HC Deb 23 October 1956 vol 558 cc498-512

Motion made, and Question proposed, That the Clause stand part of the Bill.

3.55 p.m.

Mr. Edward du Cann (Taunton)

I should like to refer to the increase in the amount of money made available for improvement grants by this Bill and, in particular, to the way in which this money is to be spent. I should like to ask the Joint Parliamentary Secretary two short questions. I had hoped to move a new Clause in an effort to clarify the situation, but I understand that is not possible, because it goes beyond the terms of the Money Resolution.

I feel that the present situation contains the seeds of some slight confusion and that may be as well at this stage if it were cleared up. I also feel that the money referred to in Clause 1 of the Bill will not necessarily be spent as economically or effectively as it might if the Hill Farming Act, 1946, did not disbar the person carrying out the work in respect of which the grant is made from charging the cost—or at any rate, 50 per cent. of it—of his work. I am not suggesting that this is a matter of major importance. These Hill Farming and Livestock Rearing Acts are very good Acts indeed, as was generally agreed in this House when we considered the Bill on Second Reading. None the less, this particular matter is a minor but, I think to some hill farmers, a very irritating blemish.

May I quote, first, the offending Clause of the Hill Farming Act, 1946? It is Clause 2 (1) and it states : The amount which may be paid by way of an improvement grant in respect of the cost of any work shall be one half of the cost of that work so far as approved by the appropriate Minister as having been reasonably incurred. When we considered this matter during the Second Reading debate, the Joint Parliamentary Secretary was good enough to refer to this point in some detail. He said that the point had been made by hon. Members during the debate. He referred to this Clause which, he said, was quite specific in that it defined exactly what could qualify for payment. He pointed out that the words, "having been reasonably incurred "debar the farmer from receiving any grant in respect of his own work. He went on to say, very generously, and I know that this point has his sympathy : We have listened very carefully to what has been said on the subject today and we will give further consideration to the point to see whether it is possible to move from the position which has been held for the last ten years. We take the weight of the point. …"—[OFFICIAL REPORT, 20th July, 1956 ; Vol. 556, c. 1642–43.] My first question to the Joint Parliamentary Secretary is whether he has had an opportunity to consider this matter, and if so, what further views he has on it, and whether he can go any distance towards helping the farmers concerned in this matter.

My second question on the subject of the expenditure of this money derives from the leaflet describing the general conditions under which these grants were made. The official reference number of the leaflet is H.F.24. In the general notes which form part of Appendix B, dealing with the cost of work, there is a subhead, "Wages and Salaries", which states : Allowance will normally be made at rates approved by the Minister for the labour of all persons engaged on the work including members of the applicant's family or household, or usual farm stafl. … That we know and, of course, it is excellent. It goes on : No allowance will be made, however, for the personal services of the applicant, save in exceptional circumstances. 4.0 p.m.

What are these exceptional circumstances? On the face of the matter, it would seem that, on the one hand, it is clearly understood that no grant can be made in respect of a farmer's own work and yet, on the other hand, that there are exceptions. Would the Parliamentary Secretary kindly tell us how these two apparently contradictory statements marry up? The farming community will be grateful if he will do so.

Put very simply, the situation is that the way in which the Hill Farming Act, 1946, is drawn precludes a farmer from obtaining a grant in respect of half the cost of his own work. If one considers the circumstances for a moment one sees how important this provision is in respect of money. Applicants for grants inevitably live in isolated areas and therefore it is sometimes difficult for them to get contractors to come to the farm. On occasion, farmers are at the mercy of contractors and have no freedom of choice. It is inevitable, therefore, that the work costs more. I have been told by the Somersetshire representatives of the National Farmers' Union that there are villages where contractors cannot cope with the volume of work, which means that work under these Acts is being slowed down.

There is much work that a farmer can do himself quite easily, like digging foundations, hauling stones for farm roads, laying mole drains, or making repairs with home-grown timber. He would want to do this work, and in the case of one-man farms the farmer is precluded from benefit by the drafting of the Section which I have quoted. This means a burden on the taxpayer greater than it need be, and greater cost to the individual farmer.

It is true in some cases, although I do not say in many, that the Act is not used to full advantage, perhaps because the farmer must pay 50 per cent. of the cost of the work done by himself. He must pay money with which he would otherwise do still more work, if he had the opportunity. It may be argued that if the farmer were allowed to charge the cost of his own work there would be danger of abuse. I recognise that that is a point of great importance which requires serious consideration.

I have already referred to the excellent Arton Wilson Report. Paragraph 126 of that Report suggests that grants in a marginal production scheme should be based upon the estimated cost. I know the point is not quite parallel, but it is difficult to see why the same reasoning cannot be applied in hill farming legislation.

It may be stated that sufficient safeguards already exist. On the Second Reading of this Bill the hon. Member for Derbyshire, South-East (Mr. Champion) quoted with great effect from the Arton Wilson Committee's Report. He pointed out that the procedure for applying for these grants was exceedingly complicated because the farmer had to go through four separate departments of the Ministry before he could get a grant at all. The hon. Member made the point, and I absolutely agree with him, that while there should be thorough vetting there should not be too much vetting, complication and duplication.

The hon. Member pointed out that there were already sufficient safeguards. This is not a case of a man trying to get some sort of maintenance allowance for Income Tax purposes for decorating his own house, where there is no proper check. This is a very different matter indeed. We know that there is ample justification for these Acts, the Hill Farming Act, 1946, and the Livestock Rearing Act. They are excellent legislation in every way and have had an important practical effect. We have only to take a short journey into the hills to see the great effect which those Acts have had. We see excellent, flourishing farms because of the 50 per cent. grant to farmers to help them to improve farms which were previously inefficient or uneconomic units but are now producing the food which the nation needs very urgently. Excellent examples of such farms were given on the Second Reading.

It is a pity that so fine and flourishing a picture is impaired by the tiny but important blemish to which I have referred. I know that the Minister and the Parliamentary Secretary are sympathetic to the points which I have raised and I hope that the Committee will also be sympathetic to them. I hope that it may be possible to give practical effect to my suggestions.

Mr. Roderic Bowen (Cardigan)

I have much sympathy with the case which has just been put to the Committee by the hon. Member for Taunton (Mr. du Cann). The hill farming community will be deeply grateful to him for raising those points in such an effective way.

During the operation of the Hill Farming Act there has been a continual sense of grievance, particularly on the part of the small hill-farmer. It is extremely difficult for him to get labour. He must use the labour which is most readily available and is most skilled and knowledgeable, that is, his own labour. However, if he is not to deprive himself of financial benefit under these schemes he must seek other labour, under difficult conditions. Something should be done to relieve this position. As the hon. Gentleman has pointed out, the cost to the Government would be reduced if help were given to these small farmers.

As the hon. Gentleman also pointed out, the Arton Wilson Report referred to the advantage of paying 50 per cent. of the estimated cost of marginal production schemes rather than of the actual cost. There is always a disadvantage in paying out on estimated cost, but there are obvious advantages. If payment were made on the estimated cost of these schemes we should get over the sense of grievance.

The Parliamentary Secretary agreed on the Second Reading that there was a sense of grievance. It exists particularly with the small farmers and it could very easily be put right. I therefore urge that the whole matter be looked at again in the most sympathetic light.

Mr. Tudor Watkins (Brecon and Radnor)

I wish to follow the points made by both hon. Members who have spoken and which have displayed a united front among the political parties.

We have had ten years' experience of this legislation and I am sure that the Minister can now give us an assurance that he will look at the position and at least try to experiment to improve it. There is no better place for such an experiment than the area covered by the Mid-Wales Investigation Report. Even if the Minister cannot consider the matter retrospectively he might start from the end of the present period, 6th November, or from the Royal Assent to the Bill, and find out whether the arguments which have been put forward are justified.

The main trouble is the difficulty of obtaining labour in upland farms, which are unable to put forward schemes because they cannot get contractors. The Minister knows that in the White Paper on Rural Wales the Welsh Agricultural Organisation Society was to be asked to come into the picture on a large scale to help these small people. It was even turned down.

It is a great disadvantage to these small farmers if they are unable to get a grant for the labour they put into schemes. There may be some administrative difficulties about the proposal, but surely the Ministry could supervise the work. The Ministry would not be expected to give grants to a farmer who said that he had put in work in order to build a house. If he were constructing fencing, on which perhaps he would be a greater expert than anyone outside his farm, that would be a case to which consideration should be given. I hope that the Parliamentary Secretary will give consideration to it and give a reply to what on Second Reading he promised to look into.

Most Government Departments now know exactly what land comes under hill farming and livestock rearing. I think that there should be closer liaison with the Forestry Commission. I know of a particular case in Breconshire where the landlord was quite reasonable to the tenant and was prepared to go in for a scheme under the Hill Farming Act. They agreed to do it, but the Ministry of Agriculture said that a portion of the land would be better suited to forestry and, in the end, the Forestry Commission took the whole farm.

Consideration should be given so that it could be known in what areas the Commission is interested. It would be unwise if the Minister of Agriculture suggested that a 50 per cent. grant should be given for certain improvements and then the Forestry Commission took over that land. I should be obliged if the Minister would tell us what has happened to the surveys which have been undertaken by the Forestry Commission. If they are to be continued the Ministry of Agriculture will be able to know exactly what land is suitable for forestry and what is suitable for livestock rearing and hill farming schemes.

I am glad that the Minister has come to my aid. Unfortunately, owing to illness, I was not able to participate in the debate on the Mid-Wales Investigation Report. In that debate everyone was concerned about the question of compulsory amalgamation. The Ministry has given an assurance that it does not agree with the Land Commission Report that there should be compulsory amalgamation. I want an assurance that the Ministry's officers will not from now on say to farmers in my constituency that they cannot agree to certain schemes unless they are amalgamated.

I have brought to the attention of the Minister a case in which a farm was not allowed to go forward with a scheme because it would not amalgamate with a farm lower down the valley. I am sure my constituents welcome the attention the Minister has given to that matter, but I am anxious that he should say publicly that he does not agree with compulsory amalgamation, so that people in Wales may know what are the intentions of the Ministry. In my opinion, they are ideal and I read with interest what the right hon. Gentleman said in the debate on the Report.

Mr. G. B. Drayson (Skipton)

Since we gave the Bill a Second Reading on 20th July, I hope that the Minister has had an opportunity very carefully to consider the question of application of the farmer's own labour to approved schemes. As has been said by other hon. Members this afternoon, a genuine grievance has existed for some years. It is particularly apparent in remote farming areas such as exist in my constituency, where it is difficult to find contractors prepared to undertake the work and where there would be considerable delay in putting schemes into operation through contractors. I hope we shall hear that further thought has been given to the question and a formula arrived at whereby labour provided by the farmer himself can be taken into account for grant.

I am sure that if that could be done these schemes would go ahead far more quickly than at present. It might well result in a saving to the Government rather than that the fear of abuse would be an important factor. There would be a saving by giving this concession. I think it appropriate that on the first day of reassembly we should be discussing the Committee stage of this Bill. That suggests how seriously the Government regard this matter and the contribution which hill farmers can make to our economy.

I hope that a concession can be given on the lines suggested by my hon. Friend the Member for Taunton (Mr. du Cann) and other hon. Members this afternoon.

4.15 p.m.

Mr. Sidney Dye (Norfolk, South West)

The hon. Member for Taunton (Mr. du Cann) is to be congratulated on having tabled a new Clause which was not called, as it was out of order, and yet getting in a speech in support of it on the Question, "That the Clause stand part of the Bill." Most back benchers are in the dilemma of seeing certain difficulties in the administration of this Measure and being unable to find Amendments which we could submit to cover those difficulties.

This Bill is merely a continuation of the main principles of the Act for a further seven years, but the circumstances in which we are to continue the Act for a further seven years are quite different from what they were when the Bill was introduced ten years ago. All work in connection with these improvement schemes now costs considerably more than it did when the original Bill was introduced. If, in the course of ten years, certain people have been able to make use of these grants, most of them have been people on hill farms who are better off and have more capital.

At present, the greatest possible hardship falls on the smaller farmer. If he is to carry out any of these schemes he must borrow the money, and interest rates on borrowing are so much higher. Therefore, if, in the next seven years, the smaller men are to make as much use of this Measure as, in the last ten years, use has been made of it by the larger farmers the Government must show more generosity in administering the Measure. That is one aspect of the way in which the Government can help smaller hill farmers to a greater extent than in the past.

As my hon. Friend the Member for Brecon and Radnor (Mr. Watkins) pointed out, in many cases it may be that the farmer may be able to do fencing, ditching or even road making and do more work in a day than could be done by contractors' men who have to come from a distance. The farmers may be even more skilful at doing that job and as they are more skilful it may be more efficiently and economically done. There may have to be a differentiation between the types of work for which the labour of hill farmers or of their families or friends may be considered for grant purposes.

As I have said, interest rates have gone up, the cost of fertilisers, materials and labour have all gone up, and the difficulties of obtaining labour have also increased. All this indicates that unless the Government have a more generous way of interpreting the Sections of the main Measure it does not look as though the success achieved in the past ten years can be continued through the next seven years.

As hon. Members will not have an opportunity of discussing these arrangements for another seven years, it looks as if the Parliamentary Secretary will be called upon to tell us rather more than he did on Second Reading about the Government's methods of helping to meet the greater cost of carrying out these improvement schemes by people who may not be financially as well off now as they were ten years ago. That is why we want clarification from him on this Clause. Unless we and the people concerned can see that it will be profitable to them to carry out improvements, and that they will be able to find the labour and the money to do them, I think that the Bill will gradually peter out and become of little value to those whom it is intended to help.

Mr. William Whitelaw (Penrith and The Border)

I want to reinforce very briefly the plea made by my hon. Friend the Member for Taunton (Mr. du Cann) on the subject of farmers being allowed to charge for their own work on these schemes. We are all aware of the importance of helping the small farmer.

On the Second Reading of the Bill, it was generally agreed on both sides of the House that, while the Bill would do much to help large farmers, tenants and landlords on the hills, it would not do much to help those with small farms who lacked capital. If they have not the capital, they find it difficult to pay their share of the scheme ; and, secondly, they do not employ any labour other than their own. I find it difficult to see why, if they do not normally employ any other labour, they should be expected to do so when undertaking these schemes.

I believe that this is one way of helping the small man on the hills and on the marginal land, and I hope that the Parliamentary Secretary will be able to give us some help in this debate.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent)

I sympathise with the feeling of my hon. Friends on this side of the Committee and of hon. Members opposite in their concern about the position of the small farmer whose own work might be used in these schemes. I can assure the Committee that we have given the most careful consideration to this problem in the interval between the Second Reading of the Bill and now. My right hon. Friend and I realise that there is a difficulty and that farmers have been conscious of it for some time, but I have to tell the Committee, with regret, that we have not been able to meet the point. That, of course, is why there is no Government Amendment on the Notice Paper. I must congratulate my hon. Friend the Member for Taunton (Mr. du Cann) in getting a new Clause put down, and, although it did not meet with your approval, Sir Charles, nevertheless in making his excellent speech upon the subject.

I should like to deal briefly with some of the points and to make a general comment on them. First, on the point which my hon. Friend asked me about the "exceptional circumstances" which are referred to in the leaflet. Those exceptional circumstances, unlike most exceptional circumstances, really are exceptional circumstances. They are only visualised as arising when a farmer who applied has, as in the past, been a part-time farmer who, because he would put in more hours work on his own holding, would reduce his earnings from working in a quarry or something like that ; and so these exceptional circumstances arise. In the present circumstances, and for a good many years now, it has not been the practice to approve schemes unless they will make the unit an economic one.

This bears on the point raised by the hon. Member for Brecon and Radnor (Mr. Watkins). We are certainly not advising farmers that there is compulsion to amalgamate holdings. Naturally, they are free to do what they like with their holdings, but we have to tell them that we cannot approve an application for a holding to receive a grant under the Hill Farming Acts unless, when the scheme is completed, the farm will, in our judgment, yield an average earning to the farmer at least equivalent to a farm-worker's wage. We feel that that is the basic minimum in terms of what we regard as an economic holding. Certainly, there is no element of compulsion.

I listened with sympathy to the hon. Member's plea for an experiment to allow the farmer's own work to be taken into account, and I do not doubt that he could find a place in his constituency where that experiment could take place ; but, despite his plea, I am afraid that, for the reasons which I am about to give, we really cannot agree to it.

The fact is that this problem has been examined most carefully by our predecessors and by ourselves. Very strong arguments have been advanced for including the farmer's labour, and they could not have been better stated than they have been this afternoon by hon. Members on both sides of the Committee. There are, however, two aspects involved. First, there is the aspect of principle, which I will not argue this afternoon, except to say that the principle involved goes far wider than these Acts. It applies to a large number of other grants and it is a principle which can be argued either way.

On the question of practice, we come up against difficulties which we feel that we cannot overcome—difficulties which have been referred to this afternoon. One is that there is really no way of satisfactorily checking what work the individual farmer has put in. Labour employed on the farm, on the other hand, is quite easy to check and that has been done in very many cases. So I am afraid that we concluded that, despite our sympathy with the small farmer, we really could not meet the case.

I would give my hon. Friends, and especially my hon. Friend the Member for Taunton, who, I know, feels so strongly on this matter, one word of consolation. We did try the approach which hon. Members have mentioned this afternoon and which was suggested by the Arton Wilson Committee's Report, namely, that we should proceed by estimates where this work was concerned—marginal production work—and that this would be simpler administratively, and would meet the case of the small farmer who does the work himself. I think that this is possible in some kind of work.

Shortly, we shall be bringing before the House a Bill to enable us to make grants for building silos, and there we think that we can proceed by the system of unit costs. No doubt hon. Members will be interested to study the Bill in due course, but the application of that principle is limited. There are many kinds of work on a farm and estimates vary from one farm to another. Any standard rate of estimate would inevitably be unfair where the farming conditions are more costly.

I would not say that it is impossible for us to go further in that field in the future in other ways. If it is possible, we shall do so, as we are anxious to meet this case where possible. I would mention, as a side wind in recognition of the small farmer's difficulties, that we have increased the rate of marginal production grant to 85 per cent. since 1st August and that will undoubtedly in some respects be of considerable help to these men.

4.30 p.m.

I hope that the Committee will recognise with me the very formidable difficulties there would be in making a change here, and recognise, also, that we have examined the matter most earnestly and in great detail to see whether we could find some way, but, despite the fact that we have not been able to, I believe that schemes will not be handicapped in going forward. I think that was the point made by the hon. Member for Norfolk, Southwest (Mr. Dye), whose anxiety was that farmers would be handicapped in going forward in present circumstances.

Naturally, we shall not get the same rate of submission of schemes as in the past. The less difficult ones have now been done. The peak of applications was reached, I should think, two or three years ago, but they are still running at a high rate and we have every reason to think that there are some thousands of farms which will still come in. Many of these men take time to make up their minds whether or not to come in and like to see how their neighbours come on who have tried the scheme. Consequently, we shall have a considerable number of them throughout the United Kingdom coming in during the coming years and the provision we have made here will be adequate to meet the needs of these farmers in promoting these schemes.

The hon. Member for Brecon and Radnor mentioned the need for co-operation with the Forestry Commission. My right hon. Friend is most anxious to bring that co-operation as close as possible, and I think that a number of recent actions that have been taken have brought about a really close and, I think, most amicable relationship between the agricultural and forestry sides which should ensure that such accidents as those to which he referred do not happen in the future.

I expect that the hon. Member will have noticed that in, I think, the debate on Mid-Wales we referred to the fact that the Forestry Commission has now agreed to fence its upland forests. That is a significant and costly thing for it to do, but, more than that, it is a very friendly gesture which, I hope, will go a long way to improving relationships in those areas. But that is only one small aspect. The Forestry Commission is most anxious to do all it can to work closely with us, to make sure that it makes the best of the land it can use and that we do the same. I hope that, with that explanation, the Committee will be willing to give this Clause its approval.

Mr. Drayson

The Parliamentary Secretary mentioned the marginal production grants, which now go up to 85 per cent. Am I wrong in assuming that, in that case, the farmer may charge for his own labour under the marginal production scheme?

Mr. Nugent

No, he may not.

Mr. A. J. Champion (Derbyshire, South-East)

The Joint Parliamentary Secretary has put his finger on the spot that matters. He has said that less difficult schemes have already been dealt with and that in future it will be more difficult to get farmers to make up their minds to proceed. I think that that is quite fair. Professor Ellison makes the point that, while a certain amount has been done which is valuable, much remains still to be done, and that it will be done only if farming is a prosperous industry—provided that the small farmer, the hill farmer, can find the capital, or the wherewithal to pay the interest on the money he will have to lay out to get a hill farming scheme going.

As the Parliamentary Secretary knows full well, these schemes require a 50 per cent. outlay by the farmer himself. He knows, too, that the average cost of the schemes which have so far been accepted by the Ministry run at just over £3,000 per scheme. That means that the small farmer has to find £1,500.

Mr. Thomas Williams (Don Valley)

Or the landowner.

Mr. Champion

Or the landowner, as my right hon. Friend says.

Nevertheless, in so many cases I notice that it is the comparatively small owner-occupier of the farm who has, in fact, to put up these schemes. If that is the case, we must always remember the cost to the small man, the amount he has to lay out every week—because that is what it really means—upon the capital he has put into the scheme.

What are the facts? If it is that these schemes cost over £3,000 each and he has to find £1,500, it means that the farmer has, at the present rate of interest, to find about £2 a week to pay the interest on that money alone, without counting any amortisation for which, of course, he will have to provide because he must pay back the money. That is difficult for a man who is not getting a very good return from his work, from his capital, from his managerial experience.

A recent farm income survey shows that very many of our farmers are receiving less as net income than are the unskilled workers in urban industry. That is not a satisfactory situation at all, and certainly does not encourage a hill farmer to embark upon the hazards of a scheme under the Acts. Some of the difficulties of the hill farmer are directly due to the Government's policies. Their marketing scheme has reduced the price of fatstock and created uncertainty in the minds of feeders. They have unsettled this industry to such an extent that it is bound to have its reflection in the price of store cattle—the price the hill farmer will receive for his beasts.

These are points that require very careful consideration by the Government. Is it possible to ensure in some way that these people can improve their holdings, as they ought to be improved in the interests both of the industry and of the national economy? Is it possible to devise some other credit method which will ensure loans to the farmers at a rate of interest less than the prevailing 5½ per- cent.? The present rate of interest is prohibitive for the small man and I can well understand why the Parliamentary Secretary says that it takes a lot to get them to make up their minds at this time. It would take a lot to make me make up my mind were I a hill farmer.

We support the Bill and wish it well, but I ask the hon. Gentleman to look sympathetically at these points and to try to find a way by which these people can take advantage of what were excellent schemes, which we gladly see going forward under this extension.

Question put and agreed to.

Clause ordered to stand part of the Bill.