HC Deb 24 March 1970 vol 798 cc1237-307
5 (1) The appropriate authority may with the approval of the Treasury by scheme provide for the making, subject to such exceptions or restrictions as may be provided for by the scheme, of grants of amounts determined in such manner as may be provided for by or under the scheme towards expenditure incurred or to be incurred for the purposes of, or in connection with, the carrying on or establishment of an agricultural business, being expenditure which—
10 (a) has been or is to be incurred in respect of any such matters as may be specified in the scheme, or in respect of works or facilities certified under section 26(6) of the Agriculture Act 1967 as amended by subsection (2)(e) of section (Amendments as to grants in connection with alterations of farm structure) of this Act; and
(b) appears to the appropriate Minister to be of a capital nature or incurred in connection with expenditure of a capital nature; and
15 (c) is approved by the appropriate Minister for the purposes of a grant under the 15 scheme.
(2) Any scheme under this section shall be made by statutory instrument and—
(a) may be made for any one, or jointly for any two or for all three, of the following, namely—
(i) England and Wales;
20 (ii) Scotland;
(iii) Northern Ireland;
(b) may make different provision for different circumstances;
25 (c) may vary or revoke any previous scheme under this section if or so far as that previous scheme is made for the same part or parts of the United Kingdom as the revoking or varying scheme;
30 (d) shall be laid before Parliament after being made and cease to have effect (without prejudice to anything previously done thereunder or to the making of a new scheme) after the expiration of a period of forty days (calculated in accordance with section 7(1) of the Statutory Instruments Act 1946) beginning with the day on which it is made unless within that period it has been approved by resolution of each House of Parliament;
35 and the duration of such a scheme (that is to say, the period within which expenditure must qualify in accordance with the provisions of the scheme for consideration for a grant thereunder) shall be a period not exceeding seven years, but that period may from time to time be extended by further schemes under this section for periods not exceeding seven years at a time.
40 (3) Any grant under such a scheme may be made, and any approval under such a scheme may be given, subject to such conditions as the appropriate Minister thinks fit; and any payment by way of such a grant shall be made at such time, or by such instalments at such intervals or times, as the appropriate Minister may determine—
(a) where the expenditure in question is incurred for the purposes of activities on land situated in England, Wales or Northern Ireland, by the Minister;
(b) where that expenditure is incurred for the purposes of activities on land situated in Scotland, by the Secretary of State.
45 (4) If at any time after the appropriate Minister has approved any expenditure for the purposes of a grant under such a scheme it appears to that Minister—
(a) that any condition subject to which the approval was given or the grant has been made has not been complied with; or
50 (b) that any work in respect of expenditure on which the approval was given has been 50 badly done, or has been or is being unreasonably delayed, or is unlikely to be completed; or
55 (c) that the person by whom the application for that approval was made (hereafter in this subsection referred to as 'the applicant') gave information on any matter relevant to the giving of the approval which was false or misleading in a material respect,
60 the appropriate Minister may revoke the approval in respect of the whole or part of the expenditure and, where in pursuance of subsection (3)(a) or (b) of this section any payment has been made by the Minister or the Secretary of State by way of grant, the Minister or, as the case may be, the Secretary of State may on demand recover an amount equal to that payment or such part thereof as the appropriate Minister may specify; but before revoking an approval in whole or in part under this subsection the appropriate Minister—
(i) shall give to the applicant a written notification of the reasons for the revocation; and
65 (ii) shall accord to the applicant an opportunity of appearing before and being heard by a person appointed for the purpose by the appropriate Minister; and
(iii) shall consider the report by any person so appointed and supply a copy of that report to the applicant.
70 (5) If any person, for the purpose of obtaining for himself or any other person any grant under such a scheme, knowingly or recklessly makes a false statement, he shall be liable on summary conviction to a fine not exceeding £400.
75 (6) As from such date as the appropriate authority may by order made by statutory instrument appoint, and subject to subsection (7) of this section, the enactments mentioned in Part A of Schedule 4 to this Act and any instrument made thereunder shall to the extent specified in the third column of the said Part A, or, as the case may be, to the extent that the instrument was made by virtue of any provision of those enactments so specified, cease to have effect.
80 (7) Notwithstanding subsection (6) of this section, the appropriate authority may with the approval of the Treasury by order provide for any such enactment or instrument as is referred to in that subsection to continue in force for such period after the date appointed under that subsection as may be specified in the order (and, in the case of the provisions of section 26 of the Agriculture Act 1967 so referred to, as if the further amendments to that section made by section (Amendments as to grants in connection with alterations of farm structure) of this Act had not been made) for the purposes of cases of any description so specified; and any order under this subsection shall be made by statutory instrument
85 and—
(a) may make different provision for different circumstances;
(b) may be varied or revoked by a subsequent order under this subsection; and
(c) shall be subject to annulment in pursuance of a resolution of either House of Parliament.—[Mr. Cledwyn Hughes.]

Brought up, and read the First time.

4.45 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes)

I beg to move, That the Clause be road a Second time.

Mr. Deputy Speaker (Mr. Harry Gourlay)

Before the right hon. Gentleman starts his speech, may I say that we shall be discussing with this new clause Amendment (a), in line 16, after 'instrument', insert: 'after consultation with such bodies of persons as appear to the appropriate Minister to represent the interests of persons engaged in agriculture'; Amendment No. 19, in page 24, line 11, after 'words' insert: 'after consultation with such bodies of persons as appear to the appropriate Minister to represent the interests of persons engaged in horticulture'; and Amendment No. 56.

Mr. Hughes

This Clause was Clause 29 in the original Bill. It was discussed at considerable length in Committee. It was repeated on a snap Division and its loss necessitated—[Interrup- tion.] We must have honest speaking. It was defeated on a snap Division and its loss necessitated the dropping of Clause 32, Schedule 2, and Part I of Schedule 5 from the previous draft. We made clear, both at the time and subsequently, that we proposed to table Amendments designed to restore these provisions to the Bill and the House will see that they are all included on the Order Paper. I think this was well understood by hon. Members on the Standing Committee.

Having looked at the OFFICIAL REPORT of the Committee's sittings, I was glad to see the remarks of the right hon. Member for Grantham (Mr. Godber), in which, quite properly, he recognised during the course of our discussions there, provision would have to be made for capital grants in the Bill. I do not think that there is any disagreement between us on that. Without it, grants for farm improvements would fairly soon have to be wound up since the fixed sum of money made available for the Farm Improvement Scheme will be exhausted in a year or so. Moreover, we would lose all the benefits of the proposed streamlining and simplification of the capital grant schemes.

I know that this is something to which the industry—and, I hope, the Opposition, as well as hon. Members on the Government benches—attach considerable importance. We certainly think that it is essential, at this stage in the industry's development, to reduce the amount of close supervision exercised over the industry as part of the grant system and to cut the costs of administration if possible.

The Opposition have developed three main themes of objection to the Clause. First, they do not accept the desirability of redirecting funds from the grants on tractors to other—and we think more productive—uses. Second, they are concerned about the provision of grants for investment which is not directly linked with the land. Third, they disapprove of the enabling character of the legislation.

Those were their three main stands of criticism in Committee. I want to deal with them, starting with the tractor grants. We feel very strongly that the industry and the country stand to benefit from the proposed changes, which will make possible a more effective use of the grant funds. That is the basic point. The investment grant is fixed at 10 per cent. of expenditure, and payment is spread over two years. Under our proposals, this grant would be terminated and the funds used for other grants. There would, therefore, be no reduction in the grant payments as a consequence of the change, and there never has been any intention of reducing the amount of grant paid to the industry. I made this point on Second Reading and a number of times in Committee, and I stress it again now.

Indeed, the industry will benefit, since the present tax arrangements would enable the vast majority of farmers to claim the initial tax allowance in respect of purchases of tractors and harvesters. This would represent a net gain to the industry equivalent to about half the value of the present 10 per cent. grant to those paying income tax at the standard rate. Anyone paying tax at a higher rate would benefit still more.

But there is another aspect of this question. The taxpayer can reasonably ask that the funds he provides should be used to good effect. There is no evi- dence that the grants on tractors have had any significant effect on tractor purchases. Almost invariably they would have been purchased in any case. And we do not expect the substitution of the initial tax allowance for grant to make any significant difference to the number of tractors purchased. But the ending of the tractor grants will allow us to grant-aid a wider range of plant and machinery, such as movable loaders, blowers, augers and plant for mechanised feeding, which can make a major contribution to improved productivity. We hope to include items that will benefit small producers as well as large.

It is clear, too, that small producers who can grow little of the food required for extra livestock will stand to benefit from being able under the new scheme to obtain grant for the first time in respect of investment to expand their livestock production—a very important advance. We are likely to get up to 80,000 applications a year under the new scheme, so that a very wide range of farmers will benefit from it.

All of these arguments must be viewed in the context of the arrangements I announced last week to make very substantial increases in grant rates on the whole range of items to be covered by the Farm Capital Grant Scheme until 19th March, 1972. It is as well that we should be having this debate now, in the aftermath of the announcement I made on capital grants last week. The original proposals would have left the industry better off. These increases in grant rates will give a major incentive to new capital investment and will themselves constitute a substantial injection of additional capital into the industry, benefiting all progressive producers—large and small.

As for the possible effect of assisting investment not directly linked with the land, we consider the fears expressed in some quarters on this score to be unfounded. As I said last week, we are for more general reasons introducing a ceiling on the amount of investment by any individual farming unit which can qualify for grant. This should ensure that a few very large producers do not get a disproportionately large share of grant funds.

As for the question of the enabling powers in the Clause, which is another point raised by the Opposition in Com- mittee, I draw the attention of the House to the grant increases which I announced last week. Some of these are being made by Orders, subject to the approval of Parliament, and others by administrative arrangement under existing powers. It would be quite wrong to tie down the details of our grant schemes by specifying them in an Act of Parliament so that an amending Act would be needed to change them.

It is essential that we should be able to take prompt action to adapt our grant arrangements to the needs of fresh developments and new situations, and that is why we have included these powers in the Clause. Any change in the grant rates specified by the scheme would, of course, be subject to approval by both Houses of Parliament. Therefore, there will be opportunity for further debate on the details of the scheme in due course. There is no question of avoiding parliamentary scrutiny.

I hope that the Opposition will reconsider their earlier position with respect to the Clause. They, too, I think, subscribe to its objectives. I hope that we can agree now on the need to get the Clause into the Bill and on to the Statute Book so that farmers can take full advantage——

Mr. John Peyton (Yeovil)

May I ask the Minister to dilate a little more, for the benefit of those of us who were not on the Standing Committee, on what he has just said. He knows perfectly well that bringing a Resolution before the House keeps discussion very short, whereas the embarrassment to a Department of having to introduce a Bill means that the House has a chance to deliberate on the issue. When a large sum of taxpayers' money is involved it is no bad thing that Ministers should have to bear that slight inconvenience. I find the Clause which was so admirably defeated by my hon. Friends in Committee most unpleasant, and I hope that the right hon. Gentleman will say a great deal more to justify it.

Mr. Hughes

The hon. Gentleman is uncharacteristically unfair. As he knows, we had a very long discussion in Committee. No doubt he has read the Committee HANSARD and will have seen that we went into it in considerable detail. I have introduced it again and explained the position in some detail. We do not wish to avoid the possibility of a very full debate on the issue now, to which with the leave of the House and the Chair I shall seek to reply. We are not finishing the discussion now, even after the most exhaustive debate. I was making the very fair point that the scheme will return and be debatable again, so that on this issue we are having rather more debate than usual.

5.0 p.m.

Mr. J. B. Godber (Grantham)

The Minister has moved the Second Reading of the Clause with his customary conciliatory attitude, and we listened with interest to what he said. Like my hon. Friend the Member for Yeovil (Mr. Peyton), I feel deeply unhappy about its reintroduction. I criticised it on Second Reading. We then had long discussions in Committee, and the Committee took a decision on the Clause. The right hon. Gentleman says that there was a snap Division. The Committee took a decision in the way it always does, on a vote. If the Government and their supporters had wished to support the Clause, they could well have been there. I took it that we had convinced some of the Minister's hon. Friends and that, to avoid embarrassment, they stayed away and thus the Clause was defeated.

An Hon. Member

Just as they are staying away now.

Mr. Godber

Indeed. They are obviously not supporting the Minister now. There is only one distinguished back-bencher opposite, whom we are glad to see. This is typical.

I thought that we put forward some compelling arguments about this Clause and I am disappointed to find it back again, in identical form. It seems that the Government are seeking to use their parliamentary majority to crush the obvious good sense of the Committee. We on this side are anxious to see capital grants playing an important part in the economy of agriculture. When in power we were responsible for introducing a number of these very important Measures.

This Clause proposes to take out some existing measures, which are well-known and well liked by the farming community and to replace them with something about which so far neither the Minister nor his Parliamentary Secretaries, have told us anything. I thought at one point that the Minister would say a little bit about this. It is common knowledge that he and his Department have been holding consultations with interested bodies. I am amazed that we should be asked to approve such a Clause, so wide in its scope, giving no indication of its intentions, which replaces statutes much more specific about the help they provide for agriculture.

I reminded the Minister in Committee that in the 1957 Agriculture Act, and in other enactments, we spelt out the broad provisions for the farm improvement scheme and other types of capital grant. The Minister is merely providing here … for the making, subject to such exceptions or restrictions as may be provided for by the scheme, of grants of amounts determined in such a manner as may be provided for by or under the scheme, towards expenditure incurred or to be incurred for the purpose of, or in connection with, the carrying on or establishment of an agricultural business … Then there are some broad limitations, but nothing like the type of limitations written into previous enactments.

This is purely an enabling Clause, as the Minister has said. It does not add to the protection of agriculture; it takes away from it because it allows any Government at any time, if they choose, to make the most drastic changes in the capital grants without consideration of any legislation on the Statute Book. It merely requires an amending scheme to be brought in under the Act to make any necessary changes. As we all know, when a scheme is brought before the House it can only be accepted or rejected in toto, and there is no opportunity for amendment or consideration of various aspects which we believe should be subject to parliamentary and statutory limitations or control.

For instance, this Clause greatly widens the provisions with regard to grants for the establishment of agricultural businesses as opposed to the co-ordination or maintenance of them. In the Farm Improvement Scheme we specifically excluded that type of thing. It seems that the Minister is seeking to spread this very wide. Quite properly, he has said that there is the limitation of a total figure of £100,000 which he proposes to introduce for any single applica- tion. That is a minor check on the sort of grants that can be introduced or curtailed by a Government. This is what we dislike most of all.

We deplore the introduction of a Clause like this to take the place of the present statutory provisions. We say that it is unwise parliamentary procedure and we do not believe that it is in the best interests of agriculture. I hope that, for that reason alone, my hon. Friends, when we have discussed this new Clause, unless the Minister is willing to withdraw it, will show their disapproval of it as they did in Committee.

Dealing with the three main categories of the criticisms we had to make, the Minister was perfectly fair in the way in which he brought these together. The first main criticism was of the withdrawal of the grants for tractors and combine harvesters. We made clear in Committee that we felt that this grant had played a useful part, or at least had been a not very satisfactory substitute for the investment allowances under which support was provided for agriculture before the present Government changed investment allowances into investment grants.

If the Minister is now arguing that these grants have not made any material change, is he arguing against figures immediately prior to the institution of the investment grants? If so, he is not comparing different categories. Before the investment grants we had investment allowances and if he is to make a comparison he should do so with the time before investment allowances were introduced. I hope that he will address himself to this point and tell us whether purchases of tractors have varied as compared with that much earlier period.

In Committee, I pointed out that those who did not buy new tractors had benefited from present arrangements and under the old investment grants, because those buying second-hand tractors were previously able to buy tractors in a good condition. That was because those farmers who could afford to buy new tractors were doing so whereas now they tend to keep them longer and thus the secondhand condition is not so good.

We have not been told what will replace these grants. We know that they will be taken away and that the total amount available will be reimbursed in some other capital general grant, but we have not been told what it will be. The House is being asked to buy a pig in a poke. The Minister should tell us far more about this. He said that the new grants would be a great help to producers and mentioned those on the livestock side. Until we know what grants will take the place of the grants for tractors and combine harvesters we cannot judge.

It is not only the Opposition who feel strongly about this. I notice that the N.F.U. has criticised this continuously. It has said that it is glad to see that the new Clause is wide enough to permit the retention of investment grants on tractors and self-propelled harvesters and in the union's view it is imperative that these should be included. The Minister has specifically said that such grants will be taken away. I do not see the point of the N.F.U. saying this unless it felt that the Minister might change his mind. Perhaps he will tell us, before we leave this Clause, whether he has given any indication to anyone that he might retain the grants for tractors and self-propelled harvesters. Otherwise, I fail to see the significance of the Clause being widened at this point.

As to the grants not being linked to the land, we paid specific attention to this point in the 1957 Act. The Minister knows our arguments well—they were dealt with at great length in Committee—and I do not propose to enlarge on them now although some of my hon. Friends who feel strongly on it may wish to take up the point.

The Minister reminded us about the new capital grants which he announced last week at the Price Review and which he said would be a big help. To the extent that they increase by 10 percentage points, as it is put in the White Paper, the specific grants, this is a help, but we were told that capital grants were to be simplified and changed, and that they were to be brought together. Does the Minister mean that he is raising the grants by 10 percentage points until such time as he introduces his scheme, when he will bring many of them together, or will the majority of the grants continue in their separate and specific ways as they are now?

There has been a great deal of feeling that the way in which the Minister made these announcements last week has been misleading to the farming community. This was the view taken by the county chairman of the N.F.U., which met yesterday, and by many people in the Press. The Minister talked of an additional figure for capital grants spread over two years, and that figure became related somehow to the total figure for this year's Price Review increases. This has led to a great deal of misunderstanding. The whole question of capital grants should have been kept out of that figure.

Mr. Cledwyn Hughes

I hope that the right hon. Gentleman is not suggesting that I contributed to any misunderstanding about this matter. I made it abundantly clear during my Price Review statement that the review award was not quantifiable in the conventional way. I subsequently made it perfectly clear, in answer to questions from the Press during my conference immediately after I addressed the House, and I have made it clear on several occasions since. It was clear to the N.F.U. leadership, who have been discussing this for the last six weeks. The official team and I have made this very clear, and I hope there is no imputation that we have been misleading.

Mr. Godber

I am sorry to have to tell the Minister that—it may be quite inadvertently—the figure given in his statement to the House a week ago of £85 million has figured largely as being the total award for this Price Review. That is not in line with the way in which the total awards have been given for Price Reviews in any previous year. In 1957, when we introduced the Farm Improvement Scheme, the amount being given was not mentioned in relation to the total, but was considered as being separate; yet now the whole of the two-year arrangement is being included. This is why I say to the Minister that—whether it is his fault or anybody else's I do not know—it is misleading to the farmers.

Mr. Cledwyn Hughes

The right hon. Gentleman is not being fair; he is taking this beyond the point of equity. He knows perfectly well what I said in my statement in the House. I made it clear that the Review award was not quantifiable in the normal way. It is clear in the White Paper, it was made clear in statements to the Press, and in other statements. The right hon. Gentleman must not pursue this is such a way as to leave a smear on me that I made this suggestion. He must withdraw it.

5.15 p.m.

Mr. Godber

I am not prepared to withdraw anything I have said. It is true that the Minister said: In total, very substantial resources have been committed to the agricultural industry as a result of this Review. These, including the increased capital grants spread over a period of about two years amount to about £85 million."—[OFFICIAL REPORT, 18th March, 1970; Vol. 798, c. 397.] This figure of £85 million has been picked up and bandied about. The farming community has always said that the bandying about of large figures gives a misleading impression, and this is the point which I am putting to the Minister.

Mr. Cledwyn Hughes

It is precisely the kind of innuendo which the right hon. Gentleman is putting over now that puts this figure into the heads of people who want to believe what he is now saying.

Mr. Godber

The Minister cannot get away with that. That figure was introduced by him and by nobody else. I have given him the full quotation, perfectly fairly, including the reference to the two years. I have not tried to pretend that he did not refer to two years, but he did give this £85 million figure.

In previous years the capital grants were not included, and now he includes them not for one year but for two years. He must, therefore, accept the responsibility if any misunderstanding has arisen. If he did not wish this to happen, it would have been better if he had not mentioned the £85 million. To clear up the position, will he tell the House precisely how many millions of pounds the award amounts to for the one year?

We shall want to know, too, how capital grants will be employed, and what opportunities there will be for the farming community to take full advantage of them. The farmers have to be able to find the remainder of the money that is required, and we are told on many hands that, in view of the present credit restrictions, the farmers are not able to take up these grants. If the Government are willing to relax the credit squeeze and to reduce interest rates, the picture will be changed. In a programme broad- cast by the B.B.C. on Saturday morning one of the leading banks made it clear that there was little opportunity for its customers to take up the grants. However much advantage there may eventually be in these new grants, it is at present very limited.

To the extent that the Clause simplifies matters for the farmers who take up capital grants, we welcome it. But, for the reasons which we have dealt with in Committee, and because the Clause is so general in its terms, we feel that it hinders rather than helps. It would have been far better to have had something which was more precise, just as we should have been told what sort of Scheme the Government have in mind. Will the scheme be introduced immediately the Bill becomes law? Are the discussions completed? If so, why cannot the Minister tell the House at least something about what he has been discussing with people outside.

I understand that with new Clause 1 we are discussing Amendment (a) to the Clause. We felt that there should be specific reference to consultation. We are not accusing the Minister of not having consultations, but we feel that it is proper to make provision for this in the Clause, and we hope that he will accept the Amendment and say something about it in replying. We do not welcome the Clause. We welcome the provision of capital grants. We are glad that they are being extended, but we still feel that it would be better if they were in a more specific form. Therefore, we hope that even now the Minister will give consideration to this aspect of the Clause.

Mr, J. Grimond (Orkney and Shetland)

Provision of capital is becoming of greater and greater importance to agriculture. As costs rise, and as over the years Price Reviews have not recouped additional costs, the only hope for most farmers is to increase their stock and their income by greater efficiency. Marginal sources of income—such as the income from eggs—are squeezed. In my part of the world the price of lambs has not moved in the last 10 years.

I should like to ask some questions about the more detailed effects of the Clause on the class of farmer with whom I am particularly concerned, the farmers and crofters in the extreme North of Scotland who mostly engage in the production of livestock. This Bill removes certain specific grants which were outlined in Committee and, as has already been said, it is difficult to discover what will be put in their place.

The Minister has assured us that the global sum of money will be increased, and I welcome this fact. But I hope that at some stage he will give a little more information about the type of grant which may be introduced in Orders made under this legislation and about the effect on farms, particularly farms and crofts in places like Orkney and Shetland with which I am particularly concerned.

Some of the grants which are being removed are not of great importance to us. The grant for grubbing-up orchards will go and we can dispense with that grant without too many tears. But then there is the question of tractors and combine harvesters. It may be that this does not affect farmers very much because most farms are supplied already with tractors, and there are few combine harvesters. But big changes are coming about in agriculture in the far North and everywhere else. We would welcome more information as to how this will affect farm machinery and how the Minister wishes these grants to operate.

Then there is the question of the maximum and that too seems to be a not unreasonable provision, but we are told little about the general application of the financial aspect of the general grant. Although I welcome the fact that the total amount of money will be increased, it will be no substitution for a lowering in the high rates of interest which now operate and which are among the most crippling things in agriculture today. The sooner cheaper interest rates return the better for farmers. I hope we shall be told a little more about the sort of the effects which are visualised on various types of farm.

It seems reasonable to suggest that there should be consultation, and the Minister has said that he intends to consult on the introduction of Orders, which will be of great importance. That will be the moment for the House to discuss what is intended, and we should like to be reassured that there has been consultation with the various bodies representing the farmers concerned. Therefore, I should like to hear a little more about the likely effects of the new Clause on various types of farming.

Mr. Michael Jopling (Westmorland)

We had a brief speech from the Minister in moving the new Clause, which did not go much further than his speech in Committee on the Question, That the Clause stand part of the Bill. On that occasion he failed completely to answer many of the points we put to him, and he even failed to refer to some of our misgivings.

On the matter of consultation, which is most important, the Joint Parliamentary Secretary said in Committee: My right hon. Friend is prepared to see whether he can satisfy hon. Members that there will be consultation, but whether this can be written in without narrowing the scope of the consultation is a question for our legal advisers."—[OFFICIAL REPORT, Standing Committee B, 16th December, 1970; c. 362.] We have put down this matter again because we thought it essential that there should be this form of consultation. If the Clause goes through, the Government will be able to bring in a Statutory Instrument which cannot be changed or altered by the House, and it is vital that interested parties should have the opportunity to alter such an Instrument.

The Minister argued on that occasion that the Amendment could be read as excluding interests not actively engaged in agriculture and horticulture, and he quoted landlords, land agents and machinery manufacturers. We want these people to be included in the consultations. For that reason we have put down an Amendment to try to meet the case. We are not expert draftsmen, but we believe that the Government would not find it impossible to find a form of words to make it a statutory duty for the Minister to consult with interested parties. I hope that the Minister, in reply, will be able to say that when the Bill goes to another place there will be an amendment of this sort.

I come to the matter of tractors, which was debated at length in Committee. Here again, we had some rather sorry answers from the Minister. There is no part of the Bill which has caused so much anger and fury to the farmers as the exclusion of grants for tractors and combine harvesters. The National Farmers' Union in its brief said on page 3: In the Committee stage debate, the Minister felt unable to take seriously the description of the indignation throughout the industry at the proposal to withdraw the investment grant on tractors and self-propelled harvesters. Members should be under no illusion as to the extent of the industry's reaction. It is both widespread and intense. That prompted us to wish to debate this matter and to get this provision altered as best we can.

We regard this as an obnoxious part of the Clause. The story of grants on tractors and combines has been a story of muddle and shuffle. In the space of five years there have been five different systems of grants or investment allowances. No wonder farmers do not know where they are because of all these alterations. The uncertainty for both farmers and manufacturers is most unsettling.

I was astonished to hear the Minister say today that this grant had not stimulated the sales of tractors. The fact is that it has had the opposite effect. Within the last year or two sales of tractors and combine harvesters have been drastically reduced. I have recently received a memorandum from the Agricultural Engineers' Association saying that tractor sales in 1969 as compared with 1968 fell from 38,000 to 32,000, and combine harvester sales between those two years went down from a little over 4,000 to slightly under 3,000. To take the most up-to-date figures that I have been able to get, sales of tractors in January, 1970, compared with January last year are down by 20 per cent. and sales of combine harvesters are down by 19 per cent. Those figures relate to new registrations with licensing authorities. This is a serious matter. It may be that this grant has not stimulated sales of tractors and combines, but the Government's economic policy on agriculture has meant that farmers, in spite of the grant, have not been able to buy as many of these machines as they did in the past.

5.30 p.m.

On Second Reading when the Minister dropped this alarming brick into the ocean and told us about the ending of these grants, his excuse was that it was a small grant with a limited effect. He went on to say that it had also proved to be both complex and expensive to administer. I should like to examine his extraordinary choice of words. He says, first that it is a small grant. On these capital grants, there are 11 different schemes and an expenditure of about £35 million, so that the average expenditure on each grant is about £3 million. When one sees that the expenditure on grants for tractors and combines comes to £5½ million, or 16 per cent. of the total expenditure on grants, it is nonsense for the Minister to try to pretend that it is a small grant.

He then says that it is a complex scheme to administer. In Committee, I produced and I produce again all the forms and explanatory leaflets which are published on these capital grants. I reckon that there are 103 pages, many of them written on both sides, about all these capital grants. Those on tractors and combines cover only six pages. For the whole of the 11 grants under this Clause, there are 41 forms which have to be filled in, but for tractors and combines there are only three. In other words, 16 per cent. of the money spent on these grants goes to tractors and combines, but they involve only 6 per cent. of the paper and between 7 and 8 per cent. of the forms, so his statement about the scheme being complex is nonsense.

Finally he says that it is expensive to administer. That is shot down completely by the facts. The cost of administration on tractors and combines is £300,000. That is only 6 per cent. of the whole. Of the 11 grants, those in respect of tractors and combines are seventh in the order of costs of administration. It is clear that his claim about the scheme being expensive to administer is sheer rubbish, and I hope that he will withdraw the statement.

The tractor is the life-blood of the farm. It is the central power unit. Certainly it is the only means whereby a small farmer can get a capital grant. The Price Review has raised capital grants, but tractors are still left out. Few farmers will be able to afford the more elaborate and sophisticated types of equipment such as the augers, blowers and loaders to which the Minister has referred. It is clear that this Price Review and the policies of the Government are in favour of the rich large farmer and are to the detriment of the smaller farmer.

I turn now to a matter which bothered us a great deal in Committee and to which the Minister has referred briefly. It is the proposal under this Clause whereby it will be possible in future for large amounts of money to be paid in capital grants to factory farming operations which are not associated with land. I was surprised that for most of the Minister's speech, apart from the three Ministers and a Whip, only the hon. Member for Norfolk, North (Mr. Hazell) was on the benches opposite. If hon. Members knew that the policy of this Government is to pour capital grants into factory farms which have no association with land, there would have been something of a rebellion on the Government back benches. Many hon. Members opposite cannot be aware of this. I believe that there would have been an appalling rumpus if they had known about it.

The hon. Member for Norfolk, North is extremely bothered about it, I know. I recall that he said in Committee: I cannot believe it is his (the Minister's) intention that such systems of farming as may well develop in the future on these lines should rank for grant, attracting money which it is Parliament's intention to make available to bona fide farmers."—[OFFICIAL REPORT, Standing Committee B, 11th December, 1969; c. 312.] I agree with the hon. Gentleman, and I cannot understand why the Government are persisting with this matter.

In the past, we have had the 50 per cent. feed rule. That is to be scrapped, and therefore there will be no limit on land associated with the project. We put down an Amendment to change the feed rule from 50 per cent. to 20 per cent. Unfortunately, the Amendment has not been selected. But I hope that the Government will understand that there will be a widespread feeling that there should still be a proviso that land should be associated with operations of this sort when we are moving clearly into the realms of factory farming and the very large units being set up by people like Mr. Eastwood and others which will be allowed these vast amounts of money.

In the Price Review statement, the Government say that there will be an upper limit of £100,000 in investment over two years which will qualify for this capital grant. But that is not the point. What the Minister has announced about the upper limit of expenditure of £100,000 is to be welcomed, but that is not the principle which we are attacking. Many of us are concerned about the abandonment of the principle that there must be land in association with these buildings. I hope that the hon. Member for Norfolk, North will repeat his disquiet about the situation and that we shall hear his attitude towards it. I hope, too, that the Minister will say that he will consider bringing down the percentage of the feed rule to 20 or 10.

Finally, I turn to the aspect of the whole Bill which bothers us. We have been told that there are to be alterations in the grant. In Committee, the Minister said that in future there will be three rates of grant: a 30 per cent. grant for buildings, land operations and plant and machinery; a 50 per cent. rate for drainage, hill land work and amalgamations; and a 60 per cent. grant for hill land drainage. In the Price Review, we have been told that for two years there is to be a 10 percentage points rise in these rates. It is difficult to understand why the Government have found it necessary to increase capital grants by this amount. They give themselves away in paragraph 48 of the White Paper, where they say: There have recently been signs of a down-turn …". I must say that there have been very considerable signs of a down-turn in capital expenditure in the industry in the past year, and that has become even more evident in the last few months.

I looked with great care at the Government's estimates for farm improvement grants on buildings and so on in 1969–70 and compared them with those for 1970–71. The estimate in last year's White Paper of the expenditure on farm improvement grants was £14.9 million which, as I understand it, qualified for grant at 30 per cent. Looking at the total amount of capital work done on farms qualifying for this expenditure of £14.9 million, that would imply that there was £50 million worth of capital work being done under this scheme last year.

Next year's projected figure for expenditure on farm improvement schemes is £15.5 million. Schemes will qualify for grant at 10 percentage points higher, at 40 per cent. Although more money is being spent compared with last year, it will be at a higher rate, and the implication is that £39 million worth of work will be done on farms next year.

There has indeed been a tragic downturn and even though larger grants are to be paid and larger incentives to be given, investment in work of this kind will be £11 million down in 1970–71 compared with 1969–70. This worries us because it shows that in an enabling provision of this kind rates of grant can go up and down like a yo-yo or even disappear.

On Second Reading we were told that tractor grants would go. Last week we were told that a 10 per cent. bonus for them would be added for two years. In the past the situation was greatly different, with specific rates of grant being written into the Statute. For example, under the 1967 Act we were told in Section 26 that there would be a 50 per cent. grant for mergers; in Section 30 we were told that there would be a 25 per cent. grant for farm improvement schemes; in Section 31 we were told that there would be a 10 per cent. grant for fixed equipment; and in Section 32 we were told that there would be a 10 per cent. grant for tractors.

That system has been scrapped. The rate of grant is not to be written into the Statute, but will appear in Orders which this House will not have a chance to amend. This bothers us most about the new Clause, particularly since the Minister did not refer to this proposal in Committee. It was sheer arrogance on his part not to refer to it in view of the disquiet which my hon. Friends had expressed.

Under his predecessor, the right hon. Gentleman who is now the Leader of the House, each specific grant was written into the Statute. Why is the present Minister changing that? If it was good enough for his predecessor to allow us to debate these matters through the normally parliamentary processes, why is it not good enough for the present Minister? Why did not he even refer to it in Committee?

I cannot believe that the right hon. Gentleman is a sort of parliamentary bulldozer, arrogantly disdainful of the House and not wanting the rates of grant to be properly discussed. However, I am bound to suspect that he is a bulldozer and many people will go on suspecting that until he explains fully why he has taken this fundamental and retrograde step.

Mr. Peyton

My hon. Friend the Member for Westmorland (Mr. Jopling) made some cogent points to which I trust the Minister will give a full answer, particularly since I was shocked by the cursory way in which he introduced the new Clause.

The right hon. Gentleman complained bitterly—apparently he had been greatly offended—because in Committee upstairs the part of the Bill to which the new Clause relates was rejected on a snap decision. As my right hon. Friend the Member for Grantham (Mr. Godber) modestly pointed out, Standing Committees come to snap decisions. However, on that occasion many hon. Members had expressed their dislike of that part of the Bill and the Minister should not have been surprised when it was rejected on a vote.

I am disappointed that the Minister has not felt under an obligation to explain the merits of the new Clause, if it has any. I deplore this terrible habit of referring back to discussions in Standing Committee and treating the Report stage like something that should be scrubbed through as quickly and informally as possible, rather as though it is merely an embarrassment and annoyance to Ministers.

The right hon. Gentleman now has an opportunity to explain what we consider to be obscure parts of the Bill. This is an opportunity for us to ask questions in the optimistic hope that the right hon. Gentleman may have learnt something as a result of our deliberations upstairs. We are surprised, to say the least, that the right hon. Gentleman should have introduced, with hardly an apology, an abominable new Clause which he knows we dislike.

5.45 p.m.

We have not been told what amount is being taken away from the agricultural community by this provision. No justification has been given for the proposal that tractors and combine harvesters should no longer attract grants. This is disturbing many people in the agricultural community. I wrote to the Minister about it recently. Members of my local branch of the N.F.U. protested to me their dismay of this proposal, which they have failed utterly to understand. They believe that the Minister must have taken leave of his senses to have reached this decision—and so far he has said nothing to justify it.

Consider the supervision of these complicated schemes. Parliament has a great deal more commonsense than resides in most Government Departments, the people in which live in a world almost totally of their own. I do not envy them. They draw up schemes of such hideous complexity that the ordinary mortal cannot follow their labyrinthian ways.

For example, the way in which the wheat subsidy is paid can hardly be described as a simple or sensible scheme. Schemes of this kind are only too apt to become pitfalls and snares to the unwary. Seen from a Government Department, the ordinary citizen is thought to have almost unlimited time to attend to the various forms that must be filled in. But they have other things to do. They are bored by all this form filling.

Mr. Cledwyn Hughes

Would the hon. Gentleman explain why he failed to make these schemes more simple when he was a back bencher and a junior Minister under Conservative Administrations over a period of 13 years?

Mr. Peyton

I had had a better opinion of the right hon. Gentleman than to suspect that he would make such a rotten point. The mere fact that a scheme existed under a Tory Government does not mean that I believe it to be good. The right hon. Gentleman reveals the paucity of his mind and seems to imply that anything he does must automatically be justifiable.

There is a penalty clause in this provision enabling, on summary conviction, a fine of £400 to be inflicted. Before schemes carry penalties of this kind, hon. Members should have the fullest chance of examining them, and the Resolution procedure is not adequate for that purpose.

My right hon. Friend the Member for Grantham made it clear that we strongly object to the enabling language which is used virtually throughout the new Clause. For example, it begins by saying, The appropriate authority may with the approval of the Treasury … One need only contemplate the record of the Treasury to know that its approval is not necessarily a hallmark of excellence. Later we find the phrase: … appears to the appropriate Minister to be of a capital nature. … Why not insist that it is of a capital nature? We then read: … is approved by the appropriate Minister for the purposes of a grant under the scheme. Paragraph (4) reads: If at any time after the appropriate Minister has approved any expenditure for the purposes of a grant under such a scheme it appears to that Minister—

  1. (a) that any condition subject to which the approval was given or the grant has been made has not been complied with; or
  2. (b) that any work in respect of expenditure on which the approval was given has been badly done,"—
or that some information was false or misleading, the appropriate Minister may revoke the approval". The Minister must give the person concerned an opportunity to explain his views, but once again we are adopting procedures which make the Minister judge, jury and prosecutor in his own court, and I do not like this method.

Paragraph (5) says: If any person, for the purpose of obtaining for himself or any other person any grant under such a scheme, knowingly or recklessly makes a false statement, he shall be liable on summary conviction to a fine not exceeding £400. This is a heavy penalty, and I do not believe that these penalties should be written into schemes without very careful scrutiny by Parliament.

In withdrawing these grants, the Minister is totally wrong. He has made no serious attempt to discharge the burden of explanation which lies upon him. In the new Clause, he is taking upon himself blanket powers which are unnecessary and offensive. Socialist Ministers are yielding far more readily to the temptation to take the bureaucratic path, to consider what is bureaucratically convenient and administratively comfortable, very often at the expense of what is right and just—and this is most offensive.

I hope that the Minister will take these objections seriously, that he will not just think that it was an unfortunate accident that the Standing Committee thought it right to throw out an obnoxious Clause. I hope that he will digest the fact that this is offensive and that the onus is on him to justify a far too large addition to Ministerial powers, and particularly to explain in detail what he contemplates removing from agriculture as a result of any scheme under these powers, and why, in the name of conscience, he is removing a very useful form of help—the grant for tractors and combine harvesters.

Mr. Henry Clark (Antrim, North)

I listened with some interest to my hon. Friend the Member for Yeovil (Mr. Peyton), who left us in no doubt that there are occasions on which the excellent work of the Ministry of Agriculture is not fully appreciated by the general public. One of the troubles is that the Ministry realises this and, when it has been doing a reasonably good job, it occasionally decides to stop doing it, just to show the difference. This is the only possible explanation for the sudden removal of the grant for tractors and combine harvesters.

It is like the situation which occurred when, for a number of years, there were generous grants for liming land. This country was getting about the right amount of lime on to agricultural land, but, because the level of liming stayed fairly constant, the Ministry began to believe that its grant was not being fully appreciated, so it stopped it, just to see the difference. In my part of the country, senior agriculture officers are beginning to suggest that the country needs more lime and that the farmers should do more. But the Ministry has the answer in its own hands.

What will be the result of cutting off these grants for tractors and combine harvesters? It is not intended to stop farmers waltzing into showrooms and writing orders for large and expensive pieces of equipment. No one in my constituency buys a combine harvester without a great deal of thought: it is not a casual decision. They think pretty hard before they buy a tractor.

Most of the farms in my constituency have only one tractor. Statistics can be made to look different, because some farmers maintain a decrepit tractor for dirty work, which occasionally leads agricultural economists to say that there are too many tractors on British farms. But many farmers in my constituency really have only one tractor each. It is absolutely vital that that tractor should be in good working order throughout the reason. The result of removing this grant will be quite simple. Most people will make their tractor do one or two more years. Farmers will be flogging away to keep an old tractor going which should not be running or should not be the key to the efficiency of a farm.

This is a case of the Ministry taking back a grant just to prove how good it has been in the past. I cannot see any other justification for it. The Ministry will say, "Were we not doing a wonderful job? If we put the grant back won't they appreciate it?"

I turn to the most explosive matter in the Clause and in Amendment (c) to the Clause. If people begin to realise the large sums of Government money which are being paid to industrialists to take from the farmer one of the few regular and profitable lines which he has, there will be an explosion which, fortunately, this Government will not be there to see. One of the classic and unfortunate things about farming is that, when any production becomes profitable, it is taken by industry and commerce out of the hands of agriculture. The broiler industry is a classic instance. The answer always is that production in large units is more efficient and will supply cheaper food to the workers, but in egg production there is considerable doubt, on the straight economics of production in reasonably-sized units—5,000, 10,000 and 15,000 hens—and production in multi-thousand units in old factories and industrial buildings

Four years ago, in an Adjournment debate, I pointed out that a hen produces an egg for exactly the same number of grains of corn in a small unit as in a big one. The level of animal husbandry is rather better in the smaller units and the labour used on family farms often cannot be used in any other way.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie)

I remember that debate, but the hon. Gentleman should realise that some of those farms have been precluded because of their lack of land. They will get the benefit of this Clause as well as the big men whom he is emphasising so much.

6.0 p.m.

Mr. Clark

The Parliamentary Secretary knows perfectly well that the big men are prepared to pay money in through a considerable period simply and solely to drive the small man out and corner a very profitable angle of food production in the country for themselves. Let us be clear that the economics of production in small units and in large units is largely distorted by the commercial practice where the very big units can buy from the producers of chicks and cages at cost leaving the smaller farmer to pay the full price and pay for research and profits. This largely allows the big unit to buy at such low prices.

If one takes a broad view of the economics of large and small egg-producing units, it is doubtful whether one would not find that the small unit comes out more economically on a national level. If the hon. Gentleman cannot follow my argument I believe that he should study this question more deeply. The fact remains—and this is the relevant point—that if one takes away, as one may well do by paying subsidies to the large and industrial units, the farmyard production from the small farmer, the Ministry of Agriculture in a few years will find itself with a far larger bill because it will be paying far larger subsidies for amalgamations and to get the small farmer out. There will then have to be higher prices to give him the standard of living to which he is entitled, simply because the Ministry of Agriculture has helped to take part of his livelihood away from him. I find it hard to understand why the Government cannot accept both Amendments (b) and (c) to the Clause.

Mr. Deputy Speaker

Order I remind the hon. Gentleman that we are not discussing Amendment (c) in this series.

Mr. Clark

I apologise, Mr. Deputy Speaker, but it does come into the whole question of agricultural grants and it is rather difficult not to carry this argument on. When one looks at the operation of farming in this country and the problems that farmers will be facing in the future, I find it extremely difficult to understand why the Government cannot accept the Amendment.

Mr. Emlyn Hooson (Montgomery)

Listening to the debate so far, I find it difficult to appreciate that the real issue is whether the Bill should go on with the Clause included or without it. This seems to me a different issue from that which we have been discussing so far.

I was not a member of the Committee which considered this Bill so I come to it with a fairly fresh mind. As I see it, the Minister's case is that he seeks to bring under the one umbrella the large and multifarious grants now payable in agriculture, and I am certainly in favour of that as a broad objective. Nor do I find it a valid criticism of this provision that there are enabling powers. It is difficult to see how this kind of umbrella-like structure under which the grant can be paid can be put into practice without enabling Clauses. These enabling Clauses provide for far greater flexibility.

I should not regard it as a criticism that, for example, the grants last week were put up from 30 per cent. to 40 per cent. or from 50 per cent. to 60 per cent. for a short period in view of the difficult times which agriculture was passing through and is still passing through. This degree of flexibility is to be commended. We should not always seek to have, as it were, a rigid formula, because economic circumstances vary a great deal. By and large, I should have thought that the agricultural community would benefit rather than lose by having these enabling Clauses. This is the test which I would apply on behalf of my constituents. The question is: are the farmers likely to benefit or lose through this provision, broadly speaking? I think that they are likely to benefit.

It is a complicated Clause, and I want to express three doubts which I am sure affect hon. Members on both sides of the House with regard to this matter.

First, no doubt the Minister's case would include the tractor and combine harvester grant, which is fairly new and has operated for about four years. I suppose that in many ways it is an odd man out as far as grants are concerned. But the Minister in his argument today laid stress on the fact that a farmer paying the standard rate of tax would gain a certain benefit and that farmers paying a higher rate of tax would receive greater benefit. The Minister must appreciate the point—especially with regard to the tractors—that to a small farmer it is very often his only big capital purchase in a decade. This makes it very difficult if a farmer is buying a tractor. He has been eyeing it and thinking of the day when he will be able to buy it. For an outlay of £900 he will get a grant of £90, and this is a big factor in his mind particularly as he often has little capital to spare, and it is the only capital grant that he receives. This is why small farmers particularly attach so much importance to the grant. Would the Minister say a little more about this because it affects farmers in his constituency as it does in mine?

My second doubt is of a much more general nature. It is that there is a widespread feeling that far too high a percentage of the capital going into farming goes into the hands of those who do not need it. The maxim "to him that hath shall be given" seems to be almost a guiding light in this matter. The Tory Party is shedding crocodile tears over the small farmer, because I did not see very much difference when it was in power with regard to this matter.

Suffice it to say that I think the ceiling suggested by the Minister of £100,000 over two years is far too high. If one is now anticipating a grant at the rate of 40 per cent., a grant of £100,000 would mean a total investment of £¼ million over two years. That is a large investment for agriculture on any view. Has not the Minister set this target too high? Would it not really ensure, as one fears, that far too high a percentage of the money available will go into the hands of those who do not really need it? I should like the Minister to expand a little on this when he replies because I think it is a matter that exercises the minds of hon. Members on both sides of the House. These grants are available to enable us to maintain a low-cost agriculture and low food prices, but also, I think, to maintain farming, taking a certain social view of farming.

Mr. Cledwyn Hughes

I do not want to be misunderstood, and I want to clarify the point and explain to the hon. and learned Member for Montgomery (Mr. Hooson) that it is the total figure involved in the scheme which is £100,000.

Mr. Hooson

I am grateful to the right hon. Gentleman for that explanation, but I still think that it is a high figure, although, obviously, it is not anything like as high as the figure which I had in mind. The reason why I raise this query is that when there is a complicated Clause of this kind before the House, and we know that Orders will in future be introduced under its terms, it is incumbent on the right hon. Gentleman to meet some of these points as he is obviously doing today.

The third point disturbing me is subsection (5), which reads: If any person, for the purpose of obtaining for himself or any other person any grant under such a scheme, knowingly or recklessly makes a false statement, he shall be liable on summary conviction to a fine not exceeding £400. It provides a very heavy fine for an offence which will not necessarily involve any element of dishonesty, and that is wrong. There is no reference in the subsection to the farmer having obtained a grant dishonestly or with intent to defraud. On the contrary, if he makes a mistake he is regarded as having made it recklessly. Suppose that, on the last day on which he can make the claim, he calls out to his wife, "What was that figure?" and she gives him the wrong one. He is apparently deemed to have put down that figure recklessly and is liable to a fine of £400.

The House should not lightly pass this kind of provision into law. I hone the Minister will look at this again to see whether the word "dishonesty" or the phrase "with intent to defraud" cannot be inserted. If there were dishonesty or intent to defraud in a claim, no one would make this kind of objection.

With these qualifications, I shall advise my right hon. and hon. Friends to support the new Clause.

Mr. William Baxter (West Stirlingshire)

Like the hon. and learned Member for Montgomery (Mr. Hooson), by and large I support the idea behind the Clause. Like him, I feel that the grant for machinery should receive careful consideration. No doubt it has already done so, but I suggest that it should get further consideration.

When all is said and done, it is hard for a farmer to be denied a grant for machinery when the small building contractor next door gets a grant for buying the same kind of equipment for his opera- tions. It causes a certain amount of discontent and dissatisfaction, and criticism of the Government. Although one cannot simply compare one with the other, nevertheless comparison is made. I urge my right hon. Friend to give further consideration to this aspect.

Another aspect which disturbs me relates to the carrying out of work under subsection (4)(b). If the work has been badly done, then this constitutes a factor which must mitigate against the giving of a grant. But who decides? Who is responsible for the work being badly done? The farmer employs a building contractor to do it, and that contractor does not make as good a job as he should. In the opinion of the inspector, but not in the opinion of the farmer, who is a simple chap who has been accustomed to doing such work himself, rather more roughly than a tradesman, the work is badly done. The farmer, nevertheless, thinks that it is to his satisfaction and expects to get the grant. But the inspector says, "This does not meet the requirements, so you will not get the grant". He puts the farmer in a difficult position.

It is not unlike what has been the practice in the past when a farmer sought a grant for land improvement for taking large stones out of the ground, for example, but inadvertently started taking up a few stones before approval had come from the Ministry for the work. Because he had started the work by putting a spade in the ground to remove one or two boulders, his application was regarded as nullified.

When legislating for matters like this, dealing with simple people engaged in such projects, we should be as reasonable and amenable as possible in meeting their requirements, and we should not lay down rigid rules and regulations which are unbending when an individual has made an error of judgment or a simple mistake. This is the one fault I find with this aspect of the Clause. Naturally, I do not approve of work being badly done, but there should be ample opportunity for the farmer to be paid a reasonable proportion of the grant even if the work does not come up to the full expectation of the Ministry official.

6.15 p.m.

Subsection (5) is very difficult, as the hon. and learned Gentleman indicated. One understands that a person who knowingly tries to "do" the Government should be penalised and a fine imposed. But the word which troubles me is "recklessly". We all from time to time do reckless things but are not willingly and knowingly trying to "do" someone. The word "recklessly" should be deleted.

I do not object to anyone knowingly putting something false into a statement for grant purposes being liable to a heavy penalty. Whether or not it is good practice to put into a provision a figure of £400 for a penalty is debatable, but the degree of the crime committed should be taken into consideration. For example, in a certain case it may not be a question of the farmer knowingly trying to "do" the Government and there may be mitigating circumstances, such as a genuine mistake. For such circumstances, a nominal fine should be provided. It is wrong to say that in all cases where something of this kind has happened a fine of £400 should be imposed.

All these matters require a little more thought, even at this late stage. Like the hon. and learned Gentleman, I regret that I was not on the Standing Committee. I believe that the principle of the new Clause is good but that the wording must be tightened up.

Mr. Peter Mills (Torrington)

We, too, were sorry that the hon. Member for West Stirlingshire (Mr. W. Baxter) was not on the Standing Committee. I well recall the many Standing Committees on agricultural Bills on which I have had the privilege of serving with him, and the fine part he played in them. Indeed, there were occasions when the Government benches were utterly silent except for his voice, and he made most interesting contributions. We certainly all missed him this time.

I want to make the situation clear about this new Clause and the Government's lack of action in Committee. The Clause was originally thrown out of the Bill because we on this side disagreed with the Government. We planned to beat them, and beat them we did. It is no good their claiming that it was trickery. They were not prepared to back up their policy with enough supporters in the Committee to see that it went through. This point must be made clear. There was no trickery. It was a well-thought-out plan. We were determined to see that the provision did not go through, and the Government had not the initiative and the courage and the troops to see that it went through.

This new Clause would, in a sense, enable the industry to have a more unified and streamlined capital grants scheme, and it all sounds very nice. Most of us would agree to that principle. If it does go through, it will save administrative costs. But before the Government take credit for all this there are many things we would like to ask about the new, unified and streamlined grants scheme.

I hope the right hon. Gentleman the Minister is listening because this is quite important. I understand that at present there are 41 different forms. I have them here with me. Yet I understand we are to have a single new form to deal with these cases. What does it look like? Where is it? We have not had a chance of seeing it, and I would have thought that at least the Committee ought to have seen it before passing this new Clause. The interesting thing is that there are 103 pages here. For scrub clearance there are four pages of forms, for fixed equipment there are 13 pages, for tractors and harvesters there are six—though, regrettably, they will not be needed now.

One could go on with dozens of pages of forms all of which have to be filled in; and, if my memory is correct, when I have had to fill them in it has usually had to be done in triplicate. So it is really a matter of about 309 pages of forms to be filled in. Yet in this new, unified and streamlined capital grants scheme there is to be one form. It is going to be very interesting to see whether this amount of writing and facts can be condensed into one form. We ought to hear the Minister's views on this. Perhaps he will be able to circulate the new form amongst us, because it is very important.

I turn now to the need for a ceiling on individual grants to prevent too much money being absorbed by a few. I welcome what the Minister has said. I was a little confused and thought that the £100,000 was the total grant under the scheme. I am glad that that has been clarified. But I agree that this is a very large sum of money. Of course, it is much easier for the bigger people than for smaller people to take advantage of this. There could be the danger that far too many large farmers take advantage of this while many small farmers just cannot do so.

Mr. R. J. Maxwell-Hyslop (Tiverton)

Before my hon. Friend leaves that point, is he quite happy in his own mind that this is not a phantom rather than a reality and that one cannot get round the £100,000 limit by dividing a scheme into sub-schemes each of £100,000?

Mr. Mills

My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), as always, is right. If anyone knows the facts and figures, it is he, and I hope that the Minister will consider what he has put forward. I have no doubt that he is absolutely correct in what he says and that there will be people who will try to find a way round it. That is a point worth mentioning, and something for the Minister to watch. My fear is that the small man will again become disillusioned about this. He will see the larger man taking the bigger share of the cake all the time. Speaking for a county with a very large number of small farmers, I would say that that is a point which should be watched very carefully by the Minister and the Ministry in their dealings in the future.

Then there are the problems of buildings divorced from land. Again, I believe very great care needs to be taken before grants are given. Some people, and particularly the very large egg producers, will try to get away with this, and it is important that the provisions of the Clause are used for the intended purpose—to encourage genuine farmers to improve their holdings and farms and enable them to take advantage of these grants.

Turning to tractors and self-propelled harvesters, I have still not heard to my satisfaction any reply from the Minister or the Government why their view has changed. In a Committee on a far-off agriculture Bill the Government stressed that it would help the small producer. I remember only too well, as I said in Committee, how I sought to support the small farmer in this country and got nasty looks from various people; and, in a way, rightly so. But I cannot for the life of me understand the reason why the Government have changed their view on this.

I believe the larger men would much rather have investment allowances, but for the smaller man it is perhaps some help to have investment grants. I would repeat that the purchase of a new tractor is a major step in the life of a small farmer. I can honestly say I have not purchased a new tractor for many years. I continue to use my old one and get it repaired and go on and on. It is a major step to pay out over £1,000 or more for a new tractor, and many small farmers look upon it as a major event in their farming career. Once again it seems hard to understand the Minister's views and why there has been this sudden change.

Mr. W. H. K. Baker (Banff)

Before my hon. Friend leaves that point, perhaps he would be good enough to meet me in the Lobby and tell me what make of tractor he employs.

Mr. Mills

I am a Fordson man, so that there is no need to change. Perhaps I may have a free one after saying that!

We have been given a promise in the Price Review, and that is very relevant to the new Clause and the increase in the rate of capital grants. The Minister talks about the £20 million extra which will flow from the new Clause, but when one looks at the Appendix to the Annual Review and Determination of Guarantees 1970 and at the Estimates for 1970–71 one sees that there is there an estimate of just under £4 million.

What is the Minister really saying? On the one hand, he is saying that there is an estimate of just under £4 million, and on the other hand he is making a public statement that £20 million will arise from the new Clause. That needs some explanation. In considering the new Clause there is no doubt in my mind that the small producer and farmer, will in many ways be unable to participate in these capital grants. At the present moment credit and new capital facilities are both difficult and very costly to obtain. This means that the smaller man is at some disadvantage. In other words, he would be unable to put his share of the investment alongside what the new Clause seeks to do. This is a very real problem.

I believe that in many cases the smaller man will be unable to benefit from the improved grant or from the Price Review; and the small farmer looks upon this as an exercise which is something of a red herring. I can assure the Minister that there is a very strong feeling, certainly in the South-West, as shown by the number of people who have got in touch with me, that this really is a red herring because the small farmer cannot participate. In my opinion, it is not much use bringing forward promises and things of this kind in a Price Review unless the small farmers can participate in it. In many cases they cannot, because of the extremely difficult position of credit and the cost. What we really need is not so much this new Clause, although, of course, it will be welcome to many, but a better end price.

6.30 p.m.

Going home in the train I was amused as I turned over in my mind all that happened last week. I thought of myself going to my bank manager and saying: "We have a new Clause which will allow capital grants for this and that. The Minister has promised in the Price Review that there is another £20 million." My bank manager would probably say to me: "You are to take no part in this. What I want to see, before you undertake any more expansion or take up of these capital grants, is a reduction in your overdraft." This is what most bank managers will be saying. It is no good the Minister shrinking down into his Bench. This is a fact.

Mr. Cledwyn Hughes

I am following the hon. Gentleman with great interest. He is putting one side of the case. I take it that, in addition to mentioning the capital grants scheme to his bank manager he would also indicate what additional income he would derive as a farmer, because his bank manager can make an assessment only if both sides are considered.

Mr. Mills

The Minister is right. That is what the bank manager would tell me today. He would say: "Let us see how far these improvements in the end price we will get work out in your case. When your bank balance begins to improve, we can then take advantage of these capital grants."

The problem with the new Clause is that farmers will not have the where-withall to carry it out. In many cases, particularly of small farmers, this is a red herring which distracts from the real problem in agriculture. It is not fair of the Minister to make out what he has done and what the new Clause does, because it is extremely difficult to find the wherewithal to carry it out.

Looking at the new Clause in detail, we see in the first line, The appropriate authority may with the approval of the Treasury". Again, we have the words with the approval of the Treasury". I make no bones about bringing this matter up again. I should feel happier if the Treasury were more on our side in these matters. In many instances I fear that it is not. I look forward to a policy in future when it will be on our side.

Subsection (1)(c) refers to expenditure which is approved by the appropriate Minister". Again, I raise the problem of the approval that we get from the Ministry for certain schemes. I suggest that many of them are too costly and elaborate. Many farmers find that if they embark upon this course of applying for a grant for an improvement, the standards demanded by the Ministry are too high. We do not want to go back to the days when we used rough sticks, old sleepers, and goodness knows what for farm buildings. There must be standards. However, I suggest that the Ministry should look more carefully at the use of cheaper materials and alternative types of buildings.

Agriculture should be a flexible industry. A man can put up a building and find within a year or two that it is not suitable, because new designs and types of production have come in, and it is not always possible to adapt an existing building. If a building has cost an enormous sum, it is difficult to leave it on one side. One has to try to adapt it. I hope that the Minister's approval will be more flexible and will take into account some of the cheaper methods and materials.

I turn now to line 40, which says, or by such instalments at such intervals or times". This presents another problem for farmers, particularly at this time. Many would like to take part in an improvement scheme, but they find that, even when the grant is given by instalments, there is difficulty in financing it. The builder usually wants the total sum paid so that the receipted invoice can go to the Ministry for the grant to be paid. This is a difficult time for farmers, particularly with the problem of credit and its high cost. Many banks are not able or prepared to cover them. Therefore, I hope that not only will there be speedy payment, but that large instalments might be paid to help the farmer.

My last point concerns lines 49 and 50, which refer to work, on which the approval was given has been badly done. I agree with the hon. Member for West Stirlingshire, who raised this matter, but I go further. I have experience of an instance where work on a road was passed by the Minister's inspector, and within three or four months the road had started to deteriorate very rapidly. In fact, it will have to be redone.

What happens? The payment has been made. The farmer, trusting the Ministry's inspector who certified that it was up to standard, now finds that it is not and he has no claim. The Ministry is not prepared to back up the farmer in his claim against the builder. This is a serious matter. If the Government are prepared to put in a provision that where work has been badly done there can be a delay in payment or a withdrawal of payment, there should be some responsibility to see that the work continues and that, whatever the improvement, it is satisfactory after two or three months. This is an important point, because I believe that a lot of shoddy work is going into many of these improvement schemes.

I have asked many questions. I hope that the Minister will be able to answer many of the problems that have been raised. The industry is anxious about these matters, and I hope that it can be reassured on many of them.

Mr. David Crouch (Canterbury)rose——

Mr. Speaker

Order. I remind the House that, at a minimum calculation, there are 19 debates ahead of us. Brief speeches will help. Mr. Crouch.

Mr. Crouch

The Minister will know why I consider the new Clause unsatisfactory. It does not contain the import of new Clause 9 Amendment of section 31 of Agriculture Act, 1967", which is not being taken today.

As we said in the House this afternoon, new Clause 1 is too loosely worded and is incomplete. The Minister has not done his job properly in presenting the House with the new Clause as it is. I ask the Minister to think again and to tighten up the regulations that he will impose concerning grants to farmers. I am concerned that the Minister should impose some restriction on the use of capital grants for fixed equipment such as buildings.

The Minister should remember that he has an obligation to take note of town and country planning. Under the Town and Country Planning Act, 1962, he was required to look at this question under the provisions of the Agriculture Act, 1967. He must take into account the impact which a farmer's activities may make on those around him. It is possible today for a farmer to erect a building to quite a large size without planning permission under the 1962 Act. I am surprised that the Minister did not think of putting a subsection into this new Clause to cover this requirement and tighten it up.

My hon. Friend the Member for Westmorland (Mr. Jopling) spoke of his concern about grants being made excessively to the encouragement of intensive farming. I know of cases in Kent where under regulations based on the 1967 Act it is possible for a farmer to erect a building of up to 5,000 sq. ft. extent and to a certain height, and within two years to erect another building of the same size, all without planning permission. In another two years he can erect another such building. In no time there could be an intensive factory farm development of 20,000 to 25,000 sq. ft. all established without planning permission.

It is necessary for some restriction to be applied. I am not saying that this kind of thing should not occur, but that the Minister should remember that when it occurs others can suffer because of it. It may be that such buildings could be sited too close to a village and make an impact which would spoil village life.

I am not against factory farming and grants towards intensive farming, which is part of our agricultural way of life and has an essential part in contributing to food production, but some restrictions should be observed. It is for the Minister to take it upon himself to realise that grants to farmers might produce unpleasant consequences such as those I have described.

In all circumstances in which such development can occur on a large scale and can affect the architectural amenity, the rural amenity——

Mr. Maxwell-Hyslop

The olfactory amenity.

Mr. Crouch

—or, as my hon. Friend says, the olfactory amenity, this should be borne in mind.

I do not intend to speak for long because I may get out of order by talking about the new Clause which is in my name and which has not been selected. The Government new Clause is too loosely worded. I hope that the Minister will think again and include in it some restriction on the application of grant in the way I have described so that there should not be absolute permission to erect buildings anywhere successively, as it allowed under the Town and Country Planning Act, 1962. I hope that he will find it possible to consult his right hon. Friend to see whether some such limitation could be put into this Measure. I do not want it to be thought that I would seek to impose restrictions on the farmer.

Mr. Speaker

With respect, the hon. Member is drifting into discussion of his new Clause, and that Clause is out of order.

Mr. Crouch

I have no intention, Mr. Speaker, of drifting in any way. Perhaps the Minister has got the drift of my remarks, and perhaps I have said enough.

6.45 p.m.

Mr. Paul Hawkins (Norfolk, South-West)

I apologise to the Minister for going out of the Chamber during the early part of his speech and not returning until after he had finished. I also apologise to my right hon. Friend the Member for Grantham (Mr. Godber) for not hearing part of his speech. This was due to a rather important engagement. If the Minister has already dealt with some of the points I wish to put, I ask him to accept my apologies in advance.

This is a complicated Clause. It seems terrible that we need to have a Clause written in this way with 89 lines to amalgamate the various grants. I agree that in principle probably it is the right thing to do, but the farmer will be immediately hit by the fact that under the Clause he has a cash grant taken away from him. The tractor-combine grant was something which he received in actual cash. The Minister will realise that cash is short in the industry. Because cash is so short, the total of £20 million of grants has been received rather like a red rag by the farming industry. Farmers have felt that the grant is out of their reach. They have to put up twice as much money to get the grant. Where can they get the extra capital when already they are right up against the ceiling of bank loans?

I draw attention to the history of grants for tractors and combines. I think I am right in saying that before January, 1966, there were 30 per cent. investment allowances which were introduced by the Conservative Administration in 1962 After January, 1966, the Government scrapped the investment allowance and introduced the 10 per cent. investment grant. The then Minister described it as something which would be extremely helpful to the smaller farmer because the larger farmer had far more benefit from the investment allowance than from this grant. It seems extraordinary that this grant, when cash is so important and more important to the small man, should be swept away by this move. It came like a bombshell when the Minister announced it in his Second Reading speech. This has caused more soreness among small farmers and has been repeated to me over the last month more times than almost any other grant matter.

I support my hon. Friend the Member for Torrington (Mr. Peter Mills) who spoke about trying to get the use of cheaper building materials. I deal with many applications for grants for buildings. Often one has to put up a far more expensive building so as to conform with the Ministry's rather out-of-date specifications instead of a cheaper form of building which would suit the purpose quite well. I remember how much money was wasted in the past in building cow houses which had to be scrapped. One realises how much money was wasted in putting up very complicated buildings when in many cases pole barns, made from timber cut in the local woods, would provide shelter for implements, straw, hay and such like. Yet the farmer could get no grant for them. I have often found as a land agent that it is far cheaper to go for a cheap building of that type than to take up the Ministry's grant, but I am sure that the building I erect with no grant will see the job through, will do just as well and will often not use such expensive material as steel, which is in short supply.

This is the wrong time to withdraw the grant for tractors and combines. Over the whole history of the grants the average farmer has been bewildered, if not worse. The tractor manufacturer is also fed up. He sees fits and starts in the demand for tractors. I am told that the demand for new tractors is very low, and after the very bad two years we have had the demand for repairs of old tractors has increased tremendously. There has been a tremendous change in my district in the machinery merchant's business over the past couple of years.

The question of who would get the grant concerned us greatly in Committee. We are in a dilemma here, because both sides of the House wish to see the smaller man receive much of the grant, but I am very concerned that a large proportion will go to the Eastwood type of farmer. The Minister considered this very carefully, and he may have said in his speech something about how he will prevent this happening, apart from the ceiling. I think that it will be a very weak ceiling. I can see masses of small companies being formed to draw right up to the limit. The right hon. Gentleman promised us in Committee that he would consider the matter further, and if he has already made a statement on it I shall be glad to read it in HANSARD. We are in great danger of driving more smaller, good farmers off the land if we push the business of animal production, which should be profitable and is often the backbone of their livelihood, over to the large man who will do it as an industrial business.

The Minister raised the question of looking at the cash received as well as the grants. He spoke about looking at both sides of the picture when replying to my hon. Friend the Member for Torrington. May we do that? I understand that about £54 million of cash will be put into the industry against a cost increase of £60 million. There will be an addition of £10 million in fertiliser grants, but I believe that it will be paid only to farmers who receive fertiliser on their farms after the 19th of this month. The vast majority of farmers have already taken delivery of their fertiliser this year, so as we are talking about the improvement in the farmers' position for this season I believe that the Minister has deluded the industry if he wishes it to be thought that the fertiliser grants will improve——

Mr. Speaker

Order. It will help me if the hon. Gentleman can say whether fertiliser grants come under these farm capital grants.

Mr. Hawkins

I am sorry, Mr. Speaker. The Minister referred to the matter in replying to my hon. Friend about the cash side of the present situation, and I thought that I could follow that up.

The Minister referred to £21 million being expended over the next two years—and this does relate to these capital grants. I believe that this £21 million-worth of grants and the whole grant system is a mirage to a drowning man, which is what the industry is now. The farmer sees a promise of those grants, but cannot reach them because he does not have the cash. He has not got the money in his account, and he cannot be given it by the bank manager or anyone else. The holding out of this mirage of grants which the vast majority of farmers cannot take advantage of is like a red rag to a bull. It will enrage the farming community against the scheme altogether.

Mr. Bert Hazell (Norfolk, North)

I think that the House generally and agriculture will welcome the reintroduction of the Clause. I am not unmindful of the fact that when it first came up for discussion in the Committee members of the Committee received a "cyclo" from the National Farmers' Union. That is not unusual. I do not think that there is any body more ardent in the supplying of Members of Parliament with cyclos than the N.F.U. It stated in the first paragraph:— The administration of the present schemes has become complex and has led to anomalies. The rationalisation, simplification and streamlining of the schemes should result in considerable saving of time of both farmers and officials handling the schemes and should expedite approval. To get a measure of approval from the N.F.U. on those lines is very welcome. I believe that farmers throughout the country would take a very dim view of it if the Clause were defeated.

Whatever may be the state of agriculture, there are, as in all other industries, those who are very progressively-minded and who from time to time change their methods of production and adopt new ideas. Whenever new ideas are adopted or methods of production change, expense is inevitably involve. Therefore, any financial grants that can be obtained from Government are always welcome. Agriculture is no exception to the rule, and therefore if the Clause is not carried and grants do not become available for further modernisation or change of policy within the industry agriculture will feel very strongly about the situation.

We can argue about emphasis of detail within the Clause, such as the method of its application and the degree to which one aspect of assistance may be compared to another. The hon. Member for Westmorland (Mr. Jopling) referred to fears I expressed in Committee that some people who may participate in a form of factory farming, and who have no direct, real interest in agriculture as such, might benefit rather more extensively than most of us would desire, to the detriment of the bona fide farmer. My right hon. Friend gave certain assurances and I hope that those assurances will be reiterated. I instanced in Committee big units close to ports, and which often rely on grains imported at a cheap rate because in some way or another they are damaged. These people have no real interest in farming, and I believe it is the intention of my right hon. Friend and the Government that genuine farmers should be assisted.

7.0 p.m.

Therefore, I hope that my right hon. Friend will reiterate the point which he has made that genuine farmers will stand to gain the most of such grants as are available under the Bill, and that they will be fairly distributed to the genuine people engaged in the industry with which most of us are proud to be associated. I cannot over-emphasise this, because of the trend which, one knows, is taking place in this country. This is why I want reassurance from my right hon. Friend.

It was a bit of a fluke that this Clause was not carried in Committee. [HON. MEMBERS: "No."] Fair enough, but it was one of the snap decisions, taken when no one expected it. One expects the Opposition to act on those lines in Committee and no one would cavil at this, but I sincerely believe that the industry, as an industry, wants us now to do our job seriously and to get this Clause into the Bill.

Mr. W. H. K. Baker

Nobody, I think, would argue with the hon. Member for Norfolk, North (Mr. Hazell) when he says that the farmers will be delighted to see an end of forms. We are all sick and tired of form filling, both in the agricultural community and elsewhere.

What we on this side of the House complain about is the vagueness with which the new Clause is drawn. That has been the burden of most of the remarks of my hon. Friends. We just do not know what the Minister has in mind, and we shall not know what he has in mind till he produces the various schemes, which, as my hon. Friends have already pointed out, certainly will be debatable but will not be amendable. We want to know exactly what goes on.

I did not have the privilege of serving on the Standing Committee on the 1967 Bill, but I understand that the then Minister of Agriculture, now the Lord President of the Council, when speaking on what was Clause 32(2), which made allowances for tractors, justified the new Measure by saying that it would help the small farmer who did not pay income tax. The present Minister of Agriculture said in Committee, and he repeated it again this afternoon: The withdrawal of the grant"— that is, for tractors and combine harvesters— must be seen in perspective. … There is no evidence that the withdrawal of the grants would in itself have any effect on productivity."—[OFFICIAL REPORT, Standing Committee B, 11th December, 1969; c. 344.] A little later he said, as he said this afternoon: Under the present tax arrangements, we know that the vast majority of farmers will be able to claim compensatory tax allowances which would significantly reduce the effect on them of the withdrawal of the grant."—[OFFICIAL REPORT, Standing Committee B; 11th December, 1969; c. 345.] The Government cannot have it both ways. It is no good with one voice, that of one Minister of Agriculture, telling us it will help the non-taxpayer when with another voice they say that farmers will be able to recoup by tax repayments. It is just absolute nonsense.

My hon. Friend the Member for Westmorland (Mr. Jopling) quoted from a circular from the National Farmers Union of England and Wales. I should like to quote from a circular sent—to Scottish Members, anyway—by the Scottish National Farmers Union. This is what it had to say: Over the past three years allowances for agricultural machines have whittled away. Until 1966 an investment allowance was available on all our machines and implements. It was then removed, and replaced by the present system of investment grant for tractors and self-propelled harvesters only. This was supposed to be worth the same amount of money to the industry as the old allowance. Now even the investment grants are to disappear. This is the crucial sentence which I would like the hon. Gentleman to hear: In the industry's present economic situation the proper course would have been to extend these grants to cover a wider range of machinery. The very nature of farming is such that most of its machinery must be mobile rather than static. That is a very important point.

As my right hon. Friend the Member for Grantham (Mr. Godber) said, the important thing about the tractor investment grant is not the fact that it encourages so much the use of new tractors on the larger farms but that it makes available secondhand tractors for the smaller farmers.

In my constituency, where the average size of farm is about 65 acres, this is a very important point indeed, because in the north-east of Scotland the tractor is literally the workhorse on the farm and is absolutely essential. In spite of what the right hon. Gentleman said in Committee, to have good, efficient production we must have a turnover of secondhand tractors. I fear very much that with the withdrawal of these grants the supply of secondhand tractors will greatly diminish. To put this matter into perspective, I should like to quote from figures which were supplied to me by the Joint Under-Secretary of State for Scotland. In the interests of brevity I will omit harvesters. In England and Wales the number of new tractors claiming grant in the last financial year was 82,805; in Scotland it was 11,599; in the north-east of Scotland, my own part of the world, it was 2,319. That is, 20 per cent. of all the new tractors registered in Scotland and grant-claiming were in that part of the world. That gives some indication of the extent of the damage which will be done by the withdrawal of this grant.

To emphasise this further, in a report by A. B. K. Tracy, "Significant Trends in Farm Finance Results in the North of Scotland, 1964―67", taking machinery the costs went up from £5.7 per acre to £6.4 per acre. I realise, of course, that this includes other kinds of machinery than tractors, but tractors obviously play a very important part. Taking the figures to 100, it means that there was an increase of 14 per cent. of machinery costs in those three years.

By removing these investment grants from tractors the Government will do irreparable harm. It may be the final straw that breaks the camel's back. Because of the stringent restriction on bank lending and the other imposts forced on the industry by the present Government, many small farmers in my area and other remote areas will go to the wall—and the whole nation will allow that to happen at its cost. I hope that my right hon. and hon. Friends will succeed in defeating the Government yet again on this Clause.

Mr. Richard Body (Holland with Boston)

I support every word that my hon. Friend the Member for Banff (Mr. W. H. K. Baker) has just said. The Minister has chopped and changed far too much over the investment grants for tractors and combines. There have been no fewer than five changes, I believe, in the last five years. From 1962 to 1966, farmers knew where they were, with 30 per cent. investment allowances. Then, this Government—the right hon. Gentleman's predecessor, we know—instituted the system of investment grants at 10 per cent. That arrangement survived only one year, and then they increased it to 15 per cent. Then they changed their minds yet again and reduced it to 10 per cent. a year ago.

Now, they propose to abolish investment grants altogether for this equipment.

For an industry which depends on a continuity of policy and needs to plan ahead as much as it can, these are far too many changes. The repeated argument for investment grants was that the small farmer needed them because so often he was not paying enough income tax to enable him to take advantage of investment allowances. That was the argument in 1966. On the face of it, it makes some sense, but now the right hon. Gentleman is saying something quite different. He told the Standing Committee a few weeks ago that the vast majority of farmers will be able to claim compensatory tax allowances for tractors and combines. But if his argument holds water now, if it is valid in 1970, how much more valid was it in 1966, when small farmers were paying more tax because their incomes were higher. The small farmer will be worse off as a result of the Minister's decision——

Mr. Speaker

Order. I believe that the hon. Member is talking about Amendment (b) which is out of order. He should come to the new Clause.

Mr. Body

I understand that the Government intend not to include tractors and combines. I am drawing to the Minister's attention an omission from the Clause. My argument is that, with this omission, the new Clause will be defective and will cause great hardship, particularly to small farmers.

The right hon. Gentleman has also said that a tractor is normally acquired in any case by the farmer. That may be true so far as he needs a tractor, but many farmers in the past 12 months have postponed the purchase of a tractor. Like my hon. Friend the Member for Torrington (Mr. Peter Mills), they are still using tractors which, with all due respect to that Fordson, should not be on the farm any longer. A tragic number of fatal accidents are caused by tractors, and many of them by old tractors. It is very serious that so many should be retained when they should be in the scrap yard. I hope the hon. Gentleman will reconsider this decision.

7.15 p.m.

I am doubtful about the new Clause and about the value of grants and subsidies of any kind. In their place, I would rather have fair prices achieved by sensible import control. But so long as we have grants, it is nonsense not to include tractors and combines——

Mr. John Pardoe (Cornwall, North)

The hon. Gentleman has enunciated an extraordinary new policy. Is he saying that, if import levies are introduced, he would do away with production grants entirely?

Mr. Body

That has never been proposed as part of Conservative policy. Surely the hon. Gentleman has attended enough agricultural debates to know that my right hon. Friend the Member for Grantham (Mr. Godber) has said again and again that production grants will be retained by the Conservative Party. What I am saying as a back bencher, without the blessing which my right hon. Friend might confer on me, is that I would rather have a sensible system of import control. Then we could do away with all subsidies, in whatever form. But that is a personal opinion.

Mr. Jerry Wiggin (Weston-super-Mare)

The new Clause, for all its obscurity—it is very complex—is clearly about capital. As I said in Committee, capital is the life blood of this or any other industry in our capitalist society, so this is one of the most important Clauses in the Bill. It is intended to improve efficiency and cut bureaucracy and, I assume, make life easier for farmers and civil servants. It is difficult to discuss this in detail, since we do not know the exact provisions of the Statutory Instrument, but I do not see how a general levelling-off in grants will improve efficiency. It will, I suppose, be easier if there is only one form to take out of the drawer, but it is bound to be a complex piece of paper, containing an enormous number of questions. It may turn out to be more complicated than some of the present forms.

As to the rate of repayment in this computerised age, since each repayment will be of a different size, I cannot see how one level will help. My hon. Friends have spoken of the virtues of the old investment allowances. As a practising farmer I have sorely missed them. I used to find it a profitable operation to change my tractors annually—an operation that not only benefited me, but my industrial neighbours in Coventry, Birmingham and in Dagenham and put on to the market good second-hand machines. What has happened? As soon as the Government brought in grants we had to stop this because it did not pay us. I have had to go on with increasingly elderly machinery because it does not pay to change.

The question of the bureaucratic nature of agriculture has bothered the industry since just before the war. The Minister will recall answering a Question on the subject, tabled by me, about civil servants and farmers. In 1951, there were 6.8 farmers to every civil servant. At that time the Ministry of Food was included in the figures. By the time the Conservatives left office in 1964 we had reduced that figure to 16.7, a substantial improvement in a number of civil servants in relation to the number of farmers. Under this Government it has dropped again, to 15.4 a decline of 8 per cent. in five years. Presumably we will go back to having six or seven farmers with one civil servant to look after them.

Too much emphasis is placed on the fraudulent aspect and the policing of these capital grants. Every grant is designed so that no one can get away with a penny, but if it costs £1 to safeguard that penny it seems an unwise philosophy. A selective checking, as is done in certain cases, could perhaps be expanded. The question of policing investment grants was much simpler. We rendered our annual accounts and agreed our allowance with the inspector of taxes. The right way to help capital investment in agriculture is through investment allowances administered through the Revenue Department. I know that there is a deficiency in that the initial cash payment is not made but the simplicity and streamlined efficiency would more than offset that disadvantage.

One other matter so far not raised is that of Statutory Instruments. I know that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) feels strongly about this. To produce a Clause on such an important matter resting solely on a Statutory Instrument which cannot be amended on the Floor of the House is a bad trend. While I am aware that previous Governments have been guilty of this, that does not mean that the proposal should not be criticized. The hon. Member for Norfolk, North (Mr. Hazell) quoted a N.F.U. circular on this Clause. It is worth quoting two lines from one I have received which says: Members should be under no illusions as to the extent of the industry's reaction to the abolition of capital grants on tractors and combines. It is both widespread and intense. I am sure that all of us in the industry are acutely aware of the feeling on this matter.

The importance of capital grants has been stressed by the Minister in the Price Review. He has given about a quarter of the Price Review in these grants and is aware of the importance to the industry of capital investment. What he has not told us is where we are to find the other two-thirds, or whatever. Like my Friend the Member for Torrington (Mr. Peter Mills), I will find at the end of the tax year that my costs will barely be recoverable in the increased production payments that I will receive under the Price Review.

Mr. Speaker

Order. I hope that the hon. Gentleman will resist the temptation to drift into talking about the form of the Price Review.

Mr. Wiggin

You will appreciate, Mr. Speaker, that there is a large element of capital grant in the Price Review and that this is a capital grant Clause. I was trying to relate my remarks to this fact. Many of my hon. Friends mentioned the difficulties of the small farmers, but I do not see why we should not have mentioned the interests of some of the larger farmers. There is a common misapprehension about the difference between a large farmer and a small farmer. This is often a question of the size of his business. I should be reluctant to join with one or two of my hon. Friends in necessarily making one rule for "A" and another for "X" according to his size. It is not always easy to decide what this limitation should be. "Man days" have been used and this is a pretty rough and ready method. This Clause is better out of the Bill and I hope that we will have a chance to vote against it.

7.30 p.m.

Mr. Maxwell-Hyslop

The context in which the Government are seeking to introduce a Clause which was rejected in Committee is a clear, rather than hypo- thetical, one. The starting point for that context must be the report called "The Task Ahead" issued in June 1968 by the Economic Development Council, which is a subsidiary of N.E.D.C. The House will recollect that it assessed a need for capital injection to meet the targets laid down at £230 million, plus an extra sum for physical inputs—fertilisers, seeds, sprays, etc.—into the industry, which would build up to an extra £110 million by the fifth year, 1972–73.

We are now two-fifths of the way along that path. It is only fair to say that the Government accepted a lower target than that recommended. If we pro-rate down the capital requirements of £230 million recommended by the E.D.C. to the figure of £160 million import substitution figure accepted by the Government, it means that the industry need £165 million additional capital and an additional £80 million to meet the further income costs, chargeable on income account, to reach the target accepted by the Government in their selective expansion programme. We must test this new Clause, which is exclusively to do with farm capital grants, to see whether it is adequate to meet those targets set by the Government.

Since the Price Review last Thursday the Economic Committee of N.E.D.C., dealing with agriculture, has again reported. A paragraph of critical importance in the report appears on page 11, reference 4.06. It is of material importance in judging whether or not the new Clause meets the requirement. It says: Nevertheless, the question of confidence—whether among farmers and growers there is sufficient confidence in the future prosperity of their industry to justify the scale of investment required—remains crucial. Since the E.D.C. first reported on this problem in June, 1968, there have been some useful developments towards achieving greater stability in in market prices. At the same time, the situation has deteriorated in two important respects. First, the rise in interest rates has been so steep that many worthwhile investment proposals must be held in abeyance. Secondly, the fall in net farm income in 1968–69 has reduced the ability of many farmers to provide for direct investment from cash flow. These are matters which justify the closest attention in the coming months. One could not have a clearer indication from this body, appointed by the Government, of what the present needs are.

Interest rates and cash flows are identified as having, in effect, sabotaged the Government's selective expansion programme. Therefore, to substitute for the cash grants the provisions of the new Clause can only serve to aggravate this position, identified publicly as recently as last Thursday by the E.D.C. of "Neddy".

Does the right hon. Gentleman accept or reject the analysis of that committee? This is highly material, because, although he could fairly claim that he did not know that this assessment would he made when he put his case in Standing Committee, he cannot claim that he was unaware of the position. I take it that the right hon. Gentleman has received this report. Although I indented for it at the Vote Office last Thursday, I had to telephone the Treasury to get a copy of it this morning, which means that it has been far from available to hon. Members.

This sets the critical context for judging the new Clause. The Minister should think again—in the light of this report, which is less than a week old—whether the capital needs of his Selective Expansion Programme can conceivably be met by reducing the cash flow available to the industry. This is the most important single point in this context.

I share the views that have been expressed recently on the subject of dealing with the whole matter by way of Statutory Instrument, remembering that that procedure does not allow for amendments to be made. The Minister will lay a large number of regulations, many of them drafted with atrocious incompetence because it is not the most competent draftsmen who are given the task of drafting Statutory Instruments which, as I say, cannot be amended.

The more skilful ones are given the task of drafting clauses such as this new Clause, which can be amended and which must, therefore, be defended in detail on the Floor of the House. The House will have no opportunity to amend these Statutory Instruments and it is therefore important——

Mr. Cledwyn Hughes

Does the hon. Gentleman realise that he has made a grave charge against parliamentary draftsmen, whose reputation is of the highest order; and I refer to those who draft Bills, Clauses, and Regulations?

Mr. Maxwell-Hyslop

I have not made any aspersion. The Minister may find that I have put forward a plausible proposition, which is that among any group of draftsmen there will be the more skilful and less skilful and the more experienced and less experienced. I do not criticise the Government for using the more experienced and skilful ones to draft matters which are more vulnerable on the Floor of the House. I was not being critical but merely observing a fact.

Mr. Cledwyn Hughes indicated dissent.

Mr. Maxwell-Hyslop

When the drafting of Statutory Instruments is subject to criticism in debate, Ministers, whichever party they represent—this is not peculiar to a Labour Government—say that they cannot be amended, and that it is up to the House to either accept or reject them. Crocodile tears are shed about the inability to amend them, and that is the end of the matter.

Mr. Cledwyn Hughes

Again, I must remind the hon. Gentleman—I am sure that his right hon. Friend the Member for Grantham (Mr. Godber) will confirm this—that the parliamentary draftsmen as a whole serve Government Departments. There is no selection of individual parliamentary draftsmen for this work. As a body, they are without rival in their work in the world and they provide the country with a good service.

Mr. Maxwell-Hyslop

Nobody is doubting that, but time and again in Standing Committee Ministers present what they call "drafting Amendments" because in the Bills which they present—presumably they read them before presenting them—there are drafting errors which must be corrected. I am not suggesting that these errors are intentional, but they happen. It is highly improbable that there should be multitudinous errors of drafting in legislation which is subject to amendment by the House, while Statutory Instruments should be innocent of this defect.

Mr. Joplin

An apt example of what my hon. Friend is saying is the 1967 Act, which will be under discussion when we come to new Clause No. 2. There were about 20 errors in that Measure—notably in Sections 26 and 27—which are having to be put right by this Bill.

Mr. Maxwell-Hyslop

I am grateful to my hon. Friend for that intervention, which serves to emphasise the point I am making.

It is a critical decision for this House to make, in every case, whether the disbursement of large sums of public money shall be under the control of the House. By giving Ministers vaporous powers which are not subject to the effective and detailed control of the House, we are allowing to pass out of our hands, and into the realm of good intention, the whole question of how large sums of public money shall be spent.

It is worse than that. It is not only the question of how prudently the money is spent, but whether or not it is spent in such a way that it interferes with the rights of other citizens. It has been pointed out that there is no planning control of capital building programmes for which payments could be made under the new Clause. Later I will endeavour to catch your eye, Mr. Speaker, to point out that this money could be spent in such a way that hideous inconvenience and lack of amenity could be caused to other citizens; for example, when extremely intensive production units are erected in what is, in effect, the middle of a town.

Mr. Pardoe

Is the hon. Gentleman saying that for all farm buildings one should have to apply for planning permission under the Town and Country Planning Acts?

Mr. Maxwell-Hyslop

No. I would not put it as broadly as that. Certain classes of building used in association with poultry and pigs, which are the real niggers in the woodpile, should be subject to the possibility of objection, where public money is being spent. If the Minister gets these powers, he should pay considerable attention to this, because it is a double injury for a taxpayer to have to pay for the erection of a building which makes the habitation of his own house unendurable. Since we shall have no opportunity to move Amendments to the Statutory Instruments under which this can be brought about, it is especially necessary to debate these implications now before the new Clause passes into law.

A further point, which superficially may not seem of great importance, is the rule that the lowest tender must be accepted. My hon. Friend the Member for Torrington (Mr. Peter Mills) spoke about work being carried out which was subsequently found not to be up to an acceptable standard. Although the rule that the lowest tender must be accepted appears to be protecting the public purse, it can militate against the public purse if it results in jerry-building. Discretion should be granted to the officer of the N.A.A.S. or of the Agricultural Land Service to exclude a tender from consideration if he is satisfied that the contractor concerned has not consistently produced work of an adequate standard. A certain amount of flexibility should be allowed so as not to defeat the purpose of the rule.

We do not know how the Minister will use the powers which he is seeking in new Clause 1, and this is why the debate has been so much longer than expected. This is the only opportunity that the House will have to make observations about the manner in which the Minister should or should not exercise powers granted under the Clause, which is a facet of the question whether or not we should give him the enabling powers. So much is left to assurances by the Minister in winding up, which the House can never subsequently enforce and the present Minister may not even be the Minister who has to implement those assurances. That is why so many of us have substantial reservations about the new Clause, and regard as prudent and wise the action of the Standing Committee in throwing it out.

7.45 p.m.

Mr. Pardoe

Like the National Farmers Union, I welcome the general provisions of the new Clause. The Minister's reasons were stated in Committee on 16th December in column 391. He explained that when he came to the Department he realised that these schemes were excessively complicated, as hon. Members who have had to consult farmers about the working of capital grants and other schemes know only too well. We welcome any attempt to simplify the administrative problems.

May I ask the Minister about his calculations of the expenditure of public money? It would be wrong for the industry to neglect the interests of the taxpayer. Agriculture is, inevitably, constantly under fire from the taxpayer and his representatives, and can go forward as a public service and as a private industry only if it retains the support and sympathy of the taxpayer.

Will the Minister say how the changes in the schemes mentioned in the new Clause will affect the productivity of labour, particularly as between small and large farms? Does he believe that the increase in output per man will be greater on small farms than on large farms? How will the schemes affect the output per acre, and the return per £? The small farmer finds access to capital more difficult than the large farmer.

It might be that productivity, labour output per acre and return on capital, from the point of view of national interest and the taxpayer, would be better if the money were concentrated in the hands of the large farmer. In arguing for the small farmer, if that were so, even then there might be a social price which some of us might wish to pay.

Fears have been expressed that the money will end up in the hands of the larger farmers. What estimate has the Minister made of the percentage of the total money referred to in the new Clause which will go to the smaller holdings, those, for example, of under 50 acres, and what percentage will go to the larger holdings? In 1963, 4 per cent. of all holdings obtained 25 per cent. of all deficiency payments. None of us would want that same pattern to emerge with capital grants.

The Minister said in Committee that the scheme would be useful to small farmers, and: A number of them for the first time will be able to obtain grant assistance in respect of investment in more intensive methods of production."—[OFFICIAL REPORT, Standing Committee B, 11th December, 1969; c. 346.] Will the Minister amplify this point? I am thinking particularly of some of the problems with the greater intensification of farms that arise in marketing the product. The scheme, for example, may give some of the money towards the intensification of milk production. I am constantly told by farmers in my constituency that N.A.A.S. advisers tell them exactly how to increase their output of milk by increasing the number of cows, and so on. But, unless we are prepared to ensure that farmers can take a higher proportion of the home market in manufactured milk, there is no point in increasing the output of either the small or the large farmer.

According to the Minister, grants could still be paid for tractors and combine harvesters, but he has no intention of paying them under the schemes mentioned in the new Clause. I entirely accept that tractor and combine harvester investment grants may not be the most productive investment. The Minister set out his reasons for believing this in Committee. He first suggested that there were better ways of using this money. His basic argument was as follows: we concluded that their contribution to the improvement of productivity in the industry was not commensurate with their cost. That may well be the case, but the House is entitled to further details as to how he came to that conclusion. The Minister then went on with a rather odd argument: It is paid in respect of machines which are necessary to the industry and which are, therefore, likely to be purchased in any event. If investment grants are not to be paid for anything that would have been purchased in any case, this knocks on the head all industrial incentive schemes of any kind because it would not be sensible to pay an investment grant for luxury goods and it would be likely to cause difficulty if the Minister's definition was too clearly defined.

Then the Minister went on to say: … the vast majority of farmers will be able to claim compensatory tax allowances".—[OFFICIAL REPORT, Standing Committee B, 11th December, 1969; c. 344.–5.] I thought that an odd argument coming from a Minister—a Minister who, I believe, supports in principle the idea of investment grants as opposed to investment tax allowances. I was somewhat worried by the argument. It could apply to the whole range of investment grants and particularly investment grants in development areas.

On the problem of tenant farmers, the N.F.U. circular sent out on 20th March expresses a concern about the tenant farmer because the tractor and combined harvester grants were the only part of the capital grant structure from which the tenant farmer could benefit. I should be grateful if the Minister could answer this point and say how he sees the tenant farmers getting anything at all out of this Clause.

As to enabling powers in general, I do not like them any more than many of the hon. Gentlemen who have spoken against them on this side of the House. However, they give flexibility, and it would be wrong to fix on to the industry at this moment in time specific ways of giving capital grants which we would require a massive Act of Parliament to change. Therefore, on the whole I am prepared to tolerate a degree of enabling powers introduced by this Clause in the interests of greater flexibility for the future of the industry.

I hope that the Minister will be able to clear up a point on subsection (4) of the Clause. If the money has been paid to a contractor and the work is then badly done, who will pay the money back? Presumably the farmer must pay it back; but does he also have to incur the legal costs of getting the money back from the contractor? I presume that this is so; but there could be additional cost which has to be borne by him. Will the farmer have to pay back the sum before the contractor pays the money back to him? In that case he may well have obtained a grant and paid the contractor for the work, or he may have paid insalments on the work and he may have paid the money and then found the work to be unsatisfactory.

To put the boot on the other foot, it is not always the farmer who may be in difficulty in these matters, but a number of small contractors who supply goods might also be in difficulties where a grant has not been paid and the Ministry says that the work is bad. There will inevitably be a period of argument between the Ministry and the farmer about whether the grant will be paid.

I had a recent case involving a drainage matter, in which the farmer subsequently said that the work was not satisfactory, and there was long delay in paying the grant. The contractor wanted the Ministry representatives to produce evidence that they had approved the scheme. The Ministry was not prepared to come forward and produce that evidence.

Mr. Peter Mills

I am sure that the hon. Gentleman would agree that it is even worse when everything has been settled up, when the grant has been paid, the contractor has been paid, and then, after two or three months, the work is found to be bad and one has no comeback at all.

Mr. Pardoe

One has the normal come-back in the courts. One has protection in that way. I do not entirely accept the suggestion that somehow the Ministry inspectors should be god-like in these matters. Inevitably they will make mistakes in the quality of work, and there will be disasters as a result.

I particularly welcome the appeal procedure. Subsection (4) says that a person who has his grant revoked or has to pay it back will be given an opportunity to appear before a person appointed for the purpose by the appropriate Minister. Could the Minister say whether in such a case the individual will be able to be represented? Some small farmers, and, indeed, people in all walks of life, are not good at putting across their points I am particularly wondering whether M.P.s will be able to appear before that person to present the case and whether such an appellant could have a legal representative.

I have already welcomed the Clause. In closing, I would merely ask the Minister to tell the House what will happen if the Clause is not passed by the House tonight. Will any grant be payable at all?

8.0 p.m.

Mr. Cledwyn Hughes

With permission, I should like to reply to the debate. We have had a long discussion on the new Clause. This is as it should be since we are dealing with one of the most important and central issues of the Bill.

Listening to some hon. Members, one would think that this was an infamous Clause. In fact, as we were reminded by the hon. Member for Cornwall, North (Mr. Pardoe), the broad concept of the Clause has been generally welcomed, including, as the hon. Gentleman said, a welcome by the N.F.U. itself. It is against that background that we should look at some of the criticisms which have been made and some of the detailed points.

There have been a large number of points. In fact, I do not remember taking part in a debate on Report when so many issues have been raised and so many questions included in every speech. However, I will do my best.

I start with the right hon. Member for Grantham (Mr. Godber), who raised a number of points. I feel that his criticism of me was rather unfair when he said that I had said nothing about the proposals. We were reminded, again by the hon. Member for Cornwall, North—who was not in the Committee but who must have some Welsh blood in him somewhere since he has been so helpful this evening—that on 16th December, in Standing Committee upstairs, I went into this matter in the greatest detail.

I took a great deal of time in the Committee in making my speech. Clearly, in spite of the persuasive nature of my speech and the clarity with which I presented my argument and the detail into which I went, it is unfortunately true that I was unable to persuade all the members of the Opposition. There was then what has been called a snap decision. I do not make any charge. The hon. Member for Torrington (Mr. Peter Mills) must not be too sensitive. I make no charge of trickery against him, but I would agree with him when he said that everything worked according to plan.

We have heard a great deal about the tractor situation. We gave this matter an enormous amount of thought before we came to our conclusion. What we are saying is that we want the money to go where we think it would be used in the best interests of an efficient industry. The tractor grant has had a good run, and there is hardly a farm in the country which has not a tractor. Nevertheless, I have retained the powers here, and we must look at them again as we go on. In the unlikely event of the right hon. Gentleman succeeding me, the powers would be there if he wanted to look at them again. I take it that the force with which he has presented his arguments is a promise to do this if, unhappily for the country, the party opposite attains office in the next 12 months or so.

The right hon. Gentleman then asked about assistance for the livestock producer. Again, we have had a good deal of discussion about the brought-in feed rule. I will not go into it in detail, but it has been in operation for some years under existing schemes. It was a desirable test in a scheme based on the land, and in the conditions in which it was first applied it was the proper thing to do. Equally, it has become apparent over the last two or three years that it is less fitted to the modern concept of the farm business. We have come to recognise that there is no merit in an objective of self-sufficiency for individual farms as an end in itself.

The present brought-in feed rule discriminates against livestock producers, and livestock and livestock products represent over two-thirds of our farm ales. In addition, the production of livestock is important to our forward programme. Such a rule hits hardest at those producers who can grow little or none of the feed which they require for their stock. But such producers now have a significant share of the production of some products, and many of them have shown that they can make an efficient use of resources and could make a major contribution to the expansion of production of the livestock, particularly pigs, that we need.

I recognise the need for a safety net against the possibility that a few very large producers might make excessive and disproportionate demands on the grant funds. We shall continue to apply under a Farm Capital Grant Scheme the ceiling on grant going to any single farming unit which was introduced concurrently with the recent increase in the rate of the agricultural investment grant on buildings and fixed equipment.

I take the point that the hon. Member for Tiverton (Mr. Maxwell-Hyslop) made when he intervened in the speech of the hon. Member for Torrington. It is a valid and important point which I shall certainly bear in mind. If I am advised that it is necessary to take any additional powers to ensure that no one evades the scheme or bursts through the ceiling by manipulating it in some undesirable way, obviously we shall have to do something about it.

Then the right hon. Member for Grantham asked about the increase of the 10 percentage points in relation to the new unified scheme. This increase applies to the main existing grants imme- diately. It will also apply to the new unified grant scheme which will replace existing grants, so that the basic rate will be 40 per cent. until 18th March 1972, and the higher rate for drainage and so on will be increased as I have indicated.

Then the right hon. Gentleman dealt with the grants for the establishment of an agricultural business. The Clause merely allows us, firstly, to provide for grants on remodelling works as a consequence of approved amalgamations, and, secondly, to assist the investment by landlords between tenancies.

The right hon. Gentleman also dealt with the replacement of funds going to tractor and harvester grants. We have had a long argument about this, and I do not think that it is necessary to deploy all the arguments which we took into account. We had to make a judgment on it. Hon. Gentlemen opposite think that our judgment was wrong. We still adhere to it. We think that it is right and that in the long term, the industry will benefit more from the new method of distributing the available money.

The right hon. Member for Orkney and Shetland (Mr. Grimond) asked for details of the scheme, and he has indicated to me that, because of another appointment, he is unable to be here for my reply. I covered this in my speech, but perhaps I might say that, with the 10 per cent. increase, rates under the Farm Capital Grant Scheme will be for buildings, equipment and machinery 40 per cent.; for water supply 40 per cent.; for field drainage 60 per cent.; for hill land improvement 60 per cent.; for remodelling works for amalgamations 60 per cent.; and for drainage in hills 70 per cent. I think that the right hon. Member for Grantham asked the same question, and I am glad to be able to give that information.

A point was made by the hon. Member for Westmorland (Mr. Jopling) on administrative savings. He was rather critical. However, as he almost invariably does, he made my point for me by referring to the complexity of the present paper work. Certainly we will do our best to make the new form as simple as possible. I am sorry that I am not able to circulate it to hon. Members this evening, but I have not yet had the authority of the House to produce it. I have to be careful of the hon. Member for Tiverton in these matters. In due course and as soon as possible we shall produce a unified capital grants form as short, as precise and as clear as possible. One of the objects of this exercise is to simplify the capital grants.

Then there was the other question raised by the hon. Member for Westmorland about the reason for the increase in the rate of capital grants. The increase is intended to give farmers further help and encouragement in carrying out the investment needed for expansion and increased productivity. The hon. Gentleman produced some calculations of his own about the rate of investment. His figures contain some serious omissions, and I will give the facts. I cast no aspersions upon his intention, but I am afraid that his calculations are open to question.

The total investment covered by the main capital grants is now running at about £90 million a year. With these new incentives, the level will increase. It is true that there has been some decline, not in the level of expenditure but in the number of applications for approval, for some but not all of the capital grants. But with the increased rates of grant, the reduction in interest rates and the increased incomes that farmers will be able to earn at the new levels of guaranteed prices, I am confident that the number of applications will rise substantially.

Again, this is a matter of judgment. We shall have to wait and see. This is what I am advised and believe. It is what my regional controllers, who are in touch with the various regions, have advised me.

Mr. Jopling

The right hon. Gentleman will recall that my figures were those of the farm improvement scheme. I suggested that last year's expenditure in the White Paper of £14.9 million at 30 per cent. grant represented £50 million worth of work, whereas the estimate for next year is £15½ million of expenditure at 40 per cent. grant, and that implies £39 million worth of work. In other words, according to the right hon. Gentleman's figures, there is likely to be a drop in capital expenditure qualifying for the farm improvement scheme.

Mr. Hughes

There is a serious misunderstanding here. Perhaps the hon. Gentleman would care to discuss it with me. Alternatively, I could deal with it in a letter to him. It is largely a Committee point but it is a point made indirectly by the right hon. Member for Grantham when he criticises the increase of 10 per cent. in the capital grants as an instrument in the award.

I was asked what the award would be in conventional terms in one year. It is difficult to quantify. I do not want to go into it, because I shall rapidly get out of order. My advice is that the take-up over two years of capital grants with the 10 per cent. increase will amount to at least £20 million. I do not want to try to quantify it in terms of one year. It would be unfair to do so, and I should be guilty of the sin with which the right hon. Gentleman does not charge me but of which he says that other people think I am guilty. Therefore, I want to avoid that.

Mr. Godber

I am grateful to the Minister for his explanation. We therefore deduct £21 million from the figure to give the approximate figure which he sought to give. The right hon. Gentleman is an experienced parliamentarian. He knows that if he puts a figure like this into a statement it is bound to attract the attention of the Press. Therefore, he will realise why it has figured so prominently in Press comments.

Mr. Hughes

I would not accept that I mention figures with the object of attracting Press comment, as do some right hon. and hon. Gentlemen opposite from time to time. I qualified my words to make clear that we were talking about a total allocation of resources. As the right hon. Gentleman clearly said, I referred more than once to the two-year period. I hope that I have clarified the matter beyond peradventure in what I have now said.

I turn now to the point about work being badly done, which was raised by my hon. Friend the Member for West Stirlingshire (Mr. W. Baxter), who has left us, and raised again by the hon. Member for Torrington. I believe that it was also raised by another hon. Gentleman. We are proposing to reduce the extent to which a technical soundness test is applied compared with existing schemes. But the taxpayer must be protected against grant-aiding grossly bad work. We are relaxing the provisions, so far as we can to help the farmer, but we must apply some test. Otherwise, we should be neglecting our duty and would be rapidly called before the Public Accounts Committee of this honourable House.

The hon. Member for Canterbury (Mr. Crouch) talked about amenity. This is a matter of concern to all. We already take amenity aspects into account when considering grant applications for approval. This is one of the points on which we advise farmers. Indeed, it is part of my duty to ensure that this is done.

The hon. Member for Tiverton raised a point about planning control. I remind the House that this is primarily a matter for the Minister of Housing and Local Government. He and I have been talking about this problem. There is a good deal of room for discussion on how far agricultural buildings need to be subject to planning control. It is an untidy sector of planning, and it needs careful consideration. We have been discussing this matter and we have had discussions with some of the interested organisations. I give hon. Gentlemen opposite the assurance that as our discussions proceed we shall bear in mind what they have said.

The cry of the hon. Member for Cornwall, North was: where will the money go? We estimate that we shall receive about 80,000 applications a year under the new scheme. As there are about 200,000 full-time farmers, it is clear that a substantial proportion of them will benefit from the new grant each year. Indeed, many provisions of the new scheme, such as the ending of the brought-in feed rule, which has prevented many small farmers from obtaining grants towards the cost of buildings for extra livestock, will be of particular help.

The new Clause has been criticised for a variety of reasons, but it has not been criticised in principle. I think that all hon. Members want to lessen the paper work that farmers have to do and want to make the capital grant schemes simpler.

If I may take the House into my confidence, I was concerned, when I began thinking about this possibility, to ensure that if we were able to produce a scheme of this kind it should not diminish the amount available to farmers from capital grants. Therefore, I assure the House that this will not be the case.

There has been criticism about tractors. I recognise the force and sincerity with which this criticism has been put by hon. Gentlemen opposite. But it is a matter of judgment, so we must agree to disagree on this matter. However, the power is in the Bill if it is necessary to use it.

8.15 p.m.

The Clause will enable us to take a substantial step forward in the administration of agricultural grants. It will give farmers and landowners greater freedom of choice to carry out the investments which they believe will be best for their businesses or estates. In this way it will contribute to the modernisation of the industry, to which we are all dedicated. It will also make possible a streamlining of the legislative procedures, as we shall be able to have a single Statutory Instrument covering what have been 11 separate grant schemes. I am sure that the hon. Member for Tiverton will be glad of that information, and will no doubt sleep easier tonight.

This measure of streamlining, simplification and modernisation has received a general welcome from a wide spectrum of opinion, ranging from the farmers unions to the Economist. Who could hope for a wider spectrum than that?

It is true that the unions expressed some reservations, but in the opening words of their memorandum to Members of Parliament on Part II they gave the provisions a clear welcome, because they said—at the end of my speech I hope I am entitled to quote this— The Union welcomes Part II to the extent to which it foreshadows a simplification of the now complex structure of capital grants and saves the time of both farmers and officials in handling schemes.

One would think from many of the comments of the Opposition that we were proposing a retrograde step. On the contrary, it is a forward-looking Measure which has been generally recognised and welcomed as such. I am confident that the future will support this view. If and when in years to come the Opposition take office, I do not believe that they will change one jot or tittle of it.

Question put, That the Clause be read a Second time:—

The House divided: Ayes 206, Noes 152.

Division No. 88.] AYES [8.17 p.m.
Albu, Austen Concannon, J. D. Gardner, Tony
Allaun, Frank (Salford, E.) Conlan, Bernard Garrett, W. E.
Allen, Scholefield Crosland, Rt. Hn. Anthony Ginsburg, David
Anderson, Donald Dalyell, Tam Golding, John
Archer, Peter (R'wley Regis & Tipt'n) Davidson, James (Aberdeenshire, W.) Gordon Walker, Rt. Hn. P. C.
Ashton, Joe (Bassetlaw) Davies, E. Hudson (Conway) Gray, Dr. Hugh (Yarmouth)
Atkinson, Norman (Tottenham) Davies, G. Elfed (Rhondda, E.) Gregory, Arnold
Bagier, Gordon A. T. Davies, Dr. Ernest (Stretford) Grey, Charles (Durham)
Barnes, Michael Davies, Rt. Hn. Harold (Leek) Griffiths, Eddie (Brightside)
Baxter, William de Freitas, Rt. Hn. Sir Geoffrey Griffiths, Will (Exchange)
Bence, Cyril Dempsey, James Hamilton, William (Fife, W.)
Bennett, James (G'gow, Bridgeton) Dewar, Donald Hamling, William
Bessell, Peter Diamond, Rt. Hn. John Hannan, William
Bidwell, Sydney Dickens, James Harrison, Walter (Wakefield)
Bishop, E. S. Dobson, Ray Haseldine, Norman
Blackburn, F. Doig, Peter Hattersley, Roy
Blenkinsop, Arthur Dunn, James A. Hazell, Bert
Boardman, H. (Leigh) Dunnett, Jack Heffer, Eric S.
Booth, Albert Dunwoody, Dr. John (F'th & C'b'e) Henig, Stanley
Boston, Terence Eadie, Alex Hilton, W. S.
Bray, Dr. Jeremy Edwards, Robert (Bilston) Hobden, Dennis
Brooks, Edwin Edwards, William (Merioneth) Hooley, Frank
Brown, Rt. Hn. George (Belper) Ellis, John Hopson, Emlyn
Brown, Hugh D. (G'gow, Provan) English, Michael Horner, John
Brown, R. W. (Shoreditch & F'bury) Ennals, David Howarth, Robert (Bolton, E.)
Buchan, Norman Evans, Fred (Caerphilly) Howie, W.
Buchanan, Richard (G'gow, Sp'burn) Evans, loan L. (Birm'h'm, Yardley) Hoy, Rt. Hn. James
Butler, Herbert (Hackney, C.) Faulds, Andrew Huckfield, Leslie
Butler, Mrs. Joyce (Wood Green) Fernyhough, E. Hughes, Rt. Hn. Cledwyn (Anglesey)
Carmichael, Neil Finch, Harold Hughes, Roy (Newport)
Carter-Jones, Lewis Fitch, Alan (Wigan) Hunter, Adam
Castle, Rt. Hn. Barbara Fletcher, Ted (Darlington) Hynd, John
Coe, Denis Foot, Rt. Hn. Sir Dingle (Ipswich) Jackson, Colin (B'h'se & Spenb'gh)
Coleman, Donald Fraser, John (Norwood) Jones, Dan (Burnley)
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.) Milne, Edward (Blyth) Rose, Paul
Jones, J. Idwal (Wrexham) Mitchell, R. C. (S'th'pton, Test) Ross, Rt. Hn. William
Jones, T. Alec (Rhondda, West) Molloy, William Rowlands, E.
Judd, Frank Morgan, Elysian (Cardiganshire) Ryan, John
Kerr, Dr. David (W'worth, Central) Morris, Alfred (Wythenshawe) Shaw, Arnold (Ilford, S.)
Lawson, George Morris, Charles R. (Openshaw) Shore, Rt. Hn. Peter (Stepney)
Leadbitter, Ted Mulley, Rt. Hn. Frederick Short, Mrs. Renee(W'hampton, N.E.)
Lee, Rt. Hn. Frederick (Newton) Murray, Albert Silkin, Rt. Hn. John (Deptford)
Lee, John (Reading) Neal, Harold Slater, Joseph
Lestor, Miss Joan Newens, Stan Small, William
Lewis, Ron (Carlisle) Noel-Baker, Rt. Hn. Philip Snow, Julian
Lomas, Kenneth Norwood, Christopher Spriggs, Leslie
Loughlin, Charles Oakes, Gordon Steel, David (Roxburgh)
Lubbock, Eric O'Halloran, Michael Steele, Thomas (Dunbartonshire, W.)
Lyon, Alexander W. (York) Oram, Bert Taverne, Dick
Lyons, Edward (Bradford, E.) Oswald, Thomas Thomas, Rt. Hn. George
Mabon, Dr. J. Dickson Owen, Dr. David (Plymouth, S'tn) Thomson, Rt. Hn. George
McBride, Neil Page, Derek (King's Lynn) Tinn, James
McCann, John Palmer, Arthur Varley, Eric G.
Macdonald, A. H. Pannell, Rt. Hn. Charles Walker, Harold (Doncaster)
McElhone, Frank Pardoe, John Wallace, George
McGuire, Michael Parker, John (Dagenham) Watkins, David (Consett)
Mackenzie, Alasdair (Ross & Crom'ty) Parkyn, Brian (Bedford) Wellbeloved, James
>Mackie, John Pearson, Arthur (Pontypridd) White, Mrs. Eirene
Mackintosh, John P. Pentland, Norman Whitlock, William
Maclennan, Robert Perry, Ernest G. (Battersea, S.) Willey, Rt. Hn. Frederick
McNamara, J. Kevin Perry, George H. (Nottingham, S.) Williams, Alan (Swansea, W.)
MacPherson, Malcolm Prentice, Rt. Hn. Reg. Williams, Alan Lee (Hornchurch)
Mallalieu, J.P.W.(Huddersfield, E.) Price, Thomas (Westhoughton) Willis, Rt. Hn. George
Mapp, Charles Probert, Arthur Wilson, William (Coventry, S.)
Marquand, David Rankin, John Winnick, David
Maxwell, Robert Rees, Merlyn Woodburn, Rt. Hn. A.
Mendelson, John Roberts, Rt. Hn. Goronwy
Mikardo, Ian Roberts, Gwilym (Bedfordshire, S.) TELLERS FOR THE AYES:
Millan, Bruce Robertson, John (Paisley) Mr. Ernesn Armstrong and
Miller, Dr. M. S. Roebuck, Roy Mr. James Hamilton.
NOES
Alison, Michael (Barkston Ash) Errington, Sir Eric Knight, Mrs. Jill
Allason, James (Hemel Hempstead) Ewing, Mrs. Winifred Langford-Holt, Sir John
Archer, Jeffrey (Louth) Eyre, Reginald MacArthur, Ian
Awdry, Daniel Farr, John Maclean, Sir Fitzroy
Baker, W. H. K. (Banff) Fletcher-Cooke, Charles McMaster, Stanley
Balniel, Lord Fortescue, Tim McNair-Wilson, Michael
Beamish, Col. Sir Tufton Foster, Sir John Marten, Neil
Bell, Ronald Fry, Peter Maude, Angus
Bennett, Dr. Reginald (Gos. & Fhm) Gilmour, Sir John (Fife, E.) Maxwell-Hyslop, R. J.
Berry, Hn. Anthony Glover, Sir Douglas Maydon, Lt.-Cmdr. S. L. C.
Bitten, John Glyn, Sir Richard Mills, Peter (Torrington)
Biggs-Davison, John Godber, Rt. Hn. J. B. Mills, Stratton (Belfast, N.)
Boardman, Tom (Leicester, S.W.) Goodhart, Philip Miscampbell, Norman
Body, Richard Goodhew, Victor Monro, Hector
Bossom, Sir Clive Gower, Raymond Montgomery, Fergus
Boyd-Carpenter, Rt. Hn. John Grant, Anthony More, Jasper
Brewis, John Grant-Ferris, Sir Robert Morgan, Geraint (Denbigh)
Brinton, Sir Tatton Grieve, Percy Morrison, Charles (Devizes)
Bromley-Davenport, Lt.-Col. Sir Walter Griffiths, Eldon (Bury St. Edmunds) Mott-Radclyffe, Sir Charles
Brown, Sir Edward (Bath) Hall-Davis, A. G. F. Nabarro, Sir Gerald
Bruce-Gardyne, J. Hamilton, Michael (Salisbury) Nicholls, Sir Harmar
Buchanan-Smith, Alick (Angus, N&M) Harvie Anderson, Miss Noble, Rt. Hn. Michael
Buck, Antony (Colchester) Hawkins, Paul Osborn, John (Hallam)
Bullus, Sir Eric Heald, Rt. Hn. Sir Lionel Peel, John
Burden, F. A. Heseltine, Michael
Campbell, Gordon (Moray & Nairn) Higgins, Terence L. Pym, Francis
Carlisle, Mark Hiley, Joseph Renton, Rt. Hn. Sir David
Chataway, Christopher Hill, J. E. B. Ridsdale, Julian
Chichester-Clark, R. Holland, Philip Rossi, Hugh (Hornsey)
Clark, Henry Hordern, Peter Royle, Anthony
Corfield, F. V. Hornby, Richard Russell, Sir Ronald
Costain, A. P. Howell, David (Guildford) St. John-Stevan, Norman
Craddock, Sir Beresford (Spelthorne) Hunt, John Scott-Hopkins, James
Crouch, David Hutchison, Michael Claris Sharples, Richard
Crowder, F. P. Iremonger, T. L. Sinclair, Sir George
Dalkeith, Earl of Jenkin, Patrick (Woodford) Smith, Dudley (W'wick & L'mington)
Dance, James Johnson Smith, G. (E. Grinstead) Smith, John (London & W'minster)
Dean, Paul Jones, Arthur (Northants, S.) Speed, Keith
Dodds-Parker, Douglas Jopling, Michael Stainton, Keith
Douglas-Home, Rt. Hn. Sir Alec Kimball, Marcus Stodart, Anthony
du Cann, Rt. Hn. Edward King, Evelyn (Dorset, S.) Stoddart-Scott, Col. Sir M.
Eden, Sir John King, Tom Summers, Sir Spencer
Elliot, Capt. Walter (Carshalton) Kirk, Peter Tapsell, Peter
Emery, Peter Kitson, Timothy Taylor, Frank (Moss Side)
Temple, John M. Ward, Christopher (Swindon) Worsley, Marcus
Thatcher, Mrs. Margaret Ward, Dame Irene Wright, Esmond
Tilney, John Welis, John (Maidstone) Wylie, N. R.
Turton, Rt. Hn. R. H. Whitelaw, Rt. Hn. William Younger, Hn. George
Vaughan-Morgan, Rt. Hn. Sir John Wiggin, Jerry
Vickers, Dame Joan Wilson, Geoffrey (Truro) TELLERS FOR THE NOES:
Waddington, David Wolrige-Gordon, Patrick Mr. R. W. Elliott and
Walker-Smith, Rt. Hn. Sir Derek Woodnutt, Mark Mr. Walter Clegg.
Walters, Dennis

Clause read a Second time, and added to the Bill.

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