Direct Payments To Farmers (Legislative Continuity) Act 2020

Commentary on provisions of Act

Section 1: Incorporation of EU legislation governing the CAP direct payment schemes

24. The purpose of Section 1 is to incorporate EU legislation governing the 2020 CAP direct payment schemes into domestic law.
25. Subsection (1) brings the EU legislation governing the CAP direct payment schemes for claim year 2020 into domestic law on exit day.
26. Subsection (2) clarifies that the body of law referred to in subsection (1) is the legislation as it has effect in EU law immediately before exit day in so far as it is concerned with claim year 2020, excepting any amendments made by the EU before this time concerned with giving effect to the WA.
27. Subsection (3) specifies the legislation being incorporated into UK law under subsection (1) and, in particular, specifies that the Horizontal Regulation (Regulation (EU) No 1306/2013) and regulations made under it will only form part of domestic law as far as they relate to the CAP direct payment schemes.
28. Subsection (4) specifies that the EU legislation being incorporated is in the English language version.
29. Subsection (5) excludes the provisions in this section from having any impact on matters relating to the previous claim year (year 2019) or earlier claim years.
30. Subsection (6) ensures continuity between January 2020 and the rest of the claim year in 2020 by treating the incorporated EU legislation as having formed part of domestic law from 1 January 2020. In relation to the 2020 claim year, farmers will be governed by EU law for January 2020 and by domestic law thereafter but this provision means that the timeframe for compliance under the 2020 scheme will be treated as starting from the beginning of the claim year on 1 January 2020.
31. Subsection (7) defines terminology used under this section.

Section 2: Interpretation and status

32. Section 2 sets out the rules for interpreting retained EU law governing CAP direct payment schemes in the domestic courts and makes provision about the status of that law. This section applies the relevant provisions of the 2018 Act with modifications for the purposes of this Act.
33. Subsection (1) applies the law within the 2018 Act governing the interpretation of retained EU law (set out in section 6 of that Act) for the purposes of this Act in respect of the retained EU law incorporated by Section 1(1).
34. Subsection (2) applies section 6 of the 2018 Act but with modifications to certain expressions in that section. The modifications applied are those set out in subsections (5) and (6).
35. Subsection (3) sets out the status of retained EU law for the purposes of this Act. It applies section 7(2) and (3) of, and specified paragraphs in Schedule 8 to, the 2018 Act but with modifications for the purposes of retained EU law incorporated under section 1(1) of this Act. Section 7(2) and (3) of the 2018 Act restrict the way in which retained EU law can be amended by primary and subordinate legislation. Paragraphs 3-8 of Schedule 8 to that Act set out how existing powers relating to subordinate legislation may operate on retained EU law and paragraphs 10-12 of Schedule 8 to that Act deals with how future power would operate on retained EU law.
36. Subsection (4) specifies that the modifications mentioned in subsection (3) are those listed in the table in subsection (5).
37. Subsection (5) lists a number of modifications to phrases used within the 2018 Act. Therefore those provisions are to be read as excluding the words in the left hand column and instead replacing it with the words in the right hand column.
38. Subsection (6) provides that, for the purposes of subsection (1) of this section, the definitions applied in section 6(7) of the 2018 Act are modified to apply for the purposes of this Act.
39. Subsection (7) provides that, when interpreting subordinate legislation which is both retained EU law incorporated by section 1(1) of this Act and retained EU law under section 6 of the 2018 Act, section 6 of the 2018 Act will apply with modifications made under this section but only insofar as it relates to the CAP direct payment schemes.
40. Subsection (8) defines the status of legislation listed in section 1 of this Act for the purposes of the Human Rights Act 1998.
41. Subsection (9) provides that certain terms within subsection (8) are to be interpreted as they are defined in the Human Rights Act 1998.
42. Subsection (10) defines terminology used under this section.
43. Subsection (11) ensures that provisions that are not yet in force and any amendments made to the European Union (Withdrawal Agreement) Act 2020 will come into force at the same time as this section comes into force.

Section 3: Regulations in connection with the retention of EU legislation under section 1

44. Section 3 gives the Secretary of State the power to make necessary operability changes to make sure that the law works properly for claim year 2020. The powers are also mirrored for the Devolved Administrations (DAs). The Secretary of State may do so UK wide but only with the consent of the DAs. There is also a power to make amendments during 2020 if the equivalent EU law is amended and the UK or DAs similarly wish to make this amendment. These powers mirror the powers set out in sections 8 and 11 of the 2018 Act with modifications. There is also a power for DAERA to enable them to continue to move towards a uniform unit value of payment entitlements.
45. Subsection (1) provides the Secretary of State with the power to make secondary legislation to fix any deficiency or failure in retained EU law governing the CAP direct payment schemes that arises from EU exit, or to keep pace with any changes made to the CAP direct payments scheme for the claim year 2020 by the EU. A failure of retained EU law governing the CAP direct payments scheme is a type of deficiency: a failure means the law doesn’t operate effectively, whereas deficiency covers a wider range of cases where it does not function appropriately or sensibly.
46. Subsection (2) places a duty on the Secretary of State to get consent from the DAs before making UK wide regulations.
47. Subsection (3) gives power to the devolved authorities in Scotland, Wales and Northern Ireland to make regulations to fix any deficiencies in the law that arise form EU exit, or to keep pace with any changes made to the CAP direct payments scheme for the claim year 2020 by the EU.
48. Subsection (4) allows DAERA in Northern Ireland to modify the retained EU law incorporated by Section 1(1) where it concerns the value of payment entitlements in Northern Ireland, so that those entitlements may continue to move towards a uniform unit value.
49. Subsection (5) explains the sorts of deficiencies arising after exit day that may be corrected using the powers in subsections (1)(a)(ii) and (3)(a)(ii). It mirrors some of the equivalent provisions in the 2018 Act.
50. Subsection (6) specifies that sections 8(5) to (7), apart from subsection (7)(e), of the 2018 Act apply in relation to regulations made under the powers in subsections (1) and (3) and explains how those sections of the 2018 Act are to be read.
    • Section 8(5) of the 2018 Act provides that secondary legislation made under the power in this section can do anything an Act of Parliament might to deal with deficiencies. This could include altering Acts of Parliament where appropriate and sub-delegating the power to a public authority where they are best placed to deal with the deficiencies. The power is subject to the restrictions set out in Section 8(7) of the 2018 Act.
    • Section 8(6) of the 2018 Act provides, non-exhaustively, for what the secondary legislation made under this power can do. For example, it can transfer the functions of EU authorities to UK public authorities. These functions might include the ability to set rules or create standards, which are currently made by the EU as non-legislative acts (delegated and implementing acts). The power can be used to repeal, amend or replace parts of the retained law. There will be other uses of the power necessary to correct deficiencies. The power could be used to amend law which is not retained EU law where that is an appropriate way of dealing with a deficiency in retained EU law.
    • Section 8(7) of the 2018 Act stipulates that regulations cannot be used to impose or increase taxation or fees, make retrospective provision, create a relevant criminal offence, establish a public authority, amend the Human Rights Act 1998 or any subordinate legislation made under it, amend the devolution Acts (except in certain specific and limited ways), or for the purposes of implementing the WA.

51. Subsection (7) clarifies that the provisions made by regulations in this section may apply in relation to matters arising in relation to the CAP direct payment schemes for the whole of the 2020 claim year. This ensures that provisions can cover matters arising in January 2020 whilst still under EU law.
52. Subsection (8) is an important safeguard and makes clear that the powers are temporary and will expire after 31 December 2020. This does not affect the continuation of regulations made before that date so, for example, any outstanding payments to farmers in relation to the 2020 scheme year can continue to be paid after 31 December 2020.
53. Subsection (9) specifies that the regulation making powers in subsections (1) or (3) include the ability to make different provision for different purposes, for example to make amendments to one of the direct payment schemes which only affects certain farmers. It also specifies that the regulation making powers in subsections (1) or (3) include powers to make consequential amendments to the regulations, including the power to re-state any retained EU law governing the CAP direct payment scheme to make it clearer.
54. Subsection (10) defines terminology used under this section.

Section 4: Publication and rules of evidence

55. Section 4 makes provision for the domestic publication of certain EU regulations relating to Direct Payments, ahead of exit day. It also contains provision on rules of evidence.
56. Subsection (1) exempts the Direct Payments Regulation, and accompanying Delegated and Implementing Acts, from the publication requirement laid down in the 2018 Act.
57. Subsection (2) places a duty on the Queen’s printer to publish specified EU regulations listed in section 1 as they appear in the Official Journal before exit day.
58. Subsection (3) cross refers to the regulations listed in subsection (1) and sub-paragraphs (i) to (v) of section 1(3)(d).
59. Subsection (4) exempts from publication anything that is repealed before exit day and any changes made after that time.
60. Subsection (5) specifies that retained EU legislation under section 1(1) is a "relevant matter" for the purposes of paragraph 4 of Schedule 5 to the 2018 Act. Paragraph 4 of Schedule 5 is a power to make provision about judicial notice and admissibility. Matters which are ‘judicially noticed’ are deemed to already be within the knowledge of the court, and so are not required to be ‘proved’ to the court. For example, public Acts of Parliament and the EU Treaties are judicially noticed. Paragraph 4 provides that a Minister of the Crown can make regulations which provide for judicial notice to be taken of a relevant matter, and for the admissibility in legal proceedings of evidence of both a relevant matter and instruments and documents issued by or in the custody of an EU entity, to ensure that appropriate evidential rules can be put in place to reflect the new legal landscape after exit.

Section 5: Power to increase direct payments ceilings for 2020

61. Section 5 amends the retained Direct Payments Regulation to allow the Secretary of State, having regard to the Bew Review, to decide to increase the UK national and net Direct Payments ceilings for 2020. It also amends regulation-making powers that already exist in the Direct Payments Regulation (in Articles 6(3) and 7(3)) so as to widen their scope to enable the 2020 national and net ceilings to be increased to take account of this decision. This means that where, as a consequence of the Government’s decision following the Bew Review, the amount of direct payments goes above the limit set by the national and net ceilings for 2020, these powers can be used to increase those ceilings to ensure they are not breached and payments can be made within the legislative framework.
62. Subsection (1) introduces the amendments to the Direct Payments Regulation.
63. Subsection (2) amends Article 6(3) of the Direct Payments Regulation so that the regulations made under the powers provided to the Secretary of State in that paragraph to adapt the 2020 national ceiling can take into account the decision made in accordance with the new Article 7A, explained below. The national ceiling comprises, for the UK, the total value of all allocated payment entitlements, of all national reserves and regional reserves and of all the financial ceilings calculated with respect to the individual direct payment schemes. Regulations made according to decisions relating to the 2020 national ceiling will require the consent of all devolved administrations.
64. Subsection (3) amends Article 7(3) of the Direct Payments Regulation so that the regulations made under the powers provided to the Secretary of State in that paragraph to adapt the 2020 net ceiling can take into account the decision made in accordance with the new Article 7A, explained below. The net ceiling delimits the value of Direct Payments which can be made in the UK for the 2020 claim year. Regulations made according to decisions relating to the 2020 net ceiling will require the consent of all devolved administrations.
65. Subsection (4) inserts Article 7A into the retained Direct Payments Regulation. This article provides the Secretary of State with the power, having regard to the Bew Review, to decide to increase the total maximum amount of direct payments that could otherwise be granted in relation for the claim year 2020. Subsection (1) of the new article provides the power. Subsection (2) specifies what the Bew Review is.
66. Subsection (5) of Section 5 amends paragraph 5 of Article 22 of the Direct Payments Regulation, so that any increase in national or net ceilings as a result of the exercise of the powers in new Article 7A will result in a corresponding increase in the value of payment entitlements.

Section 6: Consequential and transitional provision

67. Subsection (1) provides the Secretary of State or relevant national authority with powers to make regulations which he or she considers appropriate as a consequence of this Act.
68. Subsection (2) clarifies that consequential provision might include modifying both primary and secondary legislation.
69. Subsection (3) gives effect to the consequential provisions contained in Schedule 1 to this Act.
70. Subsection (4) gives the Secretary of State or relevant national authority the power to make transitional, transitory or savings provision by regulations.
71. Subsection (5) provides a power to the Secretary of State to make UK wide regulations but only with the consent of the DAs.
72. Subsection (6) clarifies what is meant by "consent", namely consent of Scottish Ministers, Welsh Ministers and DAERA.
73. Subsection (7) defines "relevant national authority".

Section 7: Regulations

74. Section 7 gives legal effect to Schedule 2.

Section 8: Interpretation

75. Section 8 defines certain terms used throughout the Act.

Section 9: Extent, commencement and short title

76. Subsection (1) provides that the Act extends to the legal jurisdiction of England and Wales, Scotland and Northern Ireland.
77. Subsection (2) sets out that section 5 will come into force on exit day.
78. Subsection (3) sets out the provisions of the Act that will commence on Royal Assent.
79. Subsection (4) establishes the short title of the Act.

Schedule 1 – Consequential provision

80. Paragraph 1 specifies how references to EU legislation are to be interpreted on or after exit day.
81. Paragraph 2 disapplies paragraph 2 of Schedule 8 of the 2018 Act in relation to EU legislation listed in section 1(3) incorporated into domestic law by section 1(1).
82. Paragraphs 3 – 6 adds definitions to the Interpretation Act 1978 and the equivalent acts in Wales, Scotland and Northern Ireland for the purposes of this Act.
83. Paragraph 7 confirms the status of EU law listed in the Act.
84. Paragraph 8 specifies that the effects of paragraphs 3 to 7 do not affect the terms mentioned in paragraph 3 of the 2018 Act.

Schedule 2 – Regulations under this Act

85. Schedule 2 details the procedures under which regulations can be made and scrutinised.
86. Paragraph 1 details the procedure by which the Secretary of State, the Welsh Ministers and DAERA may make regulations under this Act.
87. Paragraph 2 provides for regulations to be made under the made affirmative procedure in respect of correcting deficiencies in sections 3(1)(a) or 3(3)(a) , and under the affirmative procedure in respect of making modifications in sections 3(1)(b), 3(3)(b) or 3(4).
88. Paragraph 3 provides that regulations made under section 6 are subject to the negative resolution procedure.
89. Paragraph 4 details the processes for (a) the Secretary of State, (b) the Scottish Ministers, (c) Welsh Ministers, and (4) DAERA whereby regulations under section 3 are subject to made affirmative resolution procedure.
90. Paragraph 5 details the conditions of which the period of time in relation to paragraph 4(a) is subject to calculation.
91. Paragraph 6 details the conditions of which the period of time in relation to paragraph 4(b) or (c) is subject to calculation.
92. Paragraph 7 details the conditions of which the period of time in relation to paragraph 4(d) is subject to calculation.
93. Paragraph 8 specifies (a) that regulations that cease in line with the provisions of paragraph 4 will continue to be valid, and (b) that ceasing of regulations in line with the provisions of paragraph 4 will not prevent the making of new regulations.
94. Paragraph 9 sets out conditions on the making of regulations under this Act which are subject to the affirmative resolution procedure.
95. Paragraph 10 sets out conditions on the making of regulations under this Act which are subject to the negative resolution procedure.
96. Paragraph 11 allows for a combination of regulations to be made together, and lays down that regulations subject to negative resolution procedure may be made under affirmative or made affirmative resolution procedure.