Farm subsidies post Brexit

What would happen in the event of Brexit depends on who is on the media at that particular time, and I confess to being almost as fed up listening to the remain side telling us how awful things would be in the event of Brexit as I am listening to the relentless optimism of the Brexiteers telling us how wonderful everything will be without the EU shackling us.

Me, I like dealing in facts.  I even like dealing in statistics, and I have a fair idea how I think the politics of Brexit would play out.  I don’t think it would be anything like as dire as the Remain campaign will have you believe, but nor do I believe that the Brexit campaign’s optimism of independence and easily negotiating good trade deals is realistic.

A recurring theme in the media is farmers.  The standard Leave campaign position is that the UK Government will be able to provide its own scheme since we won’t be giving money to the EU.  Even though the Government has said it won’t do any such thing, it is possible that post-Brexit, the Government will be persuaded to provide such a scheme rather than just turning the money saved into reducing the deficit.  Unlikely on the whole, but far from incredible.

Such a UK-funded scheme would be administered by the Department of Environment, Food and Rural Affairs (DEFRA) for England, with Barnett consequentials for Scotland, Wales and Northern Ireland.  And herein lies the rub.

This table presents the actual figures for October 2013-September 2014, the last year for which full data is available:

England £2,241,209,250.48
Scotland £627,941,548.84
Wales £344,336,731.93
Northern Ireland £349,759,080.76
TOTAL £3,563,246,612.01

So what would that look like if the UK Government were to fully fund DEFRA for actual payments for that year, with Barnett consequentials for the devolved administrations?  Here we are, using the formula as it was for the years 2011-2016:

Barnett formula Barnett consequentialsDifference% change
England100.00% £2,241,209,250.48 £-0
Scotland10.03% £224,793,287.82 £(403,148,261.02)-64.20%
Wales5.79% £129,766,015.60 £(214,570,716.33)-62.31%
Northern Ireland3.45% £77,321,719.14 £(272,437,361.62)-77.89%
TOTAL £2,673,090,273.05 £(890,156,338.96)-24.98%

The amount of money made available by the Treasury for 2013-14 for farm subsidies under the Barnett consequentials (which of course can be used by the Executive for any devolved purpose it wishes) would have been less than a quarter of that actually paid by the EU.  To be able to pay farmers the same amount as the EU would have required the Executive to find a further £272 million from its own resources.

Suppose the full £3.5 billion were to be divided up according to the Barnett Formula.

Barnett formula ActualDifference% change
England100.00% £2,987,546,417.38 £746,337,166.9033.30%
Scotland10.03% £299,650,905.66 £(328,290,643.18)-52.28%
Wales5.79% £172,978,937.57 £(171,357,794.36)-49.76%
Northern Ireland3.45% £103,070,351.40 £(246,688,729.36)-70.53%
TOTAL119.27% £3,563,246,612.01 £(0.00)0.00%

The amount of money made available by the Treasury for 2013-14 for farm subsidies in Northern Ireland would still be less than 30% of what is currently paid.

That figure gets worse.  I haven’t been able to get figures for the replacement Basic Payment Scheme for 2014-15 yet, but from April 2016 to March 2021, the Barnett formula will change to 9.85% for Scotland, 5.69% for Wales, and 3.39% for Northern Ireland – so we would get less for any increase in spending in England.

In the event of Brexit, and regardless of whether farm subsidies are replaced, it is hard to see farmers being anything other than worse off.

Andy has a very wide range of interests including Christianity, Lego, transport, music, and computers. Anything can appear in a post.

Andy tweets at @andyboal