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England Rural Development Programme (Closure of Project-Based Schemes) Regulations 2006

rose tomove, That the Grand Committee do report to the House that it has considered the England Rural Development Programme (Closure of Project-Based Schemes) Regulations 2006 [45th Report from the Merits Committee.] The noble Baroness said: I start by thanking members of the Merits Committee, which, in its 45th report, as always, made a splendid job of highlighting the effect of regulations and drawing the House’s attention to things that it thinks are particularly worrying. In this report, they talk about the continuing uncertainty of the start date for funding under the new rural development programme following the closure of the old programme through these regulations. They say that the new funding may well not come on stream until significantly beyond January 2007. The reason for bringing forward a debate on these regulations is to reinforce the committee’s worries about the timescale, and I seek to draw those out in the hope that the Minister may be able to allay our fears. If not, I want at least to put on the record some of the issues. Rural development is taking three blows at the moment, two of which affect England only and one of which is UK-wide. The first is the £22 million sucked out of the rural economy this year by the delay in Rural Payments Agency payments to farmers. We have debated that issue before and no doubt we will do so again. At best, it has created a climate of uncertainty and, at worst, it has caused hardship across swathes of England, but I shall not dwell on that today. The second blow is the regulation which will bring to a close four rural development programmes. The closure of these schemes is the result of a new rural development programme due to start in 2007 and run until 2013. The third blow was announced by the Government in a Written Statement on 1 November. The rural development programme for 2007 will in practice be delayed for so long that it is unlikely to start before 2008, despite the fact that the regulations we are considering this evening will result in the closure of the old schemes. For rural areas, that will mean that vast numbers of projects important both to the economy and the environment will be put on hold. The new rural development programme, when it finally does start, will move from being delivered by Defra as part of the Rural Enterprise Scheme to being delivered by the regional development agencies. This is what was suggested by the noble Lord, Lord Haskins, and we supported the streamlining of such delivery, but I am sure the Minister is aware that delivery by the regional development agencies of their own schemes, known as Rural Renaissance, has proved—particularly in the south-west—to be such a nightmare of appraisal boards and more boards appraising those appraisal boards that almost no new projects have started up since 2003. My question to the Minister is: what lessons has Defra learnt, especially given the RPA débâcle and the reallocation of payments, about making the switch from the Rural Enterprise Scheme within Defra to schemes administered by the regional development agencies? I turn now to the four schemes being closed under these regulations. The first is the Rural Enterprise Scheme, which is perhaps the most important. It is a myriad of small, valuable projects that help to introduce innovation and diversification in order to aid the economy and the environment. I shall briefly run through a list from Defra’s own website of what is involved: agricultural water resources management—projects aimed at improving the management of water resources, which, as the House will be aware, we debated recently as a matter of great importance; and protection of the environment in connection with agriculture, forestry and landscape—I believe these are equally important and the Government have said as much several times. The Rural Enterprise Scheme also covers basic services for the rural economy and population, including out-of-school childcare projects, information and technology links and all sorts of other infrastructure developments for dispersed rural communities, all of which are essential for rural development. The list also sets out a number of other things, including the marketing of quality agricultural products, the renovation and development of villages, the protection and conservation of our rural heritage, diversification of agricultural activities, the development and improvement of infrastructure connected with the development of agriculture, and encouragement for tourism and craft activities. That embraces pretty much everything that is important to rural development, to jobs and to the environment. That is the first scheme that is closing. The second is the vocational training scheme, which updates skills in agriculture and hopes also to give skills to people who want to diversify out of those and expand their skills base. Again this is extremely important, particularly for remoter rural areas where access to mainstream training may be very difficult to access. The third scheme is the processing and marketing grant, which covers all the sorts of things that might come into localising food chains—something that is now dear to the Government’s heart. I declare an interest as chairman of Somerset Food Links. The grant includes adding value to agricultural products and, I believe, meeting the public procurement goals for food falls into this category. It is the sort of work that will help the Government to achieve the increased purchase of local food for consumption that is now very much part of the school meals agenda. Fourthly, the energy crops scheme encourages the planting of miscanthus and short rotation croppice. It is particularly depressing that, even though co-firing with biomass has been shown to be one of the most effective routes now available for carbon reduction, the scheme was closed to new entrants a month before the Stern report was published. So one of the few schemes that are actually producing some carbon-cutting results has been closed. All of the above schemes have just closed and there will be no new projects. My question is: for how long? Will this just be a blip or is it a yawning great hole? My fear is that it is the latter. There will effectively be no programme for rural development next year. Rural development is off for 2007 because, in December 2005, Tony Blair agreed a budget that left it the under-funded poor relation of the EU Budget. Effectively, rural areas paid the price for an agreed EU budget, but no one decided exactly what price that would be. CAP reform was, of course, a worthy goal and is rightly moving in a direction from direct reduction subsidy to environmental and development schemes, but the EU has yet to decide exactly the size and shape of the new programme. That depends on how much the receipts are and at what level modulation is set. That raises two matters: the amount of money likely to be available and the timescale. Historically the UK—and this goes back to the Conservative Government, who did not invest in rural areas at all in the way they should have done—has spent a pitiful amount on rural development. The new programme is based on that historical spend. Although rural areas may have 8 per cent of the population, we will only get 3.5 per cent of the funds. That has been confirmed at about £1.3 billion over the period I have specified. However, that allocation does not include any domestic matched funding, voluntary modulation receipts or state-aided funded elements. So far the Government have made no commitment to match-fund the modulated amount. When will the Minister be in a position to make an announcement about that? Until the Government at least make an announcement, it will be impossible for people in rural areas to make plans on any basis of financial certainty. Not only are we waiting for the decisions from Brussels that were the subject of the Statement on 1 November, but we are also waiting for the Government to make up their minds on what they will match-fund, and how much. When is the earliest possible date that rural development programmes could start again? The Government’s Statement on 1 November says it is unlikely to be concluded before spring 2007. The UK Government say that, until the regulation is in place, they cannot submit a UK programme to Brussels, although we find it hard to see why they cannot submit a draft programme that can be rubber stamped after that, which would at least gain several months. When the regulation is in place, the UK Government will need time to finalise the UK programme; say, at least two months—eight weeks—if they work really quickly. That takes us to June 2007, if all goes smoothly. Once the programme is submitted, the Government say that it will be at least six months until it is approved, so there we are: that is at the end of 2007, if everything goes really smoothly. It is unlikely, therefore, that anything will happen for new rural development schemes before 2008. We in rural areas do not have time to stall in this way. It is much harder to get something started again once it has stalled. The entire rural development programme is at great risk. It needs the Government to put all their effort behind it. These regulations give us the opportunity to debate the issue. Finally, I must refer to the correctness of the remarks of the noble Lord, Lord Wakeham, that other people were interested in taking part in this debate, but did not realise that they had to put their names down because it was taking place in the Moses Room. He raised an important point, because several other people share that thought.