Untangling the UK’s complicated relationship with European environmental policies and subsidies could be the hardest part of leaving the EU. Mark Rowe reports
When Theresa May talked of a Brexit cliff-edge – the risk of the UK leaving the EU with no trade deal in place – staff at the Department for Environment, Food and Rural Affairs could have been forgiven for raising an eyebrow. Despite being one of the smallest government departments, Defra has one of the biggest Brexit to-do-lists.
“Very few departments – other than perhaps the Department for International Trade – have such a high percentage of their activities covered by Europe,” says Dieter Helm, professor of energy policy at the University of Oxford. “Brexit is an enormous task for Defra, an institutional task.”
A daunting 1,200 EU laws relate to Defra, according to the Institute for Government, accounting for a quarter of the entire EU legislative oeuvre sitting in Brussels. The EU affects 80% of what Defra does, while 60% of food and drink produced in the UK is exported to Europe, including 90% of beef and lamb and 70% of pork.
“Defra is right up there in terms of complexity when it comes to Brexit,” says Joseph Owen, a researcher for the IfG. “Many of Defra’s agencies are based on performing a function in relation to the EU, so there is a world where some of these will no longer exist in years to come.”
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Defra’s brief includes EU laws that set standards relating to conservation for birds and habitats, pesticides, drinking water and bathing water quality. If that were not enough, Defra handles arguably the two most fiendishly complicated links between the UK and the EU, the Common Agricultural Policy and the Common Fisheries Policy. CAP dominates the way the UK and its European neighbours produce food, guides the distribution of £3bn of subsidies to UK farmers and funds agri-environment schemes that in theory encourage wildlife-friendly farming. The CFP outlines quotas for the fishing industry and requires Defra to monitor vessels more than 12 metres long in UK waters to ensure quotas are respected.
Another issue, farm labour, goes to the heart of the Brexit vote. Horticultural and fruit farmers rely heavily on permanent and seasonal workers from the rest of the EU to pick produce from strawberries to apples. The farming sector as a whole uses 700,000 migrants and maintains it cannot gather crops or sell at competitive prices without this labour. However, secretary of state Andrea Leadsom – a prominent Brexiteer – has declined to offer reassurance about a revival of the Seasonal Agricultural Workers Scheme for both EU and non-EU workers, which granted temporary visas until it ended in 2013. She further warned at a National Farmers Union conference in February that “we mustn’t forget that a key factor behind the vote to leave the EU was to control immigration”.
Another headache is that Defra’s budget is 17% smaller now than in 2010, according to the IfG, and will be almost 35% smaller by March 2019. “Our members in Defra are pretty downbeat. They have had long periods of pay restraint, job cuts and no proper sense that their skills are valued by government,” says Sue Fern, a spokeswoman for the Prospect union.
The challenges do not stop there: last year Defra was tasked with a huge restructuring plan, known as “Defra Unity” which will streamline back office services and re-orientate the department’s relationship with its 33 agencies and public bodies, such as the Environment Agency and Natural England. Then there is the implementation of the government’s 25-year plan for the natural environment, a key component of the Conservative Party’s 2015 general election manifesto. “Defra has been told that nothing stops,” the IfG’s Owen says. “Brexit has just been layered on top of those projects. That is a significant challenge.”
A further complication is that Defra is the most devolved government department. For the most part, issues such as agriculture, forestry, water and flood defence are handled by the Welsh and Scottish governments and the Northern Ireland executive. Yet while several areas were devolved in law, in practice they were delivered in Brussels.
Fishing will be a hot topic in Scotland, as the nation accounts for half of all fish by weight and size landed in the UK and is likely to demand complete say over its fisheries, something the Cabinet Office will negotiate rather than Defra.
“A lot of legislation has evolved with the understanding that the EU provides the framework in which devolved nations can manoeuvre,” Owen says. “There is now a question of what sort of framework is required to manage divergence between nations of the UK.”
The government has indicated that traditional line departments will deal directly with their Brexit tasks, meaning Defra will carry out the lion’s share of the work. So will the department be able to cope? “I think we have one of the best civil services in the world and the calibre of people and the absence of corruption is quite fantastic,” Helm says. “What we need is a mastery of a great deal of detail. There may be a case for seconding people with expertise in trade, aquaculture and other areas from universities. The government may need to look at expert committees.”
The priority, according to Fern, must be a skills audit within Defra. “We have no proper idea of what skills have been lost to cuts, where the gaps are and what needs to be recruited from elsewhere. Some skills are always transferable but other deep specialist skills will be difficult to replace.”
“People are beginning to realise you need specific knowledge and detail,” Helm says. “You really need to know every detail [in trade negotiations] because you can bet the guys on the other side of the table will have it.” When it comes to recruitment, Owen cautions, “top talent will be in demand”.
To address these challenges Defra has set up an EU Exit programme to co-ordinate work and is, according to a spokesperson, “identifying and filling vacancies on a rolling basis”. It now has three policy directors general (where there were only two and fears it would drop to one), including a director general of farms and a director general of food. In February, Defra advertised two-year fixed contracts for a number of policy team leaders, offering a £45,690 salary.
Other measures have addressed the knowledge gap that opened up while Defra areas were run by the EU: last autumn Defra tasked staff with detailed re-reading of all EU-Defra policy areas to try and fully understand the relationship between the EU and the UK in terms of agriculture, fisheries and the environment.
“The EU has acted as the co-ordination centre, the brain running many affairs,” Owen says. “Defra has been responsible for only two pieces of primary legislation since the 2010-12 parliamentary session, which would suggest it has less legislative capacity than many other departments. Given the legislative impact of Brexit, Defra will need to quickly build skills in this area.”
This re-learnt knowledge – combined with some fresh faces with fresh perspectives – may help with the thorny task of transposing legislation, something that Clare Moriarty, Defra’s permanent secretary, pithily described last autumn as “a significant exercise [for Defra]”.
“We have no proper idea of what skills have been lost to cuts, where the gaps are and what needs to be recruited from elsewhere. Some skills are always transferable but other deep specialist skills will be difficult to replace” – Sue Fern, Prospect
The Great Repeal Bill, intended to bring all EU legislation into UK law while the government works out what to do next, will not be a simple drop-in exercise, Owen warns. “There will be operable laws that will shift EU law into UK law but there will be inoperable laws. It might be – for example – that an agency has to report twice a year to the EU on environmental matters. The question for Defra is who receives these reports now, how do they assess and assure them if EU bodies no longer do. Some laws will not automatically work.”
Helm also believes the bill will prove far from straightforward. “Ministers may be minded not to transpose everything but to use the act to amend, change and cut. There may well be a need to change things but I would urge caution to amend or alter at this stage. Haste may well bring regret.”
Despite the lengthy list of daunting challenges, Helm believes Brexit could be positive for Defra and the environment. He points to several NGOs who have cautiously welcomed Brexit for its potential to re-think management of the countryside to the greater benefit of wildlife. The National Trust has called for CAP subsidies to be scrapped and farmers to instead be paid out of public funds only for environmental services such as flood prevention, wildlife and nature protection.
“It’s crucial [for Defra] to have an over-arching framework,” Helm says. “Rather than thinking: ‘What can we do to get by and buy us some time’ – which is what usually happens – it is better to ask: ‘How can we use this opportunity to do things better?’
“Defra has to replace CAP but must also think through the institutional framework of how that will happen.”
Owen agrees, noting that “Defra is going to have to work out what life after Brexit will look like. What are the risks and challenges?”
Helm argues that a seismic re-think of how Defra works, combined with advances in technology means those predicting significant staff increases may be wide of the mark. “To ask how many more people Defra needs is to miss the point,” he says. “We’re seeing huge advances on the data side.
“What we need is a mastery of a great deal of detail. There may be a case for seconding people with expertise in trade, aquaculture and other areas from universities. The government may need to look at expert committees” – Professor Dieter Helm
“Government is being digitalised and that’s creating huge opportunities. With GPS we can see land in clear resolution, we don’t need people chugging around, visiting farms to ensure they are conforming with environmental schemes, it’s almost immediately observable.”
One wider concern hangs over Defra: viewed through the brutal prism of balance sheets alone, UK farming output (valued at £9bn, roughly 0.7% of GDP) is statistically far less important compared to other sectors – manufacturing and financial services each contribute 10% of GDP. In this unforgiving context, Defra must renegotiate food tariffs.
“Trade happens in a much wider context – not just farming,” Helm says. “Look at the lobbying power of US farmers and you fear that British farmers will be used as a pawn in a wider game. Car sales into Europe are much more important in cost terms than agricultural exports there. In the haste to do deals, agriculture may be traded off against another sector.”
The many steps Defra has already taken will certainly help and, Owen says, government talk of a long-term approach to Brexit is welcome: “What is positive is that there has been a recognition that these things will take a long time to get right.”
However Owen warns that Defra could be left scrambling should the prime minister carry through her threat to walk away if a good Brexit deal cannot be secured. “She’s said no deal is better than a bad deal. But there is a lot of work to be done to make walking away a practical option,” he says. “Contingency plans need to be put in place for the most exposed areas, those where the risk is most unpalatable. Defra has to make sure that whatever the outcome, policy areas are functioning and stuff doesn’t fall over on day one.”
Defra’s headcount ranks 10th out of 17 government departments when its executive agencies are included but is larger only than DCMS when just core departments are compared. Defra was unable to confirm exact figures but is believed to employ around 21,900 staff; 2,000 in the core department and the remainder in its executive agencies. The 2016 Defra People Survey found that just 35% of staff wanted to stay in the department for at least three years – 25% wanted to leave immediately or within 12 months. Meanwhile 45% of staff feel that change is not managed well within the department but 44% expressed a strong attachment to the department.
EU & DEFRA
The Habitats Directive protects more than 1,000 animal and plant species and more than 200 habitat types, including mountains and ancient woodlands, with designations such as Special Protection Area and Special Area of Conservation which are as robust as national park status. The Birds Directive applies similar protection to birds, their eggs, nests and habitats.
COMMON FISHERIES POLICY
The CFP outlines quotas for the fishing industry across the Europe. It has introduced a discard ban, which stops the wasteful practice of throwing fish back into the sea but has been criticised for setting unsustainable quotas that ignored scientific evidence on fish stock levels.
COMMON AGRICULTURAL POLICY
UK farmers receive about £3bn every year in EU support payments via CAP which also funds rural development, paying farmers to plant hedgerows, and help them diversify, such as converting a barn into a bed and breakfast. CAP payments make up 30-40% of incomes for upland livestock farms.
Free movement of people is one of the underlying principles of the EU. The farming industry has repeatedly argued it could not gather crops or sell them at competitive prices without migrant labour.
These are regulated by the EU’s Sustainable Use of Pesticides Directive which is considered to have introduced more stringent criteria for approval and changed the mindset of countries across Europe.
The Water Framework Directive has been cited by supporters as driving the restoration of the ecological quality of rivers and lakes; a similar influence has been claimed for the Nitrates Directive, which prevents nitrates from agricultural sources polluting ground and surface waters.
The Bathing Waters Directive forced British water companies to clean up sewage they pumped into the sea; it was boosted by the Shellfish Waters Directive which also laid down microbial standards.
Defra will feel the heat from both developers and environmentalists when it comes to addressing two major pieces of EU legislation, the Birds Directive and the Habitats Directive. NGOs believe public pressure will ensure that legislation is not weakened and point to the UK’s historic role in raising environmental and animal welfare standards across Europe. Developers, however, have welcomed briefings from ministers that the Habitats Directive may be watered down to reduce planning delays caused by great crested newts. Oxford’s Professor Dieter Helm indicates that great-crested newts may become something of a lightning conductor for the wider issue of building on green land. “If you de-register newts, what is the context of how you do that? If it is to allow development in certain areas then Defra will have to consider how such a move might affect other [protected] species, such as nightingales, that might be found in the same habitat.” Some expert sources suggest that a nuanced path may be possible – that rules may be loosened where newts are more common, such as East Anglia and the north-west of England, but kept tight where they are scarce, such as the south-west and the Pennines.