HC Deb 29 June 1976 vol 914 cc348-55

10.49 p.m.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang)

I beg to move, That the Horticulture Capital Grant (Variation) Scheme 1976 (S.I., 1976, No. 762), a copy of which was laid before this House on 26th May, he approved. Hon. Members will know that the Horticulture Capital Grant Scheme is an important aspect of the Government's policy of encouraging the horticulture industry to improve productivity by increasing its efficiency. The industry also benefits from the advice and research efforts of the advisory services of the agricultural Departments, which have the same objectives as the capital grant scheme.

The variation scheme will change the principal scheme in three main ways and in several relatively minor ones. These three main changes are contained in the schedule.

The first of these is the proposal that the provision, replacement or improvement of the stakes and wirework used by fruit growers to support their crops should be eligible for a grant of 15 per cent. Raspberries are the most important crop in this group, although growers of loganberries and blackberries would also benefit from the new arrangements. Some 80 per cent. of the raspberry crop is grown in Scotland.

The second main change is the extension of the existing arrangements for water supply to the provision of water supply to open fields. This is a logical extension, since irrigation equipment at the point of delivery is already eligible for a grant of 15 per cent. It is proposed that fixed—permanent—pipelines would now be eligible for a grant of 25 per cent.

Thirdly, it is proposed to increase the flexibility with which the scheme can be administered. The very detailed list of eligible plant and equipment in Schedule 1 of the principal scheme would be replaced by more general headings. It is not intended that this should lead to any extension of grant to plant and equipment used in areas other than those grant-aided at present. However, the removal of these specific references to equipment will avoid any unnecessary restriction on the grant aiding of newly developed machinery.

The remaining changes to the principal scheme are of relatively minor importance, and are intended to bring it into line with changes recently made to the other capital grant schemes. These involve an increase in the limit of expenditure, metrication of the eligibility criteria, the ending of grants for hedge grubbing as a separate operation, provision for the receipt of claims when the scheme ends, and a change in the definition of labour unit.

The amendments I have described will enable the Horticulture Capital Grant Scheme to increase its effectiveness. The scheme is of considerable benefit to growers, and I am sure they will welcome these changes.

10.52 p.m.

Mr. A. P. Costain (Folkestone and Hythe)

We welcome the scheme and thank the Minister for his explanation. There are, however, one or two items on which we should be grateful to have further details.

I am informed by the National Farmers' Union that under the old scheme in 1973 there was a minimum qualifying expenditure before grants could be made. I understand that it was £200. Will the Minister confirm this, and may we have his assurance that the figure will not be altered or raised?

There is a great deal of disappointment in the industry that the Minister has not taken the opportunity provided by the scheme to give some aid in cases where glasshouses have been damaged by storms.

The NFU says that the scheme is not flexible enough for new technical achievements. It differs from the 1973 scheme in some respects, particularly in regard to taking account of new technical development. The Minister has already referred to this. Another example is the fact that the scheme has extended the use of plastics by not being so restrictive as the former scheme.

Schedule 1 of the 1973 scheme provided for replacement or improvement of systems for disposal of sewage effluent and waste. The new scheme seems to restrict this only to disposal from buildings. Does the Department appreciate that there is a need for drainage from hard standings? The Ministry has made special reference to giving water supply to fields. Surely it should equally make provision for drainage from fields.

Paragraph 16(v) of Schedule 1 has been amended as compared with the old paragraph 16(i), in that descriptions of plant have been left out. The Minister made special reference to the fact that it did not provide any further facilities. I was always taught that when the description of articles in a contract was removed it widened the scope. The Minister mentioned innovations, but we should like to be assured that there is not a trick in this that we have failed to pick up, and that all the facilities provided in the past will be provided under this scheme.

The scheme seems to indicate, as the earlier one did, that there should be no grant for supply to dwelling-houses. Surely there must be cases in which a new electric supply is given to a farm and a dwelling-house is affected. May we be told how the costs of bringing the mains to the farm and the dwelling-house are to be apportioned?

With those few remarks, I welcome the scheme and hope that the Minister will provide an explanation of the points that I have mentioned.

10.55 p.m.

Mr. Richard Body (Holland with Boston)

In view of what has been said from both sides of the House, I seek to dispel the notion that the scheme has the total and universal approval of horticulturists. Not every horticulturist is gasping for more money from the taxpayer's purse. Well-established horticulturists are fearful that as a result of some of the items in the scheme there will be an expansion of horticulture in areas that are not well suited to it, in terms of soil and climate.

There is evidence that an appreciable number of farmers are contemplating a move over to horticulture. I do not mean that they will abandon their farms and change over entirely to horticulture, but they may move over partly. Some farmers to whom I have spoken recently are feeling the pinch as a result of inflation, and think that it might be preferable to produce a horticultural crop. Meat producers are apprehensive about the falling demand for meat, and dairy farmers have their own specific problems. Farmers in those categories are showing a greater interest in horticultural crops, especially vegetables.

Under the scheme a 25 per cent. grant for the supply of water in open fields will be available. Well-established vegetable growers will not be queuing up for that grant. Those who will be interested in it are people who have up to now been concerned with straight farming in, for example, Worcestershire and Herefordshire, where there is growing interest in vegetable crops. They will be entitled to apply and, because generous grants are available, they will be induced to go into vegetable production.

I hope that the Ministry understands that an increased production of between 5 per cent. and 10 per cent. of certain vegetable crops may have a devastating effect upon the market, and prices can fall within a few days. That has happened with cauliflowers. If areas that do not normally produce cauliflowers suddenly send them to the London or Birmingham market the price comes down so dramatically that the people who regularly supply the markets suffer a loss.

Although I am not imploring my hon. Friends to divide the House on this issue, I hope that the Minister will not allow the kindly, good-natured and normally well-informed people in the Agricultural Development and Advisory Service to persuade farmers in areas in which vegetable growing is not usual to take advantage of the grants to switch over from, for example, cereal growing.

One hopes that the farming Press will not make a great song and dance about these grants, thus persuading people to go into these branches of horticulture and, in so doing, cause hardship to those who are traditionally in this market and dependent on a fairly stable level of production.

11.1 p.m.

Mr. Robert Banks (Harrogate)

I shall be brief. I endorse the speech of my hon. Friend the Member for Folkestone (Mr. Costain), and express a cautious welcome to this measure. It is a relief that the Government are instigating improvements, rather than creating damage or disappointment, which we have come to expect recently.

This instrument is something of a mystery, as it raises some uncertainties. The major item is the replacement of paragraphs 16 to 20 of Schedule 1 in the 1973 scheme by the new details set out in paragraphs 16 to 20 in the new schedule. Whereas the old schedule set out in some detail—one might say explicit detail—the lists of plant and equipment in respect of which grant may be paid, the new schedule details are painted with a broader brush. This raises a challenge to "spot the difference".

In the 1973 scheme the Schedule 1 paragraph 16 item went to 10 lines, listing the equipment qualifying for grant. In the new schedule it amounts to only a couple of lines. I hope that the Parliamentary Secretary will explain where the difference, if any, lies between the paragraphs in the old and new instruments.

This instrument deletes one of the facilities for which grant is paid—namely, the removal of hedges. Many people will welcome this. The great rush of agriculturists generally to remove hedges has had a grave effect on the structure of soil, and has caused difficulties with soil blowing away because the hedges are not there. It also causes difficulties for motorists who are faced with snow drifts in winter because the hedges are not there to hold back the snow. It is regrettable to consider the number of hedges that have been rooted out and done away with in the last three or four years. The time may come when the answer is to instigate a grant for replacing the hedges that have been destroyed. I hope that the Parliamentary Secretary will take this advice to the Minister and take on board the point that this should apply in agriculture generally.

The explanatory notes on the back of the instrument regrettably do not mention the continuation of grant for installation, reconstruction, alteration or improvement to heating. This will be particularly welcomed. Horticulturists are looking for cheaper means of providing heat for greenhouses, and it may be possible for oil machines to be converted to calor gas or natural gas as a means of economy. I hope that under the instrument, the installation of lighting is fully taken account of. Tomato and flower growers use artificial light as a means of heating as well, so I hope that the Parliamentary Secretary will clarify this one point, which will be helpful.

Schedule 1 item 16 (vii), which refers to the equipment and containers for growing horticultural products, raises the question whether the new type of plastic container bags which contain a compost mixture for tomato plants and others would be covered by this item.

At this time of drought the most important consideration is the provision of water. Some holdings have a natural supply of water. Do the grant schemes envisaged also provide for the storage of water? There are cases in which horticulturists would be able to store a reasonable quantity of water, which in the present drought conditions would be a wise and useful precaution. Would deep-bore extraction qualify for the grant?

In the last resort, only if the industry is profitable will people invest in it and take advantage of the grants. The grants are useful to stimulate investment, but the profits must be there to give a sufficient return on capital.

I hope that the Minister will take this opportunity to bring confidence to the industry. I hope that he will consider the industry in the long term. The grant scheme is excellent, and the rate of grant can be increased, but in these times of stringent economic control there must be a close relationship between the expansion that can be achieved by the grants and the money that is available from Government resources.

It is the housewife who benefits from greater productivity and efficiency, but we must keep a watch on unfair competition from European countries, such as Holland. Dutch producers have had the advantage of lower oil prices in the past, and that has put home produce in an unfavourable position, by comparison. I hope that tonight the Minister will commit the Government to the level of horticultural expansion that they wish to see.

11.8 p.m.

Mr. Strang

I am glad that the scheme has been welcomed by the Opposition. The hon. Member for Folkestone and Hythe (Mr. Costain) asked whether the £200 minimum investment limit would be altered. It will not be altered by the scheme, but discussions are taking place with the NFU on this point.

The replacement of the specific detailed list of headings of plant eligible for grant with a more generalised heading is not a trick. The position is as I described it in my opening speech.

Hon. Members have raised a number of technical and specialised points. It would be appropriate to write to them on such narrow questions as the eligibility of grant. The hon. Member for Holland with Boston (Mr. Body), whose views I know well, takes a different attitude on the question of grant. It is a highly defensible attitude, in many respects. However, I believe that in this instance the Government have the balance right, and I am glad that the Opposition agree.

Question put and agreed to.

Resolved, That the Horticulture Capital Grant (Variation) Scheme 1976 (S.I., 1976, No. 762), a copy of which was laid before this House on 26th May, be approved.