Chapter 2: Direct Payments After EU Exit Section 12: Power to make delinked payments
This section provides the power to the Secretary of State to delink Direct Payments from land. With delinked payments, there would be no obligation for the recipient of the payments, during the agricultural transition period, to remain a farmer. This will be called "delinking" payments because the current connection between the value of the payment and the area of land for which it is claimed will be broken. The amount of Direct Payments received by applicants during the agricultural transition, whether that be under the basic payment scheme (see sections 10 and 11) or delinked payments, will be less than received now and will be reduced further during the agricultural transition period as the payments are phased out.
	Subsection (1) allows the Secretary of State to make provision, in regulations, to make delinked payments in relation to England. Delinked payments will be in place of Direct Payments under the basic payment scheme.
	Subsection (2) defines the term "delinked payment" and specifies the conditions which satisfy the delinking period. The delinking period cannot begin, and therefore delinked payments cannot be introduced, before 2022. The delinking period ends at the end of the agricultural transition period (set out in section 8).
	Subsection (3) lists the things that must be included in regulations for delinked payments. Subsection (3)(a) requires the Secretary of State to define who will be entitled to a delinked payment. The Secretary of State intends to set qualifying criteria based on a reference period (see subsection (5)). Subsection (3)(b) requires the Secretary of State to set out the method to calculate the value of delinked payments. The Secretary of State intends to calculate delinked payments based on a reference period (see subsection (5)) and then apply reductions during the remaining lifetime of the agricultural transition period for England as the payments are phased out.
	Subsection (4) allows the Secretary of State to make further regulations concerning delinked payments as follows:
	Subsection (a) allows for recipients to opt out of receiving delinked payments. This avoids the perverse scenario of the Government making a payment that the recipient does not wish to receive;
	Subsection (b) allows for the Secretary of State to determine any circumstances under which a recipient is no longer regarded as entitled to delinked payments. Potential circumstances could include a business which has ceased to operate; and
	Subsection (c) allows the Secretary of State to introduce regulations so that it can pursue recovery of delinked payments to which the recipient was not, in fact, entitled.
	Subsection (5) provides that entitlement to delinked payments may be defined by whether an individual was entitled to payment under the basic payment scheme during a reference period, of one or more years, prior to the introduction of delinking. Other definitions are not ruled out, which allows for further consultation.
	Subsection (6) provides that the method for calculating the value of the delinked payment to any recipient may be based on the value of the "basic payment scheme" payment they were entitled to receive. This could, for example, be based on a single previous scheme year or an average over a number of previous scheme years. Other definitions are not ruled out, which allows for further consultation.
	Subsection (7)(a) specifies that no payments under the basic payment scheme are to be made after the introduction of delinked payments (save for basic payment scheme payments related to prior years).
	Subsection (7)(b) sets out that the power in section 11(1), and any regulations made under it, providing for the phasing out of Direct Payments under the basic payment scheme, will no longer have any effect once delinked payments are introduced.
	Subsection (8) provides that regulations made under this section are to be subject to affirmative resolution procedure.