HC Deb 29 January 1986 vol 90 cc1010-46 7.41 pm
Mr. David Penhaligon (Truro)

I beg to move, That this House is concerned that the recent cuts in rate support grant to the rural areas will lead to unacceptable rate increases in areas which are already facing severe cuts in jobs and services resulting from the diminution of regional aid and the closure of rural schools, hospitals, bus routes and post offices; furthermore endorses the warnings from the National Farmers' Union to the Government about the collapse of British farm income revealed in the White Paper Annual Review of Agriculture 1986, Cmnd. 9708; and calls upon the Government to halt this trend.

Mr. Deputy Speaker (Mr. Harold Walker)

I should inform the House that I have selected the amendment in the name of the Prime Minister.

Mr. Penhaligon

I am sure that my hon. Friends will forgive me if, before coming to the main thrust of my speech, I refer to today's lobby of Parliament by the tin miners from my part of the world. In a way, their problem typifies the kind of problem that we wish to raise today. It is a long way away, but it is desperately important to the community that it affects. Yet it seems virtually impossible to raise any real interest among Ministers and civil servants and to persuade them to apply their minds to finding a solution to the problem. Indeed, that is the paradox at the heart of today's debate. The Government rely heavily on the rural areas for electoral support, but the Cabinet is amazingly urban, or at any rate suburban. The rural areas—those green and pleasant lands somewhat remote from London—have real problems that deserve discussion in the House. Today's debate provides a rare opportunity to debate them.

To quantify the problem one need go no further than the basic statistics made available by successive Governments. For instance, despite the emphasis of this Parliament on urban problems, out of the 20 travel-towork areas in Britain with the highest unemployment 15 are rural on some definitions and 14 on any definition. In other words, three quarters of the areas of highest unemployment are rural areas. The top five prove the case. Newquay, Forres, Cardigan, Skegness and Lampeter are all rural areas and unemployment in those areas ranges from 25.8 per cent. in Lampeter to 29.5 per cent. in Newquay. Moreover, all those unemployment levels have doubled since 1979.

Anyone who is not convinced by that absolute proof of the case has only to consult the regularly produced new earnings survey. Although the latest available statistics are for April 1985, the relative nature of the statistics does not change. Gross average weekly earnings for the male population in Britain are £192.40. The figure for Greater London is £213.80. The figures for the shire counties, which make up our nation, pale into insignificance by comparison. Bottom of the league is my county of Cornwall where the figure is £159. In Shropshire it is £162, in Clwyd, West £164, in Devon £165, in Lincolnshire £165 and in Dumfries £167. Those wage levels are up to 30 per cent. below those obtaining in the metropolitan area. In London, just 4 per cent. of male earners earn less than £100 per week. In Hereford, Northampton, Durham, East Sussex, Cornwall, Devon, Somerset, Clwyd west, Gwynedd, Tayside and Dumfries and Galloway more than 10 per cent. of male earners earn less than £100 per week, the highest figure being in Wales at 15.8 per cent.

One does not need a PhD in economics or to study any area in enormous detail to appreciate that in areas with endemic unemployment and low wage structures a whole series of problems will follow as surely as night follows day, especially with a Government who believe that every problem can be solved by free market forces with as little central involvement as possible.

Added to all that, there is the situation in agriculture — that time bomb ticking away in our rural communities. A massive erosion of farm incomes is currently taking place. That is not just bad for the farmers. It is far more significant than that because in many communities the biggest single value added is farm income, spreading way beyond the personal income experience of the farmers. The annual review published just a few days ago shows that the latest figure for farm incomes is 78 per cent. of the 1980 figure in real terms. If one studies the figures with a little more enthusiasm, rather than just taking a brief look, one discovers that the base year of 1980 was the worst year for agricultural incomes, excluding this year, and that incomes are half what they were just last year.

The Government's handling of the milk quota saga so long ago produced a general feeling of no confidence. The Government have already paid part of the penalty for that. I have no doubt that it was their handling of that issue which cost them the Brecon and Radnor by-election.

Mr. Edward Leigh (Gainsborough and Horncastle)

Will the hon. Gentleman concentrate his mind on specifics? His hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) told me on 18 July that he would do away with quotas. He also made it clear in reply to me that the Liberal party either did not know or would not say for four years whether it would bring in price restraint. On 18 March the hon. Member for Caithness and Sunderland (Mr. Maclennan) said that he was against quotas. What is the attitude of the alliance? Do alliance Members favour quotas, are they against them, or do they not know? Are they in favour of price restraint? Or are they all things to all men in this as in everything else?

Mr. Penhaligon

The hon. Gentleman has saved you the trouble of calling him later in the debate, Mr. Deputy Speaker. The number of questions that he put amount to a speech in themselves. No doubt my hon. Friend the Member for Brecon and Radnor (Mr. Livsey) will deal with those matters in detail if he catches your eye, Mr. Deputy Speaker. [Interruption.] Conservative Members dislike any reference to Brecon and Radnor because they know that if the result there is extrapolated to the rest of the country they will be joining the dole queues that they have created in the rural areas. Ironically, Brecon and Radnor was not even a milk farming constituency. Yet there was a total breakdown of confidence in the Government. The inadequate preparation and thought in the Government's handling of the undoubted crisis eroded their support and they got a bloody nose.

The irony is that our farmers have been asked to produce more and more and they have done so. The success of their response to that request has created the present problem. [Interruption.] Conservative Members may protest, but I remember a meeting of the National Farmers Union in my county not so long ago at which the then Minister of Agriculture, now Secretary of State for Energy, told farmers that he wanted them to produce, produce, produce. That reverberated around the meeting then and has reverberated around the farming communities of the south-west ever since.

If the Government allow the farming community to fall apart and the farming economy to collapse, many of the remoter areas will be left with no real economy at all. That is the broad background to the situation. The Government have also allowed other problems to be created, acting as though Members representing those areas had no understanding of or feeling for the problems that they must see being created there. Housing is just one example. In areas of high unemployment and low wages young marrieds must inevitably look to local authority and community housing projects. For people without jobs or on low incomes the mortgages that we can just about manage are clearly out of reach. The problem is especially acute in tourist areas or areas which are attractive for second homes. House prices are higher than average while incomes are dramatically below average. One does not need to examine why so many people look to the local authority. The irony is that those areas have the lowest percentage of Government-owned housing stock.

The Government introduced their policy to sell council houses and it has been a great success. The irony is that it has been the greatest success in areas where there are the fewest council houses. I am sure that that is one of the consequences that not many of us thought of at the time. I have no objections to that. My reasons for supporting the general sale of council houses were originally based on two thoughts. First, I believe in owner-occupation. I believe, as many Conservative Members do, that it creates a series of knock-on effects which are good for the community. I do not expect the Labour party to accept that.

My second thought was that it would release, produce and create significant sums of money, which could then be applied to building the further local authority houses that were obviously required. The Government have allowed the first of my thoughts to happen but not the second. They have refused permission for the local authorities, particularly in areas where houses are most needed, to spend their own money. The problem is there to be seen in bed and breakfast accommodation, unsatisfactory temporary housing for families, and a blunt refusal of local authorities to house anybody under the Housing (Homeless Persons) Act 1977 who cannot produce a court eviction notice. No matter what the circumstances, no matter what the reasons or background, if they do not have a court eviction notice they are told to go and find their own house, to go away because nobody wants to know. I do not blame the local authorities, because they have no choice given the circumstances that have been created.

The Government are supposed to understand rural areas and the remoter parts of Britain but there is precious little evidence of that. The condition of many of the houses that do exist is far from satisfactory. The discretionary grants system has virtually been abolished. Nobody admits that, but it has virtually ceased to exist. However, properties look pretty. They have trees growing around them, the fields are green and they have picturesque little lanes leading to them but I sometimes look at them and think that the only thing keeping them up is the preservation order that has been served on them. There are many properties in my constituency, and in the constituencies of my hon. Friends, that have no water, gas, electric or sewerage systems. All the infrastructure is missing. Yet people argue that all the problems in our nation are in urban centres. I do not deny urban problems but I would argue that many problems exist in our rural areas, picturesque though they may look, which are every bit as bad. In addition to that there are many other threats facing our rural communities — involving the closure of post offices, schools and hospitals, and our transport system.

We have all fought for our rural post office and have all used a piece of House of Commons notepaper to write to the Minister pleading with him to intervene. We received a fairly standard letter back saying that it is nothing to do with him. He says that he is not the one telling the Post Office to close its rural offices but it is that same Minister who has set the financial targets for the Post Office that give it no choice.

We have all written to the Minister about our schools. Again he says that it is nothing to do with him and that it is the proposal of the shire county, but he is the one who sets financial targets which give that shire county no alternative but to come up with such terrible and unacceptable policies.

Mr. Michael Latham (Rutland and Mellon)

The hon. Gentleman has grumbled about housing, agriculture, post offices and schools. Will he tell us how the Liberal party wants to reverse what it calls the collapse of British farm income and how that will tie in with its policy on conservation?

Mr. Penhaligon

I have already said that the few hon. Members who do bother to attend do not listen to what I have to say. I have also explained that my hon. Friend the Member for Brecon and Radnor will deal with the agricultural points in the motion. I am prepared to deal with them myself but I think that my right hon. and hon. Friends might suggest that I sit down before I have the chance to deal with them in detail.

Mr. John Home Robertson (East Lothian)

I have listened to what the hon. Gentleman had to say about rural schools. He may know that I come fom the Border region of Scotland which is represented by two Liberal Members of Parliament. Indeed, he is sitting between the two of them now — the right hon. Member for Tweedale, Ettrick and Lauderdale (Mr. Steel) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood). Would he be interested to know that it was a Liberal committee chairman on the local authority who spent most of 1985 trying to close village schools in various parts of that local authority, including the one my own son attends? Happily, we have saved that school, but it was no thanks to the Liberal party.

Mr. Penhaligon

That is a good example of the pressures we are talking about. I recognise that we are achieving one of those great miracles of political activity — the Conservative and Labour parties are uniting against the alliance, which they all fear. The truth is that financial pressures are placed on such local authorities and they are given little choice. Rural hospitals—

Mr. Patrick Nicholls (Teignbridge)

The hon. Gentleman is obviously concerned about schools in the shires. Will he let us know whether he approves of the fact that the alliance is in control of Devon county council only because of a deal with the Labour party and that the price that the Labour party is extracting for that support is Liberal party commitment to destroy what remains of the grammar school system? Is not that the sort of thing he should be telling us about?

Mr. Penhaligon

I do not think that anybody would be under any illusion that the Liberal party, like many other progressive parties in the country, has long argued against selective education. That is a well-known position. The fact that that belief may be introduced in Devon is, I suspect, to be welcomed.

I understand why the interruption has taken place. It is because I was just about to mention hospitals. In fact, I did say the word hospital once but hon. Members want to discuss anything else but that saga. In many constituencies, particularly those of my hon. Friends, small, rural cottage hospitals are being closed. I know that nobody in the community wants that to happen but when it is mentioned to the appropriate Minister he replies to the effect that it is nothing to do with him and that it is the proposal of the regional health authority. That Minister has, of course, given the health authority criteria that force it to take those actions.

I love the tremendous optimism behind the Government's amendment. The amendment says that an Act has been introduced that will check the decline in bus services and initiate new services. In many areas there are no services at all and it is difficult to believe that the Act could make that problem any worse. I accept that in totality. [Interruption.] I am obviously touching on many points of contention tonight.

Mr. Colin Shepherd (Hereford)

The hon. Gentleman has said that in some areas there are no local bus services. Is he aware that those areas are not the areas where the legislation passed by the House has been in existence for four years and where the level of service has not declined at all in those four years?

Mr. Penhaligon

I do not quite understand that point, to be honest. I am not trying to be awkward. It is certainly true that where there were no buses four years ago the service has not declined over the past four years.

Mr. Shepherd

I can understand why the hon. Gentleman wants to be deliberately opaque. Is he aware that in the Herefordshire trial area the level of rural bus services, which is the same as that before the existence of the trial in rural areas, is the same now as it was at the start of the experiment?

Mr. Penhaligon

I accept what the hon. Gentleman says. That is conceivably so. I have spoken to some people from his part of the country who believe that the experiment has not been a success. I would have liked it to be successful because that is a major problem in rural areas, but even the hon. Member is not claiming that any improvement has taken place. He is simply claiming that it is no worse than it was before.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

I wonder whether I could have a little clarification. Is the hon. Gentleman saying that the trial areas were a success and that he wishes he had seen them in areas such as his own? If that is the position he is taking he should make it clear to the House.

Mr. Penhaligon

I think that I made a speech when the original proposal was made. I was willing to see a trial take place. In principle, I have nothing against a trial. We all have to learn by trial. However, I have not seen any in-depth analysis from the trial that leads me to believe that its extension to the rest of the country will improve the situation in net terms.

There is a semblance of a service in some of the rural areas, run mainly by private operators. If people are allowed to compete against those operators on the few routes that they provide, and manage to make them pay when the service is threadbare, it is inconceivable that such competition will result in an improved service. However, the measure is now the law of the land and the die is cast. We shall see what happens.

The latest example of the anti-rural phenomenon is the rate support grant settlement. It has hit the low spenders hardest — outrageously so. That view is held not by Liberal, Social Democratic or Labour Members who are in opposition and wish to cause trouble for the Government, but by Conservative Members — at least those who have had the courage to express their views in public. In the Tea Room and on the train coming to London, one can hear more candid expressions of opinion than in the House.

The hon. Member for Devizes (Mr. Morrison) says: If there had been no increases in expenditure, that figure would have been about 22 per cent. That is, the rate increase for his area. He continues: I am not prepared to support proposals that can only bring about cuts in public services or huge rate increases, or both. The hon. Member for Devizes is a Government supporter. The hon. Member for Tiverton. (Mr. Maxwell-Hyslop) expressed similar views, and his area is nearer to mine. The right hon. Member for Castle Point (Sir B. Braine) said: But it is unfair that the shift should be wholly at the expense of the shire counties, with the result that there will have to be substantial rate increases if the present level of our services is not to be reduced. The hon. Member for Chichester (Mr. Nelson) was even stronger in saying: there is a widespread feeling of betrayal in the shire counties following the rate support grant settlement." — [Official Report, 20 January 1986; Vol. 90, c. 81-99.] Those are not Opposition Members but Government supporters who have had the courage to put their head over the parapet. The right hon. Member for Chesham and Amersham (Sir I. Gilmour) expressed similar views, but I sometimes wonder whether he supports the Government at all these days. However, at least he had the courage to express his views.

The Government's proposals move money away from the lowest spending authorities in our land. They are low spenders on education and social services. It is certain that rates will rise by 20 to 30 per cent. if present services are to be maintained. I suspect that, except for the brave counties, some cuts will take place. There will be cuts in work in the rural communities by the Development Commission, the Council for Small Industries in Rural Areas, English Industrial Estates, the Manpower Services Commission and the EC. We have already experienced cuts because of the reduction in regional development aid from £700 million to £400 million. Those who are in areas of endemic unemployment are attempting to solve their own problems with the limited resources available to them, but they have been cut and cut again. Our rural areas are being thwarted by the Government whom they elected to run this country. I warn Conservative Members that if there are not some changes, the repercussions will not be long in coming and will be felt in the place that hurts politicians most of all—the ballot box.

I look forward to Conservative Members supporting the motion in the Lobby. I am sure that, if we had a secret ballot as opposed to the public ballot that we have in the House, deep down there would be a clear majority for the general ideas and arguments that I have outlined.

8.4 pm

The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: notes that the rate support grant settlement is a recognition of the undoubted needs of inner cities but involves a shift of only 2 per cent. overall in the grant paid to shire areas; welcomes the provisions of the Transport Act 1985 which are designed to check the decline in rural bus services and to stimulate new services; welcomes the Government's initiatives on conservation and the rural economy; notes the extra public spending of £500 million this year on agriculture; and welcomes, in particular, the special payments to livestock farmers in those areas worst affected by adverse weather and the recent increases in hill livestock compensatory payments. I am not surprised that the hon. Member for Truro (Mr. Penhaligon) has been inspired to move his motion with great enthusiasm, and to encourage us all to think that the world in the rural areas as we knew it in the past has disappeared, and that if we drive into the country we will see total dereliction. However, I have no doubt that the hon. Gentleman wanted partly to capitalise on the strongly expressed views of hon. Members about the relatively small switch of financial support from the shire counties and districts outlined during the debate on the rate support grant last week. I do not blame the alliance for trying that on. However, alliance Members' hopes of great support from Conservative Members may be misplaced. I believe that not because I doubt the strong feelings of my right hon. Friends about the rate support grant settlement for the coming financial year, but because the motion and the hon. Gentleman's arguments do not stand up to scrutiny.

In the context of the overall settlement, the loss of grant to the shire areas amounted to less than a 2 per cent. overall reduction. I agree with my right hon. and hon. Friends that any reduction is unwelcome, but I do not agree that in consequence the hon. Member's dire predictions will ensue. There is no doubt that last week my hon. Friends gave universal backing to the positive decision to give more resources to the inner city areas, the needs of which are not in question. The cause of upset is that, as a result of less money in the shires, there may be larger rate increases than many authorities were planning.

Mr. Paddy Ashdown (Yeovil)

The hon. Lady says that it is a small transfer of 2 per cent. However, it is incontrovertible that that means that there will be rate rises of 20 per cent. in counties such as Somerset, without an extra penny being spent. Will the Minister tell the House, the public or those who will have to bear the burden of the rates that the Government have imposed upon them why the problems of the inner cities have to be loaded on the rural ratepayers? Why should they not be paid for by the population as a whole?

Mrs. Rumbold

I am coming to that point. The rate increases in the shire counties may come if they do not look at their expenditure carefully. Very often, when one examines what is happening in local authorities, one sees that the problem is not necessarily that services are being cut, but that the councils' plans and expectations are being cut. I have been on local authorities and know that members have a natural desire for their plans for the future to come to fruition. The fact that they cannot in the coming year is not a matter of great misery, but merely a matter of waiting, replanning and coming forward eventually with proposals.

Mr. Simon Hughes (Southwark and Bermondsey)

Will the Minister confirm or deny that the Association of County Councils and people who chair counties run by her party say that their services are now cut to the bone and that the rate increases will be in double figures, sometimes more than 20 per cent.? That will happen after necessary spending — not spending on luxuries or additional spending—to do the job that her Government are asking them to do.

Mrs. Rumbold

The fact is that in all but a very few shire counties there has been about 5 per cent. real growth in the past five years. Few counties have reduced or cut expenditure.

Mr. Robert B. Jones (Hertfordshire, West)

Will my hon. Friend give way?

Mrs. Rumbold

I should prefer to carry on with my speech.

My right hon. Friend the Secretary of State drew attention to a couple of points in his speech introducing the rate support grant that it is important to reiterate. First, at the request of the local authority associations themselves, such as the Association of County Councils, he has abolished expenditure targets and penalties, which will help low-spending authorities, most of which are the rural authorities. Secondly, he said — this is an important point — that the final sum that many counties will receive will be increased as a result of money that will flow back to authorities due to adjustments after budgets have been made.

The context for that is the Government's overall expenditure proposals, which are clearly set out in the autumn White Paper on expenditure. It is not a secret what those proposals are. We know that the overall final results of this year's settlement are unlikely to produce the dismal results that some of the shire counties are predicting.

I should like to turn to the problem of life in our rural areas. The inevitable consequence of change on the basis and structure of the rural economy and the general drift away from the land to our towns and cities has had a dramatic effect in rural life. However, change and development have been taking place. New job opportunities have opened up. Efforts are being made to improve services and facilities and the migration from rural areas has been reversed.

While employment in agriculture has declined, employment in the service industries has increased, so that these industries now account for over 50 per cent. of rural employment. As for opportunities in manufacturing, rural areas have fared better than our towns and cities. Rural areas are particularly suited to the production of high-tech, high added value goods and services, whilst communications improvements are reducing the disadvantages of remoteness. And, of course, rural areas are ideal for the establishment of small firms which can be accommodated without detriment to the landscape.

Much is due to the work of the Development Commission in England and the comparable rural development agencies in Scotland and Wales.

It is obvious that the best people to create jobs in the countryside are the people living there already, on or off the farms. So the Development Commission helps local people to make good. Throughout rural England, there are now many thousands of inconspicuously sited, well-designed, small new workshops and conversions, buildings in which thousands of jobs have been developed and through which communities have been sustained.

The Development Commission provides technical, managerial and financial advice and assistance, including loans, to small businesses through its agency, the Council for Small Industries in Rural Areas. It also encourages or organises training in rural crafts and skills ranging from the technical, such as general engineering and agricultural machinery repair, to the more traditional such as thatching, farriery and wheelwrighting.

Mrs. Dunwoody

I do not find it easy to reconcile what the hon. Lady is saying with the situation in my rural constituency. We have lost jobs in agriculture in the last 10 years in Cheshire. Indeed, less than 3 per cent. of the population are now involved in agriculture and related industries. COSIRA has had difficulty in finding one site within my constituency borders to provide a base for a small agricultural engineering firm or for a small builder. At present the number of jobs being created by COSIRA, excellent though its work is, is infinitesimal compared to the number of jobs we are losing.

Mrs. Rumbold

The hon. Lady may be interested in what I shall have to say in a moment about the increase in the money that will be available to the Development Commission through the good offices of the Government.

The numbers of client firms on COSIRA's books has been steadily increasing—in 1985, 18,800—as has the number of people these firms employ—88,800, in 1985. The approved programme amounts to over 2,000 units totalling more than 3.25 million sq ft. The occupation rate is very high—84 per cent. for the units completed so far, the vacant 16 per cent. providing a most useful "float" of readily available units of various types. The units provided by the Development Commission alone already accommodate some 10,000 jobs. Additional space for craft and light industrial use has also been created by giving grants for the conversion of redundant buildings—a cost-effective way of providing new jobs, and one which is sensitive to the need for development to harmonise with its rural surroundings.

As a recognition of the valuable work which the Development Commission undertakes, my Department has been able to increase substantially the resources for its work by over £4 million which brings the total up to some £28 million this year, with a similar amount for next year. This will be spent particularly on providing additional workshop facilities which I hope the hon. Lady's area will be able to take up in order to meet the strong demand for the small facility units of which she was speaking.

If I may take the hon. Gentleman's own area, the southwest region is a good example of the scale of the Development Commission's input. As he will know, over the past two years in Cornwall it has spent over £180,000 building craft homes — houses with small craft workshops attached—and provided £110,000 in topping up grants across the whole of the region to support housing association shared equity schemes.

On job creation activities, since 1975 in the south-west, it has approved a programme to provide over 800,000 sq. ft. of advance factories, of which 570,000 sq. ft. is built. A further 30,000 sq. ft. of factories has been constructed in partnership with local authorities since 1981. On grants to help the conversion of redundant rural buildings, so far 145 projects have been approved, of which 94 are completed, providing functional and sympathetic work space for hundreds of jobs.

The motion refers to the annual review White Paper on agriculture which was presented to Parliament earlier this month. It is a very full analysis of the state of agriculture, and the picture it presents is not one of an industry in decline. Of course it is true that the calculation of farming income shows that it fell by a substantial amount—43 per cent. — in 1985 compared with 1984. But we all know that the major reason for this large decline was the weather. First, the exceptionally good weather in 1984 boosted farming income by 35 per cent. to an all-time record; then the miserable weather in 1985 cut farming income significantly.

It is in the nature of farming that incomes are sharply affected by the weather, and the decline in 1985 must be kept in perspective. Farmers have good years and bad years: 1985 was a bad year following a good year and it is totally misleading to present the results of this exceptional pair of years as showing that agriculture is in a state of collapse. Indeed, apart from 1984, the gross output of the industry in 1985 was at an all-time high.

Nor could I accept any suggestion that the Government are unconcerned about farm incomes. The White Paper demonstrates how carefully the various measures of income are monitored. It shows also how the government are ready to take national action to support farm incomes where appropriate. Because of the exceptional effects of the bad weather in some parts of the country, we decided to provide weather aid totalling £16.9 million to livestock farmers in the worst-affected areas. This will be of considerable help to them during the winter months in improving their cash flow.

More generally, the Government's concern is also demonstrated by two major initiatives in the aid to hill livestock producers. First, at the start of 1985 we extended the scheme to include additional marginal areas so that many more farmers now benefit. Secondly, we have increased the rates of payment by 11 per cent. and total payments in the present financial year are expected to be £110 million.

Looking at total expenditure on agriculture, including expenditure under the common agricultural policy as well as national grants and subsidies, the White Paper shows that it has more than doubled since 1981–82 and it is forecast in 1985–86 to be £2.2 billion — a massive commitment to agriculture in terms of public expenditure.

In addition, to the substantial measures which are applied in order to support farm incomes and secure the prosperity of the industry, the Government have taken a whole range of initiatives which are important for conservation and the rural economy.

The hon. Member for Truro (Mr. Penhaligon) touched on transportation.

Mr. Latham

Does my hon. Friend agree that any hon. Member who tables a motion referring to the "collapse" of farm incomes and calling on the Government "to halt this trend" should say something about his policy on the disposal of surpluses and how he thinks farm income should be maintained rather than just grumble generally?

Mrs. Rumbold

I am sure that my hon. Friend accepts, as I do, that it is difficult to ask the alliance parties to give us any idea of their policies on any subject.

One of the problems in the provision of bus services in rural areas, to young and old people alike, is that the present system of regulation has limited the number of bus operators. The hon. Member for Truro made a great point of saying that there were no services; but this has been part of the problem. Over the past 50 years, the present system of regulation has managed to stifle the flexible approach that is necessary to cope with falling demand resulting from increasing car ownership. That is why the Transport Act 1985 removes the straitjacket of regulation so that the operators can be set free to use their initiative. My hon. Friend the Member for Hereford (Mr. Shepherd) has clearly pointed out how successful this can be. In a free, competitive market operators, especially small local operators, will be able to offer a greater variety of services tailored to the needs of the area. These will provide new scope for the use of minibuses and taxis, which will be able to boost local bus services.

The free market will not cope with all the problems of rural areas, so local authorities will continue to be able to support services which are not commercially viable but which elected local representatives judge to be socially necessary. A requirement to put subsidised services out to competitive tender will ensure value for money. In most cases, this will mean that subsidy from the ratepayers will go much further.

In recognition of the particular problems of rural areas, the Government are introducing two further measures. The first is a new grant to encourage new services. In England up to £1 million will be available each year to be administered by the Development Commission. This will complement the practical and financial help already given by many local authorities to local transport projects, and the commission will work closely with local authorities at all levels

A second measure, tailored specially to meet rural needs, is to make available up to £20 million in the first year to help lower the cost of operators of running rural services in the important transitional period following deregulation when the full effects of competition on costs may not have worked through, and to help stimulate new services. We believe that these proposals offer the way forward to improved transport services which will be of real benefit to rural communities.

It is important to draw attention to rural services which have been mentioned, such as post offices, hospitals and schools. I shall deal first with the post offices. The Government are committed to maintaining a network of post offices throughout the country. The current policy of the Post Office is to rationalise the urban post office network, but there is no programme of closures in rural areas.

I draw attention to the valuable work of COSIRA in giving support and advice to village shops which often combine as the local post office, thus ensuring that this vital service to rural communities is maintained wherever possible.

Mr. A. J. Beith (Berwick-upon-Tweed)

Does the hon. Lady recognise that there is a great fear in rural areas about post office closures—it has been expressed in hundreds of letters which I have received — that the Government's mounting pressure on pensioners and benefit receivers to have benefits paid through a bank, and paid less frequently, will deprive village post offices of an essential income without which both the village post office and the village shop will go?

Mrs. Rumbold

It is not necessarily mounting pressure. It is much more related to the difficulty involved in getting people in rural areas to take on the responsibility of running a post office.

Mr. David Maclean (Penrith and The Border)

Will my hon. Friend comment on the contrary pressure which came from the Department of Transport insisting that an extra 500 rural post offices should issue driver and vehicle licences? Will that not help to improve the services of rural post offices and to prolong their life?

Mrs. Rumbold

That will certainly encourage more people to come forward to run post offices. One hopes that that will happen.

Mr. Ashdown


Mrs. Rumbold

I should like to continue.

Mr. Ashdown

Will the hon. Lady give way on this point?

Mrs. Rumbold

I have given way quite a lot. I want to leave time for hon. Members to make their speeches.

I should like to take up some of the points that have been made about the Health Service. Some hospitals have been closed. This has been done in the interests of ensuring that there is a maximum level of modern medicine available for patient care throughout Britain. The Government hope that all the health authorities in planning their total service for a district will take fully into account the benefits and services that a community hospital can produce in the context of the best available medical care for patients.

On the provision of education, a number of village schools have been closed in recent years, and no doubt local education authorities will continue to bring forward proposals to close small schools where they judge that to be in the interest of the pupils at the school concerned and those attending other schools in the area. It should be remembered that children in very small primary schools miss the stimulus that can be provided from working with a sizeable group of their peers. The Government recognise that many small village schools have to be retained because of the geographical isolation of the communities they serve.

Mr. Robert Jackson (Wantage)

The Oxfordshire county council—now under Labour and alliance control — proposes to close three village schools in my constituency — Childrey, Ardington and Letcombe Regis. Does my hon. Friend agree that the county council needs to be reminded that schools in the villages are not simply educational units but also the focal points of rural life?

Mrs. Rumbold

I certainly agree that there are occasionally very good reasons for having village schools. It is absolutely within the purview of the local authority to make decisions on its priorities. If the priorities are to keep the schools open for the communities, that should weigh heavily with those authorities. They are at liberty to look at where alternative schools are available and whether closure of some schools would necessitate unacceptably long journeys to school for very young children.

I should draw attention to the work that has gone into demonstrating our commitment to the countryside and to ensuring that developments in agriculture and the environment go hand in hand. For example, this year we hope that, subject to parliamentary approval, grant in aid to the Countryside Commission and Nature Conservancy Council for 1986–87 should total not far short of £50 million. This compares with less than £23 million five years ago, immediately after passage of the Wildlife and Countryside Act 1981. There has also been an increase of about 30 per cent. in national park supplementary grants over the same period. These increases, well above the rate of inflation, demonstrate the Government's determined commitment to conservation and our resolution to make the Act work.

I again stress that my Department and the Ministry of Agriculture, Fisheries and Food have proceeded in close harmony on this matter. The press, ever eager to promote friction where none exists, has tried to make out that there are significant conflicts of interests between the two Departments. The fact that my right hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food and I are here together to respond jointly to the motion shows how wrong that is. If only the press and our opponents would stop for a moment to read the contents of our announcements and ministerial speeches and to consider the content of our policies they would see how wrong they are. Unlike the Opposition, we have a living and creative policy which is continually developing in a positive and constructive manner.

The Agriculture Bill now before Parliament is the latest product of our positive approach. Its provisions emphasise the growing partnership that we seek between Government, agriculture and environmentalists. Far from the devastation presented by the hon. Member for Truro, there is considerable evidence to support the view that the Government are addressing the needs of the rural areas positively. The population migration has stabilised. Jobs in small businesses and the service industries are beginning to regenerate the rural economy. Firm action to prevent damage to the countryside and wildlife is paying dividends. New measures to check the decline in transport and mobility have been enacted. Money to support livestock farmers and agriculture has been paid out.

The Government are firmly of the belief that their policies in the rural areas are correct in targeting aid to where it is needed, providing a stimulus to those areas of services at risk and putting in place a framework within which the future for the rural areas is secure.

8.32 pm
Mr. Brynmor John (Pontypridd)

First, may I thank the Under-Secretary of State for the Environment for her discourse on rural affairs. I suspect it was a bit of reciprocity on the part of the Minister of Agriculture, Fisheries and Food, to pay for its interest in environmental matters, which we will debate again tomorrow morning.

May I deal with two or three aspects of the amendment which I suspect the Government does not want the House to scrutinise too carefully. If Members look at the second half of the amendment they will see a statement noting with approval the expenditure of an extra £500 million on agriculture last year. I leave aside the unworthy thought that to boast of extra spending not so long ago was used in Government circles as evidence that the spender was not, in the prime ministerial phrase, "one of us". I state categorically that no part of that £500 million has been used for the benefit of or for innovation in agriculture. It has been used to support the further and unwanted surpluses that have been spawned. The hon. Lady spoke of the structure of farming and said that it was not at the point of collapse. That may be so, but it is a considerable paradox that although farm incomes have gone down by 43 per cent. it still costs the rest of us £500 million more to support such a system.

The hon. Lady also paraded the raising of the hill livestock compensatory amounts. I apologise for dealing with this in detail but I thought that a Minister from another Department would deal with it. I am grateful for the restoration of some of the value of those amounts. Even in their restored form they are still, in real terms, for hardy ewes, £1.65 short of the 1981 value and, for non-hardy ewes, £1.80 short. When this matter was raised previously the Government have said that the Labour Government did not secure a rise in the allowance and so the allowance is better than it was. On hardy and less hardy ewes, the allowance is still 75p and 70p, respectively, less in real terms than on 1 January 1979. I hope that when the Minister replies we shall hear the last of that argument.

The hon. Lady raised the prospect of wet weather aid. I thought that it was a complacent statement and obviously not influenced by the sulphurous words of the NFU in Wales. I advise her to read those words before she becomes too sunk in complacency. The exclusion of both animals and areas in Wales has totally bewildered and caused a great deal of resentment and dissatisfaction. The Government did not match the needs of the hour.

The central point of this debate is the need to take an integrated look at the policies fashioned for rural areas, both in terms of their effectiveness and of the money available. Too often unco-ordinated approaches to problems—hindered by departmental isolation under all parties; I make no political point—has meant patchy and random results. This is not successful and I believe it should be changed. I had understood that an Agriculture Minister was to open the debate and I saw that as a harbinger of future Government change — that the Ministry was to take a lead in co-ordinating a strategy for rural areas.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Selwyn Gummer)

I certainly owe an apology to the hon. Gentleman because we understood that this debate would be about agriculture. It was only yesterday afternoon that the whole matter of the rate support grant was raised by the Liberals when they put down their motion. As the first half related to the rate support grant it seemed sensible that that should be dealt with by an Environment Minister. I apologise to the hon. Gentleman because I did give him the wrong infotmation when I thought this debate was about agriculture. I apologise for any inconvenience.

Mr. John

I accept that apology. The point I was making is that the one role that the Ministry of Agriculture, Fisheries and Food ought to seek—even at the risk of heightening the blood pressure of the Minister for Environment, Countryside and Local Government—is to co-ordinate a strategy towards rural areas. I thought that it was the Ministry's aversion in the past couple of years to making pronouncements on agriculture policy that led it to back off at the last moment.

Agriculture is growing in importance. The hon. Lady is quite right. The figures for rural population show a growth in the last 10 years of 29 per cent., whereas urban population has grown by only 1 per cent. There is an internal change of emphasis and balance within the United Kingdom and I believe that the machinery of government should reflect the change. The Government should reflect a more co-ordinated approach to the problem.

Because of the lack of time there are only two aspects of the problem with which I can deal tonight, although I must say that both the motion and the amendment contain a great deal on agriculture. However, I will deal with the two aspects which I believe are most needed to retain the vitality of the rural areas.

Agriculture is mentioned, rightly, because, both directly and indirectly, it is a key provider of employment in the small towns and villages of rural Britain. Such employment — I take issue with the hon. Lady — is narrow in its choice. The range of jobs available is not great and is often seasonal. Thus, unemployment in the industry generally, although not as large as in the constituency of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), is often masked by the fact that there is seasonal, low-paid employment. When I listened to the hon. Lady's encomiums about the rate support grant I wondered where the proposal about a poll tax would leave the low paid in rural areas. I suspect rather worse off than they are at the moment.

Agriculture — left in a vacuum by the absence of ministerial advice—is entering a period of momentous change. Unless the voracious appetite of the CAP is curbed, its budgetary collapse is, in my view, probable. We may differ on how to avoid this, by reforming it in time, but there must be a united view from this House that surpluses will be eliminated. The theory of maximising return has meant the amalgamation of holdings, the elimination of smaller ones and consequently a drop in the numbers of people employed in agriculture. In the last 20 years to 1980 employment has dropped by 35 per cent. and it is not over yet. Cash flow problems have hit farmers in the last year or so. Mr. Lloyd Addison, the prospective Labour parliamentary candidate for Norfolk, South, has published some figures showing that in the county of Norfolk, 1,000 agricultural workers have been discharged in the last year—15 per cent. of that sector of the work force in the last year. Is this confirmed? Is it, as I suspect, an indicator that as times get harder the general trend will be to shed labour on farms first and thus increase the problems of rural employment.

If we squarely face the issues of cereal surpluses we should be able to suggest to the farming community some of the alternative uses to which unwanted cereal land could be put. The first is the growth of protein crops. I estimate that we have room to switch a quarter of a million hectares in the next few years. I believe we should expand forestry. At present we produce only 10 per cent. of our requirements. I do not mean the conifer continents of the past. I mean woodlands on farms with conifers, deciduous and broad-leaved trees, which together would enable us to meet the full range of our timber needs. The Government have recognised this principle but in their recent discussion document talked only of 200,000 hectares. I believe we could manage five times that amount in the next 20 years, and by concentrating on grade 3 and 4 land substitute for marginal quality unwanted cereals, crops which will be economically useful and environmentally pleasing.

The problem is what to do while the trees are growing, especially for the person who plants them. Farmers must be paid as conservators of the timber. Grants for planting are not enough. I propose that they should be paid annually by the Government for each hectare while the crop is maturing. In return, the Government should share in the profits of sale. Such a scheme would benefit the economy and provide farmers with a cash flow which would percolate down to farm labourers and thus increase employment in rural areas. If the objection is cost, I can only say that the cost of agriculture, mostly in unwanted surpluses, is £2.2 billion a year at present. If we devoted just a tiny part of that to forestry, or other useful crops, we could increase employment and greatly benefit the economy.

The restoration of public services to rural areas is a paramount need. We had a battle in which the hon. Member for Hereford (Mr. Shepherd) was rather engagingly said to represent Worcester as well, much to the consternation of the right hon. Member for Worcester (Mr. Walker), I am sure. The amendment refers to the Hereford experiment. The Transport Act 1985 abolished cross-subsidisation and led to the National Bus Company saying that it would have to cut local bus services by 30 per cent. It estimates that the effect on public transport in rural areas is a cut of 25 per cent. The Government maintain that somewhere, somehow, there is a breed of tax cut, short cut or entrepreneur who will make that cut good—but how, when and to what extent?

Rural education is vital for the welfare of families. In 1983, the last year for which statistics are available, 127 primary schools in England and four rural secondary schools closed. As the hon. Lady said, a judgment must be made by local authorities, but the Government cannot escape all liability because their denial of funds to local authorities has made choices invidious. The report of the joint working party established by the Departments of the Environment and of Education and Science talked of the closure of rural schools thus: Ultimately the policy debate about rural school reorganisation cannot avoid a range of social judgments about lifestyles which we want in Britain into the next century. What is clear however is that school closures are not easily reversed. It therefore behoves all decision-makers to err on the side of caution and to weigh every conceivable short and long term effect before irrevocable action is taken. It is essential that the Government do just that when weighing up how to devote money to the education service.

The Minister mentioned medical facilities and hospital closures. Of course we want first-class medical facilities—acute conditions demand them—but there are other demands, such as those made by social problems. People now live longer and rural hospitals could be kept open to help families support the elderly. We must pursue excellence in surgery and medicine, but hospitals also have a social role. Hospital closures condemn families to long and expensive journeys if they are to keep in touch with sick relatives.

If such public services decline, many jobs will be lost. However, that is not the most important consideration. The improvement of services in rural areas would greatly enhance the quality of rural life. These two strands are intertwined. If there was the same standard of provision in rural and metropolitan areas, there would be more home helps, more meals on wheels, better library services and tens of thousands more jobs in rural areas. The key to more employment and a better quality of life in rural areas is public expenditure. We should not avoid that. In view of their blind ideological hatred of public expnditure, the Government cannot stomach that. That is why they have damaged rural areas and why their amendment avoids the real challenge of the future.

8.46 pm
Mr. David Mudd (Falmouth and Camborne)

I should like to speak about some of the Government's foolish policies for rural areas, about the implementation of some of the more helpful and promising policies and about the absence of any hint of policy for a key matter that affects Cornwall today.

Many of us were lobbied today about Cornish tin mines. The Government's inability to say anything to that industry at its time of distress, even a decent, "Farewell, and look after yourself," is utterly unacceptable to those who are associated with any pretence of a social conscience and a desire for development of industry in rural areas. Anybody who attended the miners' visit today will be haunted by the recollection of Mrs. Oates from Pendeen who said how she had grown to hate Friday. She said that she loved Fridays because there was one pay packet coming in through the door, but immediately she wondered whether there would be another next Friday. That is the hand-to-mouth existence being experienced by those involved in the Cornish tin industry, and they have had not a twitter of support from the Government.

If the industry is allowed to collapse, we shall instantly have £30 million or £40 million added to our imports bill, representing imported tin, and a region of 1,500 people will be added to the already obscenely long dole queues through west Cornwall. Even in the main towns of west Cornwall, unemployment is now running at one man in four. In rural areas, it is probable that one person in three has no job.

Successive Governments have responded to the problems of Cornwall and tried to do various things with special development area status and the normal panaceas. A couple of years ago, when Redruth was still in a special development area, Carrick district council made a courageous decision to develop a piece of land. It was a project to reclaim old industrial wasteland to provide the basis for an industrial estate which would serve that area of chronic unemployment. The Department of the Environment got terribly excited and poured in pounds and pounds. Even the much maligned Europeans said, "We want a piece of this action as well." As a result, a beautiful industrial estate was created. On the day before it came on stream, somebody at the Department of Employment, doodling with his pencil, transferred the area from the Redruth travel-to-work area to the Truro travel-to-work area. We now have a beautiful industrial estate laid out, but not a single factory upon it. There is not one penny of regional development assistance eligible for anything that goes on that estate. There is no eligibility for any help from the European regional development fund either.

That is one example of the nonsense that is perpetuated by some aspects of our regional policy towards the rural areas. The Council for Small Industries in Rural Areas has been mentioned. It is woefully under-funded. With an average cost in west Cornwall of about £50,000 per acre to develop and service industrial land, but a going rate of only £25,000 per acre for land that has been serviced and developed, it is small surprise that even entrepreneurs are not terribly excited. The only hope for factory building must lie with English Industrial Estates, but it, too, has had its finances restricted. In my constituency, five projects that would have led to new jobs for rural areas are now solemnly and faithfully entombed in a moratorium that will not be lifted this side of April 1987.

In addition to criticising what I believe to be the weaknesses and stupidities of some forms of existing regional policy, I shall try to consider constructively and hopefully some simple cost-effective policies that could be introduced. There could and should be a crash programme for the conversion of disused industrial buildings in rural areas into modern units, especially as managed workshops. We should remove entirely the anomaly whereby regional development grants are available for new industrial buildings, but not for those people who want to acquire and upgrade a redundant building. Our local authorities should be given greater autonomy to accelerate the development of industrial development in rural areas, either as single units or on the beehive principle.

Planning is the real bugbear of all. One aspect above all others inhibits industrialisation in rural areas — planning. Even now, on a small scale, when one or two people are willing to spend their own money to help create and stimulate jobs in rural areas, they are held up by planning officers and planning committees over a string of nonsenses that. nine times out of ten, will be rejected on appeal.

The sooner that our planners face up to the fact that one cannot eat the environment, the better. There should be greater flexibility and consideration, greater opportunities for conversions and more industrial developments in rural areas.

Like my unemployed constituents—I am still talking about one man in four in most of Cornwall, and one man in three in some of the Cornish villages being unemployed — I hope that we can look to an acceleration of the implementation of the Government's promises and utterances in recent months. I hope that the promised simplified planning zones, the further relaxation of general development orders and the use classes order will become a reality very quickly. I hope that those measures will be used positively to encourage rather than actively to discourage the regeneration of jobs and prosperity in our rural areas.

If that nettle is not grasped now and if the potential that is being wasted is not realised, if the cruelty to the unemployed in rural areas is not recognised, there will be a hollowness on the part of any politician who proclaims concern for the fate of the countryside.

8.54 pm
Mr. Richard Livsey (Brecon and Radnor)

The subject for debate is partly the breakdown of the rural infrastructure. I shall concentrate my remarks mainly on agriculture, but before speaking on that subject I shall mention five areas that have broken down. We are seeing a breakdown in education and in our rural shops and post offices. Another aspect is low pay.

Many people in my constituency earn an average of 80 per cent. of the national pay average and cannot afford to travel round the constituency, even to an evening meeting. Under the Transport Act 1985, transport services are being broken up. There is immense pressure, too, on our health services.

Last week in my constituency we were successful in stemming the closure of 13 schools. Even the Conservative chairman of the local association, whose school is under threat, supported the campaign. There is tremendous pressure on the education budget of our county. A sparse population over a wide geographical area is not taken into account in Government estimates to work out the rate support grant formula.

In agriculture in 1985 we have seen a 43 per cent. drop in farm incomes, a 62 per cent. drop in cereal fann incomes, a 43 per cent. drop in less favoured beef and sheep farms and an 8 per cent. drop in dairy farm incomes. Obviously, one factor has been the weather. I congratulate the Government on the increased hill farm compensatory allowances.

However, the administration of weather aid follows parish boundaries, for which there is no rhyme or reason. It has been just as wet in one parish as it has been in another, but, for some reason, those on one side of the river receive aid and those on the other do not. Some farmers who have not been able to make hay are not receiving aid.

Mr. Gummer

I carefully considered the way in which weather aid was formulated. There is no recorded time in history when divisions between different parts of the country have not caused difficulty in drawing a line. How would the hon. Gentleman draw the line?

Mr. Livsey

The Minister should accept that there are already well-known lines. Everyone recognises the less favoured area A line. Weather aid should be based on it. It is exactly within that line that the National Farmers Union required action.

We have seen the follow-on from milk quotas and the effect on the rural economy.

Mr. Leigh

What is the hon. Gentleman's quota policy?

Mr. Livsey

We have no quota policy, if that is what the hon. Gentleman wishes to know.

Mr. Leigh


Mr. Livsey

I will not give way to the hon. Gentleman; I have given him an answer. I shall outline our policies in a moment. I am analysing the current position.

We have seen the closure of the Johnstown creamery in Carmarthen, with the loss of 450 jobs. That is a consequence of the overnight introduction of milk quotas. With the closure of creameries, a vital part of the rural employment structure has disappeared. I believe that agriculture has reached a turning point, bringing great changes in our industry. We need a longterm policy for agriculture. At present, farmers lack confidence. I have been in the industry for the past 30 years and I have never seen a time when the industry has shown such a lack of confidence.

Mr. Nicholls


Mr. Livsey

No, I will not give way. I do not have much time. If I give way, more time will be lost.

Farming is looking for a comprehensive policy and an injection of confidence. That will be provided only by a policy which sets out objectives for at least the next 10 years. The Government's policy has been piecemeal—there are good and bad parts, much like the curate's egg.

Mr. Nicholls


Mr. Livsey

The Agriculture Bill has some good parts and some poorer parts, which I shall discuss.

Mr. Nicholls

Will the hon. Gentleman give way on the "poorer" parts?

Mr. Livsey

The poorer parts relate to the serious cuts in research and development. The Government should vigorously defend our system of variable beef and sheepmeat premiums. Those variable premiums are essential to buttress our beef and sheepmeat production. I hope that, in their negotiations with the European Community, the Government will stand firm on variable beef premiums which are under threat at present.

An agricultural policy should be based on the sanctity of the family farm. In those farms more than 50 per cent. of the income comes from farming. The aim should be to ensure that those farms have a net income which will provide a living for the farmer and his family. It should also provide sufficient income to service interest rates and capital repayments. High interest rates are a serious problem. They affect and penalise every small business. The family farm should also provide sufficient income to give an adequate return on tenants' capital. Those are the three facets which are essential to any agricultural policy.

Mrs. Dunwoody

Does the hon. Gentleman's party continue to support the common agricultural policy, with its effects on marginal farms?

Mr. Livsey

Of course my party supports the common agricultural policy, although not in its entirety, because we are the first to admit that it needs reforming.

We must monitor farm incomes more carefully.

Mr. Leigh


Mr. Livsey

I shall not give way. The hon. Gentleman is trying to disrupt my speech.

We have the technology to enable us to have much more up-to-date information on farm incomes. We should be able to respond much more quickly to the downward drift of farm incomes and bring in support where it is necessary. We also need an agricultural policy which will provide opportunities for young farmers and those who wish to enter the industry. More tenancies should be made available. There are two ways in which that can be done. First, we should put our faith in county council smallholdings and the provision of more starter farms on those smallholdings. Secondly, we should encourage landlords to let more land to farmers. That could be done through the taxation system and would be a constructive way of creating more farm tenancies.

Mr. Nicholls


Mr. Livsey

We must look at the vexed matter of farm credit. Interest rates are far too high at present for farming. The Liberal party believes in an agricultural land bank which would provide capital at low rates of interest, especially to entrants into the industry.

We must also provide more opportunities in marketing. It is a grave weakness that the Food from Britain campaign has only a paltry £3 million a year for the next three years. That is inadequate when the New Zealanders and the Danes spend millions and millions of pounds on bolstering their marketing.

We must create jobs in rural areas. Co-operatives would produce acceptable meat products and add value to the basic farm product. A great deal can be done in that direction, but it requires a partnership between the farming community and the Government.

The question of surpluses must occupy us greatly. We must protect our family farms in any policy to control surpluses. That can be achieved through direct support to small and medium-sized farms through many of the mechanisms that already exist in less favoured areas—for example, compensatory allowances.

Mr. Leigh

Will the hon. Gentleman deal with surpluses?

Mr. Livsey

We would not adopt quotas. The Conservative party adopted them at the twelth hour and introduced them the following morning. The farming community knew nothing about it and suffered greviously as a result.

Mr. Leigh


Mr. Livsey

I commend what the hon. Member for Pontypridd (Mr. John) said about forestry, which is a constructive method of taking land from production for non-agricultural purposes. It will provide an annual income, and we should all consider that policy carefully.

We should also consider new crops, and especially the conversion of existing crops into industrial products, such as alcohol. However, we shall not achieve those new directions without more research and development. At present research and development and advisory services are being run down. That is both serious and regrettable at a time when farming faces a great crisis. Indeed, the French are increasing their research and development budget by 10 per cent. It is clear from that from where future competition will come.

I have sought to be constructive and to describe what the country needs. It is a constructive policy for family farming units. If we can provide that, we shall be successful.

Mr. Geraint Howells (Ceredigion and Pembroke, North)

For a long time Conservative Members have been shouting at my hon. Friend while he has been making his constructive speech. Many hon. Members may not be aware why they do so. The only reason is that the Minister lost his job as chairman of the Conservative party, as a result of my hon. Friend's win in Brecon and Radnor, and, as he has been demoted, many of his hon. Friends like to shout at my hon. Friend.

Mr. Livsey


Mr. Deputy Speaker (Sir Paul Dean)

Order. I have the impression that a second debate is taking place on both sides of the House below the Gangway. The hon. Member is entitled to be heard.

Mr. Livsey

I was about to finish my speech. I thank my hon. Friend for his intervention.

We need an agricultural policy which will give confidence to the industry and family farming units. If we can provide a forward-looking policy which will ensure adequate net incomes, we shall have achieved a great deal. At present small family farms need protection and aid. If a policy is based on those principles, we shall protect our agriculture and go forward.

9.10 pm
Mr. David Maclean (Penrith and The Border)

I thought we had seen the last of humbug motions on Monday, but obviously not. I hope that when my right hon. Friend replies to the debate he will be able to elaborate on the stories going the rounds in this place that the alliance felt so strongly about this motion on rural areas that it decided not to put the motion down last Thursday or Friday, but decided to put it down only yesterday after the Opposition parties had lost the Westland debate and the Government came out of it with distinction. That proves the alliance's deep commitment to this.

Mr. Gummer

Has my hon. Friend noticed that, as usual, as soon as the alliance spokesman has finished, half the party leaves and takes no further interest in the debate?

Mr. Maclean

That has not escaped my notice or the notice of my hon. Friends. This is a horrific, catch-all motion. Practically the only thing left out is rural telephone boxes. What has happened to the cause of rural telephone boxes? They were espoused last year and the year before, but rural telephone boxes are now safe and no longer of any interest to the opposition parties. On Friday, at a presentation by British Telecom in Cumbria, I discovered that, far from removing telephone boxes, British Telecom is spending millions on replacing them and putting up additional boxes. The Opposition parties now have no interest in that subject.

The motion refers to rates and the rate support grant in rural areas. It seems the Opposition parties are worried about the amount of money going to rural areas. I hope that one of their spokesmen will tell us tonight how much money they intend to take from the rural areas. The hon. Members for Woolwich (Mr. Cartwright) and for Leeds, West (Mr. Meadowcroft) in March 1984 on Standing Committee G supported an Opposition clause to reintroduce rating of agricultural land. Then on 21 May 1985, only two years later, they both voted against re-rating of agricultural land. That is interesting.

There is in existence an SDP discussion paper which says: There is also one exclusion from the rating system which can no longer be justified; the derating of agricultural land and buildings. The re-rating of agriculture would strengthen the rate base of many local authorities with low resources". The three opposition parties must answer an important question. Will the Liberal party introduce rating of farmland? Will the SDP introduce rating of farmland? Will the alliance introduce rating of farmland? I hope the hon. Member for Caithness and Sutherland (Mr. Maclennan) will answer that question when he is winding up and I promise I will give ample time by finishing my speech at an opportune time. [Interruption.] If my speech contains material inaccuracies on the policies of the Opposition parties on the rating of agricultural land, I guarantee the hon. Gentleman that I and my hon. Friends will not utter a cheep while he elucidates those policies.

We know what the problems of agriculture are. For the first time in its history, agriculture has reached a watershed. The land is producing more than enough food to feed all our people. Our opponents must not pretend that they suddenly have a policy to deal with this. The hon. Member for Brecon and Radnor (Mr. Livsey) deserves credit for his speech, because he said for the first time in many years that "they" have a policy. They, I presume, are the Liberals, and that policy is against quotas. I am taking that as official Liberal policy rather than the statement from the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) who said: the way forward for the industry"— that is, the dairy industry— is not by means of a quota system for milk or any other product that comes from land … the milk quota system must be rejected. That is fair enough, but it is not the way forward. I hope that in winding up the hon. Member for Caithness and Sutherland will say whether that is SDP policy, because on 1 December 1983, he said: We must move to a system of quotas". So we have found Liberal policy. There are two more questions for the Opposition parties. Does the SDP believe in a system of quotas? Does the alliance believe in a system of quotas?

The problem in agriculture and in rural areas is not money or expenditure, but people. If more people were living and working in the countryside, all the other things—such as buses, rural post offices and schools—would fall into place. I make no criticism of doctors in my constituency, but the only time the closure of a small cottage hospital was proposed, the doctors, for valid reasons, were the people who strongly opposed its staying open because they wanted all the benefits which a bigger and plusher health centre could offer.

Hon. Members on both sides of the House fight to maintain rural schools. The problem that we come up against is not the politicians of national Government or local government but the so-called educational experts who say, "Small rural schools are not on; they are not viable. Little Johnnie has not got a peer group that he can interreact with."

Mr. Alex Carlile (Montgomery)

I agree entirely with the hon. Gentleman's view that rural schools in some areas are driven to closure because of the interference of so-called experts. Will the hon. Gentleman accept that the Welsh Office — one of whose Ministers is on the Treasury Bench at the moment—has done absolutely nothing about telling local authorities that the experts are wrong and is encouraging them to close village schools? Will he demand that his Government change their policy so that village schools are maintained?

Mr. Maclean

I do not think that there is any need to change policy so that rural schools can be maintained. If any Government are ever successful in ridding their Civil Service departments of experts and educational psychologists, I shall happily come back and bow to the hon. and learned Gentleman because, if he can manage that, he will be more successful than any Government in history.

The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts)

Spending per pupil in Wales is at its highest in the county that the hon. and learned Member for Montgomery (Mr. Carlile) represents.

Mr. Maclean

I shall not comment further on Wales. There is sufficient ethnic representation from the Celtic regions. I shall get back to the main stream.

I intended to talk about what the National Farmers Union and Rural Voice have suggested as the solution for rural areas. As time is pressing I shall concentrate on two points. The NFU has estimated that, within a decade, 11 per cent. of agricultural land currently used for essential food production will be surplus to requirements. It says that in a tightly overpacked and crowded island like ours we should look upon that not as a disaster but as an opportunity which can be exploited for forestry, tourism and other things.

The Rural Voice document entitled "Agriculture and the Rural Economy" makes some valid points, one of which is that farming is at the core of a healthy rural community. It also says that production of food to a very high standard must remain the prime purpose of a viable rural community. In that regard, the Government's backing of Food from Britain is proof that we are backing the right policy.

The Rural Voice document also says: A growing secondary purpose for farming and farm land, and supplementary justification for financial and other support for the farming industry springs from other aspects of national life which have been rising on the political agenda—namely environment, tourism, forestry, energy, and the strengthening of the rural economy. The Government have responded. The policy on rural diversification and the provisions of the Agriculture Bill—some of us are privileged to sit in Committee on that Bill—show that we are moving in the right direction. Agricultural improvement scheme grants are available for rural diversification and for forestry. I can go a long way towards agreeing with the hon. Member for Pontypridd (Mr. John) on the necessity to make forestry a cash crop every year until it matures. This is an avenue that we must explore.

On tourism, we have Lord Young's document, "Lifting the Burden", and "Pleasure, Leisure and Jobs: the business of tourism", where we are shifting the restrictions which hold back the development of tourism — easier signposting in the countryside, for example—and if we can do something about some of the planning boards, we will go a long way towards getting more people back into rural areas. The broad-leaved woodland policy for forestry is another example. All these are moves in the right direction.

What does not help the rural debate is this attempt at a catch-all motion, which seeks to touch on all the nice little things. Party members have obviously done an exercise as the Americans do: they have tried to calculate where there is a little bit for the green vote and the yuppy vote—the SDP no doubt has an analysis of the typical SDP vote — and the Sloane ranger vote. They have identified all these votes and tried to encapsulate them in the motion, so that they can say in their magazines, in Liberal Focus and so on, that they have tonight pressed the Government on all aspects of the rural debate. There is only one thing that the Opposition parties need to do if they want to be credible on agriculture and rural areas: they should tell us their agricultural policy on quotas, how they would deal with surpluses, whether they would rate farmland. If they fail to do that, this motion is a humbug, and I suspected it all the time.

9.21 pm
Mr. Robert Maclennan (Caithness and Sutherland)

The fact that this is an important debate has been reflected in the speeches from all sides of the House and in the deep concern that Members feel about the present condition of the rural economy. The hon. Member for Falmouth and Camborne (Mr. Mudd) enlarged upon the concern which has been expressed in Cornwall about the impending collapse of the tin industry, and he elaborated on points made by my hon. Friend the Member for Truro (Mr. Penhaligon) in opening the debate. The Government's failure to save the international tin agreement and to bring about the regulation of the London Metal Exchange, which is having such a catastrophic consequence in Cornwall, is a serious reflection on it.

The debate has properly ranged widely over the provision of services, housing, schools and many matters that were mentioned by my hon. Friend the Member for Truro on behalf of the alliance; but I propose to concentrate on the condition of agriculture. It is widely recognised that agriculture plays the major part in the rural economy, so it is important to focus on it at the moment.

On the general rural economy, although I believe that the public is sharply aware of the malign consequences of the Government's policies for the industrial areas and our urban scene, the concern in many parts of the country about the rural economy is increasingly making itself felt. It has come as an unpleasant shock to many former Conservative voters that Conservative policies can wreak as much havoc in the countryside as they do in the beleaguered inner cities. The impact of these policies on the rural areas may be less obvious than in the cities — that I grant — but, like the winter wind, the Government's tooth is not less keen because it is not seen.

I focus on agriculture because its present condition has been starkly revealed in the Government's own recently published annual review. The prospects for farming could be further harmed if the wrong decisions were taken in the forthcoming price-fixing negotiations in Brussels. Although we shall have an opportunity at a later date to consider in detail the recommendations which are being made, it is appropriate tonight to look at the general and overriding issue which must inform the mind of the Minister when he goes to Brussels — the condition of Britain's farming industry, whose well-being has not been at the forefront of the Minister's mind in past negotiations in Brussels.

Mr. Nicholas Baker (Dorset, North)

Will the hon. Gentleman give way?

Mr. Maclennan

No. My time is limited, and there are many points of substance to be made.

The collapse of farm incomes in 1985, to which our motion refers, and the huge increase in the level of indebtedness of Britain's farmers can be attributed in part to the appalling weather which we suffered this summer. But it is important to note that the annual review draws attention to the decline in producer prices as well as in the output which has marked this year. Producer prices, even at a time of relative decline, have fallen by 2.5 per cent., compared with an increase in the cost of goods and services to farmers of about 1 per cent. What worries Britain's farmers is that one bad harvest cannot be withstood because of the weakness of the industry induced by the Government's policies. More disturbing than the 43 per cent. drop in income this year — in Scotland it was a 75 per cent. drop — is the underlying downward trend of farm incomes which the Minister failed to acknowledge. It is an underlying downward trend in real terms revealed by the Government's White Paper. Table 26B sets out the position commodity by commodity.

There is an index of average net farm incomes per farm in the United Kingdom. For dairy farmers, taking 1982–83 as the index year — the year of pre-election induced boom—as 100, farm incomes have dropped to 50. They have been halved and there has been a steady decline year by year. The same is true of the less-favoured area—cattle and sheep. There has been a drop to 50 since 1982–83. Lowland cattle and sheep have gone from 100 to 25 in five years, going clown consistently every year. Those drops are not weather-induced; they have been going on year in, year out, under the Government. The same is true of other cropping. It has been cut from 100 to 30 according to the index. Pigs and poultry, as always, fluctuate around the same level.

In cereals alone has there been any difference from the general trend, but there too it is as well to remember that today incomes stand at 45 compared with 100 in 1982. They are below what they were when the Government took office.

Mr. Leigh

Will the hon. Gentleman give way?

Mr. Maclennan

No, I will not. Questions have been asked, which must be answered.

The undeniable fact is that real farming income is now some 22 per cent. below its pre-war low in 1980.

Agriculture's indebtedness has been increased not only by the drop in incomes but by the sharp rise in the cost of servicing the debt in the last year of 2.5 per cent., pushing farming interest charges up by £100 million to £696 million.

The president of the Scottish National Farmers Union said: A measure of the threat to Scottish agriculture is that interest charges cost Scottish farmers £109 million in 1985, a figure 2½ times as much as the industry's £43 million net income in that year. Every 1 per cent. increase in interest rates cost Scottish farmers around £10 million on a whole year basis—more than the aid which the Government made available to help cope with the £150 million loss caused by last year's exceptionally adverse weather. Those are not my words; they are the words of Mr. Ian Grant.

Land values around the country which were hitherto sustained by the Government's induced optimism about the prospects for farmers, are now under pressure and there is clear evidence that they will fall this autumn.

That undoubtedly must be a source of considerable anxiety to the lenders of money, who are supporting many near-bankrupt enterprises up and down the country. It is a sign of the times that some institutional investors in agriculture are being brought under pressure to withdraw from agriculture altogether.

Mr. Maclean

Quite right: get the institutions out. They have caused the problems.

Mr. Maclennan

The overall volume of farm investment, which was down 12 per cent. last year, has dropped by £100 million. The impact of that on the construction industry in rural areas which are already hard pressed because of cuts in local authority spending, is particularly sharp. Farmers' expenditure on building and works last year has been cut by no less than 23 per cent., the largest post-war cut.

The impact of these figures on the rural economy goes far beyond the 620,000 people directly employed in the industry. It hits even harder the large number of people who supply the industry and the larger number who supply the industry and process its products.

As my hon. Friend the Member for Truro (Mr. Penhaligon) said, unemployment is already high in many rural areas, and that will increase if these trends are not halted. There are, however, other trends that are giving cause for alarm.

Farming is being concentrated in the hands of fewer and fewer people. More and more farms are simply being vacated. That is leaving large and important areas of the country bereft of life. As an example of that trend, more than half the wheat currently produced in this country is grown by less than 10 per cent. of those who produce it.

The Government must have in mind three factors which account for the deepening agricultural recession. The first is the yo-yoing level of interest rates. These are insupportable by an industry that is over-geared in response to the foolish pre-election promptings of the then Minister of Agriculture, Fisheries and Food, the right hon. Member for Worcester (Mr. Walker). That undirected expansionism amounted to nothing less than cynical irresponsibility.

The single most important step open to the Government which the alliance advocates to help stabilise interest rates, is entry of the exchange rate mechanism of the European monetary system, to which we devoted an earlier debate today. That is supported by the NFU generally and by the NFU in the Minister's own constituency — I was informed of that on Monday night — and the NFU in Scotland has publicly gone on record as advocating entry of the exchange rate mechanism. It is time that the Minister of Agriculture listened to the case being made for the benefit of the industry. [HON. MEMBERS: "Where is he?"]

The second factor that is influencing and deepening the recession in the industry is the Government's approach to the reform of the common agricultural policy.

Mr. Nicholas Baker


Mr. Maclennan

Although British budgetary expenditure on CAP support schemes appears to have increased by over £400 million in the past year, little of that has found its way into the farmers' pockets. The time has come for the Minister to recognise that the present policies of open-ended price support by means of expensive intervention and export restitution are plainly failing. There is no difference between Liberal Members and SDP Members or between agriculture and the alliance on that issue. The present methods of support are not only failing to exert effective financial control—the Minster seems more concerned about that than about the welfare of farmers—but failing to ensure the fair standard of living for farmers set out as an objective in article 39 of the treaty of Rome.

The Government amendment to the alliance motion draws attention to the additional £500 million of public expenditure on agriculture this year, but it is notably silent about the £879 million drop in British farm incomes. The present system of setting a single inflexible support price for an open-ended output is a direct inducement to increase production by all possible means. It exacerbates the imbalance between supply and demand and if it is set at a level to guarantee a fair return only for larger units it penalises smaller units and those in less-favoured areas.

I put forward a preferable alternative. [HON. MEMBERS: "Ah!"] Conservative Members who have been calling for statements of policy would have heard a great deal already if they had not been behaving like the usual rabble. If, instead of an open-ended system of support, limits are placed on the amount of farm produce qualifying for the full guaranteed price and that amount is geared to what can be produced by an efficient family farm, anything produced above that limit can be allowed to find a price level on the open market.

The House should note the difference between what I am proposing and the old milk quota concept introduced by the Government overnight, without forethought or consideration of the consequences. We are not saying that we will put a ceiling on production. We are saying that we will limit the amount of production eligible for support. Such entitlement to guaranteed support is a valuable asset which should be tradeable to avoid freezing production patterns, but subject to a small proportion of that asset being acquired by national Government for reallocation where required.

The third factor inducing the continuing and deepening recession is the shocking misdirection of Government public expenditure cuts, notably in capital grants and those which are in the pipeline in research, education and advice services. This has already taken its toll on businesses which supply the industry with plant, machinery and vehicles and is forcing many building contractors in rural areas to the wall.

Ministers sometimes portray themselves as bound hand and foot by Community decisions over which they claim to have little influence. Many initiatives are not merely permitted but positively encouraged by Community regulations, but the Government have largely failed to respond to them. That is why, while there has been stability of agricultural incomes for the past 10 years in the Community as a whole, in the United Kingdom there have been fluctuations of 10 per cent. to 20 per cent. from year to year since the Conservatives came to office in 1979.

Mr. Andy Stewart (Sherwood)

What about the weather?

Mr. Maclennan

Is the hon. Gentleman seriously suggesting that other Community countries have not been subject to changes in the weather since 1979?

Furthermore, agricultural incomes in Britain have tended to lag behind European Community averages. The less-favoured area and structure directives offer scope for the Government to help farming in the hills and uplands and other marginal areas far beyond the opportunities that they have grasped. Those directives reflect an awareness that farming in disadvantaged areas ought to be supported as a means of conserving the environment and rural populations and services.

The alliance commends to the Government further specific proposals. We urge the Government to make annual payments for the upkeep and construction of environmentally desirable amenities such as dry stone dykes, meadows and footpaths. The Government's new policy, designed to maintain and enhance broadleaved woodlands, on which the hon. Member for Pontypridd (Mr. John) spoke, largely ignores the inability of woodland to produce regular income. An annual management income will be necessary if that policy is to succeed.

In an age of surplus production, it is blind folly to reduce the funding of research into agricultural commodities. It is needed not only to lower the cost of farmers' input which eats into their profits — by, for example, finding less expensive means of drying crops and eradicating pest and disease — but to find new, biotechnical, markets for agricultural products, particularly cereals. It is needed to encourage the development of new crops which are not in surplus. The introduction of changes of economic activity on agricultural land, including the development of tourism and other rural industries, requires advice and flexibly directed financial assistance.

The Scottish agricultural colleges have provided invaluable practical help; should be a model to be followed, not a service to be dismantled. Farmers throughout Britain are baffled by the evident lack of a Government strategy for land. Above all, the Minister needs to tell the farming community what he and his colleagues in the Government expect of the industry. The industry will adapt if it is given a lead. The evident lack of concern for the catastrophic fall in farm incomes, exemplified by the Minister's opening speech, and the continuing downward trend of those incomes, suggests that the Government do not accept the challenge. The Social Democratic party and the Liberal party stand ready to take it up.

Mr. Maclean

On a point of order, Mr. Deputy Speaker. The hon. Gentleman castigated members from the Government Benches for not listening. I listened intently to everything he had to say and did not attempt to interrupt him once. Is it in order for him to refuse to answer the simple question on rates that I put to him?

Mr. Deputy Speaker

The hon. Gentleman knows that it is up to the hon. Member who has the floor to decide whether he gives way.

9.41 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer)

When a motion of such importance is put before the House, even though it was not put down until the last moment yesterday, it is necessary, if it is to be treated seriously, for it to be accompanied by some explanation of what the Opposition parties would put in place of the difficulties and dangers that they see. Therefore, Government Members sought an explanation from the hon. Member for Truro (Mr. Penhaligon) about what he would do if he were able to change the situation. He said that that could not be done because it was not for him to tell us and it was to be left to his hon. Friend the Member for Brecon and Radnor (Mr. Livsey).

Therefore, I listened with great attentiveness to the remarks of the hon. Member for Brecon and Radnor. It was a revealing speech, particularly when compared with the hon. Member for Caithness and Sutherland (Mr. Maclennan). It was another attempt to explain alliance policy.

I listened with great care to what the hon. Member for Caithness and Sutherland said he would do. It is worth the House remembering that he said that we should join the EMS, review the common agricultural policy and do many things, most of which the Government are already doing.

Mr. Alex Carlile


Mr. Gummer

I will not give way. The hon. Member for Caithness and Sutherland (Mr. Maclennan) had the arrogance not to give way to anybody and I have no intention of giving way.

The fact of the matter is that we have had a debate by two parties which have shown themselves totally unfit to do anything as they have been unable to present any policy. Therefore, for five minutes of my speech I felt it right to acquaint the House with the policy that they actually have.

I begin with the hon. Member for Caithness and Sutherland (Mr. Maclennan), who is in favour of quotas. He did not mention quotas throughout the whole of his speech—[HON. MEMBERS: "Withdraw."] I am sorry. I withdraw the statement that the hon. Gentleman did not mention quotas. He did not tell us that he was in favour of them during the speech. As his hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) told us in a curious intervention that he was against quotas, we start by suggesting that there is some doubt about the unity in the alliance, which was paraded so much by the hon. Member for Caithness and Sutherland at the end of his speech.

Let me continue along that line, for it is not only quotas that the hon. Member for Caithness and Sutherland is in favour of—

Mr. Alex Carlile

Will the right hon. Gentleman give way?

Mr. Gummer

I told the hon. and learned Gentleman that already much of my time has been taken up by the hon. Member for Caithness and Sutherland, so I shall not give way.

The hon. Member for Caithness and Sutherland has put forward his policies. He is in favour not only of quotas but of tying down agricultural enterprise in a number of other ways. First, let us see the Social Democratic party's policy, as announced in The Field last week, in which there is an elegant photograph of the hon. Gentleman. The article says: On hill farms there should be stocking limits". So no doubt every hill farm in the country will have a stocking limit laid on it by the hon. Gentleman.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

What kind of stocking?

Mr. Gummer

I do not think that the hon. Gentleman's knowledge of agriculture would go as far as distinguishing between the kinds of stocking.

The hon. Member for Caithness and Sutherland goes further. None of us should miss the Social Democratic party document called "Farming in the rural economy", published in December 1985. There we discover another kernel of SDP agriculture policy, in that it supports the introduction of a statutory minimum weaning age for pigs". [Interruption.] In case there is incredulity, I shall continue the quotation: There should be a requirement that pigs are not weaned until they are at least three weeks old.

I do not know how often you have considered the farrowing of pigs, Mr. Deputy Speaker, but, as you may know, there is more than one pig per sow. What happens if the farrowing begins before midnight but ends after midnight? Are the pigs which farrow early to be weaned before those which farrow later on? Is there to be a police force to stamp the piglets as they come out? What about the sows that have fewer teats? I apologise to my hon. Friend the Parliamentary Under-Secretary, but I must say that some pigs have fewer teats than they have piglets. Would they be given special derogation from the SDP policy, if the SDP were to take power? That is only a small part of the SDP's policy. I would not have laid emphasis upon it if the hon. Member for Caithness and Sutherland had given us some other part of his party's policy upon which to concentrate.

The hon. Gentleman said that we must have a special arrangement for small firms, which was to be a Community arrangement. How would the hon. Gentleman organise that in the Community? The small farm in Britain is, on average, four times as large as the small farm in the rest of the Community. His policy would help every small farm in every country in the Community except Britain. He has not done his homework. That is what happened on the last occasion when we debated an agricultural matter, although we did not have the pleasure of his presence in the Chamber on that occasion, except when he wished to hear the words of his own hon. Friends.

If only the members of the alliance parties would do the House the courtesy of coming in for the whole debate, but then the alliance parties find it embarrassing. An amendment to motion No. 175 which they put down was signed by 87 of my hon. Friends which pointed out that on the last occasion we heard three totally separate alliance policies on agriculture. We were able to quote for the benefit of the House one or two statements made by the hon. Member for Southwark and Bermondsey (Mr. Hughes). He was kind enough to tell us what the Liberal policy was. He said: The House knows my view that agricultural land should also be subject to planning consent and planning control, in the way that all other land should be. So there is the freedom in the countryside to find new jobs. When the hon. Gentleman was criticised for this and it was suggested that it was not the policy of his hon. Friends, either in the SDP or the Liberals, he replied, "That is Liberal policy." Then he said: I know that we have to win the argument with some of the vested interests."—[Official Report, 26 April 1985; Vol. 77, c. 1138-40.] The first two people he has to win are the hon. Member for Brecon and Radnor (Mr. Livsey) and the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel). They are the two vested interests with whom he has to win his argument.

The hon. Member for Brecon and Radnor has made it clear to us that he was elected by a farming constituency. We will look with great care at his farming pronouncements. He said that the Government's Bill that is before the House at the moment was good in parts. It is odd that it should be good in parts when he and his hon. Friends voted against it on Second Reading, because it was bad in all parts on that occasion, and, indeed, it was bad in all parts when he was speaking in Wales recently, when he said, "The Government should scrap its new legislation and its new Agriculture Bill."

We disagree with some of the comments of the hon. Member for Pontypridd (Mr. John), but he put forward a policy. At least we heard a policy from the hon. Gentleman, and in that respect he stood in stark difference — and it explains why his party is the official Opposition party—from the rabble responsible for the policies on the alliance Benches.

The debate began with a speech from the hon. Member for Truro (Mr. Penhaligon). He was not able to be drawn on the question whether he believed in quotas. He said that he was concerned about the broad sweep backcloth. Would it not be lovely to govern a country on the broad sweep backcloth concept? One does not have to be particular about anything or provide an answer to any question. All one needs to do is to assemble a series of special interests and promise them that they are sequentially closer to one's heart. Whoever one has in one's surgery today becomes the subject of a motion before the House.

My hon. Friend the Member for Penrith and The Border (Mr. Maclean) raised the question in its starkest form—"Where are the rural telephone boxes of yesteryear?" They are being installed increasingly in the country, but, surprisingly enough, there is no word about them in this motion. For the Opposition parties which put this motion—

Mr. James Wallace (Orkney and Shetland)


Mr. Gummer

I will not give way. The hon. Gentleman has not been with us today and he is in no position to intervene.

The hon. Member for Truro went on to deal with rural post offices. I am sure that he has the same experience as I have in my constituency.

One major difficulty lies in getting people to take on a rural post office—

Mr. Alex Carlile

Not in my constituency.

Mr. Gummer

That may not be true in the hon. and learned Gentleman's constituency, but it is profoundly true in my constituency and in the constituencies of a large number of my colleagues. My hon. Friend the Member for Ashford (Mr. Speed) has had exactly the same problem as I have had. The hon. and learned Member for Montgomery (Mr. Carlile) has not looked at his constituency closely enough if he thinks that that is not the case.

We have to face the issue of rural schools. It is all very well to talk about rural schools, but we all know that in many areas, such as mine, there are small schools because there are fewer children in the villages. [Interruption.] It is not because of the rural population. In many parts of the country, the rural population is increasing. It is a small matter of the birth of babies. I am doing my best about that as my fourth baby is about to arrive, but I cannot do it all and nor can alliance Members.

It is not right to say that, inevitably, a school of 26 children should be kept in old buildings, meeting a rural need only, with an education that is much less good than that which could be provided in other circumstances.

Mr. Alex Carlile

The right hon. Gentleman is against village schools.

Mr. Gummer

The hon. and learned Gentleman should look at my record in my constituency. I am in favour of good village schools. I have supported the closure of those that do not meet needs. The hon. and learned Member is trying to get a few extra selective votes. He is in favour of any village school—good, bad or indifferent; large, small or unimportant. It is a matter of votes, not a matter of caring for the countryside.

How could the hon. Member for Truro talk about transport when he was clearly unfamiliar with the results of the trials in Norfolk and Hereford? He could not have made that speech if he had known the facts. My hon. Friend the Member for Hereford (Mr. Shepherd) interrupted the hon. Member for Truro but the hon. Gentleman, either purposely or accidentally, misunderstood him. The result was perfectly clear. There had been a slight increase in the number of miles covered by rural buses. In surrounding areas where that freedom did not exist, there had been a marked diminution in rural bus services. That is the basis of our policy.

My hon. Friend the Member for Falmouth and Camborne (Mr. Mudd) made some tough and clear points about his constituency. He will not expect me to answer those with which I have not—[HON. MEMBERS: "Oh."] Unlike the members of the Liberal party, I answer on those matters in which I have competence and not on those matters that concern other Ministers. Therefore, I shall not answer my hon. Friend's points, but I shall ensure that he receives an answer from the Ministers concerned. My hon. Friend's suggestions are in line with those that we have put forward, especially with respect to planning. Circulars on rural planning issued by the Department of the Environment have been saying that we want local authorities—Liberal local authorities as well as others—to be more sensible and understanding about jobs in rural communities. That is why we have issued those circulars. We hope that we can press local authorities to do that.

We shall not get anywhere by listening to the answers put forward by the alliance parties. They have asked the House to believe that to give a general catalogue of the woes and problems that can be found at any time under any Government in any section of the community is sufficient. That is sufficient only if the alliance parties can add to that catalogue a positive programme of improvements. They have failed to talk about this. Our policies assist the environment. Alliance Members voted against the conservation legislation and all the improvements put forward by the Government. They voted against the improvements we proposed in the broad-leaf woodland measures that we put before the industry and that are now being debated—

Mr. David Alton (Liverpool, Mossley Hill)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 146, Noes 262.

Division No. 56] [10 pm
Adams, Allen (Paisley N) Atkinson, N. (Tottenham)
Alton, David Barnett, Guy
Archer, Rt Hon Peter Beckett, Mrs Margaret
Ashdown, Paddy Beith, A. J.
Ashton, Joe Benn, Rt Hon Tony
Bennett, A. (Dent'n & Red'sh) Jones, Barry (Alyn & Deeside)
Bermingham, Gerald Kennedy, Charles
Boothroyd, Miss Betty Kirkwood, Archy
Boyes, Roland Lamond, James
Brown, Gordon (D'f'mline E) Leadbitter, Ted
Brown, Hugh D. (Provan) Leighton, Ronald
Brown, N. (N'c'tle-u-Tyne E) Litherland, Robert
Brown, Ron (E'burgh, Leith) Livsey, Richard
Bruce, Malcolm Lloyd, Tony (Stretford)
Buchan, Norman Lofthouse, Geoffrey
Callaghan, Jim (Heyw'd & M) Loyden, Edward
Campbell-Savours, Dale McDonald, Dr Oonagh
Carlile, Alexander (Montg'y) McKay, Allen (Penistone)
Clark, Dr David (S Shields) McKelvey, William
Clarke, Thomas Maclennan, Robert
Clay, Robert McNamara, Kevin
Clelland, David Gordon McTaggart, Robert
Clwyd, Mrs Ann McWilliam, John
Cocks, Rt Hon M. (Bristol S) Marek, Dr John
Cohen, Harry Marshall, David (Shettleston)
Cook, Frank (Stockton North) Martin, Michael
Cook, Robin F. (Livingston) Mason, Rt Hon Roy
Corbett, Robin Maxton, John
Corbyn, Jeremy Maynard, Miss Joan
Craigen, J. M. Meadowcroft, Michael
Crowther, Stan Michie, William
Cunliffe, Lawrence Mitchell, Austin (G't Grimsby)
Davies, Ronald (Caerphilly) Nellist, David
Davis, Terry (B'ham, H'ge H'l) O'Neill, Martin
Deakins, Eric Owen, Rt Hon Dr David
Dewar, Donald Park, George
Dixon, Donald Patchett, Terry
Dormand, Jack Pavitt, Laurie
Douglas, Dick Pendry, Tom
Dubs, Alfred Penhaligon, David
Dunwoody, Hon Mrs G. Pike, Peter
Eadie, Alex Powell, Raymond (Ogmore)
Eastham, Ken Prescott, John
Ewing, Harry Radice, Giles
Field, Frank (Birkenhead) Randall, Stuart
Fields, T. (L'pool Broad Gn) Rees, Rt Hon M. (Leeds S)
Fisher, Mark Roberts, Ernest (Hackney N)
Flannery, Martin Robertson, George
Foot, Rt Hon Michael Robinson, G. (Coventry NW)
Forrester, John Sheerman, Barry
Foster, Derek Shore, Rt Hon Peter
Foulkes, George Short, Ms Clare (Ladywood)
Fraser, J. (Norwood) Silkin, Rt Hon J.
Freud, Clement Skinner, Dennis
George, Bruce Smith, Rt Hon J. (M'ds E)
Gilbert, Rt Hon Dr John Soley, Clive
Gould, Bryan Steel, Rt Hon David
Gourlay, Harry Stewart, Rt Hon D. (W Isles)
Hamilton, James (M'well N) Thomas, Dafydd (Merioneth)
Hancock, Michael Thomas, Dr R. (Carmarthen)
Harman, Ms Harriet Tinn, James
Harrison, Rt Hon Walter Wainwright, R.
Haynes, Frank Wardell, Gareth (Gower)
Hogg, N. (C'nauld & Kilsyth) Wareing, Robert
Holland, Stuart (Vauxhall) Weetch, Ken
Home Robertson, John Welsh, Michael
Howells, Geraint Wigley, Dafydd
Hoyle, Douglas Williams, Rt Hon A.
Hughes, Robert (Aberdeen N) Winnick, David
Hughes, Roy (Newport East) Wrigglesworth, Ian
Hughes, Sean (Knowsley S) Young, David (Bolton SE)
Hughes, Simon (Southwark)
Jenkins, Rt Hon Roy (Hillh'd) Tellers for the Ayes:
John, Brynmor Mr. John Cartwright and
Johnston, Sir Russell Mr. James Wallace.
Aitken, Jonathan Baker, Nicholas (Dorset N)
Alison, Rt Hon Michael Baldry, Tony
Ancram, Michael Banks, Robert (Harrogate)
Arnold, Tom Batiste, Spencer
Ashby, David Beaumont-Dark, Anthony
Atkins, Rt Hon Sir H. Bendall, Vivian
Atkins, Robert (South Ribble) Bevan, David Gilroy
Baker, Rt Hon K. (Mole Vall'y) Biffen, Rt Hon John
Body, Sir Richard Heseltine, Rt Hon Michael
Bonsor, Sir Nicholas Hickmet, Richard
Boscawen, Hon Robert Hirst, Michael
Bottomley, Mrs Virginia Hogg, Hon Douglas (Gr'th'm)
Braine, Rt Hon Sir Bernard Holland, Sir Philip (Gedling)
Brandon-Bravo, Martin Holt, Richard
Bright, Graham Howard, Michael
Brown, M. (Brigg & Cl'thpes) Howarth, Alan (Stratf'd-on-A)
Browne, John Howarth, Gerald (Cannock)
Bryan, Sir Paul Howell, Ralph (Norfolk, N)
Buchanan-Smith, Rt Hon A. Hubbard-Miles, Peter
Buck, Sir Antony Hunt, David (Wirral W)
Budgen, Nick Hunt, John (Ravensbourne)
Bulmer, Esmond Hunter, Andrew
Burt, Alistair Hurd, Rt Hon Douglas
Butcher, John Jackson, Robert
Carttiss, Michael Jones, Gwilym (Cardiff N)
Chope, Christopher Jones, Robert (Herts W)
Churchill, W. S. Kellett-Bowman, Mrs Elaine
Clark, Sir W. (Croydon S) Key, Robert
Clarke, Rt Hon K. (Rushcliffe) King, Roger (B'ham N'field)
Clegg, Sir Walter Knight, Greg (Derby N)
Cockeram, Eric Knowles, Michael
Conway, Derek Knox, David
Coombs, Simon Lang, Ian
Cope, John Latham, Michael
Cormack, Patrick Lawler, Geoffrey
Cranborne, Viscount Lee, John (Pendle)
Currie, Mrs Edwina Leigh, Edward (Gainsbor'gh)
Dorrell, Stephen Lennox-Boyd, Hon Mark
Douglas-Hamilton, Lord J. Lester, Jim
Dunn, Robert Lewis, Sir Kenneth (Stamf'd)
Durant, Tony Lightbown, David
Dykes, Hugh Lilley, Peter
Emery, Sir Peter Lloyd, Peter (Fareham)
Eyre, Sir Reginald Lord, Michael
Fairbairn, Nicholas Lyell, Nicholas
Favell, Anthony McCurley, Mrs Anna
Fenner, Mrs Peggy MacGregor, Rt Hon John
Fletcher, Alexander MacKay, Andrew (Berkshire)
Fookes, Miss Janet MacKay, John (Argyll & Bute)
Forman, Nigel Maclean, David John
Forsyth, Michael (Stirling) McNair-Wilson, M. (N'bury)
Forth, Eric McNair-Wilson, P. (New F'st)
Fox, Marcus McQuarrie, Albert
Franks, Cecil Major, John
Fraser, Peter (Angus East) Malins, Humfrey
Freeman, Roger Maples, John
Fry, Peter Marland, Paul
Gale, Roger Marlow, Antony
Galley, Roy Marshall, Michael (Arundel)
Gardner, Sir Edward (Fylde) Mather, Carol
Garel-Jones, Tristan Mayhew, Sir Patrick
Glyn, Dr Alan Mellor, David
Goodhart, Sir Philip Merchant, Piers
Gorst, John Meyer, Sir Anthony
Gow, Ian Miller, Hal (B'grove)
Gower, Sir Raymond Mills, Iain (Meriden)
Grant, Sir Anthony Miscampbell, Norman
Greenway, Harry Mitchell, David (Hants NW)
Gregory, Conal Moate, Roger
Griffiths, Sir Eldon Montgomery, Sir Fergus
Griffiths, Peter (Portsm'th N) Morrison, Hon P. (Chester)
Ground, Patrick Moynihan, Hon C.
Gummer, Rt Hon John S Mudd, David
Hamilton, Hon A. (Epsom) Neale, Gerrard
Hamilton, Neil (Tatton) Newton, Tony
Hampson, Dr Keith Nicholls, Patrick
Hanley, Jeremy Norris, Steven
Hargreaves, Kenneth Onslow, Cranley
Harris, David Oppenheim, Phillip
Harvey, Robert Osborn, Sir John
Haselhurst, Alan Page, Richard (Herts SW)
Hawkins, C. (High Peak) Parris, Matthew
Hayes, J. Patten, Christopher (Bath)
Hayhoe, Rt Hon Barney Pattie, Geoffrey
Hayward, Robert Pawsey, James
Heathcoat-Amory, David Peacock, Mrs Elizabeth
Heddle, John Pollock, Alexander
Henderson, Barry Portillo, Michael
Powell, William (Corby) Stradling Thomas, Sir John
Powley, John Sumberg, David
Prentice, Rt Hon Reg Tapsell, Sir Peter
Proctor, K. Harvey Taylor, John (Solihull)
Raffan, Keith Taylor, Teddy (S'end E)
Rhodes James, Robert Terlezki, Stefan
Rhys Williams, Sir Brandon Thatcher, Rt Hon Mrs M.
Ridley, Rt Hon Nicholas Thomas, Rt Hon Peter
Ridsdale, Sir Julian Thompson, Donald (Calder V)
Rifkind, Rt Hon Malcolm Thompson, Patrick (N'ich N)
Rippon, Rt Hon Geoffrey Thorne, Neil (Ilford S)
Roberts, Wyn (Conwy) Thornton, Malcolm
Robinson, Mark (N'port W) Thurnham, Peter
Roe, Mrs Marion Townend, John (Bridlington)
Rossi, Sir Hugh Townsend, Cyril D. (B'heath)
Rost, Peter Tracey, Richard
Rowe, Andrew Trotter, Neville
Rumbold, Mrs Angela Twinn, Dr Ian
Ryder, Richard Vaughan, Sir Gerard
Sackville, Hon Thomas Viggers, Peter
Sainsbury, Hon Timothy Waddington, David
St. John-Stevas, Rt Hon N. Wakeham, Rt Hon John
Sayeed, Jonathan Waldegrave, Hon William
Shaw, Giles (Pudsey) Walden, George
Shaw, Sir Michael (Scarb') Walker, Bill (T'side N)
Shelton, William (Streatham) Waller, Gary
Shepherd, Colin (Hereford) Wardle, C. (Bexhill)
Shersby, Michael Warren, Kenneth
Silvester, Fred Watson, John
Sims, Roger Watts, John
Skeet, Sir Trevor Wells, Bowen (Hertford)
Smith, Tim (Beaconsfield) Wheeler, John
Soames, Hon Nicholas Whitney, Raymond
Speed, Keith Wiggin, Jerry
Spence, John Winterton, Mrs Ann
Spencer, Derek Winterton, Nicholas
Spicer, Jim (Dorset W) Wolfson, Mark
Squire, Robin Wood, Timothy
Stanbrook, Ivor Woodcock, Michael
Stanley, Rt Hon John Yeo, Tim
Steen, Anthony Younger, Rt Hon George
Stern, Michael
Stevens, Lewis (Nuneaton) Tellers for the Noes:
Stewart, Allan (Eastwood) Mr. Michael Neubert and
Stewart, Andrew (Sherwood) Mr. Francis Maude.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

Mr. Speaker forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House notes that the rate support grant settlement is a recognition of the undoubted needs of inner cities but involves a shift of only 2 per cent. overall in the grant paid to shire areas; welcomes the provisions of the Transport Act 1985 which are designed to check the decline in rural bus services and to stimulate new services; welcomes the Government's initiatives on conservation and the rural economy; notes the extra public spending of £500 million this year on agriculture; and welcomes, in particular, the special payments to livestock farmers in those areas worst affected by adverse weather and the recent increases in hill livestock compensatory payments.

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    2. LOCAL LOANS 26 words