Commons Sitting of 5 May 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL
    Considered; to be read the Third time.

    LONDON REGIONAL TRANSPORT BILL (By Order)
    Order read for resuming adjourned debate on Question [10 December], That the Bill be now considered.
    Debate further adjourned till Thursday 12 May.

    TEIGNMOUTH QUAY COMPANY BILL (By Order)

      YORK CITY COUNCIL BILL [Lords] (By Order)
      Order for Second Reading read.
      To be read a Second time upon Thursday 12 May.

    ASSOCIATED BRITISH PORTS (No. 2) BILL (By Order)
    Order for Second Reading read.
    To be read a Second time upon Wednesday 11 May at Seven o'clock.

    CARDIFF BAY BARRAGE. BILL (By Order)
    Order for Second Reading read.
    To he read a Second Time upon Thursday 12 May.

    CITY OF LONDON (SPITALFIELDS MARKET) BILL (By Order)
    Order for Second Reading read.
    To be read a Second time upon Thursday 12 May at Seven o'clock.

    FALMOUTH CONTAINER TERMINAL BILL (By Order)
      NORTH KILLINGHOLME CARGO TERMINAL BILL (By Order)
        ST. GEORGE'S HILL, WEYBRIDGE, ESTATE BILL (By Order)

          NEWCASTLE UPON TYNE TOWN MOOR BILL [Lords] (By Order)
          Orders for Second Reading read.
          To be read a Second time upon Thursday 12 May.

    ASSOCIATED BRITISH PORTS (BARROW) BILL [Lords] (By Order)
    Read a Second time, and committed.
Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    British Poultry Federation
    Mr. Alexander: To ask the Minister of Agriculture, Fisheries and Food when he last met the chairman of the British Poultry Federation; what matters were discussed; and if he will make a statement.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson): My right hon. Friend met the chairman of the British Poultry Federation today at the lunch following the federation's annual general meeting. They discussed a number of issues of interest to the industry.
    Mr. Alexander: I thank my hon. Friend for that reply, which was not quite as foul as I had expected. Will he congratulate the industry on the way in which it has managed to achieve considerable success without assistance from the EEC?
    Mr. Thompson: I am sure that my right hon. Friend mentioned that at lunch today. It is remarkable that industries, such as the poultry industry which receive least do best. We assist with export refunds and in as many other ways as possible. I shall be visiting the European poultry fair at Stoneleigh on the 18th of this month.
    Mr. Hunter: In discussions with the British Poultry Federation, will my hon. Friend draw attention to the fact that prices to the producer are dropping at a far greater rate than those to the consumer? Surely that is an unsatisfactory state of affairs. Will my hon. Friend comment on the matter?
    Mr. Thompson: Market forces will always find their own level. I am sure that the producers and the retailers who are in a very strong position at present, constantly argue this out between themselves.

    Hill Farming
    Mr. Kennedy: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the current level of average income in the hill farming sector.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): The latest information on the incomes of hill and upland livestock farms is shown in tables 30, 31 and 32 of the White Paper on the "Annual Review of Agriculture 1988"—Cm. 299 —and, in more detail, in the recent publication "Farm Incomes in the United Kingdom".
    Mr. Kennedy: I thank the Minister for that comprehensive answer. Following the Brussels summit in February and the decisions or actions initiated there on price stabilisers, particularly for sheep, there is bound to be some anxiety in marginal agriculture areas, such as my constituency in the Highlands of Scotland, about long-term trends in the sheep sector. Will the Government carefully bear in mind the long-term concerns in areas such

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    as the Highlands when reaching or implementing domestically any decisions that follow from European decisions?
    Mr. Gummer: I have recently spent some time in the mountainous areas of Wales, which have similar problems. I am sure the hon. Gentleman will accept that we keep the matter under close consideration, because those areas rely particularly on sheep for their income and we shall be taking them into consideration in the coming review of the sheepmeat regime. However, the forecast for the 1987–88 accounting year suggests a reasonably healthy rise in incomes for such farms in the United Kingdom.
    Mr. Curry: Will my right hon. Friend accept that little could be more damaging to the hill sheep producer than a set-aside programme which encourages people to go into livestock, notably sheep, on the lowland? Will he exercise the option that he will have when he draws up his set-aside programme to make sure that while safari parks with camels or lions may be put on set-aside land, sheep are not.
    Mr. Gummer: I am not sure that I wish to encourage camels on such land either, but the matter that my hon. Friend raises is important and we are trying to reach a decision on that in the set-aside arrangements. People are obviously considerably worried if they feel that others are supported in a way that they are not to produce something in areas where other opportunities exist. That is obviously a matter of great importance, on which my right hon. Friend will have something to say later.
    Mr. Campbell-Savours: What about the shortfall in income for hill sheep farmers in Cumbria and other parts of the United Kingdom as a result of Chernobyl? Is the Minister aware that 66 farmers in Cumbria believe that they are owed £172,000 by Her Majesty's Government for damage arising from the Chernobyl incident? Does he not think it unreasonable that an accident that took place thousands of miles away in the Soviet Union should be paid for by my constituents and other farmers in the county? I recognise that there have been many discussions over the past year, but can he, even at this late stage, help us out?
    Mr. Gummer: We have looked carefully at all the individual claims. There is no doubt that in any system some will fall outside the guidelines, whether on Chernobyl or any other matter. If the hon. Gentleman wants to do something about Chernobyl, he might ask his hon. Friend the Member for South Shields (Dr. Clark) to stop stirring up worries and anxieties over Chernobyl on matters that do not exist and never have existed.
    Sir Hector Monro: Does my right hon. Friend agree that hill farming is a hard-pressed section of the industry? Does he accept that the environmentally sensitive area programme has been a great success? Is there any hope of extending that programme, so that more farmers can avail themselves of management agreements in difficult highland areas?
    Mr. Gummer: I am sure that my hon. Friend is right in saying that the implementation of the first, and now the second, set of ESA proposals has been a success, but they are an experimental series of areas from which we must learn. It would be a mistake to suggest that we could now decide on extensions. However, we are obviously learning
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    all the time from the wide range of areas concerned, and if we find that it is sensible to extend them, no doubt we shall do so.
    Dr. David Clark: When the Minister looked at the tables of average incomes in the upland areas, did he notice that some of the incomes were very low indeed? Will he take seriously the point raised by my hon. Friend for Workington (Mr. Campbell-Savours)? Does he accept that in some cases in Cumbria and Wales those low incomes were affected by the shortfall in Chernobyl payments? Is he aware that I wrote to his right hon. Friend the Minister of Agriculture, Fisheries and Food at the end of March suggesting that we should appoint local adjudicating committees to look at all the cases to find a reasonable and fair solution to the problem?
    Mr. Gummer: We have tried hard throughout to look at those cases as carefully as possible and to give them the compensation to which they are entitled. A further look at the same cases will not make any difference. I repeat that I hope that the hon. Gentleman will take on his shoulders the serious responsibility that he bears in trying to frighten people in areas where no fears need to be raised.

    Grain
    Mr. Heathcoat-Amory: To ask the Minister of Agriculture, Fisheries and Food what representations he has received about arrangements for the release of grain held in United Kingdom surplus stores.
    The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor): I continue to receive representations about the current arrangements for the release of grain held in intervention.
    Mr. Heathcoat-Amory: Does my right hon. Friend agree that storage is now one of the most profitable sectors of British agriculture? Does he think that the tendering procedures for taking grain out of store are adequate to overcome the natural reluctance of store owners to relinquish their source of income?
    Mr. MacGregor: We are continually examining the storage arrangements to ensure that we get value for money. The real point is not about releasing grain from intervention stores, but that, under the Community rules adopted last year, Commission agreement is required for sales of grain from intervention on to the domestic market. We opposed those new rules when they were introduced, but we have them. There is no point in making intervention grain available, because, under Community rules, it cannot be sold at a price lower than the buying-in price and market prices are currently well below that level.
    Mr. Ralph Howell: What does my right hon. Friend consider to be the world market price for milling and other wheat?
    Mr. MacGregor: I do not have the precise figures, but I suspect that my hon. Friend is saying that the world market price can change. It depends on the surpluses that exist and the subsidy that is going in from not only the Community, but the United States and elsewhere, to reach a world market price. That is a difficult figure to estimate, but if we get the surpluses under control the world market price will not necessarily be where it is today.
    Mr. Tony Banks: If the Minister cannot answer that question, perhaps he can answer this one. How much is it costing to keep the grain in intervention stores?
    Mr. MacGregor: have made it plain many times that the costs are too high. The costs are about £12·5 billion a year for all intervention stores. That is not just the cost of storage, but the cost of disposing of the surpluses. That is why we took such a strong line in the negotiations for CAP reform that we have successfully carried through to deal with that problem. I have always made it clear that we must reduce those costs.

    Farming (Extensification)
    Sir John Farr: To ask the Minister of Agriculture, Fisheries and Food whether he intends to introduce a scheme to de-intensify United Kingdom farming.
    Mr. Gummer: The Council of Ministers has recently adopted a measure requiring member states to introduce extensification schemes providing incentives for farmers to reduce output of surplus agricultural products. We shall not be able to determine how extensification should be applied in the United Kingdom until detailed Commission rules have been established.
    Sir John Farr: Although I am grateful to my right hon. Friend for that answer, does he agree that there is much to be said for a regime in farming as an option that encourages farmers to put less in and extract less from their land? That would solve the problem of excess application of nitrates and the many other problems that are associated with intensive farming.
    Mr. Gummer: My hon. Friend makes a good point. The extensification schemes may play an important role. However, the problems of policing and the difficulties of ensuring that money from the taxpayer is not given to people who continue to over produce are very serious. I hope my hon. Friend will accept that it will take a little time to overcome those difficulties.
    Mr. Geraint Howells: Does the Minister agree that the Government must be careful before introducing such a scheme? Last year many hon. Members on both sides of the House suggested that we should have quotas for beef production. The Minister will be aware that there is now a shortage of beef in Britain and in other countries.
    Mr. Gummer: The hon. Gentleman, with his great knowledge of farming, underlines the problem that it is impossible to know from one year to the next what beef production will be. We know that there is a major underlying trend of increasing yields in the production of livestock. We also know that all sorts of international complications can change the suggested amounts for next year. The hon. Gentleman will agree that an extensification scheme that might allow people to farm less intensively—where that seems sensible—would be helpful, if we could find one that worked.
    Sir Richard Body: Does my right hon. Friend agree that we made a good start in this respect by introducing ESAs under the Agriculture Act 1986? Should we not press ahead with more such schemes as fast as we reasonably can?
    Mr. Gummer: It is a very good start, but these are experimental areas. Each of them has peculiarities. We are trying to see how the system works best. When we evaluate how the ESAs have worked over the next two or three years, we shall be in a better position to make the decision that my hon. Friend would like. I remind him that just a year ago we had only half as many ESAs. We have doubled that number already, and also the amount of money that we are spending on them.
    Mr. Win Griffiths: We welcome these first measures and recognise the grave problems of implementing the schemes, but are not the pollution problems, which are equally severe, likely to cause as grave problems? Will the Government give a firm commitment that they will do more to tackle the problems of pollution in rural areas?
    Mr. Gummer: I have made it clear in recent speeches and in the actions that we have taken that we deplore pollution by the farming community. This community is taking action, and more and more people will realise how important the issue is. Last year was a difficult one for pollution because of the weather, but I do not think such incidents are justifiable, and we must get a better record.

    Public Houses (Tenancy System)
    Mr. Allen: To ask the Minister of Agriculture, Fisheries and Food what representations he has received from the east midlands on the tenancy system in public houses.
    Mr. Donald Thompson: A number of hon. Members have written to me concerning the situation of tenants of Home Brewery plc. I have also met delegations of hon. Members and representatives of the National Licensed Victuallers Association to hear their views on the application of the Brewers Society code of practice on tenants' security in this and other cases.
    Mr. Allen: The Minister will be aware, because he has seen other hon. Members and me, that the Scottish and Newcastle brewery has taken over the Home brewery in Nottingham, with the consequence that up to 300 tenants have been issued with either notice to quit or up to fivefold rent increases. Will the Minister make representations so that the tenants and Scottish and Newcastle will get around the table, and the latter will behave in a decent way towards those tenants?
    We are also worried about the future of the Daybrook brewery in Nottingham, and the assurances that Scottish and Newcastle has given us may not be worth the paper they are written on. Matthew Brown's brewery in Workington—[Interruption] I know that Conservative Members do not like to hear that—
    Mr. Speaker: Order. I ask the hon. Gentleman to put his question briefly. This is not an Adjournment debate.
    Mr. Thompson: If I did not before—and I did—I now recognise the passion that the hon. Gentleman brings to this issue. I met him, my hon. Friend the Member for Sherwood (Mr. Stewart) and other hon. Members, and the National Licensed Victuallers Association. After that meeting I wrote to the Brewers Society outlining the events of the meeting and asking it to look at the matter carefully.
    Mr. Colvin: My hon. Friend will be aware that there are considerable reservations in the licensed trade about the

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    way in which the Brewers Society's code of guidance on tenants' security is operating in practice. As he will know, there are two alternatives. One is to give the code of practice statutory backing; the other is to make publicans subject to the Landlord and Tenant Act 1954. Which of those alternatives does he favour, if he feels that a change is required?
    Mr. Thompson: I suggest that the tenants, through their associations, press the breweries to stick more closely to the code of practice, and that my hon. Friend, if he thinks it appropriate, introduces a measure to codify that code of practice in legislation. It is not for me to do that at this time or to encourage the landlords and tenants to move to the Landlord and Tenant Act 1954.
    Mr. Campbell-Savours: What are we going to do about this company, which rides roughshod over the livelihoods of people throughout the United Kingdom wherever it is allowed to operate? May we have an official inquiry of some sort into Scottish and Newcastle's divestment of its shares in MacKinleys in Scotland and into the jobs lost in Scotland? Such an inquiry will reveal once again the irregular and unreasonable way in which the company operates.
    Mr. Thompson: The pressure of market forces does not always work in the direction of tenants, landlords or brewers. I do not think that the sort of inquiry envisaged by the hon. Gentleman would be sensible, or clear, if it were set up in the way that he suggests.

    Bananas
    Mr. Sackville: To ask the Minister of Agriculture, Fisheries and Food what representations he has received about the price of bananas.
    Mr. Donald Thompson: The price of bananas is a matter for the market, but my Department receives a variety of views on the subject, depending on market circumstances.
    Mr. Sackville: Is my hon. Friend not aware that, historically, we have paid the highest prices for bananas in Europe and have the lowest consumption, mainly because of our bilateral agreements with Jamaica and other producers? Does he not agree that if we are to go on helping our Commonwealth friends in this way by paying over the world price the responsibility should fall on our trade and aid budget and not on the household budgets of families such as mine, who are very partial to bananas?
    Mr. Thompson: I am afraid that my hon. Friend is a month late. On 31 March we introduced a new system whereby dollar bananas would be able to be introduced to Britain at a minimum level. That system will also safeguard traditional suppliers to whom bananas are most important and for whom they are a great source of income. My hon. Friend mentioned aid. My hon. Friend the Member for Bath (Mr. Patten) made sure that the Caribbean islands received about £4 million of aid last year, plus aid from the European Community, the World Bank and the Caribbean Bank, to which we were contributors. If bananas can produce so many fast bowlers, perhaps we could have them cheaper in Yorkshire as well.

    Pigmeat
    Mr. Tredinnick: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the competitive position of British pigmeat producers.
    Mr. MacGregor: In recent weeks the pigmeat market appears to have stabilised and the United Kingdom monetary compensatory amounts have fallen from minus 10·9 per cent. to minus 4·9 per cent.
    Mr. Tredinnick: Would my right hon. Friend care to comment on the impact of current MCA levels on imported pigmeat and bacon? Is he satisfied that the British slaughtering industry is sufficiently prepared for the single European market in 1992?
    Mr. MacGregor: The whole of industry has to make sure that it is sufficiently prepared for 1992, and many industries have a lot to do in that respect. In answer to my hon. Friend's first point, our domestic market shares have been holding up, but the important point is that the recent drop in the MCAs has meant that the subsidy per tonne of imported bacon side has fallen from £69 to £31 in the last few weeks. In so far as the MCAs are having an effect, it is much reduced. In the debate after Question Time I shall have more to say about pigmeat MCAs.
    Mrs. Margaret Ewing: Given that there is a slight improvement, is the Minister satisfied that the pig industry is out of the crisis that it has faced over the past few months? Does he recall that in 1983, in a similar situation, 12 per cent. of the United Kingdom's pig breeding stock was lost? Is he satisfied that that will not happen again?
    Mr. MacGregor: I have to make clear that it is not a slight improvement in MCAs. At the peak in February last year MCAs were nearly minus 28 points and now they are below minus 5. That is a considerable change. I am well aware of the pressures that the pig industry is facing. We are in a cycle in which supply is exceeding demand and, in a market such as the pigmeat market, that creates problems for producers.
    Mr. Marland: Is my right hon. Friend aware that the British pig industry is further disadvantaged by the Dutch pig industry, which makes extensive use of manioc imports? Pelleted manioc imported into Holland carries a levy of 28 per cent. and the levy on the raw material is 6 per cent. Is he aware of allegations that the Dutch are importing pelleted manioc and paying only the 6 per cent. levy? Is my right hon. Friend's Ministry prepared to look at this?
    Mr. MacGregor: We may if we wish use manioc in this country, but naturally the Dutch have advantages in their ports and in the ease of access at their ports for their producers. I have been looking into the point raised by my hon. Friend and the Customs directorate of the European Commission is investigating it. It is a fairly technical point and perhaps I could write to my hon. Friend about it. I do not think that it makes any difference to the present position of our pig industry.

    Woodland Grant Scheme
    Mr. Martyn Jones: To ask the Minister of Agriculture, Fisheries and Food when he next proposes to

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    meet representatives of the National Farmers Union to discuss the woodland grant scheme; and if he will make a statement.
    Mr. MacGregor: I have no arrangements at present to meet representatives of the National Farmers Union for the specific purpose of discussing the woodland grant scheme.
    Mr. Jones: Is the Minister aware that farmers who take part in the woodland grant scheme will be at a disadvantage with the planting of conifers, because if they plant less than 50 per cent. of conifers they will not be able to claim the planting grants, while farmers outside the scheme who plant 100 per cent. of conifers will able to claim on the whole figure?
    Mr. MacGregor: Some changes have been made to the woodland grant scheme to deal with conifers, which are environmentally more acceptable in some parts of the country than in others and have been welcomed by some people. However, overall, the woodland grant scheme fully compensates for the changes in the tax regime, because the support from the Exchequer, whether in tax forgone or in grants for planting, remains unchanged. The woodland grant scheme as now conceived is better than the previous one.
    Sir Geoffrey Johnson Smith: Is my right hon. Friend aware that, in Sussex and many parts of Kent, of far greater importance than a woodland grant scheme is the introduction of a clearance scheme so that people can clear the woods and go ahead with replanting?
    Mr. MacGregor: If my hon. Friend is referring to the costs of storm damage clearance, he will know that we have received a full report on the matter and a report from the Select Committee. I hope, before too long, to be able to respond to those reports.
    Mr. Alan W. Williams: Does the Minister agree that there should he far more emphasis on planting woodlands, both under this scheme and under the Farm Land and Rural Development Bill? As about 15 per cent. of our land is producing 50 per cent. more food than we need, there is a need for massive diversification into woodland. Does not the scheme need to be doubled, trebled or even increased tenfold over the next five years?
    Mr. MacGregor: I hope the hon. Gentleman will have noticed how, under this Government, private landowners have increased their planting. As he said, that is the purpose of the Bill that will come before the House for its final stages this evening. We have been taking a number of initiatives, and I hope that the hon. Gentleman will give his full support to the Bill.
    Mr. Ian Bruce: May we have an assurance that the excellent knowledge and expertise in the Forestry Commission will be used to advise farmers so that they do not go headlong into long-term investment and perhaps make many mistakes which the commission could prevent? Will my right hon. Friend encourage the National Farmers Union and the Forestry Commission to discuss such matters?
    Mr. MacGregor: The Forestry Commission is available for both encouragement and advice. Under schemes that qualify for grants farmers must go to the Forestry
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    Commission, and will therefore receive advice. My hon. Friend will know that we have been stepping up the advisory capability of ADAS to meet that objective.
    Mr. Ron Davies: If the Minister meets representatives of the National Farmers Union, will he discuss with them the practice that has apparently been developing over the past couple of years whereby the Government approve for planting more than double the hectareage provided for within their own targets? Does that mean that expenditure on the forestry industry is not cash limited?
    Mr. MacGregor: I am not aware of the problem to which the hon. Gentleman refers and I shall have to look into it, but, within our provision, we hope that there will be full take-up of these grants, although we must apply budgetary disciplines.

    Farm Diversification Scheme
    Mr. Kirkhope: To ask the Minister of Agriculture, Fisheries and Food what is the latest position on the introduction of the farm diversification scheme.
    Mr. Gummer: Farmers have responded enthusiastically to the introduction of capital grants for farm diversification. Since the scheme started on 1 January this Ministry has received about 388 applications covering a wide range of investments. We plan to introduce soon related grants for feasibility studies and marketing under powers being sought under the Farm Land and Rural Development Bill which we will discuss this evening.
    Mr. Kirkhope: Will my right hon. Friend consider placing greater emphasis on assistance to enterprises on the fringes of urban centres, such as my constituency of Leeds, North-East? Is he not disappointed that a larger number of applications have not been received for activities involving horses, bearing in mind my interest in those activities in Yorkshire?
    Mr. Gummer: I bear in mind my hon. Friend's interests in these activities, but I am not disappointed in the level of applications, because we have received a great number and wide range of them in a short time. I take my hon. Friend's point, but one of the problems that we must sort out in the urban fringes is how best to apply the planning arrangements to protect the environment, while at the same time providing people with an opportunity to diversify.
    Mr. Wells: Will my right hon. Friend consider extending the farm diversification scheme to those who benefit under the banana agreement referred to by my hon. Friend the Member for Bolton, West (Mr. Sackville), in view of his obvious antipathy to that programme? Is it not true that, under that programme, the consumption of bananas in this country has been increasing by 4 per cent. per annum?
    Mr. Speaker: Order. I am trying to relate this to the original question.
    Mr. Wells: It relates to the farm diversification scheme. I am asking my right hon. Friend whether the scheme should be extended to other producers of bananas, who will have to diversify if banana imports decline.
    Mr. Gummer: I do not think that there is any opportunity for the Government to extend the scheme to

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    the Caribbean islands. The consumption of bananas is increasing, and should continue to do so. It is reasonable that some of those bananas should come from other developing countries that produce them. We must protect those with whom we have a long-standing agreement and understanding, but I do not see why some of the expansion should not benefit the other poorer countries.

    Farming (Extensification)
    Mr. Haynes: To ask the Minister of Agriculture, Fisheries and Food when he proposes to publish further details of his proposals for an extensification scheme; and if he will make a statement.
    Mr. Gummer: Following the decisions of the European Council in February, the Agriculture Council has now agreed separate schemes for set-aside and for extensification. The Commission has recently adopted the detailed rules for set-aside. An announcement will be made as soon as possible on the detailed arrangements to apply in the United Kingdom. Introduction of a scheme for extensification will depend on further Commission rules, which have yet to be proposed.
    Mr. Haynes: There are proposals about the production of food, and whether too much or too little is being produced, but what about the protection of wildlife? We want protection for the birds, the bees, the weasels, the squirrels and the rabbits, and if we do not get it, the Minister will be looking for protection.
    Mr. Gummer: I know how close the protection of rabbits and weasels is to the heart of the hon. Gentleman, and I am sure he will be pleased to know that in the environmentally sensitive areas we have taken a number of opportunities to find ways in which this protection can be extended, not least with the strip system, which is being used in Breckland. Great care will be taken to ensure that the set-aside scheme is environmentally satisfactory. The hon. Gentleman will also understand that since the passing of the Agriculture Act 1986 the Ministry has had a duty to take into account the environmental impact of its decisions.
    Mr. Nicholas Bennett: In coming to a decision on whether, under the set-aside scheme, farmers should leave their land fallow or be allowed to use it for grazing, will my right hon. Friend bear in mind the grave concern among farmers in Pembrokeshire and in west Wales that they will be put at a grave disadvantage if farmers receiving grants can then use the land for stock grazing and undercut prices?
    Mr. Gummer: I assure my hon. Friend that we are taking closely into account the representations that we have received in deciding how the scheme should apply to the United Kingdom. It is obviously of great concern for those who can do little other than use their land for grazing if others who have a range of opportunities are encouraged by support to move into grazing of livestock. On the other hand, the opportunity for grazing fallow is there, and we shall have to consider it most carefully.

    Common Agricultural Policy
    Mr. Geraint Howells: To ask the Minister of Agriculture, Fisheries and Food what assessment he has
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    made of the extent to which the common agricultural policy at present gives British farmers the opportunity to compete on equal terms with their counterparts in Europe; and if he will make a statement.
    Mr. MacGregor: As the Commission document on the price-fixing makes clear, it is very difficult to assess equal terms between member states, since so many factors vary.
    Mr. Howells: Is this not an opportune time to have an independent inquiry into the workings of the common agricultural policy, to see whether British farmers are able to compete on equal terms with their counterparts in Europe?
    Mr. MacGregor: We have had inquiries on some aspects of the CAP. For example, an inquiry into pigmeat came to the view that, with the possible exception of the MCA issue—the hon. Gentleman knows my position on this—overall the costs were similar and that it was not possible to suggest that British farmers were in an uncompetitive position. I do not believe that a general inquiry is required. It is always my aim to ensure that, on matters of Commission or national confidence, British farmers compete on reasonably fair terms. I shall have more to say about that in our debate later.
    Mr. Haselhurst: Does my right hon. Friend agree that it is becoming extremely difficult and embarrassing explaining and justifying to British pig farmers the commonality of an agricultural policy and market in which they seem to be diminishing in number at regular, cyclical intervals? Will he do something to underpin the British pig industry more successfully than we have managed to do so far?
    Mr. MacGregor: Pig production has held up pretty well in this country, and we are maintaining our market share. I have made clear on a number of occasions that I should like to see MCAs eliminated.
    Mr. McGrady: Is the Minister aware of the precarious position of the pig industry in Northern Ireland, which has been decimated over the past decade, from a total of 24,000 producers to only 4,000? While we welcome the movement that he announced earlier on MCAs, will he strive to lift that burden from those who are trying to compete with northern Europe, where producers receive a subsidy of £50 to £70 per tonne? Will the Minister consider also increasing the export restitution, to enable an expanded market to be created in the third world?
    Mr. MacGregor: We have considered export restitutions and pressed for them on a number of occasions. There have been a number of significant changes over the past six months, and the hon. Gentleman will realise that they are available to farmers in the European Community as a whole, not just to those in the United Kingdom. I have made it clear that the subsidy to which the hon. Gentleman referred has been considerably reduced during the past few weeks. It is my objective to have pigmeat MCAs eliminated altogether, although that will be difficult to achieve.

    Farming Unions
    Dame Elaine Kellett-Bowman: To ask the Minister of Agriculture, Fisheries and Food when he last had a meeting with the leaders of the farming unions; and what matters were discussed.
    Mr. MacGregor: I meet the leaders of the farming unions frequently to discuss agricultural matters.
    Dame Elaine Kellett-Bowman: Does my right hon. Friend accept that farmers are very grateful for the stand that he takes in representing their interests? Will he please do all that he can to ensure early devaluation of the green pound, so that our farmers are paid as much as German farmers are for indentical produce?
    Mr. MacGregor: In our current discussions in the Council on price fixing I have taken the view that we should take a further step towards devaluation of the green pound. I hope to say more about that in the debate this evening.
    Mr. Skinner: Is the Minister aware that one of the complaints that he will receive from British farming unions —and if he met the agricultural workers union he would hear the same—is that on the continent the £2 billion fraud under the common agricultural policy during the past two years has meant that British farmers have not been able to compete effectively? Can he throw any light on the fiddle set-aside scheme, which has not yet been introduced, but which, according to sources within the Community, involves a figure approaching 50 per cent.?
    Mr. MacGregor: I find it difficult to understand how there can be a fiddle under a scheme that has not been introduced.

    Whales
    Mr. Bowis: To ask the Minister of Agriculture, Fisheries and Food what measures he is taking to promote the conservation of whales.
    Mr. Gummer: The Government are in the forefront of recent efforts within the International Whaling Commission to ensure that the moratorium on commercial whaling, which came into effect in 1985, is fully respected. We recently ensured that the scientific committee condemned Japanese attempts to use scientific excuses for whaling and it has asked them to stop. We shall continue to fight to ensure that the whale is conserved.
    Mr. Bowis: Will my right hon. Friend find time to wait upon the Japanese representatives currently visiting this country, to pass on to them a guide to and examples of, good practice, and the way in which the British Government have dealt with the problem, and ask them to follow suit?
    Mr. Gummer: I shall certainly look into that, and, if it proves possible, point out that the British Government's campaign has had full support from International Greenpeace and from Sir Peter Scott and the organisations that he represents.

    Common Agricultural Policy
    Mr. Wilshire: To ask the Minister of Agriculture, Fisheries and Food what further action he is taking to seek to reform the common agricultural policy.
    Mr. MacGregor: I am seeking to ensure that the approach adopted on CAP reform at the recent European Council is followed through in the price fixing. I favour adjustments to support arrangements which will bring supply and demand into better balance and restore intervention to its original role as a safety net rather than an alternative market outlet.
    Mr. Wilshire: As every citizen is a consumer of agricultural products but few earn their living from agriculture, will my right hon. Friend give higher priority to the wish of consumers for lower prices, rather than the high prices that we now have?
    Mr. MacGregor: The Government's record on food prices is very good. The average is well below what it was under the last Labour Administration, and is below the rate of inflation. I think that the problem is much more the contribution that the taxpayer has to make in ways that are not a sensible use of economic resources, and it is on that that we are concentrating.

  PRIME MINISTER

    Engagements
    Mr. Haynes: To ask the Prime Minister if she will list her official engagements for Thursday 5 May.
    The Prime Minister: This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today, including one with the Prime Minister of Hungary.
    Mr. Haynes: Is the Prime Minister aware that I have received a letter from a widow in my constituency, in the beautiful village of Selston? Before 11 April she was receiving housing benefit. She has now been told that she is no longer entitled to it, and she is struggling to find food. I hope that that point has gone home. Because of the policies of the Government and the Prime Minister, I believe that she is a wicked woman and that they are a wicked Government.
    The Prime Minister: The hon. Gentleman must think terrible things of the previous Labour Government, bearing in mind that this Government are spending far more than that Government did on social security and on housing benefit, and that there is a far higher standard of living. What a pity that he did not ask his own Front Bench—[HON. MEMBERS: "Answer the question."] I am answering the question. Hon. Members have a much better Government than they have ever had before.
    Mr. Page: To ask the Prime Minister if she will list her official engagements for Thursday 5 May.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Page: As some of the television companies are indulging in trial by television before the legal processes are completed, will my right hon. Friend consider

    1013
    strengthening the guidelines by which those companies are controlled? Will she consider whether they are the right companies to project the balance that will be necessary when the House is televised?
    The Prime Minister: Televising the House is being considered by a Select Committee, and that Committee will no doubt wish to make its own recommendations for the House to decide. As for trial by television, it is not so much the actual specific rules on which we depend. It has been something much deeper than that. It has been a matter of the customs and conventions referred to by Lord Justice Salmon in his report, in which he said:
    "One would not wish to see in this country the horror of trial by Press, Television and Radio … We have so far escaped them only because of the high sense of responsibility on the part of Press, Television and Radio".
    It is that high sense of responsibility that does not seem to be here now. Lord Justice Salmon went on to say, andthis is vital:
    "The real danger of such interviews is that witnesses whose evidence is vital to the matters under investigation are questioned without any of the safeguards which obtain in our courts of law or before Tribunals of Inquiry."
    One of the proudest bastions of liberty is that the rule of law is inviolate. That is what is at stake.
    Mr. Kinnock: In her letter to me this week the Prime Minister said:
    "what matters is the total income of individual people from benefit"
    I agree with that, but how does the right hon. Lady respond to a 76-year-old widow who says—[interruption.] All hon. Members will have received many similar letters. They had better listen to the Prime Minister's answer, because they will need it.
    The widow says:
    "My only income is my pension … I was due in April for a £1·30 rise which would bring my income to £44·68 but now I have to pay £1·68 rates which brings me off a little worse … I have to put £25 a week away for bills—electricity, gas, life insurance, house insurance, ground rent, water rates, telephone and TV licence.
    This leaves £18 a week to live on, which isn't much fun.
    All my home is getting worn out, like me, and cannot be replaced. By the way, I have got £400 in the bank but dare not break into it as it is for my funeral."
    As it is obvious that thousands of people are in a similar position, will the Prime Minister change her social security and poll tax policies again in order to remove the 20 per cent. rates liability for people such as that widow?
    The Prime Minister: No. If the lady is within income support, as the right hon. Gentleman knows, there is full transitional protection. He is very well aware of that. For a start, those people are the poorest in our society. As he knows, widows will greatly benefit from the community charge, as they will pay a lot less than they would have done under the rates system that he wishes to support. There is an 80 per cent. rebate for those who are poor, and those on income support will receive a sum equal to about 20 per cent. of the average rate to enable them to pay either their rates or, later on, their community charge.
    Mr. Kinnock: The lady in question lives in a borough where the average rate is lower than the outer London average, and lower than the national average. I know that the right hon. Lady takes notice of her own mailbag. She must know that the average rate in her constituency is £678 a year. A 20 per cent. average liability is therefore £137·40,
    1014
    which is £2·64 a week. To offset that 20 per cent. rates liability, the DHSS pays £1·30 a week. How does £1·30 a week offset £2·64 a week?
    The Prime Minister: If there is an average payment, obviously some people will do very much better and some people will not get as much. The right hon. Gentleman is perfectly well aware of that. He will bring forward one or two losers and forget all the gainers. He will know from the latest figures that the highest domestic rate in this country is 329p, in Bolsover, and the lowest is 98p, in Kensington.
    Mr. Kinnock: The Prime Minister does not understand her own system. The DHSS provides £1·30 a week towards the extra liability that people have to meet 20 per cent. of the rates liability, wherever they live. Will she tell me how somebody on an income of just over £44 a week is not worse off as a consequence of having to meet that liability? When someone gets £1·30 a week extra, is she a loser or a gainer when she has to pay £2·64 a week extra for rates? Will the Prime Minister please try to understand the situation of the thousands of people in that position, including those in her own constituency, who have somehow to meet their 20 per cent. rates liability of £2·64 a week out of an extra £1·30 a week?
    The Prime Minister: I have answered the right hon. Gentleman. It is he who refuses to understand that if there is an average sum to meet a particular liability, some people will get more than the liability and a few people will get less. Is he suggesting that because sometimes there are losers there should never be any changes? If that is so, why did his Government introduce fair rents, when everyone had to pay increased rents over controlled rents? Why did his Government change the basis of the pension uprating when it did not suit them to compensate pensioners for price increases, and every pensioner lost?
    Mr. Benyon: Is my right hon. Friend aware of the grave concern that many of us feel at what appears to be French capitulation to terrorism, and will she convey this disquiet to the French Premier?
    The Prime Minister: As my hon. Friend is aware, our policy on hostages has not changed. We do everything that we can to inquire about them and to persuade those who hold them that it is totally wrong to do so and that they should be released unconditionally. We will not pay a ransom or make any payment of that sort to obtain the release of hostages. We have asked the French Government about the matter, and they have assured us that they have not paid a ransom.
    Mr. Chris Smith: To ask the Prime Minister if she will list her official engagements for Thursday 5 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Smith: Can the Prime Minister tell the House whether the ability of British manufacturers to export competitively plays any part in determining her policy towards the appropriate level of the sterling exchange rate, or is it only the Chancellor who is interested in British exporters?
    The Prime Minister: We are all interested in British exporters and, as the hon. Gentleman will be aware, we have to import many raw materials and semi-fabricated

    1015
    products in order to export the finished product. Of course, imports under a high exchange rate are much cheaper than they would otherwise be.
    Mr. Andy Stewart: To ask the Prime Minister if she will list her official engagements for Thursday 5 May.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Stewart: Now that winter is over and our thoughts are turning to our summer holidays, has my hon. Friend considered taking her vacation in the new Center Pares holiday village in Sherwood forest? Since that new complex opened, 250,000 visitors have attended and paid entrance and holiday fees. The complex employs 450 people. Does my right hon. Friend agree that tourism is the easiest way forward in creating new jobs?
    The Prime Minister: I agree with my hon. Friend that tourism creates a great many jobs and brings a considerable income to this country. I confess that I had not thought of spending my own holiday at that place, but I hope that many other people will do so.
    Mr. Mallon: Given the Prime Minister's belief that recent television programmes produced by Thames Television and the BBC may be prejudicial to the findings of the inquest in Gibraltar, will she express similar concern at the decision of the Attorney-General not to prosecute senior police officers who were involved in similar incidents in the North of Ireland? Does she agree that that must he grossly prejudicial to the inquiries there? Does she further agree that the unprecedented delay of six years in holding inquests into those incidents must lead us to the conclusion that a just and equitable decision is not now possible?
    The Prime Minister: No, I disagree with the hon. Gentleman. As he is well aware, the Attorney-General's decision was made in accordance with the due and proper process of law, which, he explained to the House. That is quite different from trial by television.
    Mr. Gorst: Will my right hon. Friend say whether it would be the intention of the Government, in setting up the Broadcasting Standards Council, to refer to it matters such as the programme on the shootings in Gibraltar and the BBC's programme, "Spotlight", if it transmits it?
    The Prime Minister: That had not been the intention. As my hon. Friend is aware, we agreed to set up a Broadcasting Standards Council more to deal with violence and matters of that sort. I would prefer to think that we could rely on the television authorities to upheld the rule of law, which, after all, is the fundamental safeguard of the freedom of us all. One cannot agree with the rule of law and then flout its conditions. I hope that we will be able to persuade them that that is the predominant issue.
    Mr. Flannery: To ask the Prime Minister if she will list her official engagements for Thursday 5 May.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Flannery: Why is the Prime Minister, who is wealthy beyond the bounds of ordinary people's wealth, so callous and merciless with the old and the poor? Can she explain to the people outside why all this money is going to the powerful and wealthy, when it should be going to the needy, the sick and the old? How can she reconcile that with having a conscience of any kind?
    The Prime Minister: Lower rates of taxation have led to far higher incomes, to far higher standards of social services and in the Health Service than we have ever known, and to far higher living standards for widows and pensioners than they have ever known, as all the figures show. The high taxation regime run by Opposition Members led to big cuts in the social services and the Health Service. The hon. Gentleman will never understand the means by which wealth is created and the means by which extra money can be passed on to those in need. It is noteworthy that Opposition Members voted against cuts in income tax. Their votes would have cut the net take home pay of many people on quite low incomes.
    Dame Elaine Kellett-Bowman: Is my right hon. Friend aware that my constituents fully support her in the support that she invariably gives to our security services, whose members preserve our lives? Is she further aware that they also believe that if convicted terrorists were executed, they could not escape to kill again.
    The Prime Minister: My hon. Friend knows my personal view on capital punishment. This is a matter for the House as a whole to decide, and I believe that there will one day be an occasion when the House can consider it again.

P and O Dispute
3.30 pm
Mr. Michael Meacher (Oldham, West) (by private notice): To ask the Secretary of State for Employment if he will make a statement on the latest developments in the P and O dispute.
The Secretary of State for Employment (Mr. Norman Fowler): The dispute continues, but I understand that P and O are operating the Pride of Kent and the Pride of Bruges between Dover and Zeebrugge.
Unlawful secondary action and picketing have interrupted the operation of a number of ferries owned by other British companies. As a consequence, in an action brought by Sealink, the National Union of Seamen was fined £150,000 on Tuesday and its assets sequestrated. I understand that further discussions between the NUS and Sealink are taking place today in the offices of ACAS.
As with all other industrial disputes, the resolution of the issues must be a matter for the parties, operating within the law and within their economic circumstances.
Mr. Meacher: Is the Secretary of State aware that the National Union of Seamen sequestrator has frozen the pensions of retired NUS members uninvolved in the dispute, has prevented the original and wholly legal dispute from being serviced and has put a stop on business unconnected with the sequestration order, such as death and accident claims? Is not that contrary to the principles of natural justice and is not this much harsher than any previous sequestration?
Will the right hon. Gentleman accept that sequestration on the basis of secondary action was wholly unjustified? Is it not a purely legal pretence that the Sealink issue is entirely unconnected with the primary dispute with P and O, given that the chairman of Sealink said:
"If P and O does win, we are obviously asking our trade unions to accept the same manning levels"?
Is the Secretary of State aware that the NUS has offered arbitration, has agreed the phasing-in of the full P and O proposals, with the full £6 million savings within the three years that P and O originally demanded, even though the Channel tunnel is at least five years away? Will the Government now use their good offices to bring P and O back to the negotiating table, as the company's intransigence and unreasonableness are the sole cause of the continuing dispute?
Is the Secretary of State further aware that the current P and O proposals to recruit untrained crews, to cut crewing levels by 20 per cent. and to introduce an 18-hour shift day again put at risk passenger safety only 13 months after the Herald of Free Enterprise disaster? Did he see the "Brass Tacks" programme two nights ago, which revealed dangerous undermanning, the use of unserviceable and unreliable equipment and instances of ships' officers being over-fatigued? Will the Government now exercise their powers under the Merchant Shipping Act 1970 to ensure that industrial safety is paramount—or is the Secretary of State deterred by the £100,000 contribution that P and O made to Tory party funds last year?
Mr. Fowler: The hon. Member for Oldham, West (Mr. Meacher) cannot come straight from the picket line and expect us to accept what he says as an objective statement of the position in this dispute. He would do much better with regard to the Sealink case if he persuaded the union
1018
to accept the ruling of the court and to stop secondary action. It is not remotely helpful to the outcome of this dispute for the Labour party to have joined in, and for Opposition spokesmen to appear on the picket line.
On safety, there is no truth whatsoever in what the hon. Gentleman suggests. There have been general inspections of ships and their equipment, carried out in Rotterdam by Department of Transport surveyors. Emergency procedure drills were conducted before the ships left Rotterdam; and before the ships left service from Dover, emergency procedure drills were witnessed by surveyors with each fresh crew.
So far as an inquiry or arbitration is concerned, ACAS can be brought in at the request of the two parties, but I must emphasise that it is up to the parties. No inquiry will settle issues that relate, apart from anything else, to the commercial judgment of the company, faced with new competition.
The NUS had every opportunity of avoiding sequestration. There is absolutely no doubt about that. The judge said:
"Members and their leaders have only themselves to blame. This is the clearest possible case of deliberate attempted suicide."
With regard to the law, the hon. Member for Oldham, West, and I hope the Opposition and the Leader of the Opposition, must accept that unions are not above the law. If they act in defiance of court orders, they must expect them to be enforced. I hope that he will make clear now his support for the law in these matters.
Mr. Norman Tebbit: Is my right hon. Friend able to say, first, whether there are any political or financial connections between the National Union of Seamen and the Labour party?
Secondly, after the ignorant comments of the hon. Member for Oldham, West (Mr. Meacher) concerning secondary action, will my right hon. Friend confirm that the objection to secondary action is that it is taken against those who have no means of influencing the outcome of the primary dispute? That is why secondary action is, rightly, outlawed, and why those who suffer from it should have recourse to the courts for relief and damages.
Mr. Fowler: I entirely agree with my right hon. Friend. It should be recognised that there is no right for people or unions to spread a strike to companies that are not connected with a dispute; and there is no right to stop fellow workers coming to work, or to force people when they fail to persuade. A much better course for the Opposition, rather than joining in this dispute, would be to point out the value of the law in industrial relations and to seek to use their influence to get the NUS to accept it.
Mr. James Wallace: Few in this House would deny that there is a crisis in our merchant fleet, not least with the advent of the Channel tunnel, but does the Secretary of State accept that dialogue and conciliation are much better ways of sorting out these problems than taking up entrenched positions? Will he use the good offices of the Government to encourage such dialogue?
On a constituency matter, is the Secretary of State aware that the P and O ships that link Shetland with the mainland are now at port and will not sail, but that the NUS has agreed that emergency provisions may be carried. In that event, will he encourage P and O to ensure

1019
that ships are made available for that purpose? How does the Secretary of State expect messages to get through to the NUS about the emergency supplies required if the offices of the Aberdeen NUS are sequestrated?
Mr. Fowler: That individual case is a matter for my right hon. Friend the Secretary of State for Transport. As for the hon. Gentleman's point on negotiation, it is fair to point out that there has already been substantial movement from the original proposals. Crew rostering arrangements have been improved and working days reduced. The hon. Gentleman must accept that the proposals have been sufficiently attractive for more than 1,000 of the staff to accept them and for 5,000 or 6,000 people to work on these ships under those conditions.
Mr. David Shaw: Is my right hon. Friend aware that some 5,000 P and O and Sealink employees wish to work in Dover and Folkestone? Is he aware that many trade unionists approached me and other Members of Parliament about asking the union to have a secret ballot and that the union refused a secret ballot on P and O's terms? Is my right hon. Friend further aware that the 24 hours on, 24 hours off system of working is already employed by Sealink and that P and O's only requirement is that it wants to pay its employees more than Sealink to work the same system? Is he further aware that my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) and I are extremely worried about the acts of intimidation and violence in our constituencies?
Mr. Fowler: The House should know that since last Tuesday there have been 14 arrests for various public order offences and 61 reported cases of intimidation, ranging from paint daubing to threatening telephone calls. There should be no dispute in the House about the fact that such events and actions are condemned not only by the Government but by the Opposition Front Bench spokesmen.
Mr. Eric S. Heffer: Is the right hon. Gentleman aware that the National Union of Seamen is one of the most democratic unions in this country, that it regularly has secret ballots and that the outcome of some of those secret ballots was that a majority of the members decided not to accept the blue book, and certainly not the red book, which P and O has been trying to impose on those workers, a system which, if accepted, would be a form of slave labour?
The right hon. Gentleman talks about keeping to the law. Is he aware that, last Saturday, the port master of Heysham harbour cut the ropes of the Tynwald, the Isle of Man boat, putting all the craft in that harbour in jeopardy? Is that not an illegal act? What action will the Government take to deal with that man? The Government are quick enough to support the union being sequestered. They have one law for the rich and one for the trade unions.
Mr. Fowler: That is absurd. If the hon. Gentleman or his hon. Friends wish to report that action, clearly it will be investigated by the police. It is precisely the same as in any other circumstances. That is what the rule of law means, and it is about time that the hon. Gentleman understood the position.
The hon. Gentleman's remarks about secret ballots and slave labour are again patently absurd. More than 1,000 of
1020
the staff of P and O have accepted the conditions and between 5,000 and 6,000 people have applied for the jobs which have been advertised with those conditions.
Mr. Barry Field: Has my right hon. Friend found time to look at early-day motion 1035? Does he agree that the words "in every possible way" are more weasel words from the party which refused to condemn violence during the miners' dispute?
Mr. Fowler: As I have already made clear, it would be in the public interest for the Opposition spokesman who asked this private notice question to make it clear that he and the Opposition are in favour of the union respecting and following the rule of law in this country.
Mr. Peter Shore: In considering the dispute, will the Minister have firmly in mind the appalling contraction of the Merchant Navy that has taken place during the past eight years, and the need to avoid any further damage and contraction which a prolonged dispute would involve? Does he agree that the solution to the dispute must come out of arbitration? Will he urge that course on both parties to the dispute?
Mr. Fowler: No, I will not do that. I do not think that that is the right way to proceed. As I have made clear, I think that that is essentially a matter for the parties concerned.
In regard to competition, I have sympathy with the first point made by the right hon. Gentleman, but surely the lesson of what he is saying is that British companies that are trying to be competitive are also trying to protect British jobs. If the ferries become uncompetitive, the only people who will gain will be overseas competitors and overseas union members.
Mr. Ian Bruce: Does my right hon. Friend agree that secondary action in the dispute is not only illegal, but has been positively against the interests of the P and O strikers? Surely, in a single movement, they have stopped the NUS being able to support those strikers, and they have forced anybody who wants to go to the continent on a ferry to go on a non-union P and O ferry?
Mr. Fowler: As a result of the secondary action, there has been an interruption to services which has been to the disservice of literally everyone, but most of all to the travelling public and to companies that want to send goods from this country to Europe.
Mr. Tony Benn: Is the Minister aware that the use of repressive legislation passed by Parliament to destroy the National Union of Seamen, representing seafarers on whom the nation's welfare has always depended, is absolutely in line with the policies of Mussolini and Hitler, who began their attack upon democracy by obliterating trade unions in Italy and Germany? Following the ban on trade unions at GCHQ and the abolition of the GLC and the metropolitan counties, is it not clear that the Government of which he is a member are set on the systematic destruction of democracy in this country?
Mr. Fowler: The right hon. Gentleman is not only being absurd; he is making himself a laughing stock by making such remarks. It is not repressive legislation. There RS a right to work without being harassed, intimidated or threatened. There is a right for people to make up their

1021
own minds about whether to cross a picket line and to work. The right hon. Gentleman should respect those individual rights.
Sir Ian Lloyd: The very grave allegations made a few moments ago by the hon. Member for Oldham, West (Mr. Meacher) that standards of safety have been seriously compromised by the management of P and O are so serious that they should either be substantiated immediately or withdrawn.
Mr. Fowler: As I have said, the suggestions by the hon. Member for Oldham, West (Mr. Meacher) about safety standards are simply untrue. [Interruption.] I shall tell the hon. Gentleman how I know. The two P and O ferries that have returned to service have been very thoroughly inspected by Department of Transport surveyors. Probably no two ferries have ever been more thoroughly inspected. As my hon. Friend rightly suggests, it would be much better if the hon. Gentleman withdrew those suggestions.
Mr. Ieuan Wyn Jones (Ynys Môn): Does the Minister agree that the adversarial nature of legal proceedings means that the parties are now being driven into positions from which it will be difficult for them to negotiate, and because the ferry operators now believe that they have the upper hand in those legal proceedings they are merely waiting for the union's resolve to be crushed? Does not the Minister think that he should now reflect and use his good offices to urge the parties to go to arbitration because that is the only sensible way to resolve the dispute?
Mr. Fowler: I do not accept that at all. No objective observer would accept the hon. Gentleman's description of what has taken place. The NUS has been given every opportunity to avoid what has taken place in the courts. The courts have made that clear and the judge has made that clear, and the NUS has only itself to blame.
Mr. Nicholas Bennett: Does my right hon. Friend agree that we are seeing the dying gasps of boneheaded trade unionism, which contrasts very much with the new realism of the electricians and the engineers? Does my right hon. Friend also agree that it is not surprising that the Labour party should support the NUS when Mr. McCluskie is a member of its national executive and there is more interest in the leadership contest between the leader of the Labour party and the right hon. Member for Chesterfield (Mr. Benn)?
Mr. Fowler: What we do not want to see are the dying gasps of the British ferry industry and the competitive position of British ferries. That is the point. The course on which the hon. Member for Oldham, West (Mr. Meacher) seems determined to take his party means that British jobs will again be lost as a result of union action and the hon. Gentleman's support.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that this is a private notice question, which is an extension of Question Time, and we must now move on.

P and O Dispute

  Business of the House
  3.51 pm
  Mr. Frank Dobson: May I ask the Leader of the House to state the business for next week?
  The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): The business for next week will be as follows:
  MONDAY 9 MAY—Consideration in Committee of the Finance (No. 2) Bill.
  TUESDAY Io MAY—At the end on Tuesday motion on the Control of Misleading Advertisements Regulations.
  WEDNESDAY II MAY—Opposition Day (11th Allotted Day). There will be a debate on an Opposition motion entitled "The Crisis in Housing".
  Motion to take note of the European Commission's proposal on the approximation of indirect taxation. Details of the EC documents concerned will be given in the Official Report.
  The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
  THURSDAY I2 MAY—There will be a debate on prisons on a motion for the Adjournment of the House.
  Motion on the European Committee for the Prevention of Torture and Inhuman or Degrading Treatment or Punishment (Immunities and Privileges) Order.
  The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
  FRIDAY I3 MAY—Private Members' Bills.
  MONDAY I6 MAY—Until seven o'clock, private Members' motions. Second Reading of the Civil Evidence (Scotland) Bill [Lords].
  [Debate on Wednesday 11 May 1988

  Relevant European Community Documents

  8199/87

  Indirect tax rates and structures

  8200/87

  Value added tax rates

  8201/87

  Removal of fiscal frontiers

  8202/87

  Value added tax clearing mechanism for intra-Community sales

  8203/87 + COR 1

  Convergence of rates of value added tax and excise duties

  8204/87

  Taxes on cigarettes and other manufactured tobacco

  8205/87

  8206/87

  Excise duty on mineral oils

  8207/87 + COR 1

  Excise duty on alcohol

  Relevant Report of European Legislation Committee
  HC 43-viii (1987–88). para 1
  Relevant Reports of the Treasury and Civil Service Committee
  Third Report (1987–88), (HC 248)
  First Special Report (1987–88) (HC 438)]
  Mr. Dobson: First, does the Leader of the House recall telling the House last Thursday that he would try to get the Secretary of State for Social Services to clarify when the special Department of Health and Social Security unit dealing with excessive cuts in housing benefit would be set up, where it would be located, and how people affected should make claims? Since then, there has been no such clarification about that U-turn unit, so will the Secretary of State for Social Services now come to the House to spell

  1023
  out exactly what is going on and to give answers to the questions that hon. Members on both sides of the House are being asked by their constituents?
  Secondly, can we expect an early statement explaining the Government's attitude to the Kuwaiti holding in British Petroleum, which they welcomed when it bailed out the privatisation share issue but which is now feared to be a monopoly takeover hid?
  Thirdly, we understand that one of the private Bills to be considered next week is the Associated British Ports (No. 2) Bill, which would give that private company planning permission that it might not be able to obtain from the relevant planning authorities. The right hon. Gentleman will recall that the last such Bill was the one which gave P and O planning permission for works at Felixstowe dock. On that occasion, Tory Members of Parliament, including the Prime Minister, were whipped to vote for the Bill and the Government sacrificed a day's business—[Interruption.]
  Mr. Speaker: Order.
  Mr. Dobson: —a whole day's business to help the company get its private Bill through. Will the Government take—[interruption.]
  Mr. Speaker: Order. I am trying to listen.
  Mr. Dobson: I am trying to speak, Mr. Speaker.
  Will the Government take the same attitude—[Interruption.]
  Mr. Bowen Wells: On a point of order, Mr. Speaker. The shadow Leader of the House has made a damaging remark about Conservative Members. He has accused us of being whipped in support of the P and O Bill. That is a grave aspersion on our honour and he should withdraw it.
  Mr. Speaker: With my background, I do not think that I can say that to be whipped for any Bill is necessarily out of order.
  Mr. Dobson: It is an—[Interruption.]
  Mr. Speaker: Order. We have to take the rough with the smooth in this place.
  Mr. Bowen Wells: It is a lie.
  Mr. Speaker: It may be a little wide of the truth, but it is not a lie.
  Mr. Dobson: It is a fact. It is a fact that the Prime Minister stayed up most of the night to vote for P and O. It is a fact that, rather than lose P and O's business, the Government sacrificed a whole day of their business to help P and O get its private Bill through. Will the Government take the same attitude to the Associated British Ports Bill? If not, can we conclude that that company has not yet paid as much into Tory party funds as the £100,000 paid by P and O?
  Finally, and not for the first time—but I hope for the last time—when will the Leader of the House discharge his duties to the people of Scotland and establish the Select Committee on Scottish Affairs?
  Mr. Wakeham: The hon. Gentleman asked me four questions about the business for next week. First, he asked me about housing benefits. Later this afternoon, my hon. Friend the Minister for Social Security and the Disabled
  1024
  will provide the House with details of the changes in housing benefit which my right hon. Friend the Secretary of State announced in the House last Wednesday, together with the arrangements to effect those changes. The hon. Gentleman will have to contain himself until that answer is given.
  My right hon. and noble Friend the Secretary of State for Trade and Industry announced on 4 May that, in accordance with the advice of the Director General of Fair Trading, he would refer the Kuwaiti Investment Office's 22 per cent. shareholding in BP to the Monopolies and Mergers Commission. It is now for the commission to report on whether the shareholding is against the public interest.
  Private Bills are a matter not for me, but for the Chairman of Ways and Means. The hon. Gentleman's remarks confirm to many of us the wisdom of having matters connected with the usual channels conducted in private rather than in public, especially if one's facts are wrong.
  I have discussed the Select Committee on Scottish Affairs with the hon. Member for Glasgow, Garscadden (Mr. Dewar), and I am considering the best way to proceed.
  Several Hon. Members rose—
  Mr. Speaker: Order. No fewer than 35 hon. Gentlemen wish to take part in the agriculture debate. I remind hen. Members to ask single questions of the Leader of the House on the business for next week.
  Sir Peter Emery: Does my right hon. Friend accept that many hon. Members will be pleased that, after 11 months of this Parliament, we have the names of the members of the Procedure Committee on the Order Paper? Does he recall that, before we rose for the summer recess, he told the House that he would try to initiate a debate on the previous reports of the Procedure Committee? I realise that there may be some difficulty in obtaining the agreement of the Opposition for this, but will he consider having such a debate on motions in the names of the members of the previous Committee rather than in the name of the Government? The House could then decide whether advice could be given to both sides of the House on how to proceed on those reports. A debate on that matter would be to the benefit of everybody.
  Mr. Wakeham: I am glad that my hon. Friend is pleased that we have been able to table a motion on the re-establishment of the Select Committee on Procedure. I can also assure him that it is my intention to hold a debate on procedural matters as soon as it can conveniently be arranged. As I have said on many occasions, these things are best discussed with all the parties concerned so as to find the most practical and agreeable way forward.
  Mr. James Molyneaux: The Leader of the House was present yesterday when I inquired whether the Secretary of State for Northern Ireland intended to make a statement following yesterday's meeting of the Anglo-Irish Conference. Did he transmit that request, and, if so, what was the response?
  Mr. Wakeham: My right hon. Friend the Secretary of State had a private meeting yesterday with the Taoiseach,

  1025
  followed by a full session of the Inter-Governmental Conference. A full statement setting out in detail the subjects discussed at the conference is in the Library.
  Mrs. Ann Winterton: My right hon. Friend will be aware that the remaining stages of a private Member's Bill to limit late abortions for social reasons will be debated tomorrow. Will he do all in his power to prevent any possible filibuster and enable right hon. and hon. Members to exercise their own judgment on this important matter?
  Mr. Wakeham: I have a great deal of sympathy with my hon. Friend. Filibusters and rules of order are matters not for me, but for you, Mr. Speaker. I am sure that the whole House would deprecate the use of filibustering tactics to avoid discussion of this important issue.
  Mr. Robert Maclennan: In view of the reports, which have appeared this morning and been confirmed by a Government spokesman this afternoon, that the Government's chief scientific adviser has recommended the cancellation of the fast breeder reactor programme, and of the alarm and despondency that that report has caused, will the Leader of the House ensure that the Secretary of State for Energy makes a statement next week at the earliest opportunity?
  Mr. Wakeham: I do not know where the hon. Gentleman gets all his information. The information that I have is that the Government review all their R and D programmes from time to time, which is good management, as the hon. Gentleman will agree. We are considering a range of options for the fast reactor programme, but no decisions have yet been taken. I shall certainly refer his question to my right hon. Friend, as I know of his constituency interest in the matter.
  Mr. Ivan Lawrence: As there is obviously deep feeling in the country and among my colleagues in the House about the future of the British passport, would it not be appropriate for the mood of the House to be tested by having a debate on the subject at the earliest possible opportunity?
  Mr. Wakeham: I shall certainly bear that suggestion in mind. The British passport is not being replaced by a European Community one, as is alleged in some quarters. Rather, a new version of the British passport, machine-readable and in a common format agreed in 1981 with other EEC countries, will start to appear from July when the Glasgow passport office is computerised.
  Mr. Nigel Spearing: Will the right hon. Gentleman confirm that the import of his announcement about next Wednesday's business is that there will be private business from 7 pm to 10 pm and then a debate on the important proposals of Lord Cockfield and his associates on VAT extensions to food, fuel, domestic building and water and sewerage? According to a written answer that I received on Tuesday, it will also be extended to charity sales from gift shops. Is not one and a half hours too short a time in which to debate this important extension of taxation for the British people? If the right hon. Gentleman persists in having the debate at that time of night, will he consider suspending the rule and making the debate a bit longer?
  Mr. Wakeham: I appreciate that this is an important matter. I think that the arrangements I have made for the debate are adequate. I am certainly prepared to have discussions if there is a general wish to extend the time.
  Mr. Tony Marlow: My right hon. Friend will have seen early-day motion 1053, which has been tabled by various influential Opposition Members.
  [That this House condemns the continued Government attempts to interfere with the Independent Broadcasting Authority and British Broadcasting Corporation in their efforts to report and comment on the Gibraltar assassinations; and considers that both the shoot to kill policy and suppression of comment are serious aspects of this extreme right-wing Conservative Government.]
  He will notice that it seeks to brand British service men as assassins. I think he will agree with me that it is the most disgraceful and shameful EDM that we have seen. May we have an early opportunity to debate it so that we can point out the way in which certain members of the Labour party seek to twist the knife in the spine of the British services, and so that the public at large, although we are not allowed to say that that is intentional in this place, will make up their minds that it is? It is the Opposition's intention to do all that they can to undermine the success of our service men in the fight against the vile terrorists who, in cold blood, killed three innocent young men in Holland last weekend.
  Mr. Wakeham: The Government's concern is about the interference with witnesses and the effect that that could have on the inquest that will take place in Gibraltar. Of course there is no question of the Government seeking to challenge the constitutional independence of the broadcasting authorities; it is the damage that is done that we find reprehensible, and it should not have taken place. That is why I had better restrain myself from making further comments now.
  Mr. James Kilfedder: On a point of order, Mr. Speaker. Is it in order for the early-day motion referred to by my hon. Friend the Member for Northampton, North (Mr. Marlow) to remain on the Order Paper, given the terms in which it is couched? It brands three soldiers as assassins, when no decision on that has yet been made in any court of law.
  Mr. Speaker: The early-day motion is in order.
  Mr. Peter Shore: May I press the Leader of the House further on the business announced for Wednesday? It really is not good enough to have a debate lasting one and a half hours after 10 pm on a matter as important as the harmonisation of value added taxes throughout the Community—and the harmonisation of excise duties, too. This is one of the most serious proposals to come out of the EEC. It will affect the sovereignty of the House in ways deeper than many of its other enactments. Surely the matter should have been given a proper debate in prime time.
  Mr. Wakeham: I have heard what the right hon. Gentleman said. I repeat that I believe that what we have done is right and adequate, but I am certainly prepared to examine the matter again in view of what he has said.
  Sir Ian Lloyd: From a somewhat less localised standpoint than the hon. Member for Caithness and

  1027
  Sutherland (Mr. Maclennan), may I express my anxiety about the future of the fast breeder reactor programme? As Great Britain has spent an enormous sum developing this most important technology, and as her reputation stands high and it is at least arguable—I put it no stronger than that—that the future of energy in the next century could depend on the continuation of that technology, I hope that the Government will take no decision until we have had a chance to debate this thoroughly.
  Mr. Wakeham: I cannot add anything to what I said to the hon. Member for Caithness and Sutherland (Mr. Maclennan). I can confirm that no decisions have been taken. The point that my hon. Friend makes has been taken on board, and I shall see that the Secretary of State for Energy knows of his concern.
  Mrs. Margaret Ewing: Is the Leader of the House aware of the concern among those involved in the professional training of social workers that the DHSS has rejected proposals put forward by the Central Council for Education and Training in Social Work? Would it therefore be possible for the House to debate the priorities, or lack of priorities, of the Government in this vital area, in which we need adequately trained staff to deal with society's problems?
  Mr. Wakeham: I agree with the hon. Lady that that is an important subject. I cannot find time for a debate in the near future, but I shall certainly refer the matter to my right hon. Friend.
  Mr. Harry Greenway: May we have an early debate on local government finance so that the House can examine the deplorable decision of Lambeth City council to cancel, at two weeks' notice, a £50,000 grant to the excellent Caine Hall family centre, which looks after families and is run by the London City Mission, because of its refusal to employ homosexuals and lesbians? May we couple that debate with another on Ealing council's continued determination to spend £1,000 of hard-pressed ratepayers' money on an evening for lesbians?
  Mr. Wakeham: I was hoping to have a bit of a rest from local government finance, but my hon. Friend raises an important subject. I wish I could promise him a debate on the matter that gives him concern, but I cannot promise one in the immediate future.
  Mr. Frank Cook: In responding to the question of the hon. Member for Caithness and Sutherland (Mr. Maclennan) about the Dounreay reports, the Leader of the House confessed his ignorance about the source of the information. I have copies of reports from The Guardian, the Financial Times and The Independent, and I shall let the right hon. Gentleman have them. If there is substance in these reports, there is no need for me to remind the right hon. Gentleman about the importance of jobs and the protection of jobs, or about the shift in long-term energy policy that such a move would bring about. Knowing how difficult it is to get a debate in Government time—it is like trying to find rocking horse droppings—will the Leader of the House prevail upon his right hon. Friend the Secretary of State for Energy to make a statement after energy questions on Monday?
  Mr. Wakeham: When I expressed some surprise about where the hon. Member for Caithness and Sutherland
  1028
  (Mr. Maclennan) had got his information, I thought that it was probably more reliable than the front page story in The Guardian which I, too, read. My information came direct from the Secretary of State, who said that no decision had been taken. I prefer to rely on his information than on anything that I read in The Guardian. The hon. Member asked about a statement. It is probably better for a statement to be made when there is something to say.
  Mr. Kilfedder: May I refer again to the Anglo-Eire Conference meeting which took place yesterday and which the Secretary of State for Northern Ireland has described as a meeting at which crucial and important decisions affecting the people of Northern Ireland were made? Despite what the Leader of the House has said, the communiqué issued after the meeting amounted to very little. It hides more than it reveals and the Unionist people of Northern Ireland—I emphasise Unionist—are being kept in the dark about decisions being made about their future and the future of their children, whereas the SDLP is a party indirectly to all decisions made by the Anglo-Eire Conference.
  Is it not a disgrace that right hon. and hon. Members are being kept in the dark about decisions being made in Dublin? Is it not a disgrace that the Secretary of State for Northern Ireland has not had the decency to come here today to make a statement about the meeting? Will the Leader of the House make sure that the Secretary of State for Northern Ireland comes to the House tomorrow, Friday, to tell us, the people of Northern Ireland and the people of the United Kingdom what decisions are being made with Dublin?
  Mr. Wakeham: I cannot accept the hon. Gentleman's analysis. My right hon. Friend the Secretary of State For Northern Ireland did the right thing in putting a full statement in the Library. It would not be right for him to make a statement in the House. I can tell the hon. Gentleman that decisions about the United Kingdom will be taken by the United Kingdom Government.
  Mr. Seamus Mallon: The Leader of the House will no doubt be aware that a recent public opinion poll in the Republic of Ireland showed that the third most important foreign personage was the Prime Minister, who was second only to the Pope and Mother Teresa of Calcutta. The same opinion poll showed that the most important Irish person was the Irish Prime Minister. Should we not capitalise upon the mutual popularity of the two Prime Ministers by having a debate in which we can properly assess the very successful outcome to date of the Anglo-Irish Agreement?
  Mr. Wakeham: I recognise that there will be need for a debate on these matters, but. I cannnot promise one next week.
  Mr. Michael Fallon: Will my right hon. Friend arrange an early debate on the social implications of the Church of England's new urban fund and the Bishop of Durham's new opportunity fund, under which every parishioner on the church roll in my constituency will be asked for a flat rate contribution of £20, irrespective of income or ability to pay? Would not such a debate be an opportunity to persuade the bishop to introduce the same generosity, tapers and benefits that we are introducing in the Local Government Finance Bill?
  Mr. Wakeham: If the bishop were to take part in the debate, it would have to be in another place. But I take my hon. Friend's point.
  Mr. Greville Janner: As it is now nearly three months since the Government set up their inquiry into the alleged involvement of Waldheim in the death of British commandos, may we have a statement from the Home Secretary about how the inquiry is progressing, or can the Leader of the House give some indication? Meanwhile, may we have an assurance that there will be no contacts between the British ambassador in Austria and President Waldheim unless and until he is cleared of these allegations?
  Mr. Wakeham: The review is being conducted by the Ministry of Defence and it is intended to be as thorough and comprehensive as possible. It is being pursued as quickly as is consistent with proper consideration of the evidence and the need for accuracy. Although good progress is being made, this is a complex and important matter and it would be premature to speculate on when the review might be completed. It would not be appropriate for me to comment on the findings before the review is completed.
  Mr. Bowen Wells: On Wednesday the harmonisation of VAT and excise duties is to be debated for only one and a half hours. Is it not absurd that we will be considering for such a short time matters that are normally the subject of a Bill—for instance the Finance Bill, which occupies much time on the Floor of the House and in Committee? Does my right hon. Friend agree that the question of dealing with European legislation—a question that I have raised with him before—should be immediately considered by the Procedure Committee, which I am delighted to say he has been able to set up? Will he refer this matter to the Committee urgently because clearly he cannot find proper time for it in normal business hours?
  Mr. Wakeham: My hon. Friend used the word "absurd". I suggest that he reads the Government motion before reaching such a conclusion. I think that what I have done is the sensible way forward, but, as I have said, I am prepared to have discussions to see whether we can find better arrangements.
  Mr. Keith Vaz: Will the Leader of the House make time available for an urgent debate about the state of Britain's footwear industry? Is he aware that there are 11,000 footwear workers in Leicestershire and in other parts of the midlands? Is he also aware of the new figures published by the British Footwear Manufacturers Federation which show that the imports have increased dramatically over the past month? When may we have a chance to debate this important matter?
  Mr. Wakeham: As I am sure the hon. Gentleman will accept, there are many important matters calling for the time of the House and it is impossible to fit them all in. Perhaps an Adjournment debate would enable him to put some of the points that he wishes the House to appreciate.
  Mr. John Marshall: Will my right hon. Friend consider initiating a debate on the future of the confectionery industry which faces the threat of 80 per cent. of the industry being owned by companies in non-EC
  1030
  countries? Is my right hon. Friend aware that Rowntree is subject to a bid by two Swiss companies, both of which are immune to a counter bid from Rowntree?
  Mr. Wakeham: Under the Fair Trading Act 1973 the Director General of Fair Trading has a duty to advise my right hon. and noble Friend the Secretary of State for Trade and Industry about whether a merger or a prospective merger should be referred to the Monopolies and Mergers Commission for further investigation. The Director General takes into account all matters which may raise questions of public interest, including the points that my hon. Friend raised, and the likely and significant effect on employment and other matters. I think we had best leave it at that.
  Mr. Dennis Skinner: Why does not the Leader of the House arrange a debate next week about the seamen's dispute so that we can fully engage in an argument about the real facts? Will he tell his right hon. Friend the Secretary of State for Employment to have a more comprehensive list of the facts when he next appears at the Dispatch Box? Will he tell him, for example, that there is nothing wrong in Labour Members such as myself going to a picket line in Dover or anywhere else when the Prime Minister spends her time supping gin and tonic and whisky with Jeffrey Sterling in Downing street? He is employed as a special adviser to the Government and the Prime Minister and gives £100,000 for Tory party funds.
  There is much talk about a ballot. The Leader of the House should tell his right hon. Friends that all the seamen in Britain wanted a ballot, but were stopped from having one by the Tories' friends in the courts. There is also an argument about safety. If the Leader of the House had watched the BBC programme the other night, he would know that many ships are in jeopardy and that Sterling wants to reduce even further the number of men and women who are employed. The Government are interested in seafarers only when they want them to fight their wars.
  Mr. Wakeham: The one thing that is quite clear from that diatribe is that the hon. Gentleman does not want to resolve the dispute. I should have thought that he would be the first to understand that in all industrial disputes the resolution of the issues must be a matter for the parties operating within the law and taking cognisance of economic circumstances. I do not think that a debate would improve the situation one iota.
  Mr. Ian Bruce: Is my right hon. Friend able to organise a debate on office accommodation in the Palace of Westminster? In view of the comments made in the press by the hon. Member for Brent, East (Mr. Livingstone)—he said that the Labour Whips were not able to give him accommodation—is my right hon. Friend able to confirm that the Opposition Whips were given more than their fair share of accommodation? As all Conservative Members have offices, is it not strange that the Opposition Whips were unable to find the hon. Gentleman an office?
  Mr. Wakeham: I cannot comment on the remarks of the hon. Member for Brent, East (Mr. Livingstone) about those matters. Office accommodation is not as satisfactory as some people would like, although both sides of the House do their best. The Opposition have their way of doing things and we have our way, and we had best leave it at that.
  Mr. Harry Cohen: May we have a full-scale debate on the P and O attempt to break the National Union of Seamen? Some hon. Members wish to make the point that the P and O management appears to be above the law as it has not been brought before the law for its part in the Zeebrugge tragedy. It is attempting to smash the trade union and to worsen—
  Mr. Speaker: Order. The hon. Gentleman should ask for a debate, rather than participating in one.
  Mr. Cohen: Is not P and O endeavouring to worsen working conditions and passenger safety? Is it not the real enemy within in that dispute, supported by the Government's secondary action?
  Mr. Wakeham: The hon. Gentleman has confirmed my earlier view that the object of having a debate would not be to try to resolve the matter, if we were to follow his course of action. I should like to see the matter resolved, but I do not believe that a debate involving the expression of such sentiments will help to resolve the dispute.
  Rev. Martin Smyth: Does the Leader of the House accept that his answer to my right hon. Friend the Member for Lagan Valley (Mr. Molyneaux) concerning a statement by the Secretary of State for Northern Ireland leaves us absolutely amazed? The description of the statement in the Library as a full statement would not be accepted as such by anyone in Northern Ireland or by anyone reading it intelligently in the United Kingdom.
  I impress upon the right hon. Gentleman the need for an urgent statement so that we can cross-examine the Government, in the new light that has dawned, on the fact that the Government will now be concerned about border patrol. Is the impact on the finances of the Republic of Ireland making that demand or is there no real concern that people in Northern Ireland have perished because there has not been proper frontier control? We must address such questions arising for innocuous statements unless we want to leave the Northern Ireland Office in orbit over Maryfield or Phoenix Park.
  Mr. Wakeham: I hope that the hon. Gentleman is not suggesting that I am not concerned about the victims of terrorism, but I gave what I thought was a full answer to the question. A copy of the statement has been put in the
  1032
  Library, but the question whether it is a full statement is a matter of opinion and the hon. Gentleman is entitled to his opinion. I have nothing to add to what I have already said, but I shall refer his remarks to my right hon. Friend.
  Mr. Tony Banks: Why should we not have a debate on the P and O dispute? After all, the Government have interfered so much through legislation in industrial relations that they have now made it virtually impossible for any trade union legitimately to pursue its aims and objectives. Why do the Government persist in acting like industrial warmongers rather than trying to bring some peace and satisfaction to what is clearly a troublesome situation at Dover?
  Mr. Wakeham: Unlike the Labour Government, which the hon. Gentleman presumably supported, this Government have produced a framework of law so that the parties in dispute can find an orderly, civilised and legal way of settling their disputes. That does not involve debates in the House in the middle of such a dispute, and that is why it would not be sensible to have such a debate.
  Mr. Roy Beggs: If the Leader of the House has not already read the statement placed in the Library regarding the Anglo-Irish Conference meeting yesterday, will he look at it carefully? The first part of the statement relates to those people who were present and covers almost half a page. The remainder is totally unsatisfactory to those of us who represent the Unionist majority. Will the right hon. Gentleman take that into account and recognise that we should have liked to ask a Northern Ireland Minister, the Secretary of State, or the Prime Minister today whether the Secretary of State obtained the assurances from Mr. Haughey during yesterday's discussions that the Prime Minister demanded in this House? We have a right to know whether progress is being made and whether the nonsense of promising further steps to improve security is leading us anywhere.
  Mr. Wakeham: I have nothing to add to what I have already said, but I shall refer the anxiety of the hon. Gentleman and his hon. Friends to my right hon. Friend the Secretary of State.
  Mr. Tony Banks: On a point of order, Mr. Speaker.
  Mr. Speaker: In a minute.

  Anglo-Irish Conference (Meeting)
  4.26 pm
  Mr. Harold McCusker: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
  "the outcome of yesterday's meeting of the Anglo-Irish Conference."
  The matter is specific because yesterday's meeting dealt with the Gibraltar killings, extradition, terrorist cross-border racketeering, fair employment proposals, financial assistance to west Belfast, the murders of RAF personnel in Holland and the assurances that the Prime Minister has been seeking from the Dublin Government about their attitude to certain aspects of the Anglo-Irish Agreement. Those are all issues of great significance, not just to the people of Northern Ireland, but to people in the United Kingdom and further afield.
  The matter is urgent because, by this evening, the only people on the island of Ireland who will know nothing in detail about the discussions or their outcome will be the Unionist community in Northern Ireland, for whom these may well be matters of life and death. For two and a half years, the Northern Ireland Office has governed Northern Ireland by this hole-and-corner procedure, never once coming to the House to report on its dealings with the Dublin Government. In the interests of democracy, if nothing else, it should be stopped and we should make a new start this afternoon.
  Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
  "the outcome of the meeting held yesterday in Dublin of the Anglo-Irish Conference."
  As the hon. Gentleman knows, my difficult duty in assessing applications under Standing Order No. 20 is to consider whether such an application should be given priority over the business set down for today and whether it meets the criteria. I regret to say that I cannot find that the matter that he has raised meets all those criteria and, therefore, I cannot submit his application to the House.

  Points of Order
  4.29 pm
  Mr. Tony Banks: On a point of order, Mr. Speaker. I tried to raise a point of order before the Standing Order No. 20 application and you said to me, "In a minute." That is normal and it is what we have come to expect, but during business questions two Conservative Members rose on a point of order and you did not say to them, "In a minute." You heard the point of order.
  You have come up with a rule under which, in effect, points of order will not be taken until business questions, applications under Standing Order No. 20 and statements have been dealt with. We have accepted that. We simply ask that the rule should be applied equally to both sides of the House.
  Mr. Speaker: The hon. Gentleman must not allege such things. I dealt with those points of order because they
  1034
  appeared to require my immediate intervention. If the hon. Gentleman had risen at that time, he would certainly have been heard in the same way. There is no change at all. In our debates, the points of order raised are dealt with immediately.
  Mr. Michael Fallon rose—
  Mr. Speaker: Order. I remind the House that 35 hon. Members wish to speak in the following debate, but I shall take the hon. Gentleman's point of order.
  Mr. Fallon: I ask you, Mr. Speaker, to reflect further on the question raised by my hon. Friend the Member for Northampton, North (Mr. Marlow) about the standard of language that is acceptable in early-day motions. Unless a ruling is made soon, the Table Office will have an increasingly difficult position forced on it by the growing tendency of hon. Members to table early-day motions that express strong and often controversial views and describe events or policies in highly tendentious language. Some weeks ago the word "mongrelisation" was used. Last night, the events in Gibraltar were described in a highly prejudicial fashion as "assassination". Will you reflect on the standard of language acceptable in early-day motions?
  Mr. Speaker: If there is any doubt about the submission of an early-day motion, it is always brought to my attention. That motion was not brought to my attention, and therefore it was considered to be in order by the Table Office.
  Mr. Frank Cook: On a point of order, Mr. Speaker. I am genuinely confused. I listen carefully to your rulings, and—
  Mr. Speaker: I think that I can anticipate the hon. Gentleman's point of order. I took the point of order during business questions because I thought it arose out of something that had been alleged during business questions. As the hon. Gentleman knows, if something happens in a debate which requires the immediate attention of the Chair, it is raised as a point of order. That is the normal procedure, and that is what I did. If it is a point of order that requires my judgment on a general matter something not requiring immediate attention, it is taken in its proper place, which is after the applications under Standing Order No. 20. There has been no change.
  Mr. Cook: Further to that point of order, Mr. Speaker. I am grateful to you and I accept what you are saying. The problem is that I recall clearly a lengthy exchange on just these issues, fronted by my hon. Friend the Member for Workington (Mr. Campbell-Savours). It seemed to me that at that time you were ruling in a different way.
  Mr. Speaker: I disagree with the hon. Gentleman. That was a matter of points of order arising out of Question Time. It was completely different from a point of order that calls for immediate attention. [Interruption.] Is the hon. Gentleman saying that any point of order that requires the immediate attention of the Chair should be deferred?
  Mr. Cook: With respect, Mr. Speaker, that was the reason why I could not understand the ruling in the first place.
  Rev. Ian Paisley: On a point of order, Mr. Speaker. Will you help Northern Ireland Members?

  1035
  Important events are occurring in our Province, and we have only this Chamber in which to speak. Now we are not permitted to discuss anything that is happening in Northern Ireland. We do not have debates. Matters are announced by radio and television, and that is all we know about. Surely there must be more help. What is the use of our coming here when we cannot speak? When we did not come, it was said we should come, and when we do come, you do not let us speak.
  Mr. Speaker: The hon. Gentleman wishes to take part in today's debate, and no doubt he will raise Northern Ireland matters, but as I told the hon. Member for Upper Bann (Mr. McCusker), who made an application under Standing Order No. 20, I must have regard to the criteria laid down in the Standing Order.
  Mr. Ian Gow: Further to the point of order about early-day motion 1053, Mr. Speaker. You told the House that the Table Office had not referred this early-day motion to you, and it is just possible that you had not had an opportunity of looking at it until the matter was raised with you on the Floor of the House today. That being so, would you undertake to consider the wording of this motion, and let the House have your advice on whether, if the allegation which relates to Gibraltar had related to somewhere within the United Kingdom, you would have allowed a motion such as this to go on the Order Paper?
  Will you also bear in mind that some of those who signed the early-day motion are members of the national executive of the Labour party? In the opinion of many of us, a motion of this kind is deeply prejudicial to the proceedings that will take place in Gibraltar during the coroner's inquest, and are a gross abuse of the right of hon. Members to table early-day motions.
  Mr. Speaker: I will reflect on what the hon. Gentleman has said, but it would be an intolerable imposition on the Speaker if he had to look at every early-day motion. I have to rely on the judgment of those in the Table Office. I have already ruled that this early-day motion was considered to be in order or it would have been brought to my attention and I would have had to adjudicate upon it.
  Mr. Dennis Skinner: On a point of order, Mr. Speaker. It would be an irksome duty if you had to read the more than 1,000 early-day motions right through to the bitter end. You would, for instance, recently have been reading about the success of Hamilton Academicals, Wigan rugby football club, Bristol rugby club, which I believe lost, Sunderland and Lincoln, which, for some obscure reason, has been supported by the SDP. About the only sporting success that has not been delineated in an early-day motion is Steve Davis's success at the Crucible last week—and there must be a reason for that.
  If you had to look at all the motions, you would not have time to notice in the House points of order that arise on spec and cause you trouble and worry. To conclude that little episode, I remind you that I told you about two years ago that it would be difficult to sustain the process for long, and today, you had to break that ruling. In the case of further interruptions by my hon. Friends—it probably will not be me—will you allow them the same privilege?
  Mr. Speaker: If a matter requiring my attention arises during a debate or during Question Time, I would hear it. That is the doctrine of first opportunity, well enshrined in "Erskine May".
  Mr. Robin Maxwell-Hyslop: On a point of order, Mr. Speaker. You may inadvertently have said something that you may wish to correct in a statement tomorrow. If I understand what you have said today, you have propagated a new doctrine—that, although Mr. Speaker is not inerrant or incapable of error, the Table Office is inerrant and incapable of error and that anything that is accepted by the Table Office cannot subsequently be challenged with Mr. Speaker. That must, with the greatest respect, be wrong, Mr. Speaker. It must be open to every hon. Member to challenge ad hoc decisions by Clerks in the Table Office and for you to apply your own judgment to matters that have not been referred to you. I do not believe that you would wish to live with a situation where, if something out of order has inadvertently been accepted by the Table Office, you are thereby debarred from subsequently ruling that it ought not to have been accepted.
  Mr. Speaker: I hope that I did not say what the horn. Gentleman has suggested. Of course, if something is plainly out of order, then it is correct that it should be challenged. I am saying that early-day motions—there are thousands of them—are screened by the Table Office. If there is any doubt about them, they are brought to my attention. It happens with very few, but plainly if any of them subsequently turned out: to be out of order, it would certainly be in order for hon. Members to challenge them and bring them to my attention.
  Mr. James Kilfedder: On a point of order, Mr. Speaker.
  Mr. Tony Banks: On a point of order, Mr. Speaker.
  Mr. Speaker: Order. I have already dealt with the hon. Member for Newham, North-West (Mr. Banks). I will hear the hon. Member for North Down (Mr. Kilfedder).
  Mr. Kilfedder: On a point of order, Mr. Speaker. During business questions, I raised a point of order because I was provoked by what I had heard. I apologise to you because I believe that your ruling was absolutely right, and I should have waited until after business questions. I know that now and I wish to apologise to you for any difficulties that I may have caused you.
  Mr. Speaker: On that happy note, may we finish?
  Mr. Tony Banks: On a point of order, Mr. Speaker.
  Mr. Speaker: Order. The hon. Gentleman is one of those who constantly seeks to take part in our debates.
  Mr. Banks: I do not get much of a chance.
  Mr. Speaker: I will have to bear that in mind, but a large number of hon. Members wish to speak in the debate today. It is a rare opportunity to debate agriculture, and I think we should proceed.

  BILL PRESENTED

    EUROPEAN COMMUNITIES (AMENDMENT)
    Mr. Tony Benn presented a Bill to repeal section 2 of the European Communities Act 1972 and to return full

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    and unfettered powers to the United Kingdom Parliament over all legislation enacted by the European Communities which has had, has, or would otherwise have, legal effect in the United Kingdom: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 153.]

    Agriculture
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Carlisle.]
    Mr. Speaker: If we have five-minute speeches from hon. Members—I have no way to impose such a request—most of those who wish to speak will be called. If we cannot have five minutes, may I ask for speeches of no more than 10 minutes today?
    4.38 pm
    The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor): The Order Paper lists a number of documents which have been recommended by the Scrutiny Committee for consideration by the House. These relate to the stabilisers, set-aside of agricultural land, cessation of farming and the price fixing. I shall endeavour to cover all these in my remarks. Most of the measures flowed from the European Council agreement in February, which was the subject of considerable discussion in the House during the agriculture debate on 15 February, immediately following the summit's decisions. The regulations were then the subject of considerable negotiation in the Agriculture Council, and were eventually adopted on 25 April. As they were not substantially changed from those that we debated in February, I hope that the House will forgive me if I refer to them fairly briefly.
    Document 5004/88 concerns the implementation of the stabiliser for wine, which was also part of the February agreement. We had an intense negotiation on the details of that provision at the March Council, and the regulation has not yet been adopted, as the opinion of the European Parliament is not yet available. Therefore, I will bring the House up to date on that in more detail.
    Of course, the price-fixing proposals are highly topical. The Agriculture Council has had two discussions on these so far, but at this stage they have been only very general —the opening skirmishes, so to speak—with broad positions being outlined. The detailed negotiations will begin in earnest after the French presidential elections, so this is a highly appropriate time for the House to debate the subject.
    That is a large enough menu, but as Mr. Speaker has just implied, this is one of the major agriculture debates of the year and I hope that the House will agree that it would be appropriate for me to refer to other matters which are of great importance to our farmers and hence, in one sense, inextricably bound up with the documents before us.
    First, some general but fundamental comments bear repeating. I am well aware of the pressure on farm incomes. That aspect has been drawn attention to in recent debates by my hon. Friends—though I am not sure that those outside agriculture who freely comment on the protected, so-called comfortable position of farmers, as they put it, are equally aware of it. The fact is that since 1977, farm incomes in general have declined by some 50 per cent. in real terms.
    The latest farm income publication just published by my Ministry is a mine of information. It gives not just the aggregate position, as did the White Paper published in January, but data for farms of different types around the country. Therefore, we have a very thorough and detailed picture. Also given are figures from a survey of Inland

    1039
    Revenue returns which cover the total income, as assessed for tax, of those who farm. As they deal with actual incomes, it is useful and important to consider them.
    Those figures show that in 1983–84, about 68 per cent. of farmers had incomes of less than £10,000; about 24 per cent., between £10,000 and £20,000; and about 8 per cent., above £20,000. Only about 50 per cent. of total income to farming households was derived from farming alone. The rest of their income came from other businesses, other jobs, investment income, and so on.
    By no means all farmers can supplement their income from the farm to a significant extent by having other jobs, so many of them have low incomes. Indeed, the figure for actual income purely from agriculture and horticulture revealed in the survey is much lower than that which I have just quoted—and the position has not improved since 1984. For some—such as those in the dairy sector—the figure has improved, but for others it is worse.
    We can see that farm incomes really are under pressure, at a time when incomes in most other walks of life are rising in real terms. Many farmers earn what would be regarded as a very modest wage, given the hours of work that they and their spouses put in, often in very bad weather in many parts of the country—as my hon. Friends testified earlier. The paradox is that that pressure is occurring at a time when support for agriculture has been rising significantly.
    In terms of CAP support—in other words, mainly taxpayers' subsidies going to commodities—expenditure in this country has risen by 28 per cent. in real terms since the Government took office. That statistic alone belies the accusation that one sometimes hears from hard-pressed farmers that Government support for them is diminishing.
    Mr. Robin Maxwell-Hyslop: Will my right hon. Friend give way?
    Mr. MacGregor: May I just finish the sentence?
    That may he a gut reaction by farmers, when they see their income declining. I can understand such accusations, but they are misdirected. The truth of the matter is that those critics are wrong and that it is the other way round.
    Mr. Maxwell-Hyslop: Will my right hon. Friend make the point that the reason for the apparent disparity is that much of the money paid in support goes to the storers of produce rather than to the producers of food and that only quotas can directly support producers rather than storers?
    Mr. MacGregor: Quotas have a different effect. They are not a form of support but are an intervention in the market system. I want to describe the situation as I see it, which is not wholly as my hon. Friend has described it. While some element of the subsidy is going to the storers, it is also the case that if one was producing the same volume as is being currently produced, and if that support was withdrawn, then farm incomes would considerably diminish. It works through, in the support that it gives to the farming community as a whole.
    As so many wish to speak in this debate, I wish to set the scene and I therefore do not wish to give way too often. I wish to explain how—
    Sir Geoffrey Johnson Smith: Will my right hon. Friend give way?
    Mr. MacGregor: No—I must be allowed to get on with my argument.
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    The paradox of declining farm incomes and increasing subsidies can be explained principally by the fact that farmers are producing more than real markets can sustain. In other words, for part of their production at least, they are unable to meet effective demand at the going price without a significant subsidy to cover their current costs of production. That is another way of drawing attention to the surpluses, which are worldwide, and to the excessive costs to the taxpayer of sustaining them.
    Nobody can argue—and no farmer, in his heart of hearts, does argue—that we are getting value for money from excessive subsidies and that they make sensible use of the nation's and taxpayers' resources. That is why I have constantly argued that we cannot bring stability to our agriculture and to farmers until we have dealt with that problem and have contained the sharply escalating rise that has taken place in subsidy support over the past few years. Hence the importance of the stabiliser negotiations and the Brussels summit outcome.
    I am often asked what I see as our main policy objectives for British agriculture. I shall briefly restate what I have been saying in the many meetings that I have been holding with farmers around the country. First and foremost, and for the reasons I have just given, we must get supply and demand into better balance and get on top of the budgetary indiscipline in spending on agriculture in the Community that we have seen hitherto, as well as surpluses worldwide. Hence the importance not only of a stabiliser regime but of a successful outcome to the Uruguay talks. Hence, too, the priority and attention that the Government, and Agriculture Ministers, have been devoted to them.
    Secondly, we must keep British agriculture thoroughly efficient and competitive, taking advantage of technological change and not halting it simply because of surpluses. To take a Luddite approach and fail to embrace the fruits of scientific progress is not the way in which other industries have become, and remain, competitive in world markets. I want to ensure that our agriculture remains competitive and thoroughly up to date.
    Thirdly, it means focusing on the market place in meeting changing and ever more demanding consumer requirements. That means quality and a heavy emphasis on marketing throughout the whole food chain. That is primarily a matter for the industry itself.
    Fourthly, it means that we must face up to the fact that more land will have to come out of agricultural production —and, yes, more farmers as well. Hence the importance of our many initiatives to help ease that process, including set-aside. I suspect that that process will be much more painful in some other member states, where there are still vastly greater numbers of very small farmers than we have, and where agricultural structures are well behind ours. It is also worth underlining that the vast majority of land will, after that process, still be used for basic food production, which will remain the primary industry of the countryside.
    Fifthly, from the point of view of the rural economy, it is essential to recognise that land is a resource to be managed and that alternative products outside agriculture —alternative businesses and leisure activities—will all have an increasing part to play in providing rural employment and rural prosperity. Many farmers are, and have always been, highly entrepreneurial. Many have already recognised the signs and have been blazing a trail in alternative businesses and diversification for some time.

    1041
    To assist that process, we have introduced the farm diversification scheme, which has had a good response in its first few months.
    Sixthly—here I know that I will carry the hon. Member for South Shields (Dr. Clark) with me—the changing agricultural scene provides exciting opportunities to achieve a new balance between farm production and environmental objectives. Hence the ESAs, which have also got off to a very promising start.
    All six objectives form a coherent pattern and one which I believe is right for the future of British farming, the rural economy and the attractiveness of our countryside. The various new initiatives we are now pursuing, often taking the lead in the European Community, all flow from them.
    I will not dwell on the details of the stabilisers, as we have already debated them twice in the House. I shall confine myself to three points on the stabilisers. First, while we have not gone as far as some people—especially those outside agriculture and in other industries—would like, I hope that no one will be in any doubt about the potentially severe impact of stabilisers and hence the pressure on farmers if production continues to rise.
    The severe restraining effect of the oilseed stabilizer—which is necessary in view of the escalating costs and hence incentives to further production of the previous regime —is now well recognised. But in cereals, if Community production exceeds the maximum guaranteed quantity of 160 million tonnes by whatever amount regularly over the next four years, intervention and buying-in prices will automatically be cut by as much as 12 per cent., coming on top of reductions in recent years. Cumulatively, that could mean that by 1993 the common level of support for cereal producers could be as much as one third lower than it was in its peak in 1983–84.
    That is a not insignificant reform to undertake. It does of course have its good side for some sectors in our industry, in the livestock and especially intensive livestock sectors, but it is none too soon, in the light of the likely continuing technological developments and the potential worldwide surpluses. I shall have more to say about that later. The point for our farmers is that had we not acted now to get gradual restraint into the market and to curb production, our cereal growers could have faced much more drastic emergency action at short notice later on. They ask for greater certainty and stability. This helps to provide a measure of it.
    Mr. Ralph Howell: I find it difficult to understand how it will help our hard-pressed producers if their returns are cut even further when they are below production costs already. And why are we constantly talking down the world price of wheat and saying that it is lower than the price British farmers are receiving, when that cannot be proved? When our millers are paying up to £250 a tonne for American wheat to be delivered to East Anglia, and home producers are getting only about £100 a tonne, how is it in the interests of British farmers for the price to be cut still further? They are in an appalling position already.
    Mr. MacGregor: The support price will fall if production goes on rising. I beg my hon. Friend—who I know is very interested in these matters—to note that the
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    subsidy costs of the cereals regime have been rising very sharply since 1984. It is unsustainable for the increase to continue at such a pace, especially if it provokes a further international trade war. I should like to say more about that later. One part of the answer must be to take more land out of cereal production. That will be crucial if we are to solve our problems.
    The second point on stabilisers is that the wine stabiliser does not affect us as producers, but is of great concern to us as taxpayers, as net contributors to the Community budget and, in some instances, as consumers. A tough wine stabiliser is also important in keeping within the FEOGA budget ceilings. It is therefore very important to the United Kingdom that a tough stabiliser should be achieved in our negotiations, and that outcome has been achieved.
    The key point is that the price for obligatory distillation has been set at 50 per cent. of the guide price for the first 10 per cent. of normal production, representing about 10 million hectolitres, and at 7·5 per cent. thereafter. I put that on the record although I know that not many people study wine stabilisers in detail. It represents a cut of over 50 per cent. in the average price paid at present. I believe that it was entirely right to arrange such a tough wine stabiliser, because we were producing surplus wine that no one wanted, and I believe that the package meets our major objective in providing truly deterrent measures against over-production.
    I have already mentioned that the wine stabiliser has not been agreed in the Council, because it has yet to be considered by the European Parliament. I know that the House supports the Government in attaching great importance to the need for all the stabilisers to be agreed together. Let me give some reassurance on that point. The Agriculture Council has agreed that any change resulting from comments from the European Parliament would be adopted by the Council only on a unanimous vote.
    Thirdly, the new arrangements for budgetary discipline are crucial, and are already making themselves felt. Greater realism has been entering into the discussion of the Agriculture Council for some time, but this is now strongly reinforced by the awareness—in any decisions that we make, but, I suspect, especially at price-fixing time—that the financial guideline has to be respected. All the old loopholes have been closed, and, apart from an allowance for large movements in the dollar, there are no circumstances that can justify exceeding the guideline; nor can the Commission defer expenditure by allowing the build-up of stocks.
    A very important provision in the new arrangements—which the Government worked hard to achieve, and which I believe has not been given as much attention as it deserves—is that stocks must be written down to their market value when they are taken into intervention. That means that if stocks were to build up there would be an immediate pressure on the guideline. The Commission and Council have made great efforts recently to run down the mountains of food in intervention, and the new accounting arrangement will be a powerful deterrent to their re-creation.
    It is worth mentioning that while the levels of intervention stocks are still higher than we would like, considerable progress has been made. In August 1986, the Community had some 1·4 million tonnes of butter in intervention: over 10 months' supply. By contrast, in February this year the level of stocks was not much more

    1043
    than half that. For skimmed milk powder the improvement has been even more dramatic, with stocks falling from over 1 million tonnes in 1986 to a quarter of that level in February this year.
    Cereals stocks have also been reduced, albeit with assistance from two successive poor harvests. Stocks' of wheat totalled over 10 million tonnes in 1986 and are now under 3 million tonnes, and there have also been reductions in stocks of barley and rye. We see similar progress in the United Kingdom on its own, with butter stocks down by 36 per cent. from February 1987 to February 1988, skimmed milk powder stocks down to practically nothing and cereals down by 51 per cent.
    Emphasis on the financial guideline takes me straight on to the price fixing. The proposals here follow up the agreements on stabilisers, which of course affect the support levels for many commodities in 1988–89, and the Commission has generally proposed no further changes to price levels. The proposals include a number of related measures, some of which would involve effective reductions in support levels. For two sectors—fruit and vegetables, and tobacco—the proposals put more flesh on the bones of the stabilisers which were agreed at the summit.
    We have two major concerns in the negotiations. First, it is essential that we respect the new agricultural guideline of 27·5 becu—£19 billion—for 1988. The Commission's proposals are made within it. We must ensure that the final decisions taken by the Council also respect it. That means that we must carry forward the essential message of the summit: supply needs to be brought closer to real market demand.
    There is also a major deficiency in the package on green rates. The Commission has proposed only one green rate change—a 10-point devaluation for Greece. I have made it quite clear that in our view, some devaluation of the green pound at this price fixing is fully justified, and I would like to tell the House why.
    In agriculture, as across the whole range of economic activity, we are looking towards 1992 and the completion of a single European market. The Commission last year set the Community the aim of abolishing all MCAs by then. That is essential if we are to have a proper single market without frontier controls, and I strongly support it. It would therefore be sensible—and wholly consistent with the Commission's aim—to take a measured step in the direction of MCA abolition at the current price-fixing.
    I have told the Agriculture Council that I find it surprising, and discriminatory, that the Commission proposes a devaluation for only one country—Greece—and makes no provision for a devaluation in the United Kingdom.
    Although sterling has appreciated recently, our MCAs remain higher than in any member state except Greece, and are still in double figures for the main crop products. That means that support prices in other countries are higher than ours.
    Producers here have recognised the essential need for CAP reform if the system is not to collapse under its own weight. That shows their realism, and I welcome it and am grateful for it. But it would be wrong to ask them to shoulder a disproportionate share of the burden of budgetary restraint. To avoid this we need to start reducing our MCAs now, and I shall continue to press for a devaluation of all products. I well understand the desire for reasonably fair competition—I say "reasonably fair"
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    because, as the Commission document on price fixing points out, there are a whole host of different factors in each member state which in different ways made up the competitive mix, and one cannot isolate any one. I hope that this has made the position clear on the general green pound.
    It is worth pointing out that a 1 per cent. green pound devaluation adds only one fiftieth of 1 per cent. to retail prices. The House is aware of the excellent record on food prices under this Government. The average annual increase in food prices since May 1979 has been just under 6 per cent. and the trend in recent years has been steadily downwards. The most recent figures indicate a rate of just over 3 per cent. This compares with an average increase of nearly 16·5 per cent. per annum during the period of the last Labour Government.
    Mr. Nicholas Baker: What my right hon. Friend has said about the need for devaluation of the green pound will be welcomed by everyone who supports British agriculture, which demands level playing fields, not favourable treatment. What I find hard to understand, and perhaps my right hon. Friend can explain, is why the Commission is so negative and does not seem to wish to produce proposals for making these playing fields level so that our agriculture can compete fairly.
    Mr. MacGregor: The Commission has produced in its document—it is worth reading, because it is an interesting passage—some explanations of why it is very difficult to establish across the Community for every member state what a level playing field is. I go along with that, because when one looks at any commodity one sees that a whole range of factors have to be considered when trying to establish what is—to use my hon. Friend's words—a level playing field. Obviously it is for the Commission to justify its own price proposals. The Commission is arguing that the proposals that it puts forward come pretty well up to the budgetary ceiling and it feels that it cannot go any further. So this is going to be a difficult negotiation. but I hope that I have made it clear where I stand.
    Pig farmers are additionally suffering from a variety of problems specific to the sector which are nothing to do with the CAP but very much to do with straightforward supply and demand in a comparatively free market. On one of the two areas that affect the CAP—private storage aids being the other—I should like to go further. MCAs apply to pigmeat to compensate for differences in the price of cereals between member states. But the calculations take no account of the use of cereal substitutes in the pig ration. The result is that these costs are lower in the Netherlands than in the United Kingdom, yet Dutch pigmeat still receives an MCA subsidy when it comes to the United Kingdom. It is an internal trade distortion; it is nothing to do with support prices, because there is no support price regime, apart from a very small aspect. This means that for pigmeat MCAs produce distortions rather than prevent them.
    While our MCAs in pigmeat have already substantially reduced in recent months—I made that point frequently at Question Time this afternoon—and therefore have considerably reduced the trade distortion so that it is now quite small, I am nevertheless still pressing, as a point of principle, for the complete elimination of our MCAs in this sector, although, again, because the Commission has

    1045
    not proposed it and a number of member states would not wish to change the system, this is going to be a very difficult part of the negotiations.
    Time does not permit me to deal with each of the commodities, so I will touch only on the main ones. On cereals, the Commission is proposing a general freeze on prices. It has also proposed that monthly increments to intervention prices should be halved, which would reduce support levels by around 2 per cent. this year. As this flows from discussion at the European summit, I am ready to accept the proposal, although I recognise some of its disadvantages, such as that it may encourage putting cereals into intervention earlier in the year. So I would be equally ready to accept any other solution which had an equal effect—for example, a direct cut in intervention prices. We must maintain the momentum of the changes agreed at the summit if we are to bring cereals production in the Community under control.
    Some, of course, point to the improving world market for cereals and question whether the problem of surpluses still exists. It is possible that cereals consumption will exceed production in 1988, and the stocks that overhang the world market are falling. But in the past year, with our extremely difficult harvest in the United Kingdom due to weather conditions—as we in East Anglia need no reminding—we still had a surplus, as did the Community as a whole, so that there was a continuing need to export to third countries, with the big cost involved in the export refunds.
    We must also have it in mind that in the United States, which I visited recently, under current support programmes some 69 million acres of land is set aside; that is 80 per cent. of the total cereals area in the entire Community. Some 23 million acres of that land is set aside under the conservation reserve programme, which means that such land has to be set aside for 10 years. But the remaining 46 million acres is set aside on a yearly basis, and our set-aside schemes will, of course, go beyond a yearly basis.
    That illustrates the massive potential in the world for increased production. It is significant that the United States, in any case, under the provisions of the Food Security Act, plans to reduce the area set aside next year because of the fall in United States stocks of grain. Other major grain-producing countries will not continue to hold back their production if the Community does not maintain its efforts to control its own surpluses.
    There is one other major cereals issue this year—the proposal for a cereals incorporation aid, designed to increase the quantities of cereals used in animal feed. It was agreed at the summit that the Commission should be requested to come forward with ideas for increasing cereals usage, and I agree that the more cereals that we could use in this way the better. But any scheme to encourage this must be cost-effective and must not create distortions. I believe that the scheme put forward by the Commission does not meet those criteria, and I have therefore been expressing very serious reservations about it.
    I have several reservations, which I cannot cover because of the time factor, but perhaps the most fundamental one is that it seems a peculiar oddity, to say the least, that we are imposing, on the one hand, the cereals co-responsibility levy—which, as the House well
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    knows, I strongly dislike and to which I have frequently expressed objections—which adds to the costs of cereal users, and on the other hand we may introduce a complicated cereals incorporation subsidy to reduce its effect. It would be better not to have the cereals co-responsibility levy in the first place. But that is an argument that I seem to be alone in pushing in the Council. This ill-thought-out proposal reinforces my belief that a reduction in price is the best way of making cereals more attractive to animal feed compounders.
    For all these reasons, and others that I have not been able to go into, I am expressing concern about this proposal and will continue to argue—I hope that I will have the House with me—that if our aim is to increase consumption of cereals it is better to cut prices than to increase the co-responsibility levy, because lower prices benefit consumers more directly.
    Mr. Robert Key: Will my right hon. Friend give way?
    Mr. MacGregor: I really must not give way at this stage because I have other points that I must cover to explain the Commission's view and the Government's position on it, and I know that many hon. Members wish to speak.
    Dairy products are unlikely to feature very much in this year's price review. I am taking the opportunity to press very strongly for the Commission to come forward with proposals later this year to improve the transferability of milk quotas, including ideas for removing the link between quotas and the land, giving member states more flexibility in the operation of quotas, within, of course, the need to have overall effective production controls in each member state. I should like to see these discussed and agreed in the Council this year so that they are ready for operation in 1989, at the end of the first five-year period of quotas.
    Mr. James Wallace rose—
    Mr. MacGregor: I feel that I ought not to give way, because so many hon. Members wish to express their points of view. My right hon. Friend will be winding up at the end and can respond then.
    I will continue to pursue my suggestion as I believe that it is highly desirable. Again, it is an initiative in which the United Kingdom is in the lead.
    There is one other point on milk that I ought to mention, because it is frequently raised by some of my hon. Friends, who point out that there are occasions when users of milk, particularly manufacturers of cheese, are short of supplies. The point is that it is not that we are short over the year in general if we produce to or near our quota; it is that at certain points of the year, effectively the seasonal trough in the summer, supply falls sharply compared with other times in the year.
    So, as we bring milk production into line with demand, the balancing of demands in the seasonal production trough becomes increasingly important. I have therefore urged the Milk Marketing Board to make every effort this year to avoid the problems encountered with the supplies of milk for cheese manufacture last autumn.
    The board has advised me that contingency planning has progressed well on three fronts in particular. First, the programme for rationalising butter and powder manufacturing capacity has enabled a substantial reallocation of milk to higher value manufacturing usage. Secondly, manufacturers have been encouraged to make more

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    Cheddar during the peak of milk production; manufacture of hard pressed cheese is currently estimated to be 25 per cent. up on the first quarter of 1987. Thirdly, the board is seeking to reach agreement with manufacturers on arrangements to give a higher priority allocation of milk for territorial cheese manufacture in the July-October period.
    The House will appreciate that the extent to which the plans succeed will depend upon the co-operation of both sides of the industry. But I am hopeful that the industry as a whole will fully recognise the importance of avoiding seasonal shortages of high-quality home-produced cheese for which there is a regular and growing demand.
    I have explained to the House on previous occasions why I regard a set-aside scheme as an important complement to action on price. It also deals with the general objective of getting more land out of production, particularly arable land. It provides an alternative source of income for those farmers most affected by reductions in Community support. It provides payment for management of the land—this is a crucial point to underline—that will conserve the countryside and preserve the environment for the benefit of the public as a whole.
    The timetable is very tight. Member states are now obliged to introduce set-aside for the 1988–89 cereals marketing year. Effectively, that sets a target of 1 July which we must make every effort to meet, although I have made it clear in the Council that for those of us who have to take the scheme through our Parliaments it is an ambitious timetable. The Commission last week completed the drawing up of the detailed regulations and I am now considering with my agricultural colleagues in this country the form of the United Kingdom scheme in the light of these rules.
    The views we have received since I issued our consultation document in December have been most helpful and will be taken into account. Once we have completed that consideration, we must have the clearance of the Commission, like all other member states, and then put our proposals before the House. I hope to make an announcement fairly soon. I will, however, make two points now.
    First, the Community rules give member states the option to permit set-aside land to be grazed at a lower level of payments. That is now being described as grazed fallow. I was one of those who insisted that this should be optional and not compulsory. I have received divergent views on whether the United Kingdom should take up the option. Factors that will need special attention are the potential environmental benefits from permitting grazing, though there will he environmental conditions for set-aside as a whole; the possible adverse effects of an encouragement to extra production, and problems with administration and control, which are quite severe.
    One of the points of which I am particularly aware, and which will be very important in our consideration of all factors in reaching a decision, is the concern expressed by farmers, particularly in the hills and especially by the sheep industry, about the knock-on effects in lowland areas of the pressure on cereal prices and, hence, the implications for hill areas, which often have no alternative to sheep production, if there were a grazed fallow scheme on arable land which might have the effect of expanding sheep production. [HON. MEMBERS: "Hear, hear."] I heard what was said on that point during Question Time and I have
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    heard the response to what I am saying now. I shall certainly be listening carefully to further views expressed during the debate.
    Secondly, I want to make one point clear to avoid doubt in the minds of farmers about what land will qualify for set-aside payments. The Commisson rules allow set-aside of land in production in the 1987–88 crop year, provided that the land has not been brought into arable production since the beginning of 1988. The implications of this are obvious for any farmer intending to plough up grassland this year in the hope of benefiting from set-aside payments; that will not be possible.
    I should also mention one other element of the stabilisers package, to which one document before the House refers; the scheme for cessation of farming which in fact means early retirement. Member states may take up the scheme if they wish and may offer payments to older farmers taking all their land out of production or amalgamating it with neighbouring farms. I have constantly emphasised in the Council the need to ensure that such schemes do not add to production, and preferably reduce it. We succeeded in getting it confined substantially in that direction, though not entirely so. The scheme will be taken up elsewhere in the Community where there is a large proportion of such elderly farmers, often farming on a small scale. But my initial view is that the scheme is not attractive for the United Kingdom.
    I have had to outline many of the points in some detail and I apologise to the House for taking time on that. However, it is important, as this is the first opportunity we have had to show the United Kingdom's general position. I should like to finish on a few quick points of general importance to agriculture, particularly bearing in mind the fact that, as Mr. Speaker said, we do not often have main debates on agriculture.
    In horticulture, which has to look to the market for its return, the mood is buoyant. Growers have been able to benefit for the past five years from the very favourable grants for modernising their glasshouses and orchards and these are now beginning to show an effect in keeping our industry capable of producing good quality products economically and performing well in today's competitive conditions.
    The new policy initiatives that we have taken on environment and farm diversification, both of which I listed as key objectives at the beginning of my speech, are already producing good results. In the first year of operation of the five original English environmentally sensitive areas we made 1,480 agreements for farmers, covering 35,600 hectares—about three quarters of the area considered suitable for entry to the scheme.
    I am delighted to say that in the 1988 application period, which has just closed, there has been a similarly excellent response. Nearly 1,000 farmers have applied to join the scheme this year with land covering some 65,500 hectares. In all, this brings the total to just over 100,000 hectares or 85 per cent. of the area considered suitable for the scheme. That is a success story by any standards and a resounding reply to those sceptics who said that farmers would not be attracted by the ESA initiative.
    The farm diversification grants scheme has also got off to a good start in attracting lots of interest. While talking about environmental matters, I emphasise the considerable switch in capital grants that we have undertaken in recent years, cutting down substantially on those grants

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    that assist in the production of agricultural products, thus, of course, adding to the surpluses, and concentrating on grants with environmentally favourable effects.
    I simply do not think that the scale of our change has yet been appreciated. The simplest way of demonstrating the impact of our approach is to give the figures. Grants for conservation and effluent prevention work took up 4 per cent. of our total expenditure in 1983 but represent 48 per cent. of expenditure under the current scheme. Grants for production facilities under schemes presently available for take-up have declined from 96 per cent. to 52 per cent. of total expenditure.
    This year's Budget has great importance and highly favourable effects for farmers. The most marked is the removal from the tax system of so-called capital gains incurred prior to April 1982, which will exclude the inflation element of land value increases which occurred during the 1970s. That will allow farmers and landowners to unlock the value of their assets, thereby giving many of them the opportunity to reduce their borrowings or reappraise their utilisation of their resources—very important at this time of substantial agricultural change. That is not the only good point for farmers.
    Retirement relief for farmers will be extended and the further changes to the inheritance tax system, combined with earlier changes to capital transfer tax under this Government, will make it much easier for farms to be passed on without expensive or complicated schemes to finance the tax payments, the effective tax rate being cut to 20 per cent. Farmers' incomes—along, of course, with those of others—will benefit from the reduction in the basic rate of tax to 25 per cent., the reduction in the higher tax rates and the alignment of the small companies rate of corporation tax to the basic rate.
    An important point in this connection is the effect of the reductions in direct tax rates on a point that has frequently been raised by farmers—I want to stress it now—in the context of the changes to the capital allowance system in 1984. Many farmers have pointed out that 90 per cent. of farm businesses are unincorporated, so that, as they saw it, they did not fully share in the offsetting effect, when the capital allowance changes were introduced, of the reduction in the corporation tax rate. The changes in this year's Budget mean that that point, which has often led some farmers to ask for a reintroduction of modest capital allowances for unincorporated businesses, has lost its impact. The average rate of tax for unincorporated farm businesses will now be around or well below corporation tax rates.
    I know that the Opposition have supported our environmental initiatives, and I am grateful for that, but a marked feature of the current agricultural scene is how little the Opposition have to say of any value or benefit to farming.
    The hon. Member for South Shields and his hon. Friends sometimes try to make something of a point about the pressure on farm incomes. We all understand that—none more so than me, and I have already commented on it at length. But it is somewhat of a pointless comment, because the hon. Gentleman has made it clear that he fully supports the CAP reforms for which we have been successfully striving, and I am grateful for that. As I have constantly stressed, these are necessary for the long-term
    1050
    stability of British agriculture; but it is certainly these that are putting the pressures on farm incomes so the hon. Gentleman and his party have nothing to offer in that respect.
    In cases where they have something different to say, the impact of the Opposition's policies will be extremely unfavourable for and unhelpful to farming. They have already opposed the basic and higher rate tax changes that we are making, and presumably will oppose the capital tax changes, too. We have just incorporated in the Local Government Finance Bill—in the primary legislation—the exemption of agricultural land and buildings from our replacements for rates. The Labour party voted against the amendment and so would be imposing a very heavy additional financial burden on farmers if it got the chance. The hon. Member for South Shields certainly made it clear earlier that he opposes any changes in the green pound and MCAs, which farmers consider to be so important to their competitive position at present—and he nods now.
    The Labour party clearly has nothing to say of any value to farmers at the present time. It is our policies that deal directly with the current problems facing agriculture. Those policies are working for a more sensible system within the Community and a more stable long-term basis for agriculture, and will ensure the continued success of British agriculture in the changing market place, the right balance between agricultural and environmental needs in the countryside and a prosperous rural economy. I commend them to the House.
    5.21 pm
    Dr. David Clark: This is an appropriate time for the House to be debating agriculture. As the Minister rightly pointed out, we do so as the Council of Ministers and the Commission are beginning their haggling over this year's price level. We do so as an important conference takes place here in London on world agricultural trade, and at a time when British agriculture is in considerable disarray.
    I welcome the debate, although I feel that the juxtaposition of a discussion of the detailed Commission proposals and a debate on the state of agriculture in this country is not a happy one, because it means that many points with which I am sure the Minister would have liked to deal have gone without mention. I fully understand that. The Minister introduced the debate in his normal urbane and civilised manner, not surprisingly praying in aid on occasion the fact that he was involved in negotiations and therefore could not elaborate as he might have wished. We understand that difficulty but, equally, we feel that there are many points that we have the right to raise with him, and I hope that we can persuade him and his right hon. Friend to be a little more forthcoming later this evening.
    I took the Minister's comments at the end of his speech in the spirit in which they were made. They were fair political points. There are differences of opinion between us, and we must acknowledge that. However, it is also important to stress that Opposition Members believe in British agriculture. We are prepared to support British agriculture, and we believe that in the long term our approach is more for the benefit of British agriculture than might appear from the Minister's comments.
    I deal, first, with the point about the long-term benefits to British agriculture. I emphasise that we are beginning to

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    witness the real costs of the Prime Minister's capitulation at the summit in Brussels. [HON. MEMBERS: "Oh, no!"] I know that Conservative Members object to that. There is a fundamental difference between us. Opposition Members believe that the Prime Minister lost her bottle; that she got frit, to use her word, and as a result threw away our bargaining chip. We shall not get another one probably for another five years. In the intervening period we must muddle along, trying to reform the CAP as best we can. The Prime Minister had always been regarded in Europe as a tough negotiator. Now that her bluff has been called, the task of wringing changes out of our European partners will be much more difficult. Her tough image is irreparably damaged.
    As we contemplate the immediate future for British agriculture, we begin to notice the costs of the Prime Minister's concessions—costs which the Minister himself acknowledged. He repeatedly said, in effect, that arrangements had been agreed at Brussels and that we had to accept them as agreed at the summit meeting. He is quite right. All the stabilisers were agreed in principle as they lay on the table at Copenhagen at the previous summit. There had been no real debate about them previously. They were not discussed because people did not feel that they would be taken on board. We have had to take the shortcomings of the stabilisers on board without any real discussion.
    I believe that if the Minister of Agriculture, Fisheries and Food had been at Brussels at the side of the right hon. Lady we should not have got into the mess that we are in at the moment. The Minister has the unenviable task of trying to pick up the pieces and make sense of the reform of the CAP. He has to do that from a very weak bargaining position. He has admitted time and time again that when he has wanted changes in the agricultural scene he has been on his own. He has lost his bargaining power. We had a bargaining chip at Brussels, but we threw it away needlessly.
    I have made a number of allegation and perhaps it is incumbent on me to justify my criticisms of the CAP.
    Sir Geoffrey Johnson Smith: Perhaps the hon. Gentleman will make a sensible speech and get back to his proper form. No doubt this is a bad patch. What is this marvellous bargaining chip, and who supports him, apart from one or two of his hon. Friends?
    Dr. Clark: If the hon. Gentleman had not been so quick to jump to his feet he might have heard a sensible speech, and I hope that he will stay and listen. If he has not realised that the CAP—and the European Community—was bankrupt at Brussels, there is nothing that I or anyone else can do to get it across to him. It is as simple as that.
    Miss Emma Nicholson: If the hon. Gentleman is unhappy and believes that the common agricultural policy was bankrupt in Brussels, why does he not accept that stabilisers were the answer? For example, without the single sheepmeat stabiliser we would have lost our variable premium, which would have been absolutely catastrophic. What is wrong with the stabilisers as an answer if the CAP was going bankrupt?
    Dr. Clark: If the hon. Lady had graced us with her presence during other agricultural debates—
    Miss Nicholson: Will the hon. Gentleman give way?
    Dr. Clark: I shall give way in a moment.
    Miss Nicholson: I am happy to assure the hon. Gentleman that I have been present at other agricultural debates—[Interruption.]
    Mr. Deputy Speaker (Sir Paul Dean): Order.
    Mr. Brynmor John: On a point of order, Mr. Deputy Speake. Do you now permit an hon. Member to whom the hon. Member who has the Floor has not given way to speak while that Member is still on his feet? Is that another of the double standards that are creeping into the House?
    Mr. Deputy Speaker: Dr. Clark.
    Dr. Clark: If the hon. Lady was present at previous debates—I accept that she must have been: I am sorry that I missed her—she cannot have been listening. The Minister will acknowledge that we have accepted the concept of meaningful stabilisers. We are critical of the operation of some of the stabilisers, and I want to explain why. We believe that they will harm this country's agriculture and the incomes of many of our less well-off farmers.
    I was criticising the CAP because as the cost escalates the position becomes even more farcical.
    "The situation has deteriorated so far that total public resources spent on agriculture through the Community and national budgets have reached a level which even not counting social security transfers, is now practically equivalent to the, net income of the sector."
    That is a damning comment, but I am afraid that I cannot claim credit for it. That view comes directly from the Commission itself, in volume 1 of its proposals on pricing for agricultural products in the coming year.
    To rid it of Euro-jargon, it means that agriculture is highly subsidised, to an extent that could not even be contemplated in any other sector of industrial activity, in this country or elsewhere in Europe. It is a damning comment that the amount of public support for agriculture, through the Community and national budgets, is practically equivalent to the net income of the agricultural sector. That is a serious indictment, which we must address. We put forward our points of view today against that background.
    Sir Hector Monro: That information is very reveling.
    Dr. Clark: The hon. Member for Dumfries (Sir H. Monro) says, cynically, that that information is revealing. I accept that. The key point is that people in this country do not realise it. We do well to remember how much of our money and the money of our constituents goes to support the agriculture industry.
    How can the Minister justify this situation? How does he advise us to explain to our constituents, who may have been miners, shipyard workers or steel workers, that it is wrong to subsidise their industry, but right to subsidise agriculture to this extent?
    Conservative Members ought to listen to this. I accept that it is right to give some subsidy to agriculture, because the industry is vital to this country in more ways than one. Equally, I submit to hon. Gentlemen that the same argument can be made for the coal and shipyard industries.
    Mr. Nicholas Baker: Will the hon. Gentleman give way?
    Dr. Clark: No. I have given way twice already. I shall follow the lead of the Minister, as I have a lot to say. It is better that I make my speech and hon. Members then seek to catch your eye, Mr. Deputy Speaker, and make their own speeches.
    Can the Minister tell us how we can justify the present system to farmers who receive only a third of agricultural support? The key factor is that a grossly expensive agricultural support system does not reach the farmers, who are at the sharp end. Only a third of the money goes to farmers, and the rest goes to storage and the likes of export restitution. How can the Minister defend that system and not seek a radical reform? The question is unanswerable.
    I wonder where the Government stand on this issue. I listened very carefully to the Minister and though that I heard some indications. Did I detect a shift in Government policy for agricultural support? I listened carefully to what the right hon. Gentleman said today about the markets. I even listened to the philosophical guru of the agricultural Benches, the hon. Member for Calder Valley (Mr. Thompson). All his references at Question Time today to market forces got through to me. They burnt through to my soul. I thought, "Aha, perhaps there is a shift in Government policy. Perhaps they are moving away from almost unfettered support for agriculture." Are the Government really thinking of removing or reducing financial support for industry?
    I read with great interest a speech made last week by the Minister of State, Ministry of Agriculture, Fisheries and Food at the annual dinner of the Grain and Feedstocks Association. He made some revealing comments to that august group. He is reported as saying that price cuts were his preferred option to reduce surpluses. How does that square with the Government's policy on the devaluation of the green pound, which is a price increase for farmers, rather than a price cut? The fundamental message in his speech came when he provided some insight into the Government's thinking on the reduction of intervention in the farming industry. He made the point that government was best when least obtrusive and involved. His general conclusion was that farm support ought to be reduced.
    Further confirmation of that change in Government policy came yesterday from the Economic Secretary to the Treasury. I believe that the Treasury has some influence in these matters. The Minister was arguing that the experience of the deregulation of transport, financial services and mining in Britain had stimulated growth. He argued that deregulation could have a similar effect for agriculture.
    It is fair to ask the Government at this early stage whether they are really contemplating a U-turn on agriculture. Because so many jobs are involved, and the lives of so many of our citizens will be affected, is it not time for the Government to come clean and start an open debate on the matter?
    We on the Labour Benches would approach any rethinking on agricultural policy in an open and positive manner. I make that offer to the Minister. There is much at stake. It makes a lot of sense to strive for a policy based on common and agreed principles. If we could get consensus on some basic issues of principle, we might take the debate a stage further. Therefore, I ask the Minister to give us a little more information about his thinking on these matters. As he pointed out at the beginning of his speech, public subsidy to agriculture is increasing all the
    1054
    time. He gave a telling figure of 28 per cent. in the past few years. He used it for a different reason, but I use it in this context, too.
    Continuing the theme of finance, I shall consider the cost of the CAP to the consumer. It is worth repeating it to the House, with all the legitimacy of a Treasury document to back me. It was issued and distributed at the time of the NFU conference, and it said that it cost the average household of four in Europe more than £10 a week to support the farming community.
    The figure for the United Kingdom is even higher, because of our different trading patterns. As long ago as 1986, the university of Newcastle calculated the figure at £11·50 a week. I know that the figure is not very welcome to farmers in this country, but it is a fact promulgated by the Treasury. When the Minister accepted our amendment to the Government's motion on CAP reform in November 1987, we thought that, while he did not agree with the figure, he reserved his position. I fully concede that point, because I want to be fair. We believed that the Government genuinely shared our concern. I hope that that is still the case. However, I detected rather a different attitude by the Minister today, compared with his determined approach before he went to Brussels.
    I shall say a few words about the green pound, because the Minister asserted our position correctly. The NFU argues, especially through its publication British Farmer, that the green pound is still the most critical issue facing British agriculture. I regard the NFU as probably the most effective trade union in the country. It has been remarkably successful over the years in persuading successive British Governments to back its proposals. It is more than a strange coincidence that sometimes the Ministry of Agriculture and the NFU speak in almost the same voice.
    I can understand the determination of the National Farmers Union to maximise the income of its members, and I appreciate its arguments for devaluation of the green pound. There is no doubt that the system of green currencies has got somewhat out of hand, but I have some intellectual difficulty in accepting the duplicity of the NFU's approach. I shall explain what I mean.
    On one hand the NFU is on record as supporting the concept of stabilisers, which is a means of cutting surpluses by price reductions. Obviously, for such a system to work effectively, the price cuts must hurt. Yet the NFU is on record as justifying its devaluation stance by claiming that at least 4 per cent. is needed to offset the effects of stabilisers on British farm prices. The two objectives are contradictory, and that casts doubt on the NFU's determination to tackle seriously the costly farm surpluses.
    While I accept the NFU's claims that the farming industry is not so prosperous as it was, equally I use the Minister's arguments that the farming industry has had benefits in the past 12 months and will have benefits in the immediate future. The industry has the benefit of lower input costs—of fuel oil and so on—because of the strength of sterling. It has the benefit of a reduction in income tax—for some farmers, a reduction in income tax at the higher level. The industry has those benefits, as the Minister has pointed out.
    Mr. Geraint Howells: Some farmers do not earn enough to pay tax.
    Dr. Clark: The hon. Gentleman makes the point that some farmers do not pay tax. He represents a particularly difficult area for farmers, and his statement is correct. Many of his constituents are on low incomes and work hard in difficult terrain. I think I am right in saying that the average income for the Welsh upland disadvantaged area farmer is £4,617 a year.
    Mr. Howells: I am one of them.
    Dr. Clark: I thought that I was doing rather well in helping the hon. Gentleman, until he started adding his additional incomes. I think that I have made my point without the help of the hon. Gentleman, who is such an honest man.
    Apparently, the Government agree with the NFU's approach. The Minister has said that he is in favour of a devaluation of the green pound. We are entitled to ask by how much. As the right hon. Gentleman pointed out, a devaluation in the green pound affects the cost of living of the rest of the community.
    Mr. Robin Maxwell-Hyslop: Trivial.
    Dr. Clark: I shall return to that trivial point. Is that really the Government's position? How can they justify their support for the NFU's campaign to offset the cost of stabilisers by price increases to farmers through a green pound devaluation? I thought that the Government were serious about stabilisers, and here I return to the point that was made by the hon. Member for Torridge and Devon, West (Miss Nicholson), which I may have misrepresented.
    I listened carefully to the Minister. Will he confirm that the Governments of France, Ireland, Italy, Portugal and Greece have requested green rate devaluations? If they have, that negates any advantages that we in Britain may gain by our devaluation. One is then talking about rates of devaluation, and that is another reason why we want to know the rate on which the Minister has his eye.
    Mr. Tim Boswell: Will the hon. Gentleman give way?
    Dr. Clark: I must continue. I am sure that the hon. Gentleman will try to catch your eye later, Mr. Deputy Speaker.
    Will the Minister confirm that the French, the Italians and the Irish have argued that a devaluation of their green currencies is a condition of any price package agreement? Is it true that the British Government have not taken that line? Am I right in believing that the Minister is not making a green pound devaluation a condition? Is his declared support for devaluation real, or a sham? The House needs to know where he stands.
    The recent strengthening of the pound in foreign currency exchanges has made the case for the Minister's devaluation stance even weaker. On 22 April, in Farming News, the hon. Member for Skipton and Ripon (Mr. Curry) spelt that out clearly in words of one syllable for us all to understand. This strengthening led, ipso facto, to a corresponding devaluation of the green pound. Given that, surely there can be no justification for further devaluation, unless of course the Minister is not confident that the pound will remain strong over the next 12 months. For the House to make a decision, or even to offer an opinion, on the level of the green pound, we need to know where the Minister stands on this issue. Is the current strength of the pound temporary, or will it be permanent?
    1056
    The answer is crucial. Does the right hon. Gentleman side with the Chancellor or with the Prime Minister on this issue'?
    I happily offer the Minister my support on one small issue. There are sound technical reasons for the abolition of MCAs in the pig sector. In effect, it would mean a green pound devaluation in that sector. I hope that the Minister will press as hard as he can for that. He has our support. For the technical reasons which he explained so well, we believe that the pig regime is different.
    I should like to conclude on the green pound issue—[HON. MEMBERS: "Hear, hear."]—by mentioning the forgotten consumer. Obviously, Conservative Members will cheer at that, because they would like to forget the consumer. When I mentioned price increases, the hon. Member for Tiverton (Mr. Maxwell-Hyslop) said that they were trivial. They may be trivial, but, on the NFU's figures alone, it means 1p on the standard loaf of bread, 3p on a 250g pack of butter and an extra 4p per pound on beef. What does the Minister say to those of our constituents who are already on low incomes, who have been heavily penalised by the Government's policy and who have lost in the past 12 months through the Government's reform of social security and the housing benefit system—
    Mr. Paul Marland: Will the hon. Gentleman give way?
    Dr. Clark: I would rather not give way, for the simple reason that I think it important that I make my speech and then allow others to make theirs.
    When the poll tax is introduced, these people will be even worse affected. They will not have the benefits of any tax cuts, because many are on such poor incomes that they do not pay any income tax. If I may say so, they are like the farmers of mid-Wales. How can we argue for any further financial penalty in the form of higher food prices for the many pensioners, the long-term unemployed and the widows and widowers in constituencies such as mine who have lost under the Government's rigid reform of the social security system? Is it fair to suggest to widows with no capital, who were recently faced with a £15 cut in their already meagre income following the changes in the Government's rules, that there should be price increases to help the hard-up farmers?
    It is ironic that some of the unemployed once worked in the shipyards and the coal mines before the Government withdrew the subsidies. That is a fair point which is often raised with me. A further irony, while I am on the subject of ironies, is that some of the people most severely affected by food price increases are the farm workers, who are among the lowest paid in Britain. In a sense, they have been the real forgotten farmers.
    I freely acknowledge that all is not well in farming. The Government must accept some responsibility for farmers' difficulties. Farmers are completely bemused by the Government's lack of direction. The Government's policies have had the same effect on farming as on society as a whole. The past three Administrations under the Prime Minister have shown that the rich farmers are getting richer and the poor farmers are getting poorer. The small farmers in particular have suffered greatly under the Government.
    The position of some farmers in the upland areas of Wales, Scotland and England—for example, Durham and

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    Cumbria—is diabolical. Many farmers are on income support, or near to it. Many are deeply distressed at the Prime Minister's sell-out in Brussels on the sheepmeat regime. I use the word "sell-out" rightly, because even the Minister accepts that the sheepmeat regime discriminates against the British sheep farmer. No objective person could avoid that conclusion.
    I shall now turn my attention to the set-aside issue. It is disappointing that we are having this debate without all the information being available to us. This is very serious. As I understand it, the EC conditions for set-aside have been agreed. I understand that they were agreed at the end of last week. I find it rather deplorable that although the issue was agreed at the end of last week, this debate is taking place without the documents and the details being available to hon. Members.
    I shall ask the Minister one or two questions on the issue. Am I right in thinking that bare fallow will not be allowed? I should like an answer from the Minister. Does the Minister consider that the £16 million allocated to the scheme will be adequate? I wonder whether the Minister could develop a little further his attitude and his thinking about fallow grazing. If bare fallow is to be disallowed, only green fallow and grazing fallow are left. Therefore, the options are restricted. I understand that it is entirely up to the Minister whether there is grazing fallow. As has been shown by hon. Members during Question Time and in interruptions in the debate, there is deep concern about the effect of grazing fallow, especially on the farmers in the upland areas to which I have referred.
    The concept of grazing fallow is admirable if we can contain the progeny issue. As the Minister knows, there are deep and serious anxieties about the operation of the scheme. We know that the hill farmers operate a monocrop system. We also know that they have no alternative. Even if grazing fallow is allowed at a 50 per cent. grant, it turns upside down the economics of sheep farming.
    Perhaps I can use an example. Perhaps I can compare an average hill farm in Cumbria with 600 ewes with an average cereal farm in East Anglia of about 1,000 acres. The East Anglian farmer may put 200 acres into green fallow as grazing fallow set-aside. As I understand there is to be a limit on stocking on grazing fallow, he will be permitted to place approximately 400 mule ewes on that land. Given the nature of lowland farming, he would expect a lambing percentage of about 180. He would therefore stand to gain £8,000 under the set-aside scheme at 50 per cent. In addition, he would get a ewe premium of about £2,000, at £5 a ewe, and expect a variable premium on 720 lambs at £4 a lamb, amounting to £2,880. That means that there would be a total gain to the East Anglian farmer of £12,880. I accept that he would have some costs, but he would also be able to sell the lambs.
    The Cumbrian situation assumes a small drop in lamb prices, due to the increase in lamb numbers, of perhaps £5 a head. In the upland areas it would be realistic to expect a lambing percentage of about 70, which means about 420 lambs, perhaps less 120 kept back for further breeding. The system would mean a loss to the Cumbrian farmer of £1,500. Assuming that there is a drop in the ewe premium of £1·80, which is likely, there will be another loss of more than £1,000.
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    I have spelt that out in some detail because only when it is stated in such stark detail do we realise why so many hill farmers are worried. On a simple comparison—I have used the rounded figures for simplicity—the Cumbrian farmer is more than £2,500 worse off, while the East Anglian farmer gains more than £12,500. Surely that cannot be right. It highlights the danger that can follow from grazing fallow.
    Obviously the final details have to be worked out, but I hope the Minister will ensure that the House has a full debate on the set-aside issue before a final decision is taken, and before the final details are sorted out. I have not dealt with the environmental aspects and the other economic aspects that are affected by the set-aside issue.
    I shall conclude with two thoughts. All hon. Members will agree that we are facing a period of great uncertainty. I should have thought that it was time for diversification and alternative methods of farming. I understand that that is the view of the Government. However, I do not understand why they appear to be intent on further slashing the research and development budget in agriculture, fisheries and food. As I understand it, the report on the review has been submitted to the Cabinet Office. I understand that it has been discussed by the Cabinet. If that is correct, and if the future of research and development is to be altered radically, with industry being encouraged to fund more research, more jobs will be lost.
    The issue raises many questions. For example, does the industry have the ability to pay for research? I understand that the farming industry is under stress and under financial pressure, yet the Government want it to pay for more research. What influence will industry have in deciding the research topics? How will it be decided which research is to be classed as near market research? So far the review has been conducted in the utmost secrecy. The industry itself has not been consulted, nor have any interest groups affected, such as the trade unions and other pressure groups. I hope that before making any recommendations the Minister will come to the House, make a statement, and let us question him on the proposals.
    I began my speech by referring to the fundamental challenges facing agriculture and by accepting that there is a difference of approach between the two sides of the House on many issues. I began by proclaiming the Labour party's concern and desire to keep British agriculture healthy. I applaud the Government's meagre efforts to reform the CAP. Our criticism is that they were not drastic enough.
    I urge the Minister to persuade his colleagues in Europe that we must be much more serious about working in the international ambit. We must devote much more effort to making sure that agricultural issues are discussed within the context of world trade. I make the point that I hinted at in the course of my speech. We feel that there is common ground. We believe that the Government have sometimes been obsessed by secrecy. That is not good for the farming industry or for the House. We should like a much more open discussion, and I urge the Minister to ensure that during the period of readjustment and reform he takes the House and other interested parties into his discussions and listens to their opinions before reaching conclusions.
    I think the Minister acknowledges that there have been issues that we have supported. I freely admit that we have given our full support to the environmentally sensitive areas scheme, which has been a successs. We welcome its

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    success, we want it to be more successful, and we are willing to help the Government in positive efforts to help British agriculture, but we always reserve the right to take a different approach on some of the issues.
    5.58 pm
    Sir Richard Body: I was disappointed in the speech of the hon. Member for South Shields (Dr. Clark). I thought that he would get to the root of what is wrong. His speech was founded on the same fallacy as all the pages that we have had from the Community—I do not know how many, but the documents stand about four inches high. Like the speech of the hon. Member for South Shields, none of them explains the paradox that my right hon. Friend gave us at the outset. In the past eight years the Government have increased support to agriculture by no less than 28 per cent. in real terms. That is a huge increase. Every farmer in the land should be grinning all over his face with delight, but we all know that the opposite is the case. In the same period, farming net incomes have plummeted.
    There is nothing new in that paradox. It began, sadly enough, soon after we launched a policy of price support some 40 years ago. That was done entirely in good faith. We believed that if we artificially raised the price of what the farmer produced, the extra money would go into his pocket and become an addition to his net income. Instead, in the past 40 years farming net incomes have gone down, in real terms, to one third of what they were before that policy.
    Some of us are old enough to remember—the hon. Member Ceredigion and Pembroke, North (Mr. Howells) is very nearly old enough to remember—the days when, just after the war, young men could start serious farming with just a few hundred pounds and make a good livelihood. Today, they would need a hundred times more money in real terms to enable them to do so. In those intervening years—this is why I emphasise that the paradox is not new—300,000 farmers have gone out of business, and the annual review shows that they are still leaving at the rate of 2,000, 3,000 or 4,000 a year. I regret that, and I hope that all other hon. Members do so too.
    The fact is that price support has not had the effect of supporting farms. It is high time that farmers and taxpayers were given some explanation of where all the money has gone. If one looks through the annual estimates for agriculture, one can easily tot up all the money that has gone to agriculture in the past 40 years. One can also estimate how much land values have gone up in the same period. The two figures come to exactly the same. We have lost the money that has gone in price support in inflated land values. That has been fine for somebody such as myself who has the good fortune to own a couple of farms, but it is harsh indeed for the small farmer, and particularly harsh for the tenant farmer, because the more land values rise, the more rents rise. With the aid of the annual review, one can see how that has happened. Even in the past eight years they have nearly doubled.
    We must think seriously about whether the policy to which we have been pledged for so long is fundamentally right. I was more than delighted when my right hon. Friend the Minister for Agriculture, Fisheries and Food touched upon the root causes of the paradox. He is edging towards a much more sensible policy, and I hope that it will work. I am all in favour of set-aside, provided that it
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    is constructive. Nothing would damage the reputation of farmers more than to be paid large sums of money for their land to lie idle. The money must be used for constructive purposes, and I am sure that that is my right hon. Friend's wish.
    I also hope that the Ministry of Agriculture, Fisheries and Food will be much more active in extending ESAs. I appreciate that they are all an experiment, but some of us suspect that the Ministry—not my right hon. Friend, but those further down the line—are not going ahead with sufficient enthusiasm with that practical alternative by which we can lower the temperature of farming and give farmers real security by compensating them for any loss of profit that they suffer by farming differently and more constructively.
    We all know—I think that the hon. Member for South Shields quoted a figure—that the average family is paying much of the price. The figure, accepted by the Treasury and everyone else, is about £11 for the average family. That is a serious amount. If we phased out price support, the average family would be that much better off a week. They would have £11 a week more spending money.
    Mr. Ralph Howell: Does my hon. Friend accept that the figure that he has just quoted is based on wheat at £50 a tonne and that no such wheat is available? The cheapest wheat imported into Britain is £105 a tonne and wheat from other parts of the EC is as much as £177 a tonne. His figure is wholly fallacious.
    Sir Richard Body: I dispute those figures. Only a few weeks ago I had the offer of some land at £7 an acre, and that was in Australia where land that can grow wheat at £50 an acre has gone out of cultivation. There has been compulsory set-aside and farmers have walked away from it. But there is land there that is now growing wheat at £45 an acre and they would gladly send it to this country at that price. I am not suggesting that it would all come in, but I am saying that we are deluding ourselves if we think that we are helping the farming community by pursuing a policy of price support, which manifestly has not supported more than half our farmers since it was introduced.
    I am not arguing that no money should go to farming. On the contrary, I am saying, and have said often, that we have got agriculture into such a mess that a vast sum of public money is now needed to put it right. One of the things that has gone wrong is that we have brought into arable cultivation about 7 million acres—an area the size of Northumberland, Durham and Yorkshire—of poor, grade 3, 4 or 5 land, which cannot possibly grow cereals economically. That is the root cause of the grain surplus that we have had for the past few years, which nobody in Britain wants to buy, certainly not the poor pig producers and dairy farmers who cannot afford it.
    I have consistently argued that to put right the pattern of agriculture a large sum of money is needed—perhaps £2,000 million a year. I think that public opinion will accept that. I draw the attention of my right hon. Friend the Minister to a significant recent opinion poll which said that 78 per cent. of the British people would be willing for 1 per cent. of the national income—which is more than £2,000 million—to go to agriculture for purposes of protecting the countryside, conservation and so forth. That is a heartening prospect for farmers. It means that the British people are willing for an appreciable part of their

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    income to go to agriculture and support it in a genuine way. If we extend the principle of ESAs and the constructive policy of set-aside—as my right hon. Friend is anxious that we do—we would be able to use such money for that purpose.
    However, I fear that if we pursue that course we must also recognise that consumers have rights too, and it would be too harsh to expect consumers to be heavily taxed at £11 a week per family for more expensive food at the same time as contributing another £2,000 million a year.
    I hope that my right hon. Friend will pursue the course of getting to the root of the paradox that has hurt agriculture for a long time. It may not have affected some of the constituents of my hon. Friend the Member for Norfolk, North (Mr. Howell), who may have been beneficiaries, but many other small farmers in Devon, Wales and elsewhere, particularly in the livestock sector, have gone out of business at the rate of several thousands a year. Our aim should be a more balanced agriculture, but one that is secure and stable. That will not come while we pursue a policy of supporting the products instead of the farmer and his farm.
    6.9 pm
    Mr. Geraint Howells: It is always an honour to follow the hon. Member for Holland with Boston (Sir R. Body). We have both been in the House for many years and have disagreed on agricultural policy on nearly every occasion. I am old enough to remember the days when I lived on my father's 250-acre farm. My father's gross takings on that farm were £60 a year, out of which he paid a farm worker. We can turn the clock back 40 years if we want, but I would prefer to start on the farming ladder in the 1980s.
    Little did I think, when I began my farming career back in the 1950s, that Welsh farmers would one day be told that they were producing too much. After all, for years the farming community had been encouraged by successive Governments to improve the land, invest in modern buildings and machinery and build up viable units to reduce our food import bill and ensure that Britain provided as much food as possible from its own resources. Farmers responded magnificently to those appeals. Over the past decade or two, the family farms in Britain—the basis of agriculture—have improved out of all recognition. They have turned themselves into efficient small businesses that make a vital contribution to the economy of rural Britain.
    Welsh farmers find it difficult to accept with equanimity the fact that they have been penalised for their efficiency and for putting all their energies and capital into their life's work. There was a sad lack of foresight by the Government when they accepted and introduced schemes that could easily lead to the destruction of the family farm structure in Wales and the rest of Britain, and to many farmers' financial problems being made impossible.
    It should be possible in 1988 to improve the marketing organisation of the European Community, dispose of unwanted surpluses and find alternative markets, without having to use the intervention system and put everything
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    into cold storage. I was delighted when the Minister said that he has plans to remove many of the surpluses in the intervention system.
    The intervention system has always struck me as a wasteful and shameful exercise, especially when millions of people are starving and young children are dying in their thousands every day through lack of food. Those of us who confess that we are Christians—some of us do—believe that, if there is a will, there is a way to help many of the starving people of the world.
    One of the saddest aspects of the affair is the way in which such mismanagement of the common agriculture policy is turning people in Britain against the EEC and causing them to forget the advantages that membership has brought us. As a dedicated European, I feel sorry that many people are not taking advantage of what is happening in Britain. The Community has expanded the market for British goods, and it has ensured that there will never be any food shortages in the Community.
    The common agricultural policy must be reformed. I agree with the efforts made by the Government, but they have not yet done enough. I am sure that it is not an impossible task, given the will to do it. There is far more to the European concept than its agricultural policy.
    British agriculture is facing its worst crisis in recent memory. I do not think that hon. Members on either side of the House will disagree with that argument. For many of our farmers, the consequences of the crisis are dire. Many have seen their incomes fall to unacceptable levels. If I understood the Minister's opening remarks, he agrees with that view.
    In 1987, United Kingdom farming income fell to its second lowest point since the war, and over the past five years the average decline has been 9 per cent. a year. The effect of that decline has been that during the past two years about 20,000 full-time jobs for farmers and farm workers have disappeared from the industry and investment has fallen by 30 per cent. to the lowest level since the mid-1950s. Last year, the number of full-time workers dropped below 100,000—to 96,000—for the first time.
    I do not know whether it was a slip of the tongue—it is for the Minister to defend himself—but he said something that will agonise hon. Members on both sides of the House, and especially the agricultural industry. The Minister said that many more farmers will have to leave the land in Britain and in the Community. I am sure that he is aware that in France and Germany people working on the land represent 20 per cent. of the electorate. In Britain the number has reduced to just over 2 per cent.
    In reply, will the Minister state whether he wants the 2 per cent. who are engaged in agriculture in Britain to decline to 1 per cent. or even 0·5 per cent.? It is a sad reflection on the industry when the Minister responsible for agriculture says that more farmers will have to leave this land of ours and go elsewhere to look for work. If the position is so serious, the Government should introduce schemes so that many of our farmers could become part-time farmers, and save our countryside and stop depopulation.
    I draw the Minister's attention to this week's Farming News, which reports on the deepening crisis in mixed arable and pig units in north Humberside. Farm workers are being laid off in that region at an alarming rate. The report exaggerates little when it says that farmers, who are forced to take on the extra work themselves, are

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    "hanging on for grim death".
    The people who remain in the industry have seen their incomes cut drastically in recent years. What I say next will be important to everyone in the House, as I believe that agriculture is more important than political parties. The leaders of the Farmers Union of Wales are today meeting the Secretary of State for Wales in Cardiff. The union has discovered that 37 per cent. of full-time farmers in the United Kingdom earned less than £5,000 last year, and more than half of them made a loss. Those are the figures given by the Inland Revenue, which also says that about 31,000 farmers earned less than £40 a week.
    Something must be done to stop the decline. Whatever views the Minister holds, and whatever the Opposition spokesman thinks—I disagreed with many things he said —the industry is in dire financial trouble. The hon. Member for Holland with Boston said that more money must be given to the industry if it is to survive. That must be done soon.
    Mr. Richard Livsey: I particularly want to draw the Minister's attention to the farmers on low incomes to whom my hon. Friend has referred and who he says constitute 37 per cent. of all farmers. Many of them have been receiving family income supplement and are now being transferred to family credit. Their assets of livestock and land are being taken into account, and many of them are therefore not receiving the benefit. So the social security reforms are another aspect that affects agriculture. These farmers will have to leave the land. It is a serious state of affairs.
    Mr. Howells: That was a good intervention, even though it was a short speech. I am sure that the Minister will heed what my hon. Friend has said.
    I said earlier that British farming is one of the most efficient industries in the world, yet the Government continue to deride farmers for overproducing. Their record of efficiency speaks for itself. Farm product prices have risen by only 51 per cent. in the past 10 years. Food prices in the shops have risen by 88 per cent. and prices generally by 120 per cent. Britain's farmers responded to the call from the Government to produce more and make Britain self-sufficient, but when they respond to the reverse call to cut back production they can only go so far. The industry is already demoralised, without criticism from those who should be defending it in Europe.
    One step that would help to restore confidence in the industry would be an independent inquiry into the running of the common agricultural policy. British farmers have the right to know how their position compares with other farmers throughout Europe. That point was raised in Question Time this afternoon, and I am sure that when the Minister reads what I said he will take the lead in setting up a public inquiry in Europe to establish whether British farmers have the opportunity to compete on equal terms in Europe. That would be a step in the right direction and would allay many of the fears of Welsh farmers.
    The way in which the Government allow the green pound to operate is crippling agriculture, and that must be changed before it causes further damage. Its current operation creates ludicrous problems—producers in this country are put at a tremendous competitive disadvantage by the heavy subsidising of food imports and the taxing of exports. It is little wonder that British farmers cannot understand what is happening. They see their livelihoods threatened and all they hear is talk from the Government
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    —without action. I hope that the Minister will do something in the near future about the green pound. I assure him that my hon. Friends and I are behind his efforts to devalue the green pound soon.
    There must be a concerted effort to achieve parity as soon as possible in all areas so that our industry can compete fairly in the markets of Europe. Our producers cannot be expected to compete in a single European market with one arm tied behind their backs.
    The National Farmers Union of England and Wales has already been mentioned, as has the Farmers Union of Wales, but I have received a letter from the National Farmers Union of Scotland, which wrote to my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston) saying:
    "I know that you are fully aware of the grossly unfair imposition imposed by the green pound on Scottish (British) farmers at this time, and the gap remains large despite the strength of sterling over recent weeks. The Government is using the green pound to keep food prices artificially low, and in doing so is hitting the producer rather than the retailer who has much larger margins if economies have to be made."
    So the problems in Scotland are the same as those in England and Wales, and I am sure that the Minister will take heed of that request.
    I said earlier and I say again that 12 months ago many hon. Members said that it would be most likely that we should have to introduce a quota on beef production. Here we are 12 months later and we have been told by the Meat and Livestock Commission that there will be a shortage of beef before the end of the year within the Community. The Minister gave figures for butter and dried milk today, and it is more than likely that there will be shortages of other products in the Community within the next year or so.
    We can all say that the livestock market is buoyant now. Store cattle are selling exceptionally well; calves, in particular, are selling well because many are going to the continent, but there will be a shortage of beef in the near future, in my view. Whatever views we may hold on the introduction of stabilisers and set-aside policy, much more consultation should take place before the Government and our friends in Europe decide on a policy. A great deal of consultation is needed. If agriculture is to survive and we are to keep the small farmers alive in our countries and in the Celtic fringes, we need a 10-year plan for agriculture and parity within Europe.
    It is well known that I am a farmer. Perhaps I can sum up my contribution by saying that I have been in the House for 14 years and a farmer all my life. Ten years ago, my income from the House of Commons was not enough to keep the family, but the money I received from the farm subsidised that income. Today, the money that I receive from the House of Commons subsidises the farm. The position is serious. I honestly believe that the Minister is doing his best; he is an honourable and sincere man, but what is needed is action, not words.
    Several Hon. Members rose—
    Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House of Mr. Speaker's appeal for brief speeches.
    6.28 pm
    Mr. Robert Hicks: It is not for me to comment on the details of the income of the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), but it is always a pleasure to follow him because

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    he speaks much good common sense based on his own experience. I endorse his remarks about our membership of the European Community and the importance of the smaller family farmer in the structure of agriculture.
    One of the most significant features of the debate on agriculture is the growing recognition that we are no longer discussing only the level of farm incomes or even the cost of the common agricultural policy within the European budget. We are also considering the future structure of our rural areas in an economic and social context. It is about the fabric of the countryside that I want to speak.
    The background is not particularly encouraging, but that, in itself, is not surprising. Most of us accept the need for greater financial discipline. Surpluses must be reduced to more manageable sizes. Although that adjustment is difficult and painful for many producers, within the overall requirements of the country and of the national farm, the various proposals outlined by my right hon. Friend—the introduction of stabilisers, a voluntary scheme for set-aside and no increases in prices for 1988–89—are necessary. I also recognise that Ministers have a difficult task in this respect.
    As mentioned in the debate, the Government's White Paper shows that the United Kingdom's farming income in 1987 fell to its second lowest point in real terms since 1945. Over the past five years there has been an average decline in real incomes of 9 per cent. per annum. In the last two years alone, about 20,000 full-time jobs in agriculture have disappeared. In addition, many jobs have been lost in ancillary activities because of events such as the closure of milk processing plants.
    Those are all examples of reductions in the level of job opportunities in the rural economy. An added dimension to the trend is that rural areas often already have high levels of unemployment. In my constituency unemployment is currently 14 per cent. Farming and associated enterprises and activities have long been one of the principal anchor points of our county's economy. As the House knows, it is essentially a livestock area and I should like to mention the effect of the proposed changes and recent trends in milk, beef and pig production.
    As we know, pig farming traditionally operates in cycles of peaks and troughs. This trough seems to be longer and more pronounced than any of its pig trough predecessors. I hope that you can follow that, Mr. Deputy Speaker. If we look at the figures for my county showing the effect of this downward trend, we see that in 1978 there were 1,364 farmholdings with pigs forming part of the enterprise. The number has dropped by 36 per cent. in the last 10 years, so that today there are 867 such farmholdings. The total number of pigs on those farms has fallen from 105,000 to 85,000, a drop of 19 per cent. That reflects a reduction in the size of the breeding herds, the sows and gilts. This is a worrying trend. The pig production unit traditionally formed part of the mixed farming enterprise in counties such as Devon and Cornwall.
    I did not object to the principle of milk quotas. Following their introduction, the profitability of milk production rose. That was essentially because hitherto farmers had not necessarily realised that the maximum output of milk did not equate to maximum profitability.
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    The adjustment was essentially a one-off exercise and has now been achieved. We are now in a new situation in which there is a virtual standstill on milk prices, and that comes on top of a 19 per cent. quota cut since quotas were introduced. That has imposed considerable financial pressures on milk producers and had it not been for calf prices I doubt whether the financial position of the milk producers could have been sustained. Here again we run into the problem of the multiplier effect because beef producers in my part of the world are facing serious financial problems.
    In part, those problems stem from the high price of calves and store cattle. The beef producer faces the prospect of a reduction in beef intervention prices and the abolition of the variable premium from January 1989. In that context I welcome the Minister's remarks about his attitude to the green pound intervention and about the posture that he will take in meetings of the Council of Ministers. Irrespective of that, one of the key questions is simply about the alternatives that can be used to sustain the rural economy and farming incomes, given the background of the proposed changes and the consequences that will result from them.
    The Minister recently gave evidence to the Select Committee on European Legislation. He was pressed about the growth that there would be in rural employment if set-aside were to be fully implemented. He said:
    "Yes, I have been asking myself this question. It is, I think, difficult to judge. I would guess that at the end of the day the effect of set-aside will be marginal either way on rural employment."
    My right hon. Friend was pressed further and asked to be more specific. I asked about the actual alternatives for land use that would stimulate employment in rural areas. My right hon. Friend replied:
    "I have seen in the West Country quite a number of tourist activities. This is not necessarily land that is set-aside, but I have a considerable number of developments of tourist activities, old houses converted into hotels and … horse related activities."
    My right hon. Friend was correct about that, but he owes it to the House and to all those in agriculture who will be adversely affected in some way or another by these proposed changes to show a greater awareness of the difficulties that producers will undoubtedly face.
    Not everyone will be able to grow trees as an alternative activity or to set aside land. Not everyone will be able to find a suitable tourism project to develop or a leisure and recreational pursuit on which to rely. There is a limit to the number of golf courses, horse-related business activities, farm museums and theme parks that a rural economy can sustain—highly desirable as those developments may be. There are also problems in connection with local planning authorities. The Minister has a responsibility to ensure that dilatory planning authorities become more responsive to the changing needs of rural economies.
    I conclude by again emphasising to the Minister that there is considerable uncertainty among producers about their future. That is understandable, given the changes that have been made and are being made to adjust to changing circumstances that we all acknowledge. I welcome my right hon. Friend's positive attempts to lead along the path of diversification. He must demonstrate a clear perception of his objectives to the producers. They are the people that he is anxious to convince that they do have a real role to play in maintaining the structure of the countryside as we know it and wish to see it developed in the future.
    6.39 pm
    Mr. Martyn Jones: When we examine the 5 in of solid paper that we are supposed to be debating today, the need for diversification into wood production becomes apparent just to supply the paper needs of the bureaucracy of the European Community.
    However, on a serious note, hidden within that kilo or so of paper are some documents with grave potential for agriculture in the United Kingdom, particularly for the farmers on marginal hill farms, who are livestock farmers with little or no real chance of diversification, and very many of whom I represent. Farm incomes have dropped drastically in the past few years. That drop is, of course, more damaging to those already on low incomes and once again affects most seriously the livestock farmer in upland areas.
    Community price proposals will reduce beef production by abolishing the beef variable premium from next January. This will hit United Kingdom farmers, particularly in areas such as Clwyd, South-West. We are the only country that has variable premiums. Others buy into intervention, and therefore the United Kingdom will as usual come off worst. Monetary compensatory amounts exacerbate the situation, taxing producers and denying fair competition for our producers in Europe.
    Sheepmeat production is probably the most important provider of jobs and plays an important role in the preservation of the countryside in large areas of my constituency. We have heard that the vast amounts of Eurocash being spent on the common agricultural policy are not cost-effective. Both the farmer and the housewife obtain value from the variable premium scheme for sheep, and it will be detrimental to both if it is removed.
    Control of production is required, but the present measures are likely to have a twofold effect on farmers dependent on sheep.
    First, measures to reduce production in other areas that desperately need control, such as cereals, are likely to drive lowland farmers into sheep and grazed fallow, and such moves will turn into a stampede.
    Secondly, that will push the United Kingdom flock over the stabiliser limit and the twofold effect will be disastrous for marginal hill farms and for the conservation of our upland areas. Surely one sector of an industry that is in surplus should not have its problems solved at the expense of another.
    The Minister claims that some devaluation of the green pound will take place. This will help the farmer, although once again it will help the better off more than the less well off. I am sure that the long-term interests of most farmers in my constituency would be better served by some form of income support based on the continuation of their responsible care of the rural environment. Environmentally sensitive areas are welcome, but set-aside properly administered could be a godsend to hill farmers squeezed by low incomes and arable replacement by lowland farmers.
    Set-aside with safeguards to protect wildlife, landscape and archaeological features of farms, with maintenance plans taking in the whole of the farm and avoiding intensification on other parts of the farm, but with adequate payment for the farmer, must be the only answer in the long term that will not destroy the fabric of large areas of the rural parts of my constituency.
    6.43 pm
    Mr. Alick Buchanan-Smith: I was encouraged this afternoon, as was the House, by the speech of my right hon. Friend the Minister of Agriculture, Fisheries and Food, particularly by his acknowledgment of the serious situation facing agriculture and by his tough and realistic approach to the negotiations in Brussels in the weeks ahead. I intend to refer to some of the problems facing agriculture, particularly in the light of my right hon. Friend's comments and open acknowledgment of the difficulties, although I shall not detain the House for long.
    I shall not repeat my right hon. Friend's comments about incomes. We face similar problems in Scotland, as I am sure he will acknowledge. The real value of net farm incomes is now only about 33 per cent. of the 1977 figure. This again shows the difficulties that we, like farmers in Wales, now face. However, as my right hon. Friend acknowledged, that pattern is not the same in different parts of the country. He mentioned East Anglia, where he comes from, and I wish to mention the Grampian area of Scotland, where I come from. Last year, the harvest there was probably more disastrous than in any other part of the United Kingdom, and the problem of indebtedness is serious. I have made those points before and simply wish to emphasise them again.
    There has been a massive deterioration in recent years in the agriculture asset base. It is critical to consider that in terms of the long-term future of the industry. We have seen, on the one hand, increased borrowing and, on the other, lower land values. For example, over recent years that asset base—it is on that base that any industry judges its prospects for the future—has diminished by about 50 per cent.
    This is not simply a question of moaning or crying wolf. In these debates we set out the facts to enable proper judgments to be made. What is to be done? I know from practical experience that in the negotiations my right hon. Friend must be guided by the agreement in Brussels in February.
    The remarks of the hon. Member for South Shields (Dr. Clark) left me with niggling doubts and complete uncertainty about what alternative he would offer to tackle that problem. He appeared to be grudging about progress so far. I am sure that my right hon. Friend will stand up for United Kingdom interests in the broad framework agreed in Brussels in February. He must ensure that there is no deterioration in those matters of prime interest to British agriculture, in view of claims made by other European Ministers.
    My right hon. Friend covered a number of matters, including set-aside. I want to concentrate on the green pound because, given the background of the Brussels agreement in February, this is crucial to British agriculture in the forthcoming negotiations. The green pound is overvalued, as my right hon. Friend acknowledged. The British farmer is receiving less than his competitors and, most important, the terms of trade in agricultural products are to the disadvantage of United Kingdom producers. My right hon. Friend will know that that is not a new phenomenon. It has been going on for several years and has been a major contributor to the current weakness and malaise of British agriculture.
    It is acknowledged that the worst affected sector is pigs. Earlier this year the subsidy on bacon imported from

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    Denmark and Holland was as high as £70 a tonne. The situation has improved because the pound has strengthened, but that does not remove the need for action.
    Will the pound remain strong? I shall not enter into that debate here, because it would not necessarily take us very far. What matters is that in future the strength of the pound could deteriorate, and I ask my right hon. Friend to ensure that in the negotiations in Brussels he takes the green pound to such a level that if there is a deterioration we do not go back to those huge export subsidies which our competitors in Europe enjoy. Therefore, I urge my right hon. Friend to achieve, as far as possible, at least a neutral position, and as soon as possible.
    There is a cost in this, but there is also a benefit. Every 1 per cent. of devaluation means an extra £50 million increase in the incomes of British farmers, who are so pressed. There is a cost to the Exchequer of between £8 million and £9 million for every 1 per cent. change, but that is a small price to pay to help this major industry in its difficulty. One can always come up with objections—for example, the cost of living and food prices, a point made by the hon. Member for South Shields. However, as my right hon. Friend did, let us get this into perspective. A 1 per cent. devaluation is about 0·2 per cent., or one fifth of a penny in the pound, on food prices. It is about 0·02 per cent., or one fiftieth of a penny in a pound, on the retail prices index. In those circumstances, we need a devaluation of between 9 and 10 per cent. That is about one third of a penny in the pound on the RPI and it is necessary to sustain this great industry.
    Some Labour Members may say that this is inflationary, but let us remember that over the past 10 years the retail prices index has gone up by 120 per cent., while the farmgate price has gone up by only 50 per cent. This means that agriculture has made a massive contribution to the Government's achievement of their objective of bringing down prices and inflation. Agriculture has served this country. Let us now, in our turn, see that the Government and the country serve agriculture.
    6.52 pm
    Mr. Ieuan Wyn Jones (Ynys Môn): In this important debate, I shall concentrate on the effect of agricultural policies not only on agriculture but on the agricultural and rural communities of the countries of Britain. Agriculture is an important employer in Wales. In rural Wales, it is a vital industry in terms not only of the number of people employed directly on farms, but of those employed in ancillary industries such as creameries. We have seen the effect of certain policies on those creameries in recent years, and on the small businesses and families who depend on agriculture.
    The policies of the past 30 years have had a dramatic effect on rural Wales. In those years, thousands of people have left rural Wales, leading to massive rural depopulation, to the break-up of many rural communities and the consequent pressure that that puts on the traditions of rural life, the way of life of those communities, and, in parts of Wales, on the Welsh language. Therefore, it is important for us to consider not only the economic impact of agricultural policies but the social, linguistic and cultural consequences.
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    We have heard a great deal about different sectors of agriculture, but it must be remembered that Wales and Scotland, and parts of England and Northern Ireland, are primarily livestock producing areas and that the consequent effect of pressure on those sectors makes it difficult for those farmers to retain their livelihoods, because they have little room for manoeuvre if they wish to move into other sectors. That is why I shall concentrate on what is happening in the beef, sheep and milk sectors and how that affects our farmers.
    The beef sector has already been highlighted in the debate. It is interesting to note that, although for years we have been talking about a potential beef surplus, the industry believes that there is a shortage of quality beef coming on the market. In view of the potential crisis, I ask the Government to give a significant boost to the suckler cow premium. As has been said, about 12 per cent. of our calves are being exported, and they are sometimes the best quality calves. Therefore, in years to come, the quality of our beef stock will suffer immensely. I urge the Government to consider a substantial improvement in the premium.
    The crisis which faced the milk sector in 1983, 1984 and 1985 through the initial imposition of milk quotas has in some ways subsided. However, there remains the significant problem, which the House should consider, of the transfer of milk quotas between farmers. The main reason why milk quotas are being transferred from farmer to farmer is the total failure of the outgoers scheme. The original intention of the scheme was to reduce overall milk production in the United Kingdom. That is not happening. Rather than being reduced, milk production is being moved around the country, with the significant effect that small producers in places like Wales, Scotland and Northern Ireland are feeling the pinch because they are in financial trouble. The large milk producers are buying up milk quotas and, increasingly, milk production in the rural areas is lost. I urge the Government to look at ways in which that can be prevented.
    The sheep sector is of major importance for Wales. I warn the Government that the problems in this sector, unless we get it right, could make those of the milk sector pale into insignificance. Some 80 per cent. of farmers in my constituency keep sheep. Therefore, the importance of sheep to Wales is obvious, and the Government understand that and should act upon it.
    We could face real trouble as a result of the agreement in the cereal sector and the introduction of green fallow and grazing fallow. In fairness, the Minister of Agriculture, Fisheries and Food said that there would be significant problems over the introduction of the grazing fallow. Let us make one thing clear: the introduction of the grazing fallow shows that the muscle of the cereal growers, in having this on the agenda in the first place, is significantly greater than that of sheep producers. The cereal growers are an important lobby and the importance of that lobby has put that issue on the agenda.
    We have the awful prospect of cereal growers being subsidised for not growing cereals, and being entitled to move into other sectors such as the sheep sector. If that happens, sheep will quickly be in surplus. Something should be done now to protect our sheep producers, and the Government should reject any proposals to bring grazing fallow into operation in the United Kingdom.
    There is already a massive increase in the number of sheep being kept. For example, in the first eight weeks of

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    this year's lambing season alone, £48·5 million was paid out in the variable premium, whereas the total sum for last year was only £105 million. Last year there were 2,000 new wool producers, and if one allows cereal growers to keep sheep that will have a significant impact. If there is an increasing squeeze on sheep producers, family farms in rural Wales and in other rural areas of Britain will be under threat. The Government should act now.
    The overall position of the varible premium and of the ewe premium in the Brussels negotiations should tax the Minister's mind greatly. We know that there will be problems in introducing sheep quotas and realise that they will create severe policing difficulties. However, the Government have a duty—in my view, a primary duty —to protect the traditional sheep farmer who has nowhere else to turn if there is a surplus and a knock-on effect. The traditional sheep farmer in rural Wales will suffer significantly if no agreement is reached in the Brussels negotiations.
    My penultimate point concerns the green pound. I shall not detain the House unduly because other hon. Members have already spoken eloquently about that subject. However, I would ask the Minister, when he replies, to give the House some idea of the level of devaluation that he considers necessary, bearing in mind that the NFU recently called for a 9 per cent. devaluation.
    Finally, at a crucial time for agriculture, research and development becomes of increasing importance. If farmers are not to be allowed to follow the traditional path and are compelled to consider other methods and sectors of production, it is vital that they receive the best possible advice. That means good research and development. Will the Government give an assurance that research establishments in England, Scotland and Wales will be maintained and expanded? Also, will the Minister tell the House when he expects to receive the results of the Barnes review of research and development in Scotland? We implore the Government, with all the passion at our command, to consider the problems of rural areas, particularly in respect of their agriculture industries, and to take up many of the issues that have been raised in this debate.
    7.2 pm
    Sir Michael Shaw: I am glad that I have this opportunity of following the hon. Member for Ynys Môn (Mr. Jones) because, judging from his remarks, the northern area of my constituency is like his constituency. Last Saturday I met members of the Whitby NFU, who knew of this debate. They made a number of points, and I am glad to say that my right hon. Friend the Minister has dealt fairly and squarely with most of them. I shall certainly make sure that his remarks are put before them in due course.
    I was sorry to hear the hon. Member for South Shields (Dr. Clark)—I regret that he is not in his place—say that the Government had thrown away a unique opportunity at Brussels. He cannot understand the processes of Brussels, because if one enters into negotiations there expecting 100 per cent. success, the only certain thing is that one will achieve nothing. The successful future of the Common Market and of the CAP, whatever changed form it finally takes, will largely be due to the determination of our Government, particularly during their presidency.
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    We went as far as we could, and the successes I believe we shall achieve—and we all give our good wishes to my right hon. Friend the Minister in his further negotiations —will stem from the fact that we knew how far to go at the appropriate time. We are now taking up the fight again on those points which we believe to be so important. In other words, we did not throw away a unique opportunity at Brussels. We played it right, and it is an ongoing game in which we shall continue to have an important role to play.
    The farmers in my constituency are worried by a number of the factors which right hon. and hon. Members have touched on in this debate. The devaluation of the green pound ranks high among their problems. My right hon. Friend the Minister spoke about the MCAs and the problems of securing agreement because of the varying circumstances in each member country. We, too, have varying circumstances, which no Minister can himself manipulate. None the less, those circumstances exist.
    I hope that in any discussions my right hon. Friend has, it will never be forgotten that the rates of interest all our farmers have to pay at the bank are very different from those paid by our competitors in Europe. That is an important factor in pricing policy.
    Farmers in my constituency are also very worried about set-aside. Beef and sheep producers feel that that is the only stock they can rear on their farms and the only type of farming they can do. They have always done it, and are doing it now, and it represents their only hope for the future. Others who might be persuaded to enter beef and sheep production might do so only temporarily, and it would be fatal if their temporary incursion were to cause lasting damage to those farmers who will always have to depend on beef and sheep farming for their livelihoods. I shall say nothing about the subject of pig farming, because enough has been said already about how seriously those concerned, who include pig farmers in my own constituency, view that aspect of production.
    There has been no reference so far to diversification. One of the problems affecting it will be the attitude of planners. If one is diversifying, there will be a change of use, and old buildings might have to be altered for new uses. There may even be questions about whether roads are suitable for tourists in certain parts of the country. It would be tragic if farmers seeking to diversify, as they are encouraged to do, found themselves bumping up against objections from planning authorities. I hope that those concerned with planning in country areas will make sure that they have the machinery set up to help, as sympathetically as they possibly can, those farmers seeking to diversify. In that way, they will be of great benefit to their own countryside.
    7.8 pm
    Mr. Alan W. Williams: I wish to say a few words about reforming the common agricultural policy and about the set-aside proposals, particularly in respect of grazing fallow, which is a serious matter for my constituents. I start by quoting from a recent Consumers Association report concerning the common agricultural policy, which described it as
    "one of the most anti-consumer policies of all time."
    In considering agriculture, we tend always to think of the farmer—the producer—and hardly ever of the consumer. As has been said several times already, the CAP costs the average European family £710 a year. That figure

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    was given in the Which? report. How can such a policy be justified when £10 or £11 a week is being paid by each family in this country?
    The report also comments that the arrangement hurts low-paid families much more than those with average incomes, because such families—pensioners' families, for instance—spend proportionately more on food. The Consumers Association concluded that, in the longer term, the only way to reform the CAP was to bring down support prices to a point at which surpluses were no longer created. That applies in all other industries: agriculture is singularly cushioned in this respect. In the long term, it must be the sensible course.
    As I said earlier, seen from the consumer angle, there can be no justification for the CAP. It would have been much more appropriate to hold a debate tonight not on agriculture, but on food and food prices and the effect on rural communities. Those factors affect most of the population. As the hon. Member for Ynys Môn (Mr. Jones) said so eloquently, during the past few decades the effects of farming policy in Wales have meant massive rural depopulation.
    Earlier the Minister admitted that the drift from agriculture would continue. He said that with equanimity and complacency, as if it were a fact of life about which he could do nothing. In comparison with the rest of Europe, however, that drift has gone far too far already in Britain. The thrust of any agricultural policy must surely be to try to preserve rural communities and small farmers.
    The CAP was devised originally to protect small farmers: that is the incredible irony and dishonesty of what has happened in the past 20 or 30 years. Initially, in 1960, there were 17 million farmers in the nine EEC countries. Now the figure is down to 7 million. In Britain, 430,000 people derive their livelihoods from agriculture, and that number is falling by 9,000 every year. That is the pace of decay in agriculture.
    Unfortunately, the Government allow the relentless drift from agriculture to continue. We know that that is happening, despite the enormous subsidy—the £11 per week per family, the £20 billion cost of the CAP and the £4 billion that comes from the British taxpayer and consumer. Agriculture derives a larger subsidy from the taxpayer than the whole of manufacturing industry. The subsidies to British Rail, British Steel and the coal industry, and regional aid, are dwarfed by it.
    The money that goes to agriculture, however, is spread out very unevenly. It is based almost entirely on production, which means that the big producer receives an enormous benefit, while the small farmer derives very little. It is tied to land ownership. Six per cent. of farmers own 45 per cent. of the land, so half of any money that we put into agriculture will go to fewer than 10 per cent. of farmers.
    In any reform of the CAP, we need targeting, if I may use the Government's word. I do not believe in it when it comes to social security, when money is taken from the poor to pay for the richest. In agriculture, however, we have the reverse of targeting. The taxpayers' money is going to the very rich farmers. There is the awful distortion of the big farmers deriving hundreds of thousands of pounds a year in subsidies. Co-existing with those millionaire farmers are farmers in the poorer rural areas of
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    Wales who are driven to the wall and out of business. We drastically need a redistribution of resources away from the rich farmers to the poor ones.
    We were not told the numbers involved, but one of the announcements that we heard this evening concerned the devaluation of the green pound. I cannot agree with such a devaluation simply because it is a blanket benefit to all farmers. A farm that is 10 times as big as another will derive 10 times the benefit. That cannot be justified. Every 1 per cent. devaluation means £50 million. A 9 per cent. devaluation means £450 million being taken from some part of the British economy.
    In the past month or so, social security changes have been announced. Apparently we have not the money to give the pensioners and the low-paid, and we have learned of the cruelties of the social fund. How can that and the deterioration in our health services be squared with giving money to these farmers? I would agree with it entirely if the money went to small farmers, but unfortunately half of it will go to only 10 per cent. of farmers.
    Two months ago, the Prime Minister returned from Brussels championing the success of her negotiations, and trumpeting her success in limiting the budget. But, as was conceded earlier, devaluing the green pound is simply a way of countering or neutering the effects of that—a way of getting back the money that was conceded in Brussels. The Consumers Association has concluded that the only sensible long-term reform of the CAP must involve guaranteed prices in Europe coming into line with market realities—if I may use a phrase used by Ian MacGregor during the coal miners' dispute. The market realities in Europe are that we are producing 15 per cent. more food than we need, and prices are well above world prices. Stabilisers will help, and I am delighted with that major step forward. The amounts agreed—160 million tonnes for cereals, for instance—were too high; too much ground was given in Brussels. Nevertheless, the principle holds considerable hope for the future.
    As 15 per cent. of land needs to be declared redundant, farmers are asking what else they can do with the land. The Government are being very weak about giving a direction to those farmers, who do not know which way to turn. They know that there is a crisis and that they cannot carry on as they are, but the Government are providing very little leadership. They seem to have no policy to offer the farmers, bumbling from one little step to the next.
    Woodlands obviously have a major role to play. I have been involved in Committee with the Farm Land and Rural Development Bill, which is a very timid affair. We talk about 12,000 hectares a year when we know that 4 million hectares are redundant and it would take 300 years to diversify at that pace. We need at least 10 times the commitment to that.
    Mr. Roger Knapman: The hon. Gentleman devoted the first part of his speech to saying that his constituents needed more help and the second part to decrying the level of Government expenditure. Is there not something slightly ironic there? Do those two parts fit together?
    Mr. Williams: As was said by the hon. Member for Holland with Boston (Sir R. Body)—I am sorry that he is not in his place, but this was very much the thrust of his

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    excellent speech—the money that now goes to agriculture needs to he redeployed and used to solve the problems of agriculture, especially as it is going to rich farmers.
    Woodlands certainly have a major role to play, but we are far too timid and the action that the Government are taking is on far too trivial a scale. The consumer would very much like to see de-intensification of agriculture and cutting down on the use of pesticides and fertilisers, especially in areas where there are serious problems of nitrate pollution and where nitrogenous fertiliser should not be used, for the sake of human health and safety and the preservation of our water supplies.
    As has already been said, the Ministry is very much in the pocket of the NFU, which is a very effective pressure group. Where do their policies differ? The consumer is in favour of de-intensification and a tax on the use of pesticides. The Government should look at what is happening in Europe. In Sweden there is a tax on the use of pesticides and a very heavy tax on fertiliser usage. It needs to be a heavy tax to cut down its use, and there are strong environmental arguments to justify such a tax. There is now a trend towards organic farming and, among consumers, towards organic, healthily grown food. Food can be grown perfectly economically with far less use of pesticides and fertilisers. Again, Government thinking is at a very elementary stage. They are pussyfooting around without any real commitment or direction.
    I feel very unhappy about set-aside in a moral or ethical sense. It is fundamentally immoral to declare land redundant. It is like declaring people redundant—and this Government, of course, have no compunction about that. I feel that set-aside is a wrong policy anyway, whatever type of set-aside it may be.
    I am particularly concerned about the idea of grazing fallow. Perhaps there is an argument for green fallow, the rotation of crops and the 15th or 17th century idea that in one year in five one should not grow anything. But the implications of what we have heard so far of Government thinking on grazing fallow would spell disaster in my constituency and many other less-favoured areas.
    The idea, as I understand it, is that in the fertile cereal-growing areas farmers could be given about £50 to £200 per hectare to turn to grazing and produce sheep meat or beef. Sheepmeat is not in surplus; it is just about in equilibrium at the moment. Therefore, any extra sheepmeat produced in cereal-growing areas would threaten to lead to a surplus. We do not really need it, and it would simply exacerbate the problems of the CAP.
    Far worse would be the effect on areas such as those in Wales, because it would mean that we were subsidising lowland farmers to drive upland farmers out of business. That, in summary, is what grazing fallow means.
    I hope that the Government will take seriously the comments made in the debate and any representations made by farmers in our areas.
    7.25 pm
    Rev. Ian Paisley: As the largest single industry in Northern Ireland, employing 13 per cent. of the total work force, directly or indirectly, agriculture plays a vital role in the economy of Ulster. The crucial importance to Northern Ireland of the future well-being of agriculture must be recognised by the Government in their dealings with the European Commission and the Council of Ministers. At the moment the outlook for Ulster farmers
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    is very bleak indeed. Ulster farms are largely small family farms, and they are the backbone of the industry in Northern Ireland. They are now being seriously threatened by factors that are beyond the farmers' control. With little or no alternative means of earning a living open to many farmers in Northern Ireland, it is imperative that action is taken to preserve the rural infrastructure.
    Suggestions from some quarters that farmers should diversify—for example, go into tourism—re in many cases simply not practical in Northern Ireland. Our indigenous population is much too small for diversification into tourism and, because of the continuation of the troubles, there is unlikely to be a vast influx of tourists to the Province, although we welcome the increase in tourism there. Therefore, Northern Ireland is not in a position to benefit in the same way as other European countries or the mainland here from schemes to diversify into tourism.
    Similarly, the suggestion that farmers in Northern Ireland should get involved in forestry as a means of diversification is not likely to attract any small farmer. He would have to wait a very long time to see any return on his initial outlay and investment if he tried to diversify into forestry.
    Options which are open to agriculture elsewhere in Europe are simply not available to the farming community in Northern Ireland. Given that fact, it is essential to address the very real problems being experienced in the industry in Northern Ireland. It seems to me to be a terrible step for the Ministry of Agriculture, Fisheries and Food to announce that from 1 October farmers in Northern Ireland will no longer have the advice services of the Department of Agriculture, unless they pay for them. Up to now, such services have been free of charge, but from 1 October farmers must pay for them. This will undoubtedly lead to advice not being sought, because the farmers' financial position is very serious indeed. I had a meeting with some farmers recently, and they brought their bank manager along. They put their accounts on the table and I was appalled at the plight of the farming community.
    The European Commission's farm price proposals contain some measures that are detrimental to Northern Ireland farming interests. In particular, the proposal for no change in the valuation of the United Kingdom green pound will have serious repercussions in Northern Ireland. I welcome what the Minister said today, and I urge him to seek a substantial devaluation in the United Kingdom green pound during his discussions and negotiations in the Council of Ministers. I should like to know what percentage he has in mind for devaluation.
    Farmers in Northern Ireland and in the United Kingdom generally have no objection to competition, but they must be allowed to compete in the market on a fair and equitable basis and not be placed at a disadvantage compared with farmers in other member states.
    We have heard prices of cereals quoted in the House today. Many hon. Members are unaware that, because of transport costs, all farmers in Northern Ireland have to pay £13 or £14 per tonne more than farmers in the United Kingdom. How then can farmers compete in the Common Market? I must confess that I am opposed to the Common Market. I always have been, and always will be. We had a large intensive industry of pigs and poultry in Northern Ireland but it has been slashed by 50 per cent. because we cannot buy grain on the world market. However, I do not want to go into that controversy today.

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    For dairy farmers, the present milk quota regime has led to many difficulties. I agree with the hon. Member for Carmarthen (Mr. Williams) that the larger producer has done well, but the small family farm is now in jeopardy. If something is not done for the small family farm in Northern Ireland, many thousands of farmers will go to the wall. Many of us fought hard for the extra allocation of 65,000 tonnes of milk from the EEC. If that had not been spread over the entire United Kingdom, but had come fully to Northern Ireland, we would not be in our current state. The super-farms on the continent are nothing more than milk factories. They get away with it, while the small farmer in the United Kingdom goes to the wall.
    With the milk quota regime in place, the further proposal from the Commission to extend the milk co-responsibility levy for a further two years is unacceptable and should be resisted by the Minister in his discussions in Europe. It is an extra tax on milk producers which they should not be asked to pay when one realises the considerable constraints under which they already have to operate.
    In the beef industry, once again there is a proposal to end the United Kingdom variable premium. I am on record in the House and in the European Parliament as condemning the proposal, which the Commission has been forced to take back on previous occasions. The premium compensates producers when the market price falls below the target scale. It also ensures that the price is kept down for the consumer. We have heard much tonight about the interests of consumers, and rightly so. However, the intervention system increases the price to the consumer, by taking beef off the market. The variable premium provides benefits for producers and consumers. It should be retained rather than be phased out simply to bring us into line with the rest of the EEC.
    I want to stress the tragedy that has occurred within our pig industry. It has been cut to 50 per cent. and Northern Ireland has become the dumping ground for pigmeat from Holland. The Dutch have trebled their pig industry, while ours, as I have said, has been cut by 50 per cent. Before joining the Community, Northern Ireland was able to buy cheap cereals on the world market. Now, it is forced to import dearer feedstuffs and, as a result, cereals are very expensive.
    What is the Minister's commitment to the abolition of MCAs on pigmeat? He told a deputation from Northern Ireland that he was interested in this issue. Is it true that in France the MCAs on pigmeat have been phased out?
    The time has come to look at the pigmeat that is imported into Northern Ireland from Holland. Why is it —perhaps the Minister can tell me—that meat from Holland is not inspected? The Ulster Farmers Union, a deputation of which I met this morning before coming to the House, told me that it had been in touch with the Department of Agriculture in Northern Ireland, which said that such matters were not its responsibility. The Department said that it was the responsibility of the Department of Health and Social Services. The deputation went to the DHSS and was told that such matters were not its responsibility either. Therefore, we have uninspected pigmeat coming to Northern Ireland. The pigmeat that is exported from Northern Ireland is carefully checked and
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    examined, while pigmeat coming in is not inspected, and the two Departments wash their hands of any responsibility.
    Northern Ireland has been fortunate. It has been free from swine fever for a long time. The time has come for the Department to do something about this matter. I understand that swine fever could come to Northern Ireland through contaminated pigmeat.
    The farmers in Northern Ireland will wait with interest to hear the Minister's reply. Some of the things that he said today were encouraging, and I was glad to hear him make such remarks.
    7.37 pm
    Mr. Eddie McGrady: It is probably opportune that I should follow the hon. Member for Antrim, North (Rev. Ian Paisley) who so eloquently described the agriculture industry in Northern Ireland. I should like to re-emphasise what he said: agriculture is the base industry upon which most of our people are sustained. It sustains the farmers, their families, their communities and their entire environment.
    I am what is called "book-learned- on agriculture. That is a Northern Ireland expression meaning that I have no practical knowledge of the industry. However, in my former occupation as a professional adviser I was aware of the greatly deteriorating real income being suffered by the farming community. Since becoming a Member of the House, representing an entirely rural constituency, I have been inundated day by day by matters concerning the plight of the small farmer. I have been concerned with the plight of the farmer with 40 or 60 acres, the hill farmer and the family farmer who are all suffering greatly.
    The sector that is most at risk and is teetering on the verge of collapse is the pig industry. Producers in Northern Ireland are producing animals at a loss of £4 to £6 per head. Obviously, they cannot sustain a continuing loss of that nature for any time.
    The plight suffered by the industry can be shown by the fact that about 10 years ago there were 24,000 producers and now there are only 4,000. The pig population has been decimated by 50 per cent. Most of that is due to what is seen as the unfair competition from the northern European countries, arising from the MCA differential. As has been said, until last month that was giving continental producers a hidden subsidy of almost £60 to £70 per tonne and now, fortuitously in a sense, it has been reduced to £45 per tonne as a result of the exchange rate fluctuation. That is still an enormous disadvantage. When added to feed costs, import costs and additional transport costs when produce is sent out again, it gives rise to very heavy overheads indeed.
    I was pleased to hear the Minister say at Question Time that he was resolved that the MCAs should be reduced to nil as soon as possible. I asked him then whether he could extend the export restitution so that not just Northern Ireland and the United Kingdom as a whole, but the whole European Community could expand into new markets—particularly in the Third world.
    Perhaps one of the most unjust systems applying to farming in Northern Ireland is the milk quotas system. We seem to be locked into a decision made some years ago which seems to be immutable. The dairy farming community in Northern Ireland is small and, because of its size, farms have tended to pass from family to family and

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    from farmer to farmer. However, that community is now locked into a fixed position. None of the cases concerning milk quotas that I have referred to a tribunal seeking the alleviation of hardship has been successful. I have not been successful in getting quotas reallocated in one single case. No real revision of adverse circumstances arising from the quotas is possible for the producer.
    Quotas are also stifling new blood and new ideas in the industry. The young farmer can no longer get into the dairy business. He lacks the capital and purchasing power to buy quotas. The new generation of dairy farmers will not succeed unless something is done to alleviate matters and allow more fluidity in the allocation of milk quotas. The hon. Member for Antrim, North referred to the hijacking of additional quota for Northern Ireland to the United Kingdom as a whole.
    Milk quotas are having a further adverse effect, as many hon. Members have said. They are forcing many would-be mixed farmers and dairy farmers into sheep farming. That has a particularly adverse effect in my constituency, which is a less-favoured area and contains two mountain ranges. Hill sheep farming is most important to many of our people. Unless relief is given, we shall be heading for a new mutton mountain. We shall then have to take corrective action, probably when it is too late.
    I do not wish to repeat what has already been said, but I have one or two new points pertaining to Northern Ireland in particular.
    Mr. William Ross: The hon. Gentleman refers to the problem of ossification due to milk quotas and to the looming problem of a mutton mountain. I agree that milk production has ossified as a result of quotas, but may I now take it that the SDLP is against quotas and will be against quotas for mutton as well?
    Mr. McGrady: I am arguing for flexibility and fluidity to enhance dairy farmers' ability to continue to earn an income so that they will not be forced to consider sheep rearing, with the possible creation of a future mutton mountain.
    A problem has recently arisen regarding the plight of potato producers in Northern Ireland. My recent information is that they are suffering financial hardship. I do not know to what extent the Ministry can intervene. The producers are not being paid for their produce. Exporters are not being paid by their foreign importers. That will have a most serious effect on that important sector of farming in Northern Ireland.
    Let me deal with the less-favoured areas. There are applications before the Ministry to extend them. It seems to me that the Ministry is sitting on them; there appears to have been no movement in the decision-making process over the past few months.
    The hon. Member for Scarborough (Sir M. Shaw) made some interesting remarks about the panacea of diversification in farming to supplement farm income from other sources. I completely agree with him that the possibility of diversification will be negated by the planning regulations that will apply in Northern Ireland. My constituency is almost exclusively an area of outstanding natural beauty. Parts of it are areas of special scientific interest, and parts of it are areas of special control with green zones, blue zones and yellow zones. Within that colour scheme, it is virtually impossible to
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    build a house to accommodate one's family, let alone diversify into other forms of industry and income-producing activity.
    I recommend hon. Members who are interested in rural development and the protection of rural communities to read in detail the Maher report, an EEC report designed to help rural communities in Northern Ireland. It is a most interesting document whose recommendations about planning and revitalisation would go a long way towards assisting the continuation of our rural communities. which are the backbone of most nations, and certainly of our nation.
    I wish briefly to make two points which are nevertheless important to the people who are suffering the disadvantages to which I shall refer. Perhaps the problem of rural electrification is unique to Northern Ireland, as I do not think that it has been mentioned today. I draw the Minister's attention to the fact that the most exorbitant prices are being charged for rural electricity extensions by the sole producer—the Northern Ireland Electricity Service, which is a monopoly. The charges being quoted for small extensions to main lines, even for a relatively short distance, are prohibitive to our small farmers. In addition—the House may hardly believe this—if a farmer goes for credit with NIES, which, as I said, is the sole producer of electricity, it charges an annual percentage rate of 34 per cent. That has been admitted in a parliamentary answer. No small farmer can afford that sort of money for the simple modern facility of electrical energy.
    My last point is allied to that and concerns bank interest rates. Bank interest in Northern Ireland is automatically 2 per cent. above the minimum lending rate. No reason is given. It is completely to the profit of the banking fraternity. Whatever the rate in the United Kingdom, it is 2 per cent. extra in Northern Ireland from the start. One negotiates from there upwards. Several years ago, farmers were being encouraged to bring wheelbarrows to the high street banks to get the surplus money lying on the counters. They took out massive loans. Since then, they have been crippled by enormous overheads in the form of bank interest.
    Will the Minister consider what justification there is for this additional interest factor in Northern Ireland, which affects not only the farming community but the manufacturing and service industries and personal loans.
    I commend the Minister of Agriculture, Fisheries and Food for his interest in abolishing the obvious subsidy created by MCAs. I look forward to that alleviating some of the disadvantages suffered by farmers in Northern Ireland and the United Kingdom.
    7.50 pm
    Mr. James Paice: One of the disadvantages of sitting through a debate and being called to speak at the centre point, if not beyond it, is that many of the more important points have been made.
    Many farmers will be watching with interest the results of this debate, and the negotiations in the next few weeks. They will be gratified by the Minister's speech. He showed clearly that he will go to Brussels to defend the interests of the British farmers. That will not be a moment too soon for the British farmer. One of my sorrows during the few months I have been a Member of the House is that many hon. Members have been critical of British farmers and

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    agriculture. Even today there have been accusations from the Opposition Benches about the levels of subsidy in agriculture. The blame has been laid entirely at the door of the farmer: we are told that it is his fault.
    It is worth reminding ourselves, however, that farmers have responded to the pressures of successive Governments. It is only 13 years since the previous Labour Government produced the White Paper "Food from Our Own Resources" which was widely welcomed. It gave the green light to farmers to produce continuously. That is exactly what has happened. But 13 years is but a blink of an eyelid in the time scale involved in agriculture production.
    Farmers have had the security of some market price support, which has enabled them to continue producing and to live up to the expectations of the House. Every country in the western world has various forms of support for agriculture. It is not unique to us. Farmers have sat back and rested in the sure knowledge that the Government and the state will support them all the way. They have invested in and been very welcoming to new techniques, machinery and technology.
    We have heard it suggested that many people want to turn back the clock and ban the use of chemicals, and even fertilisers, and that it would solve the problem. It is ludicrous to suggest that as a universal panacea. It would be like telling the National Coal Board that it should produce coal only from its poorest and oldest pits. That would also mean turning one's back on modern techniques of production. It is a good idea in environmentally sensitive areas to have a system such as the Government have brought in during the past few years. I welcome that, but abhor the suggestion that it should be applied across the country without further thought. It would reduce production but increase production costs per tonne, litre or kilo. Then consumers, or the House, would have to find more money in support of agriculture.
    We heard much about the consumer from the hon. Member for South Shields (Dr. Clark). The interests of farmers are in fact very much akin to those of consumers. They are two sides of the same equation, because if the consumer is not buying, the farmer is not producing and surviving. They are both vital. In the 14 years that the CAP has applied to this country, food prices have increased by less than the retail price index year after year. The consumer in Britain as well as in Europe, has been protected from the massive price fluctuations that occur among commodities that are not subject to a marketing regime.
    The public perceive that our stores are bulging. I understand why it is highly emotive to have surplus food when we see on our television screens people starving in other parts of the world. It is a vital issue, but we have to examine the reality. On 1 January this year there were just over 1·25 million tonnes of cereals in store in the United Kingdom, or half the figure of a year before and a fifth of what it was two years before. That is a measure of the way in which our intervention stocks have been reduced, contrary to claims that are often made in the House.
    Just to put it into context, the 1·25 million tonnes of intervention stocks on 1 January represented only half the reduction in the previous year's harvest, which was 3 million tonnes down. That was more than twice what we
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    had in store only four months after that harvest. Those figures put in context some of the more absurd ideas that have been put forward.
    Mr. Nigel Spearing: Will the hon. Gentleman give way?
    Mr. Paice: I shall not give way, as many hon. Members wish to speak. The hon. Gentleman will have a far greater chance to speak from the Opposition side.
    The Minister said that 50 per cent. of CAP money is spent on storage and disposal of surpluses, and on export refunds; that position is ludicrous. It has occurred because the Community's politicians—I absolve most politicians in this country from the charge—have failed to grasp the nettle time and again. Because of that inaction, farmers are being asked to pay the price. The massive amount of money spent on storage and export refunds is all considered to be agricultural support. Farmers are personae non grata. They wonder where they are going. They are vilified by the press, by Opposition Members and, I am sorry to say, by a few Conservative Members. That is unacceptable, and it worries me.
    I cut my teeth on agricultural politics. I joined the Conservative party and came into the House because I know that my party and my Government support agriculture, as they have done for many years. It worries me that farmers are beginning to doubt the Government's commitment to their future. I know that that is not true, and I want to make it absolutely clear as far as I can. I am sure that the Minister of State will do the same in winding up. The Government and the party are committed to a strong and vibrant agriculture that faces the future, as well as recognising the faults of the past.
    We have to create more opportunities for farmers to diversify. There is no single panacea or prop, or livestock commodity, that every farmer can say is the new golden world. It is only 10 to 12 years since oilseed rape appeared on the horizon of East Anglia and then spread throughout the British isles. Now it is planted as far away as Orkney and Shetland. That crop was a great boon. The bubble has burst and there is no similar crop that farmers can plant.
    There must be a range of alternatives for farmers, but we have to accept that, as has been said by hon. Members on both sides, for topographical or geographical reasons, not all farmers can take them. Not all farmers are able to go into tourism, horses or other activities. That must be recognised.
    I have no brief to protect farmers from bad investments. There have been many of those in the past few years. I do not hold a brief for the inefficient, who must recognise that the time has come for change. But I believe that the country and the House have a responsibility to recognise that farmers need time to adapt to change and to face the future. We have asked them to do a great deal ever since the war, and they have done it beyond all our wildest dreams. Our response to what they have given us must be to give them the chance to change and to be treated fairly. I welcome the commitment by my right hon. Friend the Minister on the green pound. It is important that we have a devaluation to enable farmers to compete just that little bit more fairly.
    I recognise the dilemma faced by Ministers. It is strange to be trying to contain the costs of the CAP while maintaining farmers' incomes and viability. We must do something. Although stabilisers are a good means of

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    putting a cap on the Community's expenditure, I am worried about the effects on individual farmers. In a few years we may wish that we had adopted a more flexible approach.
    The Farm Land and Rural Development Bill, which we shall discuss later, is a valuable step forward. It brings in measures that are long overdue. It is many years since I urged my Member of Parliament, my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), now the Minister of State, Ministry of Agriculture, Fisheries and Food, to introduce a scheme to encourage farmers to move into woodland production. This is happening now and, although it is long overdue, it is welcome.
    Mr. David Nicholson: It is too small.
    Mr. Paice: I shall come to that point.
    Two or three Opposition Members have compared the amount of money spent on supporting agriculture with the amount spent on supporting British Steel, British Coal, British Shipbuilders and other industries. But there is an even more significant statistic—the amount of money that we are providing to enable those who are finding farming impossible or difficult to continue to diversify or to move into other businesses or interests. The Farm Land and Rural Development Bill will provide £1 million a year for grants towards diversification projects, in addition to the £3 million for related capital grants. Sums of £10 million or £12 million a year have been allocated as replacement for income forgone for woodlands.
    That can be compared with the amount spent on British Steel to help steelworkers when there was no further work in steel—£419 million over the past 10 years in readaptation benefits. I do not include redundancy payments. I am talking about special payments to enable those workers to find other businesses and jobs. As for British Coal, more than £2 billion was provided to redundant mineworkers to help them find alternative employment and businesses. That puts into perspective the £4 million a year which we are giving to farmers for diversification and the £10 million or £12 million a year which we are putting into woodlands.
    I agree with my hon. Friend the Member for Taunton (Mr. Nicholson) that the woodlands scheme is too small. I hope that it is the beginning of something much greater. Over the next few years, we shall press Ministers to double, treble and quadruple the assistance.
    Hon. Members are rightly concerned about the rural environment, conservation, public access and leisure. The points have been made many times. Great steps have been taken and the Government's measures will assist. We must understand that these measures can be taken only with profitable agriculture. One cannot achieve effective conservation by pauperising agriculture—contrary to the beliefs of some. The countryside is changing. Agriculture is changing, and it knows that it must. Farmers recognise the challenge facing them. We owe them the opportunity to change. I support the Government's efforts to reduce the costs of the CAP. I know that Ministers will work hard over the green pound and other issues, in the interests of farmers.
    The House has a major responsibility to tell farmers clearly that it knows that they must adapt and face the future. That is their reponsibility, but Parliament must recognise that it owes them the chance to change. We shall give them that opportunity.
    8.5 pm
    Mr. Brynmor John: I should like to follow the remarks of the hon. Member for Cambridgeshire, South-East (Mr. Paice) in two particulars. First, I have abstained from agriculture debates for a few months since the corruption of the Opposition Front Bench gave way to the incorruption of the Back Benches—[Interruption.] I was sure that the Minister of State would look up that ecclesiastical reference. Little has changed in agriculture debates in those few months. We come every year to talk about the crisis facing farmers. The crisis has been continuing for nearly a decade and the main problems have changed little or not at all.
    The hon. Member for Cambridgeshire, South-East said that we blamed the farmers. For my part, that is not true. I have never blamed the farmers for our present position with the CAP. We are producing too much of the wrong quality for consumption. There is a mismatch between what is produced and what is consumed. That is partly the structural fault of the CAP, and partly the fault of Ministers. I hope that the hon. Gentleman will not be unduly defensive or prickly when I say that the House must decide the balance between consumption and production for the future and how we shall best achieve it.
    Secondly, I hope that hon. Members will not look upon the green pound devaluation as a panacea. They appear to do so, but it will be at best—this is the Government's argument and not necessarily mine—only a temporary alleviation of the problems. I say "temporary" for a reason. These matters are not decided by economics. One of the weaknesses of the NFU's brief is the belief that if we move everyone else will stand still and that, either passively or actively, they will accept that we should devalue, whereas others should not accept a devaluation. The truth is that every country will look for a matching devaluation of the green pound once we start. The hon. Member for Cambridgeshire, South-East talked of a devaluation of the green pound to enable us to compete, but there will he little or no competitive edge. We must return to the point: how, in the long term, do we match agricultural production with the CAP system?
    I agree with the Minister of Agriculture, Fisheries and Food. There is something structurally wrong with a system that pays so much subsidy, yet so little trickles through to the producer. Whatever else it is doing, it is not doing the job for which it was intended, so we must change the system fundamentally.
    The hon. Member for Ceredigion and Pembroke. North (Mr. Howells) and a number of hon. Members ask why we cannot feed the Third world out of our surpluses. There are two answers. First, the surpluses provided depend upon other measures being taken. For example, skimmed milk products are of no use unless there is a pure water supply in the country to which they are sent, and that depends on other forms of overseas aid.
    The second answer is that if we systematically exported our surplus products to the Third World to feed them we would destroy their economies, their agriculture and their societies. Let there be no mistake about this. I think that there is general agreement in the House that we should seek a balance between consumption and production within the EEC, with only reasonable economic exports being added.
    I now turn to the present situation. I rely heavily on documents 4079/88 and 4588/88 in dealing with the

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    surplus of cereals. The cereal surplus was 18·1 million tonnes in 1986–87. That has dropped to 14·2 million tonnes because of the very bad harvest last year, but it is interesting to note that it is 0·4 million tonnes higher than it was two years ago, so let us not be sanguine about the way in which all the mountains are disappearing. They are not disappearing. Consumption still does not match production. If a stabiliser is set at 160 million tonnes, that will still provide a continuing surplus in Europe over and above what we can consume, so the mountains will not disappear.
    The documents say that, despite all the efforts, there is still a beef surplus which amounted to 700,000 tonnes in September. We all recognise the problem of red meat and livestock production. Sugar production is acknowledged to be in chaos. We have over-produced for many years. Who knows what the benefit is? There are A quotas, B quotas and C quotas. In our C quota we are effectively undermining the economies of the cane sugar producing countries and causing poverty in many other countries. I do not think that we should be proud of that record.
    The production of fresh fruit and vegetables has increased in the past year, despite the fact that buying off the market—that is, buying in and not putting the produce on the market—in many continental countries has become a valuable and significant source of income for farmers. In other words, the products are already too numerous and too great in volume for the market, yet we still consider them to be worth subsidising.
    We have to consider where to go from here, because there is a time limit. Document 5448/88 says that in time all those things will be brought into equilibrium, but when will that be? How long, oh Lord, how long? Set-aside can provide only a partial answer. In my view it cannot provide an answer on other than environmental grounds, because the Minister acknowledged in his evidence to the Select Committee that marginal land will be put into set-aside first. He said that we are so efficient that we will not be able to produce more. We are told that crop yields in cereals will rise by 25 per cent. in 10 years. If that is so, from the remaining land we can produce much more than we are producing at the moment in cereals.
    Everyone is trying to avoid talking about quotas. The Minister of State knows my view. I believe that quotas should be introduced to govern all products. I believe that that should be done by the EEC for an overall total, but the decision on how each country works up to its national total should repatriated to the individual countries. We must take steps to bring in those quotas. That is the only way in which we can help the small farmers. What we mean by a small farm is not what Europe means by a small farm. In European terms, a British small farmer is a large farmer. We will be unable to help small farmers unless we have a measure of repatriation in the common agricultural policy.
    Sheep farming is vital in my part of the country. For such monocultures it is a matter of life and death, not only for individual farmers, but for communities. The NFU is fighting very hard on sheep quotas, despite the fact that union members are asking for them.
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    When speaking to a farm conference, Mr. John Davies, the Under-Secretary at the Welsh Office responsible for agriculture, was reported in the Western Mail on 28 April as saying:
    "I for one will fight tooth and nail against the imposition of sheep quotas."
    Does the Minister really consider that that is the proper way for a civil servant, who is traditionally politically neutral, to address the problem? Ministers should come out from behind their civil servants and say that to the farmers, instead of using civil servants to express politically contentious views.
    Ultimately, wriggle as Ministers may, the only answer will be quotas which combine strategic decisions being taken by the EEC with national repatriation of the means of working up to the quota. Only in that way can we begin to safeguard the small farmer, the monoculturalist and the future of the agriculture system. Even if we continue with a budget of £19 million in subsidy by the EEC, this will be greater than the present budget and will be a continual source of reproach. In all future debates, as if the matter were fresh and new, hon. Members will be saying that we face an era of crisis. We have faced it for a decade. For heaven's sake, in our negotiations this year, let us seize the means of overcoming it once and for all.
    8.16 pm
    Sir Charles Morrison: I was interested in what the hon. Member for Pontypridd (Mr. John) said about quotas. As a result of the introduction of stabilisers, we have what amounts to a Communitywide quota. It will be interesting to see to what extent that Communitywide quota or, to use the old term, standard quantity over a period of time, has to be broken down into quotas for individual farms.
    I was very encouraged by the appreciation and understanding shown by my right hon. Friend the Minister of the situation facing agriculture. Nonetheless, it is a continuing irony that agriculture, the industry which, more than any other, has done what was asked of it—increasing production, productivity and the self-sufficiency of national food requirements and helping the Government in their endeavours. The industry is now facing the greatest difficulty. Not surprisingly, as a result, many farmers feel somewhat soured and let down, let alone worried, financially squeezed and desperately anxious about the future of their businesses and the future of the countryside.
    The underlying cause of that disarray remains the slow growth in the size of the market in comparison with the huge growth in output stemming from scientific advances put into practice.
    I think that the hon. Member for Pontypridd is right. We now have to bring consumption and supply into better balance. However, that is small consolation to the individual farmer who learns from the White Paper that United Kingdom farming income in 1987 was the second lowest in real terms since the war, and that over the past five years the average decline has been 9 per cent. a year. Whereas industry generally is achieving an annual return of about 8 per cent. on working capital, farming achieves the negative return of minus 0·5 per cent. and investment is at its lowest level since the 1950s. Nor is it a consolation that all that is a consequence of successful farming. None the less, that is the situation with which my right hon. Friend the Minister must grapple.

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    In practice, my right hon. Friend must grapple with the contradictory objectives of preventing further growth in surpluses and in the cost of the common agricultural policy, and the commitment in the treaty of Rome to increase the earnings of those engaged in agriculture.
    Furthermore, my right hon. Friend carries a great responsibility, as has been emphasised several times already, for the economic and social interests of rural areas and for the conservation of the countryside, the latter being an admirable, but added, self-imposed burden stemming from the Agriculture Act 1986. I do not envy the Minister, but he and his ministerial colleagues are extremely well qualified to cope with the gargantuan task that they face.
    We all know that in 1992 the Common Market becomes a reality. From that time on there should be fair and equal competition between all food producers in the Community. That does not mean, as was said earlier, that British farmers will automatically enjoy a bonanza. It must not be forgotten that many European farmers, probably a majority, are already efficient and are daily becoming more so. On the other hand, British farmers will at least not be at a disadvantage, as at present they are in many respects. Not only are they squeezed financially in the short term, but farmers outside Britain enjoying a slightly better level of prices may be able to improve their competitiveness now, which would be to our disadvantage from 1992.
    The National Farmers Union has calculated that the loss of farm income in the United Kingdom brought about by stabilisers for all commodities in a full marketing year will amount to about £125 million. I accept that the Government do not wish to have a green pound devaluation to offset the effect of stabilisers, as the objective of stabilisers is to contain output and the cost of the common agricultural policy. But I also agree with the hon. Member for Pontypridd that a devaluation on the green pound is not a panacea.
    On the other hand, when United Kingdom agriculture prices are between 6 and 8 per cent. lower than those in France and Ireland, and up to 17 per cent. lower than those in the Netherlands and West Germany, it must follow that there is a strong case for the devaluation of the green pound, because such price levels are bound to militate against the competitiveness of United Kingdom producers. Therefore, I was pleased to hear what my right hon. Friend had to say on that topic.
    There is heavy discrimination against cereal farmers in Britain. Although some livestock market prices are satisfactory at present, livestock farmers are being asked to compete on unfair terms. The position of pig farmers continues to be very serious indeed.
    The vice-chairman of a pig farmers' co-operative in my constituency has just sent me some illustrative figures. I believe that they were produced by a Cambridge agriculture economist and refer to eastern counties pig producers, but I am assured that the situation in Wiltshire is similar.
    In the four weeks up to 23 February this year, pig producers in the study were making a loss of £13·20 per £100 of output, or about £6·50 per pig. In the subsequent four weeks a loss of £11 per £100 of output, or about £5·50 per pig, was registered.
    My correspondent described his position as an example. He turns out 5,000 finished pigs a year. Therefore, even if the loss was £5 per pig, less than either
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    of the figures that I have quoted, he would show a year-end deficit of £25,000. Clearly, such a situation cannot continue for long without disaster, and action is called for.
    I have no doubt that pig farmers are efficient enough to make a living if competition is fair, but for that to be so my right hon. Friend the Minister must achieve a devaluation of the green pound and wipe out MCAs whatever opposition he faces from his European counterparts.
    While pig producers' returns have not exactly been helped by extra sheepmeat coming onto the market and while I am pleased to see more sheep in a traditional sheep area such as Wiltshire, I share the concern of my right hon. Friend the Minister and others about possible adverse consequences in the upland areas where sheep are often the only source of income.
    I revert for a moment to cereals and other crops on which there is major economic pressure. For example, rape has been an excellent corn break and cash crop for the past decade or more, but now its economics is decidedly marginal. Therefore, there is bound to be a tendency for farmers growing rape to return to more grain production.
    Already the United Kingdom is the sixth largest exporter of grain in the world. Even as little as 10 years ago nobody would have thought that that was conceivably possible. It is an extraordinary reflection on British agriculture's ability to increase output. It is amazing. But equally clearly, against a background in Europe and the United States of what almost amounts to a glut in cereal production, there is little scope for still more exports. In any case, as we know, stabilisers will insist on a limit on production, and with storage and disposal of all surpluses costing about £250 million a week, the stabilisers must be right.
    But I am not sure whether the production limit insisted on by the stabilisers is fully understood. We know that the stabiliser for cereals has been set at 160 million tonnes. We know that the EC can normally dispose of about 155 million tonnes. We know that the estimated output for Europe in 1992 is about 184 million tonnes. No doubt stabiliser price cuts would cut off some of that production, or at least reduce it in some areas. No doubt set-aside, too, will encourage a reduction in cereal acreages, but the size of the area to be set aside, or de-intensified, or extensified, is literally enormous.
    Mr. Christopher Gill: Does my hon. Friend agree that to set aside the equivalent of 5 per cent. of our productive area we need to set aside the equivalent of the counties of Shropshire, Herefordshire, Worcestershire and Staffordshire put together?
    Sir Charles Morrison: I am sure that my hon. Friend's calculation is more or less correct. I was about to make the same point in a different way.
    On the basis of an annual growth in grain production of about 2·6 per cent. on average—I say on average because obviously there will be an occasional bad harvest, as there was last year—in the United Kingdom alone, it has been estimated that the area of land surplus to the requirements of cereal production is likely to increase annually at about 100,000 hectares—247,000 acres. That means about 1 million acres in four years. It is a staggering acreage that must come out of grain production in one way or another.
    It is no use pretending that there is a simple panacea for this problem. My right hon. Friend will have to make use

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    of a full range of policies to cope with the new position of agriculture and the rural areas. I am glad that that is exactly what he is doing. However, I hope that he will give more consideration to the financial encouragement of the growing of spring cereals and the undersowing of grain. Those two systems together could have a considerable effect on reducing the total grain production and would be enormously beneficial to environmental conservation.
    While my right hon. Friend considers those matters, will he also redouble his efforts to convince his colleagues on the Council of Ministers that the co-responsibility levy achieves nothing but great administrative cost? Does the Minister know what that administrative cost happens to be? That levy is also a considerable cost to feed manufacturers, and improves the relative economics of imported manioc to the detriment of further use of United Kingdom or European Community-produced grain.
    I encourage the Minister to take more of his measured steps more quickly, and perhaps even a few unmeasured ones, if they can speed the process of readjustment of British agriculture. British farmers and all those employed in the ancillary industries depend on the success of that process. Collectively, they account for the health of the rural economy. That is the burden for which my right hon. Friend is responsible. It is a heavy burden, but for the good of all our rural areas, it is one in which my right hon. Friend must achieve success.
    8.32 pm
    Mr. Calum Macdonald: We heard earlier that a number of Conservative Members wish to speak in the debate. I have the impression that it would be helpful if speeches were kept as brief as possible to let as many hon. Members as possible speak. That is a courtesy that is not normally extended to Scottish Opposition Members during Scottish Question Time or Scottish debates, when often our time is eaten up by Conservative Members. I shall try to be as brief as possible, because I would not wish to follow that pattern.
    The thread running through the debate is not just the vast amounts of money being expended on agricultural subsidies in general. There is also a worry, expressed especially by Opposition Members, that the small farmer is not getting a fair and adequate deal.
    I remember a comment made by the former Minister with responsibility for the Highlands and Islands, who was then the hon. Member for Argyll and Bute, Mr. John MacKay. He referred to crofters as state pensioners. He said that they should not be receiving handouts from the state and behaving like pensioners. The electorate has now pensioned off that Member of Parliament. That sort of attitude from the Government is not appreciated by smaller farmers or crofters.
    For crofters to be referred to as state pensioners is to imply that they receive an excessive amount of Government subsidy. That was not only a graceless remark by the previous Minister, but it was wrong. It has been mentioned already that only about 30 to 40 per cent. of EEC agricultural subsidies go to farmers. Only 10 per cent. go to the smaller and poorer farmers—those on less than average incomes. That is despite the fact that,
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    according to The Economist, the smaller farmer is more efficient in his output per acre, output per head of stock, unit labour cost and pound invested.
    However, as the hon. Member for Holland with Boston (Sir R. Body) said, the overall effect of Government subsidies is to support not smaller and proper farmers, but always the larger farmers. That is the sort of discrepancy that I draw to hon. Members' attention. It is wrong not only on the grounds of equity, but on the grounds of efficiency. It is wrong not just in the narrow economic sense, but in the larger sense of using Government and Community money properly to sustain, support and promote rural communities.
    I confine my remarks to crofters as a sub-group of the smaller and poorer farmers. The image of crofting sometimes conveyed—possibly the image that Mr. MacKay was thinking of when he referred to them as state pensioners—is that it is an outmoded, inefficient and inadequate system of agriculture or a traditional form of farming that has lost its place in the modern world. That is not true. Modern-day crofting is more relevant than it has ever been.
    Crofting is a model of the sort of farming that Conservative Members say that they want to see. Crofting exemplifies the virtues of diversification of farming activities. Crofters commonly combine their farming activities with other economic supplements—for example, weaving, working in light industry, tourism or even professional work. That not only increases their individual income but stabilises the rural population.
    Although people can lose their jobs and go through temporary periods of crisis, if they have a crofting background on which to fall back, they can retain their roots in the community until they find further employment. That helps to avoid the demoralisation that could easily lead to rural depopulation.
    Crofting is also relevant to today's needs. It will probably amaze many hon. Members to learn that the most densely populated area of countryside in Britain is in the northern end of my constituency. Although it is very marginal land, because crofting can combine with other forms of income, people are encouraged to stay on the land, which maintains a flourishing rural community
    Sir Hector Monro: Will the hon. Gentleman give way?
    Mr. Macdonald: Perhaps the hon. Gentleman will allow me to continue. He may be able to catch your eye later, Mr. Deputy Speaker.
    I turn now to some of the problems that crofters face. Enough has been said about the threat that grazing fallow poses to them. If sheep production is moved from the upland areas down to the lowlands that will be a body blow to the crofting communities, because sheep production is the staple of crofting. I hope that the Government will seriously take account of that.
    This problem is reminiscent of the problems of the milk quotas and unequal effects on farmers, particularly in Scotland, where farmers have not produced to excess but have been hit by the broad-brush approach because of the way in which the quota scheme operates. I hope that the same will not happen with stabilisers for sheep production.
    A couple of points that have not yet been discussed arise from the Minister's opening remarks. He got feisty and condemned the Opposition for having nothing to say for the farming community. He tried to give the impression

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    that the Government's record with farmers was blameless, but the tax on research and development is affecting smaller farmers who cannot afford to pay the new fees they are being asked to pay for services from the Ministry, which they formerly received free.
    What will be the effect of the poll tax on crofting communities? The Minister made great play of the fact that farmers, too, would benefit from the income tax changes of the Budget. However, he scrupulously avoided referring to the poll tax's impact on rural communities. It will be devastating, particularly in the Highlands and Islands, for two reasons. As a flat-rate tax it will discriminate against low-rated rural areas in the Highlands and Islands. The university of Strathclyde has estimated that between 65 and 75 per cent. of people there will end up as losers under the poll tax.
    The present rating system makes allowance for the fact that marginal, peripheral and outlying areas receive fewer council services—less rubbish collection and street cleaning, fewer street lamps, and less access to libraries and facilities such as swimming pools. By taking account of those factors, the rating system balances out the inequity. The poll tax will not take account of them and will be a great disincentive to people to live out in the rural areas, because they will have to pay the same for fewer services.
    The poll tax will also disadvantage crofters because they will lose the 50 per cent. rating concession that they now have and which was introduced by a Conservative Government in the 1950s. It is an unfortunate sign of the times and of the change in the Conservative party that it should take that concession away. It is hypocritical of the Government to go on about the supposed threat of the rating of agricultural businesses and to do away with the 50 per cent. rating concession simultaneously. If there is an argument for the one it also applies to the other.
    The rating concession for crofters was introduced specifically to take account of the disadvantages they suffer, living and working in the areas that they do. The costs of living are higher there; electrification is an example which has been mentioned. Crofters in my constituency can pay £2,000 to £3,000 to be connected to electricity. That is why it is sad that the Government are thinking of taking the concession away. It has been estimated that the introduction of the poll tax will remove £1·5 million from the crofting areas.
    The Government cannot pretend to be blameless on fish farming, either. It is not an industry in surplus. It is an example of crofters diversifying and it makes great use of new technological developments. It has exciting prospects and is particularly useful in the disadvantaged areas on which we need to target our money. The Government happily sit by while fish farmers are burdened with a tax with which no other enterprise or business in the country is saddled. It was imposed by the Crown Estate Commission and the fish farmers receive next to nothing in return for it. They would at least receive services in return for their rates. Until the Government wake up to that and do something positive about it, they can hardly pretend to he blameless.
    The thrust of Opposition Members' remarks has turned the Government's attention to the position of smaller and poorer farmers in disadvantaged areas. The agricultural crisis consists not only of the difficulties in keeping subsidies for the farming sector under control. The underlying crisis is the increasing trend towards fewer and
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    bigger farms. That is an unhealthy trend for rural communities and the Government should try to do something about it.
    8.47 pm
    Dame Elaine Kellett-Bowman: I agree strongly with what has been said about the beef variable premium. It always seemed a perfect system to me. It helps the farmer and encourages the housewife to buy the beef by keeping the price down instead of selling it into intervention. To get rid of it seems an act of madness.
    I thank my right hon. Friend the Minister for the tough stand he takes on most issues for British farmers—if not yet on the one I have mentioned. He manages to hold out against all the other farm Ministers in the European Community, he preserves our interests, and he prevents discrimination against us. That is his primary job. We shall never reach a stage at which everything in the garden is satisfactory, so I draw his attention to some matters that particularly concern my constituents.
    First, we demand a measured devaluation of the green pound so that we are paid the same for our produce as other European farmers. However, it is important that should not lead to the French obtaining an even better devaluation, which would cause CAP spending to hit the budget ceiling and so jeopardise other policies. There is no justice in our farmers getting less than the others on the continent for identical produce.
    My sheep farmers are worried about the future course of stabilisers. We did not want and do not like a separate stabiliser system for sheepmeat and we know the Minister fought hard to avoid that. But we can all—albeit a trifle reluctantly—accept the logic that as we have a separate sheepmeat regime to which we are deeply attached we cannot grumble too much if we have a separate sheepmeat stabiliser relating to 1987 flock numbers, as long as it does not lead to too big a reduction in the support price.
    We are, of course, anxious to get on with the wider review of the sheepmeat regime so that we know where we stand in the longer term. Until the French presidential elections are over, I fear that this, along with many other things, will have to wait. The French insist that we do not discuss the long-term review until negotiations with the 12 outside countries, and especially with New Zealand, are completed. Those discussions have not yet begun.
    I make absolutely no apology for saying that we should take a very tough line with New Zealand on sheepmeat and on butter now that she no longer fully supports NATO. It is most important that in any set-aside policy, land set aside should not be used for grazing sheep because that would put many of my sheep farmers out of business. I am grateful to the Minister for getting this matter on the optional list in Europe, and I trust that he will not permit it to take place here. I hope that I did not detect a slight wobble when he was speaking about this and trust that it was merely a courteous nod to his own part of the world.
    The matter of most concern to dairy farmers is the quota system. They have now settled down and adjusted to it as it is. Although we know that quotas should exist up to 1992, there is no guarantee that they will exist up to then or that even before 1992 there will not be changes in the rules and regulations about transfer and leasing after 1989, never mind 1992. It terrifies me to see how much some farmers are paid for quota. That is an absolutely artificial market that can be changed by Government regulation,

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    reducing an expensive quota to a worthless piece of paper virtually overnight. It is vital to clarify these points as soon as possible or bankruptcy could result.
    I thank the Minister for his efforts on our behalf and wish him well in his negotiations in Brussels.
    8.51 pm
    Mr. Win Griffiths: In many ways the debate is a rerun of debates that have taken place in the last decade or more. Anyone who reads the Commission's document, "The Situation on the Agricultural Markets", or its proposals for agricultural prices in 1988–89, which sketch what has been happening in agricultural markets, cannot help having a great sense of feeling that he has read it all before throughout the 1980s.
    The Commission admits that the money being spent on the common agricultural policy is doing very little for farmers. Referring to the agricultural markets, the document says:
    "it has become increasingly evident that the income support function the CAP provides to farmers is often poor value for money."
    The document on the proposals for agricultural prices for 1988–89 says that, despite the changes so far undertaken,
    "the underlying trends in consumption and of production are not yet significantly different from those recorded in the more distant past."
    In other words, even the tinkering that has so far been carried out on the common agricultural policy has not produced a significant change in the way in which money is spent on that policy.
    It is difficult to realise in the context of a debate on CAP spending that this year's budget for the CAP shows the largest increase for a long time—perhaps even in the history of the common agricultural policy. It is up by almost 30 per cent. In the previous five years, the average increase was slightly over 16 per cent. and yet the budget is presented to us as a triumph for the new realism. The new realism for the cereal quota is 160 million tonnes, but Community consumption over the past few years has been less than 140 million tonnes. Unless there is some way of exporting about 20 million tonnes at no cost to the taxpayer, we are building into the system a significant subsidy at a time when we are supposed to be trying to get rid of subsidies.
    A great deal has been said about the GATT round of talks in Uruguay. Even if they are successful, they will take at least four years to carry through. The differences that exist between the negotiating positions of the European Community, the United States and the so-called Cairns group headed by the Australians are so great that it is difficult to see how a compromise can be achieved within four years.
    The common agricultural policy has outlived its usefulness. It was formulated at a time when traditional farming methods were the norm, when the dairy industry grazed cows on ordinary untreated grass in the summer and gave them a bit of hay in the winter. Now we are factory farming and the common agricultural policy cannot cope with that. We must stop tinkering with the complexity of the existing systems and come down to seeking a few fairly simple but radical solutions.
    The first thing we must say is that the existing system must be phased out over, perhaps, five years. In its place
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    we need a battery of measures, such as the introduction of quotas across the board allied to a reduction of inputs. That can be achieved partly by reducing prices and thereby discouraging farmers from the excessive use of fertilisers, cattle feed and pesticides, most of which are doing irreparable damage to parts of the countryside.
    The Minister was rather complacent in speaking about some of the people who oppose new methods and changes as Luddites. Much of the opposition is simply to do with making sure that we do not pollute the earth and poison ourselves. We need to extend the principle of environmentally sensitive areas. Perhaps we should push a similar scheme on the 7 million acres of land mentioned by the hon. Member for Holland with Boston (Sir R. Body). That land has been brought into production since the last war and has brought about much unnecessary production.
    We should get rid of the green currencies, phase them out. However, we must accept that in doing that we will come up against one of the major problems of the common agricultural policy, which is that conditions between member states are very different. I shall give one example of that in relation to energy prices. In 1987, energy prices declined in real terms by more than 20 per cent. in the Netherlands, by 12 per cent. in Italy but by only 4 per cent. in France. I could give other examples to show that the input costs for farmers vary tremendously across the Community. We need to forget about the existing common agricultural policy and get a completely new one based on the factors that I have mentioned.
    8.58 pm
    Mr. Paul Marland: I begin by paying tribute to my right hon. Friend the Minister of Agriculture, Fisheries and Food for what he has achieved in Europe on behalf of agriculture in this country. Many farmers in my constituency admire his robustness and they will be delighted to hear that he has forced a tough stabiliser on wine production. Too often the farmers of this country think that farmers in other countries get away with blue murder while we put up with the curtailment of output.
    The situation in the countryside is genuinely worrying, not only for farmers, but for the ancillary trades and for the rural economy in general. There is no doubt that the dairy industry is experiencing a certain stability over the introduction of quotas and I cannot help but smile when I recall the resistance to those quotas when they were introduced. The future for cereal farmers and livestock producers is most uncertain.
    I welcome my right hon. Friend's commitment to the transferability of quotas between farmers. That will be widely welcomed and we should appreciate what my right hon. Friend has achieved. Nevertheless, the farmers are still a little discontent about the £90 dairy inspection charge. A commitment was given some time ago that that would be re-examined, and it would be interesting to hear tonight whether any progress has been made on that.
    Like myself, the dairy farmers in my constituency are against the co-responsibility levy and it would be marvellous if that could be abolished. It is a ludicrous tax and is now down to low levels, particularly in the dairy business.
    Furthermore, there is a levy to be paid by milk producers this year on over-production. My right hon. Friend will probably remember a commitment given by his

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    predecessor that farmers in this country would not have to pay that levy unless it was paid by producers in every other country in the Community. I should be grateful if he would reiterate that commitment.
    Overall, dairymen crave fairness and fair competition. They are prepared to take on anyone, but they want fairness. As we face up to the next stage of curtailing agricultural output, farmers accept the need for financial discipline. Quotas have undoubtedly made farmers look carefully and afresh at their businesses to maximise profits rather than simply maximise output. A price squeeze has the same effect, but the farmers retreat into trying to produce more rather than trying to produce it more cheaply, thereby defeating the object.
    Farmers are looking at the whole of their businesses, rather than concentrating on producing more and obtaining a greater output. Whether they are involved in milk, cereals or meat, they are concentrating on selling the product rather than just producing it. Food from Britain has undoubtedly been a help in that, but much still remains to be done and we must look to the farmers and producers to do much of that themselves. If they wish to diversify and go into a leisure business—caravans, fishing or shooting —they expend a great deal of time researching the market before they do so.
    The message that I wish to give to my right hon. Friend is that agriculture as a whole is looking for fairness of competition. We shall achieve parity in a genuine common market in 1992. I am delighted that we are to begin to take steps towards achieving parity of the green pound and sweeping away some of the livestock MCAs that need to be removed.
    Many hon. Members were impressed by yesterday's lobby by pig farmers from the NFU headquarters. They crave equal opportunity. In 1984, 83 per cent. of the food consumed in this country was home-produced. In 1987, that figure had fallen to only 73 per cent. Much of that must he attributed to the fact that our farmers are facing unequal competition while others are able to send cheap food to this country. There is no accounting for those who want to eat Danish butter or drink French water, but we are losing out in our market to cheap imports.
    I was pleased to receive a brochure entitled "Pork Talk", published by the NFU, as it shows the unfairness of competition in the pig in the pig industry abroad. In France, there is a system called "Stabiporc". That is not a new way of putting the wretched animal to death, but a stabilisation scheme initiated by the Credit Agricole and backed by the French Government. Last year, this scheme paid out £12·5 million via marketing groups, either as a subsidy or as cheap loans at a 5 per cent. rate of interest. In Italy, grants totalling more than £30 million have been paid to producers on a per pig basis as an emergency measure. In Germany, small farmers are able to reclaim VAT of 13 per cent. on output, while paying only 7 per cent. VAT on inputs.
    As I said at Question Time today, the imports of manioc carry a levy of 28 per cent. for pelleted or processed product and 6 per cent. for raw product. It appears that, although the imported product is processed, the lower levy of only 6 per cent. is being paid. This is in clear breach of the rules. I hope that my right hon. Friend the Minister of State will have time to reflect on these obvious breaches of the regulations and will be able to give us his thoughts about "Pork Talk"'s revelations.
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    What of cereals and stabilisers in general? As I have said, when prices are forced down, farmers produce more. Secondly, the plant pathologists have guaranteed that they can increase output by 1·5 per cent. per annum, so that forcing down the price will not do much good. Thirdly, stabilisers penalise the non-expanders. Fourthly, bearing in mind that mainstream farming will always occupy most of the land in the United Kingdom, it would be marvellous if we could look again at the quotas for producing cereals. Quotas have been successful in milk, potatoes, sugar and hops.
    As has been said already today, morale in agriculture is bad—it goes from poor to terrible. We can see where we are going, but I urge my right hon. Friend to keep talking and to keep pushing as he has been doing in Europe. He must go steadily, and be gentle with the farmers. He must keep on telling them where he is taking them because he is getting a lot of credit for doing that.
    9.6 pm
    Mr. Nigel Spearing: It is unfortunate that the Minister cannot tell the farmers where he is taking them. I do not criticise the right hon. Gentleman personally, because he does not decide policy any more, and neither does the House. The Minister was not even present—if I am mistaken he will correct me—when the Prime Minister, along with others, decided what the stabiliser figures and arrangements would be. That is the extent to which uncertainty about agriculture has been increased.
    The House is not even debating a motion on the important documents before us, which bring about a complete change in agricultural policy and the prices for the coming year. We are paying those prices in the way of taxes.
    I deplore the fact that the Government have decided, though a procedural device, not to allow the House to debate an amendable motion. There is now no view of the House on this change of agricultural policy or on the prices that are being paid. That procedural and constitutional slippage should not go without strong remarks. We should point that out to Conservative Members. They have different views from mine about the main merits of the market, and they voted away those powers, so they have no real claim to talk, because we are now but a consultative assembly, if not less than that.
    Enough of procedural matters—let us talk about agriculture. Can and do stabilisers work? If the liabilities exceed the income, capped by the so-called discipline tied to the gross national product of the Community, what will happen? Those who know doubt very much whether stabilisers will do the trick. The Select Committee on European Legislation has reported on these matters, in documents HC 43-xix and HC 43-xxx. We note that, although 1 million hectares have been designated for the set-aside proposals, the Government reckon that even if it is reduced on the basis of cereals, it will save only £260 million.
    It looks to me as though we shall be in shtuck in a few years' time, if not sooner, with those so-called measures. The bizarre results about which we have heard, if my hon. Friend the Member for South Shields (Dr. Clark) was right, shows that there has not been much field work. His

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    figures comparing likely income from the schemes for a farmer in Cumberland compared with one in East Anglia were bizarre indeed.
    With the quotas introduced this year, together with those introduced two years ago, we have reached a turning point in British agriculture of equal significance to that resulting from the Williams Act and our entry into the Common Market itself. The Minister must agree that the tragedy of it all is that, despite the money being spent, and unlike those two other eras of the War Agriculture Executive Committee and the Williams Act, we are not encouraging good husbandry.
    The combination of interest rates, bank loans, the need for inputs and the need for productivity screws farmers into practices and financial difficulties that they could well do without. Indeed, as has been publicised in the newspapers, the Minister may have difficulty in deciding who is to pay for better practices. There are reports questioning who is to pay, for instance, for nitrates—with which we shall have to deal in respect of our water supplies in any case.
    I draw the attention of the House to evidence that can be found in the Library, and which has been received by the Select Committee on European Legislation, from the Council for the Preservation of Rural England. In referring to direct income aids, the council states:
    "CPRE considers that if a rich and varied landscape, wildlife and historical heritage is to be maintained, price reduction must be accompanied by the introduction of direct income aids tied to environmentally beneficial uses of land. This is not recognised in the Commission proposals."
    The Minister suggested that there would be some environmental benefit from the additional expenditure, I doubt it. Mention was made of environmentally sensitive areas, and it was stated that 100,000 hectares will be put into the sort of regime that I will describe in inverted commas as "the Halvergate scheme". That is surely no answer at all. Paying farmers additional money not to grow things which they might otherwise grow, under a regime that is already expensive, is throwing additional sums of money after and additional sum of money. That illustrates the back-to-front nature of the whole scheme.
    Article 39 of the treaty of Rome is worth studying because it encourages production, scientific innovation and greater output per farm worker. Those may have been valuable at the time when the treaty was drafted—my hon. Friend the Member for Bridgend (Mr. Griffiths), adverted to them in his speech—but they have now become the opposite. Instead of encouraging certainty for farmers, who have the weather to deal with anyway, they encourage uncertainty, and that is what agriculture can well do without.
    9.13 pm
    Mr. Robin Maxwell-Hyslop: When the quotas were introduced in April 1984—may I have the attention of my right hon. Friend the Minister?—the then Minister of Agriculture explained to the House that he had agreed to southern Ireland having an increased milk quota while ours was slashed, on condition that the United Kingdom was allowed to keep the variable premium. Therefore, if the variable premium is taken from us, I charge my right hon. Friend to ensure that the southern Irish quota increase, which was agreed only on the basis of
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    the variable premium remaining, is taken away to what it would have been had it been on the same historical basis as that for the United Kingdom. We cannot have this penny spent over and over again—it was a quid pro quo and so it must remain.
    In the brief time available to me I exhort my right hon. Friend the Minister, who is such a redoubtable fighter for the United Kingdom's industry in negotiations, to ensure that the policy is coherent. It is not coherent to put a standard quantity—now called a stabiliser, although it is exactly the same as a standard quantity—on lamb production, and then to allow the grazing of fallow land so that others can go into sheepmeat production who are not there at present.
    Nor, of course, does it make sense to put a standard quantity on British sheepmeat production and not drastically curtail imports of New Zealand lamb. Otherwise the percentage of the market occupied by New Zealand will continue to rise rather than fall, just as the percentage of our packaged butter market going to New Zealand has increased rather than diminished. By 1989, New Zealand butter imports ought to be down to 40,000 tonnes. New Zealand will then have only the same percentage of the market as it did in 1983. That is essential. New Zealand has sacrificed our sympathy in following a policy of withdrawing from its defence obligations; we therefore have no further obligation to crucify our own agriculture to admit New Zealand's produce.
    Quotas have been mentioned, but when a quota is applied it should, if possible, be before and not after there is a surplus. Otherwise many producers will have the unanswerable problem of spreading an overhead commitment based on one level of output over a smaller level. It follows as night follows day that the standard-quantity policy will fail for the same reason as it failed under Christopher Soames. It does not bite on the individual producer; it still pays him to produce more and to beggar his neighbour instead of himself.
    We shall have to proceed to a quota policy, because it is the only way to resolve the dilemma to which my right hon. Friend himself drew attention. With vastly increasing expenditure on the so-called agricultural programme in the Community, we nevertheless have catastrophically falling farm incomes. The only way to square the circle is to have quotas which provide budgetary limitation, with the payment going to the food producer rather than to the food storer.
    I have said this before, and I shall continue to say it. The truth will not go away with failure to grasp the nettle, and that is why quotas are bound to come. They are, moreover, the only way to secure the pattern of livelihood in rural areas, instead of causing rural depopulation with all the social costs that go with it. The realities will not change.
    I have a last question for my right hon. Friend. Much reference has been made to 1992, when EEC competition policies are to achieve final harmonisation. The date for other policies is 31 December 1992, but many people assume that the end of the green pound and the MCAs will be on 1 January 1992. Will that be the case, or will it happen a year later, on 31 December? It is crucially important that we get rid of such distortions—which will otherwise drive so many of our producers out of business —before that date arrives. That is why we should do as much as possible this year rather than leave it until 1 January or 31 December 1992. We must get rid of those

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    distortions with which our industry is at such a disadvantage as compared with other producers in Europe.
    9.20 pm
    Mr. Ron Davies: I am very conscious of the fact that a number of hon. Gentlemen who have been present in the Chamber throughout the debate have not been fortunate enough to be called. That is a matter of regret, because the debate has been interesting and very well informed. I express my personal regret that those hon. Members on the Government Benches have not had an opportunity to make their contributions. I know, however, that the Minister of State is anxious to reply fully to the debate. That is right and proper because, as the Minister said in opening the debate, this is essentially a consultative debate. I am sure that the House wants to hear some response from the Minister of State on the matters that have been raised.
    I am the sixth hon. Member from the Principality to speak this evening. There have been contributions from two of my hon. Friends representing Scottish constituencies, and from two hon. Members from Northern Ireland. I am aware that the responsibility for agriculture is not held exclusively by the Minister of Agriculture, Fisheries and Food, because the territorial Ministers have responsibilities as well. None of them has been present during the debate. I do not say that as any kind of criticism, because they have other responsibilities, and the debate is being led by the Minister. Because serious concerns that have been expressed by those hon. Members representing Wales, Scotland and Ireland, I hope that the Minister of State will give an undertaking that he will draw to the attention of the territorial Ministers the concerns that have been expressed this evening. That is not a point of contention. It is a request to the Minister and I should be grateful if he would respond to it.
    The majority of the contributions have had three things in common. First, and most obviously, most of them have been critical of the Government. That is true not only of the contributions from the Opposition Benches, but of most of those from behind the Government Front Bench. Secondly, most of the contributions have concentrated on constituency matters. That, too, is right and proper, because there has been an intensive system of lobbying during the last couple of days, and farming interests are very important to the economy and the fabric of our rural life. It is therefore important that those interests are properly represented in debates in the House.
    Thirdly, most of the contributions have come from hon. Members who represent essentially the dairying or livestock areas of this country. Those are the areas that are in greatest jeopardy because of the potential movement out of cereals as a result of the stabiliser proposals. The great fear in the dairying and livestock areas is that as the stabiliser package starts to bite and put pressure on cereal producers to go into livestock rearing, this will undermine those areas that have been referred to by several of my hon. Friends as monoculture areas, where the combination of geographical and economic circumstances means that there is little opportunity for diversification. I believe that those are very significant developments.
    When the Minister opened the debate he referred to the paradox of the common agricultural policy. He said that
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    as financial support for the CAP has grown, so the income of farmers has fallen. Tonight's debate is essentially about how that internal contradiction can be resolved.
    There has been much criticism of the CAP, particularly from my hon. Friend the Member for Pontypridd (M r. John), whose contribution I welcomed, because for several years he spoke for the Labour party on agricultural matters. I am sure that all of us recognise the value of his contributions, and I was particularly pleased to hear him in the debate this evening.
    It is worth reminding the House that since 1975 the CAP has been responsible for increasing agricultural production by 23 per cent. That has been at the cost of a 125 per cent. increase in expenditure by the guarantee fund. At the same time as that increase in production, farm net income has seen a 25 per cent. reduction. As my hon. Friend the Member for Bridgend (Mr. Griffiths) said, the average cost to the average Family in the Community is now running at over £10 per week.
    Throughout that time, in the words of the former Minister responsible for the environment, the hon. Member for Bristol, West (Mr. Waldegrave), the CAP has been operating as the engine of destruction of our environment. As my hon. Friend the Member for Pontypridd pointed out, we have been responsible for dumping surpluses on the Third world and wrecking their economies. That is not a record of which the CAP can be proud.
    Both sides of the House have expressed the concern and alarm for the future that is felt, in all sectors of the industry. Everybody is concerned, apart from the Minister of Agriculture. He seemed to suggest that everything is OK. He said, "I will make adjustments to the green pound if I can get agreement. I will get the stabilisers to operate if I can get agreement." He made many suggestions about his policy, but he signally failed to give us any guarantee about his negotiating position. I was reminded of the speech that he made in February, when he said:
    "As was constantly said to me when I was going round the country, what farmers want most of all is an end to the uncertainty … We have achieved most of our objectives, and one of the factors that had to be considered was the importance of ending uncertainty."—[Official Report, 15 February 1988; Vol. 127, c. 756–57.]
    The Minister set that as a standard by which we should judge him, and by that standard he has failed in his performance this evening. When we have asked for an end to the uncertainty and for guarantees about the position, we have had precious little from him. Our cereal farmers do not know what is to be expected of them. They have no guidelines. They do not know how to adjust their production if they are to avoid the imposition of stabilisers.
    The future of the beef support scheme is in jeopardy. We know that the variable premium will end on 1 January, and we are told that there will be something to replace it, but we do not know what that will be. Our sheep producers face the prospect of an end to the variable premium. The sheep rearing areas do not know what will replace that. We do not know the Government's real intention on the green pound. We had a vague statement from the Minister this evening. He said that he was generally in favour of a devaluation, but he failed to take the same steps as his colleagues in the Council of Ministers, who have set devaluation of the green pound as a condition to their

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    sitting down to negotiate. Our Minister has said that we would like to see a devaluation of the green pound, but has not set it as a condition.
    That is supposed to be a package that brings an end to uncertainty. I am afraid that we have had as much certainty in those matters as we have on the Government's real intention on extensification and set-aside. We have not had an end to any of the uncertainty.
    We know that the Government have announced that by midsummer the proposals will be implemented. If anybody could think of a date for the implementation of the proposals that would be least suited to agricultural interests in this country, it would be midsummer. The cereal harvest will be growing and harvest time will be approaching. How are farmers supposed to adjust then? How, halfway through the season, are our stock farmers supposed to adjust their annual programmes? How are they to cope? How are they to avoid the impact of stabilisers? By midsummer none of the uncertainties will have been resolved.
    We know that the Minister has succeeded in one thing. He has succeeded in making most people opposed to his proposals. I do not mean just those in the House, but most people outside as well. The hon. Member for Ceredigion and Pembroke, North (Mr. Howells) referred to the representations from the National Farmers Union. He mentioned the good briefing that the NFU had circulated to Members of Parliament.
    The NFU said:
    "Over the last two years some 20,000 full-time jobs for farmers and farm workers have disappeared and investment has fallen by 30 per cent. to the lowest level since the mid 1950s. Farmers' return on working capital was negative."
    The NFU also said:
    "The Government's White Paper also showed that UK farming income in 1987 was the second lowest in real terms since the war—over the last five years, the average decline has been 9 per cent. a year."
    That is not a particularly praiseworthy record. The NFU goes on to say, however, that the package will serve to tighten the screw even further. That is the view of the NFU.
    The Farmers Union of Wales was even less charitable. On 3 May it responded—[Interruption.] The Minister of State may want to challenge some of these points and I look forward to hearing him challenge the statement by the National Farmers Union, interpreting the Government's statistics. The president of the Farmers Union of Wales said:
    "The Ministry of Agriculture's recent report on farm incomes in the UK shows that the real value of farm land and building has fallen by 40 per cent. since 1979. Based on Inland Revenue data, 48 per cent. of all farmers were assessed to have a total income of less than £6,000 in 1985 and 31,000 had an income of less than £2,000 a year … These statistics bear out the fears we have been expressing in recent months. Unless farmers generally can improve their incomes, the effect of this continuous erosion of earnings will have far-reaching consequences on the industry."
    The package will have far-reaching consequences in precisely the areas that can least afford to bear the brunt —Scotland, Wales, Northern Ireland and the upland parts of England. That is the unfairness and folly of the Government's proposals. They have not sought to ensure that the cuts fall where they can be borne most easily. Not through malfeasance on the Government's part, but
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    through indolence, or perhaps lack of concern about the upland areas, their policies will fall most heavily on those areas.
    I see that the hon. Member for Torridge and Devon, West (Miss Nicholson) has come back into the Chamber. It is true that she joins us frequently during our agriculture debates. She comes in, goes out and comes back in. I am sure that, like all other hon. Members, she will have had representations yesterday from the farmers. The farmers who lobbied me and my colleagues from Wales were particularly concerned about the erosion of the farming base. They argued as follows "We have had lean times, certainly since 1979, and they have eroded our earning capacity. As a result of that erosion, capital investment in the industry has fallen. It has now fallen to its lowest level. It is now a third of what it was a few years ago. As a result of the Government's packages and the lack of investment that we have had in recent years, the industry is being critically weakened."
    The farmers are looking forward a few years—it is a pity that the Government are not—to 1992. In 1992, the Single European Act will be in operation, whatever the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and my hon. Friend the Member for Newham, South (Mr. Spearing) may think or hope. What will happen then? If our agriculture has been faced with five years of erosion, if farm incomes and farm investment have suffered from five lean years, it will not be in a position to respond to the challenge available to it. I fear, and the farmers of Wales who came to visit me yesterday fear, that instead of an exciting challenge and the opening up of new opportunities, they will face a nightmare. They obviously do not welcome that prospect.
    Those views from the industry have been expressed in the debate this evening, and they are shared by the House of Lords Select Committee on the European Communities. As most hon. Members know, the Committee has been examining these proposals. The Minister of State will be pleased to know that it is not the national executive committee of the Labour party, but a Committee of the House of Lords. The report says in paragraph 50:
    "It is the Committee's view that Agricultural Stabilisers should not be regarded as the major instrument for controlling production levels. Primarily, Agricultural Stabilisers are instruments for budgetary control … Effects for production of most CAP commodities are likely to be limited and to be lost within the overall variability in agricultural production from year to year."
    It goes on to say:
    "For sheepmeat, the Committee cannot accept the discrimination against the United Kingdom incorporated in the Commission's original proposals. Following the perverse logic of setting a separate stabiliser for sheep numbers in Great Britain, the principal Community sheepmeat producer, the Commission should equally have proposed the setting of separate stabilisers for the principal Member State producer of other commodities (for example, a separate stabiliser for cereals in France)."
    The sheep farmers of England and Wales want to know the reason for this treatment. They will lose £3 million in variable premium next year because the Community is in surplus and we have special arrangements for Britain, which is the largest producer. That will have considerable consequences, as my hon. Friend the Member for Ynys Môn (Mr. Jones) said. Why have sheep farmers been singled out for equal treatment, while the cereal farmers of Germany and France, who are responsible for surpluses in that commodity, are not to be treated similarly? Why does

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    the European burden not fall on them? It is most unfair. There is little wonder that farmers in the uplands, faced with the prospects of a squeeze, and competition from lowland diversification, view the future with trepidation.
    The environmental impact of stabilisers has been mentioned, as has the way in which the Government have been using the Agriculture Act 1986. We all listened to the hon. Member for Holland with Boston (Sir R. Body) with great interest and respect. I am sure that some of us read his books in the same spirit. The hon. Gentleman mentioned environmentally sensitive areas. The Opposition have gone on record as saying that we endorse the Government's proposals and welcome ESAs. They have been successful. I am sorry that my hon. Friend the Member for Newham, South, does not agree with us, but, that is our view. We debated this in Committee and told the Government of our support, but it is not unqualified and unlimited support. The reservations that we are starting to have about the impact of these measures are shared by many people outside the House.
    Let me quote from evidence given by the Council for the Protection of Rural England, with eight other organisations, to the House of Commons Select Committee on European Legislation:
    "the Commission's proposals pay scant regard to the environment, maintaining many damaging aspects of the guaranteed section, despite firm evidence of the acceleration of loss of landscaped features."
    The CPRE was joined in that by eight other groups, including the Ramblers Association, the Royal Society for the Protection of Birds, the Council for the Protection of Rural Wales and the World Wildlife Fund, in an unprecedented coalition to put pressure on the Government to recognise the folly of their ways. They are particularly anxious to ensure that when the new set-aside proposals eventually come into effect, they will achieve a diminution in agricultural production in a way that minimises environmental damage and uses the opportunities that created for environmental enhancement. It is a great pity that we have had little evidence from the Government that they intend to do that.
    We are not confident that the set-aside proposals will achieve the objective of reducing production. This week the European Commission has made provision for a 50 per cent. leakage of saved production. If the Commission wants 1 million hectares of land removed over a five-year period it will have to make provision for double that, because of the inherent inconsistencies of the set-aside proposals. It is budgeting for a 50 per cent. failure of the proposals.
    The proposals present a threat to the upland farmer. They will not achieve their objective and will be environmentally damaging. In the last debate, in February, we offered constructive support to the Government. They have failed in the endeavour that they set out to achieve in Europe. Their proposals are inadequate and we shall urge them to reconsider their position.
    9.40 pm
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): It must have been surprising for many hon. Members who have sat through the debate to hear the speech of the hon. Member for Caerphilly (Mr. Davies) and compare it with the speech of the hon. Member for South Shields (Dr. Clark). The hon.
    1104
    Member for Caerphilly attacked the Government for not listening to the lobby of the National Farmers Union, yet his hon. Friend told the NFU that the real problem with the Government was that we were not tough enough on the price stabilisers, that we had not banged the farmer strongly enough and that my right hon. Friend the Prime Minister did not have enough bottle. That is what the hon. Member for South Shields said, although it is not something that would be recognised by any other European country. If the hon. Gentleman had been around Europe and listened to what the rest of Europe thinks about how successful the Prime Minister had been and how unsuccessful their own Prime Ministers had been, he would have heard a different story.
    The hon. Member for Caerphilly had the cheek to say that we had been too hard on the NFU and went on to say that the NFU wanted a devaluation of the green pound. The hon. Member for South Shields said that he did not want any devaluation of the green pound. The hon. Gentleman cannot have it both ways, even though lie has been divided from his hon. Friend by every other hon. Member who spoke. No doubt the hon. Member for South Shields will start telling his hon. Friend that it is a good idea to have the same policy at the beginning of the debate as at the end. The only problem is that that would mean that we would have to assume that there was a policy at the beginning of the debate. That is difficult to understand.
    I felt sorry for the hon. Member for Pontypridd (Mr. John) because at least when he led the Opposition we knew where we were. We may not have agreed with him, but he put forward a policy that had to be answered. He had a view. He said that we should have quotas on everything. That was nonsense, but it was a perfectly legitimate view. The hon. Member for South Shields has given us no view at all. On the one hand, he has said that the farmers were poorly off and, on the other, his policy would make them more poorly off.
    I must apologise to the hon. Member for South Shields. In a recent debate, I accused him—I think, in retrospect, unfairly—of being committed to a policy of £50 a tonne, for wheat. If I was unfair, the hon. Gentleman must stop using the figures which are based on £50 a tonne; otherwise he is trying to have it both ways. I apologise to the hon. Gentleman, but I hope that he will cease using figures that suggest that farmers in Britain could produce wheat at £50 a tonne.
    The hon. Member for South Shields went on to accuse my right hon. Friend the Minister of a sell-out on the sheepmeat regime.
    My right hon. Friend has made it absolutely clear that the United Kingdom needs a regime which satisfactorily meets the needs of our sheep industry, but at the same time we are not starting discussions by saying that we are not willing to discuss. That is no way to get out of our problem. The Opposition admit that a series of different regimes within Europe create certain problems. If we could find a solution which was satisfactory to everyone, it would be worth discussing. However, as history has shown, we have stood up toughly for the British farmer, as my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) made clear.
    The hon. Member for South Shields cannot have it both ways. Either he should accept that it is his policy to clobber the farmer, or he should propose something which will give the farmer even more in the way of subsidy. He cannot expect to have the farmer's vote while he is making one

    1105
    half of his speech and the consumers and the taxpayers vote for the other half. He really must be consistent, and until he is he will not be taken seriously by the farming community or indeed by the electorate.
    My hon. Friend the Member for Holland with Boston (Sir R. Body) is taken seriously. I have not quite finished his book, "Red or Green for Farmers", in which he made some important points which we should not avoid. His major concern is that farmers should be seen, at least in part, as conservers of the countryside. I think he used the word "husbandman" in his book. We might be accused of sexism if we use that word, but we may find a word which would cover what he wishes us to do.
    I hope that my hon. Friend agrees that the Government have shown themselves increasingly concerned to say that part of the reason why the agriculture community is supported in a way that is different from other industries is that they look after 80 per cent. of the land area of the country. If it were not looked after by farmers, it would turn into a wilderness that would not be loved by ramblers, bird watchers, townies or anybody else. Therefore, the farmers need support to enable them to avoid that.
    The hon. Member for Ceredigion and Pembroke, North (Mr. Howells) always delights us with the charm with which he puts the whole of his own personal experience, and indeed his personal financial circumstances, at the mercy of the House so that we can understand how matters proceed. I agree very much with his concern that we should not so cut production in the rich part of the world that we are unable to meet the needs of the poor. However, all the advice of the independent groups such as Oxfam is that, except in emergencies, there is little place for food aid, because continuing food aid undermines the ability of countries to produce.
    Not long ago I went to Mauretania, which is one of the poorest nations. The effect of continuous food aid on that country and the destruction of nomadic agriculture as a result is one of the most serious things I have ever seen. We must not be too facile in our discussion of the matter—that description does not apply to the hon. Member for Ceredigion and Pembroke, North—and suggest that one can pick up a lot of the surplus food produced in the west and deliver it on a permanent basis to developing countries.
    I take very seriously the points raised by my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) about the problems with the pig cycle. I worry lest pig producers should believe that, even if in the course of our negotiations we reach our desired aim which is the elimination of MCAs on pigmeat, as has been stated very clearly by my right hon. Friend and myself, that will not remove the fundamental problems of the pig industry, which is a much wider international issue. It is necessary to eliminate MCAs as it is unfair that the situation should remain as it is, but it ought not to be seen as the only answer. The NFU briefing gives the impression—I am sure it is not meant—that the removal of MCAs will have a bigger effect on the livelihood of farmers than I believe will be the case.
    Mr. Quentin Davies: Will my right hon. Friend give way?
    Mr. Gummer: No. I want to apply myself to answering the questions.
    My hon. Friend the Member for Cornwall, South-East also mentioned the planning authorities' attitude. We are anxious that all planning authorities should realise that the changes in the countryside demand a more sympathetic understanding of the re-use of old farm buildings, of new enterprises and so on. The countryside must be a work-place, not a museum. It is crucial that planning authorities should realise that.
    The hon. Member for Clwyd, South-West (Mr. Jones) made a curious comment. He said that, as usual, the United Kingdom comes off worst. Time and again the rest of Europe believes that we have won battles, even though we have started with a major disadvantage. The trouble with the hon. Gentleman is that he constantly carries on with an untruthful statement about the effect of British negotiations and discussions.
    My right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith) spoke of the contribution of lower food prices to the fight against inflation. We should congratulate the farming industry on the way in which over the past 10 years it has made a major contribution to the reduction of inflation. It is noticable that it has been able so to do within the environment created by this Government whereas it was not able so to do within the anti-agriculture and anti-food production environment created by the previous Labour Government.
    The hon. Member for Ynys Môn (Mr. Jones) talked about the suckler cow premium. It was this Government who raised the level in Europe much higher than it had been before and paid at the top of the permitted level. I know that he will understand that the suckler cow premium is always one of the most difficult parts of my negotiation because other EC countries do not attach the same importance to it as we do. However, I shall certainly take on board what he has said.
    Mr. Gill rose—
    Mr. Gummer: I must try to answer the points that have been raised. I shall talk to my hon. Friend after the debate, if he will allow me.
    My hon. Friend the Member for Scarborough (Sir M. Shaw) talked about planning, and that is a matter that we have very much in mind. I have now addressed five meetings of planning officers and those concerned with planning committees and I am now discussing means whereby we may make farmers more aware of their responsibilities. This is a two-way matter. It is not just a matter for the planning committee; the farmer must be prepared to proceed in the right way in order to have the best chance of obtaining planning permission.
    The hon. Member for Antrim, North (Rev. Ian Paisley) talked about whether the rest of the United Kingdom had stolen his milk. I know of his feelings, but I must tell him with great care that much of the English part of the United Kingdom feels rather the opposite. There is always that difficulty. The hon. Gentleman may disagree with them, but I merely say that as a matter of fact, whether they are right or wrong. However, the hon. Gentleman made an important contribution enabling us to understand even further the particular problems in the north of Ireland.
    The hon. Member for South Down (Mr. McGrady) made some points that I shall draw to the attention of my right hon. Friend the Secretary of State for Northern

    1107
    Ireland. The hon. Member for Caerphilly (Mr. Davies) asked me to draw to the attention of the various territorial Ministers the points made in the debate, and I shall certainly do so.
    My hon. Friend and constituent, the Member for Cambridgeshire, South-East (Mr. Paice) spoke about diversification opportunities. He said that so far we have done the right things, but not enough of them. I would expect him to press me to do more, but it is most important that what we do we get right. We must not have a modern equivalent of the groundnuts scheme. We must not go forth with some gigantic scheme for, for example, the afforestation of Britain which turns out to be founded upon false premises. We cannot have an ESA system which turns out to be an invitation for fraud or scandal. We must move step by step towards a position in which alternatives are available for farmers throughout Britain.
    The hon. Member for Pontypridd reminded us clearly of his view on quotas. However, I disagree with him and with my right hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) on that. Quotas have a disastrous effect upon an industry. They give to those who can the power to continue. There is no opportunity for others to come in. They solidify and restrict an industry. There is little opportunity for enterprise. There is no advantage in dong something well. They have all the worst aspects of Luddism and I continue to be wholly opposed to them. If we have a system with a mixture of price restraint and alternative provision, and we can keep the farming community closer to the market, I believe that we shall have an answer that will work.
    My hon. Friend the Member for Devizes (Sir C. Morrison) spoke about the green pound, and in so doing he did a most important service to this debate. He reminded us of the underlying increase in yields and production. The hon. Member for Ceredigion and Pembroke, North passed over the fundamental underlying facts about the increase in production in favour of temporary positions in the beef and cereal markets. My hon. Friend the Member for Devizes put the record straight.
    The hon. Member for Western Isles (Mr. Macdonald) spoke about the problems of crofting. I shall consider with my right hon. Friend the points that he made. He knows that I have tried to see what can be done for crofters. I was sorry to hear his comment about my former hon. Friend, Mr. John Mackay. I do not believe that the hon. Gentleman quoted him properly. That was a pity given the tremendous amount of work that John Mackay did on behalf of those people least well off in the farming industry.
    My hon. Friend the Member for Lancaster congratulated my right hon. Friend, and I thank her for that. She made some points about New Zealand that were echoed elsewhere. We must be careful about blaming the New Zealand people for the state of their not always attractive Government. We shall take into account what my right hon. Friend said.
    The hon. Member for Bridgend (Mr. Griffiths) suggested that our policy was to get rid of subsidies. That is not our policy. We accept that agriculture will continue to need support. Our policy is to ensure that that support goes to the farmer and is not wasted on the system. We
    1108
    want to make savings for the taxpayer and make sure that our money is efficiently and effectively spent. If the hon. Gentleman wants to get rid of subsidy entirely, he must tell the farming community that that is the policy of the Labour party. That is what its policy appears to be.
    My hon. Friend the Member for Gloucestershire, West (Mr. Marland) mentioned the £90 dairy charge. It difficult to accept the objection to people paying £90—usually once every two and a half years to ensure that the product that they sell to the public is of the proper quality. Everyone else has to do that, and I do not see why it is so terrible to ask the farmer to do it, too. If we can reduce the price, we certainly will. I hope to make an announcement on that matter once the discussions have been completed.
    The hon. Member for Newham, South (Mr. Spearing) made some procedural points. Those were agreed through the usual channels and cannot be aimed at the Government or at my right hon. Friend.
    My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) knows that I do not share his views on quotas. The sort of quotas that he wants would not be a sensible solution to the problem. However, I agree with him about coherency of policy. It is important that all parts of the policy fit together. He will agree with me En rejecting the attacks of the hon. Member for Caerphilly. In the part of his speech which was on the same side as the hon. Member for South Shields the hon. Gentleman repeated the argument that the Government should now tell the House what decisions will be made after the negotiations for the price fixing. We could do that if we knew. We do not know, because we have not had the negotiations.
    The Opposition have not been involved in negotiations for so long that they do not understand how they work. They cannot ask us to tell the House our detailed position when we are trying to win in negotiations. If they go into negotiations by telling their opponents exactly what they will settle for, they will lose the negotiations.
    That point was made by the hon. Gentleman who was presuming to tell my right hon. Friend the Prime Minister how she should negotiate. A fat lot of good she would have got out of the negotiations if she had gone in like him. She would have said, "This is what I will settle for; I might go down the road as far as that. I have agreed to do this in advance." What a nonsensical way of dealing with anything. Thank God our negotiations are not carried out by the hon. Member for South Shields and his cohorts our opposite numbers in Europe would not know who was speaking on bahalf of the Government and they would be beaten in any discussion of any subject in any part of the farming industry.
    This debate has been another example of the fact that the Labour party has no agriculture policy. In so far as it discusses agriculture, it hits the farmers, attacks what they are doing and does everything possible to undermine—
    It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

    BUSINESS OF THE HOUSE
    Ordered,
    That, at this day's sitting, the Farm Land and Rural Development Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Ryder.]

    Farm Land and Rural Development Bill [Lords]
    As amended (in the Standing Committee), considered. Order for Third Reading read.
    10.1 pm
    The Minister of Agriculture, Fisheries and Food (Mr. John MacGregor): I beg to move, That the Bill be now read the Third time.
    The House will be well aware from the previous debate of the action we are taking at Community level to tackle the challenge of the surpluses and, domestically, to deal with alternative land use. I did not refer to the farm woodlands scheme earlier, because there is an opportunity to do so now, although I made a brief passing reference to the farm diversification scheme.
    The two schemes that we shall introduce after the passage of the Bill are part of a coherent policy that we have been developing for the alternative use of land that is no longer needed for food production. Both the farm woodlands provisions—clause 2—and those on farm diversification—clause 1—will help to contribute to the process of adjustment that will be required. They will also assist the rural economy and help to maintain an attractive and living countryside.
    I am delighted to see that there has been considerable interest in the Bill and widespread support for the principles that it contains. About 80 amendments or new clauses were tabled in Committee, mainly relating to clauses 1 and 2. Most were designed to probe the Government's intentions about the details of the schemes that we propose to introduce by secondary legislation. I am grateful to my right hon. Friend the Minister of State and my noble Friend in another place for the admirable way in which they guided the Bill through its Committee stages.
    In view of the hour, I shall comment now on only one or two points of general interest. While the Bill was under consideration in Committee, my right hon. Friend the Chancellor announced in the Budget that the tax arrangements for forestry were to be changed. That brings to an end arrangements that were widely seen as unjustified, unacceptable and damaging in the long term to the forestry industry. In parallel with the tax changes, the Forestry Commission closed its existing planting grant schemes, and we have introduced a new one, called the woodland grant scheme. It was not possible, for obvious reasons, to announce the Budget changes in advance or to consult on them. However, the House will have an opportunity to debate the financial side of the changes during the passage of the Finance (No. 2) Bill. My right hon. Friend explained in Committee the implications for the farm woodlands scheme.
    In brief, the Forestry Commission's new woodland grant scheme offers higher rates of planting grant than previous schemes, both for broadleaves and conifers. However, for farm woodlands, we have decided to increase the grants only for broadleaf trees. We hope that that change will ensure an adequate proportion of broadleaf planting under the scheme, especially as the new higher rates will apply to pure broadleaf planting and the broadleaved component of mixed woodland. We felt that that was a better way of encouraging more broadleaf planting than the introduction of compulsory minimum
    1110
    proportions of broadleaves, as favoured by some. That would have been administratively cumbersome and too inflexible, given that the appropriate mix of species will vary from area to area.
    The Committee also took the opportunity during discussion of clause 1 to discuss the closely related capital grants for diversification, which we introduced on 1 January this year, and the way in which the scheme relates to the planning process. We made it clear in those discussions that we shall not be paying any capital grant on work that has not secured any necessary planning consent. So the new scheme is not in any way designed to circumvent the normal planning process.
    In the case of the new grants for feasibility studies and for marketing costs which the Bill introduces, the need for planning permission will not, of course, normally arise, so the arrangements will be different. We are, however, conscious of the need to help farmers to become aware of when they need planning permission and of the need to encourage them to discuss relevant proposals with the local planning authority at an early stage. That can often be helpful in securing planning consent.
    Replying to the previous debate, my right hon. Friend the Minister of State spoke about the relationship between farmers and planning authorities now that we are encouraging more actively farming diversification to alternative businesses. I am well aware of the concern among farmers about the attitudes of planning authorities. As my right hon. Friend said, it is equally important that farmers should become knowledgeable about how to approach planning authorities about their developments, and we are currently thinking about how we can assist on that.
    The Bill has been widely welcomed and forms part of our coherent strategy for farm diversification and the rural areas. It is desirable for the Bill to be passed as quickly as possible so that we can move to the next stages and introduce the schemes that are involved.
    10.5 pm
    Mr. Richard Livsey: My hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) cannot speak in the debate because he chaired the Standing Committee—with distinction, I understand. I was not a member of the Committee but I have taken a close interest in it. The Bill must be seen in the overal context of the Minister's policy. It is clearly part of the common agricultural policy as it applies to Britain.
    The Minister earlier spoke about price restraint, stabilisers and set-aside. I shall not go into detail about that. He spoke about taking land out of production and into woodland. I gather that overall, 12,000 hectares of woodland per annum is the planting target. One hopes that there will be a proper balance—indeed, the Bill makes some effort to achieve it—between broadleaf trees and conifers. We are also dealing with diversification and rural development.
    One of the critiques that one can make of Government policy as seen in the Bill is, can it be measured against declining farm income? We have heard that farm income dropped in real terms by 9 per cent. per annum throughout most of the 1980s. We also heard that 37 per cent. of farmers have incomes of less than £5,000 per annum. I should like to look at that against the Minister's policy on prices, and the reduction in output that will result from the

    1111
    imposition of the policy of putting more land into woodlands and against the Government's other policy, which is not in the Bill but is connected with set-aside. When one looks at those policies one cannot be over-optimistic about the effect on farm incomes.
    If, by one way or another, land is taken out of production, output will go down and the profit from farming will he reduced. Another part of the Minister's policy is that farm prices will be held. That will also lead to a reduction in profits if, at the same time, the input prices that farmers have to pay continue to rise. The overall equation does not make economic sense, especially on family farms.
    The Minister said that environmental grants in 1983 were 4 per cent. of total grants and that in 1987 they were 40 per cent. of the total. He failed to say that between 1983 and 1987 total grants dropped from £216 million to £95·7 million. It is easy to make up statistics in an honest endeavour to prove the case, but 4 per cent. of £216 million compared with 40 per cent. of £95·7 million represents a reduction in support of £121 million over a four-year period. That needs to be put in perspective.
    From my research of the Committee proceedings, I see that there is an allocation of £1 million for diversification and a forecast for the farm woodland scheme of £10 million, plus capital grants of £3 million. That adds up to £14 million and must be set against the loss of £121 million over the past four years. There is a problem because there is less land in production and there are lower prices and rising costs. It is not surprising that farmers find that their margins are reducing substantially.
    I welcome the proposals for diversification and the increase in woodlands, but I counsel the Minister that this long-term policy requires time. I refer him to an article in today's Western Mail which states:
    "Robin and Jo Ransome have a 30-acre holding, Grieg Cottage Farm, near Grosmont, in Gwent, where they run a flock of 100 milking ewes."
    Clearly, those people have gone into diversification. The article continues:
    "The milk produced by the flock is processed on the farm to make `Skirrid' cheese. Whilst at agricultural college, Jo did a business management exercise on setting up a milking sheep unit. She interpreted the available data pessimistically but still came up with a viable proposition."
    It is a viable proposition, but I know from personal experience that it has taken five years to get it off the ground. I was the lecturer who supervised that project at the Welsh agricultural college. I plead with the Minister to note that diversification takes time, and investment should be made over a period so that farmers can develop their business.
    New clause 1 has excellent objectives—
    Mr. Speaker: Order. No amendments were selected.
    Mr. Livsey: I understand that, in Committee, a discussion took place about low-input farming.
    Mr. Anthony Steen: How does the hon. Gentleman know that?
    Mr. Livsey: I know that because I read a chunk of the Committee proceedings.
    There is a case for low-input farming, but I wish to caution the House about that. It is an attractive ecological policy to farm all the land, rather than taking some of it out of production, but the margins on low-input farming
    1112
    are unknown and uncertain. I ask the Minister to consider the possibility of putting his experimental husbandry farms to work in diversification.
    Mr. Speaker: Order. The hon. Gentleman must relate his remarks to what is in the Bill, rather than what might have been in the Bill.
    Mr. Livsey: Diversification could be tested on the test bench of the experimental husbandry farms to find out whether adequate net incomes could be obtained from farmers with diversified farm enterprises. Much work is needed before we can go headlong into great changes of policy. However desirable, they are theories and need to be put into test bench practice before they can be brought to a conclusion.
    In rural development, there is no question but that the work of the Development Commission and the Council for Small Industries in Rural Areas has been good. I understand that the two bodies are to be amalgamated under the Bill, and that is an interesting development because COSIRA has a good record in assisting small businesses and jobs in the countryside. The Bill must bring about a sustainable agriculture with adequate farm incomes, a countryside that appeals and remains ecologically and environmentally balanced, and a rural population that lives on more than a poverty wage, with a diversity of occupations.
    Those objectives are hard to achieve, but they should be aimed at, and the Bill is a start on that route. I encourage the Minister to go much further, because the money that is on the table is not adequate to replace some of the land that has been lost from agricultural production. More money is needed to ensure that these farm businesses survive.
    10.15 pm
    Mr. Quentin Davies: I welcome the Bill, but it is in the nature of a minor palliative for the debilitating disease from which British agriculture is suffering. It is rather like treating a case of serious typhus or yellow fever with an aspirin. It may be welcome to the patient, but it does not go far enough.
    There must be a general realisation, after our earlier debate, that agriculture is in a serious position. The general public still do not have the faintest notion of the seriousness of the problems. I can give two cases from my constituency to support much of what has been said in the Chamber today. Last weekend, I was speaking to someone who is greatly respected as a conscientious and efficient farmer in the Fens. He has been farming since 1943 and he tells me that this year, for the first time, he will be making a loss. I was also speaking to the senior partner of one of the biggest firms of chartered accountants in south Lincolnshire, most of whose clients are in agriculture, and he told me that not one would be reporting a profit this year. That is in Lincolnshire, an area which until now has been associated with prosperous agriculture.
    Of all the grievous burdens that British farmers face, the most grievous and the most easily avoidable is that created by the completely bogus system of currency rates, the so-called green exchange rates. There is no reason, either in equity or in economics, why exactly the same exchange rate should not he applied to agricultural commodities as is applied to all other goods and services.

    1113
    Would it not be regarded by the House as a monstrous national scandal if it were suggested that German cars, washing machines or schnapps should benefit from a 12·5 per cent. export subsidy and British motor cars should suffer a 12 per cent. levy?
    Mr. Speaker: Order. Will the hon. Gentleman please return to the subject of the Bill?
    Mr. Davies: I hope that I did not stray too far out of order. The subject that we are discussing forms part of a complex structure with the rest of today's proceedings and the reason is simple. It is that the object of the Bill is to address a fundamental problem, which has already been referred to by the hon. Member for Brecon and Radnor (Mr. Livsey)—the future of agriculture and the livelihood of the people who work in it. I have been much impressed by the energy and determination with which my two right hon. Friends have defended our agricultural interests in the Council of Ministers.
    Dr. David Clark: On a point of order, Mr. Speaker. My understanding is that we are debating the Farm Land and Rural Development Bill. The House has strict procedures and I was wondering whether the Orders of the Day had been changed.
    Mr. Speaker: Certainly not. The hon. Member for Stamford and Spalding (Mr. Davies) must relate his remarks to the Bill.
    Mr. Davies: I trust that it will be in order, Mr. Speaker, to say that while I greatly welcome the Bill and the effort which the Government have put into it, I hope that that effort is not by one iota at the expense of the energy and determination that my right hon. Friend the Minister will continue to display in Brussels, in endeavouring to abolish green rates of exchange.
    10.20 pm
    Mr. D. N. Campbell-Savours: I was not a member of the Standing Committee on the Bill, but I understand that the debates which took place there were both informed and constructive.
    I come to this debate armed with words of wisdom from a member of the Royal Society for the Protection of Birds, which is most concerned about one aspect. That society approached me as a member of the Public Accounts Committee to point out that some £6 million will be allocated over the next three years to a particular area of expenditure under the farm woodlands scheme.
    My understanding of that scheme is that it is intended to bring about a major change in land use in the United Kingdom by the conversion of 12,000 hectares of land each year for the next three years. Although that is only a modest measure, it represents an increase of more than 50 per cent. in the current rate of woodland planting in the United Kingdom, which is 23,500 hectares a year.
    The Bill makes no provision for monitoring the impact of the scheme on the environment or the extent to which it meets the objectives of directing land away from agricultural production and assisting in reducing surpluses. There is no provision either for monitoring the enhancement of the landscape and the creation of new wildlife habitats, or the contribution made to the rural economy and to the nation's timber needs.
    1114
    How will the Minister know whether the scheme has helped to reduce agricultural surpluses? How will he be able to measure that if he does not check the output from farmers who enter the scheme, or even make a sample check that could be subject to some form of multiplier with a view to making a national assessment? How will the Minister know that a farmer has not turned over to agriculture a spare piece of land which may be of high interest in terms of its wildlife? Such action by irresponsible landowners could negate the objective of the scheme.
    Mr. Barry Mayes of the Royal Society for the Protection of Birds, who so competently briefed me on these matters, wishes to know, on behalf of his organisation, how the Minister can satisfy himself that the objective of achieving one third broadleaves has been met if the scheme is not monitored.
    Mr. Steen: The hon. Member for Workington (Mr. Campbell-Savours) has raised an important point. Like him, I am a keen enthusiast of the Royal Society for the Protection of Birds. However, is the hon. Gentleman not concerned that if farmers grow trees, which is commendable and would have his support, they may be tempted to destroy the habitat for wildlife and birds that currently exists there, in order to make good the crop output which they lost? That is one of the worries. If I can catch your eye later, Mr. Speaker, I hope to extend that point—but is it not one of the hon. Gentleman's concerns?
    Mr. Campbell-Savours: The hon. Gentleman makes a good point, of which I am sure the Minister is aware. We all know that some farmers will try to compensate for that loss of production by utilising land that currently might form a habitat for wildlife, and that is worthy of concern. What I want to know—as does the RSPB—is how those habitats will be protected from the greedy farmer who wants to compensate for loss of income.
    Mr. William Ross: The hon. Gentleman has just referred to the "greedy farmer who wants to compensate for loss of income". Surely anyone whose income falls tries to increase it to its former level to maintain his standard of living and that of his family. Why should farmers be called greedy for trying to do what everyone else tries to do?
    Mr. Campbell-Savours: If the hon. Gentleman had been listening to what I was saying, he would realise that I was referring to the "greedy farmer" in the context of his making use of a specific loophole. If he did not do so, I would not wish to describe him as greedy. I am sure that the hon. Gentleman would accept that if a farmer used the scheme to compensate himself for money that he might have lost, that would be a greedy move. No doubt he would not wish to condone it, and nor would the hon. Member for South Hams (Mr. Steen). I am sure that the Minister will wish to assure the House that he will not condone it either, and will introduce monitoring arrangements to ensure that it does not happen.
    Can the Minister satisfy himself and Parliament that taxpayers' money—potentially £2 million a year—is being spent effectively? How can he modify the rate of grant under clause 2(3) if he is unable to measure how effectively grants are being put to use? On behalf of the RSPB, I suggest that, as a compromise, a review is conducted of perhaps 10 per cent. of the participants in each region.

    1115
    That would keep the administrative burden and the cost to the state to a minimum, while providing an indicative measure of cost-effectiveness and of the extent to which the objectives of the scheme are being met.
    I put that proposition as a member of the Public Accounts Committee. I remember many occasions on which the Government have introduced schemes and we have ended up evaluating the effective use of taxpayers' money. We have often found that the money has not been used properly, in that it has not met the objectives of Government. The Minister may wish to intervene to reassure me. I believe that he should consider the possibility of a Public Accounts Committee inquiry. However, if he were to give the assurances that the RSPB and I, along with other hon. Members, are seeking, that inquiry could possibly be avoided.
    The Minister of State referred earlier to the groundnuts scheme. We might have a minor "groundnuts scheme" if all this went wrong. The Minister may refer with glee to the famous groundnuts scheme, but he would do well to recall that the losses on Nimrod and on Britain's torpedo programme—losses incurred under the present Government—far outstrip in real terms anything lost by a Labour Administration during that groundnuts affair.
    10.27 pm
    Mr. Christopher Gill: The Bill has been described as a modest little Bill. However modest it may be, I welcome it: indeed, I welcome any initiative that encourages woodlands. I am sure that it is right to encourage broadleaf woodlands particularly, and right also to encourage those who are prepared to plant them and to make an inevitably long-term investment that has little or no prospect of short-term gain. If previous generations had not taken that broader view, where would all the beautiful Shropshire oak that adorns the Chamber have come from?
    Farm woodlands make sense on four counts: economic, ecological, practical and environmental. Economically, it must surely make sense to try to replace 90 per cent. of our timber imports with our own production. Quite apart from the benefit that that would confer on our balance of payments, it would create employment. Environmentally, trees are an important part of the countryside and they certainly improve any landscape. Practically, we can grow trees in this country. The climate is not unfavourable and farmers have the ability and knowledge to plant and care for trees. Ecologically, at a time when the world is seeing the destruction of the rain forests, it must make sense to plant trees, on however modest a scale. Timber is the only replaceable fossil fuel.
    While congratulating my right hon. Friend the Minister on the Bill, I should like to put the proposed measures in perspective. It would be wrong to believe that this is more than a small step forward. It would be wrong and dangerous for Parliament to suggest to the nation that it is anything more than a small step forward.
    In my county of Shropshire, which is a reasonably green and pleasant land, woodland occupies only 7 per cent. of the total land area. That is 7 per cent. after considerable arboreal activity in the years since the war. In fact it represents only a mere 0·5 per cent. increase in the 40 years since the war.
    In the context of agricultural surpluses, estimates of the land that we need to take out of production vary according
    1116
    to which expert one consults: some say as little as 5 per cent. and some say as much as 20 per cent. If we accept the smaller of the figures, we are talking about taking out of agriculture the equivalent of what is currently planted with trees in the British countryside.
    The purpose of my remarks is not in any way to denigrate the efforts of my right hon. Friend the Minister. Indeed, all concerned—the farmers, the public and my right hon. and hon. Friends—recognize—
    Mr. William Cash: Will my hon. Friend give way?
    Mr. Gill: I will give way to a neighbour.
    Mr. Cash: I am a constituent of my hon. Friend and I thought that it would be appropriate for me to say how much I agree with everything that he has said. I am not only a constituent but a neighbour, and my hon. Friend has touched on a point that is of great interest to his other constituents in Shropshire and to my constituents in Staffordshire. I endorse everything that he has said.
    Mr. Gill: That was a generous intervention and it was much appreciated, even though my hon. Friend interrupted me in mid-flow when I was trying to pay tribute to my right hon. Friend the Minister for his efforts. Hon. Members recognise and respect him as a sincere and concerned man who is doing what he can under extremely difficult circumstances. I should not like my right hon. Friend to interpret my remarks in any way as critical of his efforts. The purpose of my remarks is to put those efforts into perspective. However, the scale of the problem defies any one man's efforts. Indeed, it defies the best endeavours of this nation and all other nations. But, Minister, every little helps.
    10.33 pm
    Mr. William Ross: There is much in the Bill that I welcome and much that will be welcomed in Northern Ireland. However, Madam Deputy Speaker, you will not be surprised to hear that I begin with the same little quibble, to put it mildly, that we always have. When I turn to page five, line 10 I see that
    "Sections 1 to 3 above do not extend to Northern Ireland".
    There is a little more above that, which is the usual junk that we see in Bills. It says that there will be
    "An Order in Council under paragraph I (1)(b) of Schedule 1 to the Northern Ireland Act 1974".
    All the same old nonsense that we see time and again appears in the Bill.
    My hon. Friend the Member for Antrim, South (Mr. Forsythe) would have been carrying out this task tonight, had it not been for a family death. He raised that point in Committee and said that there is no good reason why he Bill, and so many others, should not be extended to Northern Ireland. Then we would not have to go through all the other nonsense of introducing something similar for Northern Ireland when we are not offered any possibility of real debate and certainly no possibility of amendment. The introduction of something similar for Northern Ireland may be during the next few weeks or perhaps as far away as two years. However, I do not think that it will be as long as that in this case.
    It is that point about Northern Ireland which concerns me, my party and those whom I represent. I wish that the Government would get away from it and start treating Northern Ireland as if it really was part of this kingdom,

    1117
    rather than something that some of them appear to wish to push away, off into the blue yonder. Northern Ireland is not going to go away; it will be part of the United Kingdom for a very long time. Since I came to this place 14 years ago, I have existed in that limbo. I liked it little then and I like it less now. The sooner that we are done with that nonsense, the better for all concerned.
    When I was here in 1974, the House was full of sound and fury and weeping and wailing about a universal food shortage. We are now bemoaning a massive surplus across the world. When one reads the papers and sees the horrifying pictures of famine in some lands, one sometimes wonders where the surpluses are, although one can understand the difficulties of dealing with localised famine in the world.
    How have we gone from one extreme to the other in those 14 years? I recall that in my first speech on agriculture all those years ago I asked what we would do when European production created surpluses. Some hon. Members giggled, but the Government of the day did not giggle as loudly as the rest. They clearly saw it coming.
    We are in this difficult situation today because agriculture has existed in highly artificial market conditions for the past 50 years. Those artificial conditions have caused many of the difficulties that we now face. Our problems will remain. I cannot envisage those artificial market conditions—either the former or the present measures of support—disappearing. They will stay with us for many a long day, and we must live with them. We must accept the restrictions that they place on us, but we hope to see the day when agriculture can stand on its own two feet.
    The Bill deals not only with woodlands but with grant-aided ancillary farm business activities. Just to lift the Minister's heart, let me tell him of a wonderful story that appeared in the Belfast Telegraph on Good Friday this year about a new farm industry in Ballymena in Northern Ireland. A farmer there had started a brand new farm industry. He was producing donkey's cheese for sale. Those who care to look up the date of Good Friday will realise that we were being had. I am afraid that that particular bird never flew very far. I see one or two hon. Members having a look at their diaries. For the benefit of those who cannot remember, Good Friday fell on 1 April. I confess that I thought that that was a wonderful story and showed a great deal of initiative on the paper's part. Sadly, the donkey's cheese is still in the making, and will remain in the making for many a day.
    Earlier today, the Minister spoke of people with small farms going out of agriculture. He implied that that would reduce production. Shortly afterwards, the Liberal spokesman, who will forgive me if I do not try to pronounce his constituency—I am not sure that he would do all that well with some of our Irish place names—drew attention to the fact that he was a small poor hill farmer from Wales who did not apparently earn much money out of his farm. That is precisely the position in most of Europe, which is full of small part-time farmers like the hon. Gentleman, who has taken on another part-time job in the House.
    We shall continue to have in much of continental Europe people who are not really dependent on farming
    1118
    nevertheless farming at a fairly high level of efficiency and producing an enormous amount of food. I do not believe the happy story that the small farmer on the continent will disappear, thereby reducing total food production. People will remain, because they like living that way.
    The Minister said that we had to keep up with modern farming methods. I got the impression that, if we did not, farming would quickly be in serious trouble. Over the past 40 or 50 years, we have been engaged in steadily reducing the number of human hands in farming, increasing the number of machines, improving our methods and increasing production as a result. Every time we moved another step down the road of more machines and fewer people, we took another step towards our present surpluses.
    There is a limit to how much one pair of hands can do, how many sheep and cattle they can look after. Every stockman in the House knows what I mean. A farmer needs to look at the animals every day and to look after the machinery, crops, hedges, ditches and fences to ensure that everything is in proper shape for farming.
    If we continue taking land out of production and pursue farm diversification and ancillary farm businesses, inevitably, regardless of set-aside, there will be a transfer of food production from the marginal worse land to the better land. That will follow as surely as day follows night. The smaller farmer in the hills will suffer. The squeeze will be slow, but steady, and continued.
    We face the problem with which the United States, Australia, Canada, New Zealand, Argentina and many other countries have had to live throughout their existence —the ability to produce far more food than our people can consume. We are going down the same road that the United States went down, of trying to reduce food production to provide a reasonable standard of living on farms or farming enterprises.
    Whenever I come to the House, I drive over Glenshane pass, which is not far from where I live. I always look out across the river Roe and I see a large chunk of the hill which, a few years ago, was heather but which was dug up at great public expense. It is one of the areas in the United Kingdom which was dug up and sown with grass to increase hill production. One wonders now how wise that expenditure was. Although it was useful to the farmer concerned and allowed him to remain in business and to look after his family for a few more years—it is not quite the loophole to which reference has been made—in the long run it will be money lost. Sadly, a good proportion of the farming community will come under increasing financial pressure. Over a long period, it will mean that fewer people will live on the land.
    A new clause was tabled but not selected, which was a pity. If we had considered it, we would have started to discuss the nitty-gritty of what the Bill says to the farming community. The Bill is an admission that, for many farmers in a large part of the United Kingdom, farming no longer provides a satisfactory standard of living. There are transitional movements to keep people on the land.
    To some extent, the Bill is a bit of social engineering. It is an attempt to keep a living viable community in the rural areas. We would be far more honest if we spelt out our long-term regional objectives to the farmers, but I fear that, as usual, they will never be told how much or what food they will be expected to produce. We shall continue down that road and cause more problems than ever before.

    Farmland and Rural Development Bill [Lords]
    10.44 pm
    Mr. Anthony Steen: I had the great fortune and privilege to be a member of the Standing Committee which considered the Bill, and I pay tribute to my right hon. Friend the Minister of State for the skill, ingenuity, courtesy and kindness with which he steered the Bill through, and for his grasp of the subject, which all my hon. Friends will appreciate.
    It would he unfortunate if I rehearsed at this late hour all the arguments that were put forward by hon. Members on both sides of the House, because my right hon. Friend will have taken them all on board and looked at the sense of them, but I want to raise one point. The Bill is about land use. It is a modest proposal—not something to get excited about or to make long speeches about. It will make only a tiny difference to the general farming pattern in Britain.
    However, the Bill is a major step in a change of attitude which the Government are courageously formulating. The farmer must now find alternative sources of income from other uses of his land with which to supplement his income for which, in the past, he depended on the Government. He must now go to the private market and find a new source of income for the land for which the Government previously paid him. That is the critical point of the Bill. It is trying to encourage the farmer to find a new vehicle for exploiting his innovatory talents so that he can find a new way of generating income. I do not know whether my right hon. Friend considers that to be a fair synopsis of what he is trying to do.
    The alternative land use that the Bill will develop will reduce food production only a little. However, the hon. Member for Workington (Mr. Campbell-Savours) raised a real point, although he may not have put it in quite the modest and courteous way that he usually does, when he suggested that farmers were greedy. That may have been a slip of the tongue, but it did suggest something a little more sinister. The farmers are not greedy; they are desperately trying to make good a falling income. But as a result of that they may be tempted to make use of land which in the past has been scrubland and an important habitat for wildlife which they have not previously thought of using, but which, in view of the new pressure on them to make good a falling income, they may feel forced to use.
    In that context, let me mention that in my constituency there is a dying race of bird called the cirl bunting. There are only 80 pairs left in Great Britain. I am sure that many hon. Members have spent many hours in South Hams looking for the cirl bunting. The Royal Society for the Protection of Birds arranged for me on Sunday morning a few weeks ago to spy out the land on and around East Prawle and East Portlemouth and spot the cirl bunting. This may not be the right time to describe the beauties of the bird, but the point is that the cirl bunting needs the coastal scrubland which is peculiar to South Hams.
    The farmer in this area could be tempted to apply for a grant to plant trees on his land. In that event, he might also be tempted to say, "I am losing good acres on which I have produced food. I will plough up this scrub land." As that land is important for the survival of the bird it could mean the destruction of another rare species in Britain.
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    Not all hon. Members will agree that preserving the cirl bunting is of great importance, but the point I have made is indicative of the dangers that are inherent in the Bill. I hope the Minister, if he does not mention the cirl bunting by name, will refer to the problem that was raised eloquently, if unfortunately in some respects, by the hon. Member for Workington.
    Mr. Roger Knapman: I too enjoyed serving on the Standing Committee. Does my hon. Friend think it possible that cirl buntings are down to the last 80 pairs because they do not have enough trees in which to nest?
    Mr. Steen: They do not nest in trees.
    My fear is that farmers may take advantage of the Bill to grow trees. The Government's whole land use policy may also encourage farmers to make good the shortfall in their incomes not only by laying down the 20,000 golf courses which land owners have said would solve our agricultural problems, but will go in for housing. There is a great threat to the countryside in the south of England by ever more houses being built on the green belt and on green field sites, and I understand that my hon. Friend the Member for Orpington (Mr. Stanbrook) will raise that issue on the Adjournment.
    I fear that farmers who cannot produce food on their land and who are desperate to achieve alternative land use will be obliged, if they can do so, to sell land for house building. Not only will that destroy the agricultural potential of that land, but it will destroy wild life and habitat.
    I feel sure that the Minister, in his broad compass approach to these matters, will deal with the problem of the urban sprawl of housing in the south and the dangers of the Bill becoming a vehicle for the exploitation of farm land for purposes other than agriculture.
    10.53 pm
    Mr. Tony Speller: The hon. Member for Londonderry, East (Mr. Ross) was right to choose reality as his text, because the Bill provides vast enabling powers to the Minister, should he wish to use them, and should the Treasury agree to their use. On that basis—not that it is the only one—the measure is to be welcomed.
    The Bill does not refer only to afforestation, but as we import over 90 per cent. of the timber used in Britain, afforestation is a sensible course to pursue. Apart from that—and whether or not the cirl bunting of South Hams is helped to multiply—it gives us a chance to save and promote agriculture and rural England for those who should live there.
    It is no secret that every agricultural area or village is, in effect, its own minor green belt in which live excellent people who have retired from the cities, but who were not originally rural residents. While my hon. Friend the Member for South Hams (Mr. Steen) seems to be strongly against the provision of more houses, he should be aware that in the adjacent constituency of Devon, North we want many more houses for our young people, who at present cannot afford the few houses that are being provided.
    I welcome the Bill, because it is sensible and logical, but it is only fair to say that in its totality it bears upon the whole future of agriculture, if there is to be a future. We can destroy agriculture, as indeed this nation has

    1121
    destroyed other industries—for example, shipbuilding, steel and others—whether wilfully or otherwise. It is easy to lose industries in the name of efficiency.
    Hon. Members have mentioned scrubland. Many of my constituents work incredibly hard to make upland scrubland productive. It is an unwise world that says, "Let the farmer go; let the scrubland stay," because sooner or later we will need the food that that scrubland can provide. It would be an unwise Administration, which this is not, or unwise Members of this House, which we are not, who would allow us to destroy our agricultural existence for the benefit of some largely plasticised green belt, which, if we are not careful, will spread across the country. We can buy cheap food at the moment, but the moment that we cannot provide food for ourselves will be the moment when the prices will go up. The Bill is welcome, not just for the afforestation provisions, but for the other things that it will allow.
    In the county of Devon, about 5 per cent. fewer people will be working the land 12 months from now. If that continues, we will not have a rural population to talk about developing or assisting. We will have a selection of retirement homes dotted round a countryside that we have deliberately denuded in our folly. The golf courses may come—I welcome golf courses. But, more than that, I welcome the Bill because without the rural development that it can help to bring we will not have the people in the village or in the small town to retain the school, the church, the doctor, the health centre, the scout troop, the guide troop and all the things that make the countryside far more worth living in than the town for people like myself. That is not to be unkind to the town, but, it is illogical if everyone says, "Infill the town," when what they are actually saying is, "Neglect the countryside."
    I give my full support to the Bill. It could turn out to be a more major measure than most of us believe. It is important not to destroy the countryside in the name of some form of conservation, which may mean buntings for all but houses for none.
    10.58 pm
    Sir John Farr: I support the Bill as far as it goes.
    It was said by some hon. Members in Committee, and it was repeated during the debate on agriculture earlier this evening, that some local authorities have an oppressive attitude towards any change in farming activities. My right hon. Friend the Secretary of State for the Environment has sent a succession of circulars to local authorities suggesting, for example, a modest change from farm activity to perhaps camping or riding. These suggestions have been resisted by local authorities. My right hon. Friend should remember that local authorities must be brushed up on change and be reminded of their obligations, or they will restrict farming—as many of them do—with the same old restricted planning pattern that they have used for old and out-of-date farm buildings.
    Clause 2 deals with farm woodland schemes. Some people believe that the development—12,000 hectares, or 30,000 acres, a year, making a total of 100,000 acres over three years—is tiny. It is a step in the right direction, and I do not regard it as insignificant. The replanting of 100,000 acres over three years could make a great impact
    1122
    on the countryside. What I do not like about the Bill, and what I had hoped to mention tonight in debates on my amendments, which unfortunately were not selected—
    Mr. Hugo Summerson: Nor were mine.
    Sir John Farr: I share my hon. Friend's sorrow.
    My anxiety is that the farm woodland scheme is permanent. The trees will be there for ever. The scheme may be right—indeed, the Government are convinced that it is right. The trees will be there for our lifetime, and probably for our children's lifetime, especially if we plant the hardwoods that the Government are making financially advantageous. But is it the right thing to do now? Should we commit ourselves to taking out of agricultural production for ever 100,000 acres of land, whether it be good or bad quality, without considering alternatives, such as less input, less output?
    If there were a sudden need for increased agricultural production—perhaps because of a complete change in the political climate—we could not retrieve land planted with trees. But if land was on a low-intensity regime, output could be stepped up overnight and we could meet any critical demand that we cannot foresee now. I hope that there will never be such demand, but I had hoped that the Bill would give the Secretary of State power to include a modest de-intensification scheme.
    The hon. Member for Workington (Mr. Campbell-Savours) and other hon. Members asked about the monitoring of the complex requirement to plant 100,000 acres of land with trees. Does my right hon. Friend have any idea of how it will be checked? Although I do not expect that the average farmer or landowner would try to breach the regulations, if it is known that there will be no supervision of the system, that will encourage people who are in a bad way financially—many of my farming constituents have never been worse off—to bend the system. It is asking for trouble.
    The Bill could have been much improved. Sooner or later—I hope sooner—the Government will have to introduce a scheme of de-intensification. It has been demanded by hon. Members on both sides of the House, and I am sorry that my right hon. Friend did not see fit to include it in the Bill.
    11.2 pm
    Sir Richard Body: I agree wholeheartedly with everything that my hon. Friend the Member for Harborough (Sir J. Farr) said.
    When replying to this short debate, will my right hon. Friend the Minister give an assurance on how clause 2 will be used? We have lost many thousands of acres of moorlands. A quarter of the north Yorkshire moors have been ploughed up—much of it to produce surplus grain. We have lost hundreds of acres on Exmoor, and the same can be said of nearly all our moorlands. My right hon. Friend knows, too, that many recreations depend upon open countryside. Some time ago, in preparing a talk for a conference, I discovered 20 such recreations. I need hardly remind my right hon. Friend that those recreations are carried out by taxpayers, and our objective must be to reconcile the interests of taxpayers with those of farmers. We shall not achieve that objective if even more of our moorlands are lost to afforestation.

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    Perhaps my right hon. Friend will give an undertaking to the many people worried about the matter that clause 2 will not be used in a way that will result in the loss of even more of our moorlands.
    11.4 pm
    Mr. James Paice: I have already welcomed the Bill, but I am sure that my right hon. Friend the Minister will not take exception to my continued expressions of pleasure and welcome for it.
    It is right that we should go in this direction. As several hon. Members have said, the Bill opens the door to a new approach to supporting agriculture in its widest context, not merely as food production, which is how we have always thought of it, but as the husbandry and management of the land.
    I fully recognise the need to try out the schemes before they are let loose and expanded across the countryside. I accept what my right hon. Friend the Minister of State said when winding up the previous debate: it is necessary to prove the schemes. We must be able to do so.
    Hon. Members on both sides have mentioned monitoring. I want the scheme to work, and I believe that it will, but I want to be able to say in two years' time that it works because we have proved that it does. It is probably impossible to monitor it on every holding that goes into planting woodlands, but we should be able to do some sort of sampling to prove that there is a reduction in yield on the farms in question. If there is a proven reduction in output on those holdings, that justifies the scheme and will justify hon. Members in asking to double or treble its size in a couple of years. We can do that only if it has been proved to reduce surpluses.
    I am slightly concerned about the level of compensation for loss of income on the woodlands scheme. I realise that that is not cast in stone in the Bill, but income replacement must recognise the role of fixed costs on the farm. Merely converting 5, 10 or 20 per cent. of the land to tree planting does not reduce fixed costs in proportion. That is the opposite of economies of scale and we must all understand that.
    Unless the acreage payments during the growing period at least replace some of the fixed costs a greater burden will be placed on the remaining acreage. We have already heard that there is no way in which the remaining acreage can carry that extra burden. The upshot will be less interest in the scheme from farmers, because they will realise that the bottom line of their farm business will get worse, not better.
    I fully understand the impossibility of index-linking. That idea was proposed in the Standing Committee, on which I was pleased to serve. I also understand that my right hon. Friend has the Chief Secretary to the Treasury continually looking over his shoulder at every penny he spends. I hope that he will at least undertake to review the payments regularly to ensure that they are sufficient to encourage farmers to move into these schemes. Otherwise, a highly welcome and acceptable change in direction could be spoilt for that odd ha'p'orth of tar.
    11.4 pm
    Mr. Ron Davies: It has already been noted that the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) was not joining in the debate this evening because he chaired our proceedings in Committee.
    1124
    I put on record my appreciation of the work that he did as Chairman of the Committee. He brought to it a fairness and expertise that was appreciated by all.
    I also put on record the support that I received from my hon. Friends in Committee; several of them spoke in the debate tonight. This may be a rare occurrence, but I thank the Minister, too, and congratulate him on the approach he adopted in Committee. There was a bipartisan approach to the Bill and I am pleased to say that its progress was helped, if not accelerated, by the thoughtful and courteous way in which the Minister responded to the amendments that we tabled, many of which were probing amendments.
    In opening the debate the Minister said that during the proceedings an announcement was made after the Budget about the introduction of a new woodland grants scheme. He said that the scheme would replace the old arrangements because they were unsatisfactory and had led to a great deal of tax abuse. We certainly support the introduction of the new scheme and hope that it will remove the opportunity for abuse of the tax regime. However, the Minister's stated objective will not be achieved because, on the basis of figures provided by his Department, about 250,000 hectares of land were cleared for planting under the old regime and the tax concessions will last for the next five years. That fact should be set against the Government's much vaunted statement that they put and end to these abuses. It is unsatisfactory that these tax abuses will continue for another five years, and I hope that the Committee examining the Finance Bill will remedy that defect.
    We are not entirely happy with the new grants, although they are important in that they form the basis of the grants available under clause 2 of the Bill. Despite all the arguments and the protestations from the Government, the planting grants still favour coniferous afforestation. It was our view, and we thought that it was the Government's view following Government statements, that the planting of broadleaf trees should be encouraged. The new grants scheme and the new financial arrangements mean that continuous incentive is given to coniferous afforestation.
    The Minister has had one close look at the reports of our debates in Committee. I suggest that he has another close look, when he will see that the evidence that we received from, among others, the Oxford institute, showed that the balance was still in favour of coniferous afforestation. I think that at one point the Minister agreed with us about that. That is not a sour note, but it is a note of disagreement between us.
    We did not oppose the Bill on Second Reading and I like to think that in Committee we approached the Bill constructively. We offered amendments and views and hoped that the Minister would take note of them. He said that he would take notice of some of them. We have no intention of opposing the Bill on Third Reading, but I should like to reinforce a couple of points. This is an enabling Bill. We look forward to the secondary legislation which, I presume, will be introduced next month. I hope that the Minister's mind is still open and that perhaps we can persuade him on one or two points, as some hon. Members have attempted to do in the debate. He need not respond to my questions now, but perhaps he will see whether there is still room for manoeuvre in the statutory instrument.

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    The matter of consultation has been raised in the debate. My hon. Friend the Member for Workington (Mr. Campbell-Savours) was the first to raise it and he did so in response to a brief from the Royal Society for the Protection of Birds which, I am sure, assisted all Members in Committee. The hon. Member for South Hams (Mr. Steen) supported my hon. Friend the Member for Workington and spoke in particular about the cirl bunting. I was disappointed that he was not equally vociferous in Committee and did not use his vote there to support the cirl bunting as he used it to support it in this debate.
    While the hon. Gentleman was speaking I had a look at the Committee Hansard. On Third Reading the hon. Member for South Hams spoke for seven minutes, but during the whole of the Committee proceedings he managed only three interventions which between them made four paragraphs. On my calculation that is one and a half minutes. He also made three sedentary interventions. He voted against an amendment of ours that would have provided precisely the sort of protection that he argued for the cirl bunting, thereby denying the protection that he is now vociferous in advocating.
    I suggest to the hon. Member for South Hams that we have both learned something from the debate. I have learned not to rely on his vote following his voice in Committee, and he has learned that before he makes interventions on Third Reading he should check his actions in Committee to see whether he can justify his comments on Third Reading.
    The question of consultation has been raised. We are particularly concerned to ensure that there are safeguards for areas of high landscape or environmental value. Areas of outstanding natural beauty are excluded from the consultation arrangements. We do not wish to see coniferous afforestation in such areas unless there has been adequate consultation. If there has been consultation and it is proved that the afforestation is not damaging to the landscape, we have no objection, but there should be consultation in respect of such areas. Unfortunately, although the Bill provides for the Minister to undertake that consultation, it does not require him to undertake it and I hope that he will consider that point further, even at this late stage.
    The question of monitoring has been raised by the hon. Members for Harborough (Sir J. Farr) and for South Hams, by my hon. Friend the Member for Workington and by the hon. Member for Cambridgeshire, South-East (Mr. Paice), who frequently joins us in these agriculture debates. I hope that the Minister will consider the question of monitoring for the following reasons.
    First, if the Bill is to provide a scheme that will, of its nature, be experimental, there must be a measure of assessing that experiment. If it is a scheme on which there will be further developments, the effectiveness of the scheme must be properly evaluated.
    Secondly, the broadleaf percentage should be high and increasing. Unless there is a proper measure of assessment and monitoring, the Government will not know what factors control the broadleaf component, what the damage is or what the consequences are of the relative percentage between broadleaf and conifers. It would be useful for the House to know how the forestry industry and farmers are
    1126
    responding and whether they are planting broadleaf or coniferous woodlands. Without that measure, provided for in the Bill, we shall not have that information.
    Thirdly, the Minister said that the grant rates might change. Unless there is more monitoring and an understanding of the economy of the farms involved in the scheme, how will the Government know the relevance of grant rates? Will they be increased or reduced, or will the balance between broadleaf afforestation and coniferous afforestation be changed? For those reasons, the Minister should reconsider the question of monitoring. I do not expect him to answer those detailed points now, but I hope that he will consider them before bringing forward a statutory instrument.
    The hon. Member for South Hams raised the question of displacement. By displacement, we mean that a farmer might seek to afforest part of his holding but then replace that agricultural land by ploughing up an area that might be of the highest environmental value, although not in agricultural use. The hon. Gentleman described that as scrub land. We are concerned to prevent that. The Minister recently said:
    "If I could find a satisfactory way to tighten the system, I should implement it."—[Official Report, Standing Committee B, 29 March 1987; c. 125.]
    Has he found a satisfactory way? Can he now offer us some practical evidence that he intends to live up to his words?
    I understand that the Government will have a tight way of measuring and assessing the new set-aside proposals. If they can find a way of measuring set-aside, with all the hazards that that involves, I am sure that they can find an adequate way of assessing these proposals. The Government should do that to ensure a diminution in agricultural production and to provide the environmental protection that we are seeking.
    Fourthly, we must consider the question of planting rates. This was the subject of debate in Committee, and we argued that if the applicant for grant wished to plant at less than the normal density, full grant should nevertheless be paid. For example, some farmers would want to plant to the highest levels of coniferous or broadleaved, but at a lower density to ensure rides, because if they want to develop a pheasant shoot, a ride that has not been planted would be a requirement. We argued that if they set aside areas from within the total holding, and planted only 70 or 80 per cent. of it, because of the high fixed cost of, for example, fencing, the maximum grant of 100 per cent. should be paid. That would encourage lower density forestry rather than the higher density traditional forestry.
    The Minister did not give way on that in Committee, and said that the planting was primarily for timber production. In as much as the land cleared for planting exceeds by something like a factor of two the amount of land that the industry feels that it is necessary to afforest, we do not think that the argument about the primacy of timber production exists any longer. I ask the Minister to look at that again.
    Many areas of derelict woodland are not in timber production but have the highest environmental value and are a major component of the farm as an on-farm woodland, and at least some, if not the whole, of the financial provision should be made so that farmers can achieve proper control of woodland production in areas of

    1127
    neglected woodland. We were thinking in particular of the woodlands in the less-favoured areas, because they have particular financial problems.
    Those are some of our concerns. I hope that the Minister will at least listen to the representations which have been made by hon. Members on both sides of the House, and which are shared by people outside the House. I hope that he will be able to satisfy us a little more on these points when we debate the statutory instruments.
    11.21 pm
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): I thank the hon. Member for Caerphilly (Mr. Davies) both for the courtesy of his remarks, and for the conduct of the Opposition case in Committee. It was a happy and pleasant Committee, which did its job well, and that was not least because of the chairmanship of the hon. Member for Ceridigion and Pembroke. North (Mr. Howells). I am not sure whether he would have agreed with the hon. Member for Brecon and Radnor (Mr. Livsey) about the milking sheep unit that took five years to set up. I wonder whether that was because of, or in spite of, his help. He is right to suggest that there is no perfect answer to our problems, and the idea that, by some miracle, low income farming can provide an alternative, without considerable research, is mere idle speculation. It will provide some of the answers, but it cannot be seen as a panacea, and too many panaceas are presented by people who often know little about the practicalities of farming, although the hon. Gentleman is certainly not one of those.
    My hon. Friend the Member for Stamford and Spalding (Mr. Davies) congratulated my right hon. Friend the Minister and me on some of the stances that we have taken. In his close concern for the Bill, he reminded us of some of problems of agriculture with which the Bill does not attempt to deal. I have no doubt that other legislation will be introduced to solve the problems that he has raised, and on that occasion we can deal with the points that he made.
    The hon. Member for Workington (Mr. Campbell-Savours) spoke about monitoring, and I assure him that we shall monitor the scheme carefully, because every request for support will come to the Ministry, as well as to the Forestry Commission, and there will be occasions on which the Ministry will refuse, because the land is not suitable, or because the plan is thought not to be what we want, so the monitoring will start then.
    Secondly, we shall have to monitor a sufficient number to ensure that what has been claimed as the plan is the plan that is carried out, for people will, in some cases, be paid a different sum because of the nature of the trees that are planted. Obviously we shall have to monitor that aspect. We shall have to monitor also to see whether the planting meets the purposes for which it was undertaken.
    It is difficult to devise a monitoring system that will with absolute certainty link particular amounts of production from the total farm with the effect of a certain amount of afforestation of woodlands. For example, the woodlands might be started in a year in which farming activity was hit by very poor weather and production from the rest of the farm in that year was very low. If one monitored the situation three years later, one might find a considerable increase in production. However, that might have more to do with the weather than with the fact that perhaps a very
    1128
    small amount of land had been set aside for woodlands. It is not possible to make direct comparisons, but we shall certainly undertake direct monitoring of the kind for which the hon. Gentleman asks.
    I disagree with the hon. Gentleman in his concern that, because of the woodlands scheme, farmers are likely to be pressed into bringing into production areas of their farms which are not currently in production. If a farmer had such an area and was so pressed, he would be able to bring it into production whether or not there was a woodlands scheme. Indeed, in many ways he might be more likely to do so because he would not have the advantages that a woodlands scheme would give him to use for woodlands land that perhaps would not be suitable for cereal production.
    The hon. Gentleman applied himself to the real problem, to which I referred in Committee, that there are certain types of habitat and wild land in the ownership of farmers which we would much prefer not to be turned into productive agricultural land. Indeed, the changes made to grant structures over the past few years have been aimed at not helping farmers to do that. We have also implemented grant aid to help people return to having more hedges and trees, and the like.
    Hon. Gentlemen opposite have raised perfectly reasonable points, but I do not believe that the problems they mentioned are directly connected with the woodlands scheme. I do not see an easy way of stopping farmers from undertaking, at their own expense, that which most of us would prefer them not to undertake—except that there is a growing understanding of the damage that such action can cause not just to individual farmers but to the farming community as a whole—who know that its reputation can be very much affected by the actions of an individual.
    I hope that the Public Accounts Committee will not need to look unhappily upon the results of the scheme, for my right hon. Friend the Minister of Agriculture was himself once a Treasury Minister and he is more keen on monitoring even than the hon. Member for Workington. Were I to propose any scheme that was not properly financially controlled, my right hon. Friend would use his superior office and power to cut me down at once. I assure the hon. Gentleman that that is so.
    Mr. Campbell-Savours: When grant applications are made, will assurances be sought from farmers that certain land in their ownership might not have its use changed in the way that I suggested might be the case?
    Mr. Gummer: There is no such formal requirement in the Bill. However, our experience with the ESAs has shown that the people on the ground who are concerned with these matters are increasingly knowledgeable in conservation, so applications will be carefully considered. If circumstances arose in which we felt that an application was marred by other intentions, we would see to it that those other intentions were not carried out. I cannot make a formal commitment, but that is the spirit in which we are approaching the matter.
    My hon. Friend the Member for Ludlow (Mr. Gill) called this a modest Bill. In one sense, of course, it is.; no vast sums are available. In another sense, however, it is not. First, the British Government are entering into a very long-term commitment to enable people to grow trees. I follow the view of history given to us by the hon. Member for Londonderry, East (Mr. Ross). Even five years ago, I

    1129
    cannot imagine that people would have believed that the Treasury might consider such a long-term commitment reasonable. It is a major achievement. It has not happened in other countries, but it is happening in Britain, and it will make a considerable difference. We now have a different attitude to woodlands.
    The support for marketing and feasibility studies is a crucial part of helping farmers to develop that different attitude. It emerged in Committee—from hon. Members on both sides—that farmers are not natural foresters. It is quite difficult to change their approach so that they see trees as a crop, but the Bill makes a major move in that direction. The phrase "modest proposal" is perhaps better seen in the Swiftian context than in any modern one.
    The hon. Member for Londonderry, East gave us a salutary reminder of 14 years ago, when people feared a major worldwide food shortage and starvation because of the growth in the population. The Government are determined not to put land permanently out of agricultural use in a way that would endanger the future if the position changed dramatically. We must learn that we were wrong 10 or 14 years ago, when we thought that the world would be one of continuous shortage. We cannot be absolutely sure that our present best analysis—that it will be a world of surplus—will continue ultimately to be so. We must act on it, because it is the best that we have, but we can all produce scenarios in which it would not apply.
    For my hon. Friend the Member for South Hams (Mr. Steen), that is the protection against his fear that the land will be used for house building, concretisation and so forth. In that event, it would not be available for agriculture were circumstances to change. Woodlands, farm diversification, recreation and golf courses are sensible uses of the land because they enable the land to be used again for agriculture. In the end, the provision of food for our people must be the primary demand of any Government.
    Mr. Steen: Is my right hon. Friend saying that he will discourage the Department of the Environment from allowing widespread building on land in the south of England that is currently used for agriculture?
    Mr. Gummer: My hon. Friend must understand that the Department of the Environment needs no discouragement from me. The Department has made it absolutely clear that it intends to protect the green belt and look after the very interests that he mentions. I want to encourage the Department to do what it is doing now—to join me in trying to persuade planners to be a little more flexible, in areas where the pressure is not of that kind, towards farmers who want to diversify and provide jobs in country areas which are essential so that those areas do not become museums but remain work places
    That is the major importance of the Bill. We want a living countryside; we want a working countryside. We do not want a Marie Antoinette countryside. I agree with my hon. Friend the Member for Devon, North (Mr. Speller) about the need to ensure that planners take the problems seriously. I underline also what he has said about farmers looking after the land.
    I have sympathy with the belief of my hon. Friend the Member for Harborough (Sir J. Farr) that we should have the ability to de-intensify. I am sure that he will be
    1130
    comforted to know that if his amendments had been accepted and written into the Bill the Ministry would not have had powers additional to those that it already has. Under the European Communities' extensification plans, we would be able, by laying orders before the House, to do exactly what my hon. Friend wishes. I ask him to allow us to proceed in a way that makes sense. We are committed to present a system of set-aside and a system for the extensification of holdings. We must proceed in that way in accordance with the timetable that has been laid down by the Community, which is one that we would wish to follow.
    The set-aside will be established first, and that will be followed by an extensification scheme. Extensification is a more difficult task than the establishment of a set-aside scheme for it involves a form of monitoring that we have not yet crack painted. I think that my hon. Friend will agree that there is a real problem. How should we lay a reasonable system that will satisfy the Public Accounts Committee upon a scheme for extensification? It is difficult to determine the base line and thereby to demonstrate that there has been a real diminution in production in those terms. We have not yet produced the answer, but I hope that we shall be able to do so.
    Mr. William Ross: I apologise for intervening at such a late stage in the Minister's remarks. I wish him to appreciate that the planting of trees is a long-term project. If it is found after 14 or 15 years, for example, that the land is needed for other purposes, we shall not be justified in cutting down the trees at that stage. Furthermore, it will not be easy to bring the land back into production. It will be a costly business, however, to wait until the trees grow to maturity and then to bring the land back into production. For example, all the roots will have to be removed. If there is to be a land bank, as it were, and extensification, surely sheep grazing will be a more reasonable approach.
    Mr. Gummer: The hon. Gentleman is asking me to take an alternative course when I believe that we must take both approaches. As my hon. Friend the Member for Holland with Boston (Sir. R. Body) has said, we are talking of large areas and a wide range of considerations. There is no one answer, and woodland can be only one part of our approach. I have no doubt that other elements of it will be extensification, set-aside and diversification. There will be low-input farming and some organic farming. If we allow woodlands to be a part of our approach, that does not mean that we remove permanently the possibility of agriculture being introduced within that scheme. Of course, it would not be easy to return the land to agriculture directly. Indeed, it would not be possible to do so for some time.
    My hon. Friend the Member for Holland with Boston talked about moorland. We have framed the Bill extremely carefully and its provisions have been changed very much from the original proposals to try to meet the problems that my hon. Friend has in mind. That is why we have talked about improved grassland, although there is a restricted amount of land that can be used for that purpose. In considering grant aid for the planting of woodland, we would not agree to provide it if we considered that there were important environmental

    1131
    reasons against doing so. The arguments that my hon. Friend advanced are precisely those that we shall be taking into account.
    I am loth to give a guarantee that in no circumstances will there be a slip-up. I do not intend that moorland that should be an open area should be turned into woodland. That is not the purpose of the Bill, and I can assure my hon. Friend that we shall carefully keep in mind the responsibility that the Government placed with the Ministry of Agriculture, Fisheries and Food for the first time in history to take as one of its requirements environmental needs as well as direct agriculture needs and food production.
    My hon. Friend the Member for Cambridgeshire, South-East (Mr. Paice) pressed the point of monitoring. I hope that I have answered that. I understand his question on loss of income. We will be reviewing the payments. We made it quite clear that after three years we would do so. It will not be tied to the cost of living because that would be the wrong way of looking at it and I cannot guarantee that we would be increasing the figures. However, we shall certainly be reviewing the payments, as he asked.
    The hon. Member for Caerphilly (Mr. Davies) asked a range of questions. We intend to use the experience of the ESAs. He was gracious enough to say that experience had shown that his original fear, which was that the Ministry of Agriculture, Fisheries and Food was the wrong body to control the ESAs and that it should perhaps be done through a third party such as the Countryside Commission, was groundless. I hope that I can ask him to accept that his fears may be groundless in other areas. [Interruption.] I hope that time will tell and that in the future the hon. Gentleman will not be as unhappy as he is now. He will discover that, where there is any doubt or concern, we will take the necessary steps to consult people
    1132
    who can give us advice. We intend to be careful about conservation needs and to ensure that proper decisions are made. Those decisions will be taken particularly carefully when it comes to environmentally important areas.
    The hon. Gentleman's concerns on mixed planting and other matters are not well-founded. However, I shall look at them again, as he asked in the preparation of the statutory instruments.
    This Bill has been welcomed on both sides of the House. It is modest only in the sense that it is experimental and because we have restricted it by insisting on cash limitation, hectarage limitation and other things to ensure that we do not run before we can walk. However, it is not modest in that it makes a major change in the way in which the Government look at the countryside and the agricultural community. That change has been made necessary by current conditions and we have made the change before almost all our continental partners. In that we can honestly say that we are leading Europe to a better understanding of a proper partnership between the farmer and the conservationist.
    We believe that the farmer is the best conservationist of the countryside. To be that, he must, in a time of surplus, be helped because he will need to change not only his farming methods but his habits and the habits of his forefathers. He will have to see woodlands as a crop. He will have to look for methods of diversification. He will need to see new ways of using the land. All that demands of the farmer a considerable amount of change. The Bill, when it becomes an Act and when the statutory instruments are laid, will give him a chance to make that change more effectively.
    Question put and agreed to.
    Bill read the Third time, and passed, without amendment.

    Green Belt (Urban Development)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]
    11.43 pm
    Mr. Ivor Stanbrook: Mr. Deputy Speaker, with my agreement and that of my hon. Friend the Minister, my hon. Friends the Members for Beckenham (Sir P. Goodhart) and for Chislehurst (Mr. Sims) hope to catch your eye during the debate. I see also that my hon. Friend the Member for Sevenoaks (Mr. Wolfson), who I know is particularly interested in this subject, is present, as is my hon. Friend the Member for South Hams (Mr. Steen).
    The debate concerns the green belt and its necessary preservation. Fifty years ago, something happened which changed the lives and the environment of Londoners and provided us with a constant blessing. The London and Home Counties (Green Belt) Act 1938 was passed to protect and preserve the swathe of green land then surrounding London. From that time onwards, the urban sprawl was halted; the concrete jungle ceased to encroach on the English countryside. A simple proposition—a presumption against planning consent for urban and residential development—has sufficed to preserve London's green lungs for half a century.
    The green belt is not sacrosanct, and there have been exceptions to the general rule. Some development, consistent with the overall policy, has been allowed. There is scope for developments serving agricultural and recreational needs that retain the green fields and enable the city dweller more fully to enjoy his natural heritage.
    There is, however, constant pressure on local planning authorities in the south-east to make more land available for development and to meet the increasing demand for housing. The very attractiveness of areas such as my own, on the edge of the green belt, has increased the demand and forced up the value of existing sites or added to the pressure for infilling or backfilling, to the detriment of the local environment. Local authorities are continually urged by their residents to resist higher densities, and they try to do so, but they constantly lose cases on appeal to the Secretary of State who—all too often contrary to an approved local strategic development plan—allows higher densities and lower standards. If I have one criticism of my right hon. Friend it is that too often he appears to want to deregulate our planning controls. Deregulation is a good policy in certain fields of activity but it cannot and must not apply to planning law.
    If housing in established residential areas is growing increasingly more expensive, the landowner and farmer who owns land in the green belt on the fringe of London sees himself as living on a gold mine with nothing but the green belt policy separating him from a huge fortune. There is a lot of money to be made from getting planning consent for development in the green belt, but the public and the public interest demand that the policy be maintained.
    The green fields between urban London and the M25 motorway are precious to Londoners. They serve the ecological, social and economic needs of London and it would be an act of ministerial vandalism to destroy them by allowing them to be used for commercial or urban development. If the developers want to satisfy the
    1134
    increasing demand for housing and office premises, we should insist that they build in the existing urban areas and the inner city and not on green field sites.
    Mr. Anthony Steen: Is my hon. Friend aware that the land register already shows 100,000 acres of land in public ownership which is vacant, dormant, derelict or underutilised and which is still not being used for housebuilding? Although the Government are committed to getting rid of public vacant land, the speed at which they are doing so is such that it will not be until the year 2500 that the land will be properly used. Does my hon. Friend agree that public vacant land is one of the major problems that are causing developers to go into the green fields and into the green belt? They are not using the land that is going to waste.
    Mr. Stanbrook: That is an astonishing fact and I hope that the Government will turn potential developers' eyes towards land that is available to them and away from green field sites.
    In 1986 a farmer in my constituency who owns some 500 acres of good farming land abutting on the M25 joined forces with the Prudential corporation and put in an application for planning consent to develop his land on a scale that takes one's breath away. He proposes a huge shopping and commercial complex covering 1,700,000 sq ft of floor space with parking for 6,000 cars. The catchment area on which it will draw is expected to include places within 30 minutes' driving time, which would cover more than 2 million people. The effect would be to draw on people as far away from Orpington as Rochester, Maidstone, Tonbridge, Tunbridge Wells, Greenwich, Bexley and Lewisham.
    The effect on local shopping centres, trade, firms and businesses in my constituency and those of my hon. Friends in the London borough of Bromley would be devastating. The proposed floor space is one and a third times greater than the entire floor space of all the shopping facilities in Orpington. The traffic generation would be enormous. At peak times it would involve 30,000 to 60,000 movements in the Orpington area alone. With the addition of the service traffic required to supply such a massive development, the effect on the M25, which is already working to capacity, could be disastrous.
    The planning authority, the London borough of Bromley, refused the application. It said that development in the green belt was inappropriate, damaging to its character and likely to lead to dangerous traffic congestion. The site is in an area, on the escarpment of the north downs, of outstanding natural beauty. It is covered by public footpaths which I, my hon. Friend the Member for Chislehurst, Councillor Dennis Barkway, the leader of the council, and almost 4,000 local residents traversed on foot last Monday, a public holiday, in protest at the plan. The impact on local shopping areas would be annihilating. Worst of all, approval for such a scheme would drive a coach and horses through the green belt policy.
    The proposed developers have appealed. The hearing of the appeal will be on 21 June. Is it conceivable that such a scheme could be allowed to succeed? Do the Government contemplate abandoning the green belt policy? Surely not, and yet why should a huge multi-million pound corporation like the Prudential venture its capital and its reputation on a huge publicity campaign and immense legal costs if it did not expect to succeed?
    Mr. Mark Wolfson: My hon. Friend has made the point that, if permission were granted on appeal, it would drive a coach and horses through the present planning policy. Does he agree that we expect my hon. Friend the Minister to give a clear signal to the potential developers that this appeal is unlikely to succeed and that their efforts are wasted? I understand that the relevant Minister gave such a signal at an earlier stage.
    Mr. Stanbrook: I entirely agree with my hon. Friend. Why should we all go through the agony of doubt, fear and suspicion that the appeal might be allowed if there is no question of its being allowed? I realise that my hon. Friend the Minister will say that the Secretary of State will be called upon to act in a judicial capacity, so we cannot expect her to pronounce on the merits of the case. If so, there must be a better way of stopping the waste of public money and of satisfying the very strong feeling of outrage, than suffering a long drawn-out process extending over two years before we get a rejection of an application which should never have been made in the first place.
    I cannot contemplate the political consequences of the appeal being allowed. If it were allowed, the consequences for the Government would be devastating in the south-east. I hope that my hon. Friend the Minister will make it plain that the Government stand by the green belt policy and will not allow London's heritage to be sacrificed to private greed.
    Sir Philip Goodhart rose—
    Mr. Deputy Speaker (Mr. Harold Walker): Order. Does the hon. Member have the Minister's consent to intervene?
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Marion Roe)indicated assent
    Mr. Deputy Speaker: The hon. Member may proceed.
    11.53 pm
    Sir Philip Goodhart: I congratulate my hon. Friend the Member for Orpington (Mr. Stanbrook) on the eloquent but restrained fashion in which he put the case for the people of Bromley against the proposed development at Hewitts farm in the green belt. I must admit that I have received one letter in support of the scheme—it was sent by the planning consultants, representing the Prudential Assurance Company. But I have received scores of letters from individual constituents opposing the scheme. Virtually every residents' association in the area has told me that it considers the scheme to he an outrage.
    I realise that the Minister cannot pronounce on the merits of the case tonight, but I am encouraged by the fact that last year, in a restatement of Government policy, she said:
    "the Government have also made it clear that large retail stores simply do not belong in green belts. We have also made it clear that developers who pursue proposals for large scale retail developments in green belts to appeal and are unsuccessful may expect to have the costs of any inquiry awarded against them."—[Official Report, 24 July 1987; Vol. 120, c. 678.]
    That seems to be an excellent statement. I hope that my hon. Friend will say again tonight that costs can be awarded against the developer. I hope that she will go further in the next few months. At the moment it is far too easy for developers to appeal against a decision by a local planning committee. They might become more selective in their appeals if they knew that they invariably had to pay
    1136
    the costs of an appeal, whether successful or unsuccessful. Our only real defence against such incessant appeals is to make the appeal process more expensive for the developer.
    In this short but important debate we clearly cannot properly discuss the general issue of appeal costs, but I am confident that the Minister will be sympathetic if I write to her later.
    11.56 pm
    Mr. Roger Sims rose—
    Mr. Deputy Speaker: I take it that the hon. Gentleman has leave to intervene.
    Mr. Sims: I am grateful to my hon. Friend the Member for Orpington (Mr. Stanbrook) for allowing me to contribute to the debate. The site to which he has referred lies in his constituency, but the issue that we are discussing has far wider implications.
    The development proposed would affect many of the shopping centres within the borough. It would radically alter the entire rural environment in which my hon. Friend's constituents and mine live, and, of course, it would be completely contrary to the Government's green belt policy.
    In reply to a question on 19 November 1986, the then Minister, my hon. Friend the Member for Bristol, West (Mr. Waldegrave) said:
    "There is a general presumption against inappropriate development throughout the green belts".—[Official Report, 19 November 1986; Vol. 105, c. 242.]
    That policy was reiterated by my hon. Friend the Under-Secretary in a debate that I initiated in July 1937 and it has been spelt out subsequently in planning policy guideline documents issued at the beginning of this year. It was further confirmed in an exchange of correspondence which the Secretary of State had with my right hon. Friend the Member for Henley (Mr. Heseltine) as recently as March.
    If the Hewitts farm proposal were allowed it would be contrary to the wishes of the borough council, which has rejected it firmly; it would be contrary to the wishes of the people of the borough as represented by the 4,000 people who accompanied my hon. Friend and me and the leader of the council on our walk through the area that would be affected last Monday, and it would blow the Government's green belt policy to smithereens.
    If the proposal were allowed, how could my right hon. Friend the Secretary of State possibly resist similar applications all round London? The result would be that London would rapidly become built up from Trafalgar square in all directions to the M25.
    Yet we shall still be going through the procedure—a planning application is put in, it is rejected by the local authority, an appeal is lodged, a campaign is mounted, and there is a public inquiry accompanied by enormous anxiety at great expense. We have already spent 12 to 18 months on this issue. Why do we have to go through all this? My hon. Friend the Minister will tell us when she replies that the law requires that we should, just as she will tell us that because of the law she cannot comment on this case. That we understand, but the law does not have to require that we go through such a charade. We are in a position to alter the law. In the debate that I initiated on 24 July 1987, I urged the Government to take powers to

    1137
    designate certain parts of the green belt as inviolate for a period of years during which no planning applications would be entertained.
    My hon. Friend the Minister pleaded that there would be practical difficulties in so doing. I have to tell her that I am not persuaded by those arguments. Agreeable as it is to spend a couple of hours on a bank holiday morning in the company of my hon. Friend and the leader of the council, walking through a pleasant country area, it should not be necessary for us to do that as a means of persuading the Government to carry out their own policy. I invite my hon. Friend to look again at a way of avoiding all this cost and distress by adopting my suggestion.
    Meanwhile, the Hewitts farm proposal has provoked widespread reaction in the borough of Bromley, in the press, in correspondence, in speeches and in posters, some of it in language which I suspect would be ruled unparliamentary were I to repeat it.
    I invite the Minister to tell the Secretary of State that when the inspector's report on the inquiry into the Hewitts farm application arrives on his desk, he should respond to it with the two letter word "No."
    12.1 am
    The Parliamentary Under-Secretary of State for the Environment (Mrs. Marion Roe): I congratulate my hon. Friend the Member for Orpington (Mr. Stanbrook) on his speech and my hon. Friends the Members for Beckenham (Sir P. Goodhart), for South Hams (Mr. Steen) and for Sevenoaks (Mr. Wolfson) on their contributions. I know that their concerns about the pressures for development and the future of the green belt are shared by many hon. Members, so I welcome this opportunity to set out, once again, the Government's policy and position.
    The constituency of my hon. Friend the Member for Orpington includes substantial stretches of green belt land. Having been a councillor in Bromley for three years, I have personal knowledge and experience of the area and continue to take a close interest in it. I can therefore well appreciate the great value that my hon. Friends, their constituents and visitors place on the countryside in and around the area. I am, of course, also aware that it is the very quality of this countryside, together with the general prosperity and fine residential developments in the area, that make the area so attractive to residents and developers alike.
    I make no apologies for these intense pressures for development in my hon. Friends' constituencies and in other constituencies, particularly, but not exclusively, in the south-east. Those pressures are evidence of developers' increasing wish to invest in this country's new-found and continuing prosperity. Such investment is essential to sustain economic growth and to ensure the provision of jobs, houses, shops, leisure facilities and all the other services required by a growing population.
    However understandable these pressures for development may be, we would be foolish and shortsighted to respond to them solely with economic objectives in mind. Such an approach would rapidly become self-defeating. It would cause irreparable harm to the countryside that we value so much. The Government remain fully committed to protecting that countryside.
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    Our policy therefore is, as it always has been, to meet the needs of development, while protecting and enhancing the environment. This is the essential aim of the town and country planning system, which this year celebrates the 40th anniversary of its implementation. The planning system has served the country well and continues to do so. We intend to retain it, while continuing to refine it to improve its performance and efficiency.
    I accept that reconciling economic and environmental objectives is often a difficult task. It requires planning authorities, my Department's inspectors and the Secretary of State to reach judgments on finely balanced issues. My postbag shows that in planning it is impossible to reach decisions that please everyone, and I suspect many other hon. Members have similar experience.
    It is the purpose of the planning system to regulate the development and use of land in the public interest, not to protect the private interests of one person or group against the activities of another. The question that faces every planning decision-maker is how far a proposed development would affect the locality generally and whether it would affect unacceptably amenities that should be protected in the public interest. The countryside, and in particular the green belt, rank highly among such amenities.
    Normally, in the planning system, there is a presumption in favour of development unless it would cause demonstrable harm to interests of acknowledged importance. That is not the case in the green belt, however, where there is an explicit presumption against development except for a limited range of uses.
    My hon. Friend the Member for Chislehurst (Mr. Sims) suggested that we might go even further and declare parts of the green belt prohibited areas for all planning applications and development. This is an interesting idea, but it would not achieve its objective. Apart from the fundamental questions that the suggestion raises about the basic principles of the planning system, the practical difficulties of defining and identifying areas of extra specially protected green belt would distractingly shift the focus of debate, without necessarily addressing the underlying issues. Moreover, the creation of first-class green belt implies also the creation of second-class green belt with a somehow inferior degree of protection. Our policy is that all green belt is special and that, while all development proposals should be treated on their merits, the developments that are likely to have merit in the green belt are very severely limited.
    The detailed policy on controlling development in the green belt, in line with the "presumption against", was first set out in its present form in 1955. We have recently restated it in planning policy guidance note 2. Incidentally, I hope that all hon. Members are aware of these excellent new digests of planning policy, which my Department introduced in January. The policy states that approval should not be given, except in very special circumstances, for the construction of new buildings, or for the change of use of existing buildings, other than for a very limited range of purposes. These purposes are agriculture and forestry, outdoor sport, cemeteries, institutions standing in extensive grounds, and other uses appropriate to a rural area. My hon. Friend will note that that list of purposes does not include major retail development.
    The planning policy guidance note to which I have just referred sets out the five purposes of green belts. They are: to check the unrestricted sprawl of large built-up areas; to

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    safeguard the surrounding countryside from further encroachment; to prevent neighbouring towns from merging into one another; to preserve the special character of historic towns; and to assist in urban regeneration. The Government attach great importance to green belts. Since 1979 the area of approved green belt in England has more than doubled. The area of approved London green belt has increased from 760,000 acres to 1·2 million acres in the same period. There is no question of change in our policy.
    We are robust in our defence of the green belt. A corollary of this is that the needs of development must be met elsewhere, again with due sensitivity to the environmental implications. We have a range of policies designed to encourage development in areas where it will be welcomed, particularly in the inner cities, but, as my right hon. Friend the Secretary of State said in March in his letter to my right hon. Friend the Member for Henley (Mr. Heseltine), it is simply not practicable to accommodate all development needs in this way. Some new land has to be allocated in the south-east, for housing and employment, with regard to where people wish to live and where businesses wish to locate.
    We can, I think, claim a fair measure of success in accommodating those aims. Thus, while the south-east has maintained its share of new housebuilding, this has not encroached on London's green belt or on areas of outstanding natural beauty or other statutorily protected areas. Further, the evidence shows that more and more development is taking place on land that was derelict or was vacant land in urban areas. Work done for us by the Ordnance Survey shows that in the past two years or so about 46 per cent. of all new housing throughout the country has been on this type of land, and a survey by consultants has shown that in the south-east the figure was 55 per cent. The rate at which farmland has been taken for development has fallen dramatically in recent years, and in the last five years or so has been at its lowest since records began in the 1920s.
    There is sometimes concern about the future of green belt sites which, although not built on or redundant, have deteriorated in quality and may no longer appear to warrant the description green belt. It is sometimes suggested that the improvement of such sites, and their restoration to truly green appearance, might be secured by the proceeds of allowing a small part of them to be developed for residential or commercial use. This is a dangerous path to follow and, while I must respect the doctrine of "each case on its merits", I should not wish to recommend it.
    One of the primary purposes of green belts is to separate neighbouring towns by checking the spread of large built-up areas. This purpose can be achieved almost as well by gravel pits or other so-called scruffy parts of the green belt as by a landscape of pristine fields and woodlands. To accept otherwise is almost to encourage dereliction in the green belt in the hope that planning authorities will eventually concede that even development is preferable. However, I remind the House that it is an explicit part of green belt policy that detailed green belt boundaries should not be amended or development allowed merely because the land has deteriorated or become derelict. This is not to say that such land should not be improved, but it means that its deterioration cannot justify its development.
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    My hon. Friend is particularly concerned about major retail development. Our policy on major retail development in the green belt could hardly be clearer. It is most recently stated in paragraph 15 of planning policy guidance note 6, which states:
    "Proposals for major out-of-town retail development, which may be well over 100,000 sq ft and up to 1 million sq ft or more, have no place in the green belt, where there is a strong presumption against all inappropriate development. Nor are developments on that scale generally acceptable in the open countryside."
    Short of taking statutory measures to prohibit major retail development in the green belt even being considered. I doubt whether we could emphasise our policy more strongly.
    In case my hon. Friends are still not convinced, I repeat what my hon. Friend the Minister for Housing and Planning said at a conference organised by the CBI in October 1986. Speaking about the continuing flow of proposals for vast shopping and leisure complexes, he said:
    "It is difficult to see why major developers and institutional investors should be advancing these giant speculative projects that fly full in the face of long-established green belt policy —a policy to which this Government is fully committed. Any such proposal has, of course, to be considered on its merits and in the light of general policy. Some may come to me on appeal, so I must not name names. There is provision, as there must be, for exceptions to be made in very special circumstances. But by way of general policy I would say that the promoters of some of the wilder schemes have no reason to think that they will succeed in breaching green belt policy."
    That was more than 18 months ago, but it remains a waste of time for local planning authorities, local objectors and, not least, my Department's planning inspectors, to have to deal with unrealistic proposals, whether for major retail development in the green belt or for other equally misconceived schemes. As Ministers have said before, those who pursue such schemes to the point of appeal may find that the costs of any inquiry are awarded against them. Whether appellants should bear all or part of the costs of inquiries, irrespective of their justification or outcome, as my hon. Friend the Member for Beckenham suggested, is an interesting proposal, and I look forward to receiving his letter on the matter.
    My hon. Friend will have noted that, so far, I have been conspicuously silent about the proposed development that was the principal subject of his speech. I am, of course, very familiar with the development proposals for the Hewitts farm site—even more so following my hon. Friend's description of them. I am also aware of the controversy that they have generated in the constituencies of my hon. Friend and his parliamentary neighbours. However, as my hon. Friend appreciates, I must keep my counsel since, as he said, the proposals are now the subject of a planning appeal currently before the Secretary of State. A number of other major retail schemes around London have reached or are approaching more or less the same stage in the planning process.
    Although I cannot comment on the merits of the Hewitts farm proposals, I can confirm the arrangements for the public inquiry that the Secretary of State has ordered to help him to determine this appeal. The inquiry is scheduled to be held at the civic centre, Rochester avenue, Bromley and to start at 10 am on Tuesday 21 June.
    In conclusion, I again thank my hon. Friend for raising this important issue tonight. Green belt policy is one of the most successful and enduring components of the planning

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    system and one which, I am sure, will continue to enjoy support from hon. Members on both sides of the House. As my hon. Friend said—
    The motion having been made after Ten o'clock on Thursday evening, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
    Adjourned at thirteen minutes past Twelve o'clock.