HC Deb 28 July 1964 vol 699 cc1371-90

10.25 p.m.

Mr. J. M. L. Prior (Lowestoft)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Agricultural Lime Scheme 1964 (SI, 1964, No. 903), dated 19th June, 1964, a copy of which was laid before the House on 25th June, be annulled. The value of lime to agricultural production in this country is enormous. On acid soils it is estimated that it can amount to as much as £20 per acre loss of production if the soil is not properly limed. The use of agricultural lime has increased from about 1,300,000 tons in 1937 to about 6 million tons today. This is largely as a result of a scheme previous to the one we are discussing, and it shows at once the great benefit of the scheme.

The Scheme which we are discussing is a new scheme based on a flat contribution which will result, quite rightly, in very intensive competition within the trade, but which will also have its effect on the farmer. It may result in some areas, where only the better grades are available, in the farmer not obtaining the 65 per cent. subsidy envisaged and in areas where coarser materials are available it will be possible to obtain up to a 75 per cent. subsidy.

I should like to ask my hon. Friend the Parliamentary Secretary for his views on this point as all the evidence points to the desirability of using high grade material with a high neutralising value as is laid down in the booklet published by his Ministry called "The Use of Lime in Agriculture". On page 30 it says: The point is that a low grade, bulky product may appear cheap on first cost, but what really matters to the buyer is the Neutralising Value of the material and its whole cost on the land. With bulky material, the advantage of a low price per ton can soon be lost in low Neutralising Value and the extra cost of transport and labour in spreading the larger quantity needed". I hope that my hon. Friend will be able to give us some indication of how his officers think that this new Scheme will work in that respect.

There have been some very unpleasant major swindles in the lime industry in the last few years, including in South Wales, Cornwall and Yorkshire. Another case in Norfolk is at present under appeal. These are the swindles about which we know. There may well have been others about which we do not know. This is possibly a good deal more important than any other aspect of the scheme.

There are many ways in which a swindle can be perpetrated. Swindles generally involve a lot of people, but one of the ways in which they happen is by fanners signing for lime which they have never received. Lorry loads of lime may be weighed over the weighbridge as they go out of the lime pit but not be emptied properly. Thus, the lime is weighed again on the return trip. There are many other variations.

Swindles of this sort have worried the lime industry as much as they have worried hon. Members. In my view, they can be put right only in two ways. The first is by strengthening the Agricultural Lime Department officials and making certain that they are on the job and doing the job, and the second is by having a careful check of all the partners in the lime industry and building mutual confidence and responsibility within the trade. What steps are we taking in this new Scheme to do that?

Building confidence and integrity in the industry is very much in the industry's mind and it has approached many of my hon. Friends, and, I think, hon. Members opposite, with a view to setting up an advisory committee which would be in a position to consult the Minister when things looked like going wrong. There is a strong feeling in the industry that communications between it and the Agricultural Lime Department have not been so close or so beneficial as they need to be, and much of the abuse of the old scheme and many of the difficulties of the new could best be examined and sorted out by this committee. The industry would like this to be a statutory advisory committee, and it has pressed hard for this.

I put a Question to my right hon. Friend asking whether he would consider setting up a committee in response to the industry's request. In a Written Answer on 24th June, he told me that he did not consider it necessary to establish a formal committee, but was prepared to have joint meetings between representatives of the industry and the Department from time to time to discuss problems arising from the administration of the scheme.

The industry considers that that promise does not go far enough. Considering the troubles it has had in the past, it has good grounds for something rather more permanent. After all, if the purpose of a committee is merely to consult the Ministry's officials from time to time and there is no laid down formula for those consultations, I do not see how the committee will perform a useful function.

If the committee is to work effectively, it must have fairly clearly defined objectives, and these would have to be accepted by the Minister. It should meet regularly, and its agendas should be properly worked out and it should have an efficient secretary to see that everything is minuted. The secretary should hand the agenda and the minutes to the various trade associations about eight weeks in advance of the meetings so that relevant issues can be raised. I would have thought that this committee might meet at least twice a year to start with and possibly once a year after the scheme is seen to be working properly.

I hope that my hon. Friend will be prepared to go a little further tonight than his right hon. Friend has so far indicated. This is an important industry and £9 million a year are being spent in subsidies. If the trade feels that this is the best way in which its own house can be put in order and to help the Ministry officials to do their job, we should give our help and encouragement. I ask my hon. Friend to be as forthcoming as he can and, if he is unable to give me an affirmative reply tonight about the setting up of this committee, that he will be prepared to consider it again with his right hon. Friend and to get in touch with the industry so that it feels that it is brought into the consultations right from the start so that this new excellent scheme which has been devised can get off on the right foot.

10.35 p.m.

Mr. John Brewis (Galloway)

I want to object to this Scheme on behalf of the farmers on the Wigtownshire side of my area, which, as hon. Members know, is a somewhat distant part of Scotland, though a very important agricultural county and a county where lime is greatly needed all the time for the production of crops. But what I say about Wigtownshire applies, though perhaps with diminishing force, to the Stewartry of Kircudbright and, perhaps, Dumfries-shire. I see my hon. and learned Friend the Member for Dumfries (Mr. D. C. Anderson) in his place; no doubt if he catches your eye, Mr. Speaker, he will mention this matter.

We obtain a far larger part of our lime requirements from the north-west of England, and therefore the one-sixth extra contribution for lime produced in Scotland and sold to Scottish farmers will not help us. I think that my hon. Friend the Under-Secretary will agree with me that at the moment the Scottish lime quarries can only produce about 70 per cent. of the requirements of Scotland. Therefore, there is no extra lime coming from Scotland to enable us to shift our orders from the north-west of England to Scotland and get the one-sixth extra contribution. Therefore, it does not help Scottish farmers at all.

I have some figures which show what this Scheme is going to mean. Taking Newton Stewart, which is the nearest point in Wigtownshire to the lime quarries, the present price is 25s. 5d. net to the farmer. Under the proposed Scheme lime is going to be 36s. 8d. a ton, an increase of 11s. 3d. In case my hon. Friend does not agree with the figure, the gross cost is 72s. 8d. The present subsidy of 65 per cent. means 47s. 3d. off, leaving the present price at 25s. 5d.

Under the proposed Scheme, instead of there being a subsidy of 47s. 3d. the subsidy will work out at 38s. It seems to me that this is an enormous increase of something like 50 per cent. to a farmer. It will, in fact, reduce the subsidy from 65 per cent. to about 50 per cent. I am very anxious to know what my hon. Friend intends to do about this situation which becomes very much worse when one gets further into the county, for Newton Stewart is just under 100 miles away. The other main agricultural centres of Stranraer, Whithorn and Drum-more are about another 35 miles from the quarry, and as haulage tariffs do not cater for anything over 100 miles the extra cost of haulage here will have to be borne entirely by the farmer. Therefore, making an estimate for Stranraer, the extra cost is going to be something like 13s.

I have had a letter from my hon. Friend saying that he understands that there would be only minor differences in price. I wonder what he means by only minor differences in price. Would an increase of 10s. be more than a minor increase, because, if so, I feel very strongly that these extra costs will have to be looked at?

There is another thing in the Scheme on which I wish to comment. It is the allowance for lime suppliers who establish a depot. The depôt has to be 75 miles away from the quarry and if it is established in Scotland then there is an extra subsidy of 17s. On that basis the cost in Wigtownshire could be kept down to about the same as it is at present. It would, however, be an extraordinary system, because once lime is loaded on a lorry it can be run in one day through to distances of about 150 miles from the quarry, which is well within the radius within which my area lies.

To force a quarry owner to establish a depôt, which is bound to involve him in increased costs, seems to me to be completely unnecessary. Not only would it make increased costs for the lime quarry owner, but it would add considerably to the liability of the Exchequer. It has been calculated that if this is proposed as the answer for remote areas, it would be cheaper for the Government to give an 80 per cent. subsidy rather than approximately 65 per cent. as is proposed.

There are two things which I should like to see done. The first is the realisation that the extra subsidy of one-sixth is not a subsidy for the lime quarry owner in Scotland, but a subsidy intended for the Scottish farmer. Therefore, it should be given whether the lime comes from an English producer and is used in Scotland or from a Scottish producer.

Secondly, I should like the haulage scale to go considerably beyond the present limit of 100 miles and to have a flat rate rather than a tapered rate. There should be a flat rate of something like 4½d. per mile. In that case, the users in remote areas would continue to pay approximately the same for their lime as at present.

10.42 p.m.

Mr. Henry Clark (Antrim, North)

I am glad of the opportunity to raise some points to which, I hope, I may obtain answers, which I was unable to do when the hon. Member for Kilmarnock (Mr. Ross) suggested that I was out of order on a previous occasion. I do not want to go into the points fully at this stage, because my right hon. Friend the Minister has been kind enough to write me at some length. There are one or two anomalies which I should like to have cleared up.

First, there is the question of the transport subsidy. Part III of Schedule 2, relating to Northern Ireland, shows that the subsidy is paid at the rate of 4d. per ton for every mile over 5 miles up to 20 miles, whereas in other areas of the United Kingdom the rate of 4d. per ton applies for every mile over 5 miles up to 30 miles. Northern Ireland is fortunate in having lime well distributed throughout the country, but there are certainly many areas where it must be transported more than 20 miles. The acid moorlands of County Deny, for example, are in many cases 40 miles from good supplies of lime. Why is the subsidy being cut down in Northern Ireland when, as far as I can see, there is no geographic reason for dividing Northern Ireland from the other regions mentioned in the Schedule?

Secondly, why is it permissible to obtain a subsidy for exports of lime from Northern Ireland only to Bute County and Islay? The limestone quarries of my constituency are probably ideally suited for shipping lime to the Western Isles and to a great deal of the Scottish mainland. I do not suggest that this is simply preferment against Northern Ireland. I think that it is a stupid provision. The quarries in Northern Ireland are looking hard for new markets and they should not be ruled out of the markets of the Scottish islands further north than Bute and Islay. Will my hon. Friend the Joint Parliamentary Secretary look at this aspect again?

There has been full consultation between the Ministry and the lime producers in Northern Ireland and they have ended up with definite disagreement on the terms of the Scheme. The lime producers in Northern Ireland feel that the reduced subsidy to be paid on burnt lime may well result in the redundancy of between 30 and 50 men in the quarries in Northern Ireland.

There has been disagreement and there has been discussion. I want to make it quite clear that this Scheme is not fully acceptable in Northern Ireland. We are prepared to let it work, but I reserve the right to come back to the Ministry in a very short time if our fears are realised, because burnt lime is being penalised, and, equally, because no special recognition is given to the fact that hard limestone, with which a large part of Northern Ireland is supplied, calls for heavier grinding machinery than does the lighter limestone in other parts of the country.

10.45 p.m.

Mr. D. C. Anderson (Dumfries)

I should like to focus attention on the points which pertain a little further east of the area dealt with by my hon. Friend the Member for Galloway (Mr. Brewis).

The position in Dumfries-shire is that those farmers with whom I have been in touch with regard to this Scheme are unable to obtain supplies of lime from Scottish quarries. The Scottish suppliers are situated uneconomically further north, and in any event their total production is exhausted in meeting the demands of farmers in the central and eastern parts of Scotland.

In Dumfries-shire the land is supplied with lime obtained from suppliers in the north of England—in Durham, Westmorland, and Cumberland. The result is that the Dumfries-shire farmers are unable, under the Scheme as it stands, to claim the additional one-sixth subsidy which farmers in other parts of Scotland further north can claim.

That would not matter if the prices from the suppliers in northern England were one-sixth lower. I understand that the Scheme has been framed on the supposition that costs in England are, on average, to that extent lower than the production costs in Scottish quarries. My information is that that is not so, and that the cost ex-works of lime from the north of England is substantially similar to that from the Scottish suppliers. Dumfries-shire farmers are therefore at a disadvantage compared with those in similar occupations further north.

A further point which was also touched on by my lion. Friend the Member for Galloway was with regard to the provision in the Scheme for the 17s. additional subsidy where the lime is channelled through a depót more than 75 miles from the source of supply. This provision in the Scheme costs the taxpayer more than if there were a straight flat rate based on distance alone because if, for example, the rate of 2d. per mile, which applies at present between 30 and 100 miles, whether the carriage is direct from the quarry to the farmer, or from a depót to a farmer, was extended at 2d. a mile for the remaining distance up to 200 miles, it would cost less in subsidy than the present system of giving 17s. if the lime is sent through a depót.

Accordingly, while I welcome the general provision of the Scheme which departs from the 65 per cent. subsidy and embarks on a flat-rate system instead, I must point out that it is in the details of the flat-rate system that the farmers with whom I have been in touch find difficulty and unfairness.

I should like, therefore, to hear my hon. Friend the Under-Secretary's comments upon the suggestion either that the 17s. subsidy for channelling through a depôt should be out of the picture altogether, and the distance extended to 200 or even 300 miles, with appropriate flat rates, or that we should have this additional distance flat rate up to 200 or even 300 miles as an alternative.

Secondly, I should like to hear what he has to say about the suggestion, that I feel strongly is advisable in equity and fairness, that the one-sixth should be made available to all Scottish farmers, whether their source of supply is from Scottish quarries or—as has to be the case throughout Dumfries-shire—from quarries in the North of England.

10.50 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

The hon. and learned Member for Dumfries (Mr. D. C. Anderson) has put forward an interesting argument. Apparently his main complaint is that this Scheme will cost the Government more than the old Scheme. I should have thought that this was an unusual complaint for the hon. and learned Member to make—

Mr. D. C. Anderson

My point was that what would cost more would be not the difference between the old Scheme and the present one, but the difference between the present Scheme, with its depot allowance of 17s. for a distance, let us say, of 150 miles, made up of 75 miles to the depot and 75 miles thereafter, and a straight 150 miles without a depôt at all.

Mr. Hoy

The hon. and learned Member is trying to base his argument on the flat mileage charge, but that is not what the Scheme seeks to do. I am surprised that hon. Members opposite are always complaining about subsidies for certain sections of the community. We have just had a debate about that. Apparently they do not find that any denial of what they are doing about this. We are here dealing with a subsidy. I raised this question on a previous occasion. One reason for this new Scheme is that the Public Accounts Committee has been going over these subsidies for a long time. Indeed, no hon. Member will deny that there was a considerable abuse of this subsidy, as well as of others, and that as a consequence the cost had to be met by the taxpayer. I beg to remind hon. Gentlemen that Ferrantis is not the only firm that has been doing well recently.

Mr. H. Clark


Mr. Hoy

The hon. Member need not say "Oh." This was reported to this House, and certain prosecutions had to take place in connection with these subsidies. The Public Accounts Committee took notice of this and reported it to this House, and quite rightly the Minister and the Ministry have taken cognisance of it.

We are not seeking to deny that this subsidy is an aid to agriculture, or to the fertility of the soil. That is the very purpose of it. If hon. Members would read the Explanatory Note at the back of the Statutory Instrument they would see that that is what it seeks to do. What the House was asked, and what it asked the Minister to do, was to see that when these subsidies were paid control was taken of them, to prevent any abuse taking place in future.

Although we want to encourage agriculture in every form, we are not going to allow the taxpayer to be abused by it. In paragraph 8 it is made quite clear that the Minister and the Ministry will give approval to schemes which are being made, but the Minister rightly takes power to see that where people abuse these schemes he can withdraw the subsidies altogether. I take it that no hon. Member would object to that. We think that the Minister is quite right in this respect.

I was interested to note the meticulous care to which the Ministry has gone to meet the needs of people in Scotland and elsewhere. One sees from page 11 of the Scheme that there is to be a 10s. additional subsidy? Does any hon. Member object to that? This has been gone into with great care. There are also considerable allowances for mileage charges in connection with depots from which supplies are drawn. They are dealt with on page 12. The Ministry has gone to a fairly considerable extent to meet the needs of farmers, not only in Scotland but in other parts of Britain.

Although we welcome the subsidies, which will help in ensuring the fertility of the soil, we would point out that the Ministry also has responsibility to the taxpayer. I should like to know from him what the whole Scheme will cost. I think that it will be in the region of £9 million, which is a not inconsiderable sum to ask from the taxpayer. If the Minister proposes to pay £9 million in lime subsidies to fanners, to which we do not object, we should have an assurance from him before we give our approval that the Scheme will not be abused.

10.56 p.m.

Mr. John Mackie (Enfield, East)

I wish to raise a slightly different point from those raised by hon. Members opposite, although as a farmer I naturally deprecate any reduction in income which may come as a result of this Scheme. I appreciate—having been a victim of the malpractices that can go on in lime subsidies, as mentioned by my hon. Friend the Member for Edinburgh, Leith (Mr. Hoy)—why the Minister has had to bring in the Scheme.

I draw attention to page 8, Schedule 1. I have had considerable correspondence with the Under-Secretary of State for Scotland on this subject. He will know that most of the lime which goes on the land is ground limestone. The different categories are given at the bottom of page 8. Was it really necessary to use these figures of 19s. 11d., 20s. 11d., 21s. 10d. and so on? This is all very well for Government Departments which have calculators and computers, but it presents many difficulties for those in the industry. Why do the Government adopt this system, which confuses merchants and leads to mistakes? I have had this point drawn to my notice and have had correspondence about it with the Department, but I have not been able to discover why these figures are adopted.

10.59 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins)

I am glad that my hon. Friend the Member for Lowestoft (Mr. Prior) has given us an opportunity to debate this subject and for me to answer the various points which have been made.

The House will realise that the reason for this change in the lime subsidy Scheme is in a sense the success of the previous Scheme and the extent to which it has stimulated the use of lime throughout the country and stimulated production. The response from both farmers and the lime industry has been remarkable. The second point is one made by the hon. Member for Edinburgh, Leith (Mr. Hoy) and other hon. Members that it is a subsidy for farmers and not a subsidy for lime producers. It is there to help farmers meet their liming costs.

It is rather a paradox that our major preoccupations in administering the subsidy so far, and more particularly in recent years, have been with the problems of lime suppliers, expressed either through their trade organisations or by individual firms. It would appear from the remarks made tonight that hon. Members on both sides have also received representations from them. This has been inevitable with a system where suppliers' prices and charges are controlled in various ways and in different degrees.

By far the greater part of the discussion and negotiations about individual supplying firms which arise from price control should disappear as a result of the change to a flat-rate system. It remains inevitable, however, that the collective bodies representing the various parts of the trade, as well as other kinds of producers whose interests may not be covered by them, will still have their special concerns as traders in their relations with the agricultural Departments and the policies and workings of the subsidy.

It underlines the paradox which I mentioned to think that nearly all the points raised tonight by hon. Members have been concerned with the interests of suppliers, rather than directly with the farmers' interests, although I appreciate that my hon. Friend the Member for Lowestoft began his speech by welcoming the Scheme and spoke of the amount of good it had done for the land over the years.

My hon. Friend the Member for Lowestoft and several hon. Members have urged the establishment of a formal advisory committee to take part in the administration of the subsidy. But, as I have said, this subsidy is paid to farmers, not to lime producers. This is not to say that we will not listen to representations by other interested parties, including producers. We are, of course, always ready to do this and have done so on numerous occasions in the past. But the proposal before hon. Members now is rather different from that. I was somewhat surprised to hear hon. Members say that our relations with suppliers were not as close as they might be. Whatever the position, I hope that those relations will become even closer in future.

As I say, the proposal of my hon. Friend—which has been put forward by several hon. Members, both tonight and in correspondence—is quite different and the question is whether we should refer matters for advice to a formal committee of this sort composed of those who have a beneficial interest in the workings of the Scheme. Indeed, as I understand it, the proposal is not merely to refer matters to this body, but to accept advice from it on whatever subject it wishes to offer advice.

As I said, it has always been open to any association concerned with the Scheme—or, for that matter, any individual firm—to get in touch with officials of my Ministry or of the Scottish or Northern Ireland Departments of Agriculture and put forward their proposals or views or give advice or information on any aspects of the Scheme or its administration. It is not clear to me what advantage would be gained if proposals or advice came through a committee instead of coming direct.

A further point is that it is, after all, the responsibility of my right hon. Friends to administer the Scheme. It is, I should have thought, also their responsibility to decide precisely what matters they need advising on and where they will go for their advice. The proposition which has been put to us and repeated tonight is that my right hon. Friends should depend for their advice on a committee composed of representatives of the buyers and sellers of lime, with terms of reference which seem very wide and general.

I hope that the House will understand why we are hesitant about agreeing to the formation of a committee of this kind. This proposal for an advisory committee has been urged by some of the bodies representing lime suppliers, but I must make it clear to the House that the National Farmers' Union does not support it. The position is, therefore, that we have conflicting advice as to the suitability or otherwise of this kind of committee. If anyone wishes to see us, and suggest improvements, I have offered to meet them after we have had a little experience of the working of the new flat-rate contribution scheme.

Both my hon. Friend the Member for Lowestoft and the hon. Member for Leith referred to frauds and irregularities that have occurred in the past. The hon. Member for Leith is correct in saying that it is our duty to safeguard public funds. It is also correct that there have been irregularities in the past, indeed, I have a whole list of irregularities, where those concerned have been taken to court, and where moneys have been recovered. These proceedings are continuing. The House will agree that, from our duty to safeguard the public funds, it follows that we must do everything we can to make certain that the new scheme is open to as little of any type of fraud as possible.

I suggest that under this new Scheme the area for irregularities is greatly reduced. For instance, it will no longer be profitable to inflate artificially the cost of lime to the farmer—by, for example, concealing discounts and rebates and so attracting irregular subsidy payments. It is a pretty wide field, and we have been involved in a great deal of digging out of facts, and investigating cases where suspicion has arisen in the past, and we have now a great deal of knowledge and experience of these matters.

This will be entirely eliminated now, except for those cases where owing to exceptionally low charges, a cut-off of 75 per cent. of cost has to be operated. But in the very nature of these low-cost limited. The scope for increasing subsidy by inflation of price is very limited indeed, but the possibility that claims may be made for inflated or even nonexistent tonnages remains, but our checking and policing system is very alive to this now after the investigations we have made in the past. We have at the moment a number of officers who spend their time checking on the Scheme and on its administration.

My hon. Friend next mentioned that my Ministry seems to have advised farmers to use lime of higher quality rather than low-grade lime. If I understood him correctly, he said that this was inconsistent with the provisions of the Scheme. As he will know, the main quality of lime is its neutralising value—NV—or percentage of calcium oxide, and suitable materials range from around 25 to 90 units of NV. Nearly four-fifths of the lime used in the United Kingdom comes from limestone or from chalk. These fall for the most part in the range of 45 or 55 NV. One-eighth of the supply comes from waste lime, with an average NV nearer 35. Burnt limes, with a high NV, averaging 70–75, account for about one-twentieth, and in Northern Ireland for about one-fiftieth.

Waste limes are cheap at source and although they usually need to be applied more heavily than processed limes, their cheapness in many circumstances offsets the higher transport costs involved in moving larger quantities. The burnt lime which my hon. Friend talked about is generally more expensive at sources unless it is surplus to some industrial demand.

The fineness of the particle is the second quality, but it is not generally a critical one. The hon. Member for Enfield, East (Mr. Mackie) referred to the classification of limes in the Schedule. The hon. Member will realise that the classification is the result of a great deal of experience and consultation with the industry and is the commonly accepted classification of the various types of lime. This is why there are so many subdivisions in the Schedule. The reasons for subsidy contributions like 21s. 10d., 20s. 11d., and 19s. 11d. per ton which he mentioned is that these are as exact a calculation as possible of 65 per cent. of the typical cost of production plus margins and spreading. This was a duty laid upon us by Parliament and this was the percentage of grant. Therefore, the flat-rate contribution must be made as exact as possible so that the farmer receives the precise benefit which Parliament intended him to have.

These two qualities—the neutralising value and the fineness—give a balance between speed in action and length of effect, and farmers can choose which they want. But these standards are not critical, and material somewhat finer or coarser, if it is more cheaply available, is generally adequate to any farmer's need. The farmer has the choice of higher quality material with a higher neutralising value, which has a much lower transport cost because the weight per unit of N.V. is lower, or coarser material of heavier weight with a lower N.V. which has a higher transport cost. It will be found that almost any farmer has a choice of two or three types of lime which can be applied to his land, and he will receive roughly the same subsidy contribution—around 65 per cent.—of the cost of that lime to him.

The hon. Member for Galloway (Mr. Brewis) has unfortunately left us. He spoke about the difficulties of lime producers and particularly of farmers in Scotland. He said that the farmers would have to bear the higher cost of the lime used on their farms. He quoted some figures, but we have had an extensive survey and sampling in Scotland and our figures do not agree with his, which are far and away higher. At sample levels it seems quite clear that there will be at most only a marginal increase in cost to my hon. Friend's farmers in obtaining their lime, as I have already told my hon. Friend in a letter.

He also raised the question of supplies through depôts, as did my hon. and learned Friend the Member for Dumfries (Mr. D. C. Anderson). I am sure that it will be realised that it is a straight choice for the farmer whether or not it is cheaper for him to buy lime via a depôt, and get an extra depôt subsidy of 17s. a ton, or straight from the quarry which may be 100 miles or so away. It is entirely for him to choose. In South-West Scotland it may well be worth while for a supplier to set up a depôt, in which case the farmer will be able to receive a subsidy of 17s. per ton for lime coming out of that depôt as well as a contribution at a rate of 4d. per ton mile from the depôt to the farm.

I think my hon. Friends will find when they work this out and consider its practical application that this is an equitable arrangement. Also it makes the situation more competitive, and farmers in my hon. Friend's constituency will be able to choose the cheapest places to obtain their lime. It may be that some high-cost suppliers will have to look at their prices and see whether improvements can be made. My point is that it will increase competitiveness. The extra allowance for depôts will assist areas such as my hon. Friends have mentioned. I stress that the one-sixth increase which is allowed for Scottish lime arises from the extra cost of lime production in Scottish quarries. It is solely for that purpose that the increase has been given.

Finally, on the Scottish point, I would mention that the N.F.U. and the Scottish N.F.U. have accepted these rates and, no doubt, if there is difficulty in the future they will be the first, with my hon. Friends, to advise us of the fact. My point is that the N.F.U. and the Scottish N.F.U. seem to find these rates satisfactory.

My hon. Friend the Member for Antrim, North (Mr. H. Clark) referred to the problems in Northern Ireland. His first point related to the difference in the transport rates in Northern Ireland as compared with elsewhere in the United Kingdom. I am sure he knows that few Northern Ireland farms will be situated more than 20 miles from a source of lime, and probably there is more than one quarry or other source available. In Northern Ireland the maximum distance between any farm and a source of supply generally speaking, is 30 miles. As a result, we have scaled down the mileage limits so that the Northern Ireland farmer will be getting transport subsidy on equivalent terms to his counterpart in other parts of the United Kingdom. This is different from areas like the Scilly Isles and elsewhere where the distance is greater and so the mileage limit is also greater.

Mr. H. Clark

Would not my hon. Friend agree that the cost of transporting for 30 miles is the same in Northern Ireland as anywhere else, and we are therefore entitled to the same subsidy?

Mr. Scott-Hopkins

I am sure my hon. Friend will agree that most farms in Northern Ireland are situated within 20 miles of a source of lime and, therefore, they are getting a comparable rate of subsidy for every mile over five miles, as are farmers in the rest of the United Kingdom.

Mr. Clark

I am sorry to press the point, but I cannot let my hon. Friend get away with this. There are certainly some acid soils in the Sperrins and elsewhere in Londonderry. One has to pay for the transport of lime 30 miles, and I cannot see why for the last 10 miles we are getting only 2s. a mile whereas everybody else is getting the higher rate.

Mr. Scott-Hopkins

I do not want to weary the House with figures, but my hon. Friend will realise that 70 per cent. of farmers in Northern Ireland live within 20 miles of their source of supply of lime, whereas in England only 50 per cent. live within 30 miles of a source of supply. It is a question of scaling the subsidy down in proportion. I take my hon. Friend's point. I know that this has been worrying him, because he has written to me on the subject.

He also referred to burnt lime, but he will realise that this represents a very small proportion of the lime used agriculturally. In fact, it represents about 2 per cent. of Northern Ireland supplies. It is of high quality, but it is expensive as well.

My hon. Friend asked also about exports from Northern Ireland. The only exports I am aware of at the moment are to Bute and Islay, the ones to which my hon. Friend himself referred. If, and when, any other trade develops, or it seems likely to do so, we shall most certainly consider it and sec what it is necessary to do. I hope that my hon. Friend will accept that the Northern Ireland farmers are in no way worse off than their counterparts in England, and that the Northern Ireland producers are not being stopped from seeking other markets outside the country.

I commend the Scheme to the House. I believe that, now we have gone over to flat-rate contributions, it will be seen that this is the correct and proper way of administering the subsidy. It will achieve two results.

Mr. Hoy

What will it cost the taxpayer?

Mr. Scott-Hopkins

The hon. Gentleman gave the figure of £9 million, and that figure is correct, assuming 6 million tons of lime is used. Of that £9 million, Scotland takes about £2¼ million, England £5¼ million, Wales £500,000 and Northern Ireland £1 million. All this is assuming that the level of use is 6 million tons.

Now that we have introduced the flat-rate system, and once we have got the Scheme working, we shall find that producers, suppliers and farmers will be able to work just as competently as in the past. It will, I believe, be much more difficult to commit irregularities or frauds, and public funds will, therefore, be safeguarded. If there are any difficulties, I hope that any supplier, producer or farmer will get in touch with us.

I have said already that after the Scheme has been working for a few months I shall be more than willing to have a meeting of those interested in it. But I cannot accept the suggestion of a formal and statutory advisory committee. I shall gladly arrange a meeting of the interested bodies—organisations representing suppliers, producers and farmers—to examine the working of the Scheme, but I am certain that, after a little time, when the rough edges have been worn off, we shall find that this is a better Scheme which will work in a much better way and be greatly to the advantage of the farmer and the whole agricultural industry.

11.24 p.m.

Mr. William Ross (Kilmarnock)

Will the hon. Gentleman answer one or two questions? First, as to consultations, he told us: about agreement with the National Farmers' Union and the National Farmers' Union of Scotland, but did he also consult, and did he have agreement with, the limestone producers in Scotland? I have had communications from some in my own area. They are reasonably satisfied about the additional contribution in respect of home producers in Scotland—the one-sixth contribution meets the case at the moment—but they are concerned about the future. Do I take his answer about his willingness to meet interested parties after the Scheme has been going a bit to cover that point?

What about non-returnable bags? They are quite expensive, in some cases 5s. per ton. In this connection particularly, I should like a definition of what is a Scottish isle. Does it cover islands as remote as the Outer Hebrides and as near as the Isle of Bute? Further, how will non-returnable bags be checked?

May I take it that the additional voyages to the Scottish section reflect the pattern of supply? It might be argued against the 4s. charge from the mainland of Scotland to Skye, which might be supplied from Glasgow, that this charge represents a considerable distance while the 24s. in respect of Bute represents the cost of supplies which for many parts will be sent from close at hand. Would I be right in assuming that this reflects the pattern of supply and the pattern of trade?

Mr. Scott-Hopkins

The hon. Gentleman is correct in saying that these contributions reflect the pattern of supply.

The limestone producers were consulted and I would be very willing to see them after the Scheme had been working for some time, if they so desired, to review the position. I must re-emphasise that my offer covers the whole field and that I am more than willing to meet all those concerned after the Scheme has been working for some time to see how their interests are affected.

Non-returnable bags can be worth using only when nothing else is suitable and the reason for their use is the lack of other containers.

I will not go into the definition of the Scottish Islands. If the hon. Member for Kilmarnock (Mr. Ross) has any difficulties about that, he should get in touch with my hon. Friend the Under-Secretary of State for Scotland.

Mr. Ross

I have less difficulty than he has about definition.

Mr. Scott-Hopkins

I am delighted to hear it.

Mr. Prior

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.

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