HC Deb 21 July 1970 vol 804 cc396-419
Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. We come now to the third subject for debate: the improvement of agriculture in the hills and uplands of Scotland. May I remind the House that the debate must be confined to the items which begin at the bottom of page 30 and continue to the end of the first item on page 32.

11.34 p.m.

Mr. Robert Maclennan (Caithness and Sutherland)

It is a pleasure to follow the maiden speech of the hon. Member for Rossendale (Mr. Bray) and to welcome him to our midst. We listened with interest to his speech, at the end of a long debate through which he has patiently sat. I have no doubt that in future he will make further valuable contributions to the debates in which he participates. His predecessor in this House was well known. In due course, no doubt the hon. Gentleman may be as well known.

I am glad to have the opportunity tonight to raise the subject of the improvement of the condition of agriculture in the hills and uplands in Scotland, because there is an immediate crisis facing the industry, and a crisis of which the Government are showing themselves rather less than sufficiently aware.

This afternoon at Question Time the Minister of Agriculture was asked by myself and by a number of other hon. Members whether he was prepared to institute an interim agricultural Price Review at which it would be possible to consider the various grants and the level of the grants that we are considering tonight in the Supplementary Estimates. The right hon. Gentleman replied that he was prepared to listen to representations on this subject. That was a surprising reply, because extensive representations have already been made to the right hon. Gentleman, to his right hon. Friend the Secretary of State for Scotland, and also, I believe, to the Under-Secretary of State for Scotland, whose presence in the Chamber I particularly welcome.

On the 16th of this month the President of the English National Farmers' Union met the Press to discuss the predicament of agriculture in this country as a whole. He made it clear that since the Annual Price Review in the spring there had been serious cost inflation, and in seeking the immediate assistance of the Government in the form of injecting extra cash into the agricultural economy he put a figure of £20 million per annum on that cost inflation.

Mr. Deputy Speaker

Order. I am sorry to interrupt the hon. Gentleman, but would he be good enough to tell the Chair to which of these Votes he is referring?

Mr. Maclennan

As the level of each of these grants was determined in the Annual Price Review, my remarks are germane to every head.

Not only have we had that specific request from the Chairman of the English N.F.U., but we have had a similar statement from the Scottish N.F.U., and reported in the Glasgow Herald of 17th July describing a meeting between the N.F.U., the Secretary of State for Scotland, and the Under-Secretary of State who is present tonight. It is interesting to note the marked difference of emphasis between the two statements that have been issued, because in the statement made in Scotland it was said that Ministers accepted the need for urgency in getting a special assessment under way as a necessary basis for the Government's consideration of the need for action.

What I think is clear is that both unions have made a strong plea for an immediate cash injection into the agricultural economy, and that they are not prepared to wait until the normal processes of the annual Price Review get under way at the end of this year. They take the view that urgent consideration, leading to a special Price Review, must be given by the Government to the immediate situation.

The reason for that is clear. It is that there has been this dramatic cost inflation of, the unions estimate, £20 million per annum since the last Price Review, with no attempt by the Government to intervene, either in the public sector, for example in respect of electricity charges, or in the private sector in respect of increased fuel charges. These costs have been rocketing in recent weeks, and Ministers have simply stood by and allowed this to go on. They have done no more than express a general degree of sympathy—

Mr. Ian MacArthur (Perth and East Perthshire)

Which Ministers?

Mr. Maclennan

—for the farmers' predicament.

Mr. MacArthur

Which Minister?

Mr. Maclennan

The Minister of the hon. Member's Government.

Mr. MacArthur

When the North of Scotland Hydro-Electric Board first intimated its intention to increase charges, what action was taken by the Labour Government?

Mr. Maclennan

The hon. Member may be suggesting that the present Government are or are not responsible for the increased charges. I am not making a party point. I am drawing attention to where the responsibility currently lies, however unfortunate many of us find that to be. Right hon. and hon. Gentlemen opposite have allowed this cost-inflation to go on at an ever-increasing pace while doing no more than express sympathy with the farmers in their predicament.

Mr. MacArthur


Mr. Maclennan

I have given way to the hon. Member and he has made his point. No doubt he will have the opportunity to speak later in the debate. A number of hon. Members wish to take part in it. I am expressing no party point of view. This is a matter of great seriousness and it will not be advanced by hon. Members seeking to ascribe praise or blame for the predicament of the farming community. But inherent in what the Government are proposing for agriculture is a genuine difficulty which stems from the fact that they propose a change in the system of agricultural support. By their own admission that is to take a period of years. What is uncertain is what will happen during the three-year period of transition when we are moving over to the new levy system.

Mr. Deputy Speaker

Order. I am worried about the hon. Member's speech because I cannot see that the Government's future policy has anything to do with these Estimates. The hon. Member should look at the Estimates and decide about which he wants to talk, because the only subject which is in order is the increase in these Estimates. I hope that he understands.

Mr. Maclennan

I understand perfectly, Mr. Deputy Speaker, and I am sorry if my argument is ranging rather generally, but the level of the increase and whether it is adequate seems to fall within the scope of the debate. The Government appear at present to be committed to the technique of assistance by capital grants but the future remains uncertain. It falls to the Government to explain how they propose to inject this extra cash into the agricultural economy to meet the cost-inflation, because these heads of expenditure were determined in the Annual Price Review some months ago before this cost-inflation took place. Since then we have seen a dramatic increase in fertiliser costs—I understand that the N.F.U. have put it as high as £3 a ton—despite undertakings by the fertiliser industry that no cost increases would be passed on to the agricultural community during this year—undertakings given when the Labour Government announced in the Price Review that they proposed to make substantial increases in the fertiliser subsidy on a once-for-all basis.

That is the most dramatic of the cost increases which the farming community has had to bear. There have been others, particularly notable in transportation in Scotland. That question has been exercising the mind not only of the hon. Member but his friends in the Ministry of Transport, but when I sought to put this point to the Minister of Transport he referred me to his hon. Friend. I hope that tonight the Minister will have something to say about the way in which he proposes to overcome the cost increases that the agriculture industry has had to face in transport and freight, and whether he feels that the increases put forward in the Price Review are sufficient to deal with the inflation that has taken place since.

I want finally to consider one or two specific grants that fall to be considered tonight. First, it will be generally welcomed by the farming community that the grant for the improvement of hill land has been increased to 60 per cent. But there are certain deficiencies in the grant that the Minister was well aware of, at least when in opposition. In particular, there is the question of the eligibility of shelters for grant assistance. I shall be interested to hear what the Minister's thinking is on that point. It is widely accepted that it is desirable that in wintering shelters should be provided and grant-assisted at the higher rate of 60 per cent. rather than the lower rate of 40 per cent.

The brucellosis eradication scheme has also been given a rather muted welcome by the farming community in Scotland. It is not difficult to see why. The hon. Member for Edinburgh, West (Mr. Anthony Stodart)—who now has a Government responsibility for agriculture—during an earlier debate upon the brucellosis eradication scheme said that in his view the longer eradication was delayed the greater the risk to herds which were clean at the moment. He said that reactors had to be kept off the market, and that he was certain that that could be done only if compensation was paid. What plainly has not been provided by the new scheme is the payment of compensation for the slaughter of reactors. It is a matter of some urgency that the Government should look at this and institute the area eradication schemes promised by the previous Government, and, if possible, at an early date. We realise that there is a problem in relation to the supply of brucellafree stock.

The House will be glad to hear the Minister on this point. In his farming capacity he has pursued this problem with some interest and sensitivity to the needs of Scottish agriculture. One hopes that this scheme is just the precursor of something much more effective in eradication than it promises to be, relying as it does on private insurance.

The revised provisions of this Estimate increase the amount payable under the general fertiliser subsidy by £1 million. This is a useful injection of cash, but it was fixed before the recent increases in the price of fertilisers. I should like to hear how the Minister proposes to deal with this.

I advised the hon. Gentleman that I should want to raise a point concerning a drainage scheme in my constituency, in the Strath Fleet area of Sutherland. In some parts of Scotland, to make progress with drainage schemes it is necessary to obtain the consent of the proprietor, who is the person eligible for grant. In large areas of the Highlands, the proprietor is interested not so much in the promotion of agriculture but, frequently, in sport or recreation. Consequently, he has no incentive to take up these grants. I have found this difficulty also in the Loch Watten scheme in Caithness. The Government should give some thought to overcoming this difficulty. It is inhibiting the proper land use of large areas of the Highlands that grants are available to the proprietor and not to the tenant farmer, whose livelihood depends upon proper use of land.

But the nub of this debate must be the Government's attitude to the request, which is becoming increasingly loud, from the farmers' unions to step up the rates of grant and to increase the cash available as early as possible. The Minister's statement today that he was prepared to listen to representations on this subject was difficult to understand, since those representations have already been made. According to the union spokesman, they were thought to have been understood. Does the Minister understand that what is being asked for is an interim price review not later than the autumn?

Is the Department now working on the question of increased costs, and when will the Minister be in a position to say what those increased costs are? It is not sufficient for the House to be told that these costs are being studied. We want the true facts because we have an important part to play as Members of Parliament in assisting the agricultural community to make its case, and we cannot adequately do that save on the basis of agreed and understood facts about costs. This has been the deficiency of the price review system in the past. I hope the Minister will clear up the doubt that has arisen about the Government's attitude to an interim price review.

11.56 p.m.

Mr. Ian MacArthur (Perth and East Perthshire)

The House is grateful to the hon. Member for Caithness and Sutherland (Mr. Maclennan) for raising this important subject.

The hon. Gentleman is right to remind hon. Members that farmers in Scotland, and particularly in hill areas, face enormous problems as a result of escalating costs. He is equally right to remind us that responsibility for the future must rest with the new Administration. However, a certain responsibility must rest with the previous Labour Administration.

My hon. Friends face a double task, because a large part of their responsibility is that of trying to clear up the mess which they inherited in farming from the Government who, mercifully, have left office. The hon. Gentleman appeared to forget that my right hon. Friends have been in office for just under five weeks. He cried out for an interim Price Review. If there is a case for such a review this autumn, that will be a reflection of the inadequacy of the review earlier this year, forced on agriculture by the then Labour Government.

The hon. Gentleman is right to call attention to the financial problems confronting hill farmers, who are often small farmers, in Scotland. They have suffered from the tight credit policy of the Labour Government, from the high interest rates which resulted from the economic incompetence of that Government, and now they are about to suffer from the higher electricity charges put to the Labour Government by the North of Scotland Hydro-Electric Board.

They have suffered for four years and more from the impact of S.E.T., which the hon. Gentleman has consistently supported in this House and which costs agriculture in Scotland about £1½ million every quarter—an enforced interest-free loan to the Government introduced by Labour and suported loyally by the hon. Gentleman throughout, to the detriment of farmers in his constituency and throughout Scotland.

Mr. Maclennan

The hon. Gentleman is devoting a large part of his speech to recounting history, and what he is saying may no doubt be of interest to the farming community. However, to set the historical record straight, if he looks up my maiden speech he will see that I drew attention to what I considered to be the folly of seeking to recompense farmers through the price review for S.E.T. That method was subsequently changed, so that my representations were not wholly without effect.

Mr. MacArthur

The hon. Gentleman may claim as much credit as he likes for the work done by the National Farmers' Union of Scotland and the Conservative Opposition of the day. He will recall that the selective employment tax, even in its amended form, costs Scottish agriculture about £1½ million every quarter of every year, in an enforced interest-free loan to the Government. He may think that that is a wise economic policy for farming. I do not, and that is where we differ.

The hon. Gentleman complains of other increases in farming costs. I have in mind transport charges, which have escalated enormously thanks to the increases in petrol duty under the Labour Government and the enormous increase in licence charges, a result also of the impact of S.E.T. on the charges to farmers by the garages which service their vehicles.

The hon. Gentleman may take pride in the introduction of British Standard Time, which has increased costs to farmers in his constituency as in mine, and he may take comfort from the fact that the present Government have already removed the worst excesses from the Transport Act which would have caused so much additional cost and hardship to farmers throughout Scotland.

I mention all these things because I take it rather amiss of the hon. Gentleman in particular to levy charges against the present Administration. The whole reason for the problems which he has rightly described—and I congratulate him for doing so—rests with the Administration which he supported loyally year after year. He is right to point out that it is now the task of the present Government to try to clear up the problems resulting from those years of neglect of farming in Scotland.

The hon. Gentleman pointed out that my right hon. and hon. Friends propose a change in the pattern of support for agriculture. I welcome this, and I am very glad that there has been the closest consultation between my right hon. and hon. Friends and the National Farmers' Union of Scotland, and that this close consultation will continue. I think that most farmers in Scotland believe that there is a need for a change in the pattern of support, which will be of as much benefit to farmers in the hill lands as anywhere else. What they and all farming interests require is the prospect of expansion. It is expansion that can bring a higher cash flow into farming, and the hon. Gentleman will agree that a better cash flow is what farmers and farm workers require for the prosperity of their industry.

I hope that my hon. Friend will be able to say a little more about the progress of the consultations in his reply, and that he will remind the House and the public that the very difficulties the hon. Gentleman described so evocatively are the responsibility not of the present Administration, which has been in office less than five weeks, but a reflection of the years of neglect of farming which were the legacy of the Administration the hon. Gentleman supported so loyally year after year.

12.3 a.m.

Mr. John P. Mackintosh (Berwick and East Lothian)

It is a little tedious at this time of night to have to listen to hon Members' election speeches reiterated again and again. Normally I listen to the hon. Member for Perth and East Perthshire (Mr. MacArthur) with some pleasure, but on this occasion I found his speech somewhat tedious.

Mr. MacArthur

It was relevant.

Mr. Mackintosh

It was highly irrelevant, as I shall argue.

I have, first, the more pleasureable task of welcoming the Under-Secretary of State for Scotland. We look forward to many speeches from him. I have a great deal of personal knowledge of his interest in the industry and his work on the Select Committee, and therefore I expect that we shall have from him a proper treatment of the subject rather than electioneering clap-trap of that kind we have just heard.

We are discussing Supplementary Estimates for the assistance of hill agriculture in Scotland. When the parties change sides after a General Election there is a tendency for one side to resume the arguments where the other left off, and for the Government to take up the comforting atmosphere of the previous Government that nothing is wrong and that things are better than people imagined. Recalling the attacks of hon. Members opposite on the Labour Government's Price Reviews, I was amused and interested that the Minister of Agriculture, addressing some farmers recently after he had been in office three weeks, said that the trouble with agriculture now was two bad reasons rather than ungenerous Price Reviews. What a change in atmosphere now! According to the right hon. Gentleman, the Labour Government's Price Reviews were not ungenerous. I want tonight to drop this sort of rotation and to ask the Minister how his thinking is going after four weeks he has had to time to devote to this matter. He will appreciate that the sectors of agriculture we are discussing in hill agriculture in Scotland, for which these Supplementary Estimates are intended, have been in doubt for some considerable time. There is a lack of confidence and uncertainty about the future. Two things have increased the uncertainty. One is the prospect of immediate negotiations for entry to the Common Market in which the future of the Supplementary Estimates is not clear if the negotiations are carried through. Secondly, there is the move of the party opposite to a levy system. That is not clear and I should welcome clarification on the question of the extent to which the party opposite wishes to retain or to phase out provision in such Supplementary Estimates.

A third point was mentioned by my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), the increase in costs since the last Price Review. This is a serious point. I do not know whether it yet merits a serious review. No doubt the Under-Secretary is bearing this matter in mind. I should be grateful if he could give an indication of how far costs would have to go in acceleration before the Government begin to think of criteria for a special Review. The National Farmers' Union has estimated an increase in costs of £20 million between April and the present time.

There are present problems which highlight these Supplementary Estimates. Uncertainties could be rapidly cleared up if the Government were able to make a series of statements, which I appreciate would in part have to anticipate a Budget Statement. If prices continue to rise, uncertainty will remain as bad as it is now. Such statements of intent could clarify the situation and farmers facing the difficulties of harvest and into the winter would know where they stand. I urge the Minister to see that the stronger our agriculture is, the better it will be for us if we go into the Common Market and the less we would have to pay in import levies to the Common Market.

In this sense the well-being of particular areas of agriculture is of particular importance. The Common Market is a net importer of beef and veal and the areas we are considering are store areas for beef cattle. I should think it possible to expand our beef cattle production. I should like the Under-Secretary to confirm that the hill cow and hill sheep subsidies and the Hill Land Improvement Scheme will remain intact and will not be diminished in any way in any review of agricultural policy and subsidies which the Minister and his right hon. Friends may undertake. It would help a great deal if we could be promised that these grants will be maintained at their present level and value if costs go markedly further. In view of the importance of sheep farming in these upland areas, are the Government contemplating the renegotiation of agreements with New Zealand under which mutton is brought into this country? This is of critical importance if the Government are to pursue a levy system and if we are to strenthen the position of sheep farmers in upland areas.

Besides the future of cattle and sheep farming in upland areas, there is an acute problem of the labour force which is directly related to the income of these farmers. All hon. Members, especially those with upland areas in their constituencies, know the great danger of a rapid drain of manpower from the land. On a number of farms in upland areas there is no labour except that of the farmer and his family, and extra labour at critical times such as lambing and harvesting is exceptionally difficult to obtain and very costly. If labour is to be retained in agriculture, the income level of these farms must be raised. This is done largely through the type of grant set out in these Supplementary Estimates.

I do not wish to push any partisan points. I want to probe the new Government's thinking on these problems after four or five weeks in office. Any reassurance that they can give the industry to cover the three-month period of the Recess will be welcome, because we will be going into these matters directly the House reassembles.

I should be grateful if the Minister could say a little about the fertiliser grant mentioned in the Supplementary Estimates. The Labour Government received an undertaking from the fertiliser companies that prices would be pegged when the fertiliser grant was increased in the Price Review, yet this does not appear to have happened. There are widespread reports of increases in fertiliser prices. This appears to be a local variation.

In relation to these Supplementary Estimates, are the Government thinking of any particular aid to ensure that grassland is better brought into operation for the benefit of expanding sheep and cattle production in the hills?

I will not go over the statements which have been bandied back and forth across the House. What we are interested in is not politics but the welfare of agriculture in these very difficult hill areas. We should welcome any statement the Minister could make to increase confidence and increase the desire and capacity of the people in these areas to remain on the land.

12.12 a.m.

Mr. John Brewis (Galloway)

I am glad that the hon. Member for Caithness and Sutherland (Mr. Maclennan) has had the opportunity to raise the question of hill farming tonight. It is a subject that we do not debate nearly often enough. Like my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur), I thought that the hon. Gentleman was disingenuous in ascribing all the cost increase and the problems of transportation to five weeks of Conservative Government. It will take a considerable time to rectify this position.

Has my hon. Friend the Under-Secretary considered the possibility of a remoteness grant such as that given in Northern Ireland to deal with some of these problems? A strong and viable hill sheep industry is most important to the whole of British agriculture. There are areas, particularly in the North of Scotland, where forestry is not an alternative to the hill sheep industry. There are other reasons why the hill sheep industry is so important, particularly for fertility which sheep bring to arable areas where the problem of soil fertility is of some importance.

Over the last few years the hill sheep farmers have battled against adversity, partly caused by bad weather and partly by a long succesison of bad price reviews. The increases made by the last Government, many of which figure in these Estimates, have come rather too late. In the area I represent the decline in the numbers of sheep is distressing. For example, in the South-West of Scotland—the Langholm district—the numbers declined by 11.2 per cent. between 1963 and 1968. In Maybole in South Ayrshire they declined by 8.6 per cent. In the Stewartry of Kirkcudbright they declined by 7.1 per cent.

I agree with the hon. Member for Berwick and East Lothian (Mr. Mackintosh) that we need a declaration of intent. The way the hill sheep industry is treated will be a touchstone of confidence in the Government's attitude to farming in general. The hon. Member also mentioned the Common Market. It would be out of order for me to follow him. However, it is most unfortunate that the problem of these areas is always called a social problem which it should more properly be called a regional problem and there should be regulations in the Common Market for dealing with the problems of remoter areas, which will be necessary as soon as Norway, and perhaps the United Kingdom, enters the Common Market.

We are discussing the grants which are of a capital nature. The only solution to the problem is an increase in the end product. To increase, for example, the hill ewe subsidy does not necessarily make for good husbandry. It is merely a question of having a number of ewes on the holding, and in many cases there might not be enough winter keep. Therefore, animal husbandry may suffer by this sort of grant. What is important is an increase in the end price. This applies also to the price of wool.

I notice that in the 1970 Price Review it was stated that the subsidy was very large compared with the return to the producer, but it is only about half what it was three years ago. I feel that it was a mistake by the last Government not to increase the ewe subsidy.

As regards the general question of grants for the improvement of hill land, we must all note that, as the hon. Member for Caithness and Sutherland has said, shepherds are very hard to get and their wages do not compare favourably with wages in other industries, particularly in England.

We need more productivity on the hills. One thing that we should look at is the waste of time which occurs on many hill farms. The position could be improved if the Government helped to develop a vehicle which enabled a shepherd to get over his area rather quicker than spending two or three hours walking great distances. I believe that various vehicles—the Hafflinger and the Gnat, for example—are being tried out and I hope that the Government will give grants for research for this purpose.

Another grant which is very important is the grant for fencing. If a farmer can fence his hills into areas of 200 or 300 acres, he does not waste so much time in looking for sheep over enormous areas. This grant, therefore, is also particularly important. Basically, one of the troubles is that all these things, like making tracks across hills for vehicles or providing fencing to keep sheep in, are very expensive and the money simply is not there in the industry.

I turn now to the improvement of farm structure in hill areas. There is no doubt that hill farming is subsidised, but, equally, forestry is subsidised, too. For example, when the Forestry Commission incurs a deficit on its annual working, it is to a very large extent subsidised by the taxpayer. Similarly, subscribers to the Economic Forestry Group obtain tax concessions of a considerable order, so that they, too, are subsidised.

I feel strongly that we need proper land use in the hill areas, and I am very sorry that successive Governments have not paid more attention to good land use in these areas. The rural development boards seem to me to be a sledgehammer to crack a nut. When the Forestry Commission proposes to plant what was previously a hill sheep farm, it has to obtain the permission of the Department of Agriculture. This should apply equally to private forestry interests, like the Economic Forestry Group, and they should do so voluntarily by submitting details of intended acquisitions to the Department of Agriculture. Proper land use is so important that my hon. Friend the Under-Secretary should, if necessary, produce legislation to prevent a great deal of useful upland land being planted unnecessarily with trees.

12.18 a.m.

The Under-Secretary of State for Scotland (Mr. Alick Buchanan-Smith)

I should like first to thank the hon. Member for Caithness and Sutherland (Mr. Maclennan) for raising this subject in the Consolidated Fund Bill debate, because it is particularly important, as the quality of the speeches has shown. I congratulate the hon. Member on his success in the Ballot and his choice of subject.

At the same time, I should like to thank the hon. Member for his kind remarks in welcoming me to the Box tonight. This is the first opportunity I have had since I came to my new post to speak in an agriculture debate, and if I had been asked on what subject affecting Scottish agriculture I should have liked to speak in the first debate to which I was replying, it would have been the hill and upland areas, which are not only close to my heart concerning Scottish agriculture, but are very important, both in my own constituency, and in the constituencies of all hon. Members who have spoken in this debate.

Having said these few words of kindness—I hope—to the hon. Gentleman, and before coming to some of the constructive comments made in the debate, I must say that I was a little disappointed at the tone of the initial part of the hon. Gentleman's speech. He talked of a crisis in the industry. As my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) rightly pointed out, his Government were not able to put it right in 5½ years, so to expect us to do it in five weeks is, perhaps, a little unkind, or I should think it a little unkind did I not take it as flattering that the hon. Gentleman has such confidence in the ability of this Government quickly to sort out the problems which his right hon. and hon. Friends failed to solve. However, I let that pass for the moment.

It is true that costs are rising fast now. We are looking at this carefully, and considering closely what the National Farmers' Union has said and is saying to us. But in the Price Review of last March the industry had to take account of price rises of £60 million, 50 per cent. more than in 1969, and very nearly as much as the record level of £68 million in the post-devaluation year 1968. So let the hon. Gentleman have the position clear. When he talks about cost increases, let him look at the situation in the context and perspective of the kind of cost increases which the industry had to face under his Government, and some of the increases of recent months which are a legacy from his Government, not the creation of the new Government.

Mr. Maclennan

It is unnecessary for the hon. Gentleman to labour the point, as it was for the hon. Gentleman the Member for Perth and East Perthshire (Mr. MacArthur) to make it. I said clearly in my speech that I was referring to cost inflation since the last Price Review. Of course, the hon. Gentleman is not responsible altogether for that. What we want to hear tonight is how he proposes to deal with this problem. That is what I have tried to focus attention on. The ascription of blame will be of no great interest to the farming community.

Mr. Buchanan-Smith

If the hon. Gentleman meant that, he would have done better to put it in that way. I shall not dwell on it further. If he wants to introduce that sort of spirit into his speeches, he must expect the same spirit back, and he should not complain if he finds it unpleasant.

I take one other example, transport. In the last 5½ years, transport costs—the hon. Gentleman knows this, just as I do in my part of Scotland—have risen faster than at any time in recent years. In our few weeks in office, we have helped transport by our concessions in regard to livestock haulage and our assurance that we shall not introduce the 100-mile limit for road haulage. We have shown our concern about haulage and demonstrated clearly where our interests lie, that is, in looking after agriculture in Scotland and, in particular, the remoter areas where transport is so important.

Before coming to the more general part of the debate, which, I recognise, is by far the most important, I shall deal with some of the specific questions which have been raised. First, the question of fertilisers. At the last Price Review, the fertiliser manufacturers gave an assurance to the Government that they would not raise their prices. On the evidence we have seen, it seems that they are keeping the same price lists as at a year ago.

There seems to be a certain amount of doubt about the rate of discount and the amount of margin taken by merchants on handling the fertilisers, for it is not in every case that the manufacturer sells direct to the farmer. We are aware of the concern. So far it has been difficult to get precise information, but the National Farmers' Union is helping us in this respect and as the subsidy returns come into my Department, we will study them closely and compare the prices with those of last year. I assure the House that this is a matter which we are watching closely, but we have not yet had long enough to be certain whether the pledge is being honoured.

The hon. Member spoke about grants for buildings in hill and upland areas. This is a subject which I have mentioned in debates here and elsewhere and I have some sympathy with what the hon. Member had to say. I hope that he had something to say to the Labour Government on the subject. While the situation is as it is, in that buildings in these areas qualify only for the farm improvement rate of grant and not for the higher rate, I can give the hon. Member the assurance that this is a matter which we shall keep in mind in the future consideration of grants.

He mentioned brucellosis, which is a problem close to my heart. We have to push on with eradication as fast as is practicable. The hon. Member quoted my hon. Friend the Member for Edinburgh, West (Mr. Anthony Stodart) on the subject, and his criticism that there was no compensation. We announced a scheme last week. No doubt the hon. Member has read what was said then, but if he would like a copy of the details of the scheme, I will write to him rather than take up the time of the House at this hour.

The eradication of brucellosis is a very different matter from the eradication of a disease like tuberculosis. It requires far more investment and co-operation by the farmer than do other forms of disease eradication. That is why personally I have always supported the principle of the incentive. The carrot is better than the stick in matters like this. When farmers realise that they can earn incentives by going into schemes and co-operating they will do so, and that is a better way in which to get the scheme going.

Secondly, and here I come to the criticism made by my hon. Friend the Member for Edinburgh, West, at the time of the Price Review we were concerned with how much of the incentive would be taken by insurance premiums. Clearly, if a large proportion of the incentive were to be taken by insurance premiums, the incentive would be undermined. It is clear from the policies proposed by most of the large insurance companies, however, that the premiums will take only a small proportion of the incentive. This throws a completely new light on the subject.

However, I assure the House that if the premiums are reviewed by the insurance companies at any stage, we will bear in mind the relationship between the premiums and the incentive earned, because what we want is the eradication of the disease. The incentive scheme will cost £5 million in a full year, which is a big investment, and we want to ensure that we get value for money.

The hon. Member asked a detailed question about a drainage scheme for the River Fleet. I have written to him about this. I share his regret that it is not possible to go ahead with this scheme, but, on account of its complexity and size, it can be carried out only under the Land Drainage (Scotland) Act, 1958. The rate of grant is fixed in that Act and is limited to 50 per cent. of the cost of doing the work, and that figure cannot be increased by Statutory Instrument.

Unfortunately in this case the 10 per cent. supplement given in the hill land improvement scheme and the further 10 per cent. supplement grant following the 1970 Price Review cannot apply. As the hon. Gentleman pointed out, a scheme under the Act normally requires the unanimous support of the proprietors concerned. He raised the question of interests other than those who are just proprietors, and I agree that there is a problem of the clash of interests here. After all, it is the proprietors who have the primary interest in the land in question. It has always been a principle of these schemes that we have had to deal with the proprietors over the improvement and qualifications for grant. While we need the unanimous support of the proprietors, the position of a minority can be overruled in certain circumstances if the cost of the scheme does not exceed £40 an acre. Unfortunately, in this scheme the majority of owners could not see their way clear to proceeding and in any event the estimated cost per acre was above £50. I share the regret of the hon. Member in this case. I am sorry it has not been possible to carry it forward in the way that he and I would have liked. However, it is something involving the co-operation of everyone concerned.

My hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) mentioned the question of costs, with which I have already dealt. He also raised the question of consultation with the industry, to which I will come later. I pass to the hon. Member for Berwick and East Lothian (Mr. Mackintosh) and thank him for his kind remarks about me. He and I have served together on the Select Committee on Agriculture and I much respect his interest and knowledge of the industry. I agree with him that this is not an electioneering occasion. It is an occasion when we have all tried to show our concern for the present position of the industry.

The hon. Member raised one or two specific points and I will deal first with his point about entry to the Common Market. I repeat what my right hon. Friend the Chancellor of the Duchy of Lancaster said in his opening speech in the negotiations, that the question of our hill and upland areas is one of the prime matters for negotiation. I do not think that he can expect me to go any further. He knows my concern because we discussed it in the Select Committee and elsewhere. I give him my absolute assurance that in Scotland we regard this as of prime importance. In passing, I would mention that it is not just a consideration for the United Kingdom or Scotland. I understand that in Norway it is of even greater relative importance to the agricultural problem than it is for us. We should not think of ourselves as alone in the problem of negotiation with Europe. It is a matter of common interest among other countries seeking entry.

The hon. Gentleman raised the question of our proposed changes in the system of financial support for agriculture, namely, a changeover to the levy system. I would say "Yes, production grants are an essential part of our system and it is vitally important for our hill and upland areas that we maintain their importance within that system". Obviously, we do not intend to say categorically at this stage that they will stay in exactly the same form, at exactly the same rate. That would be quite unrealistic. We admit their importance and we give an absolute assurance that they will be continued. This will be one of the matters about which we will be consulting the N.F.U.

The hon. Gentleman also asked when the level of costs rise would justify a special review. This is a very subjective question and I am sure that he does not expect a specific answer. This depends not only on the total level of the rise in costs but on the type of costs that rise and the impact they have on the industry.

In our consultations with the N.F.U. we shall watch the cost position closely as well as its impact on the industry. If we feel that a special review under the Agriculture Act, 1947, is justified, then we will have it, but if there are other ways of dealing with this question we will consider them. We will try to act in the most practicable and expeditious way in dealing with the problems of the industry.

Our whole purpose is to expand home agricultural production. We are changing the system of agricultural support in order to obtain this expansion. This will involve overseas consultation, and indeed my right hon. Friend the Minister of Agriculture in reply to a Question has said that we would need to consult overseas suppliers.

I was asked to comment on the labour force in the industry. We too often forget the important part played by the sadly declining labour force in the industry. We cannot afford a further decline in this force if we are to expand production. We owe a very great deal to the workers in the industry and I should like to pay tribute to their loyalty. Their prosperity depends on the prosperity of the industry as a whole. I hope that in our pledge to expand the agricultural industry its workers will share in that expansion and will benefit from the kind of deal we can give to the industry.

I should like to see a labour force that is increasingly skilled, not only in terms of mechanical skills but in terms of responsibility. It must be remembered that one man on a farm can be responsible for equipment worth £20,000 or £30,000. We need young people coming into the industry who are equipped to take on this skilled responsibility.

I thank my hon. Friend the Member for Galloway (Mr. Brewis for his constructive and helpful speech. He mentioned the remoteness grant, which was a topic raised by the Scottish N.F.U. in discussions with my right hon. Friend the Secretary of State. It is a matter that we have agreed to consider in the same way as there is a remoteness grant in Northern Ireland. We have an open mind on the matter, although it is not an easy one. On the one hand it can be said to give flexibility to the Minister, but it is equally clear that in negotiations the amount of this fund would have to be related to the amount of financial support for other schemes. Many people would like to see the same or equivalent support for other schemes as well. It is taxpayers' money and this has always to be borne in mind.

My hon. Friend also raised the question of wool prices. There has been much concern in the industry following this year's Price Review when wool prices for certain grades fell. We will discuss this matter with the farming industry and take it into account at the next Price Review. My hon. Friend referred to two other matters with which I want to deal briefly. The first concerned the management of hill farms generally. As my hon. Friend knows, tremendous work is being done by the Hill Farm Research Organisation in Scotland. It has a research farm in my constituency. Its work on hill management is as important as anything else. By applying its methods, for example, a shepherd can look after a much larger flock. There is tremendous scope, and my Department will do all that it can to encourage that kind of development.

My hon. Friend also mentioned forestry and land use. He was right to do so, because there is concern in the industry. It is not necessarily a question of conflict between agriculture and forestry. It is far more a matter of integration. It has been shown in some areas that, by sensible afforestation, it is possible to increase the stocking rate of sheep. It is in this direction that we want to put our effort, and it is to this end that research work is being done by agricultural colleges in Scotland.

I turn now to the more general points which have been raised in the debate. We are discussing the hill and upland areas—basically our hill sheep and cattle stocks. It is an important debate, because the livestock industry is the biggest sector of Scottish agriculture. But it is not just a matter of agricultural production. As hon. Members have said, it is also a matter of regional and social policy. That is of equal importance, and we must pay attention to it. In his address to the British Association last autumn, Sir Joseph Hutchinson emphasised this point, and it may be that it is more important in the Highland areas than elsewhere.

This is a time at which we have to assess the situation in Scottish agriculture, but I suggest that, after only five weeks in office, it is too early for us to do it. If we are to do a thorough job of assessing problems, we must have sufficient time. I do not belittle the problems, especially those in sheep rearing. We are looking at costs, and we have asked for evidence from the N.F.U. as soon as possible on fertilisers and other items on which costs are rising.

We are looking closely at the current level of grant uptake. The grants were increased at the last Price Review. To some extent, we can get from the level of uptake an indication of how much money is going to the industry by way of grants. The present level of uptake is considerably higher than it was last year or the year before, and this is an encouraging factor.

We are also considering the current level of prices of stock coming off the hill areas. It is too early to make a general assessment. The first store sales of lambs have only taken place in the last week. While we cannot yet draw firm conclusions, the current level of prices is slightly higher than it was a year ago.

I can assure all hon. Members that we are conducting consultations with the N.F.U. My right hon. Friend and I had a meeting last Friday with its representatives. In spite of all the other burdens and priorities with which we have had to deal since coming into office, my right hon. Friend has been able to find time in the first five weeks of government personally to meet the N.F.U. We had a useful meeting, and I know that it was appreciated by its representatives. At that meeting, among the main points discussed were the problems of our sheep industry. One of the brightest spots in our sheep industry at the moment is the amount of self-help within it. I have always believed, as I know has the hon. Member for Berwick and East Lothian (Mr. Mackintosh), that if the industry is to seek help from the Government—and it is right to do so—it must demonstrate its ability to help itself. One way is in marketing. In the formation of the Scotch Quality Lamb Association and the Caithness and Sutherland Livestock Breeders' Association, we have evidence from the industry that it is organising itself into a suitable and proper outlet for quality produce from the industry. It encourages me in trying to help the industry to realise that I am helping an industry which is already trying to help itself.

I accept that the doubts of the industry have been mounting over recent years. I hope that in what I have said tonight I have shown that I am aware of and alive to the problems facing the industry. I hope that I have shown that the Government recognise some of the problems facing the industry. These problems will be looked at urgently over the next weeks and months. We are literally having running consultations with the N.F.U. on these points. As soon as we complete our consultations and our assessment of them, I assure the House that we will not delay in putting forward our policies for dealing with these problems. I am anxious, because I am tremendously interested in the industry, having spent most of my life in it, that we should get the answers to the problems.

I come back to what I said earlier. In seeking these answers we are basically pledged to seek an expansion of the industry, not just in the interests of the industry, but also in the interests of the economy as a whole. We must not only consider what we can save on imports in helping the economy, but also, in the wider context of Europe, expansion of the agricultural industry is something which, if the negotiations are successful, will pave the way to a more easy entry of this country than might appear at first sight.

I have tried to approach the matter in a constructive spirit tonight. In the summer months, whilst the House is in recess, I assure hon. Members that we will not be idle in carrying forward our plans to deal with these problems.