The Deputy Presiding Officer (Linda Fabiani):
The next item of business is a statement by
Fergus Ewing on the repatriation of convergence
funds that are owed to Scottish farming. The
cabinet secretary will take questions at the
end of his statement, so there should be no
interventions or interruptions.
16:33
The Cabinet Secretary for the Rural Economy
(Fergus Ewing):
This Government, with the support of this
Parliament, has been campaigning for many
years for the repatriation of the European
Union convergence funds that are owed to Scottish
farming. We have been united in our endeavour
to achieve that and I thank all members, across
all parties, for their support and efforts.
There have been developments since the issue
was previously discussed in the chamber, on
which I want to update members.
First, I think that it would be helpful to
set out the circumstances and history behind
the issue. In 2013, the EU announced that
a process of external convergence should occur
between member states, as it considered that
historic allocations of common agricultural
policy support, which were based on production
levels in the 1990s and early 2000s, were
no longer meeting the objectives for farming
and food production. Therefore, any member
state whose average direct payment rate was
less than 90 per cent of the EU average in
2013 would be awarded a convergence uplift,
to take it at least to €196 per hectare
by 2020.
England, Wales and Northern Ireland were each,
on average, already above the 90 per cent
of EU average convergence threshold in 2013.
However, direct payments in Scotland were
significantly lower on average, at €130
per hectare. Indeed, they were low enough
to pull the overall United Kingdom rate below
the convergence threshold.
As a result of Scotland’s low payment rate,
the UK was awarded an uplift of €223 million
of additional CAP funding to cover the 2014
to 2020 period. Despite the fact that the
EU’s rationale for convergence funding was
to narrow the payment gap across the EU, the
UK Government chose to distribute the money
across the UK Administrations based on the
historic allocations formulae that were used
for all other CAP money allocations. That
meant that Scotland received only 16.3 per
cent of the uplift, despite being the only
part of the UK that was, on average, below
the EU’s convergence threshold.
There is no doubt that that was neither equitable
nor within the spirit of the EU’s aims for
convergence. The Scottish Government tried
to prevent it from happening, my predecessor,
Richard Lochhead, corresponded furiously with
his UK Government counterparts and the Scottish
Parliament agreed unanimously to support the
case for repatriation of the convergence funding,
but all to little avail. The UK Government
would not budge.
On being appointed Cabinet Secretary for the
Rural Economy, I took up the cudgels and was
determined not to lay them down again until
every avenue had been explored and every effort
made to win Scotland’s case. In October
2017, I brought the issue back to Parliament
to secure on-going support from across the
chamber. In addition, I engaged stakeholders,
including NFU Scotland, the Scottish Tenant
Farmers Association, Scottish Land & Estates,
the Scottish Beef Association, the National
Sheep Association in Scotland and the Scottish
Crofting Federation, all of which agreed to
work in partnership with us to press the case
with the UK Government. They did so, and I
thank them all for helping to keep the matter
firmly at the forefront of UK ministers’
minds.
The UK Government might have imagined that
the issue would fade away with the prospect
of Brexit, but if anything, that only served
to underscore the urgency of the matter and
the necessity of resolving it. Therefore,
I determined to raise it at every opportunity
with the then Department for Environment,
Food and Rural Affairs secretary, Michael
Gove. Although I suspect that I might simply
have worn him down, in fairness, I must convey
my gratitude to him for finally agreeing,
in late 2017, to conduct a review. We might
not have got the terms of reference that we
wanted—they were changed such that the focus
of the review would be solely on future funding
allocations; I understand that that change
was made at the behest of the UK Treasury—but,
under the chairmanship of Lord Bew, a review
has been undertaken. First, I thank the Scottish
Government officials for their input to making
Scotland’s case robustly to the panel. Secondly,
I thank Scotland’s representative on the
Bew panel, Jim Walker, for his sterling efforts
on behalf of Scottish farming and for all
the time that he has devoted to the task.
Jim has ensured that Scotland’s case and
voice have been heard. He has applied himself
to the task that was asked of him with customary
gusto and tenacity—frankly, we could not
have asked for more.
I understand that the review has reached its
conclusions, and I look forward to those being
published. I hope that the review panel has
accepted Scotland’s case as being substantial
and compelling. Support has come from perhaps
surprising quarters in recent times. Many
people might have been surprised that Boris
Johnson, in his campaign to be elected to
lead the Conservative Party, unequivocally
promised to pay out additional funding to
Scottish farming in 2020 and again in 2021.
Although I do not intend to make a habit of
it, I am happy on this singular occasion to
say that I agree with the Prime Minister that
we must
“make sure that Scotland’s farmers get
the support that they are owed.”
Where I would disagree with him is on the
idea that this “historic injustice”—to
use the phrase that he deployed—came about
as a result of the CAP. It was caused entirely
by his predecessor Government.
What matters now is that Boris Johnson is
willing to put matters right. Therefore, I
welcome his further pledge, which was given
to a Scottish National Party MP in the House
of Commons, so to do. What concerns me is
that subsequent exchanges with DEFRA, and
exchanges that my colleague Derek Mackay has
had with the Treasury, have not confirmed
that the £160 million that Scotland is owed
will be transferred.
My intention today is to encourage this Parliament
to unite once again in calling on the Prime
Minister to make good his promise and to do
so swiftly. Further, I hope that I can secure
support in affirming, as we did in a debate
earlier this year, that agriculture is a devolved
competence—it is a policy responsibility
that we have been dealing with for two decades
now—and that we send the very clear message
to the Prime Minister, to DEFRA, to the Treasury
and to anyone else in the UK Government who
needs to hear it that if we receive the £160
million owed to Scottish farming, and indeed
the future allocations as pledged, all the
funding comes without strings. There can be
no attempt to bind or determine how the funding
is to be used or disseminated—that is this
Parliament’s responsibility
I want to reassure members about this Government’s
intentions should we receive what we have
been promised. I have secured the agreement
of my colleague Derek Mackay, the finance
secretary, that all additional convergence
funding received will be ring fenced for agriculture.
That is only right and proper, given its origins
and its purpose, and that is what this Government
will do. I understand that people want to
get on with spending this funding, but I caution
them that we have yet to receive any funding
and we cannot spend warm words.
Today, I hope that we can come together as
a Parliament and focus on the final part of
this six-year-long campaign to ensure its
success and the delivery of the funding that
is owed to Scottish farming. In doing so,
I offer the reflection that this Parliament
is often at its best when we can act together
and support with one voice a campaign to repatriate
money that, plainly, is in the interests of
our farmers and crofters, who face very real
and pressing challenges in the short and medium
term, as we all know.
Therefore, I urge all colleagues in all parties
to use today’s opportunity to reaffirm their
support for the repatriation of the convergence
funding that is owed to Scottish farming,
in the hope and belief that our collective
efforts will shortly result in success. Scotland’s
farmers and crofters deserve no less.
The Deputy Presiding Officer:
Thank you, Mr Ewing. The cabinet secretary
will now take questions on the issues raised
in his statement. We need to be very prescriptive
today—I can allow 18 minutes for questions
and then we will move on.
Peter Chapman (North East Scotland) (Con):
I declare an interest as a partner in a farming
business.
I thank the cabinet secretary for prior sight
of his statement. We all agree in this chamber
that the EU convergence fund should have come
in its entirety to Scottish agriculture. There
has always been cross-party support for that
stance. The cabinet secretary recognises many
of the organisations that have made that argument,
but he neglects to mention the 12 new Scottish
Conservative MPs who were elected last year,
who have also been working hard to achieve
a successful result.
The Prime Minister has promised to deliver
the fund to Scotland and we will hold him
to account on that promise, but given the
complete lack of planning by this Government
for future agricultural support, how does
the cabinet secretary propose to spend this
money when it is delivered? It will not be
acceptable to spend the money on any one sector
of Scottish agriculture. It must be delivered
right across all sectors, not just used to
plug the hole in less favoured areas and LFASS—less
favoured area support scheme—payments that
has been created by this Government’s inability
to plan ahead. Can the cabinet secretary promise
that he will not use it to do just that?
Fergus Ewing:
I think that I discerned support there for
the campaign—
Richard Lyle (Uddingston and Bellshill) (SNP):
Just.
Fergus Ewing:
Just. It was a positive start and I welcome
that.
I also welcome the fact that politicians who
are elected representatives from Scotland
have supported this campaign. In all seriousness,
I think that when we can act together, it
helps to deliver results. I hope that that
will be the case on this occasion. That is
why I am approaching the debate in this way.
As to the disbursement of the money, if I
promise to you, Presiding Officer, that the
cheque is in the post, I suspect that your
reaction may well be one of scepticism. I
make it clear that not only is the cheque
not in the post, but it is not yet signed.
Richard Lyle:
It is not even written.
Fergus Ewing:
Indeed. Therefore, it is premature to start
spending money that we do not have. That is
a pretty solid message that every farmer in
Scotland would understand. However, I have
already given the absolute assurance that
Mr Mackay—whom I have consulted on the matter
in the formal way that is absolutely appropriate
in Government—has confirmed that the money
will be used solely for Scottish agriculture.
That assurance, which I have announced today,
is welcome.
Mr Chapman used the phrase “plug a hole”
in relation to LFASS funding. That is not
correct, because there is no hole in LFASS
funding. The problem is that the rules that
attach to LFASS mean that the payments might
have to go from 100 per cent to 80 per cent
next year. I have previously indicated my
determination to do what I can to maintain
income for hard-pressed farmers—our hill
farmers and other LFASS farmers—who perhaps
need it the most. I fully intend to make good
on that promise. It would help if the UK made
good on its promise, which would allow us
to provide a real boost to agriculture in
these challenging times.
Colin Smyth (South Scotland) (Lab):
I thank the cabinet secretary for providing
advance sight of his statement.
Labour fully supports all efforts to end the
convergence funding injustice and to give
Scotland’s farmers what is rightly theirs.
We should remember that it was as a result
of Scotland’s low CAP support payment per
hectare that the UK was awarded the convergence
uplift in the first place. We urge the UK
Government to set a date for the publication
of the Bew review as a matter of urgency.
The cabinet secretary will know that those
who receive the lowest level of support are
Scotland’s hill farmers and crofters. Will
he therefore ensure that the funds will be
used for convergence, which would mean that
hill farming and crofting are prioritised
in any allocation of support in future?
Fergus Ewing:
I genuinely welcome the support from Colin
Smyth and the Labour Party. I hope and expect
that there will be support from across the
chamber. Let us be clear that if we argue
among ourselves all the time, it is more difficult
to achieve things for Scotland. What gets
me up in the morning is doing good for Scotland
and, in this case, righting a wrong that has
existed for six long years.
Colin Smyth makes the good point that many
of those who are in the greatest need are
those who farm in our marginal uplands, our
hill farms and our island areas. It is therefore
right that they should benefit from the convergence
moneys, if the promise is indeed implemented
by the Prime Minister. We agree in principle
that that is the case, but the member will
forgive me if I want to see the colour of
the money and have it in the bank account
before we announce decisions on how to spend
it.
The Deputy Presiding Officer:
We will move on to open questions. If we have
succinct questions and answers, we should
get through them all.
Emma Harper (South Scotland) (SNP):
I thank the cabinet secretary for his continued
pursuit of the convergence moneys. Will he
explain a wee bit more about what the Bew
review was set up to do? Will he join me in
calling on the Secretary of State for Scotland
to urge his Cabinet colleagues to right this
wrong?
Fergus Ewing:
The original terms of reference of the Bew
review included looking at why the €223
million was not applied to Scottish farmers,
as was intended by the EU. That was Michael
Gove’s intention, as discussed on 6 November
2017 and again in February 2018. However,
the Treasury appears to have intervened and
altered the terms of reference so that, instead
of looking at what happened and why it happened—why
UK Government ministers took the decision
not to provide the money to Scottish farmers
and what advice was given to UK ministers—the
review’s remit was solely to look at the
next two years and the convergence moneys
that are expected to be available for them.
Although we welcome that limited remit, it
does not implement the promise that Owen Paterson
first made six years ago.
Edward Mountain (Highlands and Islands) (Con):
I refer members to my entry in the register
of interests.
In a rare moment of agreement with the cabinet
secretary, I also think that the convergence
moneys should have come to Scotland—and
they will. Will the cabinet secretary guarantee
that the farmers who were disadvantaged by
that historical injustice will be top of the
list when ensuring that the situation is righted?
Fergus Ewing:
Again, I welcome that statement from Mr Mountain,
and those from all members who are supporting
this case so that it is followed through and
payment made. I, too, hope and expect that
payment will be made. It is a very serious
situation and there is a real opportunity
that I intend to make the most of.
In direct response to his question, I say
yes, plainly, those who have been farming
land that is of the low average yield per
hectare should be entitled to benefit from
the convergence money. A lot of solid work
will need to be done to make sure that they
are. As Mr Smyth said, they are among those
who need help most. Just a couple of weeks
ago, I met many of them at the Lochaber show
with my colleague Kate Forbes, and they are
having a tough time, as are farmers throughout
the parts of Scotland where farming is a tough
existence and job. Therefore, I am determined
that they should benefit from the convergence
money—once, of course, it is in our bank.
Stewart Stevenson (Banffshire and Buchan Coast)
(SNP):
I welcome the comments from the Conservative
members that indicate that the money should
come to Scotland. Does the cabinet secretary
share my concerns that the decision-making
power regarding how it may be distributed
might be retained at Westminster? I say that
in the light of remarks from the new Secretary
of State for Scotland about the UK Government
taking control of spending money in Scotland.
Is that simply a new minister being naive,
or is he being mendacious?
Fergus Ewing:
I do not think that I am going to stray into
talking about mendacity today, as you may
be pleased to hear, Presiding Officer, but
I have some concerns that there have been
a number of suggestions—I will not go into
them all, as there is not enough time—that
there may still be some intention to attach
strings to how the money should be deployed,
should it be repatriated. That would be entirely
wrong. It would be a breach of devolution
and a predation of our powers, and we would
not be willing to accept such conditions.
However, I hope that reason will prevail and
that that will not be the case. I hope that
I have also clearly indicated that there is
reasonable common ground about the main thrust
of how the lion’s share of the funding should
be deployed.
Rhoda Grant (Highlands and Islands) (Lab):
I, too, support efforts to get those convergence
funds back to Scotland and the cabinet secretary’s
indication that the funds will be directed
to those in the most disadvantaged areas.
Would the CAP information technology system
be able to distribute those funds, especially
if they are to go to those most in need?
Fergus Ewing:
I am confident that the CAP system and its
operation would not be an obstacle to the
distribution of funds. I should say that those
are funds that were intended to have been
distributed over the seven-year period between
2014 and 2020. It was not intended that the
money be distributed from 2019 onwards. Therefore,
we have to be careful in examining the strictures
of the CAP system in terms of state aid—in
particular, the de minimis rule—and in weighing
that up.
Of course, the EU intended that those who
most needed this money should get it, therefore
I hope and am confident that we will be able
find a way for that to happen.
John Finnie (Highlands and Islands) (Green):
I commend the cabinet secretary and his predecessors’
efforts on the matter, and I roundly condemn
the duplicitous UK Government for its treatment.
The cabinet secretary talked in his statement
and in a reply about doing good for those
in need, and said that the money would be
directed to agriculture. Is there an opportunity
to do good and address need by directing some
of the divergence money to the croft house
grant scheme?
Fergus Ewing:
The croft house grant scheme is pretty much
separate from the convergence funding. I had
not thought of that. I am happy to consider
any suggestions that I get, including from
Mr Finnie if he wants to write to me on the
matter.
From memory, I would say that the croft house
grant scheme has been extremely helpful in
enabling us to help several hundred crofters
throughout the mainland Highlands and particularly
in the Western Isles, in Dr Alasdair Allan’s
constituency, and I have been a forthright
advocate and a determined deliverer of funding
to do just that.
It is an interesting point and I will consider
it, but my first reaction is that that is
not quite what the convergence money was intended
for.
Mike Rumbles (North East Scotland) (LD):
I agree that the funds should be due to Scottish
farmers and crofters, but the varied statements
of our Prime Minister on so many varied issues
might not be so very sound. Having asked for
Lord Bew’s review, and the review having
reached its conclusions, will the Scottish
Government accept its findings when they are
published and does the cabinet secretary expect
the Prime Minister to accept them, too?
Fergus Ewing:
I am hopeful that the findings will be admirable
ones that we can support. I had the opportunity
to give evidence to Lord Bew and I thought
that the response that I had from him and
his team was very positive. I got the impression
that they understood the arguments and that,
perhaps, there was a tacit acceptance of the
arguments, which are not very complicated.
I am hopeful about the results. I do not think
that I could say in advance that we accept
the conclusions of a report that has not yet
been delivered, but I am hopeful that the
Prime Minister, who has made one of the most
unequivocal promises that I have ever seen
in 20 years in politics, will make good on
that promise. I hope and expect that that
will happen, and sooner rather than later.
Dr Alasdair Allan (Na h-Eileanan an Iar) (SNP):
The issue of convergence funding is not made
any easier or fairer as the prospect of a
no-deal Brexit draws closer, with potentially
disastrous consequences for sheep and beef
producers in the Western Isles. Beyond the
very welcome loan scheme that is now under
way, what else can be done to provide some
much-needed financial clarity for farmers
and crofters as they make their plans for
the future?
Fergus Ewing:
The position is that, on the loan scheme in
respect of the pillar 1 payments, we have
issued 15,570 offers, which are worth €394
million. This is entirely separate from convergence.
That represents 95 per cent of the eligible
population. After the first week, over 7,500
loan offers have been returned. I urge all
farmers and crofters in Dr Allan’s constituency
to return their offers as quickly as possible.
If they do so, the intention—and my expectation—is
that we will deliver payments of nearly €400
million, if everybody accepts their offers,
within as early a period as possible, starting
in the first week in October.
I praise the team of officials in the rural
payments and inspections division that has
been administering the scheme, which is very
complicated. They have now done it for a few
years. This is money that farmers and crofters
will receive before Hallowe’en—before
31 October and the possibility of a no-deal
Brexit—and it is money that will go into
the rural economy to pay the bills of feed
merchants, contractors and other parts of
the supply chain in the agriculture sector.
This is a very important piece of work, and
it is probably the main practical thing that
we are doing to prepare to mitigate as far
as we can the consequences of a no-deal Brexit.
The Deputy Presiding Officer:
That concludes questions on the ministerial
statement on the repatriation of convergence
funds that are owed to Scottish farming. I
apologise to Donald Cameron, David Torrance,
Alex Rowley and Richard Lyle for being unable
to take their questions.
