HC Deb 04 March 1966 vol 725 cc1668-75

12.2 p.m.

The Under-Secretary of State for the Home Department (Mr. George Thomas)

I beg to move, That the Payments in Aid of Agricultural Schemes (Extension) Order, 1966, dated 15th February, 1966, a copy of which was laid before this House on 23rd February, be approved. The purpose of the Order is to renew the special assistance granted to Northern Irish agriculture for a further five years and to increase the grant by £500,000 to 1¾ million. This is a substantial increase which, I know from my experience in Northern Ireland, is deeply appreciated by the farming community there.

The grant originates in the decontrol of food marketing and of agricultural produce which took place in 1954. During the period of control farmers throughout the United Kingdom received from the Ministry of Food the same fixed price for their produce sold off the farm. The system introduced in 1954 gives farmers throughout the United Kingdom the same deficiency payments based on the difference between the average market price for the country as a whole and the guaranteed price. This means that when a deficiency payment is made each farmer receives the same addition to the price he obtains from the market irrespective of the actual difference between the price he himself has obtained and the guaranteed price.

This presents a special difficulty for Northern Ireland because of its remoteness from the main markets in Great Britain. Northern Irish farmers tend to get lower prices on average than farmers in many parts of Great Britain. This was recognised in 1954, and the Government decided to make a grant each year to the Government of Northern Ireland for the purpose of assisting agriculture in Northern Ireland. The grant is now payable under Section 32 of the Agriculture Act, 1957. This provides for the grant to be extended for periods of up to five years at a time, and for the amount of the grant to be varied in respect of any extension period, subject, of course, to Parliamentary control and approval.

In 1957 the grant was fixed at £1 million a year. It was renewed for a further period of five years in 1962 and raised to £1⅓ million. At the 1965 Annual Farm Price Review the Government decided to re-examine the rate of grant, and, after doing so, announced last October that it would be raised to £1¾ million from the 1966–67 financial year. I should explain that the Agriculture Act does not give Ministers the power to vary the rate of grant during the period of extension of the grant. That is why this Order brings the current extension period to an end—it would otherwise still have a year to run—and starts a new extension period at the higher rate.

The Government have taken two points into account in deciding to increase the rate of grant. First, they have examined the market prices obtained for the guaranteed agricultural commodities and concluded that the difference between farmers' returns in Great Britain and Northern Ireland has increased somewhat since 1962. Secondly, the Government have considered what amount of money could be effectively spent. I should emphasise that the grant is not intended merely to be a means of supplementing farmers' prices in Northern Ireland. The schemes financed by it are also designed to give constructive help to Northern Irish farmers to overcome their remoteness disadvantage. The schemes are described briefly in a statement laid before Parliament each year, and a statement for 1965–66 will be made shortly. I would add that it had better be in a hurry.

Finally, I will say just a word about the way in which the grant is used. This is in the hands of the Ministry of Agriculture for Northern Ireland, subject to general approval by the three United Kingdom Agriculture Ministers. Approval by United Kingdom Ministers is required because the special assistance is part of the total assistance given by the United Kingdom Government to the United Kingdom farmers and must be consistent with the Government's agriculture policy. Subject to this, the disbursement of the money is a matter for the Northern Ireland Ministry of Agriculture.

It has been a great privilege for me in this Parliament to have a great deal to do with Northern Ireland. I respected it before; I have learnt to love and honour it. It is a very great part of the United Kingdom. I had a great deal to do with the farmers when I went over there, and I shall always have happy memories of them. I am glad to think that my last official task in this Parliament is to move an Order which is designed to help that hardworking and thriving community.

12.9 p.m.

Marquess of Hamilton (Fermanagh and South Tyrone)

I welcome the Order, of course, because it fulfils our election pledge to the Northern Ireland agricultural community that we would make the strongest possible representations to the Government for an increase in the scheme.

I should like briefly to give an assurance to the House that the money under the scheme is spent in a most worthwhile and responsible way in order to promote and further special growth points in production. For instance, last year £830,000 was spent to encourage beef production, for which there is a great demand in the United Kingdom at the present time. Also, a payment of £170,000 was made to improve the seasonality of marketing, which will be of direct benefit to the consumer.

However, the disparity in prices between Northern Ireland and the rest of the United Kingdom is still very considerable and the gap is in no way closed by the extension of this scheme.

The Northern Ireland farmer is subject to a far greater degree of price differentiation than is borne by producers in the rest of the United Kingdom. In 1963, the total loss of farm income through selling at Northern Ireland farm prices amounted to over £5 million and the 1964 figure was similar. Again, we in Northern Ireland are at a distinct disadvantage since we are forced to import a considerable quantity of essential feeding stuffs, the price of which has risen rapidly, if not dramatically, in recent years.

In 1963, grain cost approximately £14 per ton. The import price today is £23 per ton. Again, this distinct disadvantage is extenuated since the Northern Ireland farmers have to market the great majority of their production on this side of the Irish Sea, thereby incurring ever-increasing freight rates, especially during the last two years.

I believe that this House must appreciate the real disadvantages and problems facing the agricultural industry in Northern Ireland—an industry that is a particularly important part of the economy of Northern Ireland. This was strongly stressed by Lord Beeching during his recent visit to Belfast. The problem of farm income is also acute and serious because there are approximately 23,000 farmers whose output in production is too low to provide an income equivalent to the minimum agricultural wage.

I can assure the Under-Secretary of State that the Northern Ireland fanner cannot continue to contend with increased costs and falling prices. He is not in a position to do so. Finally, It is of vital importance that the Government should not regard this extension to the scheme as a substitute for the fair, realistic price review for which there is no genuine substitute.

12.12 p.m.

Mr. Henry Clark (Antrim, North)

As a Northern Ireland Member, I want to begin by saying how glad I am to have this opportunity to express our thanks to the Under-Secretary of State for the sympathetic, always charming, friendly and co-operative way in which he has dealt with matters concerning Northern Ireland. I know that I speak for all my Ulster colleagues in saying so. Well I remember the meeting at which he announced this increase in what we call the "remoteness" grant. It was in a large hall packed with farmers, but not even the hon. Gentleman's charm would have kept them happy if he had not been able to produce this £500,000 addition to the grant.

I am sure that he himself did not make this decision but that it was arrived at by his colleagues in the Ministry of Agriculture, because £500,000 is a pretty small proportion to get for the 1965 season, which was about the most disastrous year that the Northern Ireland farmers have experienced. This increase represents about £10 per head per farm and about £5 per head for the people employed in the Northern Ireland agricultural industry.

It is not much. It does not quite make up for the increased cost of living during the past year nor for the rise in industrial wages in the same period. It is perhaps wrong to compute the amount directly to the increases in cost of living and industrial wages but it is a way in which one must look at this. There is no question that the increased costs on the farm have cut very deeply into farmers' profit margins in the last two or three years.

My noble friend the Member for Fermanagh and South Tyrone (Marquess of Hamilton) has detailed some of the increases in costs. Can we have from the Under-Secretary of State a statement of how the figure of £500,000 was arrived at? I believe that the remoteness grant is computed in a purely arbitrary fashion with, as far as I can see, no real attempt to compute losses to the Northern Ireland farmers as against the remotest parts of Great Britain.

There have been successive increases in freight charges and the Northern Ireland farmers have to suffer as well an undoubted psychological barrier. It is not just freight rates that make beef in Scotland get 30s. a hundred more than the same beef in Northern Ireland. Nor is it a question of Aberdeen Angus quality. Too often beef sold in Scotland is Irish beef from the same farms and fattened in identical conditions. Yet Northern Ireland farmers get 20s. a hundred less than the Scottish.

When the remoteness grant was introduced it was considered a triumph for the Ulster Farmers Union. It was the first clear recognition we had that the Northern Ireland farmers are in a less favourable position than the farmers throughout the rest of the United Kingdom. But I am frightened that the grant, which bears no real relation to the facts, is becoming a sop to the consciences of successive Ministers of Agriculture because they know that the Northern Ireland fanner is worse off than his colleagues on this side of the Irish Sea.

The negotiations in 1957 were carried out in an atmosphere in which we in Northern Ireland were importing grain from the world market. So was Great Britain. On the whole, if anything, our feed prices were rather lower than in the rest of the United Kingdom. Since then a certain number of feed grains have been replaced or are supplied by British production here and feed prices have on the whole been kept down. But we in Northern Ireland have suffered considerably from the minimum import prices enforced at all British ports. Perhaps it would be better to do away with the remoteness grant and to accept the peculiar position of Northern Ireland. One of the easiest and most straightforward things that the Government could do would be to reduce the minimum import charges at Northern Ireland ports.

Mr. Speaker

Order. We cannot discuss alternative policies.

Mr. Clark

I will try to adjust my remarks to your Ruling, Mr. Speaker. It is a question of feedingstuffs and of reducing the cost of imports and, equally well, of a policy to encourage the production of grain of a different standard quantity which would begin to put right the difficulties of Northern Ireland farmers.

We welcome this Order, but I do not think that the increase is a solution. Perhaps, as his last act for Northern Ireland—for I cannot see the hon. Gentleman sitting on the Front Bench in many weeks' time—he would make the firmest possible representations to the Minister of Agriculture either to pay the grant on direct quantities or tackle Northern Ireland's agricultural problems and farm incomes on a more direct and positive basis that would give the small farmers the proper return for their work.

12.20 p.m.

Mr. James Scott-Hopkins (Cornwall, North)

I hesitate to intervene in a debate which has been so ably conducted by my hon. Friends, who have great knowledge of the conditions in Northern Ireland, and the Under-Secretary of State who has acquired a great deal of knowledge in the last few months when he has been fulfillling this responsibility.

Like my hon. Friends, I welcome the Order and these increases. I hope that the Under-Secretary has had his attention drawn to the remarks of my noble Friend the Member for Fermanagh and County Tyrone (Marquess of Hamilton) who spoke of rising costs of feedingstuffs and so on, and of increased freight rates, also mentioned by my hon. Friend the Member for Antrim, North (Mr. Henry Clark). It is true that the extra money to be given to Northern Irish farmers by the Order will recompense them for increased costs which the Government have imposed upon them.

The Under-Secretary may have made a slip of the tongue, but I thought that he said that the details for 1965–66 would be ready very shortly. That work should already have been done and we should already know how the 1965–66 grant of £1,250,000 was allocated as between the various products. I think that the hon. Gentleman meant 1966–67 and I hope that details of the allocations for that year will be ready as soon as the agreements have been reached.

However, the main issue which I want to raise concerns the hon. Gentleman's control over the allocation of this money. It is a considerable sum which is being spent to help Northern Irish farmers and three matters are mentioned in the Explanatory Memorandum—the making of silage, payment for fat cattle marketed, and payments to certain farmers not engaged in milk production.

Presumably, that is a reference to 1965–66 and it would be interesting to have the actual allocation of the funds within the £1,250,000 presumably spent in that year. Can the hon. Gentleman tell us what is to be the allocation for 1966–67 and whether it will still be on those three headings? If so, can he say how the £1,750,000 will be split among the three, or does he intend to include extra headings after consultations with his hon. Friend?

12.23 p.m.

Mr. George Thomas

I am much obliged to the three hon. Members opposite for the kind things they have said. We are dealing with a matter which means a great deal to the hard-working farmers in Northern Ireland. The remoteness grant has never been intended to represent the total amount of the disadvantage of Northern Irish farmers. It is intended to promote constructive schemes to offset the disadvantage which farming suffers in Northern Ireland.

I tried to explain earlier that the amount of the grant is decided by establishing the difference between market returns in Northern Ireland and in Great Britain. We try to redress the balance to help as much as we can. The money is dispersed by the Northern Ireland Minister of Agriculture, Mr. Harry West, with whom I have worked in very close consultation and with whom it is very easy to work in close co-operation and who is a master, as one would expect, of his own subject. He guides and he and his colleagues in Northern Ireland decide how the money is to be spent.

The hon. Member for Cornwall, North (Mr. Scott-Hopkins) was quite right to say that the silage payments scheme was one of the matters on which help is given from the remoteness grant. The cattle breeding herds scheme, helping with the breeding and rearing of calves, the cattle headage payments, the herbage seed improvement scheme, which provides for grants to be made to the Herbage Seed Marketing Board for Northern Ireland, the Northern Ireland seed potato scheme and the sugar beet development scheme are others.

The agricultural authorities in Northern Ireland, among whom I include the Ministry and the Ulster Farmers Union, discuss what is best for the industry and I think that they themselves agree how best the money can be used.

Mr. Scott-Hopkins

Surely the hon. Gentleman has the final say-so about what the Ulster Farmers Union and the Ulster Ministry agree. It is his responsibility, is it not?

Mr. Thomas

It would be very churlish of us on this side of the Irish Sea to say that we knew better than the people in Ulster when they advise us how best the money can be spent over there. As long as there is a Welshman in this office, we shall be very tolerant of the proposals of the Irish.

Question put and agreed to.

Resolved, That the Payments in Aid of Agricultural Schemes (Extension) Order 1966, dated 15th February, 1966, a copy of which was laid before this House on 23rd February, be approved.