(1) In such cases, and subject to such conditions, as may from time to time be determined by the Minister or Ministers concerned with the making in any part of the United Kingdom of any description of grants to which this section applies, the cost of any works, or the amount of any other cost or expenditure, shall, if the applicant for grant so elects, be taken for the purpose of determining the amount of the grant as such standard cost or amount as the Minister or Ministers in question may from time to time fix with the approval of the Treasury.
(2) The grants to which this section applies are as follows—
- (a) grants under section 16 of the Agriculture Act 1937 or section 15 of the Agriculture (Miscellaneous War Provisions) Act 1940 (drainage and water supply);
- (b) improvement grants under the Hill Farming and Livestock Rearing Acts 1946 to 1956;
- (c) grants under section 1 of the Horticulture Act 1960 (horticultural improvements) or section 3 of the Agriculture and Horticulture Act 1964 (orchard clearing); and
- (d) grants under section 30 (farm improvements), section 41 (hill land improvements) or section 61 (co-operative activities) of the Agriculture Act 1967.—[Mr. Mackie.]
§ Brought up, and read the First time.
§ 9.15 p.m.
§ Mr. MackieI beg to move, That the Clause be read a Second Time.
This new Clause will enable Ministers to fix standard costs from time to time for various works in certain capital grant schemes. A farmer can choose between having his grant based on the actual cost of the work or on prescribed standard costs for specified types of work. One of the advantages of standard costs to the 1326 farmer is that he does not need to obtain estimates or tenders or provide receipted accounts in support of his claim. Standard costs will also help the farmer who does the work himself, since on an actual cost basis he could not obtain grant on the cost of his own labour. To qualify for grants on standard costs the improvement must comply with all the detailed specifications set out for that type of work in the Standard Costs Regulations. There have been hard cases that I have had to deal with where we have had to reject claims made on a standard cost basis because of some minor deviation from the detailed specifications.
Hon. Members will understand that these specifications are at present described in a long and complicated Statutory Instrument giving the whole list of works that can be done on a standard cost basis. Grant has had to be refused when work deviated, sometimes only slightly, from the specifications, even though the improvement was perfectly satisfactory and eligible in all other respects. My hon. Friend the Member for West Stirlingshire (Mr. W. Baxter) wanted some flexibility. I am sorry that he is not here because I warned him that I would be moving this new Clause.
It is clear that we need more flexibility to accept claims which may deviate slightly from specifications, but where such deviations are not in practice significant. The new Clause which provides for the new unified grants will enable us to adopt this more flexible approach by making it possible for the standard costs specifications for the grant to be fixed administratively instead of by Statutory Instrument; that is to say we will give our officers a list of things instead of the present system. We also need to be able to adopt this more flexible approach for outstanding applications under existing schemes and applications under such schemes as the Horticulture Improvement Scheme, which will continue alongside the new unified scheme for farm capital grants.
This new Clause permits us to fix standard costs administratively for all the schemes within subsection (2) of the Clause so that we can lay down the standard costs specifications for them as well as for the new unified scheme. The specifications will no longer be prescribed by Statutory Instrument but will be pub- 1327 lished in a leaflet. Apart from the fundamental advantage of giving this greater flexibility in the treatment of grant claims this policy has the incidental advantage of enabling us to make changes in the specifications rather more promptly to meet fresh developments which arise, such as technical advances, or the need for metrication. The schemes covered by the new Clause are the grants for drainage and water supplies, for the improvement of livestock rearing land. for the Horticulture Improvement Scheme, grants for orchard clearance—and I do not know why the right hon. Member for Orkney and Shetland (Mr. Grimond) was interested in non-clearance of orchards—grants for the Farm Improvement Scheme, the Hill Land Improvement Scheme and co-operation grants.
§ Mr. JoplingI welcome flexibility in such matters. I have heard of cases where improvements have altered slightly from the original plans and there has been considerable difficulty in obtaining a grant. What puzzles me is why it has been necessary to introduce this new Clause I am not clear what has necessitated its introduction.
For many years we have had standard costs as an alternative to specific prices for the work to be done. How often in the past have the standard costs had to be altered, presumably upwards? With the rate at which costs have been rising in recent years the standard costs would need to be altered very often. The introduction of S.E.T. has escalated standard costs. I should be surprised if the figures did not show that in the last six years costs have gone shooting up.
During the six years in which the Government have been in office farmers' costs have risen by £41 million a year, whereas during the previous six years of Conservative Government farmers' costs were rising by only £17 million a year. This will be reflected in the standard costs which have been applied. In the last six years costs have been rising at two and a half times the rate at which they were rising during the previous six years, and this is a scandalous situation. Will the Minister tell us how often the standard costs have been changed, and to what extent they have risen during this Government's period of office?
§ Mr. Scott-HopkinsMy hon. Friend the Member for Westmorland (Mr. Jopling) has put his finger on the reason for the introduction of the new Clause. I entirely agree with the Parliamentary Secretary that one of the difficulties with standard costs has been that any slight deviation has meant that a grant has been refused. If the Minister continued to administer the existing scheme, he would have to bring in new regulations because of rising costs, and this is why the Minister has brought forward the new Clause.
I question whether this is the right way of doing it. I fully realise the difficulties that arise when costs get out of line with the standards laid down by regulation. According to lines 7 and 8 of the new Clause, the determination by the Minister can be made only with the approval of the Treasury. Presumably, the Treasury will lay down strict guide lines. Although the Minister will have complete carte blanche to dispose of a large amount of public money, he will not have to tell Parliament how this will be done.
The Minister mentioned metrication, and what I have to say applies equally to decimalisation. The new Clause means that there will be no need for the Minister to come to the House to show how the grants and standard costs have been arranged by the Minister and approved by the Treasury when metrication and decimalisation take place. The Minister should have to explain to the House exactly how the standard costs will be adjusted when the new systems are adopted. Instead of this method whereby the determination is made solely by the Minister, it would have been easier and better if there had been laid down in regulations a bracket within which the standard cost grant could be operated. This would give complete freedom to Ministers, although I accept that it would be fettered by the Treasury having to be called in.
Will the Treasury have to give approval to every particular matter? Can the Minister change the determination of the level of standard costs at any particular moment with the approval of the Treasury from day to day, from week to week, or from month to month? What exact form will this take in future?
A good many farming constituents will be bewildered later on by the cost the 1329 Minister is to adopt. He will need to take great care and will need to give advance publicity to the new standard cost throughout the country, otherwise many people will not know what the levels are. Once again they will find that because they are outside the standard costs laid down by the Ministry, they will be refused grant on that basis and will need to get estimates and go through all the other rigmarole that is involved.
Therefore, I do not feel that this is a satisfactory way to deal with the problem, although I accept that the existing system is not as satisfactory as it should be.
§ Mr. MackieThe hon. Member for Westmorland (Mr. Jopling) asked how often alterations in standard costs have taken place. They have been altered twice since 1967. The hon. Gentleman also asked why this change was necessary. At present there are four different grants, which I will not detail, going back to previous Acts. We have then the new amalgamated grants, and we wish to alter the situation so that they can all be dealt with together. As the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) said, we need to give a good reason why we should do this.
The hon. Member for Westmorland used his short speech to mention costs, and I do not want to get out of order. The hon. Gentleman knows that general costs in agriculture have gone up as a result of wage increases. I do not think he would suggest otherwise, in view of the fact that hon. Members opposite have suggested that the agricultural industry should pay better wages. They cannot have it both ways.
The hon. Member for Derbyshire, West said that the main reason for the new Clause is not to enable us to change the standard costs specification more frequently, since we do not want to do that, but to enable us to adopt a more flexible approach to administration so that slight deviations in a farmers' schemes will not differ in the matter of grant. This is why this is being taken out of the area of the Statutory Instrument and being put out in a leaflet. The hon. Gentleman made the point that we must have the approval of the Treasury for almost everything done in Parliament in voting money.
§ Mr. Scott-HopkinsWith the greatest respect to the hon. Gentleman, I do not understand how this changes matters. If he is going to put these matters in a leaflet, he will need to lay down the standard of grant. How does this make it more flexible, unless, by laying it down in a leaflet, the hon. Gentleman will argue that it need not be exactly as laid down. This will provide for an extraordinary amount of flexibility of which I do not approve.
§ Mr. MackieHon. Members cannot have it all ways. If we are to simplify the matter and make the thing easier to operate administratively, then if it is put in a Statutory Instrument officers in the field will need to have with them that Instrument and to follow every detail of it. I see that some hon. Members have the document with them and they will see that it is six or seven pages long. If farmers do not follow it closely, any deviation will mean that they will not get the grant. If it is just put out in a leaflet, not in the form of a Statutory Instrument, then officers in the field can be more flexible in dealing with any deviation. That is the point I am making.
Any change in the standard costs is totally different. That is the reason why we are doing it. It is not so that we can change the standard costs when we wish, although it will be easier when metrification comes in.
§ Mr. StodartI am not clear what the hon. Gentleman means when he says that this will look after deviations and make matters easier. My impression of standard costs has always been that they are pitched a good deal lower than the actual cost of the work. I presume that this is always deliberate policy so that, if a farmer wants to get on without the trouble of getting two or three competitive tenders, he can do the work on the basis of standard costs. If the object of the Clause is to make the changing of the rates of standard costs easier to do, then it is a sensible one, because there is no doubt that the need for a change in the rates is much greater than was the case 10 years ago when costs were not rising at the speed at which they are today. However, the hon. Gentleman must explain what he means by making deviations easier or more flexible.
§ Mr. MackieI am sorry if I have not made it clear. At present, the standard costs are laid down in detail in a Statutory Instrument. I am not saying whether they are too low or too high. If a farmer elects to go for improvements on the basis of standard costs, he has to carry them out in detail and, because it is a Statutory Instrument, our officers have to follow it. As a result, if a farmer deviates, he may lose grant. If it is put into the administrative machine in the form of a leaflet, our officers can be more flexible in the event of a deviation.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.