The Deputy Presiding Officer (Linda Fabiani):
The next item of business is a statement by
Fergus Ewing on allocating convergence funding
to Scottish farmers and crofters. The cabinet
secretary will take questions at the end of
his statement, so there should be no interventions
or interruptions.
The Cabinet Secretary for the Rural Economy
(Fergus Ewing):
Following a six-year campaign, and continued
pressure by successive Scottish ministers
and key farming and crofting organisations,
Scotland is getting its convergence funding
at last. Since I became rural economy secretary
in 2016, I have pressed relentlessly for the
issue to be resolved. I am therefore delighted
with the long-awaited outcome.
The review that was set up under Lord Bew,
with Scotland’s interests being represented
by Jim Walker, made the difference. I thank
Lord Bew for his diligence and for listening
to Scotland’s case. Of course, I also thank
Jim Walker, who was relentless, forensic and
persuasive. He has played a key role in our
success and we should all thank him for his
work.
I also thank all members across the chamber—in
this parliamentary session and the previous
session—for their continued support to achieve
this result. Finally, I should—and I will—acknowledge
the commitment made by the Prime Minister
to “right this historic wrong”. It would
be churlish not to do so.
The background to this long-standing issue
will be familiar to most members, but perhaps
not to everyone who is listening. In 2013,
as part of the most recent common agricultural
policy reform, the European Union set out
to redistribute direct payments more equally,
based on average euros per hectare. The intention
was that member states that were receiving
less than 90 per cent of the EU average rate
per hectare would close the gap by one third
by 2019, and achieve a minimum rate of at
least €196 per hectare. More important,
the United Kingdom qualified for such an uplift
only because Scotland’s extremely low average
rate per hectare reduced the UK average per
hectare rate to below the EU’s 90 per cent
threshold. Without Scotland, the UK would
not have qualified or received an additional
€223 million—around £190 million—from
the EU over a six-year period. Without Scotland,
the UK would have received nothing. Despite
that, the UK Government failed to return the
money to Scotland, to those recipients for
whom it was intended. Instead, the uplift
was distributed across the UK, with Scotland
receiving only just over 16 per cent, or £30
million, which was far below what was due.
At last, we can now put matters right. The
UK Treasury has confirmed that one half of
the £160 million—an initial £80 million—in
convergence moneys will be made available
to the Scottish Government in this financial
year. That was at our request, to allow farmers
and crofters to be paid as quickly and as
efficiently as possible. I therefore confirm
that the first instalment of £80 million
will be paid to active farmers and crofters
by the end of March 2020. It is also my intention
to allocate the remaining £80 million by
the end of March 2021, and I will confirm
arrangements for that once the funding is
delivered by the UK Government.
I have already made clear that the convergence
moneys will be ring fenced for agriculture
and land management. The approach I am taking
to allocating the funding is founded on two
core propositions. First, I take seriously
my responsibility to arrive at the fairest
and best decision that is true to the principles
of convergence. Secondly, this funding should
most help those who need help the most—those
who farm on our marginal land. Accordingly,
I asked Government officials to model an approach
to deliver on those two principles. Other
key considerations were activity, timeliness
and deliverability.
I have determined that the moneys will support
active farmers and crofters who currently
receive CAP basic payments. There will of
course be some in the industry who have retired
or whose farm businesses have changed since
2014. If we were to include them, we would
have to trace them through the system, calculate
what they might be due and do so for each
year since 2015. That would inevitably hold
up making payments to any farmer or crofter.
I consider it important to get the funds paid
as quickly as possible to active farmers and
crofters through a process that is simple
to deliver and makes it simple for them to
receive the money. We will therefore use the
current CAP architecture, data and activity
rules without requiring farmers and crofters
to apply for the funds. We could have come
up with a complex system with more targeted
payments and conditions, but that would have
taken much time to design. It would have required
farmers to apply and be assessed, to wait
to know the outcome, and ultimately wait to
be paid.
Farmers and crofters in Scotland have waited
long enough. My key consideration is ensuring
that those farmers who need support the most
receive most of the funding. I will therefore
also use those funds to deliver on my commitment
to do everything possible to avoid a reduction
in overall funding to the less favoured areas.
The approach that I have set out ensures that
the funding will go to where it was originally
intended to go. The document that I have shared
with members of the Scottish Parliament to
support this statement sets out how that approach
delivers on those core propositions and seeks
to provide helpful clarity and transparency
about how the funds will be deployed.
The first tranche of funding will be entirely
in the form of a direct payment to active
farmers and crofters and a significant proportion
will be a standalone area-based income support
payment comprising two elements. The first
element will be based on the existing basic
payment scheme regions, with an approach that
respects the principles of convergence.
The second element of the single payment will
ensure that my commitment to maintain funding
in the less favoured areas is met. There is
no doubt that the current uncertainty around
Brexit and its impact on farming is taking
its toll, not least on our beef sector. There
are undoubtedly long-term issues to resolve
in the sector to make producing beef a profitable
and sustainable enterprise, but we also need
to help the sector in the short term. So I
will also use the convergence funding to make
an additional payment under the existing voluntary
coupled support schemes and I will set out
more detail on how that will be achieved in
due course.
I am aware that others have promoted a different
approach. I want to assure members that I
have considered those carefully, but I have
concluded that the approach that I have chosen
achieves both the intent and the purpose of
convergence. There is no doubt that this one-off,
lump sum payment will come at an important
time—a wealth of evidence indicates that
Scotland’s farmers and crofters would be
worse off under every Brexit scenario. I hope
that the payment will provide some mitigation
of the disruption caused by the threat, and
potential reality, of leaving the EU. I hope,
too, that it provides Scotland’s farmers
and crofters with more evidence of the Scottish
Government’s willingness to do all that
it can to support them through hard times.
There is more work to do. I appreciate that
members may have questions about the details
of the approach, which I may not be able to
answer fully today—although I will do my
best.
The accompanying document will help in that
regard, and I am, of course, happy to update
Parliament as more details become available.
However, today is about marking a victory
for Scottish farming and crofting—money
that they are due is, at last, being repatriated.
I am glad that we are getting on with getting
the funding allocated as quickly as we can.
The Deputy Presiding Officer:
The cabinet secretary will now take questions
on the issues that were raised in his statement,
for which I will allow no more than 20 minutes.
It would be helpful if those who wish to ask
a question would press their request-to-speak
buttons.
Peter Chapman (North East Scotland) (Con):
I declare an interest as a partner in a family
business and as a member of NFU Scotland.
I thank the cabinet secretary for prior sight
of his statement. We all celebrated the successful
campaign by our Conservative MPs to repatriate
the £160 million from Westminster. [Interruption.]
Edward Mountain (Highlands and Islands) (Con):
Steady, Mr Lyle.
Richard Lyle (Uddingston and Bellshill) (SNP):
That is a good one, Peter.
Peter Chapman:
It is absolutely genuine.
I also applaud the fact that the £80 million
has been delivered to Scotland much earlier
than expected. It is, indeed, good to get
some extra money out to our hard-working farmers.
However, I am deeply concerned that an announcement
as to how the money is to be spent was made
to the press, and not to Parliament. On Tuesday,
there was no ministerial statement on the
order paper, and we had to push hard for today’s
statement. It is totally unacceptable to have
to drag ministers to the chamber to answer
questions.
More worrying still is how the cabinet secretary
is planning to share out the money. My understanding
is that most of the money will go to regions
2 and 3. It appears that the cabinet secretary
does not realise that Orkney, Tiree and Bute—to
name but three areas—are predominantly region
1 land, with 1.6 million hectares of region
1 land, two thirds of which are growing grass
and supporting livestock. Has he learnt nothing
about the crisis in our beef industry?
A further serious allegation surrounding the
announcement is the fact that the money has
been used to replace £13.1 million that was
taken from the less favoured area support
scheme budget.
The Deputy Presiding Officer:
Come to your question, please.
Peter Chapman:
That is money that the Scottish Government
received, and which has now been disgracefully
raided by Derek Mackay for other purposes.
The Deputy Presiding Officer:
Come to your question, please.
Peter Chapman:
How can Fergus Ewing possibly try to promote
the idea that he is a benevolent uncle while
at the same time stealing money from farmers’
pockets?
Fergus Ewing:
What I have announced today is funding of
the first tranche of £80 million for the
farmers and crofters in Scotland, the majority
of which funding will benefit those who farm
marginal land. That is exactly what Lord Bew
recommended, it is exactly what the money
was intended to achieve in the first place,
and it is exactly what we will do.
As far as the less favoured area support scheme
is concerned, I made it absolutely clear that
I would do everything that I possibly could
to maintain LFASS income. Although I do not
know whether Mr Chapman was listening at the
time, I stated in Parliament that convergence
funding would be used for that purpose, and
I made it clear during a recent meeting with
the NFUS. I have delivered on our promise.
I finish by saying to Mr Chapman that it has
taken six years, since 2013, for the United
Kingdom Conservative Government and its colleagues
here in Scotland to be shamed into admitting
that what it did—[Interruption.] Even now,
the Conservatives do not seem to accept it;
however, what the UK Government did in 2013
was a shameful injustice. It admitted that.
The Prime Minister said that it was a historic
injustice, and it took six years for the UK
Government to be shamed into agreeing to pay
that money back. By contrast, it has taken
us just over six weeks to come up with a system
to get that money out of the door, and to
get it done. I think that Scottish farmers
and crofters will notice that contrast.
Colin Smyth (South Scotland) (Lab):
Labour has long supported calls for the convergence
funding to be fully allocated to Scotland.
As such, we welcome the outcome of the review
by Lord Bew, and thank all those who delivered
the funding.
We also welcome the fact that the Government
has now set out proposals on how to allocate
the funding or, rather, part of the funding.
However, I share the concerns about that being
in the form of a press release at one minute
past midnight on Tuesday morning, rather than
to Parliament. Members have had to request
today’s statement, which was given to members
to read only a short time ago during portfolio
question time.
As the cabinet secretary said in his statement,
stakeholders such as NFUS and the Scottish
Crofting Federation had a range of views on
how the funding should be allocated. The one
thing that united all the stakeholders and
every Opposition party in this chamber was
the view that the funding should not be used
to plug the gap in LFASS or be siphoned off
to deliver commitments that the cabinet secretary
made but which he had no funds to back up.
However, that is exactly what he has done
and, in doing so, he has ignored the views
of Scotland’s farmers and crofters.
However the cabinet secretary allocates the
funding—
The Deputy Presiding Officer:
Will you come to your question, please?
Colin Smyth:
The long-term future of farming needs to be
addressed, so when does the cabinet secretary
expect to set out in detail the long-term
plans to properly fund agriculture, and to
allocate the funds that are needed to make
necessary changes in the future?
Fergus Ewing:
I respectfully disagree with Colin Smyth’s
opening remarks. I made it absolutely clear
in response to Mr Chapman that I am delivering
not only what I promised, but far more and
to a far greater extent, which I think is
accepted. I do not accept the characterisation
of the views of stakeholders that Mr Smyth
presented.
On Mr Smyth’s question about long-term issues,
as members know, in the motion that Parliament
passed in January, as amended by Mr Rumbles,
the Government was asked to set up an advisory
group to advise on precisely those matters.
We have done that. The group first met at
the Royal Highland Show and it has met subsequently.
It is doing that work and it will report,
through me, to Parliament in due course.
The Deputy Presiding Officer:
Front benchers are given quite a long time
to ask their questions. However, on this occasion,
both have gone well over that time, which
disadvantages their colleagues.
Maureen Watt (Aberdeen South and North Kincardine)
(SNP):
I congratulate the cabinet secretary on refusing
to give up and succeeding and on shaming the
Tories into righting that wrong. It is a windfall
for farmers and crofters that many had given
up on ever receiving. When they receive their
payments, will there be conditions attached
regarding how they are spent?
Fergus Ewing:
Under our approach, the first £80 million
instalment will be paid to eligible farmers
and crofters by the end of March next year.
Officials are working hard to start making
payments as soon as practically possible.
There will be no conditions attached regarding
what farmers can spend the money on. Farmers
and crofters will be able to utilise the money
not only by investing in their own farms and
crofts, but, where appropriate, by reducing
any debt that they have, which I know is a
serious problem for some in the sector. It
will make a substantial contribution to both
groups.
Edward Mountain:
I refer members to my entry in the register
of members’ interests.
Before I ask my question, I must raise the
issue of why the cabinet secretary thinks
that releasing information to the press before
giving it to Parliament is the right way to
do things. [Interruption.]
The Deputy Presiding Officer:
Members are asking you to raise your microphone,
Mr Mountain. They are obviously desperate
to hear you.
Edward Mountain:
Sorry. You put me under so much pressure,
Presiding Officer.
On convergence payments and where they went,
the cabinet secretary said that that was “a
scandalous act” and nothing more than a
“great rural robbery”, yet he is doing
that again now. He is taking £13 million
out of the money that should have gone to
farmers to top up the LFASS pot, which the
Government raided. Would it not be fairer
for the Government to pay that back to the
farmers first, and then pay the rest of the
money to farmers as allocated?
Fergus Ewing:
I completely reject that assertion. There
is no evidence whatsoever to back it up. I
will leave it at that.
Gail Ross (Caithness, Sutherland and Ross)
(SNP):
It is absolutely laughable that the Tories
are trying to claim any glory from the situation,
but there we are.
Farmers in my constituency and I welcome the
approach that the cabinet secretary has set
out. Will he explain why he decided not to
adopt the approach that was promoted by NFU
Scotland?
Fergus Ewing:
I was pleased to meet and discuss the matter
with the NFUS. There are several grounds of
commonality, because both the NFUS and I felt
that active farmers and crofters should benefit,
that each approach has advantages and disadvantages
and that the money should be paid out as quickly
as possible.
However, I disagreed with the NFUS’s view
that more money should be paid out to region
1 components, because I felt that more money
should be paid out to region 2 and 3 components.
We respectfully disagree about that.
I have already agreed to meet the chairman
of the NFUS LFASS committee and his members
as soon as possible. I think that those further
discussions will be fruitful, because I profoundly
believe that the modelling and methodology
that we have based our core principles on
are in accordance with the convergence principles
and will benefit those whom it was intended
to benefit most.
Rhoda Grant (Highlands and Islands) (Lab):
I agree with other members that the money
should not be used to plug the LFASS gap.
The money was given to the UK because our
Scottish farmers and crofters receive less
than 90 per cent of the EU average rate per
hectare, and the money was intended to close
that gap. Can the cabinet secretary tell me
how many Scottish farmers and crofters will
still receive less than 90 per cent of the
EU average and how many of those to whom he
is giving additional funding already receive
in excess of that amount?
Fergus Ewing:
The table that has been provided to members
shows an analysis of the average figures that
apply; it is not possible to show individual
figures. However, under the proposals, all
farmers in Scotland will benefit. The information
has been provided to members so that they
have as much information as possible before
them.
As far as the LFASS gap is concerned, the
position was set by Europe. Members will recall
that, following a consultation in 2016, it
was agreed between stakeholders and ministers
that, in the short term, the best option to
provide stability for crofts in our constrained
areas was to retain LFASS and that moving
to an areas facing natural constraint scheme
would result in redesignation of our constrained
areas, which would have resulted in the redistribution
of funding across Scotland. That was perhaps
why stakeholders and ministers agreed not
to proceed in that way in 2016.
John Finnie (Highlands and Islands) (Green):
I thank the cabinet secretary for early sight
of the document. This is, indeed, a victory
for Scotland’s crofters and farmers, and
people are to be congratulated on that, including
repentant sinners. The cabinet secretary talked
about the time to design a scheme, and I get
that he wants that done with some speed. However,
is there any latitude to revisit the situation
of those who have retired since 2014?
Fergus Ewing:
The majority of farmers and crofters who are
farming now will have been farming in 2014
and will therefore benefit over the next two
years’ payments. It is fair to point out
that the majority of those will benefit. Mr
Finnie is right, however, to point out that
some will not because they will have retired
or, sadly, passed away.
However, I do not believe that the purpose
of convergence money is to pay people retrospectively.
I understand and sympathise with the case
that Mr Finnie makes, but I do not think that
it would be right to use the money for that.
In addition, to have backtracked payments
in that way would have required an exercise
of labyrinthine complexity that could have
tied up our systems for a couple of years
before any payment could have been made. That
is certainly not what anyone wishes. I believe
that I have the support of the main stakeholders
for my approach. Mr Finnie has raised a fair
point that I understand, but I think that
we are doing the right thing.
Emma Harper (South Scotland) (SNP):
I welcome the cabinet secretary’s statement.
The payment in question is not the only payment
that the Scottish Government will provide
to farmers and crofters. Can the cabinet secretary
update us on what payments farmers and crofters
have already received this year and how that
compares to what is happening elsewhere in
the UK?
Fergus Ewing:
Yes, I can. So far, 13,837 farmers and crofters
have received their national basic payment
support loan payments, which are worth more
than £334 million. The loans are the single
biggest mitigation action that Scotland can
provide to our farmers as they face the challenges
of Brexit. We were the first Administration
to offer loans and to make the loan payments.
Indeed, I believe that our farmers and crofters
will have received their money around two
months earlier than their counterparts in
England.
Mike Rumbles (North East Scotland) (LD):
The Liberal Democrats welcome the cabinet
secretary’s statement, how he will distribute
the £80 million of convergence funding this
financial year and, in particular, the fact
that farmers and crofters will not have to
apply for the payments. Will he use the same
distribution formula when the Scottish Government
receives the second tranche of £80 million
in 2021, or—and I think that this would
be very helpful—will he take time to analyse
the effectiveness of his choices for distributing
the first £80 million?
Fergus Ewing:
Mr Rumbles makes a very important point, which
I am pleased to have the opportunity to emphasise:
no farmer or crofter needs to make an application.
No one needs to pore over a form, worrying
about how to fill it in or whether they will
make mistakes. The funding will be paid using
existing data and systems. That is one of
the many benefits of the system—[Interruption.]
The Tories do not like it; indeed, they do
not seem to like anything at all about this,
but there we are.
Mr Rumbles asked about the second tranche
of funding. The second £80 million has been
promised to us in the next financial year.
We already have a plan to apply the same approach,
to avoid a process with an application form.
We have provided the detail to members about
the core principles, the basis of the methodology
and the percentages that are to be applied
to regions 1, 2 and 3. There are elements
of the methodology that have yet to be finalised;
we hope to do that next week in respect of
the first payment. We intend to apply the
same approach in general terms to the second
payment, when it is received. I will fully
update Parliament—as I always freely and
happily do—in due course.
Dr Alasdair Allan (Na h-Eileanan an Iar) (SNP):
Clearly, it is a great result for Scotland’s
crofters and farmers to get these moneys,
which have been withheld from them for so
long by the UK Government. Does the cabinet
secretary recognise that it is worth continuing
to uphold the principle of recognising the
needs of crofters and farmers on the least
favoured land, which the Scottish Crofting
Federation and others have successfully argued
for?
Fergus Ewing:
The short answer is yes. Some 85 per cent
of agricultural land is classified as less
favoured, and support is vital to maintaining
farming and land management in areas such
as the Western Isles, which Dr Allan represents.
Scotland is the only part of the UK that provides
additional support to our most marginal farmers,
especially those in crofting in the hills
and uplands. I have supported that principle
in the past, I support it in the present and
I will support it in the future.
Finlay Carson (Galloway and West Dumfries)
(Con):
Will the cabinet secretary outline his plans
for the distribution of the second instalment
of £80 million? When the time comes, will
he once again repeat the “great rural robbery”
and raid the convergence coffers—this time
for £40 million for his LFASS shortfall—and
again ignore the experts from the agriculture
industry?
Fergus Ewing:
I have heard of a brass neck, but the member
must have been applying the Brasso last night
to remove the tarnish. That is an absurd proposition.
We are paying back money—£80 million—that
was wrongfully withheld for six years by the
Conservatives. We will pay the second £80
million once we receive it. We will not do
that before we receive it, because we try
to run finances prudently. [Interruption.]
The Cabinet Secretary for Environment, Climate
Change and Land Reform (Roseanna Cunningham):
And who can trust the Tories? We cannot trust
them.
Fergus Ewing:
Who can trust the Tories? The great irony—perhaps
the Tories would like to listen to this—is
that the Prime Minister has admitted that
what took place in 2013 was a great injustice,
but the Scottish Tories cannot bring themselves
to admit that fact, even now.
The Deputy Presiding Officer:
If the last two questioners are fairly succinct,
I will get them both in.
Stewart Stevenson (Banffshire and Buchan Coast)
(SNP):
The argument has always been with the UK Government,
which distributed the money from Europe to
farmers elsewhere in the UK. Can the cabinet
secretary confirm that no farmer elsewhere
in the UK who received the money when they
should not have done will be disadvantaged
by what is happening? Our friends and colleagues
in the important agricultural industry elsewhere
equally deserve our support .
Fergus Ewing:
I made it clear to Lord Bew, to whom I gave
evidence, that Scottish hill farmers have
an affinity with hill farmers in other parts
of the UK. We took a reasonable approach.
That underlay our ability to persuade Lord
Bew and his colleagues to benefit Scotland
in the way that has emerged from the work
that they did.
The money is a great boost. Contrary to the
nonsense that we have heard from the Tories
today, every farmer and crofter will benefit.
However, it is a short-term boost, and much
uncertainty remains, especially because the
UK Government, having said in the Brexit referendum
that it would match EU money, is now, Treasury-driven,
promising to end direct payments by 2027.
The Deputy Presiding Officer:
That concludes questions on the statement.
I apologise to Ms Beamish, who did not manage
to get in.
