Brexit: priorities for Welsh agriculture Contents

4Responsibility for agricultural policy

23.Under the current devolution settlement agriculture is a devolved matter, meaning it is the responsibility of the Welsh Government.34 However, the devolved administrations cannot pass legislation which is incompatible with EU law,35 and the EU’s substantial role in agricultural policy—particularly through the Common Agricultural Policy—has meant that in practice agricultural policy has largely been made by the EU, and implemented by the UK and Welsh Governments. This means that the UK’s departure from the EU will require provisions to be made to reflect the ending of the supremacy of EU law, and the repatriation of responsibility for areas of policy which have previously sat with the EU.

24.The Welsh Government has been clear that, post-Brexit, agricultural policy should remain devolved and be the responsibility of the Welsh Government. The Welsh Government Cabinet Secretary told us that agriculture had been a devolved area of responsibility for almost 20 years, and that she did not think the referendum had been a vote on changes to the devolution settlement.36 In its paper on Brexit and Devolution the Welsh Government said that any attempts by the UK Government to reverse the devolution settlement in this area would be “vigorously opposed by the Welsh Government”.37

25.The UK Government has recognised that Brexit will result in powers returning from the EU to the devolved administrations. In February 2018 the Secretary of State for the Environment, Food and Rural Affairs, Rt Hon Michael Gove MP, said that, post-Brexit, there would be “the maximum level of devolution to ensure that policy fits the needs of individual nations of the United Kingdom.”38 When questioned about what this would mean in practice, the Minister for Agriculture told us that agriculture would be devolved, saying:

We see agriculture policy—the design of the schemes—and anything that might replace the existing common agricultural policy, both pillar 1 and pillar 2, as being a devolved policy area.39

26.Our witnesses agreed that the Welsh Government should have the ability to tailor agricultural policy so that it met the needs of Wales,40 but it was also acknowledged that there were areas where a UK approach would be sensible, and that the systems of governance which currently exist at an EU level would need to be replicated at a UK level.41 We look at these issues below, when we consider arrangements for UK-wide common frameworks.

The European Union (Withdrawal) Bill

27.Although there appears to be agreement in principle that agricultural policy will be a devolved area of responsibility post-Brexit, there has been substantial disagreement between the UK Government and devolved administrations about the legislation—the European Union (Withdrawal) Bill—which the UK Government has brought forward to provide for the UK’s withdrawal from the EU.

28.The UK Government introduced the European Union (Withdrawal) Bill in July 2017 to provide a statutory basis for the UK’s withdrawal from the EU, and to provide for the repatriation of powers from Brussels. The Bill as introduced would have removed the requirement for devolved legislation to be compatible with EU law, but would also have created a new restriction on the competence of devolved legislatures so that, in the first instance, only the UK Parliament would be able to legislate in areas which had previously been within the competence of the EU.42

29.Shortly after the Bill was introduced, the Scottish and Welsh Governments stated that they would not be able to consent to the Bill as it stood, largely because of the legislative constraints on areas of policy returning from the EU.43 The two governments proposed a number of amendments to the Bill, which would remove these constraints and limit the ability of UK ministers to make secondary legislation in devolved areas.44 Carwyn Jones AM, the First Minister of Wales, said that the Bill represented a “fundamental assault on devolution” by creating a “new set of constraints in devolved competences that would be controlled by the UK Government”.45

30.Following extensive discussions between the two governments—and the passage of a “Continuity Bill” by the National Assembly,46 as a contingency measure—on 24 April 2018 the Welsh Government announced that it had reached an agreement with the UK Government over the provisions of the Withdrawal Bill.47 The result of the agreement between the UK and Welsh Governments is set out below.

Box 1: Agreement between UK and Welsh Governments on the European Union (Withdrawal) Bill

All devolved powers and policy areas remaining devolved, unless they are specified to be “temporarily held” by the UK Government—these will be areas where there is a need for common, UK-wide rules.

The UK Government will seek the consent of the devolved legislatures on which areas of current EU law will be “frozen” while common UK-wide rules—known as common frameworks—are agreed.

A “sunset” clause that guarantees the “freezing” of powers will be temporary.

Any regulations made by the UK Government on policy areas they temporarily hold would expire after five years.

Source: Welsh Government, ‘Welsh Government agrees deal on Brexit Bill that respects devolution’, 24 April 2018

As a result of the agreement, it is understood that the Welsh Government will be withdrawing its “Continuity Bill”.48 The Welsh Government Cabinet Secretary told us that she did not expect many areas of policy would need to be subject to the “freezing” powers, and that the Welsh Government planned to make sure they were ready to go with their own agricultural policy.49

31.David Lidington MP, the Minister for the Cabinet Office, welcomed the agreement between the Welsh and UK Governments, saying it was a “significant achievement that will provide legal certainty, increase the powers of the devolved legislatures and also respect the devolution settlements.”50 On 25 April the Government published amendments to the Bill, and a related intergovernmental agreement and memorandum of understanding.51

32.The UK and Scottish Governments are yet to reach an agreement on the areas of the EU (Withdrawal) Bill which affect Scotland’s devolution settlement.52

33.We recognise the agreement between the UK and Welsh Governments on the approach of the European Union (Withdrawal) Bill to responsibility for areas of agricultural policy which will return to the UK post-Brexit. It is essential that any changes to the devolution settlement for Wales which result from Brexit are agreed with the Welsh Government, and not imposed by Westminster. It is regrettable that it took so long for this agreement to be reached.

UK-wide common frameworks

34.In parallel to discussions about the European Union (Withdrawal) Bill, there has been debate about the extent to which it will be necessary or desirable to have common UK-wide approaches (often referred to as common frameworks) for areas of policy where EU policy has previously provided for a consistent approach across the UK.

35.There is broad agreement that, post-Brexit, it will be desirable to have UK-wide frameworks for various areas of policy where the UK’s membership of the EU means that policy is currently uniform across the UK. Huw Thomas, Political Adviser at NFU Cymru, told us that common frameworks would be necessary for the functioning of the internal market, and also to enable new free trade agreements to be made.53 Glyn Roberts, President of the Farmers Union of Wales, agreed, telling us that large variations in approach across the UK would lead to market distortion.54 The Welsh Government has also accepted the need for common frameworks post-Brexit, saying:

We recognise that in some cases, in the absence of EU frameworks which provide an element of consistency across the UK internal market, it will be essential to develop new UK-wide frameworks to ensure the smooth working of the UK market.55

36.In October 2017 the Joint Ministerial Committee (European Negotiations)—which brings together ministers of the UK Government and devolved administrations to discuss matters relating to the UK’s departure from the EU—agreed that common frameworks would be established where they were necessary to enable the functioning of the UK internal market, ensure compliance with international obligations, ensure the UK can pursue trade agreements, enable the management of common resources, administer and provide access to justice, and safeguard the security of the UK.56 The Joint Ministerial Committee agreed that the frameworks would respect the devolution settlements and the democratic accountability of the devolved legislatures.

37.In February 2018 the Department for Environment, Food and Rural Affairs (Defra) published a command paper and consultation, Health and Harmony: the future for food, farming and the environment in a Green Brexit,57 which outlined the Government’s intentions around the establishment of common frameworks, and asked what areas should be included in the common framework for agriculture. This stated:

In line with the principles underpinning the creation of common frameworks agreed by the Joint Ministerial Committee (EU Negotiations), frameworks will be established where they are necessary in order to enable a well-functioning internal market across the United Kingdom, compliance with international obligations and protection of our common resources. Together, we are confident that we can determine frameworks with the right mix of commonality and flexibility. It is the government’s expectation that the process will lead to an increase in decision-making powers for each of the devolved administrations.58

The paper said that the UK Government and the devolved administrations had “made good progress on identifying where a common approach may be needed”.59 The Minister for Agriculture confirmed to us that “the two principal areas where everybody agrees that there need to be frameworks are, first, those that pertain to international negotiations—international trade agreements, for instance—and, secondly, those necessary to protect the integrity of the UK internal market.”60

38.The UK Government has analysed areas of EU law that intersect with devolved competences, and set out where it believes common frameworks will be required. In the agricultural sector, this includes:

a)Areas where non-legislative common frameworks may be required: environmental standards.

b)Areas that are subject to more detailed discussion to explore whether legislative common framework arrangements might be needed: agricultural support, marketing and certification of agricultural produce, animal health and welfare, food labelling.

c)Policy areas that the UK Government believes are reserved: protected names for agricultural produce.61

The Minister for Agriculture indicated that the forthcoming Agriculture Bill—expected in the second half of 2018—while focusing on England, might have UK-wide implications for some areas, but told us that he expected the Welsh Government would agree with the areas where the Bill took a UK-wide approach.62

39.It is clear that, post-Brexit, UK-wide common frameworks will be required in some areas of devolved policy, to ensure there are no barriers within the UK market, that the UK is in compliance with international obligations and that the UK’s common resources are protected. We welcome the agreement between the UK Government and devolved administrations about the areas where these will be necessary.

What common frameworks will look like

40.Although there is agreement that common frameworks will be required in some areas, it is not yet clear what these will look like or how they will operate. Huw Thomas, Political Adviser at NFU Cymru, suggested that there were a number of different approaches which could be used to establish them:

If it is something of the highest order, the first order, it might need a legislative basis. Other things could probably be achieved via memoranda of understanding between the devolved Governments and the UK Government. We should be looking towards memoranda wherever we can get them because I think that accommodates and respects devolution better than perhaps a heavy-handed legislative approach.63

41.The Welsh Government has called for “a new UK Council of Ministers” to be created, served by an independent secretariat, to strengthen decision making and collaboration in relation to any UK-wide common frameworks.64 It has suggested that “the four administrations would meet regularly in a variety of formats to negotiate common rules and frameworks where it is agreed that coherence across the UK is necessary and beneficial”.

42.The UK Minister for Agriculture questioned whether a UK Council of Ministers needed to be formally established, telling us that this “happens already”, through Defra meetings with opposite numbers in all parts of the devolved administration.65 Danny Jeyasingam, Deputy Director for the Devolution Team at Defra, told us that discussions about where common frameworks would apply, and what they would look like, were still ongoing, and emphasised that “all those discussions are on the basis of consent”.66 He added that discussions about common frameworks were looking at “how decisions are taken, how they will be scrutinised, how disputes will be resolved”.67

43.The Welsh Government Cabinet Secretary told us that there also needed to be a “completely new structure in place to look at disputes”.68 The Welsh Government has suggested that, if there is not agreement between the relevant governments, a combination of the UK and one of the devolved administrations should be sufficient to make decisions about common frameworks, meaning that decisions would not require unanimity but that the UK Government could not impose policy if it was opposed by all of the devolved administrations.69 We did not look in detail at this proposition, but there appears to be clear consensus that there will need to be new mechanisms for dispute resolution, whatever they end up looking like.

44.UK-wide common frameworks could be established in a number of different ways, but it is still not clear where they will apply, what they will look like, how they will work, or how any disputes would be resolved. It is imperative that these frameworks are agreed mutually between the UK and devolved governments and ensure the unique issues that face each of the administrations are given due consideration. We believe that these frameworks will need to be supported by robust and transparent intergovernmental mechanisms. We urge the UK Government to work with the Welsh Government to agree on the areas of agricultural policy to which common frameworks will need to apply, and to establish how these will work, and the mechanisms for their governance. This should be done ahead of the Agriculture Bill being introduced in the UK Parliament. The UK Government should keep us updated on the timeframes for the establishment of common frameworks, to ensure that we have an opportunity to scrutinise these arrangements before they come into effect.

Role in future trade deals

45.There has been debate about the extent to which agricultural policy being a devolved area of responsibility will mean the Welsh Government will need to have a role in trade deals. While international agreements—including trade deals—are a reserved policy area, they can include provisions which affect devolved policy, including agriculture. This would be true if a trade deal specified particular standards for animal health, or limits on financial support for agricultural producers.

46.The Welsh Government has stated that, outside of the EU, it would have “a more direct interest in trade negotiations”, particularly given that these would have important inter-dependencies with key aspects of the policy and regulatory context for devolved areas.70 The Cabinet Secretary acknowledged that trade deals were a reserved matter,71 but said that the Welsh Government had “made it very clear we need to be around the table because of the impact on Wales”.72 She told us that she did not think there had been any push back to that suggestion.

47.George Eustice agreed that there needed “some kind of mechanism” for the UK Government to engage with the devolved administrations on trade deals,73 but told us that “the way in which the devolved Administrations will be engaged in trade deals is still being discussed with the Department for International Trade.”74

48.Post-Brexit the Welsh Government will have an increased interest in trade deals negotiated by the UK Government, and particularly their implications for devolved policy areas. Given the inter-dependencies between trade deals and devolved policy, there will need to be robust intergovernmental arrangements to ensure that Welsh interests, and the consequences of trade deals for devolved policy, are considered during negotiations. We recommend that the UK Government agree with the Welsh Government arrangements for seeking the input and consent of the devolved institutions in Wales on trade deals.

34 Government of Wales Act 2006, Schedule 7 (as amended by the Wales Act 2017)

35 Government of Wales Act 2006, Clause 108 (6) (c)

36 Q543

37 Welsh Government, Brexit and Devolution: Securing Wales’ Future, January 2017

38 Department for Environment, Food and Rural Affairs, “A Brighter Future for Farming”, 20 February 2018

39 Q433

40 Q515 [Cennydd Jones, Dafydd Jones]

41 Q515 [Laura Elliott], Q127 [Huw Thomas], Q129 [Glyn Roberts]

42 European Union (Withdrawal) Bill, Clause 11 (2) [Bill 005 (2017–19)]

43 Welsh Government, ‘First Minister takes step to protect Wales post-Brexit’, 12 September 2017, Scottish Government, ‘The European (Withdrawal) Bill’, 12 September 2017

44 Welsh Government, ‘Written Statement - European Union (Withdrawal) Bill’, 19 September 2017

45 Welsh Government, ‘Written Statement - EU (Withdrawal) Bill’, 16 January 2018

48 HC Deb, HCWS646 [on European Union (Withdrawal) Bill and Devolution: Update on Clause 11], 25 April 2018, [Written statement]

49 Q547

52 Scottish Government, ‘Update on Brexit talks’, 2 May 2018

53 Q124

54 Q124

57 Department for Environment, Food and Rural Affairs, Health and Harmony: the future for food, farming and the environment in a Green Brexit, Cm 9577, February 2018

58 Executive summary, para 7

59 Department for Environment, Food & Rural Affairs, Health and Harmony: the future for food, farming and the environment in a Green Brexit, Cm 9577, February 2018, page 60

60 Q433

62 Q478

63 Q124

64 Welsh Government, Brexit and Devolution: Securing Wales’ Future, January 2017

65 Q453

66 Q434

67 Q452

68 Q550

69 Welsh Government, Brexit and Devolution: Securing Wales’ Future, January 2017

70 Welsh Government, Brexit and Devolution: Securing Wales’ Future, January 2017

71 Q579

72 Q546

73 Q438

74 Q440

Published: 9 July 2018