HC Deb 22 January 1969 vol 776 cc475-7
32. Mr. J. E. B. Hill

asked the Minister of Agriculture, Fisheries and Food whether he is satisfied that the present investment incentives in agriculture are adequate to sustain the expansion programme announced on 12th November; and if he will make a statement.

Mr. Cledwyn Hughes

Estimated gross fixed capital formation in agriculture is rising. One of the questions which will need to be considered at the Annual Review is whether the current trend will provide the resources for investment needed for the selective expansion of agriculture at which we are aiming.

Mr. Hill

In so far as capital for the expansion programme is expected to come from increased income, is it not essential to maintain the incentives to plough back profits into new investment and not, for example, to cut the investment grants, as happened at the beginning of this year? Will the Minister therefore not accede to the N.F.U. request to go back to the simpler and more liberal system of investment allowances?

Mr. Hughes

The hon. Member will be aware that when the investment allowances were abolished not only were investment grants introduced but considerable improvements were made in the Horticulture Improvement Scheme and initial allowances. The House will know that the advantages of the new investment grants are that farmers know beforehand what grant they will receive, they are available to those who are not paying tax and they are paid more promptly.

Mr. Mackintosh

In view of the importance of carrying out the expansion programme announced by my right hon. Friend on 12th November, will my right hon. Friend consider in the interim, between now and the publication of the Annual Review, issuing a Green Paper in which the alternatives, the cost of the various types of incentive and the likely result of these incentives are set out, so that the House and the public will know the alternative methods of achieving the programme and the likely cost to the taxpayer?

Mr. Hughes

A good deal of that information is already available. My hon. Friend, while making a valuable suggestion, has asked me to produce a very complex document in a short period of time but, looking to the future, I will consider what he says.

Mr. Prior

Is the Minister aware that there is only one way of providing an incentive to the farming industry, and that is to pay them more? If he does that all the other incentives will be unnecessary.