just a tendency to think, "Well, we're going to get rid of it. We'll sell it whatever way we can." No, the Government doesn't take the view that we should be interfering in local decision-making. That must be for them but, as I say, personally I hope they will think very carefully before going down that route.

Q230   Mrs Glindon: Could Defra have some kind of stance, if it didn't want to directly interfere, on new entrants who are coming in from outside farming and obviously have skills? How important is that and how should that be fostered? Is there anything that you could do from that side—not directly interfering, but emphasising the importance of new entrants? I don't know if there's anything you think Defra could do indirectly to help.

Mr Paice: There are a couple of aspects to this. The first is the issue of having the right skills and qualifications to work in farming is hugely important, and Defra does have a big role in that, in the Agri-Skills project, and we're working to develop that, and in the narrow context of uplands. It's one of the reasons I was on Dartmoor last week—to look at the Moor Skills project, which was about farmers' sons and others going through an apprenticeship targeted specifically at uplands farmers on the moors, where a group of farmers had come together to pool their resources so that the apprentices actually worked for seven of them during the course of their apprenticeship and got a wide range of experience. Trainers came to them, because of the remoteness of the area. This was entirely a local initiative; it was a superb example. There is a similar one in Northumberland, because I know they copied the Moor Skills one. They're superb examples of how you get the skills into the next generation.

The other part of your question, if I may be so bold, is: how do you then give them a foot on the ladder? You then have to speculate, and this is speculation, as to whether that foot will always be a farm of their own, either a tenancy or even owner occupancy, and owner occupancy is obviously not going to be open to many people unless there's a family farm to inherit. I think more and more—and this is my crystal ball, but with a lifetime in and around the industry—that over the coming years we're going to see many more large operations, but with more good employment opportunities for young people. Not everybody may like this projection. Those young people may not necessarily be working for themselves; they may actually have a better income and a better lifestyle working for somebody else, a bigger farming operation. Certainly this is already happening in the lowlands. Whether it will happen in the uplands may take a bit more time. Given the extent it has developed in the last decade in the lowlands, I'd be surprised if it doesn't extend to the uplands. A lot more young people are working for big farming operations in the lowlands already, both in the arable side of the country and down in the South West, particularly in the dairy sector.

Q231   Tom Blenkinsop: I think you answered most of my points there, about borrowing lessons from manufacturing in terms of clustering, skills gaps and also the type of jobs that will be available. If the Minister does think farming is going to move to larger operations, couldn't Defra take an arbitration or a facilitating position, working with bodies like the Tenant Farmers Association, to look at options going forward for how the industry will evolve, not necessarily taking direct regulatory steps or having direct influence, but maybe covering some options where you could work with the bodies so you could steer or guide the industry?

Mr Paice: I certainly don't think it's for the Government to say what the farm structures should be, whether we should all go to big farms or small farms or whatever. I think that has to be a matter of commercial decision-making. Our job, as I see it, is to create the economic environment—and I include the natural environment in that, because that is now an increasingly economic aspect of agriculture—in which businesses can make the right decisions, whether they are big businesses or sole entrepreneurs, about how they take forward their business. I'm more than happy to talk to anybody and, if a group of the industry or the whole industry was to come to us and say, as you suggest, "We'd like you to be honest broker in some negotiations or discussions," I stand ready to do that. What I'm not going to do is say, "Government's going to have a blueprint and this is what you're all going to do." That's not for us.

Tom Blenkinsop: Don't you think there's a clue in there in terms of having a succession plan, that there is a plan?

Mr Paice: Do you mean a Government plan?

Tom Blenkinsop: Or a view at least of a number of different ideas that could be brokered or arbitrated, rather than just leaving it to the market.

Mr Paice: It's not entirely to the market. It's a matter of individual choice. If you look around the farming industry today, you will see massive variations. At one end of the stream, it's the biggest farming companies, the cooperative farms. They're not involved in dairy anymore; they're primarily involved in arable but not entirely—top fruit and things like that—where they employ large numbers of highly skilled managers, earning substantial salaries; a good income. You have that at one end, with great career opportunities for those who want it, and you have some really top-class small farmers who've found a niche market for some local product. They're in individual cheese or whatever it may be, and they're being successful too. Out there, there are a whole range of models, and, of course, there are those who are struggling with whatever model they're in.

I'm always wary about Government poking its nose in where it's not really necessary to do so but, as I say, I'm always ready to be there as an honest broker, if you like. If there is need, and I don't want to reject your suggestion out of hand, if there is a need for that sort of role then, yes, I stand ready to help. My job, as I see it, is to help the farming and food industry prosper. I would hate us to think of farming purely on its own; it's part of a bigger industry.

Q232   Chair: Are you concerned about the average age of farmers in the uplands?

Mr Paice: I am, because it's rapidly getting to be older than I am. For years I've always argued that I was younger than the average age, and those days are changing. I am concerned, but actually it hasn't changed very much for a very long time. What I might call Paice's Thesis on this is it's the age of the man who fills in the questionnaire that goes up, and quite often the guy who's doing the work is the farmer's son in his 30s or 40s. Dad does the office work and fills in the questionnaire. "How old are you?" Tick the box. I've got absolutely no evidence that that is the case, other than extreme scepticism. When I go around and go to the meetings of NFU or other groups of farmers, the average age is not 59 or anywhere near.

Chair: It's in your memorandum as 57-point-something.

Mr Paice: Whatever it is, I take that with a pinch of salt. To be serious, the issue is important, because it comes back to succession.

Chair: New entrants as well.

Mr Paice: That's what I mean. When I say "succession", I don't just mean inheritance-type succession. I mean succeeding the older generation into the industry in any form of employment, either as an employee or as a business operator. It is important, and that's why we're putting so much emphasis, as I say, on the whole skills issue.

Q233   Chair: Right at the outset, in your statement, you referred to uplands farmers becoming more competitive and getting better margins. Do you think they've done this already? Why have they not done it? Are there any obvious barriers in their way and are you doing anything to remove them?

Mr Paice: I certainly don't think it's all been done. Like every other sector of agriculture, you will find a great variation between those who are really pioneering, moving ahead, developing modern systems, being very competitive and making a reasonable living, and those, given a similar opportunity, who for one reason or another are not picking up the challenge. That applies to hill farms as much as any other sector. Why may it not be happening? I suspect, and again this is me talking from experience rather than an evidential base, they are more remote in the uplands, and therefore issues of communication and learning what others are doing, etc, are going to be harder. There are, as I said earlier, quite a lot of very small farms in the uplands still. I suspect we haven't been through some of the rationalisation of farm structures in the uplands that we've been through in the lowlands, particularly in the eastern half of the country, making farmers bigger and therefore more viable. Partly it will be lack of profit, over successive years, to invest in the future.

One obvious area is winter housing. A lot of upland farmers still leave their stock out all winter, which is extensive but can be labour-intensive, because of the time taken to check them, etc. It also often has environmental consequences of poaching etc, and it probably means you have to keep the more robust, hardy breeds of stock, whereas if you were winter housing you might be able to have slightly more economically efficient breeds of stock. I don't want to sit here and pretend I have a solution for everybody; I haven't. However, winter housing should be something that, as long as it's part of a sensible business plan, in my view, should be part of the Rural Development Programme, the ability for farmers to access it for that. I'm not saying everybody would get it, but in principle it should be suitable, and that comes back to the earlier discussion about the direction in which we should be going.

Q234   Chair: Finally, looking at a sustainable future for the uplands, what place do you think farming will play in that mix, and do you think we have the balance right between agri-environmental measures and production?

Mr Paice: I'm very optimistic about farming's future, as a general industry but, as I implied a few minutes ago, I do think it has to see itself—and I'm afraid this is a criticism of much of the farming industry—as part of the food supply chain. If it can be seen like that, it will have much more economic clout politically. I don't just mean here or partisanly, but generally. I do think, if you look at the global prospects for food over the next few decades, there is potential for great prosperity. The uplands have a right and the opportunity to share in that increased prosperity, but they have unique challenges and we've talked about them this afternoon. I think there is a good future for farming in the uplands. I also think it's critical for the future of the uplands because, as we touched on earlier about stocking rates and things like that, the very beauty of the uplands, which attracts the tourism that Mr Parish was talking about, which is of greater economic value to the uplands than farming is, is there because of farmers. Forgive me, I've said this a number of times. All the dry stone walls that people go up to see because of the picturesque view, they weren't put up with an Arts Council grant; they were put up to keep sheep in. It is because of farming that we have that landscape and, therefore, it is essential if we're going to maintain that landscape, enhance and improve it, that farming is part and parcel of it.

Q235   Chair: Just on Mr Parish's point and Mr Blenkinsop's, on actually working with tourism and diversification to bring money from the tourism industry into the upland economy, do you think there's more we could do to tap into that?

Mr Paice: I'm sure there's always more we can do to tap into it, but that's really a role for DCMS and the tourism sector. I know, again before the election, when I was talking to my then colleagues in that team, they were very enthused by the need to increase rural tourism. That is within scope of the RDPE, all of which feeds back to my answer earlier about the need to make sure we have as much resources in that programme as possible.

Chair: When you do visit, we can recommend some very good B&Bs. Minister, can we thank you most formally for being so patient, so kind and thorough in answering our questions as part of this inquiry? To you and your team, thank you very much indeed.

Mr Paice: Thank you very much indeed.

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1   Ev 83 Back

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3   Ev 84 Back

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5   Ev 85 Back

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Prepared 16 February 2011