Natural Environment and Rural Communities Bill

So we believe that Clause 13 strikes the right balance and will enable Natural England to carry out its functions properly and efficiently. The budget was agreed as part of the EU budget deal in December with a seven-year ceiling of €69.75 billion, which is roughly—I repeat, roughly—equivalent to current spending; that is, for the present financial perspective, which is 1999-2006. This one is for 2007–13. The new budget will include spending for Bulgaria and Romania plus the current 25 member states. The agreed budget also increases emphasis on new member states rural development expenditure—at least, €33.1 billion. However, the rural development budget for the EU 15 was cut in order to get a deal due to reluctance to further cuts in Pillar 1. Securing voluntary modulation was an important part of the budget agreement, certainly for the United Kingdom. Member states can voluntarily modulate up to 20 per cent of their Pillar 1 budget for use on Pillar 2 rural development expenditure. Unlike compulsory EU modulation, financing voluntary modulation does not have to be co-financed by member states before it is spent. It is a welcome flexibility to choose co-financing levels rather than to have to accept imposed levels. As the Committee will know, there is pressure from farming bodies against moves to increase modulation without co-financing. A number of further details have to be worked out. The agreed EU budget still needs European Parliament endorsement and the allocation of main funding—that is to say, outside convergence regions for all member states to be proposed by the Commission in line with the rural development regulation. The amount left to be allocated to the EU 15 from ex-guarantee will be €18.91 billion. Compulsory EU modulation will add approximately €7 billion across the EU, all of which must be match-funded by member states. That takes us to the article in the Daily Telegraph, which was referred to by the noble Baroness. While I encourage all Members of the Committee to look at that article, written by a most reputable journalist, I also encourage the Committee to read my letter, published in that newspaper today, which attempts to deal with some of the point on which we think that the article was wrong. My letter makes it clear that it is no secret that we wanted, as a country, to reduce mainstream CAP subsidy payments to provide funds for rural development. I believe the committee of the noble Lord, Lord Renton, would heartily approve of this. The agreed EU budget for rural development spending is roughly the same as expenditure in the current period. It is not true that the deal will cause a 40 per cent cut, I argue, in payments for green farming in the UK. The key to funding the new environmental stewardship scheme in England was agreement in December to allow transfers of up to 20 per cent from CAP subsidies to fund such schemes. We believe that is a significant step forward in our strategy to shift CAP funds to environmentally sustainable farming. It was also not true that only the first 5 per cent can be match-funded by Government. Member states can choose the level of match funding that they allocate. Lastly, the article claimed that Defra Ministers have written a joint letter to the Prime Minister with the Environment Agency, RSPB and English Nature. Defra Ministers have not written such a letter. I could go on, but think that at this hour to say more about that settlement would mean that we have less to say when we come to debate these matters in due course. The noble Baroness asked about future funding of Natural England. Natural England will receive the core of its funding from Defra. A large part will be for the agri-environment programme. We expect Natural England to seek appropriate sources of income from other areas, as the Countryside Agency and English Nature have done. That could include the lottery, sources of targeted EU finding and even commercial sponsorship. It is for the lottery distributors to decide their policies for giving awards, and it would not be right to prevent Natural England from receiving lottery grants. Natural England will have a total budget of over £300 million. I hope I have gone some way to answering the points made in this debate.