Hill Livestock (Compensatory Allowances)

HC Deb 16 February 1993 vol 219 cc270-96

12.4 am

Dr. Gavin Strang (Edinburgh, East)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1993 (S.I., 1993, No. 70), dated 18th January 1993, a copy of which was laid before this House on 18th January, be annulled.

Mr. Bob Cryer (Bradford, South)

On a point of order, Madam Deputy Speaker. There is notification on the Order Paper that the Joint Committee on Statutory Instruments has not yet completed its consideration of the Instrument. That rubric is no longer true because this afternoon, at a meeting of the Joint Committee, we completed our consideration. In the Vote Office, a very brief extract from our report is available to hon. Members. However, I must point out that the terms of the Standing Order under which the Joint Committee on Statutory Instruments is established places an obligation on that Committee to provide a report for the House. Had the matter been more complicated or had it required evidence or a further memorandum, it would not have been possible to have provided the information in time for the debate. That would have negated the whole purpose of having a Joint Committee to review statutory instruments and report to the House. I hope that the Government will note that they should seek to lay instruments on the Order Paper only when the Joint Committee has reported.

Madam Deputy Speaker (Dame Janet Fookes)

I know that the hon. Gentleman has great experience of these matters. He will know that the arrangement of business is not a matter for the Chair, but I have no doubt that Ministers will have noted what the hon. Gentleman said.

Dr. Strang

Successive Governments have recognised the need to provide special assistance for livestock farmers in our hill areas. That assistance is necessary to compensate them for the difficult farming conditions in our hills and uplands.

It was the post-war Labour Government who enacted the Hill Farming Act 1946, which was introduced to rehabilitate hill farming land. Farmers who adopted hill improvement schemes received capital grants for farm buildings, houses, roads, fencing and land improvement. The Act also made long-term provision for headage payments for hill cows and hill sheep.

In 1972 it was the Conservative Government who negotiated an annex to the treaty of accession to the European Community which enabled the British Government to continue the hill subsidies. Again, a Labour Government were in power in 1975 when the hill livestock compensatory allowance directive was negotiated.

Dame Elaine Kellett-Bowman (Lancaster)

Will the hon. Gentleman give way?

Dr. Strang

In a moment.

That directive enabled the hill subsidies to be put on a European Community basis.

Dame Elaine Kellett-Bowman

Perhaps the hon. Gentleman has forgotten Joe Godber's work on this matter. On 1 May 1973, the Council, at his behest, agreed a resolution about farming in poorer areas. He had to fight very hard for that. The hon. Gentleman omitted that little bit.

Dr. Strang

No, the hon. Lady has got that wrong. I remember putting a question to the right hon. Gentleman when he was Minister for Agriculture. He made a contribution when the Conservative Government were in power from 1970–74.

Dame Elaine Kellett-Bowman

I know, at column 997.

Madam Deputy Speaker

Order. This is not a private conversation.

Dr. Strang

It is important to recognise that hill livestock compensatory allowances are paid to compensate farmers for the natural handicaps in the hills. Hon. Members who represent constituencies with hills and uplands well know the severe conditions with which the farmers have to cope. They know that hill farmers cannot be expected to compete with farms in the lowlands without special Government assistance. They also know that the hill farming measures have been successful in maintaining the population in our rural areas and in supporting the rural economy.

The purpose of the Opposition's prayer is to reject the cut in the hill livestock compensatory allowances for sheep in severely disadvantaged areas announced by the Government in December. If the prayer is carried, the Government's regulations cutting the HLCAs will be annulled. In those circumstances, the Government would have a duty to implement the wishes of Parliament and table new regulations maintaining the HLCAs at their current levels.

Mr. Jonathan Evans (Brecon and Radnor)

Will the hon. Gentleman clarify the position for those of us who are concerned about the reduction in HLCAs? If the prayer is carried, will it be possible to make HLCA payments, or will they be stopped from tonight?

Dr. Strang

I have just explained that. This is the proper procedure for voting against the cuts. The Government have an obligation to implement the wishes of Parliament. If the hon. Gentleman wants to stand up for his hill farmers and their families tonight, he must vote with the Opposition.

The Government have advanced two arguments to justify the cuts in the HLCAs. First, they have referred to an improvement in hill farm incomes in recent years. Secondly, they have pointed to the increase in the hill ewe premium and to the less-favoured areas supplement to that hill ewe premium.

But the Government must recognise that, while it is true that on their own figures hill farm incomes are estimated to rise this year and the previous year, that increase is from a desperately low level. The average incomes are well below the 1988–89 level and significantly below the average in the five years from 1983–84 to 1987–88.

According to the Government's figures for the distribution of farm incomes for 1991, the most recent year for which figures are available, 48 per cent. of English LFA farms produced for their occupants a cash income of less than £10,000. In Wales, Scotland and Northern Ireland the corresponding figures were respectively 42 per cent., 37 per cent. and 62 per cent.

Some farmers earn a great deal less. A recent survey showed that in Wales 17 per cent. of farmers in the less-favoured areas earned less than £5,000 a year. We welcome the evidence that hill farm incomes are increasing, but they are rising from a dismally low level.

We also welcome the increase in the hill ewe premium, arising from the devaluation of sterling in October and the consequent devaluation of the green pound in January, and in the less-favoured areas supplement, agreed at the Agricultural Council in December.

It is true that the combined effect of those increases more than offsets the cut in the HLCAs. But the Minister must appreciate that it is unfair to tell hill farmers that, because their incomes now show some prospect of rising after such desperately low levels during the 1980s, the HLCAs will be cut.

Why did farmers from throughout the United Kingdom converge on Parliament earlier this year to protest against the cuts in the HLCAs? It was because they saw the cuts as unprecedented. It is true that previous Governments had failed to increase the HLCAs in some years, but the farmers regarded it as unprecedented for a Government to cut them in cash terms.

It is true that farmers hoped that their incomes were beginning to rise again, but from the Government's statements it seemed clear that they had no idea of the level of poverty and misery which had occurred in the hill areas throughout the 1980s because of the total collapse in those incomes. When an income falls by 50 per cent., as these incomes fell between 1988–89 and 1989–90, one needs an increase of 100 per cent. to return to the original level. That is something which the Government do not seem to appreciate in all their statements about this.

We shall vote for this motion because we want a fair deal for hill farmers and their families. We shall vote for it because we shall be voting against depopulation in the hills and the uplands. We shall vote for it out of our recognition of the crucial importance of hill farming to the rural economy in some of the most beautiful parts of these islands. I urge all hon. Members to support the Opposition motion.

12.16 am

Mr. Cryer

On a point of order, Madam Deputy Speaker. I wonder whether there has been any explanation of why the Minister of Agriculture is not here—

Madam Deputy Speaker

Order. The hon. Member well knows that that is not a point of order for me.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. David Curry)

It seems to me to be both natural and right that a member of the ministerial team in the Ministry of Agriculture who has a very large number of hill farmers in his constituency and knows them well should seek to reply to this debate, because—[Interruption.] Well, let me finish my point. Because it is natural that my personal experience of my constituency leads me to want to do so. I asked my right hon. Friend that I should speak in this debate, and he agreed that I should. It is my responsibility, and I will take that responsibility. I cannot see why anyone at all should complain.

Ms. Hilary Armstrong (Durham, North-West)

Perhaps the Minister is unaware of the great insult felt by hill farmers because of the words and pronouncements of the Minister of Agriculture. That is why we want him here. It is he who insulted hill farmers.

Mr. Curry

We have had the thinnest speech that I have heard from an Opposition spokesman for a very long time. We have now had an entirely irrelevant point from the hon. Lady. Clearly, the Opposition have not got their hearts in it. I think that they are beginning to regret that they launched this operation.

Dr. Strang

What concerns Labour hon. Members is that the Minister was seen in the Chamber during the previous Division. Why is he not present for the debate?

Mr. Curry

This is typical of the Opposition. They are not concerned about hill farmers at all. If they are so concerned about hill farmers, why have they spent the past five minutes talking about my right hon. Friend?

Madam Deputy Speaker

Order. There is too much noise and now too much heat is being generated. Perhaps the hon. Member can now continue with his speech. May I add that a number of hon. Members have indicated that they wish to speak in this fairly short debate.

Mr. Curry

The decision on HLCAs has to be seen in the context of the total support for farmers in the uplands which is directly linked to production. I am not talking about the environmentally sensitive areas; I am not talking about the countryside stewardship; I am talking about the totality of support. [Interruption.] Madam Deputy Speaker, there is a choice. I do not mind giving way. I often give way. It simply eats into the time that other hon. Members have to intervene in the debate. I will give way once more, and that will be 50 per cent. more than the Opposition spokesman did.

Mr. Cynog Dafis (Ceredigion and Pembroke, North)

I was wondering whether the Minister would like to meditate on the significance of the fact that the Minister of Agriculture said that the market conditions had improved to such an extent that the HLCA must be cut. As chairman of the Agriculture Council, he suggested that the sheep annual premium supplement needed to be increased because of the difficult conditions in the sheep meat market especially for producers in the uplands.

Mr. Curry

If the hon. Gentleman waits, I will come to the figures. My right hon. Friend was an excellent chairman of the Agriculture Council for three—[Interruption.] I hope that farmers will listen to the irrelevant babble coming from the Opposition Benches and judge how seriously they take these matters.

There are three sources of support for farmers. There is the market place, which is sometimes forgotten; there is the ewe premium, and that obviously depends on the pound-ecu rate and the supplement; and there is the HLCA payment. When all these are taken into consideration, as they all were taken into consideration at the beginning of this calculation, the hill sheep farmer is significantly better off.

Mr. Alex Carlile (Montgomery)

rose—

Mr. Curry

I will not give way; I want to make some progress.

Madam Deputy Speaker

If the Minister is not giving way, the hon. Member must resume his seat, as I am sure he knows.

Mr. Carlile

On a point of order, Madam Deputy Speaker. Is it right for a Minister to misinform the House? The fact is that hill farmers will be worse off this year. Next year there may be a marginal improvement. Why will he not tell the truth to the House, or leave it to his Minister of Agriculture to do so?

Madam Deputy Speaker

The hon. and learned Member raised that as a point of order. The accuracy of what the Minister or anybody else says is not a matter for the Chair—thank goodness.

Mr. Curry

The figures that I will give are absolutely accurate. There is no purpose whatsoever in my seeking to misrepresent the situation. I cannot think why the hon. and learned Gentleman thinks that there would be the slightest profit in that, and I do not intend to do it.

Mr. Colin Shepherd (Hereford)

I would be most grateful if my hon. Friend could explore the question of the returns from the market place. I have to say in all honesty that my hill farmers are puzzled as to how their figures match up with his. I do not doubt that there is an adequate explanation, but the sort of figures that I am quoted are these. Between 1991 and 1992, one farmer dropped 13.2 per cent. in the market place, another 17.2 per cent., another 7.6 per cent. and another 21.7 per cent. So, if they are supposed to have had a better return from the market place for fat lambs, possibly there is some aspect that I am not taking into account. Can my hon. Friend help?

Mr. Curry

I will try to help my hon. Friend. I will give him the figures, which are, of course, arrived at by independent academic authorities. Those are the figures on which we have based all our calculations in the past and they have not changed in this circumstance.

It is entirely wrong to isolate the HLCA from the totality of support that farmers get, as if there were a moral virtue in the HLCA payment which does not obtain with any other payment. The decision on the HLCA was taken after the pound had left the exchange rate mechanism, when the consequent devaluation was clearly signalled, and when the imminent abolition of MCAs meant that that would work through very rapidly indeed into the price farmers received. The three factors are income, the ewe premium and the HLCAs. I will deal with them in turn. The income survey is conducted by universities and colleges, except in Northern Ireland, where it is conducted by the Government Department there. It is based on 850 hill livestock farms in the less-favoured areas. The survey has been carried on for 50 years and this particular method has been carried on for over 10 years. Nobody, and that includes the National Farmers Union, disputes the methodology used or the legitimacy of the survey.

Mr. Robert Maclennan (Caithness and Sutherland)

I thank the Minister for giving way in this short debate. If the methodology is accepted—and I do not believe that it is accepted by my farmers—can he explain why all the farmers in the severely disadvantaged areas, who do not seem to be singled out in the surveys, are of one mind in believing that their position, as expressed to Members by their bankers, their accountants and those in the Benefits Agency who are having to pay out family credit to farmers this year, is so much worse, and that their plight seems not to be appreciated at all by the Government?

Mr. Curry

That is not true on any count. We carry out surveys on income. They are not disputed in their base because they are carried out by academic institutions and not by the Government. They are not rigged. The NFU and the Scottish NFU have not disputed their validity. I do not deny that the income increase is from a low base. I am not trying to pretend that is not the case. However, it has been an increase from a low base and refers to representative farms.

Mr. Michael Connarty (Falkirk, East)

The Minister mentioned the Scottish NFU. Just last night I received a call from a member of the executive of the Forth Valley NFU telling me that the figures for Scotland that the Minister quoted misrepresented income figures, as income for the year 1992 did not relate to a 12-month year but to the period from 1 January 1992 to 31 March 1993. Suddenly we had a 15-month year. Those figures were quoted in the House and denied by the Scottish NFU.

Mr. Curry

All the figures are in the Library of the House of Commons, so the hon. Gentleman can examine them, but those income figures are identitical to those which we have used in the past. When we use them as the basis for demanding an increase, the complaints are far fewer than when they are used to justify a decline.

Livestock farms in the severely disadvantaged areas throughout the United Kingdom—that is 90 per cent. of the less-favoured areas—have seen their income go up by 35 per cent. in real terms in the two years to mid-February 1993. In England, the net farm income on specialist sheep farms has gone from £6,600 to £14,200. That relates just to the farm and does not include bed and breakfast or the wife's activities. It takes into account the costs of depreciation, unpaid family labour, valuation charges and imputed rent for owner-occupiers. In Scotland the equivalent figure has risen from £8,100 to £11,400 and in Wales the same survey shows that the figures have increased from £10,500 to £18,700 and for Northern Ireland, where all the farms are livestock farms, the figure has increased from £4,000 to£6,800—[Interruption.]Hon. Gentlemen should complain to the University College, Aberystwyth, because that institution provided the figures.

Mr. Alex Carlile

rose—

Rev. Ian Paisley (Antrim, North)

rose—

Mr. Eddie McGrady (South Down)

On a point of order, Madam Deputy Speaker. The Minister is misinforming the House about the figures for Northern Ireland because the Department of Agriculture for Northern Ireland stated quite recently that the average hill-farm income for Northern Ireland is exactly £3,761. If the Minister considers that to be an adequate income, he is being ridiculous.

Madam Deputy Speaker

Order. I have already told another hon. Gentleman that accuracy is not a matter for the Chair and is not a point of order.

Mr. Curry

The figures—

Several hon. Members

rose—

Madam Deputy Speaker

It is not a point of order. Mr. Curry.

Mr. Curry

The figures are in the Library of the House of Commons. I am quoting figures which are in the public domain and which are the results of the surveys upon which we have always based our actions in the past. I am sorry if hon. Gentlemen do not like the outcome of the figures, but they remain the same, and the figures for cash in hand are proportionately larger.

Several hon. Members

rose—

Mr. Curry

I shall not give way again because it would not be fair to those who wish to speak in the debate.

Mr. Seamus Mallon (Newry and Armagh)

On a point of order, Madam Deputy Speaker. The matter in dispute is central to the case that will be made by Members representing constituencies in Northern Ireland. The Minister with responsibilities for agriculture in Northern Ireland is sitting next to the Minister of State. Can he confirm or deny the figures presented by the Department of Agriculture for Northern Ireland? Would it not be advisable to ask him to clear it up now and take the opportunity to stand by his figures—or not?

Madam Deputy Speaker

Order. I have made it quite clear that the accuracy or otherwise of figures has nothing whatsoever to do with the Chair and is not a point of order.

Rev. Ian Paisley

On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker

I hope that it is not the same point of order.

Rev. Ian Paisley

No. If the Minister is giving figures from the Department of Agriculture for Northern Ireland, let him give the figures and not misrepresent what he is saying to the House.

Mr. Curry

I am misrepresenting nothing; I am reporting the outcome of the surveys.

The ewe premium is paid in three instalments. Without any devaluation, the ewe premium would have been £14.61. After devaluation, it comes to £17.25. The supplement for less-favoured areas was £4.37. After devaluation plus the additional £1.05, this takes the figure to £6.57. The overall net gain on that subsidy is £4.84 per ewe.

The final payment for the ewe premium and the supplement is £23.82 per ewe. That is the supplement for hardy ewes in severely disadvantaged areas. When the third instalment of the ewe premium is paid in early April, the overwhelming majority of 90,000 claims will receive a sum of about £10.50.

The third strand is the hill livestock compensatory allowance. The high rate was £8.75, and that has gone down to £6.50. The lower rate, which is for non-hardy ewes, has gone down by the same amount proportionally to £3.60. In the disadvantaged areas, there has been no cut in the hill livestock compensatory allowance; it has been increased to £2.86.

If we net all that out, we find that farmers in severely disadvantaged areas will be £2.59 per ewe better off with regard to their hardy ewes, which are 58 per cent. of the flock. They will be £3.54 per ewe better off for their non-hardy ewes, which are 28 per cent. of the flock. In the disadvantaged areas, farmers will be £5.25 per ewe better off with regard to about 14 per cent. of the flock. Hill farmers in severely disadvantaged areas will get £13 per hardy ewe more than farmers in the low land. It is worth while reporting that that is the case.

Mr. Nicholas Winterton (Macclesfield)

I am grateful to my hon. Friend for his full explanation. I represent hill farmers and those in less-favoured areas. If the figures are so good in my hon. Friend's view, why are the National Farmers Union, the Country Landowners Association and the Council for the Protection of Rural England—none of them really anti-Tory organisations—so worried about the income of hill farmers and their ability to maintain themselves and the countryside which many of us consider so important?

Mr. Curry

My hon. Friend is not an anti-Tory organisation, either. Did he really expect any of those organisations to applaud the cuts? We know that they do not applaud them. They would prefer the cuts not to be made.

What I am saying to those organisations and many individual farmers is that the net effect of the cuts will leave them better off than many anticipated when they made their farm plans. When they made their farm plans, I am sure that they were not banking on a ewe premium at the present rate.

Mr. James Wallace (Orkney and Shetland)

The Minister has just accepted that there is a cut. In the figures which he has just given—even if we accept his figures as to the net effect—he made it perfectly clear that the positive net effect is much less for those in severely disadvantaged areas than for those in disadvantaged areas. Surely the whole point of the hill livestock compensatory allowance is to give specific advantage to those who have difficulties because of transport and other factors. The Minister is eroding the differential, and that is the whole point.

Mr. Curry

In certain respects, low-land sheep producers found themselves in the most difficult circumstances recently. Upland farmers have the push in the hill livestock compensatory allowance for the less-favoured premium. The differential between the allowances for upland farmers and some lowland farmers is significant. Lowland farmers have found themselves in some difficulties.

Dame Elaine Kellett-Bowman

Will my hon. Friend give way?

Mr. Curry

I shall give way to my hon. Friend. It will be the last time that I give way, otherwise no one else will get a chance to speak.

Dame Elaine Kellett-Bowman

As I do not come from Cheshire, and I have farmed 1,600 feet up, I know something about sheep. My farmers appreciate the battle that my hon. Friend the Minister had to get the extra 79p. It was a bit of very smart footwork on his part. He got it a year early. But the sting is in the tail. Devaluation gives us a bonus for now. But what will happen if it goes the other way? Can my hon. Friend guarantee that we will then get the benefit? If the pound goes the wrong way, will he increase the compensatory allowance?

Mr. Curry

I had better not speculate about which is the right way for the pound to go. Just as on this occasion we examined all the factors in determining the final conclusion, so next year we shall examine all the factors present in determining the recommendations that we make. That would be a sensible thing to do.

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

Will the Minister give way?

Mr. Curry

No. I have given way infinitely more frequently than the Opposition Front-Bench spokesman.

Mr. Foulkes

I am grateful to the Minister.

Mr. Curry

No. I shall not give way.

Some farmers will not receive the sums that I have quoted. I wish to make that clear to the House so that I am not accused of misrepresentation. They include those with more than 1,000 ewes, to whom the ceiling applies if they have not organised their partnership schemes—but most of them have. They also include those with un-tupped Herdwick shearlings. I will translate for those who might have a problem with that. The Herdwick is a sheep; un-tupped means that it has not yet had the pleasure of a ram; shearling means that it has been sheared once but is less than two years old. Such sheep receive only a 70 per cent. premium. But there are only 25,000 sheep in the country to which that applies.

Mr. Foulkes

Will the Minister give way?

Mr. Curry

No.

I shall give some typical consequences of the change. Farmer No. 1 claims on 662 ewes, as against 652 last year and 40 cows, which is the same as last year. His total subsidy from HLCA and the ewe premium will be £22,485. That is £3,868 more than the previous year—an increase of 20.1 per cent.

A second farmer has 483 ewes, on top of which are 102 Herdwicks. Last year he had 439, on top of which were 84 Herdwicks. He has five cattle—unchanged from last year. He will receive £17,512 in support from the two schemes. That is £3,879 up on the previous year—an increase of 28.5 per cent.

A third farmer has 607 ewes, as against 590 the previous year. His number of cows is unchanged at 72. He will receive £21,318—an increase of £4,235. A farmer with 683 ewes, against 696 the previous year—so he has destocked somewhat—with no cattle, against six the previous year, will receive £19,835. That is an increase of £3,031, or 18 per cent.

Mr. Barry Porter (Wirral, South)

On a point of order, Mr. Deputy Speaker. Is it appropriate in this debate to refer to the problem of the hill shipyard workers, the hill steel workers and other workers who apparently do not get all this nonsense? They would not know—

Mr. Deputy Speaker (Mr. Michael Morris)

Order. I think that I can help the hon. Gentleman. The answer is no.

Mr. Curry

The four cases that I have quoted are not taken entirely at random. They are the four farmers with whom the National Farmers Union invited journalists to discuss their position at the mass lobby of Parliament. Every one of them is substantially better off as a result of the change that we have made.

Mr. Foulkes

Will the Minister give way?

Mr. Curry

Farmers will be paid the HLCAs. The first batch of cheques is ready to go out today. We shall pay as soon as the applications come in. The third instalment of the ewe premium will go out in early April. It will be about £10.50. It will go to 90,000 eligible farmers. So the Government's commitment is clear. Half a billion pounds a year of public support goes to hill farmers.

Mr. Foulkes

Will the Minister give way on that point?

Mr. Curry

The hon. Gentleman should be congratulated on his persistence but not on his success.

We support hill farmers and we are proud to do so. We support the landscape and we are proud to do so. We promote the food which a farmer produces and we seek an ever wider market for it. We are proud to do that. We have husbanded agriculture through an intensely difficult period of change and challenge. We are passionately committed to doing that.

Hill farming is tough; we do not deny that. The conditions are hard, and the rewards are rarely generous, and often meagre. We know that the contribution that farmers make to the community is essential, and we shall sustain them in that role. In this regard, we have kept faith with them, and we shall continue to do so. By their baying tonight, the Opposition have shown that this motion is opportunistic, outrageous and ill-informed. Their concern is simulated, and I urge my hon. Friends to oppose the motion.

Mr. Deputy Speaker

As a great many hon. Members wish to contribute to this debate, I make a plea for short, succinct speeches.

12.40 am

Mr. Martyn Jones (Clwyd, South-West)

During agriculture questions on 3 December I asked the Minister if he could give an undertaking that the GATT negotiations would not affect support for hill farmers. I received the very comforting answer that those negotiations would not affect HLCA payments. I should have asked the Minister whether he would tamper with HLCA payments, as, two or three weeks later, he announced that he would cut them. This was a bombshell to my farmers, who attempt to make a living in the upland areas of Clwyd. Farmers in those and other severely disadvantaged areas throughout the United Kingdom are trapped by the conditions in which they find themselves. They depend on traditional methods, and have little opportunity to diversify. For years they have been at the bottom of the incomes league table. This has taken its toll on hill farming areas in economic, cultural and social terms.

Farming is absolutely necessary to maintenance of the current condition of the countryside—the state in which the city dweller expects to see it—and to preservation of the fabric of rural areas already eroded by Government policy on the privatisation of bus services and by cuts in education and in council services. The need for hill farms has been recognised by successive Governments and by the European Communities, and the HLCAs go some way towards helping to maintain the upland farmers. But these were cut for the first time ever by the Minister. After my farmers had got over the shock of this unprecedented move, they were astonished—nay, incredulous—to be told that the cut was justified by some massive rise in incomes that they were supposed to have enjoyed over the pass. 18 months. Such farmers are hardy folk. They may spend most of their working lives on the hilltops by themselves, but they are not stupid. They know that in some cases incomes have improved, but they know also to what levels incomes sank in the previous two years.

The Minister of Agriculture, Fisheries and Food and the Minister of State have acknowledged that incomes have risen from a low base, but they are very coy about describing how low that base has been. In 1991, statistics showed that farm businesses in Wales suffered a net drop in income of more than 25 per cent., to £7,500. Of hill farmers, 45 per cent. are on zero net incomes and a further 40 per cent. have incomes of less than £10,000. In other words, 85 per cent. of all farmers in the less-favoured areas have incomes of £145 or less a week—only 56 per cent. of the average industrial wage.

Mr. Dafydd Wigley (Caernarfon)

I am sure that the experience of the hon. Gentleman's farmers is the same as that of mine: that about 40 per cent. of them are on family credit schemes. Those are the ones who are eligible. The worry is that the next generation simply will not go into this work unless the recompense is better.

Mr. Jones

I agree entirely. And family credit is means-tested. This tends to give the lie to figures such as those that we have heard from the Minister. We all know that statistics can be used to prove or disprove anything.

I have here a sheaf of letters from my farmers, all of whom are suffering real problems. This is not a joke. It is not spurious or made up. We know that farmers in general have a reputation for crying "Wolf", but this time the farmers in the less-favoured areas of my constituency are indeed badly affected. They are in real trouble. On one clay in Ruthin market I received a petition signed by 150 farmers. Typically, they are facing small cuts—£350 to £500 a year—in income. When their income is so low that that constitutes 10 per cent. of their net income, they are in real trouble.

The use of percentages by the Minister is also misleading. A 50 per cent. reduction in income needs a 100 per cent. increase just to return to the previous position. There has also been a reliance on figures relating to sheep farms. Thanks to the Government's failure to stay within the ERM and the resulting devaluation, sheep farmers have benefited slightly from the devaluation of the green pound. But most LFA farms are sheep and cattle farms and have done considerably worse, and—like the rest of us —they all are facing higher bills for inputs, council tax and so on.

To add insult to injury, most farmers, even some of the least well off, face council tax bills based on being placed in band G, giving a valuation of between £160,000 and £320,000. That is crazy. I would develop the point if there were time, but I am aware that other hon. Members are anxious to speak.

Never have HLCAs been cut. I am not aware of such cuts being made by other member states, so it is hardly surprising that hill farmers feel let down. It is true that the HLCAs represent a compensatory allowance, but they are not, as the Minister implied, a direct compensatory allowance for fluctuations in prices or incomes. If they were, they would have been reduced long ago. They represent compensation for farming in some of the worst and bleakest farming conditions in northern Europe. Even so, those farms are essential for the maintenance of the rural uplands.

The proposed cut is nothing but a Treasury-inspired money-saving plan because the Government are in desperate financial trouble, in a hole of their own digging, and they expect the most vulnerable farming sector to get them out of it. I urge the Minister to reconsider the cut in HLCAs for the benefit of all who enjoy the countryside and for the culture of rural Wales. He should give the money to those who desperately need it.

12.46 am

Mr. Paul Marland (Gloucestershire, West)

It is refreshing to note that there is at least one area of agreement between the two sides of the House—that we should seek to keep the rural and difficult areas populated. But am I the only person who is wondering whether there is a limit to which we can ask the taxpayer to contribute when it is possible for hill farmers to get income from other sources? [Interruption.] I shall explain what I mean.

Farmers today are living in a different world. The farm gate mentality is nearly dead. That applies in every sector of farming. No longer can they simply produce goods and get them to the farm gate, and then leave it to someone else. Farmers recognise that they must grow for a market, and that applies even in very difficult areas. A friend of mine farms in the Inner Hebrides, on the Isle of Mull. He is a west highland sheep farmer who has discovered a way to finish his sheep, by changing their diet, in such a way as to fill a niche in the Spanish market. He is making extra money by going after that market.

As David Naish, president of the National Farmers Union, said at the NFU's annual general meeting this week: Farmers must innovate and differentiate and promote their own products. We must urge farmers to do that, in whatever part of the country they live. In their turn, the Government must produce sound and sensible economic policies in which farming can flourish, and that they are clearly trying to do. Inflation has dropped from 11 to 1.7 per cent. and interest rates have come down from 15 to 6 per cent. Marketing grants are available to help farmers market their products.

We are witnessing an onslaught on over-regulation and a massive cut in red tape. Opposition Members say that HLCAs have never been cut before and that farmers are working from a very low base. Both statements are correct. But thousands of other businesses in difficult areas are working from a low base. Consider, for example, garages, retail shops and hotels. They are all suffering in what is a world recession. But we do not say that garage proprietors or hoteliers in difficult areas should receive a massive subsidy from the Government to enable them to keep going.

I was pleased to hear my hon. Friend the Minister of State reminding the House that HLCAs are reviewed annually with interested parties. So those who are worried that the reduction in HLCAs is set in concrete for ever need have no worries because they are reviewed annually. This year the currency changes will have a major influence on farm incomes. That view is supported by the most recent edition of Farming News which, as my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) and I know, is not a paper that is necessarily well disposed towards the Government. Its leader in this week's issue says: Currency changes put back a bit of bounce. Sterling's exit from the exchange rate mechanism is putting some bounce back into British agriculture. Seven straight devaluations of the Green £, allied to almost as many cuts in interest rates, have not only taken the sting out of the MacSharry reforms, they have left many of us better off than before … the currency realignments will work similar magic on livestock returns, helping to restore battered confidence there. This week's announcement of an extra 79p on the hill sheep supplement, worth some £10 million, is a case in point.

Mr. Brian Wilson (Cunninghame, North)

The hon. Gentleman can read!

Mr. Marland

I can read. So, for the moment at least, the news is good, and far better than we dared hope only five months ago. Long may it continue so.

Mr. Connarty

I notice in Vacher's that the hon. Gentleman's previous occupation is listed as a farmer and that he owns a farm. If it is so lucrative, why has he got out of farming?

Mr. Marland

I am happy to give way to useful interventions—but what a feckless, useless and unnecessary intervention! My hon. Friend the Minister has given details of the changes in pounds and pence. I am ready to back him. Suffice it to say that hill farmers are getting more money. It is worth mentioning that the total payment per ewe to hill sheep farmers in difficult areas will be £30.92. So a hill sheep farmer with 500 ewes will get a subsidy from the taxpayers of more than £15,000 per annum, and a man with 1,000 ewes will get a subsidy of more than £30,000 a year. As I have said, there is plenty for the sheep farmers but nothing for the garages, the hotels or other businesses in difficult areas.

Mr. Dafis

May I point out to the hon. Gentleman that the shift in emphasis from the HLCA to the annual premium means that the British Treasury will make a substantially reduced contribution, with the weight of the contribution coming from the European Community? Is the hon. Gentleman aware of that, and is he aware too that that means that the Treasury is trying to offload the responsibility on to the European Community?

Mr. Marland

Whether the money comes in theory from the European Community or from the British taxpayers, my point, which I think is supported by my hon. Friends, is that it is still coming from the British taxpayers. We have a duty to look after their interests. Opposition Members may be willing to ignore that duty, as they have done in other cases, but my hon. Friends are not. We are the guardians of the taxpayers' purse, and it is fair and reasonable that we should do everything we can to protect it. How much more do Opposition Members expect the British taxpayers to pay out?

If I did not know as much as I do about the tactics of the Opposition, I would be deeply shocked by what I have heard in the debate. Once again we have an example of Opposition parties seeking to create the maximim misunderstanding and confusion in the minds of sheep farmers. Once again they are seeking to muddy the waters and distort the truth in an effort to pretend to be the farmers' friend. Not for the Labour party the clear and concise exposition that we have had from my hon. Friend the Minister of State.

When the money starts to flow, farmers will see how much better off they are. When they recognise that farmers are better off, I hope that Opposition Members will have the good manners to come back and apologise to all hon. Members for the disgusting performance which they have put on this morning.

12.54 am

Mr. Paul Tyler (North Cornwall)

This debate is remarkable both for the Members who are here and for those who are not here. We have had the benefit of the presence of the Leader of the House, the Secretary of State for Defence, the Home Secretary, the Secretary of State for Scotland and the Secretary of State for Wales—but lo and behold, where is the Minister of Agriculture, Fisheries and Food? I have some sympathy for the Minister of State, who has had to take his place. Obviously he has been selected to be ducked in the pond.

We must take the figures that have been put before the House with a large pinch of salt. The hon. Member for Gloucestershire, West (Mr. Marland) clearly does not come from an upland area, a less-favoured area, or one of the areas where farmers have been very angry, not merely about what has happened, but about the manner in which it has happened.

I come from an upland area and live among the hills of Bodmin moor. I am not a farmer and do not have to declare that interest, but I am passionately interested in the future health of upland communities. The hill livestock compensatory allowances were originally introduced—and have been maintained by successive Governments—to try to help such communities, and not as a form of income support. They are unrelated to other forms of subsidy. The HLCAs are there to try to ensure that such areas remain working communities and that people can make a realistic living there.

If the hills are to continue to be alive environmentally, economically and socially, the HLCA system has to be in place. That is what has gone wrong and what has caused so much consternation.

The hon. Member for Gloucestershire, West is wrong. No one had to stir the hill farmers into protesting about that outrageous decision—they were stirring us. If he had attended the lobby a couple of weeks ago, he would have found that evident. My Scottish colleagues have received representations from their constituents and from the Scottish National Farmers Union. My Welsh colleagues have received submissions from Wales. Many upland areas happen to be represented by Liberal Democrats.

Mr. John D. Taylor (Strangford)

What about Northern Ireland?

Mr. Tyler

We have not received representations from Northern Ireland, but we would have been pleased to do so. No doubt the right hon. Member for Strangford will speak about that later.

The key issue is where does one start from? The figures for the past few years are immaterial. The Minister's Department has given us figures that show a dramatic drop, of about 75 per cent., in average farm incomes for the upland areas over the past 10 years. What would the Minister say if his salary level had dropped by three quarters, in real terms, between 1982 and 1992?

Mrs. Margaret Ewing (Moray)

Perhaps it should have.

Mr. Tyler

The hon. Member may be right. That is the level of the reduction.

Mr. David Nicholson (Taunton)

Will the hon. Member give way?

Mr. Tyler

I shall not, as I know that many hon. Members on both sides of the House wish to enter into the debate and I am trying to be as brief as I can.

The long-term viability of very vulnerable rural communities is at stake and the HLCAs are the only safeguard against those fragile economies being destroyed.

The Farmers Union of Wales has rightly pointed out that hill farmers have no recourse to alternative enterprises. They are trapped within a restrictive environment and terrain, which will only support hill livestock production. The hon. Member for Gloucestershire, West mentioned diversification; but clearly he has never been to an upland area. What sort of diversification could there be?

Mr. Marland

I was not talking about diversification; I was simply talking about trying to add value to what the farmer was producing.

Mr. Tyler

I wonder whether the hon. Gentleman has visited Dartmoor, Exmoor, Bodmin moor and the Brecon Beacons. One cannot add value in those terrains. The HLCAs were designed to demonstrate clearly that there are areas of Europe, and not merely of the United Kingdom, that need special support if we are going to maintain a working and environmentally acceptable countryside. A derelict countryside is not acceptable.

Mr. David Nicholson

I am grateful to the hon. Gentleman for giving way as he mentioned Exmoor in my constituency. When the first announcement about the cut in the HLCAs was made there was great anger among farmers, which affected a number of my hon. Friends who represent hill farming areas. However, since then it has become apparent that there has been a significant increase in the ewe premium, we have felt the full effects of the green pound devaluation and, most recently, thanks partly to my hon. Friend the Member for Ryedale (Mr. Greenway) and the pressure that he and others have placed on Ministers, we have experienced the 79p supplement. Finally, we had the details of the environmentally sensitive areas which affect Exmoor and other places. Would not the hon. Gentleman agree that all those factors have counterbalanced the initial shock of the HLCA cut?

Mr. Tyler

The hon. Gentleman must recognise that we shall not have a devaluation every year and we shall not be able to cover all the upland areas with ESAs; it is physically impossible. The HLCAs stand alone as a policy that successive Governments have used to support the upland communities. The other factors—many of which affect lowland areas as well—are irrelevant to the decision.

Sir Roger Moate (Faversham)

(rose)—

Mr. Tyler

I shall not give way as I have done so several times and I want to allow time for other hon. Members to speak.

The declared aim of the subsidies was clear. I am sure that hon. Members who have intervened in the debate have read about the purpose of the subsidies, which was to ensure the continuation of livestock farming, to maintain a viable population in the LFA and to conserve the countryside". They were not, and have never been, intended as a direct income support system. Therefore, the overall level is of critical importance in maintaining the healthy economy of those areas.

It is extremely important to recognise that the figures that we have been given this evening must be seen against a backdrop of steady decline in recent years. In an answer to a recent question posed by my hon. Friend the Member for North Devon (Mr. Harvey), the Minister said that, in real terms, the value of the allowance for higher rate sheep in severely disadvantaged areas had fallen by 45 per cent. and for the lower rate, by 60 per cent. since 1980. We are not considering the figures against a pattern of two years of looking slightly better, but against a steady decline over a decade.

When I posed questions to the Minister about farmers' incomes on hill and upland livestock holdings, he demonstrated that they were consistently below that of the earnings of full-time adult manual workers in the country —they continue to be so and they continue to fall relatively. Since 1982, the income of LFA livestock farmers has collapsed by 75 per cent. Therefore, whatever rise now occurs, it will be only a modest upward blip against the depressing trend.

In Scotland the effect is felt even deeper than in the rest of the United Kingdom–98 per cent. of Scottish LFA ewes were in the severely disadvantaged areas in 1992. Therefore, 98 per cent. of the Scottish LFA stock will experience a reduction in HLCAs in 1993—a fall of 12 per cent. in income from an already low base.

We have heard quite a lot this evening about the devaluation of the green pound. What would have happened if there had not been a black Wednesday and a devaluation of the green currency? Would the Minister now be suggesting a major increase in the HLCAs and, if so, by what amount? If he is suggesting that the two are directly and inexplicably linked, we should be told what the figure would be. Unless the Minister is now assuming a continual devaluation—a creeping devaluation—of the pound, the rise is one-off and is irrelevant to the long-term future of these areas.

It is extremely important that we view every calculation as a continuation to the factors that can turn the tide. The tide is not currently being turned in the hill areas. What is especially difficult to understand, given the background of Government support from both major parties, is why the Minister chose now to target the cuts on the hill areas—the most vulnerable of all the disadvantaged groups in farming. The cuts should either be spread equitably across all sectors or they should be targeted at other, less vulnerable areas and less disadvantaged groups, or the benefits of indiscriminate improvement in prices should be narrowed so that help can be concentrated where it is most needed.

The latest announcement of a ewe premium supplement for LFAs, made in the past few days, was obviously helpful; but it is important for the Minister to explain why he intends always to link the ewe premium with HLCAs. Surely there should be no such direct link. The one cannot simply be substituted for the other. Moreover, that is yet another one-year adjustment. The hill farmers will want to know what is to happen next year.

The most anger and resentment was caused by the lack of consultation. Conservative Members nod: they must be well aware that the way in which the decision was leaked in the farming press, the subsequent announcement just before the Christmas recess and the back-tracking statements that followed it caused immense damage to the reputation of the Minister, his team and the Government as a whole. That is evident from the number of contradictions in the statements that we have heard in the past few days.

Real offence was caused by the lack of consultation. The National Sheep Association—again, not a radical socialist group—said: It would have given the sheep industry more confidence, and the Government more credibility, if they had consulted more fully with the industry and explained in more detail their change in direction. The proposal to cut HLCAs is an attempt to undo the good work of successive Governments who have tried to protect and enhance the economic viability of the hills and hill farming. There has been a steady decline in the past 10 years; given the devaluation of the green pound, this was a good opportunity to reverse that trend. We hope that Conservative Members who have been critical of the Government's decision will carry their criticism into the Lobby and that—instead of being present at this late hour simply at the behest of their Whips—they will vote for their hill farmers.

1.6 am

Mr. John Greenway (Ryedale)

I think you will recall, Mr. Deputy Speaker, that I first raised this matter on the Floor of the House some nine weeks ago, on the motion for the Christmas Adjournment. I think it significant that, on that occasion, my hon. Friends the Members for Taunton (Mr. Nicholson), for Macclesfield (Mr. Winterton) and for Tayside, North (Mr. Walker) spontaneously supported what I had to say. I do not recall much interest being expressed by Opposition Members. I doubt very much that many of them understood what we were talking about, and some of the interventions that we have heard tonight—this applies less to the speeches—suggest that, nine weeks later, not many of them understand it now.

I felt at the time that we could draw three clear conclusions. First, farmers in the uplands were deeply angry and upset by the decision: I said that forcefully at the time. Incomes had shown some improvement, but from a very low base. Secondly, it was clear to me that the HLCA settlement must be part of the overall public expenditure round, in which agriculture generally did extremely well. We all knew, I think, that we were unlikely to get much additional money from the Treasury, if any. We must face the inevitable fact that, when public expenditure is extremely tight, we cannot pick and choose which parts of an overall settlement we like and which we do not.

Mr. Foulkes

Will the hon. Gentleman give way?

Mr. Greenway

No; many other hon. Members wish to speak.

My third conclusion was that something must be done. The position, as it stood nine weeks ago, was not sustainable: in some way, income would have to be made up. Lo and behold, within a week my right hon. Friend the Minister of Agriculture, Fisheries and Food came back from the Farm Council and announced that the EC would help with a 1.5 ecu increase in the rural world supplement. The question of what that was worth was extremely complicated, as was the arithmetic involved in sorting out the effect of the green pound devaluation. My right hon. Friend then suggested that it was worth £1.41 per ewe. I made some inquiries and did some sums. Some weeks ago, I suggested to my right hon. Friend that the total value was understated by about 80p a ewe. It transpired that it was 79p a ewe. I am happy to settle for that.

We have deducted £2.25 for hardy ewes under the HCLA payments and only £1.35 for the less hardy ewes, but both will get £2.20 more as a result of the rural settlement. In addition, as the Minister pointed out, there is a green pound devaluation that will provide a much-needed boost to hill farmers. I look forward to talking to mine again when they get the money. Will the Minister please ensure that they get it on time?

In all the circumstances, we have to accept the position now arrived at for this year. I am tempted to suggest that, had we been in this position nine weeks ago when this first leaked out and the Minister had to make a formal announcement, we might have avoided a lot of fuss, but such a facile view underestimates the difficulty that the ministerial team had in Brussels during the negotiations. Opposition protests are due to their lack of experience in these tough negotiations. We must now concentrate our efforts on the future. I have already said that the payments need to be on time. There is also a need for stability.

Can the Minister confirm that in the case of the rural world supplement, initially proposed by the Council of Farm Ministers to be for one year, the agriculture committee of the European Parliament has reported that, in its view, it should be for two years. That would provide welcome stability. I hope that the Minister will fight for that and get it.

There has also been criticism tonight of the fact that EC funding might not be as advantageous as United Kingdom domestic support. I do not accept that. I have talked at length to my farmers. They seem to think the exact opposite. We have a very tight United Kingdom public spending round. Although I do not underestimate the difficulty of getting money in Brussels for our farmers, the fact remains that there is greater certainty of payment. I accept that the value of sterling is a factor, but all that has to be taken into account in future reviews. Whether it is the HLCA mechanism, or whether it is the rural world supplement, the plain fact is that both mechanisms are income substitution. For that reason, they can be negotiated and agreed only on an annual basis.

I welcome also the fact that the Agriculture Select Committee is to look in detail into this matter. One of the points that I made during the Christmas Adjournment debate was that we needed to get rid of some of the mystery that surrounds the true figures. There should be a much more open review of the hill farm position.

We need also to consider the environmental dimension. Those of us who represent hill farm areas understand just how important hill farming is to the environment. We have some important caveats—particularly that there should be no over-grazing and that we need to conserve the landscape. That must be worth a price to the farmers. We have environmentally sensitive areas in some hill farm areas. We have the north York moors farm scheme in my constituency. We have the Department of the Environment stewardship scheme. It is time that all this was rationalised so that farmers know just where they stand.

Finally, and above all, it is very much now a case of restoring confidence among hill farmers in the future of hill farming. The events of the past nine weeks demonstrate that, while it is possible to make a lot of hot air and fuss about the issue, it is Conservative Members who have seen fit to take a very close interest in it. That is what we do week in, week out, month in, month out. That is why I believe that we should continue to support the hill farmers. Then they will continue to support us.

Mr. Ieuan Wyn Jones (Ynys Môn)

On a point of order, Mr. Deputy Speaker. It must be extremely difficult in the Chair for you tonight. During a very short debate of an hour and a half, it is difficult for the many hon. Members who want to support the hill farmers in this campaign but who have not had the opportunity to make their views known. It is an extremely short debate for a very important matter.

Mr. Deputy Speaker

The Chair does not decide the length of the debate.

Mr. Mallon

Further to that point of order, Mr. Deputy Speaker. I realise the difficulties that you face, but the measure is much more punitive in Northern Ireland than it is in England, Scotland or Wales because of our agricultural structure. Unfortunately, because the debate is to last only for an hour and a half, no one from Northern Ireland has been able to make that case. I realise that it is not within your competency or ability at this stage to ensure that the case is made, but it is regrettable because of the terrible punitive effect in Northern Ireland.

Mr. William Ross (Londonderry, East)

Further to that point of order, Mr. Deputy Speaker. It will not have escaped your notice that the measure applies only to Great Britain, not to Northern Ireland. Therefore, if the Opposition would care to table another prayer on a Northern Ireland order tomorrow, we could have a further hour and a half's debate.

Rev. Ian Paisley

Further to that point of order, Mr. Deputy Speaker. The Minister made certain remarks about the statistics pertaining to Northern Ireland, but it should be put on record that the statistics that he gave were misleading and a slander on the hill farmers of Northern Ireland.

1.16 am

Mr. D. N. Campbell-Savours (Workington)

Hon. Members will have noted that the Minister of Agriculture, Fisheries and Food has failed to attend the debate. We are bound to ask whether he intends to vote—perhaps he is still filling envelopes with hill livestock compensatory allowance payments.

We have had an interesting debate, once again characterised by the Government's questionable use of figures. We believe that the Government stand accused of an inexcusable error of judgment only partially offset by the convenient reconsideration of rules, which has enabled Ministers to pull a rabbit out of a hat in the form of an extra 79p. I am afraid that the House will not be fooled. The Government have sought to justify their original error with a spray of statistics which, when tested, misrepresented the truth. Farmers, the Opposition and a large number of hon. Members rejected them.

Who in their right mind could argue that a 25 per cent. reduction in the ewe price between 1988 and 1992 was in fact an increase, and then have the cheek to suggest that the worst year in living memory in the less-favoured areas be used as a baseline for calculating income growth? Who in their right mind could argue that special sheep annual premium payments offset HLCA cuts, without admitting that SAPs are variable payments which can be reduced as readily as increased? Indeed, we need a guarantee that if SAPs are ever reduced, HLCA payments will be increased to compensate.

Hon. Members have given innumerable examples challenging the Government's statistics on farm incomes. I commissioned some interesting research from the National Farmers Union in Cumbria. We took six farms and analysed incomes from 1983 to 1992. A representative sample of the research showed that in the period studied, on a farm of 500 breeding ewes, where livestock sales remained static in cash terms at just over £11,000, the net profit after subsidy, depreciation and interest on a £5,000 loan rose from £5,000 in 1983 to £7,000 nine years later in 1992. That farmer has been running a charity. No one else could have farmed more efficiently. He was and still is doing society a favour managing that land in the heart of the Lake District. We have exploited his good will.

David Keddie's work at Swansea university confirms that the position is the same in Wales. He shows in his detailed and exhaustive research of 400 households in several regions that farm incomes are miserly and far too dependent on peripheral activity. He shows that the more precarious the income the greater the pressure to increase stock levels. The fear of indebtedness is dominant.

The reality is that, despite all the evidence, the Government have sought repeatedly to hide the truth. The truth was never an argument about offsetting national subsidy with European subsidies and green pound devaluations. It was a decision born in Whitehall to save money on the back of hard-pressed hill farmers.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

Will the hon. Gentleman give way?

Mr. Campbell-Savours

It is not possible this evening.

In evidence of that I quote a letter from the Minister of Agriculture, Fisheries and Food to the Chief Secretary to the Treasury dated 6 November 1992 which says: Cuts in the HLCA rates will inevitably provoke strong criticism from the farming industry. The farming unions have made very clear to us that the industry's confidence will be dealt a severe blow if the recovery of incomes is undermined by Government action. They have pointed out that real hill incomes remain below their levels of a decade ago. And even following the recovery hill farm incomes remain at very low levels in absolute terms. Then the Minister says: There is undoubtedly merit in the union's case. That was a clear admission by the Government of the collapse in hill farm incomes in the United Kingdom. The letter proves that the Government desperately wanted the cuts and they did not care a damn if the hill farmers paid the price.

I come now on a more constructive note to the wider issue of farm incomes. There is, without doubt, throughout the farming community, a developing consensus that farm incomes should not be overdependent on public subsidy. That is the Opposition's view. Farmers have another option open to them and that is to secure a higher price for their products in the market place.

Lamb prices in the United Kingdom at auction are grossly depressed. British lamb is nearly the cheapest in Europe but the retail price of lamb throughout the Commuity is grossly inflated. Dead-weight United Kingdom prices are often half and less what they are in other parts of Europe, particularly in southern Europe.

Miss Emma Nicholson (Torridge and Devon, West)

Will the hon. Gentleman give way?

Mr. Campbell-Savours

I am sorry, I do not have time. Perhaps the hon. Lady can intervene next week on the Agriculuture Bill.

The explanation is not only to be found in the demand for smaller lambs and seasonal buying, but equally in the nature of a meat trade in Europe which loads the lamb price at retail on the basis of it being a specialist product. Within 200 yards of the European Commission's offices in Rue de la Loi in Brussels three weeks ago, I found lamb being sold at £11.50 a kilo. The United Kingdom dead-weight carcase price on the same day was £1.80 a kilo.

British lamb producers must break the stranglehold of a highly restrictive retail meat distribution network in Europe. That network, in the absence of real competition, is denying the European consumer cheap meat. United Kingdom meat exporters must rise to that challenge. United Kingdom lamb production must become far more market oriented. In a more buoyant market, arguments over subsidy will inevitably recede in importance.

The Government should take a far more hands-on approach to the development of United Kingdom meat exports. Exhibitions and the impressive work of the Meat and Livestock Commission are not enough. We need a meat export strategy which positively carves out a major proportion of EC markets for United Kingdom producers. If we cannot work through the existing retail networks, British multiple meat retailers should expand overseas. The Government can take the lead. The answer to this whole question is to be found not only in public subsidy, but in the wider European market place. In the absence of such a strategy, hill farmers will unfortunately need more and more help. That is why HLCA payments at this time are critically important to their survival.

The whole strategy has to change. Hill farmers need Government help. The Government must take the lead. The disequilibrium in the EC sheep market must be brought to an end.

Tonight's debate has been objective and constructive. Hon. Members of all parties have recognised the difficulties. We all want the industry to survive. In that light, I invite all hon. Members to support our motion. The hill farmers need our support. It will enable Ministers to bring back an order. If we win the motion tonight, that would be the radical, tactical and popular position to take.

1.25 am

Mr. Deputy Speaker

I call Mr. Curry.

Mr. Alex Salmond (Banff and Buchan)

On a point of order, Mr. Deputy Speaker. You have an obligation to protect minorities in the House. You are aware that hill areas are concentrated in Wales, Scotland and Northern Ireland. Yet there have been no speakers from Scotland or Northern Ireland. What is more, the Ministers for Scotland, Wales and Northern Ireland have sat silent like stookies throughout the debate. We are about to be misinformed for the second time by the English Minister. This is abuse and I invite your protection and intervention.

Mr. Deputy Speaker

Order. The hon. Gentleman knows that this is a 90-minute debate and that the Chair cannot control the length of speeches. I made a plea and I regret that hon. Members did not totally respond to it.

Mr. Foulkes

On a point of order, Mr. Deputy Speaker. Is it not the case that the Minister of State can speak only with the permission of the House? He has already spoken and since we have here the Secretary of State for Wales, the Under-Secretary of State for Scotland and the Under-Secretary of State for Northern Ireland, all of whom deal with agriculture, they could adequately reply. I object to the Minister of State speaking again and I do not think that he has the permission of the House.

Mr. Deputy Speaker

Order. May I formally check that the hon. Member is objecting to the Minister of State responding?

Mr. Foulkes

Yes, Sir.

Mr. Deputy Speaker

Then the leave of the House is not granted. The debate may continue. I call Mr. Bill Walker. [Interruption.] Order. The House has requested an hon. Member from Scotland to speak and I have called one.

1.28 am

Mr. Bill Walker (Tayside, North)

Mr. Deputy Speaker, you can be assured that I speak for a part of Scotland that has uplands, mountains, and lots and lots of sheep. There is no doubt that my hon. Friend the Member for Ryedale (Mr. Greenway) illustrated the humbug and hypocrisy that we often see in the House. [Interruption.] In the debate before Christmas, which I, my hon. Friend and others attended, we noted the absence of all those caring faces that I see tonight. What has brought about the transformation? I believe that it has been brought about because there is a three-line Whip: all these individuals who in the past have shown their enormous interest in the problems of my hill farmers by their absence are here tonight because the Labour party saw an opportunity to put on a three-line Whip. That was in the hope that they could exploit a situation that had developed, as is often the case where negotiations are required in Europe, so that agreements can be made in Europe and payments—

Mr. Llwyd

rose—

Mr. Walker

I shall give way to the hon. Gentleman if he is patient.

They saw an opportunity to exploit it, but they were mistaken, because when they tabled the motion they failed to realise that negotiations were continuing and that figures had been arrived at which were different from what they thought they would be.

Mr. Llwyd

I do not know whether the hon. Member recalls that I am not a member of the Labour party, but it was in response to my question that the Minister made his statement about the HLCAs. We in Plaid Cymru and the SNP are concerned about what is going on and I dare say our Labour colleagues are as well. It is not good enough to say that it is convenient for all of us to worry about it. It is a great worry in the whole of Britain and it is time that the Conservative party grew up.

Mr. Walker

Where was the hon. Gentleman when we took the opportunity to debate this matter late last year? He was not showing his care then.

Miss Emma Nicholson

In support of my hon. Gentleman, does he agree that the Opposition spokesman knew nothing about what he was saying? He was reading from a brief which did not bear any resemblance to reality. He was talking, for example, about the dead carcase weight price of lamb in English markets, and I assume in Scottish markets also, without realising that the point about hill-farmed lamb is that it is exported live and on the hoof, killed in the importing countries, such as Spain and France, and then stamped Spanish or French lamb and sold at a premium price.

Mr. Walker

I thank my hon. Friend for that helpful intervention. One of the great tragedies in the House is that often Members speak who have no background or experience. I do not accuse the hon. Member for Workington (Mr. Campbell-Savours) of that, because I recall standing with him in the Falkland Islands, when we looked out at a sheep farm. The hon. Gentleman said that it could be his constituency and I said that it could be mine, because we both represented hill farm constituencies. So I do not charge the hon. Gentleman with not knowing what is happening in his constituency, because he has always impressed me as knowing that.

Mr. Wilson

I am sure that the hon. Gentleman will recall that on many occasions in my six years in the House the issue of HLCAs has been raised at Question Time and during debates by hon. Members who are deeply concerned about the population and agricultural communities in the upland areas. On every one of those occasions there has been cross-party support for the concept of maintaining HLCAs, because everyone who cares about this subject realises that when we start eroding the HLCAs, we are eroding the ability to sustain populations in those areas. Does the hon. Gentleman realise that the only thing that has changed tonight is that Opposition Members are still saying what we have been saying throughout the years and that Conservative Members are having to find reasons to rationalise a complete change of position?

Mr. Walker

I thank the hon. Gentleman, because he is quite right. But—

It being one and a half hours after the motion was entered upon, MR. DEPUTY SPEAKER put the Question, pursuant to Order [12 February].

The House divided: Ayes 245, Noes 283.

Division No. 155]	[1.35 am
AYES
Abbott, Ms Diane	Allen, Graham
Adams, Mrs Irene	Alton, David
Ainger, Nick	Anderson, Donald (Swansea E)
Ainsworth, Robert (Cov'try NE)	Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary	Gilbert, Rt Hon Dr John
Austin-Walker, John	Godman, Dr Norman A.
Barnes, Harry	Godsiff, Roger
Barron, Kevin	Golding, Mrs Llin
Battle, John	Gordon, Mildred
Bayley, Hugh	Graham, Thomas
Beckett, Margaret	Griffiths, Nigel (Edinburgh S)
Beggs, Roy	Griffiths, Win (Bridgend)
Beith, Rt Hon A. J.	Grocott, Bruce
Benn, Rt Hon Tony	Gunnell, John
Benton, Joe	Hain, Peter
Bermingham, Gerald	Hall, Mike
Berry, Dr. Roger	Hanson, David
Betts, Clive	Hardy, Peter
Blunkett, David	Harman, Ms Harriet
Boateng, Paul	Harvey, Nick
Boyce, Jimmy	Henderson, Doug
Boyes, Roland	Heppell, John
Bradley, Keith	Hill, Keith (Streatham)
Bray, Dr Jeremy	Hoey, Kate
Brown, Gordon (Dunfermline E)	Hood, Jimmy
Brown, N. (N'c'tle upon Tyne E)	Howarth, George (Knowsley N)
Bruce, Malcolm (Gordon)	Howells, Dr. Kim (Pontypridd)
Burden, Richard	Hoyle, Doug
Byers, Stephen	Hughes, Kevin (Doncaster N)
Callaghan, Jim	Hughes, Simon (Southwark)
Campbell, Mrs Anne (C'bridge)	Hume, John
Campbell, Ronnie (Blyth V)	Hutton, John
Campbell-Savours, D. N.	Ingram, Adam
Canavan, Dennis	Jackson, Glenda (H'stead)
Cann, Jamie	Jackson, Helen (Shef'ld, H)
Carlile, Alexander (Montgomry)	Jamieson, David
Chisholm, Malcolm	Johnston, Sir Russell
Clapham, Michael	Jones, Barry (Alyn and D'slde)
Clark, Dr David (South Shields)	Jones, leuan Wyn (Ynys Môn)
Clarke, Eric (Midlothian)	Jones, Lynne (B'ham S O)
Clelland, David	Jones, Martyn (Clwyd, SW)
Clwyd, Mrs Ann	Jones, Nigel (Cheltenham)
Coffey, Ann	Jowell, Tessa
Connarty, Michael	Keen, Alan
Cook, Robin (Livingston)	Kennedy, Charles (Ross,C&S)
Corbett, Robin	Kennedy, Jane (Lpool Brdgn)
Corbyn, Jeremy	Khabra, Piara S.
Cousins, Jim	Kilfoyle, Peter
Cryer, Bob	Kirkwood, Archy
Cummings, John	Lestor, Joan (Eccles)
Cunliffe, Lawrence	Lewis, Terry
Cunningham, Jim (Covy SE)	Litherland, Robert
Cunningham, Dr John (C'p'l'nd)	Livingstone, Ken
Dafis, Cynog	Lloyd, Tony (Stretford)
Dalyell, Tam	Llwyd, Elfyn
Darling, Alistair	McAllion, John
Davies, Rt Hon Denzil (Llanelli)	McAvoy, Thomas
Davies, Ron (Caerphilly)	Macdonald, Calum
Davis, Terry (B'ham, H'dge H'l)	McFall, John
Denham, John	McGrady, Eddie
Dixon, Don	McKelvey, William
Dobson, Frank	Mackinlay, Andrew
Donohoe, Brian H.	McLeish, Henry
Dowd, Jim	Maclennan, Robert
Dunnachie, Jimmy	McMaster, Gordon
Dunwoody, Mrs Gwyneth	McNamara, Kevin
Eagle, Ms Angela	Madden, Max
Eastham, Ken	Mahon, Alice
Etherington, Bill	Mallon, Seamus
Evans, John (St Helens N)	Marek, Dr John
Ewing, Mrs Margaret	Marshall, David (Shettleston)
Fatchett, Derek	Marshall, Jim (Leicester, S)
Fisher, Mark	Martin, Michael J. (Springburn)
Flynn, Paul	Martlew, Eric
Foster, Derek (B'p Auckland)	Maxton, John
Foster, Don (Bath)	Meacher, Michael
Foulkes, George	Meale, Alan
Fraser, John	Michael, Alun
Fyfe, Maria	Michie, Bill (Sheffield Heeley)
Galbraith, Sam	Michie, Mrs Ray (Argyll Bute)
Galloway, George	Milburn, Alan
Gapes, Mike	Miller, Andrew
Garrett, John	Mitchell, Austin (Gt Grimsby)
Gerrard, Neil	Molyneaux, Rt Hon James

Moonie, Dr Lewis	Simpson, Alan
Morgan, Rhodri	Skinner, Dennis
Morley, Elliot	Smith, Andrew (Oxford E)
Morris, Rt Hon A. (Wy'nshawe)	Smith, C. (Isl'ton S & F'sbury)
Morris, Estelle (B'ham Yardley)	Smith, Llew (Blaenau Gwent)
Mowlam, Marjorie	Snape, Peter
Mudie, George	Soley, Clive
Mullin, Chris	Spearing, Nigel
Murphy, Paul	Spellar, John
O'Brien, Michael (N W'kshire)	Squire, Rachel (Dunfermline W)
O'Brien, William (Normanton)	Steinberg, Gerry
O'Hara, Edward	Stevenson, George
Olner, William	Stott, Roger
O'Neill, Martin	Strang, Dr. Gavin
Orme, Rt Hon Stanley	Taylor, Rt Hon John D. (Strgfd)
Paisley, Rev Ian	Taylor, Matthew (Truro)
Pendry, Tom	Tipping, Paddy
Pickthall, Colin	Trimble, David
Pike, Peter L.	Turner, Dennis
Pope, Greg	Tyler, Paul
Powell, Ray (Ogmore)	Wallace, James
Prentice, Ms Bridget (Lew'm E)	Walley, Joan
Prentice, Gordon (Pendle)	Wardell, Gareth (Gower)
Primarolo, Dawn	Wareing, Robert N
Purchase, Ken	Watson, Mike
Quin, Ms Joyce	Welsh, Andrew
Randall, Stuart	Wicks, Malcolm
Raynsford, Nick	Wigley, Dafydd
Reid, Dr John	Williams, Rt Hon Alan (Sw'n W)
Roche, Mrs. Barbara	Williams, Alan W (Carmarthen)
Rogers, Allan	Wilson, Brian
Rooker, Jeff	Winnick, David
Rooney, Terry	Wise, Audrey
Ross, Ernie (Dundee W)	Worthington, Tony
Ross, William (E Londonderry)	Wray, Jimmy
Rowlands, Ted	Wright, Dr Tony
Ruddock, Joan
Salmond, Alex	Tellers for the Ayes:
Sheerman, Barry	Mr. Jack Thompson and
Sheldon, Rt Hon Robert	Mr. Jon Owen Jones.
Short, Clare
NOES
Adley. Robert	Brooke, Rt Hon Peter
Ainsworth, Peter (East Surrey)	Brown, M. (Brigg & Cl'thorpes)
Aitken, Jonathan	Browning, Mrs. Angela
Alexander, Richard	Bruce, Ian (S Dorset)
Alison, Rt Hon Michael (Selby)	Budgen, Nicholas
Allason, Rupert (Torbay)	Burns, Simon
Amess, David	Burt, Alistair
Ancram, Michael	Butler, Peter
Arbuthnot, James	Butterfill, John
Arnold, Jacques (Gravesham)	Carlisle, John (Luton North)
Arnold, Sir Thomas (Hazel Grv)	Carlisle, Kenneth (Lincoln)
Ashby, David	Carrington, Matthew
Aspinwall, Jack	Carttiss, Michael
Atkinson, David (Bour'mouth E)	Cash, William
Atkinson, Peter (Hexham)	Channon, Rt Hon Paul
Baker, Rt Hon K. (Mole Valley)	Clark, Dr Michael (Rochford)
Baker, Nicholas (Dorset North)	Clarke, Rt Hon Kenneth (Ruclif)
Baldry, Tony	Clifton-Brown, Geoffrey
Banks, Matthew (Southport)	Coe, Sebastian
Banks, Robert (Harrogate)	Congdon, David
Bates, Michael	Conway, Derek
Batiste, Spencer	Coombs, Anthony (Wyre For'st)
Bellingham, Henry	Cope, Rt Hon Sir John
Bendall, Vivian	Couchman, James
Beresford, Sir Paul	Cran, James
Bitten, Rt Hon John	Curry, David (Skipton & Rlpon)
Blackburn, Dr John G.	Davies, Quentin (Stamford)
Body, Sir Richard	Day, Stephen
Booth, Hartley	Deva, Nirj Joseph
Boswell, Tim	Devlin, Tim
Bottomley, Peter (Eltham)	Dicks, Terry
Bottomley, Rt Hon Virginia	Dorrell, Stephen
Bowden, Andrew	Douglas-Hamilton, Lord James
Bowis, John	Dover, Den
Boyson, Rt Hon Sir Rhodes	Duncan, Alan
Brazier, Julian	Duncan-Smith, Iain
Bright, Graham	Dunn, Bob

Durant, Sir Anthony	Hughes Robert G.(Harrow W)
Dykes, Hugh	Hunt, Rt Hon David (Wirral W)
Eggar, Tim	Hunt, Sir John (Ravensbourne)
Elletson, Harold	Hunter, Andrew
Evans, David (Welwyn Hatfield)	Jack, Michael
Evans, Jonathan (Brecon)	Jenkin, Bernard
Evans, Roger (Monmouth)	Jessel, Toby
Evennett, David	Johnson Smith, Sir Geoffrey
Faber, David	Jones, Gwilym (Cardiff N)
Fabricant, Michael	Jones, Robert B. (W Hertfdshr)
Fenner, Dame Peggy	Jopling, Rt Hon Michael
Field, Barry (Isle of Wight)	Kellett-Bowmari, Dame Elaine
Fishburn, Dudley	Key, Robert
Forman, Nigel	Kilfedder, Sir James
Forsyth, Michael (Stirling)	King, Rt Hon Tom
Forth, Eric	Knapman, Roger
Fox, Dr Liam (Woodspring)	Knight, Mrs Angela (Erewash)
Fox, Sir Marcus (Shipley)	Knight, Greg (Derby N)
Freeman, Roger	Knight, Dame Jill (Bir'm E'st'n)
French, Douglas	Kynoch, George (Kincardine)
Gale, Roger	Lait, Mrs Jacqui
Gallie, Phil	Lang, Rt Hon Ian
Gardiner, Sir George	Lawrence, Sir Ivan
Garnier, Edward	Legg, Barry
Gill, Christopher	Lennox-Boyd, Mark
Gillan, Cheryl	Lester, Jim (Broxtowe)
Goodlad, Rt Hon Alastair	Lidington, David
Goodson-Wickes, Dr Charles	Lightbown, David
Gorman, Mrs Teresa	Lilley, Rt Hon Peter
Grant, Sir Anthony (Cambs SW)	Lloyd, Peter (Fareham)
Greenway, Harry (Ealing N)	Lord, Michael
Greenway, John (Ryedale)	Luff, Peter
Grylls, Sir Michael	Lyell, Rt Hon Sir Nicholas
Gummer, Rt Hon John Selwyn	MacKay, Andrew
Hague, William	Maclean, David
Hamilton, Rt Hon Archie (Epsom)	McLoughlin, Patrick
Hamilton, Neil (Tatton)	McNair-Wilson, Sir Patrick
Hampson, Dr Keith	Madel, David
Hanley, Jeremy	Maitland, Lady Olga
Hannam, Sir John	Malone, Gerald
Hargreaves, Andrew	Mans, Keith
Harris, David	Marland, Paul
Haselhurst, Alan	Marlow, Tony
Hawkins, Nick	Marshall, John (Hendon S)
Hawksley, Warren	Martin, David (Portsmouth S)
Hayes, Jerry	Mawhinney, Dr Brian
Heald, Oliver	Merchant, Piers
Heathcoat-Amory, David	Milligan, Stephen
Hendry, Charles	Mills, Iain
Heseltine, Rt Hon Michael	Mitchell, Andrew (Gedling)
Higgins, Rt Hon Sir Terence L.	Mitchell, Sir David (Hants NW)
Hill, James (Southampton Test)	Moate, Sir Roger
Hogg, Rt Hon Douglas (G'tham)	Monro, Sir Hector
Hordern, Rt Hon Sir Peter	Moss, Malcolm
Howarth, Alan (Strat'rd-on-A)	Needham, Richard
Howell, Rt Hon David (G'dford)	Nelson, Anthony

Neubert, Sir Michael	Stanley, Rt Hon Sir John
Newton, Rt Hon Tony	Steen, Anthony
Nicholls, Patrick	Stephen, Michael
Nicholson, David (Taunton)	Stewart, Allan
Nicholson, Emma (Devon West)	Streeter, Gary
Norris, Steve	Sumberg, David
Onslow, Rt Hon Sir Cranley	Sweeney, Walter
Oppenheim, Phillip	Sykes, John
Ottaway, Richard	Tapsell, Sir Peter
Page, Richard	Taylor, Ian (Esher)
Paice, James	Taylor, John M. (Solihull)
Patnick, Irvine	Taylor, Sir Teddy (Southend, E)
Pattie, Rt Hon Sir Geoffrey	Temple-Morris, Peter
Pawsey, James	Thomason, Roy
Peacock, Mrs Elizabeth	Thompson, Sir Donald (C'er V)
Pickles, Eric	Thompson, Patrick (Norwich N)
Porter, Barry (Wirral S)	Thornton, Sir Malcolm
Porter, David (Waveney)	Thurnham, Peter
Portillo, Rt Hon Michael	Townend, John (Bridlington)
Rathbone, Tim	Townsend, Cyril D. (Bexl'yh'th)
Redwood, John	Tracey, Richard
Renton, Rt Hon Tim	Tredinnick, David
Richards, Rod	Trend, Michael
Riddick, Graham	Twinn, Dr Ian
Rifkind, Rt Hon. Malcolm	Vaughan, Sir Gerard
Robathan, Andrew	Walden, George
Roberts, Rt Hon Sir Wyn	Walker, Bill (N Tayside)
Robertson, Raymond (Ab'd'n S)	Waller, Gary
Robinson, Mark (Somerton)	Ward, John
Rumbold, Rt Hon Dame Angela	Wardle, Charles (Bexhill)
Ryder, Rt Hon Richard	Waterson, Nigel
Sackville, Tom	Watts, John
Sainsbury, Rt Hon Tim	Wells, Bowen
Scott, Rt Hon Nicholas	Wheeler, Rt Hon Sir John
Shaw, David (Dover)	Whitney, Ray
Shaw, Sir Giles (Pudsey)	Whittingdale, John
Shepherd, Colin (Hereford)	Widdecombe, Ann
Shersby, Michael	Wiggin, Sir Jerry
Sims, Roger	Willetts, David
Skeet, Sir Trevor	Wilshire, David
Smith, Sir Dudley (Warwick)	Winterton, Mrs Ann (Congleton)
Smith, Tim (Beaconsfield)	Winterton, Nicholas (Macc'f'ld)
Soames, Nicholas	Wolfson, Mark
Speed, Sir Keith	Wood, Timothy
Spencer, Sir Derek	Yeo, Tim
Spicer, Sir James (W Dorset)	Young, Sir George (Acton)
Spicer, Michael (S Worcs)
Spink, Dr Robert	Tellers for the Noes:
Spring, Richard	Mr. Sidney Chapman and
Sproat, Iain	Mr. Timothy Kirkhope.
Squire, Robin (Hornchurch)

Question accordingly negatived.