HC Deb 21 January 1959 vol 598 cc285-94
Mr. Frederick Willey (Sunderland, North)

I beg to move, in page 1, line 7, after "grants", to insert: which in some cases may be made repayable subject to such conditions as the Minister may determine". We can claim a little ingenuity in draftsmanship in having succeeded in raising the point that we discussed in Standing Committee. In an earlier discussion today, it was clear that there is a sharp division between the two sides of the House on the question of co- operation. We get a lot of lip-service from the Government about co-operation in agriculture. We do not get effective action and we know why. It is because the lobby of the middlemen is a very real lobby in the Conservative Party. So it is with regard to the question of credit that we are discussing on this Amendment.

Everyone who has studied agriculture knows that one of its urgent needs is better credit facilities. That is reaffirmed in the recent Report of the Grassland Utilisation Committee. We cannot get any effective action from the Government, because they are subject to the bankers' lobby. The bankers are not anxious that we should extend publicly the provision of credit to agriculture. I do not want to pursue this at length, because it was discussed in Standing Committee. It is, however, a matter of great regret that although this was one of the matters discussed between the Government and the producers at the time the Government issued their White Paper on long-term assurances, still we have no action from the Government concerning agricultural credit.

In the Amendment, we are not suggesting that loans should be an alternative to grants. We believe, as does the National Farmers' Union, that the grants should be supplemented by provision in one form and another for loans. One of the major reasons for this is that we share the concern expressed by my hon. and learned Friend the Member for Northampton (Mr. Paget), who said, with his usual stringency, that the Bill and the provision that the Government intend to make under it are inadequate.

As the House knows, the National Farmers' Union suggested that the husbandry grants should be supplemented by farm business loans. We made it clear in Standing Committee that we are not committing ourselves on the question of what interest there should be upon any such loans, but we would certainly argue that there is a case for preferential rates of interest. Because we share the views of the N.F.U. and the producers that the Government's proposals are inadequate, we believe that further provision should be made for loans to assist the small farmer.

The Government failed to persuade the National Farmers' Union that their proposals are adequate. As a result, the N.F.U. remains dissatisfied, and so do we. We have had a very inadequate reply from the Government so far. The Joint Parliamentary Secretary will remember that when we argued the case for provision by way of loan, one of the Government's arguments was that the advisory officers were not the best people to determine the creditworthiness of a farmer. This is not an argument that we can accept, because we are dealing here with a scheme to provide, quite properly, assistance to the small farmer, but at the expense of the other farmers.

If the advisory officers can give advice that results in the taking of other people's money and giving it to the small farmer, they must be equally able to advise about giving loans to such a farmer. If we are concerned with the relationship between the advisory officer and the farmer, the provision of a loan should assist that relationship. If we are to put our trust and confidence in someone, I can think of no better way of doing it than by loan.

The Minister knows quite well that he made a fool of himself when he expressed his views about this and he upset many farmers. I do not want to make too much of this, but, again, I remind the Minister, as I did in Standing Committee, that he said: The sort of chap whom we are trying to help is not the sort of chap who likes to have loans, and I shall be very sorry for any successor of mine who tried to get the money back."—[OFFICIAL REPORT,Standing Committee A,25th November, 1958; c. 7.] That gives the lie to the White Paper, which specifically argues that the purpose of the scheme is to make the small farmer more creditworthy and it is a vote of no confidence in the proposals which the Government are now making.

It is because, like the small farmers themselves, we are upset by this attitude of the Minister, betraying the fundamental approach of the Government that this is no more than a dole to the small farmer to alleviate matters for a few years, that we beg the Minister to reconsider the question of loans. If he would make provision for loans, he would show that he had more confidence in the proposed scheme that he has explained in his White Paper and he would show a more constructive and continuing regard for the small farmer.

For these reasons, I hope that the Minister will accept the Amendment in this rather modified form and make provision for the possibility of providing loans further to aid the small farmer.

Mr. M. Philips Price (Gloucestershire, West)

I hope that the Minister will reconsider this matter, various aspects of which we discussed in Committee, when the Government and the Minister did not show any sign of approaching our point of view.

Two points can be stressed legitimately. One is that it is undesirable to leave small farmers who would benefit under the Bill, but who, possibly, would like to take loans rather than grants, to the fluctuations of the money market. We have seen great fluctuations in the last eighteen months, with the Bank Rate up to 7 per cent. Ever since 1951, there have been fluctuations of various kinds.

There is a case for men in small business of this kind being given the opportunity by the' Government to meet their obligations under conditions of reasonable stability. That is why there is a case for giving them the opportunity to take loans on a stable basis, not subject to the fluctuations of the money market, if they so wish.

The other reason is that many—in fact, most—farmers will feel that if they make use of the facilities provided by the Bill, they will be affecting the possibilities of support for prices of agricultural produce, because, as is clear from the terms of the Bill, the support for this assistance will come out of the general fund for keeping prices stable by subsidies of various kinds. Many farmers will feel that they would prefer not to run that risk, but there is a case for having the conditions reasonably stable and not subject to the fluctuations of the money market.

I hope, therefore, that the Minister will reconsider the matter on the lines on which we on this side of the House have been pressing.

8.0 p.m.

Mr. Harold Davies

I sincerely hope that the Minister will listen to this side of the House on this point, because by means of the Amendment he can do something for those parts of Britain where there is marginal and difficult farming. In Committee I tried to make the point that encouragement outside even a scheme of grants might be given to small farmers. There are 1,710 farms of under 20 acres each in North Staffordshire, and among 1,340 of those in my area hundreds are farmed by men who by means of a small loan would be enabled to bring water supplies or electricity to their farms.

In many cases these small farmers do not ask the Electricity Board for a supply of electricity and do not install a tapped water supply because they cannot afford to do so. A loan for this purpose would encourage initiative. If huge loans can be given to people to enable them to stuff their houses with television sets, in the name of sanity why cannot we have a much more realistic approach to the provision of certain basic requirements for the benefit of the country as a whole?

Tens of thousands of small farmers in Britain, whom we so often decry, provide mountains of fresh food for the nation, and they produce it at times of crisis. These farmers should not be forgotten in the transitional periods. The Conservative Party talks a great deal about helping the small farmer. The Amendment provides the Government with an opportunity to give the help. The Minister has the power. All he needs is the courage to accept tonight an extension of the Bill, by means of the Amendment, which would bring about a vast improvement and would enable small farmers to obtain electricity and water supplies and provide small individual drainage schemes which might increase production by 25 per cent. I beg the Minister to consider this constructive Amendment.

Mr. John Hall

Although I would not altogether agree with the wording of the Amendment, there is something to be said for the proposal that a provision should be inserted in the Bill to enable the Minister to make loans available in certain circumstances. I understand from small farmers in my constituency that their main objection to grants is that they will come out of the global sum. I can also understand the Government's objection to having loans outside that total sum paid to farmers, because that increases total Treasury liability at any one time and there is no certainty in what year that loan element is likely to be reduced.

It should be made possible to make loans to farmers who may be outside the terms of the Bill because, although their acreage is right, their man-day calculation is wrong, which means that they have shown that they are efficient and that if they had made available to them money at a low rate of interest, or loans free of interest, they could still further increase productivity.

It might be asked why special facilities should be given to farmers, either interest-free or at an artificially low rate pf interest, when they are not made available to other forms of industry. The answer is quite simple. At the moment we feel it necessary, for the benefit of the nation as a whole and in order to encourage food production and ensure food supplies, to give special treatment to farmers to the tune of £350 million a year.

Mr. T. Williams


Mr. Hall

I am subject to correction on the figure, but in any event it is a very large figure, and it is certainly a special form of assistance. If it is reasonable to pay support of that kind, we should not cavil at giving loan facilities at a special rate of interest where we think that they will increase productivity.

I do not know what amount of the food that we require in this country is met by home producers. I think that it is 60 per cent. But it may well be that in the next ten or twenty years the total amount of food requirement met by home producers may fall in relation to an increasing population and a not sufficiently rapid rise in agricultural production. Therefore, we should help not only the small farmers who are within the purview of the Bill but the efficient small farmers who, by their very efficiency, have put themselves outside its purview. Therefore, I should like to see my right hon. Friend take powers which would enable him to give help of this kind.

Mr. Hayman

I am glad that the hon. Member for Wycombe (Mr. John Hall) has supported the Amendment, and particularly the principle. His suggestion that there should be a low rate of interest or even an interest-free loan was excellent. I made the point in Committee that there is already a low interest rate which the State recognises, namely, the 2½per cent. rate of interest paid on Post Office Savings Bank accounts. That is something which the Minister might consider if he is prepared to accept the Amendment but does not want to give an interest-free loan.

Mr. Tudor Watkins (Brecon and Radnor)

I also want to support the Amendment. No doubt the Minister has by now been advised about what was said in debate yesterday on the Electricity (Borrowing Powers) Bill, in the course of which my right hon. Friend the Member for Blyth (Mr. Robens) suggested that consideration should be given to the possibility of loans being made available to small farmers so that they might obtain more equipment for their farms, and particularly movable assets which would use more electricity. It was an admirable suggestion which was echoed by hon. Members on both sides of the House.

I want to support that suggestion in the hope that the Minister will deal with it favourably if not now, then in the near future. Ministers and hon. Members sometimes criticise farmers because they do not use a sufficient amount of electrical equipment and increase the consumption of electricity in rural areas. Greater facilities should be given to farmers to obtain loans for this purpose and I welcome the splendid suggestion made by the hon. Member for Wycombe (Mr. John Hall).

Sir Archer Baldwin (Leominster)

I agree with all that has been said about the importance of electricity in agriculture, and especially on the remote farms. If we are to keep production going in these remote areas electricity must be provided. If my right hon. Friend does not think that the idea of a loan is a good one, I would suggest that the electricity authorities who now give hire-purchase terms for refrigerators should provide those terms for the installation of electricity, which would be very much more useful to smallholdings' and small farms.

Mr. John Hare

As the hon. Member for Sunderland, North (Mr. Willey) said very frankly, a certain amount of ingenuity had to be exercised to get this subject ventilated in the House. We have had very considerable and lengthy debates on it in Committee but regretfully I have not changed my mind and I have not been convinced by the reasons put forward in favour of this proposal. I am sure that that does not come as a surprise to the hon. Member for Sunderland, North in view of our Committee debates. The hon. Member said that loans should be used to supplement grants. There is a major difference between the party opposite and the National Farmers' Union, which wanted loans and not grants.

Mr. Willey

The N.F.U. also argued that if there were husbandry grants, they should be supplemented with farm business loans and that whereas there was an arguable case for grants in the one case, there was an argument consequential upon that, that if one was to provide sufficient assistance by way of farm business aid, it should be in the form of loans.

Mr. Hare

The N.F.U. may have argued that, but, as the hon. Member knows, its main thesis was that assistance under the scheme should take the form of loans rather than grants. There is thus a major difference between the outlook of the N.F.U. and that of the party opposite.

The hon. Member also said that he felt that advisory officers would be capable of handling the very considerable extra administration which would be needed if they were to be responsible for assessing the credit-worthiness of farmers. The hon. Member for Gloucestershire, West (Mr. Philips Price) was anxious that a system of loans should be introduced to avoid fluctuations in the market. The hon. Member for Leek (Mr. Harold Davies) asked me to take courage to do something which I think would be wrong. My hon. Friend the Member for Wycombe (Mr. John Hall) spoke in the same vein as the hon. Member for Leek, a delightful change for the House to observe.

I hope that my hon. Friend the Member for Wycombe will excuse me if I do not repeat the very long arguments which I put forward in Committee to show why we think that we were right to stick to our approach of loans, an approach which we put forward on Second Reading and which we expounded in Paragraph 13 of the White Paper. Very briefly, the main reasons are that until a small farmer begins to get the benefit of improvements from the scheme, he will hesitate to come forward and accept the burden of loans being uncertain until he has started to make his improvements whether he will be able to keep to the terms and time of repayment.

Nor do we think that the executive staff of our divisional offices can do what the hon. Member for Sunderland, North thinks they can do. It would be asking far too much of them in a scheme of this great size and which is very different from other services. Thousands of applications would have to be considered and far too great a burden would be placed on people who would not have the specialist knowledge needed.

We think that what we should do is by grants and advice to small farmers to encourage them to build up the productivity of their farms. By doing that, we shall improve the credit-worthiness of the farmers so that those who need further credit will be able to obtain it through normal channels. Those are the argu- ments which I made in Committee and which are still valid.

Having been able again to air his views on the subject of loans, I think that the hon. Member for Sunderland, North will agree that he would not want me to accept the Amendment, since it would give far too much power to the Minister of Agriculture. So far as I can make out, it is left entirely to the Minister's discretion as to who will get outright grants, who will have to make repayments and over what period repayments will be required and even what, if any, rate of interest should be charged. I do not know what the right hon. Member for Don Valley (Mr. T. Williams) thinks, but I should not be able to take on that invidious responsibility, nor do I believe that any Minister of Agriculture of either party would wish to do so. Having had this further airing of the subject, perhaps the hon. Member will now be kind enough to withdraw the Amendment.

8.15 p.m.

Mr. Willey

That is a leading invitation. We were not necessarily taking the same view as the N.F.U., but were merely calling in aid generally what the N.F.U. had said. We feel that there should be provision for loans. If the Minister had had any doubts about using advisory officers for the administration of such a scheme, he could have accepted the Amendment in principle and found other ways to implement it. However, I agree at once that if a provision of this sort were made, this would not be a very satisfactory way to do it.

I agree that there is a difference of approach between the two sides about credit. We believe, as we said in "Prosper the Plough", that steps should be taken to provide better credit facilities for farmers. I hope that the right hon. Gentleman will carefully study that document and seek some other opportunity for meeting what is a major need in farming.

I welcome the intervention of the hon. Member for Wycombe (Mr. John Hall). We think that there is a need for credit facilities, as the hon. Member said. We have taken a further opportunity to air the matter, but, as the right hon. Gentleman has indicated, we do not intend to press the Amendment to a Division. Accordingly, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.