Official Report: Minutes of Evidence

The Chairperson (Mr Butler): I again welcome John Terrington and Elaine McCrory to answer our questions and to discuss issues as we go along. I remind Committee members that the aim of the deliberations is to go through the Bill one clause at a time; to discuss any issues with or queries about the clauses in the evidence that we have received; to identify whether further information or clarification may be required; to decide on whether amendments are to be considered; to be as precise as possible about what we want any proposed amendments to achieve; and to clarify with the Department whether the Minister will be happy to consider them.

I draw members' attention to the updated legal advice from the Examiner of Statutory Rules (ESR), which includes a small correction to the report that she highlighted during her presentation in closed session last week. I also refer members to the response from the Northern Ireland Human Rights Commission (NIHRC), which states that it has no comments to make on the Bill.

Members have been provided with a copy of the Bill and a copy of the explanatory and financial memorandum (EFM). The Committee Clerk updated our deliberations table after last week's meeting. The table summarises where we had got to with queries and comments. Information in blue text in the table is from the ESR report and remains restricted legal advice. An evidence summary table is also provided, as is all the written evidence that has been received via Citizen Space or that accompanied the oral briefings that we received. If members are content, we will make a start.

John and Elaine, we were down a few members last week, as you will remember. If yo do not mind, may we start at the beginning? I request that not to interrogate you desperately hard but to ensure that all members have a fair chance to go through the Bill clause by clause. I ask you to give a brief overview of each clause and to highlight any specific issues quickly. You can refer to queries that have been raised previously so that we are not going over the same ones again. I ask you to kick off with clause 1.

Mr John Terrington (Department of Agriculture, Environment and Rural Affairs): Do you want us to start at clause 1 again?

The Chairperson (Mr Butler): Yes, please.

Mr Terrington: There are six clauses in the Agriculture Bill. Clause 1 makes support under the legacy European Union fruit and vegetables aid scheme (FVAS) discretionary. That is to say that it removes an obligation to fund all eligible claims automatically. In doing so, it brings the scheme into line with other agriculture support. It makes the change by amending article 32 of the assimilated Common Market organisation (CMO) regulation 1308/2013. That enables the Department to continue the fruit and vegetables aid scheme on a purely discretionary basis in Northern Ireland. A new paragraph 1A is to be inserted in the CMO by subsection (4) of clause 1. That is required in order to clarify who is eligible for discretionary support — a producer organisation (PO) or an association of producer organisations (APO) — but it otherwise maintains the status quo. There are no APOs in Northern Ireland anyway. Finally, clause 1 contains transitional provisions in relation to existing FVAS programmes. That is a belt and braces provision to ensure that nothing in the Bill impacts on existing agreed operational programmes that are due to end at the end of this year.

Clause 2 provides the Department with the power to make regulations to modify the named direct fruit and vegetables aid scheme legislation. It includes an additional power to make more specific regulations regarding the review of decisions relating to support under the scheme. That is important, because the support is no longer mandatory. Regulations made under the power will provide for the appeal of decisions and will be in line with rules already in place for other support.

Clause 3 confers on the Department the power to make regulations on assimilated law, this time in relation to EU agri-food information and promotion schemes. Elaine provided a summary of the clause last week and can do so again if the Committee wishes. Perhaps that can be done at the end, because it is not an area that we have discussed an awful lot at the Committee.

Clause 4 provides some detail on the regulation-making powers in clauses 2 and 3. It provides that the regulations can make:

That is a standard provision to allow for changes to other legislation to ensure a fully functioning statute book following amendments made to assimilated law by clauses 2 and 3. That is particularly important, given the complex and interwoven nature of EU law. Indeed, as Elaine pointed out last week, the powers in the agri-food information and promotion schemes refer to the fruit and vegetables aid scheme and vice versa, which gives some idea of the potential complications involved.

Clause 4(2) provides that consequential etc changes can be made to any statutory provision, which, when read in conjunction with the Interpretation Act (Northern Ireland) 1954, as set out in clause 5, can include primary legislation. Again, that is a narrow power and is standard in order to ensure a fully functioning statute book. Finally, the clause provides that any regulations made under the Bill can be made only following Assembly approval by draft affirmative resolution.

Clause 5 provides interpretation of terms used in the Bill, such as "modify", the meaning of which "includes amend, repeal or revoke". Those are standard provisions that allow for changes in whole or part to the legislation in question, and it is particularly important to have them in the Bill should an alternative scheme be developed for which it would be considered inappropriate to maintain any old legislation on the statute book. The clause also defines the term "statutory provision".

Finally, clause 6 is another technical clause. It provides for the coming into operation of the Act on Royal Assent. Given the transitional provision in clause 1, it may impact on existing operational programmes and current support for them. It also sets out the Act's short title, which will be the Agriculture Act (Northern Ireland) 2025. Hopefully, that has helped refresh your memory about the six clauses.

The Chairperson (Mr Butler): Thank you for attending the Committee. We hope to get through a good bit of the Bill today. If you do not mind, we will go through the Bill clause by clause. We will take each clause in order. We know what most of the discussions will be about. I have about four queries.

First, as was said in the plenary sitting, Committee members and other Members appreciate the Minister's move not to close the FVAS at the end of the year. Does the Minister intend to guarantee three years of funding for successful applicants, or will funding be available until such times as a new scheme is developed, whichever comes sooner?

Ms Elaine McCrory (Department of Agriculture, Environment and Rural Affairs): The Minister was always clear that he was not going to remove support without suitable alternative support being in place. He wanted to make that assurance clearer. As it stands, POs submit a three-year operational programme. We plan to get those three-year operational programmes up and running and, in tandem, design suitable alternative support with the sector. We therefore cannot say categorically that the scheme will be for only three years, nor can we say that it will run for ever. It depends on the timescale for developing the alternative.

The Chairperson (Mr Butler): OK. My query is on the context of the three years. The three-year plan will require three years of support and funding. If a new scheme is developed inside those three years, does that end the support? For example, if someone makes an application to the new scheme within the three years, will that three-year funding programme run the whole way through?

Ms McCrory: It is too early to say, because the design of the new scheme, whatever it may be, is in its early stages. John said that the powers that we will get are to amend the existing FVAS. We do not have a great deal of separate, domestic legislation to help us run an alternative scheme. The Agriculture Act (Northern Ireland) 1949 is being used for some of the sustainable agriculture programmes. We need to start the work and see where it takes us. We have to keep engaging with the sector, because it needs to know what is happening and to be part of the co-design process. We will therefore work with the sector to see where we are going.

There are transitional powers in there as well, so, if the Bill is enacted, we could make adjustments to extend a programme for another year if the new support was not ready. It is hard to tell at this stage exactly what will happen. What is certain is that the legislation states that you apply for a three-year programme.

Another factor to consider is that it is a match-funded three-year programme. It is subject to what POs want to do. They will determine the course of action. They will come to the Department for it to approve the programme, and the money will then be released as they undertake certain activities.

The Chairperson (Mr Butler): If someone is successful in their match-funded three-year bids and a new scheme is developed but they do not meet the criteria or do not apply to it, will the Department stand over the three years?

Ms McCrory: If they are in the middle of a three-year programme?

The Chairperson (Mr Butler): Yes.

Ms McCrory: My assumption would be yes, because it would have made the commitment to fund the three-year programme.

The Chairperson (Mr Butler): OK. Thank you. Does anybody want to come in on that issue? I have four to get through. Is it on that, Declan?

Mr McAleer: I just want to ask about the Henry VIII powers. Maybe now is not the time to ask about them.

The Chairperson (Mr Butler): We will come to that, if that is all right.

Mr McAleer: Yes.

The Chairperson (Mr Butler): OK. This is my second question. Am I correct in my understanding that clause 1(4) refers to amending only the current assimilated law that relates to the FVAS to provide the financial assistance that may be granted to POs? Does it mean that any new FVAS may require new primary legislation or regulations?

Mr Terrington: It depends on what is meant by "a new fruit and veg aid scheme". The Department may want to wipe the slate clean and come up with something brand new called, say, "the vegetable and fruit scheme", which may be entirely different. Our powers to create something almost brand new would be constrained, as Elaine said. I have made the point a couple of times that the Bill is very technical, but, if you look at what is already in the scheme, there are powers to change the legislation. There are limitations, however.

The powers are still quite broad and cover many of the things that the sector called for during the consultation process in parallel with the review. If, however, it were a brand new scheme and it were felt that something could be put in place to assist the sector that had previously made use of the fruit and veg aid scheme but that was more attractive to other sectors —.

The Chairperson (Mr Butler): That is probably what this relates to.

Mr Terrington: There are reasons that people have not participated in the fruit and veg aid scheme, at least in Northern Ireland. Using those powers, legislation could be amended to make the new scheme more attractive to other sectors. If the idea was that a scheme was needed that was more attractive, the fruit and veg aid scheme was never going to do that. Something new was needed, and the theory is that new powers may be required in future for that.

My assumption is that the fruit and veg aid scheme will run on until such times as it ends, or perhaps it will be amended to make it more Northern Ireland-friendly in order to meet outcomes or be reviewed in order to meet some of the stakeholder requirements or whatever else, as part of that stakeholder [Inaudible.]

The Chairperson (Mr Butler): Patsy, before I bring you in, does your question relate to that issue?

Mr McGlone: Yes.

The Chairperson (Mr Butler): I just wanted to make sure.

Mr McGlone: I get that.

The response from officials about the fruit and vegetables scheme states:

You are conducting a review: what are its initial findings? If you have a scheme that is not being used, it is neither attractive nor useful. I presume that horticultural people would know of the scheme's existence, so, if they are not using it, it is because it is no use to them. Are you getting any initial soundings from them as to why it is of no use to them?

Mr Terrington: Elaine will speak about the review, but I will say first that the scheme is clearly of use to the mushroom sector. It has made good use of it, hence its commitment to continue to support it. On the review, I do not think that it is a secret —.

Ms McCrory: We have not concluded the review yet, but some of the things from it are fairly obvious. The mushroom sector, I think, described it as a fantastic scheme, at one stage, but thinks that it could be improved.

The strawberry people were part of a PO before but did not like the constraints of being in one. Currently, you have to be in a producer organisation to avail yourself of the aid, and they did not like being in a PO, because they felt that they had lost a bit of control. They had to market everything through the PO, which they did not want to do, as they wanted to keep their own customers. There were things that the strawberry people did not like.

We spoke to the Ulster Farmers' Union (UFU) about the scheme, and some of the field crop people just do not think that it is appropriate for them. Again, they have issues with being in a PO. That is mostly what is driving this, rather than fruit and veg aid. They also prefer to receive competitive funding, because it is a very competitive sector.

Mr McGlone: Have the mushroom growers in a PO expressed similar concerns?

Ms McCrory: About being in a PO?

Mr McGlone: Yes.

Ms McCrory: There are always tensions within a PO. People are working together, and there are always tensions. They have to democratically agree on what the organisation will do, who will get funding in a particular year and who will not. There is therefore always a bit of tension, but the mushroom sector has made it work for them. OK, we have people who are in three POs. They are in not just one PO, which, again, may tell you about some of the tensions that there can be when people have different ideas about what they want to do. On the whole, however, I would say that they are happy being in a PO. You can ask them next week, but I think that the mushroom sector is happy.

Mushroom producers think that the fruit and veg aid scheme is a great scheme, in that it gives them stability and certainty, but they believe that there are things in it that could be improved. They are looking across the border to the South of Ireland, where mushroom producers can get 80% funding for certain things. Here, they can get only 50%. There are therefore things in the existing scheme that they would like to see changed. We cannot make those changes at the moment, because we do not have the powers to do so.

Mr McGlone: The power and the money. Do you have the money to do it?

Ms McCrory: We have submitted bids for the money. There is a ring-fenced budget. As it stands, we have some money. If the budget were to shoot up big time, we might not have the money to do it, as the Minister would then have to make decisions about whether to take money from elsewhere to fund the changes, because he has a finite envelope of money.

Mr McGlone: OK. Thanks very much.

The Chairperson (Mr Butler): OK. I will now open it to members on clause 1. Do those who did not get a full go at last week's session have any further questions or queries for clarification? The paper that the Clerk has put together is pretty substantial and encapsulates all our questions and queries so far.

If members are content, we will move on to clause 2. Is that OK?

The Chairperson (Mr Butler): I have a query about clause 2. Am I correct in my understanding that clause 2 refers to regulations to make modifications pertaining to the existing assimilated laws on the FVAS so that it will be possible to improve the existing scheme while the development of a new scheme is under way?

Mr Terrington: That is —. [Inaudible.]

Mr Terrington: There are timing issues around doing that for the next operational programme until we have the powers. The aim of taking them is to improve the existing scheme, however. As I have said before, that may involve aligning with the Republic of Ireland or with something else that comes out of the review.

Ms McCrory: The review of wider policy in the Department.

Mr Terrington: You have heard from stakeholders about the things that they want to see improved, which are mostly to do with alignment or with making the scheme less bureaucratic, as it is an EU scheme. It could be aligned with financial practices in the Department or whatever. All those things would be seen as improvements.

The Chairperson (Mr Butler): The mushroom sector is quite significant, not just because it avails itself of the scheme but because it is a pillar of horticultural output in Northern Ireland. As has been mentioned, the strawberry sector will be affected. We may have discussed it before, but will this measure offer flexibility so that the scheme can be broadened beyond strawberries and mushrooms to tomatoes and so on?

Mr Terrington: That may be possible. As Elaine said, some of the main concerns of those in the field-crop sector are about being a member of a producer organisation, which has separate but interrelated rules. However, those issues are primarily for DEFRA, and our powers to change the three pieces of legislation listed in clause 2 do not extend to reserved areas, as you will understand. There may be some things that can be done to facilitate the involvement of other sectors, but there may be things that are outside the scope of our Bill because they are reserved matters.

Ms McCrory: Maybe it is also about promoting it to the other sectors a bit more. The POs mentioned before that they did not feel that the scheme had been promoted particularly well because it was an EU scheme. Maybe that could be looked at. We cannot pre-empt the outcome of the review and what the Minister wants to do, but those are things that we can consider. Is the issue a lack of awareness of the scheme?

Mr Terrington: The mushroom sector has said that the College of Agriculture, Food and Rural Enterprise offer for horticultural support did not suit them. A lot of that is about trying to address why people do not want to be part of POs, which is an issue that has been identified. It might be because of a slight resistance to collaboration. The other schemes are looking to try to facilitate that sort of collaboration, which might lead to producers stepping over the problems that they have and seeking PO membership. That might be the next step.

The Chairperson (Mr Butler): The legislation does not necessarily do this, but I do see the collaborative approach paying off through an increase in the scale of marketability or saleability. When it comes to such collaboration, has there been any internal work on an alternative to a PO for a single-item producer?

Mr Terrington: There are a number of parallel streams to look at that for the horticulture scheme. The Department identified a gap where most sectors do not collaborate particularly well for whatever reason. Those schemes were set up to address that. The realisation and acceptance that that was not going to help the mushroom sector is why the Minister has made a commitment for the next three years. I expect that there is other work going on with the supply chain on collaboration

Ms McCrory: It would not be as far advanced as some of the other elements. Rosemary mentioned that to you before. As part of the sustainable agriculture programme, there is a supply chain work stream that is looking at interventions to try to make the supply chain more efficient and joined-up, through not just horizontal collaboration but vertical collaboration, because we are not always good at getting all elements of the supply chain to work together, and there is a reluctance to do it.

The Chairperson (Mr Butler): The term "modify" pops up a couple of times. That is defined as including, "amend, repeal or revoke". Would the power to repeal or revoke only be used for the current assimilated law once a new scheme has been agreed, or is there any circumstance beyond that in which the power could be used?

Mr Terrington: My understanding is that the power could be used to revoke bits of legislation. I suspect that there are provisions in legacy EU laws that are not relevant to Northern Ireland, because they are about membership of the EU. There is an opportunity to revoke or repeal bits of those pieces of legislation.

Ms McCrory: There are some provisions in the assimilated law that are redundant and need to be removed.

Mr Terrington: That is one instance in which the power could be used. One of the reasons for the power being a general power is so that it can be used to tidy up things like that. Ultimately, as I said in my introduction to the clause, it provides for the removal of all or any such law should there be a replacement so that it is not on the statute book. However, it has other uses below that.

Ms McCrory: That clause also relates to information and promotion schemes, so the modifying powers apply to those. We might change bits of that, or we might decide that the existing legislation is no longer required.

The Chairperson (Mr Butler): No problem. Again, regulations that are made under the Bill would need the Assembly's approval, so there is the chance for debate.

Mr Terrington: Yes. Ultimately, that is why, for a number of reasons, we think that that is a safety net for a number of aspects of the Bill.

The Chairperson (Mr Butler): Yes. I need to come back to that for my own understanding each time. If no other members want clarification or further information on clause 2, we will move on.

I do not have any questions on clause 3. I will reiterate a couple of points. The majority of respondents were opposed to clause 3. Some thought that more information was needed because modifying the scheme could reduce current levels of funding. The review of the current scheme needs to be completed and a clear plan laid out for the future of the funding. The key risks to small farmers include reduced access to promotional support, favouritism towards large agribusinesses and a loss of transparency and information sharing. Some of those have already been mentioned. Those responses came in prior to the ministerial announcement of the extension of the funding.

I have no further questions, and need no further clarification, on clause 3. Does anybody else need more information? No. OK.

We move on to clause 4. I have an indication from the floor, particularly on the Henry VIII powers that kick in at clause 4. I do not have any further queries on that. I will bring in Declan to seek clarification on his points.

Mr McAleer: You would need to be a lawyer to get your head around some of these matters.

The Chairperson (Mr Butler): Absolutely.

Mr McAleer: From my reading and understanding, the Henry VIII powers provide the ability to amend primary legislation using delegated legislation, which is subject to less scrutiny. What is your interpretation of that? Why are Henry VIII powers needed in this situation?

Mr Terrington: If I may say so, you are right about the interwoven nature of the clauses and definitions therein. The powers in clauses 2 and 3 would allow for the amendment of primary legislation and, therefore, on the face of it, could be considered to be Henry VIII powers. However, I will start by saying that the amendments would be subject to the draft affirmative procedure. Subordinate legislation is as important as primary legislation. The Assembly processes are set, and that has to be approved by a vote of the Assembly.

Mr McAleer: It will go to the Assembly anyway.

Mr Terrington: Yes. That is a safety net at the end of the process. At the start of the process, the powers in clauses 2 and 3 are broad in the sense that they are enabling. The Committee cannot see, in the Bill, what those powers would enable the Department to do. If you look at the fruit and veg aid scheme legislation or the information and promotions scheme legislation, you see that it sets out the limits to what we could change. The powers under clause 2, just to take one clause at a time — the same applies to both — are narrow in that they allow us to change only the bits of the three pieces of legislation listed that are devolved and not reserved matters. That is a narrow change.

The change to the definition to allow for consequential and transitional etc provisions is very narrow and relates only to any changes that are made for policy reasons to the CMO and the two delegated implementing Acts.

They are a consequence of policy changes, but they are not policy changes. They will ensure that policy changes do not adversely affect other legislation elsewhere, including subordinate legislation.

I have already said that, for example, the two schemes are interrelated in that POs can apply to both for funding. There are lots of other places in EU law where there might be definitions, and we want to make sure that you do not make a change to the legislation that is listed in the Bill and have an adverse effect somewhere else. It is narrow in that it is only the fruit and veg aid scheme and it is only consequential to changes to that, including to any primary legislation. It is not a policy position: it does not change anything in the policy. It is not a major change and therefore is not deemed as a Henry VIII power. The changes will be made by the draft affirmative procedure anyway, should there be any concerns.

I hope that that gives you some reassurance. If you are drafting legislation that will make amendments in other places, it is standard to draft a power into it to make sure that you can make amendments anywhere so that you do not end up with something that just does not work somewhere because of an incorrect definition or the use of a term that no longer exists. I have seen it used before, and those are the kinds of things that come to mind.

Ms McCrory: If we called it the "vegetable and fruit scheme" or something like that instead — I know that that is facetious — we would have to make sure that that followed through in any related legislation. If we said, "You cannot have double funding for this and that" and the two names are wrong, the legislation will not work properly, so you need to be sure that the naming conventions, the definitions and all those things follow through naturally.

Mr Terrington: It is very far down the line of a process. The policy will have been decided, and you will bring forward your draft subordinate legislation and say, "We want to change fruit and veg aid scheme rules thus". You will then have to do a sweep of all other legislation to make sure that that does not have any unseen or unwarranted consequences in subordinate legislation, including in retained or assimilated EU law. Sitting here, I am not sure that I can identify any examples, but it depends on the legislation or —

Ms McCrory: It will probably affect —

Mr Terrington: — other bits of retained law.

Ms McCrory: — assimilated law, because EU law is very interconnected. Things run through various pieces of legislation, and you need to make sure that they are all consistent.

Mr Terrington: I would be surprised, when the Committee comes to look at other primary legislation, if you do not see similar provision. It is just in case, somewhere down the line, you end up with a statute book that does not operate in some way.

Mr McAleer: That is fine. Thank you, John and Elaine.

The Chairperson (Mr Butler): Forgive me if I have asked this before, but, without the Henry VIII powers, there would be no power to amend the primary legislation. Is that right or is there another route?

Mr Terrington: We have already said that there are no powers to change the CMO. That is why we need the powers in the Bill. If something comes up, I guess that you would try to find another route and see whether you could supplement some other piece of primary legislation down the road and make the change through that. There is not an obvious place, and, as I say, the time to do it is when you have, if the Department gets them, these enabling powers so that you are making sure that, the day and hour that the subordinate legislation comes into place, and those changes are made to the fruit and veg aid scheme or the information and promotion scheme, everything else works at that point. I cannot say categorically that, if you send a lawyer into a corner, they will not find some way of doing it, but it is likely to be by using some of those other powers to change primary legislation. This is the only way that you can use subordinate legislation, because the provisions are consequential and transitional.

The Chairperson (Mr Butler): I remember that, in the previous mandate, legislation was coming through and the Bill sponsor was looking to exercise Henry VIII powers that would be subject to negative resolution procedure, which did not happen. The trade-off was that that conferred too much power to the Department.

Mr Terrington: I take your point. The changes here are so narrow that I would not be not overly worried about them being subject to negative resolution procedure. However, the safety net is there for all the powers in the Bill. It is set out in the delegated powers memorandum to give the Assembly its place, and it parallels the powers that we have to change the other common agriculture policy legislation through the Agriculture Act 2020. All those powers are subject to draft affirmative procedure, so we thought that it was important, for whatever reason, to make sure that the powers in this Bill aligned with them to ensure consistency and continuity.

The Chairperson (Mr Butler): Are there any more points to raise on clause 4? No.

Clause 5 is on interpretation. I do not have any queries on that. There are a couple of items in our paper that we have pulled through. Do members have any further points of clarification to raise on clause 5? No. Thank you very much.

Clause 6 is the commencement and short title. I am not going to assume anything. Does anybody require clarification or information on anything in clause 6? No. OK, members.

I thank the officials for attending again. We reserve the right to ask you to attend again if the Committee needs you to do so. We may not, but we will be hearing from some of the stakeholders in the next couple of weeks. Hopefully, the Committee will then be in a position to finalise its position on the Bill. On behalf of the Committee, I thank you for your attendance and wish you a nice weekend.

Mr Terrington: Thanks very much indeed.