Oral evidence: The Work of Defra, HC 321

Oral evidence, 13 June 2018.

Witness

Rt Hon. Michael Gove MP.

Chair

Good morning, Secretary of State. You are absolutely bang on time and, as we are televised, we are being televised now, so very much welcome.

Michael Gove

Thank you.

Chair

We are very pleased to have you before us. We have quite a wide‑ranging lot of questions this morning. I am sure you will be more than capable of answering them, so shall I get straight into the questions? The first one I want to say to you is: are you confident that Defra will achieve everything it is set to do in the Parliament? We have taken on an awful lot more extra staff. I am just quite intrigued as to the management of those extra staff and how you feel it is all generally going.

Michael Gove

Well.

Chair

Could you expand a little bit on that?

Michael Gove

Yes. The first thing to say is that it is just over a year since I was fortunate enough to be appointed to this post. During that time, my admiration for the staff in Defra and across the family of arm’s‑length bodies for which Defra is responsible has only increased. Under the leadership of Clare Moriarty, the Permanent Secretary, we have been able to add to our numbers. Of course, it is invidious to name names but there are people who have come from the Cabinet Office, from the Treasury and from other Government Departments of the very highest calibre to join those already there. I set out seven areas that are personal priorities for me where we want to see change, and we can perhaps touch on those during the course of our time together. I have been struck by the fact that we have been able to make progress in all of those areas, and, of course, that is as well as performing what one might call the business‑as‑usual functions: those things that Defra has to do anyway, irrespective of the ambitions or hopes of any particular Minister or Prime Minister. There are, of course, areas where Defra performance in the past has been weaker—the delivery, for example, of Countryside Stewardship—but, again, changes are in train in order to ensure that we can better deliver on those areas where we have been weak or patchy in the past.

Chair

On the stewardship schemes, and sometimes with the Rural Payments Agency, the problem we have is that it has gone on rather a long time and it seems to be rather repetitive. We seem to get the same old problems reoccurring, very often created by themselves: by the agencies, not just by farmers and landowners making the application. I would make a plea that, at some stage, we really do have to get to grips with it.

Michael Gove

Yes, you are absolutely right. There are different but overlapping issues with Countryside Stewardship and with the BPS scheme. Some of the problems—and we will touch on all sorts of questions, I know, related to our departure from the European Union—arise not necessarily intrinsically from our membership of the European Union but because of decisions that have been taken during our time as members of the European Union.

Chair

Yes, and I know some of the rules of the European Union do not help, but there are times when we do not help ourselves as well, and you would probably accept that.

Michael Gove

Very much.

Chair

On the stewardship scheme, we will talk a bit more about it later, but there is a line of thought now that there are schemes coming up for renewal now—this year and next year—so would it be better to roll those schemes on until 2021 and then do the new schemes rather than try to reallocate them and do them? The trouble is, Secretary of State, that farmers are finding them very complicated. They are still waiting. I had a farmer who made an application in September and still has not heard whether they have been accepted. What worries us is that you might get people leaving the stewardship schemes when you probably want more people in them as we move to this new agriculture policy, which leads me into my next question, in some ways. Have you given that consideration?

Michael Gove

Yes, absolutely. You are right. One of the big problems that we have is that the imperfect delivery of existing Countryside Stewardship schemes has meant that people who would otherwise be undertaking environmental enhancement and improvement, and being rewarded for it, are not in those schemes and are wary about future schemes as well, absolutely.

Chair

This is absolutely fundamental to your thoughts, I would believe, on a new environmental and agricultural policy. If we are going to take the farming community and the rural landowners with us, they have to have more confidence than they do at the moment in the agency delivering. There is very little confidence out there on the ground, because of the time and the complexity. They just do not hear from the agency for months, and then, when they ring them, they get different people all the time. I know you cannot organise all that but certainly, within the Rural Payments Agency before now, there have been dedicated case officers and others. It is no good just saying—dare I say it—that it will get better. It has taken an awful long time to get better and I do not really see any signs of it getting better. That is the trouble.

Michael Gove

You have put it perfectly. I would not disagree with that.

Chair

We can be confident that, when you next come here in a few months’ time, it will all be perfect.

Michael Gove

No, it will not be perfect but there are changes coming. I hope the Committee will approve of those changes but you will certainly be hearing about them before the next meeting.

Chair

You are naturally very much aware of the situation.

Michael Gove

You betcha! I do not want to go into some of the conversations that we have had, but there have been some tough conversations about the failure to deliver so far.

Chair

Your PPS is smiling behind you, so I think there probably have been one or two conversations. We will say no more. The next question is on the agricultural Bill. What is the next stage in the development of the agricultural Bill? How long are Health and Harmony, and all the responses, going to be monitored? When will we see the great Bill itself?

Michael Gove

I hope that the Bill will be published before the recess. That is our aim.

Chair

Before the summer recess?

Michael Gove

Yes. That is our aim. Therefore, as you will appreciate, with 44,000 responses and with some binary policy questions—you either go for A or B—as a result of that, we are working through those. We have recruited some brilliant people from across and from outside the Civil Service to help make sure that we are in a position to bring forward legislation that will meet the scale of the challenge ahead.

Chair

A lot of people are sometimes a little cynical when you have a consultation as to whether their views ever get through Government and get through, so can you reassure us all this morning that the points that have been made in those 44,000 submissions will be monitored thoroughly? It is whether they are taken into consideration at the end, really.

Michael Gove

To give you a case in point, right at the very beginning, I had argued that one of the inherent unfairnesses in the BPS system is that it allocated more money on the basis of the size of productive agricultural landholding to people who were already wealthy. I thought that the right thing to do was to have some form of cap. One thing that has come through very strongly in the evidence from people across farming is that they would prefer there to be the same proportionate reduction for all farmers who are in receipt of BPS. We are looking at that argument and at potential alternatives between the two.

Chair

You are looking at a form of syphon, really, but a percentage one across all payments.

Michael Gove

Exactly. A strong argument has been made. We were discussing with officials in the Department on Monday and we are having another meeting to look at the different impacts on different sectors, much as you recommended in your report, to make sure that, if we do take things forward, we can justify them in public policy terms, but we can also know what the impact is on the ground.

Chair

You are now doing impact assessments, sector by sector, are you? We felt this was a slight weakness within Defra at the moment. We have not really seen any details of that, so can we be reassured that that is being done?

Michael Gove

Yes. Again, to be fair, a lot of work was already going on. Since I have arrived, we have refreshed the team of non‑executive directors. Again, without naming names, some of our new non‑executive director team have direct, hands‑on experience of farming. We have benefited from one of the non‑executive directors pointing out, from the point of view of a beef farmer, what some of the consequences of the proposed changes might be. We were already thinking about the ways in which our changes would have—again, as your report brought out—particular impacts on the livestock sector, particular impacts on cereals and, as we had already make explicit, particular impacts on upland and, in particular, sheep farmers as well.

Chair

The issue with the basic farm payment is that, if you have a very intensive business with a big turnover—say, a large dairy unit—your basic farm payment is important but it is nowhere near as large a percentage of your income as it would be for an extensive beef or sheep farmer. That is the bit where, sector by sector, there really are some differences. Quite how we deal with that when we look at it, I am not certain, but it needs to be really flagged up. I can be reassured that the Department is doing that.

Michael Gove

That is exactly what we are wrestling with at the moment, yes.

Julian Sturdy

Michael, I wanted to touch on something you just said regarding the evidence that has come in. You are saying, basically, that you are relooking at the capping system and that it might syphon down, so everyone who gets payments will lose a certain percentage of their payments.

Michael Gove

Yes.

Julian Sturdy

If you decide that that is the route to take—and you say that evidence has come in through the inquiry that might push you down there—would that not have a much bigger impact on those smaller farmers who are much more reliant, whether it is livestock or small tenant farmers, on these payments than the larger landowners, who are much more efficient, which is a good thing, but are generally less reliant on that payment to keep their businesses going?

Michael Gove

You have put your finger on it. One of the reasons why I originally put the case forward for a cap was precisely the argument that you have outlined. We are holding these things in balance, so no definitive decision has yet been made; we are just debating it. The interesting thing is that, when I went to a consultation at the NFU organised in Warwickshire, but more particularly when I had conversations last night with farmers who had come down from County Durham—three out of the four of them upland sheep farmers, and one of them a lowland arable farmer, but all from north-west Durham—as it happened, they were all in favour of everyone taking, proportionately, a small slice in reduction. Their argument was: we see farming as a chain; we do not see ourselves operating in isolation. Their other, related argument was: everyone has to recognise that change is going to come, so a small reduction—but a reduction for everyone—means that nobody can be under any illusions that they have to think about what that change might be. I was very struck by the fact that these guys were precisely the sorts of farmers about whom you have expressed concern, and they were clear in their view. As I say, that was just one group.

Chair

“Small reduction” is an interesting phrase. What do you mean by a “small reduction”—5%, 10%, 20%? Where are you, Secretary of State?

Michael Gove

Not as big as 20%. That is what we are modelling at the moment: what the proportionate change would be in order to release the money that we talked about in Health and Harmony, in order to create some of the pilot schemes, which, going back to your earlier point, we need to make sure are well designed if people are going to adopt them.

Chair

I accept that you need money if you are to be able to change the system, but “a small percentage” is an interesting statement; that is all. We will await with interest as to what percentage that is.

Alan Brown

In the same kind of thought process that Julian had there, if you think a cap is needed because the wealthy are making too much money, and then everybody just takes a small proportion, surely that is still disproportionately allocating money to the wealthy landowners, who you seem to think do not require that money. Surely, a straight cut across the board is too blunt an instrument as well.

Michael Gove

My starting point was your starting point, but the interesting point about having a consultation is that, if you have farmers—large and small—making a particular case, we need to bear it in mind, although no definitive decision has yet been taken. If it was simply, for the sake of argument, a group representing the larger landowners that was making that case, naturally, like you, I would be a bit wary. What was interesting is the extent to which that was the view of the NFU as a corporate body, but also the view of a number of smaller farmers, so it is something that we are weighing at the moment.

Alan Brown

How do you weigh up what the appropriate small, proportionate cut is in order to recirculate the savings into the other schemes?

Michael Gove

That goes back to the point that the Chairman made, which is that we are looking at models of what impact these changes might have on particular sectors, and what our future model of funding might do for particular sectors as well. As I have said and as George Eustice has said in front of the Committee, the future for individual sectors does not depend simply on the support they get from the state through BPS or any successor set of schemes; there are other things that we can do or other things that will influence the profitability of those businesses, but it is a big part of it.

Dr Johnson

You talked about the percentage being across the board, so do you envisage a system like the income tax system, where those smaller farmers get a smaller percentage reduction than the larger farmers, or do you envisage the same percentage being applied to farmers of all size? As a follow‑up to that, do you envisage a level of support below which you would not go?

Michael Gove

Yes. The analogy with the income tax system is a very good one. We are thinking that, yes, even if we say all farmers, perhaps there is a point beyond which you would not go in terms of viability. Then the other argument is, exactly as you say, that nearly all farmers face a percentage cut, apart from those below that threshold, and then larger farmers face a slightly larger percentage cut—a higher band, as it were.

Chair

Would it be 20% tax and 40% tax? You have been given an analogy.

Michael Gove

It is an analogy, but not those figures. Another argument is that some of the schemes we have done in the past have just been overcomplicated. If we are going to have reductions, let us not over‑engineer it. It is always the case that, whatever scheme you design, there will be people either side of a cliff edge or either side of a taper. Maybe it is simpler to have a straightforward, albeit small, percentage reduction for all. This is what we are wrestling with at the moment.

Dr Johnson

Would you suggest that, if you did cut it for everybody by the same amount, the larger farmer or the larger landowner is perhaps better set up to have people to work on how to get involved in these stewardship schemes? Therefore, it might end up that more money comes from the smaller farmers to the larger, wealthier farmers, because they are better set up to enter your stewardship schemes.

Michael Gove

There are two things I would say. First, there are some farmers—for example, there are some large tenant farmers—where the individual or the business concerned is in receipt of a significant amount of BPS money, but it is not a supremely well capitalised or extremely profitable business. It is not automatically the case that a large amount of BPS payment correlates to someone who is relatively wealthy—not always—and that is the complication.

Dr Johnson

They have the opportunity to be, if they run their farm properly.

Michael Gove

Yes. The second point is a fair one as well, which is that it will often be the case that, if you operate at scale, you are more capable of delivering some environmental benefits. That does not necessarily mean that that is an option available only to an individual, family or business that owns a large estate; it is also the case that groups of farmers working together can secure the right sort of relationship, which means that they can unlock quite a lot in terms of environmental payments. For example, I was privileged, with the Chairman, to visit Exmoor last week. One thing that farmers on Exmoor are doing—and they are of variable size, some smaller, some larger—is thinking hard about how they can work together to make sure they can unlock some of the payments that you described accruing to those people who can put into the pot a little bit of the energy, time and expertise to unlock these payments.

Dr Johnson

But it is much more difficult, you would accept, for a small farmer to do that.

Michael Gove

For an individual, isolated, smaller farmer, there is a challenge, yes.

Chair

By the way, Secretary of State, can I thank you very much for that visit both to Exmoor and into Devon? We really appreciated it, so thank you. We were looking at the farming connected to the environment, and you saw how related the agriculture is to that great environment, so it was great to have you there. One final question before I move on to the next is about the opportunity for us to undertake pre‑legislative scrutiny of the ag Bill. Where do we stand as far as that is concerned?

Michael Gove

If I may, I will talk to your team about giving you as much opportunity as possible to look, whether it is clause by clause or groups of clauses together, at what we have proposed to bring forward. The other thing is that, even at its most ambitious, at the very outset of our ambition, the most that we could do is to have a Second Reading of the Bill before the summer recess. We would not be able to go into Committee before then. If we had that Second Reading and then we went into Committee in September, prior to it going into Committee or even thinking about what might happen in Committee, we could ensure that the first sessions of Committee are appropriate evidence sessions.

Chair

That has stimulated some discussion.

Kerry McCarthy

In the Health and Harmony command paper, the bit about what might be in the Bill is quite a small part of that. Will there also be a separate Government response? You say you have had 44,000. Not all of it is going to end up in the Bill, and I just wondered if you could give a bit of a steer as to what the scope of the Bill would be, as opposed to how you take forward all the other things that are mentioned in there. I am particularly keen on the public health side of things.

Michael Gove

You are absolutely right. The Bill will be, in broad terms, a framework Bill, in that it will outline some of the powers that Defra will have in order to make payments, attach conditions to those payments, inspect appropriately and so on. However, there are all sorts of other aspects of policy, some of which will be spelt out in the subsequent secondary legislation that the Bill will make provision for, but some of which will be outside the scope of the Bill and which we will need to say more about. One of the things that you are right about is that there is more to be said about public health, but one of the strong messages from the response to the consultation is that people wanted Defra to play a bigger role in the public health debate. Again, we are still a long way from doing it, but one thing that we hope to do is to produce a food strategy document, which will look at everything from improving Government procurement to considering what the right steps are in order to help lead to more responsible and sustainable food production, and to help encourage people towards a better diet. One of the things about that, as the Committee knows, is that the Department of Health’s role and the Department for Education’s role are critical in this as well.

Kerry McCarthy

You said you are still a long way from doing it. Do you have a rough timescale or is that a hostage to fortune?

Michael Gove

One of the jobs that I have given to one of our new non‑executive directors, who has a background in food, is specifically to lead on this. He had some experience beforehand as a co‑author of the school food plan, and he is setting to work at the moment, talking to a variety of businesses and people beyond the Department, with the hope that we can produce something during the course of this year.

Kerry McCarthy

Excellent.

Angela Smith

Secretary of State, you just outlined the potential for pre‑legislative scrutiny on the basis of the Bill being presented in the summer for Second Reading. Surely, what is important here is the principle of pre‑legislative scrutiny, rather than whether or not we can do it according to when the timing of the Bill’s introduction is, because we all know that best practice now indicates that pre‑legislative scrutiny should take place, particularly on Bills of this importance, and we know it makes for better legislation. Really, I am looking for—and I am sure the Committee would agree with me—a commitment to thorough pre‑legislative scrutiny, whenever the Bill is introduced in the Commons or the Lords.

Michael Gove

Wherever it might be. I would like to give you as much opportunity to scrutinise the Bill as possible but, without the “by your leave” of our business managers, I cannot give you that promise.

Angela Smith

That is astonishing. Ordinarily, we know that best practice indicates that Parliament should get the opportunity, via its Select Committee, to scrutinise this legislation thoroughly. Surely, it is not that difficult for the business managers to fit into the schedule a commitment to pre‑legislative scrutiny.

Michael Gove

My view is that there is more than one way to skin a cat and that the most important thing is that you have an opportunity to scrutinise the legislation.

Angela Smith

In which other way could we skin this particular cat? Either we have the Bill before us to scrutinise before it goes into Committee, or we do not. Which other way is there to scrutinise the legislation?

Michael Gove

There are 101 different ways to scrutinise the legislation.

Angela Smith

Really? Would you like to indicate two or three of them to us?

Michael Gove

Yes. By being on the Bill Committee.

Angela Smith

That is not pre‑legislative scrutiny.

Michael Gove

No, but it is scrutiny.

Angela Smith

You know full well that it is not pre‑legislative scrutiny.

Michael Gove

No, but it is scrutiny.

Angela Smith

It is not scrutiny. Pre‑legislative scrutiny is what we are looking for.

Michael Gove

That is the whole function of being on a Bill Committee: to scrutinise legislation.

Angela Smith

I find that quite astonishingly arrogant, Secretary of State.

Michael Gove

No, it is perfectly fair. Your Whips will, I am sure, hear your plea to be on the Bill Committee in order to give it appropriate scrutiny.

Chair

We also would need a draft Bill first, if we were going to do proper pre‑legislative scrutiny. Do we expect that or not?

Michael Gove

Not under the timescale, no. The thing is that we want to publish a Bill, ideally before the summer recess. We want to get on with it.

Angela Smith

We can take it for granted that we are not going to be offered the opportunity for pre‑legislative scrutiny, which is not being in a Committee, as the Secretary of State well knows.

Michael Gove

Not saying yes does not mean saying no.

Dr Johnson

Secretary of State, forgive my inexperience in this, but can you explain why it is up to the business managers, and not up to you as Secretary of State, how that process works? Presumably, you are setting the direction of how it is written and what it says.

Michael Gove

Yes.

Dr Johnson

Can you not direct them to print it off more quickly? I do not understand.

Michael Gove

I will use an analogy from aviation. The business managers are air‑traffic controllers, who need to ensure that planes take off and land at the right time. There are only so many days in the parliamentary year. There are only so many opportunities to ensure that bills can be introduced. We want to introduce the Bill and to give people plenty of opportunity to debate, scrutinise, propose amendments and so on. Pre‑legislative scrutiny is a wonderful thing to have but, of course, we have an opportunity via all sorts of different ways, including open public debate, committee hearings and the Bill going through its Committee stages, in order to provide appropriate scrutiny for it.

Dr Johnson

I get the process now but, if you have written the Bill, I do not understand why you cannot say, “Okay, it is now going to the business committee” or whatever. “We are going to put it in on a particular date. We will ensure that it is available a fortnight before or a few weeks before for someone to look at”. I do not understand why that is not in your gift.

Michael Gove

First, we are at the moment—as we have just been discussing, and I have been very open with the Committee—discussing some of the issues. If Members of the Committee have concerns or points that they want to make, as they have done, about each of those deliberations, we are always happy to take them onboard. If it is the case that we are going to introduce the Bill, which we hope to, before Parliament rises in July, we need to make sure that we have concluded some of the policy discussions and introduced the Bill in a timely way. It may be or it may not be that there is time for pre‑legislative scrutiny before that, but I do not want to issue a promise that I cannot necessarily guarantee that I will fulfil.

Dr Johnson

Is it written yet?

Michael Gove

No, by definition. If it were written, it could be introduced.

Chair

One of the points with pre‑legislative scrutiny is that, if there are mistakes in the Bill, it is a friendly way for us to say to the Department and to you that we think there is a problem. This is all part of our role. We will scrutinise the Bill, one way or the other.

Michael Gove

Absolutely.

Chair

Of that I can assure you, Secretary of State, even if it is by running an inquiry alongside it. But I still think it would be better, wherever we can co-operate, to have the maximum of scrutiny. It is quite obvious, from what you have said, that there is not time or you are not going to give us time for pre‑legislative scrutiny. There is no point in arguing about that all morning. I would like the reassurance from you that we can have as much scrutiny of this Bill as possible and it can be as open as possible.

Michael Gove

Yes, of course.

Chair

As I have described to George Eustice, Government policy is like a cement mixer: it is all going round and it is all very fluid, and then all of a sudden you tip out the concrete, and in five minutes it is set and policy is completely set.

Michael Gove

That is a very fair point.

Chair

That is what we are interested in: to make sure that, as that cement is going round in the mixer, we can make some changes to it before you pour out the mix, it is all concrete and you say, “It is too late now; it has been done”.

Michael Gove

I completely agree. I completely understand.

Chair

You may agree with the comment, but what are you going to do about it?

Michael Gove

We will make sure that this Committee, the whole House and, more broadly, the public and those affected have as much chance as possible to debate, shape and influence the future legislation. But simply to wave a piece of paper and say, “We must have pre‑legislative scrutiny in this way and everything else is somehow imperfect” is to make the perfect the enemy of the good. That, in itself, is a mistake.

Chair

At the start of your conversation, you offered the fact of our team talking to your team. I would like to have the reassurance that we can genuinely talk through with your team what is in the Bill, and then genuinely put some input into that, before the concrete has set.

Michael Gove

Totally. If members of this Committee—individually, collectively or in groups—would like to make suggestions, submissions or recommendations, of course you can. If you would like to have access to any member of the team in Defra, either to get questions answered or to share thoughts, of course you can. The approach that the Department takes is pragmatic, flexible and open.

Chair

Everything that you have said, Secretary of State, has been recorded for posterity and we will take you up on it.

Dr Johnson

As a point of clarification, I am a person who works to deadlines, so I understand that you have a month to do it but you do it in the last week. If you know that this Bill will have to be put before Parliament before the summer, because that is your aim, you are obviously getting towards having it finished by now. If the business people are telling you the likely date for putting it before Parliament is going to be 12 July or whatever, you know that, if you want to give us an opportunity to scrutinise it, your deadline is about 1 July or the end of June. What is outside of your control that prevents you from getting that deadline in an extra couple of weeks beforehand to allow the scrutiny?

Michael Gove

The Bill may not be ready on 1 July; it may be ready a little bit later.

Dr Johnson

You can work to that. If you genuinely want scrutiny to take place, and you are genuinely open and keen for it, that deadline is there for you to work to. I appreciate that you are a man of great talent and can achieve that.

Michael Gove

You would be inviting me to delay the introduction of the Bill until September. If the Committee would like that—

Dr Johnson

No, to complete it more quickly, in good time, so that it can be scrutinised.

Michael Gove

By definition, a casserole takes so many hours to cook. You cannot accelerate the cooking of a casserole.

Dr Johnson

Are you likening the Bill to a casserole?

Michael Gove

I would say it is like a daube of beef. It is being slow‑cooked in order to get the maximum amount of flavour out of it.

Dr Johnson

It is only being slowly cooked.

Michael Gove

You can microwave the casserole but, in so doing, you spoil it.

Chair

I hope the casserole is very tasty when it is finished, Secretary of State.

Michael Gove

It will be a mix of British beef and vegetables.

Chair

The interesting thing is when you talk about the timing of this Bill. Do not forget that the timing of this Bill has changed dramatically over the last few months. It was not too long ago, when I was having a conversation with you, when you thought it may not be in until Christmas. Now you are saying it is going to be published before we recess, and do we want it put back to September? We do not want it put back but we want some proper scrutiny. This is the final ball I will throw at you on this one: would it be possible for us to regularly, perhaps once a month, meet with the Bill team to discuss exactly what is in it?

Michael Gove

It will be a pleasure.

Chair

It will be a pleasure, will it? That will definitely be recorded. We will leave it there. We have given it quite a good airing and you know our strength of feeling.

Michael Gove

Absolutely.

Chair

We believe we should have pre‑legislative scrutiny. We are not going to get it, but we will try to get as much scrutiny as possible and we will do it ourselves as well. Seriously, it is one of the roles of the Select Committee. Especially with a new world out there, where we are changing agriculture and environment policy dramatically, we have a very good role. All Select Committees have very good roles to play, but we have a particularly good one at the moment, where we can look slightly more widely sometimes than the Department can.

Michael Gove

I could not agree more.

Chair

I would much prefer to co-operate than not, really.

Michael Gove

Absolutely.

Chair

Let us leave it there, then.

David Simpson

On the subject of Bills, you will know that the fishing federation is having a large lobby today in Committee Room 10. When do you intend to present the Fishing Bill to Parliament? Will it start in the Lords or the Commons? When would you hope to get that done?

Michael Gove

Our aim is to publish a White Paper on fisheries. We have completed the drafting of it. It is being shared with other Government Departments and will be shared, we also hope, subject to agreement across other Government Departments, with a representative of the devolved Administrations. Then we hope to publish our legislation in the autumn.

David Simpson

Will that be the timeframe for the Bill itself?

Michael Gove

Yes. In the same way as we published a command paper, Health and Harmony, on agriculture, and we had, as we discussed, various different responses, we want to publish this fisheries White Paper. As I say, a draft exists and we are fine‑tuning that. There have been previous drafts in circulation, some of which have been leaked. Some of the leaks have been inaccurate and have not reflected where we want to be. We want to publish that White Paper as soon as possible. The things that we also have to bear in mind are the broader White Paper on our relationship with the European Union that the Government are publishing, and the June Council at which the Prime Minister will be taking the next stage in the negotiations. To go back to the question of timing and air‑traffic control, the plane needs to be—

Chair

On which runway is going to land? Is it going to land on the Commons runway or the Lords runway?

Michael Gove

Probably the Lords.

Chair

That is the fishing paper.

Michael Gove

Yes.

Chair

What about the agriculture paper?

Michael Gove

Probably the Commons.

David Simpson

You mentioned there the input from the regions. What input have the regions had in relation to the fisheries Bill?

Michael Gove

So far, we have had an opportunity to hear from, and I have had the opportunity to talk to, people from all parts of the United Kingdom who have a particular interest. Again, one of your parliamentary colleagues, David, very kindly gave me the opportunity to talk to representatives of producer organisations from Northern Ireland. I have also talked to individuals, whether they are representing inshore fishermen from England or the pelagic fleet out of the north‑east of Scotland. We have listened to all their particular views and we have also listened to the processors about their concerns.

David Simpson

Are you intending to visit Northern Ireland soon? Kilkeel, I think it is.

Michael Gove

That is my hope, yes. I am hoping to visit Northern Ireland in August.

David Simpson

Very good.

Chair

It will be really good if you can, because, naturally, the Northern Ireland situation, especially on the food and farming side of it, is huge.

Michael Gove

During my time so far, I have visited Northern Ireland on three separate occasions, and it is always a pleasure to do so.

David Simpson

Thank you. I will come back to Northern Ireland later.

Alan Brown

The fisheries Bill, you state, is going to start in the Lords. In the current climate, we keep getting told the Lords is only a revising Chamber, so why is the Department putting primary legislation through the Lords?

Michael Gove

It is a long‑established tradition—again, people can argue whether or not it is a wise one—to have some legislation, often legislation that commands widespread support, start in the House of Lords. One of the things that we all recognise is that, whatever our other views about leaving the European Union, being able to take back control of our territorial waters is something that people are looking forward to, and there is a great potential for coastal communities and marine conservation as a result of that.

Alan Brown

Yes, but why not recognise the primacy of the Commons?

Michael Gove

We all recognise the primacy of the Commons. Indeed, one of the things that we are discussing this afternoon is whether or not the Commons should be asserting its primacy more vigorously in some areas.

Chair

Finally on the White Paper on fisheries, we had a look—we did not really look at the whole Bill—at the previous fishing Bill that you had, and we would like, when it is possible for us, to go and have a private look. Could we ask for that?

Michael Gove

Absolutely. Again, the fisheries team in the Department, under Neil Hornby, do a superb job. Again, if you wanted to come in for an informal briefing, they could take you through their thinking and discuss one or two of the legislative—

Chair

Yes, we might try to take the whole Committee at some stage perhaps in early September, when we come back, because we would like to have some idea of what is coming.

Michael Gove

Absolutely.

Alan Brown

Moving to rural broadband, you will be well aware of the issues around rural broadband, and rural mobile coverage and connectivity. I believe you have suggested before that, post-Brexit, some of the UK’s contribution that goes to Europe could be diverted. How much of the UK’s annual contribution to the EU is going to be spent on improving rural broadband, and mobile coverage and connectivity?

Michael Gove

Only yesterday, we were discussing within Government the Shared Prosperity Fund, which is the means by which money that is currently spent by the European Union on our behalf can be repatriated and spent by the UK Government. One of the key things that we want to do with that money is to improve productivity in areas that face particular challenges. Again, one of the things that the Government absolutely believe—it is an objective fact—is that rural and coastal communities are among some of those that face the biggest productivity challenges, and that one of the biggest ways in which you can improve productivity is by improving educational outcomes and improving infrastructure. The critical infrastructure investment that will improve productivity in these areas is access to improved broadband and improved mobile telephone coverage, as part of greater interconnectivity. Separately, I have had meetings with BT Openreach and with Matt Hancock as Secretary of State, in order to ensure that the existing programmes we have that are there to improve rural connectivity can work as effectively as possible.

Alan Brown

We all agree with that, and we know the problem. Have you had discussions with other Departments to identify how much money is required and, therefore, how much money is going to be allocated?

Michael Gove

That is what we are discussing at the moment. We are discussing the process by which the UK Shared Prosperity Fund would work and then the way in which that money could be allocated.

Alan Brown

How do you see the process working?

Michael Gove

One of the things that we want to do is to make sure that local communities can also set their priorities. This is something that we already do when it comes to allocating funding for broadband. That money in England is often distributed by counties. It is not that there is a tension, but while we in Defra can say “We think these are the communities that most need additional coverage”, if you have a respect for devolution, you sometimes have to acknowledge that the local authority or the other body that is distributing this money will have a closer fingertip feel for how money should be spent.

Alan Brown

It should be based on need, not population.

Michael Gove

These are all live debates.

Alan Brown

In terms of rural broadband, do you think the USO of 10 megabits per second is adequate?

Michael Gove

No.

Alan Brown

Are you working with the Secretary of State for Culture to change that?

Michael Gove

Yes. It should be at least 30.

Angela Smith

My constituency is one of the bottom 10% in terms of connectivity and superfast broadband infrastructure, so it is slightly alarming to hear you talk, Secretary of State, about improved broadband rather than the delivery of superfast broadband, in accordance with the Government commitment to 95% of the UK being connected to high‑speed broadband by 2022. I want to ask about your statement that rules on state aid have prevented us from investing in broadband. How?

Michael Gove

It has been the case that, because of the way in which the interrelationship between British Telecom in its provision of a public utility and the existence of British Telecom as a private enterprise has operated, in the past we have not necessarily been able to take some of the steps that we might, had we been outside the European Union, in order to invest in the extension of broadband to those who we believed were deserving recipients of it.

Angela Smith

How have countries like Spain managed to do it, then?

Michael Gove

Spain has different ownership structures in its telecoms businesses.

Angela Smith

On that score, why has the Government not engaged more quickly in liberalising the delivery of the fibre network that we know we all need?

Michael Gove

Again, these are appropriate questions.

Angela Smith

This is the other way of doing this. It is not all about state aid.

Michael Gove

No, indeed.

Angela Smith

By the way, I think that is more complicated than you suggest.

Michael Gove

Possibly.

Angela Smith

That is interesting, but why have the Government not got on with the job, not just of separating Openreach out from BT structurally, but also liberalising the delivery of the network?

Michael Gove

I have come to this issue over the course of the last year with a determination to do better, but I will not necessarily look back in anger.

Angela Smith

Are you committed to effectively liberalising the delivery of the network? This is really important in my area.

Michael Gove

Yes, it is, and it is a matter for the Secretary of State for Digital, Culture, Media and Sport.

Angela Smith

You can make representations, Secretary of State. I represent a rural area with small hamlets that have very little by way of connectivity.

Michael Gove

Absolutely.

Angela Smith

I am depending on you, and my communities are depending on you, to deliver this, by making sure that DCMS is committed to delivering that network as quickly as possible.

Michael Gove

DCMS is committed to delivering that network as quickly as possible, but I cannot bind or make decisions on behalf of another Government Department. What I can do, and what we are doing, is to work collaboratively with them, including on things—

Chair

Sorry to interrupt you, but you were very upbeat, I remember, at the NFU conference back in February, and there were quite a few promises there. We are looking for those to be delivered, if we could be so bold.

Michael Gove

Yes, and that is why I am working so collaboratively with the Secretary of State at DCMS, in order to do just that.

Chair

There is no timescale on when constituents can have their proper broadband.

Michael Gove

Watch this space. Angela has a particular policy recommendation, which is much to be recommended. To return to my phrase this morning, though, there is more than one way to skin a cat.

Chair

I am not sure about your analogy, talking about the skinning of a cat, when we are so strong on animal welfare, but carry on.

Angela Smith

Finally, Michael, are you, in principle, in favour of liberalising the delivery of this infrastructure? Frankly, I cannot see any other way of doing it; otherwise, we are going to get left behind internationally.

Michael Gove

I appreciate the force of the argument but I am not going to fetter my colleague.

Dr Johnson

I too represent an area where there are significant challenges with broadband and, as life becomes more and more online, particularly for Government Departments that we have to interact with, it becomes more of a problem for people and causes more productivity difficulties for my constituents. Also, as the Government have rolled out broadband in the way that they have, which has been great, and covered as many people as possible, as quickly as possible, it means that those people who do not have that superfast broadband are now more remote, more isolated from each other and, therefore, less able to group together to contribute towards getting broadband. Would you agree with me that, as the Government have more money to spend on broadband, they should focus on ensuring that those isolated homes and businesses are provided with a superfast standard of broadband, before we work on providing ultrafast to people in the cities, who already have an excellent service?

Michael Gove

I do not think that we should set them up in opposition, the one to the other.

Dr Johnson

You are happy to spend lots of money on providing that. It is a bit like, when somebody is starving and somebody else has a two‑course meal, giving them pudding when the other person sits and starves.

Michael Gove

Yes, but I do not see that we should automatically say we are going to discriminate against urban dwellers.

Dr Johnson

We are not discriminating. We are providing equality of service.

Michael Gove

My original point is that you were inviting me to choose in a false dichotomy. It is not a binary thing.

Chair

Caroline is also saying to you that the rural population in these pockets that we have in all our constituencies—the Blackdown Hills is one of mine—really are suffering now. Ministers will come down and say that 95% of the country is connected to superfast broadband, but it does not really mean much when 20% or 30% of one’s own constituency may not be. When you talk about faster and faster speeds, that gets them more and more cross.

Michael Gove

Yes, but I do not.

Chair

No, you do not, but Ministers do. You are all responsible, ultimately, and I hope you would accept that.

Michael Gove

That is why we work collectively together. All of us in this Committee are all too well aware of the challenges that are faced. We are also aware that one of the fastest ways of securing superfast broadband is by either using existing copper or the provision of new fibre networks. By definition—

Angela Smith

Copper is not good enough.

Chair

It is the fibre network that we need. The copper will not work because you will not get these fast speeds, ultimately.

Michael Gove

The cost of getting fibre—and Caroline makes the point fairly—to isolated communities is proportionately greater; therefore, the commercial return for companies in getting that fibre to those isolated communities is potentially lower; therefore, it is vitally important that there should be a method of state support in order to ensure, whether through fibre or by other means, that you get broadband to those areas. We are working with DCMS to consider what the best means of doing that is. It is already the case that we have a means by which we give support to organisations like Broadband for the Rural North. Indeed, more recently, as I think the Committee knows, we have collaborated with the Church of England in order to ensure that, while it is not the spread of fibre, we can get broadband transmission to more isolated communities. We are trying to do all of those things, but the note of caution that I would exercise is that it should not be either/or. It is also the case that we need to make sure that we get the best possible provision to everyone, and it will be the case necessarily that the state needs to subsidise that provision for people in rural areas in a way that it does not in urban areas.

Chair

Rural people are very patient but, after 2010, 2015 and 2017 and all these promises, they still do not have their broadband, and they are getting just a trifle impatient, Secretary of State.

Michael Gove

Yes, that impatience has been communicated to me, albeit in polite and stoical terms.

Chair

We really are not making much progress on our questions, but carry on.

Alan Brown

I am just trying to see what the endgame is here. Secretary, you said to me earlier on that money should be allocated by need. In answer to Caroline, you were saying that you cannot have a false dichotomy; you cannot spend more on rural and leave urban behind. Surely, if you are allocating money by need, you need to focus on the rural.

Michael Gove

I take that point.

Alan Brown

You touched on state aid, so surely that proves it. If the rural areas are so far left behind, surely they qualify for state aid anyway, so the real problem with state aid is not the EU but the UK’s delivery model. You are saying you have come to it late. Surely, arguing about EU state aid was a red herring. More importantly, you need to allocate money by need and start with the rural areas.

Michael Gove

It is not a red herring. It was a material fact in the way that we could or could not support the extension of rural broadband. As Angela acknowledged, it was not the only issue, but part of it was related, of course, to the structure of our telecoms industry.

Alan Brown

In Scotland, the Highlands and Islands qualified for state aid because they are rural. I am sure you could identify areas in England that would have qualified for state aid, had you chosen to do so.

Michael Gove

We are at cross purposes on the meaning of “state aid’. State aid is an explicit subsidy to private industry, which, under European Union rules, you are not allowed to allocate. State aid, as I think you are describing it, is the deployment of public money in order to ensure that a particular utility reaches a deserving community, and that is a separate thing. It is not state aid as governed by EU rules; it is simply, for the sake of argument, rural development funding. The two are distinct and different, so it is a category confusion. Within that, it is perfectly legitimate—and this was my point in response to Caroline—to ask for money, and I believe in allocating money, to ensure that people within rural communities have improved access to broadband and to internet connectivity. However, the suggestion that I took from Caroline’s question is that we should somehow go more slowly in providing superfast connections to people in urban areas. That is less a matter of public support and more a matter of the business model of individual companies.

Alan Brown

There are urban areas that are getting commercial rollout anyway, so the Government should be focused on other areas.

Michael Gove

That is where we are.

Alan Brown

Now that you agree that 10 megabits per second is too slow and it should be a 30 megabits USO, what do you think a timescale for that should be and how do you factor that into allocating money to needs for rural areas?

Michael Gove

As fast as possible and as quickly as we can.

Alan Brown

What does that mean?

Michael Gove

As fast as possible.

Alan Brown

That just means nothing.

Michael Gove

I would say two things. Firstly, the responsibility for the rollout of broadband—rural or urban—is for DCMS. What I can do is make a case; what I cannot do is bind or fetter DCMS, any more than I can bind or fetter the Scottish Government.

Alan Brown

What would be your ideal target deadline for the 30 megabits?

Michael Gove

It is such a tempting question, but you are inviting me once again to say what I think Matt Hancock should do, and Matt is the appropriate person to answer that question, not me.

Dr Johnson

I just wanted to clarify that I did not suggest we should slow down superfast for one area out of preference for another. I suggested that, where some people have superfast already, providing them with ultrafast while others have nothing is perhaps not the best target for Government money. You said at the beginning that education and infrastructure were the biggest challenges for rural areas. I, as many of my constituents have, have had to return homework to school saying, “We cannot do this because our internet connection is not fast enough to support the homework websites that you have given us”. Surely, the two are linked and, if they are the greatest challenges for rural areas, your job is to make representations to Matt Hancock and say that the most important thing that we can do is to ensure that the basic minimum of superfast broadband of 24 megs or 30 megs—whatever is a usable connection—is provided to everybody in every constituency, no matter how remote their home is, before we provide 300 megabytes, a gigabyte or whatever to someone in a city. They do not have the challenges. They are not sitting at home unable to complete their tax return.

Michael Gove

I completely agree with your former point, but the final point is that one would always need to look at what the trade‑offs and opportunity costs were that meant companies were operating in that particular way, and see how one could influence their model. Yes, overall, as an organising hermeneutic, I do not disagree, but I would want to know what the individual companies were doing in each individual case before pronouncing whether or not that was the right or the wrong decision.

Chair

We are saying that the priority for Government money must be, surely, for those who really do not have any connection.

Michael Gove

I completely agree with that.

Angela Smith

Farmers are going to be required, I suspect, to work with quite sophisticated IT systems to access the new support system that you are developing, Secretary of State, for public money for public goods post European Union membership. Can you guarantee that farmers will have the connectivity to allow them to access any IT system that is used for making applications and receiving payments under the new scheme?

Michael Gove

The new scheme should be simpler.

Angela Smith

That is not the point. Will they have the connectivity to access it?

Michael Gove

We want to improve connectivity overall anyway, but the premise of your question was: given that things are going to be so much more complex, can we have better connectivity? They are going to be simpler.

Angela Smith

No, that was not my question. The question is: there is going to be a new IT system for making applications and receiving payments. Will farmers have the connectivity required to be able to make use of that system?

Michael Gove

Again, you are repeating your premise, which is that things become more complex; my argument is that things should become simpler.

Angela Smith

The question is about connectivity. Will farmers be able to go online, make applications and receive payments? It is a straight question.

Michael Gove

Angela, the need to improve connectivity is clear, come what may, but, as I say, the premise of your question is misconceived.

Chair

We wait with great interest for the simplification and the delivery of this policy, really, because in the past we have not delivered.

Michael Gove

Quite.

Angela Smith

Farmers at the moment are having to drop the idea of making applications online under the present system. I do not care whether it is simpler or more complex; the point is that farmers are having to use a paper‑based approach because they do not have the connectivity. Will that cease to be the case once you have the new system up and running, or when will it cease to be the case? That is another way of putting the question: when will it cease to be the case?

Michael Gove

It is the case that you have now acknowledged—you have changed the premise of your question—that the current system is not delivering as it should; therefore, that is one of the reasons why we want to simplify it. We also want to improve connectivity.

Angela Smith

The point, as you know full well, Secretary of State, is about connectivity.

Michael Gove

I do know that full well, Angela. You are constructing a “when did you stop beating your wife?” question and, therefore, I am going to reject the premise, as it is perfectly within my rights to do.

Angela Smith

Secretary of State, you cannot answer the question, because you do not know when farmers will be able to make proper and full use of IT systems, because we do not know when we are going to deliver the connectivity they need. Is that not the case? You have no sense of when farmers are finally going to be able to enjoy connectivity to broadband.

Michael Gove

Angela, you have written the question knowing the answer that you want, and I am not going to—

Angela Smith

Oh, right, so I can take it that I know the answer.

Michael Gove

You might as well ask the question, “When are we going to have sunny days every day in July?” The whole point is: what is an adequate level of connectivity?

Chair

You have more control over the delivery of broadband than you do whether the sun shines in July, Secretary of State.

Michael Gove

Yes, I know, but Angela is saying asking, “When is everything going to be perfect?’

Angela Smith

No, that is a very cavalier answer, Secretary of State. Farmers will not be impressed at the lack of commitment to making sure they are properly connected to broadband.

Michael Gove

Again, Angela, I am very clear that we want to dramatically improve connectivity, and we have discussed some of the ways in which we are doing so but, as I say, you have framed the question in a particular way, based on the answer that you want.

Chair

The point that Angela makes and we all make to you—and I am sure it is not lost on you—is the frustration that it is all taking so long, and there are so many people still left out of that connectivity, but we have made our point and I think you probably understand it.

Michael Gove

You have made the point and it is a point of which I am all too well aware. That is one of the reasons why I said what I said to the NFU several months ago, one of the reasons why we conduct the conversations that we have and one of the reasons why, in response to Alan’s question, I discussed how the Shared Prosperity Fund might work.

Chair

A lot of those farmers listening to you in February, by the time they get to next year, will be expecting to have it, you see. That is the thing.

Michael Gove

Yes, but I do not want to make a specific pledge before I know that we have, to change the metaphor, all our ducks in a row.

Angela Smith

Can I just ask the Secretary of State to give us some evidence as to why state aid rules are getting in the way of delivering the funding that we need for connectivity?

Chair

That is fair.

Michael Gove

Yes, of course.

Julian Sturdy

Secretary of State, I want to return to stewardship schemes, if we can. I know you touched on this in your opening remarks. Chair, I should probably refer at this time to my declaration of interests and my farming interests. Without going into too much detail on the actual schemes, I want to touch on what reports you have received of how many environmental management schemes are not going ahead at the moment due to the uncertainty of post‑2022 funding. Is there also an element that you feel within Defra, if schemes are not going ahead, of a wait and see process going on at the moment, with farmers not wanting to commit until they see what a future policy might look like? They do not want to tie themselves to a five‑year scheme and then find that the policy is very much different to that and they cannot adapt and change. Is that something you are taking on board?

Michael Gove

Yes. I do not see much evidence of people declining to engage with the current scheme because they think that they will wait to see what comes along. There is evidence—anecdotal but still evidence—of people who have been involved in previous agri‑environment schemes, who are not involved at the moment with Countryside Stewardship, because they find the process too bureaucratic and time‑consuming.

Julian Sturdy

You have said quite clearly already in this session that you want to make things less bureaucratic and much simpler. On that, within the agri‑environment schemes that might come forward and the simplification that might flow from that, is there going to be any support to farmers to get involved in these schemes?

Michael Gove

Yes.

Julian Sturdy

I ask that and the cynic in me says that, quite often, a lot of these environmental schemes are driven by land agents wanting to go to small farms, sell them their advice and get them to sign up to these schemes, but charge a large amount of money to do that, so the farmer does not get the benefit from it and it puts some farmers off. That is a slightly cynical side of me saying that, but to really get the benefit of this, and the environmental benefit of it, we want as many farmers as possible, including the small farmers, to be signing up to it. Going forward, they will need that advice through Defra to be able to get involved.

Michael Gove

You are absolutely right. Making the system as accessible as possible, so that you do not need to pay an adviser or a consultant a significant sum to navigate your way through that process, has to be part of it, yes.

Julian Sturdy

What advice are you seeing or anticipating coming forward?

Michael Gove

Let me speak about an organisation that has been typically useful, and that is the Country Land and Business Association, which has come forward with proposals for how land management contracts might work: broadly, a universal approach that almost everyone can access, and then a specifically more sophisticated approach, which can reflect a higher level of ambition. I do not want to endorse its model and say that that is the model that we are automatically going to adopt, but it is an example of an organisation that has engaged with our proposition and come back with a very constructive potential way forward.

Julian Sturdy

I have a last question on this specific area. You have talked in detail about how we need to protect and manage our soils going forward, and I agree with that principle. Is there a concern within Defra that we might be missing certain farmers within that going forward; that is, you have short business‑farm tenancies and contract farmers who rent land who might not see that long‑term benefit from the need to invest in soil, or the environmental benefits, so might not buy into the schemes? Is there a way around it? Is that something you are looking to address?

Michael Gove

Yes. There is a broader question about tenancy reform overall, which we have been discussing, but there is a recognition that the model that some farmers are either locked into or have chosen may mean that they are not eligible for or cannot participate in schemes that we might otherwise think would be good overall. Again, one of the things that we are seeking to model is what the consequences are for particular subgroups—not just sectors but particular subgroups—so that we can be clear, as we move to this model, about who may or may not face a difficult time and, therefore, what mitigating steps we might need to take.

Julian Sturdy

There is still, from what you are saying, quite a bit of detailed work still to go on about that.

Michael Gove

Yes, that detailed work is going on now, absolutely.

Julian Sturdy

Going back to the very beginning and the questions on the potential for an agricultural Bill coming forward in July, is the Department going to be ready for that coming forward?

Michael Gove

This goes back to our earlier question and, in response to Kerry’s point, I talked about the nature of the Bill. The idea is to have a framework, so that we say that we will provide support to farmers, land managers and landowners on a particular basis, pay for particular services, and explain what the restrictions on payments might be, and what the inspection and other regimes might be. By definition, our aim is to have a piece of a secondary legislation that would allow future Secretaries of State to say, “We have an environmental land‑management scheme here. I have the power to allocate money to people who do certain things, but I want to amp up this or to turn down that in order to achieve particular outcomes”.

Julian Sturdy

Work will be ongoing, right the way through the process, to evaluate how it is working.

Michael Gove

Exactly.

Chair

Hopefully, we can also feed into that, and we had your assurances earlier on.

Angela Smith

This is a slightly leftfield question, because it is the only question related to the environment. The 25-year environment plan is clear about delivering a net gain for biodiversity. The Government’s Making Space for Nature report in 2010 recommended that planning policy and practice should provide greater protection to other priority habitats, including particularly local wildlife sites and ancient woodlands. DCLG is consulting on a revised National Planning Policy Framework, which is effectively weakening the protection for local wildlife sites. Are you making representations to ensure that the protection enjoyed by local wildlife sites is restored and, indeed, improved?

Michael Gove

Yes.

Angela Smith

You are making those representations.

Michael Gove

I have done so.

Angela Smith

In footnote 7, there is now going to be a definitive list of what should count against and a presumption of sustainable development. You are in support of delivering a place for local wildlife sites on that list.

Michael Gove

Let me look again at that list.

Chair

What about ancient woodland? I see your PPS behind you there, who is very interested in ancient woodland.

Michael Gove

I am not disagreeing with you on the point about local wildlife sites, but it is the case that, in the NPPF, there is already improved protection for ancient woodland.

Angela Smith

My question is not about ancient woodland, although I feel very strongly about ancient woodland as well.

Chair

Can I just ask you a very quick question? I do not want to take up too much time, and I am using my Chairman’s prerogative, but this is on the tidal lagoon that is a long way from your brief. I am quite in favour of the tidal lagoons, and I just wonder whether, beyond Brexit and now, you offer support for tidal lagoons. They have very high capital costs but, once you have them, the tide comes in and out and your fuel is for nothing. Compared to some of the nuclear projects, I still think they are quite effective. I do not know where you stand on those.

Michael Gove

I stand four‑square behind the Secretary of State for Business, Energy and Industrial Strategy.

Chair

I am not going to tempt you further than that.

Michael Gove

You can, but I will not.

Chair

It is one of those things that we are really quite keen to see happen, but we had better not diversify too far.

Kerry McCarthy

My questions were originally intended to be about capping of direct payments, but we have done quite a lot on that, so can I ask more generally about the next round of CAP, as in the common agricultural policy?

Michael Gove

Yes.

Kerry McCarthy

There is some concern that they are looking at a reduction in Pillar II, but then Commissioner Phil Hogan has also said some fairly positive things. I think he said that you had learnt from him on public goods, although I do not know how the conversation went, but where do you feel we are in relation to public goods as opposed to where the EU and the next round of CAP is? Can we try to ensure that we are all going down the same path, so that one side is not undercutting the other? We would want a race to the top.

Michael Gove

Yes. I absolutely take your point. The EU 27 have been discussing what the future of CAP will be. One of the challenges that they face—and they are honest about this—is that, when Britain goes, and Britain’s contribution to the overall EU budget goes, the money will be tighter. There are splits between individual EU nations, depending on the importance of agriculture and the type of agriculture that they have in their country. Commissioner Hogan takes a similar approach to the one that we take, but not every EU member state takes that approach. The split between Pillar I and Pillar II spending is something that they are discussing at the moment. One of the consequences of our departure is that the EU 27, quite understandably, will say, “We want to have free trade arrangements but, when it comes to allocating our own method of domestic support, you are a separate country now, so your views may well be very interesting but please do not lecture us”. If I were to say that I had wholeheartedly endorsed Commissioner Hogan’s approach, I would not necessarily make his life easier.

Chair

The point is particularly on the capping, is it not? If Europe caps and we do not cap in 2021, there could be a distortion in payment. Do you see the capping taking place here in 2021?

Michael Gove

Do you mean capping of the total amount that we give to individual farmers or the total amount that we give in agricultural support?

Chair

To individual farmers, really, because the EU is talking about doing that, is it not?

Michael Gove

There were a number of ideas in play, and we will take account of them, as we would with the support that is given to any other country. We will reflect on any specific changes that they make and consider whether or not that means that we have to change. We have to try to work out what the best method of supporting our industry is, and then reflect on whether there are things being done across the Channel that should give us pause for thought.

Kerry McCarthy

Can I just ask about food prices? It is one thing subsidising farmers, and it is an important part of their income, but what happens if we see lower food prices as a consequence of trade deals that we enter into post-Brexit? There is a nod to that in Health and Harmony that has worried a lot of people; it says there is an opportunity for lower food prices. Peter Kendall, who you will know is an ex‑president of the NFU, speaking at an event earlier this week, said, “Trade deals are the biggest single worry for me as a farmer. We would be crazy to build a policy where we scavenge the world for cheap food”, which is what Health and Harmony alludes to, so can you help put farmers’ minds at rest? It is one thing saying that consumers might want cheaper food but food prices are quite low at the moment and farmers have to make a living.

Michael Gove

Yes. There is so much in that, so let me try to address it briefly. I absolutely understand that we do not want to have a situation where the protections that British agriculture and British consumers enjoy are removed, and we have run some of the iconic ways in which we need to maintain those protections. It is also the case that there are some non‑temperate foodstuffs that you cannot grow in the UK and that we might be able to source from outside European countries as a result of trade deals, which will be cheaper for British consumers. It might also be the case that we can secure access to other markets for parts of the carcass that are not popular or favoured here and, as a result, we can increase production overall and then bring down prices that domestic producers can charge to domestic consumers, because they are running a more productive business overall. Those are two potential benefits from free trade. But Peter Kendall is right and you are right to say that, while there are clear benefits that we can accrue, we must not have a deterioration in the high standards that we set in environmental protection and animal welfare, in pursuit of the cheapest possible food, because, again, as Peter Kendall and others have pointed out, the very cheapest food produced worldwide has environmental costs and externalities that are borne by others. It is something that I have touched on in front of this Committee before: that food is nominally cheap in terms of price, but we pay the price for it in other ways.

Kerry McCarthy

You mentioned externalities then, and there has been some research and some suggestion that, in the same way that natural capital prices in all those externalities, we need to look at that in the food chain as well. Is that something that you have looked at?

Michael Gove

I am interested in it, yes. To go back to your earlier point, it is the case that, as a country and as individual families, we spend less as a proportion of our income on food than at any time historically. As you and I both know, that does not mean that there are not people who face real difficulty in their lives as a result of poverty, and we need to support them in order to make sure that they can have access to a healthy and balanced diet. But you are also right that Government need to think—individuals already are—in a more sophisticated way about the cost of food.

Kerry McCarthy

I think £1 in every £10 in the NHS is spent on type II diabetes, which is clearly diet‑related. It is quite frustrating. I appreciate what you are saying about the food plan, but it is frustrating that people do not take a long‑term view. Changing the food system and what people eat could be the answer to where we get this extra money from for the NHS that everyone is talking about.

Michael Gove

I completely agree.

Chair

Secretary of State, if I could take you slightly wider on this one, affordable food is really important, and that is where 90% of our food goes through the big retail sectors. Health and Harmony talks a lot about the high end of food, which is great, but we have to make sure there is affordable food. I want to take you to the Sainsbury’s‑Asda deal. The whole idea of bringing prices down by 10% is to reduce the price they pay to those producing the food, while not taking too much out of their system. Lidl and Aldi can give the farmers a good price and still deliver a good price to the consumer, so I would like to see you putting some pressure on the retail sector to say, “Not only do the farmers and the growers have to be competitive, but so does the retail sector”. I am just a bit worried that the beasts in the jungle getting bigger means that they bite the smaller beasts down the food chain, literally. I really am quite worried about this new monster that could be produced by bringing Sainsbury’s and Asda together. I do not know if you share some of my concerns.

Michael Gove

Yes, you have put it very well. I am sure there are all sorts of efficiencies that bringing Sainsbury’s and Asda together can bring to the consumer, but you are right to issue a warning note, not necessarily specifically to them but overall generally. In an effort to demand from contractors lower and lower prices, you risk those contractors no longer being around in the future. We have seen it, in a separate way, with Carillion, and I do not want to get into the Carillion case, but we know that, overall, in the provision of public services, if you—

Chair

Drive it too low.

Michael Gove

Exactly. Therefore, there needs to be fairness in the supply chain. Of course, one of the reasons why the Groceries Code Adjudicator was created was to try to ensure that there was fairness in the supply chain. The situation is not perfect everywhere, and you are also right to point to dairy as one area of particular concern because of some of the problems that we have had in the past. In the medium to long term, farmers—including dairy farmers—recognise that there is strength in being part of a good co-operative and there is also strength sometimes in thinking about diversification and where the milk might go. But, in the short term, we need to remain vigilant in order to make sure we do not have things happening in retail that put undue pressure on our primary food producers.

Chair

You raise an interesting point on the Groceries Code Adjudicator, because, naturally, we would like to see her powers broadened. With this Sainsbury’s‑Asda deal coming forward, you will have over 60% of the retail trade in this country within the hands of two big supermarkets: Tesco and Asda‑Sainsbury’s. If you are a supplier, a processor or a producer, it is very difficult for you to pop your head above the parapet and say, “They are treating me badly”, because they will find out who you are and you will be pushed out of that market if you are not at all careful. We really need to be aware of this.