SCOTLAND (FARM IMPROVEMENT GRANT) (Hansard, 29 November 1966)

§ Mr. John P. Mackintosh (Berwick and East Lothian)
I wish to raise the matter of the refusal of a farm improvement grant to Mr. Duncan C. Fairbairn, of Newmains, Drem, East Lothian. I do so partly because it means a loss of £167 to an able and industrious smallholder, money which I believe he rightly should have had, and also because several important issues of principle are involved of the kind which ultimately, I believe, might be appropriate for the Parliamentary Commissioner when that official is appointed. First, I will state the facts.
Mr. Fairbairn is a smallholder chiefly concentrating on dairy farming. He considered that he could increase production, apart from efficiency, if he had a bulk tank for holding milk. This 150 gallon refrigerated tank cost £670. Preliminary approaches were made by him to the Milk Marketing Board, with which he dealt in June this year. The Board was positively enthusiastic about the proposal and urged him to proceed and to start supplying its lorry if possible from 1st August.
414 Under the Milk and Dairies (Scotland) Act, 1914, the County Council had to give approval and he had to arrange for the financing of the project. He also sought a farm improvement grant to help pay for the tank. The total volume of paper work involved was very considerable, and I have the bulk of it here to demonstrate the point. He had to get all these various approvals and request permission from the Scottish Department of Agriculture.
When he approached the Department, this involved one of its officials, who normally dealt with Mr. Fairbairn as a smallholder, visiting him, discussing the project with him and investigating the matter. At this point I am in some difficulty, because the case rests in part on a conflict of evidence or a misunderstanding between the official, the lands officer, and Mr. Fairbairn, and I will therefore have to go into this in some detail. Unfortunately, since this series of events, the lands officer has died, but all the information in connection with the case is in the hands of the Department and is therefore known to my hon. Friend. I must say also that there was at no time in my intention or that of Mr. Fairbairn any element of criticism of the lands officer. He was a well-liked and capable official and, if he erred at all, it was that he was over-zealous.
The lands officer visited Mr. Fairbairn and discussed the project with him and left him the appropriate form to fill in. Here I come to the element of disagreement. According to Mr. Fairbairn—and I quote his version—the lands officer said, "I know the place very well. There will be no hitch here. When the form arrives on my desk I shall sign it. There will be no one down here again, so just go ahead."
There followed the detailed work of approval and of installation of the tank to be carried on. According to Mr. Fairbairn, the only subsequent thing that happened was a telephone call from the Department asking for an estimate for the tank to be sent to the Department, and this was duly done. The tank was then installed. The Board several times contacted him and urged him to be quick about the matter and be in time to start by 1st August. This he managed to do.
Shortly thereafter, two officials called from the Department. I understand that 415 the lands officer in question was on holiday at the time. They looked at the plans, the estimates, the county council's letter of approval and so on. They then gave their entire approval. They said the scheme was entirely satisfactory from their point of view.
On leaving, however, they asked when he hoped to start using the tank. He expressed surprise and said that he had already begun to do so. I think this shows his good faith about the go-ahead he thought he had been given by the lands officer. These officials expressed complete surprise, their attitude changed and they told him he would get no grant because he had begun operations before their written permission had been received.
Now this is Mr. Fairbairn's account. He is a good farmer and an honourable man—that has never been doubted by anyone concerned. There is positive evidence of his good faith in that he was ready to admit that he had already installed the tank and begun operations.
The Department's account is somewhat different. It insists that no verbal go-ahead was given. It points out that the form in question, which I have here, states quite clearly, as it does, that one must not begin work without the Department's written authority, and if one does so the grant will not be paid. It also says that a letter to this effect was sent to Mr. Fairbairn on 10th June, although I have not been able to find any record of this letter in Mr. Fairbairn's file.
I tried to ascertain, when I started to investigate this matter, which of the two versions was correct and I rang up the lands officer in the Department. I do not want to press this point, but when I rang I encountered very considerable embarrassment and, after a long conversation with the officer, I got the impression that he appreciated that there had been a genuine conflict of opinion on this and that he had left Mr. Fairbairn with the impression that he could go ahead, even if he had not explicitly intended to do so. I do not want to press this. I do not know whether the lands officer, who was a man keen on production, and who had the confidence of these small-holders, co-operating fully with them, may be felt that he could put this form through and may not have 416 realised that he would be on holiday when it appeared. Perhaps he thought that the installation would take longer. There is no knowing what was in his mind.
What I am pressing is an issue of principle which arises from this. There was clearly a conflict between the two men. A conflict of understanding, of interpretation, and the end result is the citizen is penalised to the extent of £167. It is a matter of principle that if there is a conflict of this kind with such a result, then the citizen's version should be taken and not that of the official.
The second issue of principle arising is that Mr. Fairbairn's only error in the whole procedure was to begin production too quickly. He accepted the Marketing Board's plea to get on with the job and started to use the tank. The Prime Minister has been going around the country urging people to do just this, to cut corners, to give up red tape. I listened to him at the Labour Party conference, expatiating against conservatism, bureaucracy and delay of all kinds, and yet here is the Scottish Department of Agriculture penalising a man for doing what the Prime Minister has urged, producing and getting on with the job.
This is reversing the Prime Minister's message. It seems that the Department wants to delay things and to penalise people. In my discussions with the Under-Secretary of State responsible for this Department, Lord Hughes, the chief objection advanced, which I took very seriously, was that if the rule of prior consent was not adhered to the Government would lose control of schemes and would have to pay for schemes which they would not otherwise have approved. This is simply not the case.
If a project is badly planned, if it was in any way unsatisfactory and did not meet the requirements of the Government, there would be no case for making a grant. In this case the project was entirely approved; it was exactly what the Department was prepared to authorise. I gather that a grant had been provisionally authorised, and was withdrawn simply because production began too early. Under these circumstances, if this rule was waived, no grant would be given to a scheme which would not otherwise have received a grant. No 417 control would be lost and all that would happen would be that that misunderstanding between a small-holder and the Department would be taken as a reasonable excuse for giving approval to an otherwise exemplary project.
Before I came here I used to teach politics and administration, and I recall that a number of writers discussed the question of the meaning of the word "bureaucracy". It sometimes had a slightly unpleasant meaning if regarded as different from administration pure and simple. In what did this difference lie? I have been interested in this case, because I find that it offers two definitions at this kind of bureaucracy. One is that where a conflict of evidence arises between an official and a citizen on a point in respect of which the citizen can lose or be penalised, whose word is taken? If the word of the official is accepted, that is bureaucracy. The citizen's word should be preferred even when both parties are honourable and above reproach in their general conduct. The second definition is where the policy of the Government is to act is one way—in this case to hasten production—and the action of the Department or of the officials is the reverse of that.
Apart from these administrative issues there are political issues involved. I have always believed that Government Departments can administer in a progressive spirit—and I am sure that many do so—and that the objective of the policy can be adhered to. But if people pervert that policy from its original purpose it is to be condemned. If farmers, knowing that a subsidy is designed to improve output, plant a crop not for the sake of the crop but for the sake of the subsidy, it is a perversion. If, similarly, a Department administering a grant or subsidy is not thinking of the end product —which in this case is producing food—but is concentrating on form-filling and the observance of small clauses, it is a perversion of policy, because it does not concentrate on the right objective.
I have listened to my hon. Friend the Minister of State on many occasions at political meetings saying that he rejects the argument that Government Departments have a dead hand and that State administration is in some sense the enemy of rapid action and progress. I have listened to him expatiating on this many 418 times. I hope that he proves true to his word on this occasion by changing his attitude. The more I look at the Government's administration of agriculture as an example of Government intervention in a private sector the more unhappy I become, because so much is made of form-filling. The more regulations there are and the more detailed administration and expensive administration is built up the more likely the whole objective of agriculture, which is food production, is likely to be lost sight of.
I hope that my hon. Friend—I appreciate that he had nothing to do with this until a brief was dumped upon him—will not simply read out his brief but will consider the issues involved. I hope that he will consider the citizen's rights in this matter. I hope that he will not go along the line I have described but will reiterate the Government's determination that rapid production is to be praised, and will reverse what I regard as a very unfortunate decision.

§ The Minister of State, Scottish Office (Mr. George Willis)
I have listened carefully to what my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) has said about this case. He has put it quite forcefully and with his customary elegance, although I am afraid that for a professor he has been rather loose in some of the things he has said, especially in attributing to me all sorts of things which I am sure he has not heard me say. Nevertheless, allowing for these flights of fancy, the case was well presented. I am afraid, however, that I must reject it.
As my hon. Friend stated, Mr. Fairbairn is a tenant of one of the Department's smallholdings. He applied on 9th June of this year for a grant in respect of a bulk milk tank. A reply was sent to him the following day, explaining that, before the application could be further considered, it would be necessary for him to provide an estimate of the cost of the tank.
Mr. Fairbairn claims that he never got this letter. I am not questioning that. On 29th June, he telephoned the Department's lands officer, who was responsible for factoring the estate on which his holding was situated and asked what the position was. The lands officer got in 419 touch with the branch of the Department concerned with farm improvement grants and was told that the estimate was required before consideration of the application could proceed.
There is general agreement up to this point, but there the testimony begins to diverge. The lands officer said—I have no reason to doubt this—that he simply passed on to Mr. Fairbairn the information which he received from the Department. Supporting evidence for this lies in the fact that the necessary estimate was received by the Department from Mr. Fairbairn the following day. Mr. Fairbairn, however, further alleges that he received oral authority from the lands officer to proceed with the work.
I find this hard to credit, as there are standing instructions to all our staff that such authority is not to be given by word of mouth and the lands officer confirmed that he was well aware of these instructions. After the Department received the estimate from Mr. Fairbairn, arrangements were made for an inspection of the farm, which took place on 16th August. The tank was found by then to have been installed and grant was refused on the ground that work had been started without prior written authority.
My hon. Friend has advanced two main arguments why this decision should be reversed first, that, in the conversation with the lands officer of 29th June, there was at least a genuine misunderstanding, as a result of which Mr. Fairbairn thought that it was in order for him to proceed with the work at once. My hon. Friend goes further and says that, in cases like this, we should always give the citizen the benefit of any such doubt. His second argument was that the Department is being excessively bureaucratic and narrow-minded by a rigid insistence on the prior approval rule and are thus frustrating the carrying out of works which are in the national interest.
As regards the alleged misunderstanding in the conversation on 29th June, I cannot help feeling that if Mr. Fairbairn construed the lands officer's remarks as giving him authority to proceed, the wish was, to a certain extent, father to the thought. I am not blaming him for 420 that; it is understandable. But what we have to remember—this was mentioned only cursorily by my hon. Friend—is that the leaflet and the application form issued to Mr. Fairbairn include, no fewer than seven times, the statement that grant will not be paid on work begun without the Department's prior written authority.
Indeed—my hon. Friend ignored this altogether—the application form which Mr. Fairbairn signed included, in heavy black type less than half an inch above where he had to place his signature, this statement: I realise that grant will not be paid on any work begun without the Department's prior written authority. It is hard to believe that a person can sign this form—we have the form, of course, in the office—and not see this heavy black type just above his signature——

§ Mr. Mackintosh
The whole point is that this was well-known to Mr. Fairbairn, but that, in their discussion, the lands officer told him, "Now carry on. When this form, with your signature and this clause, comes in, it will be put through. You need not wait for this."I am not pressing this, but this is the burden of Mr. Fairbairn's case.

§ Mr. Willis
I also have examined this matter. I stress the word "writing". In face of these very clear and specific statements, it was reasonable to expect Mr. Fairbairn to have been more cautious about proceeding on any oral statement. I cannot regard his version of the conversation on 29th June as justification for acting in the way he did. I, too, have a version which is rather different from that of my hon. Friend. This is what Mr. Fairbairn says the lands officer said: My colleague and myself know the place so well that there is no hitch at all You just go ahead and when the form arrives on my desk I will sign it. These two sentences taken together seem to indicate that the lands officer was referring to the form. These are the words which Mr. Fairbairn says were said to him. They are not quite the same as my hon. Friend quoted, but it is rather difficult to be exact two or three months after they have been said.
In regard to the second argument about the rigidity of the proposals and the 421 manner in which we deal with them, I cannot agree with my hon. Friend. I should have thought it obvious that a rule of this kind was a most elementary and necessary safeguard for public funds. My hon. Friend referred to the amount of form filling which a farmer has to do in respect of agricultural grants and subsidies. He seemed to forget the enormous amount of public money involved. Something over £300 million is involved. We would be failing in our duty if this amount of money was given out without proper safeguards. The House would be very critical and so would be the Public Accounts Committee.
I should have thought it was a safeguard—if, for example, the work is to be done by contract it is right and proper to insist wherever possible that there should be competitive tendering and that the Department has an opportunity of scrutinising the tenders beforehand. This rule is common form not only from the farm improvement scheme but for other capital grants schemes for hill farming, land drainage and water supplies and in local government housing and improvement grants. The rule is not only in the public interest, but also in the interests of applicants, as quite often proposals initially submitted will not be satisfactory on technical or economic grounds. If we have an opportunity to look at them before work starts we can suggest modifications to enable them to qualify for grant rather than being confronted by a fait accompli. If we are to have a rule of this kind we must in fairness to all concerned administer it strictly. To do as my hon. Friend suggested and to give retrospective approval to cases when we found that work had been satisfactorily 422 done would be tantamount to having no approval at all. That could lead to endless argument as to whether in particular cases any deviation from normal standards was or was not sufficiently substantial to warrant withholding grant. It would be utterly impossible for any sensible or prudent administration to proceed on those lines.
This matter has been raised before in debate on 2nd March, 1964. Perhaps I could not do better than repeat what was said by the hon. Member for Edinburgh, West (Mr. Stodart), then Joint Parliamentary Under-Secretary of State for Scotland: I cannot possibly agree with the remarks made to me by my hon. Friend —The then hon. Member for West Aberdeenshire, who is no longer with us—— in a letter on the subject of the farm improvement grant in which he said that the condition laid down about consent being required before work began was merely an administrative convenience. Far from being this, it is, in my view, absolutely fundamental to this most valuable scheme."—[OFFICIAL REPORT, 2nd March, 1964; Vol. 690, c. 1098.] I quarrel a good deal with the hon. Member for Edinburgh, West, and he quarrels with me, but on this occasion I would certainly thoroughly endorse what he said then.
In all the circumstances, although I have a great deal of sympathy with Mr. Fairbairn, I am afraid that I must tell my hon. Friend, as he has been told already, that I can see no justification for reversing the decision taken in this case.