HC Deb 28 January 1993 vol 217 cc1137-40
5. Mr. Martyn Jones

To ask the Minister of Agriculture, Fisheries and Food what was the average income for mostly sheep farms in severely disadvantaged areas in 1988–89 and in each subsequent year for which figures are available for England and Wales.

Mr. Gummer

Full details of farm income indices are in the Library. Hill sheep farmers' incomes in 1992–93 were higher than in any year since 1984–85.

Mr. Jones

I am sorry that the Minister did not choose to answer the question on the Order Paper. Had he done so, it would have been obvious that although farm incomes have risen during the past 18 months, it has been from a very low base. Nevertheless, the right hon. Gentleman has reduced hill livestock compensatory allowance by 26 per cent. Having taken that unprecedented step, will he give the House a firm promise that should the EC-funded payments for ewe premiums go down, he will put up HLCAs to compensate?

Mr. Gummer

I hoped that I had answered the hon. Gentleman's question as well as I could. There is a long series of figures available in the Library which will probably answer it. I hope that he will look at them.

It is true that nominally there has been a significant increase in incomes, but I accept that it has been from a low base. Perhaps the better measure is the fact that every farmer—with so few exceptions as to make "every" the most accurate description—will receive £1.80 extra for every ewe this year than he received last year, which is the year under discussion rather than the year before. That can hardly be considered a cut.

The HLCA is designed to be a compensatory payment. The reason why it fell, although the total subsidy and extra help rose, was that overall incomes have risen by 50 per cent.—admittedly, as I have said in every announcement, from a low base. By law, we must take that into account. In the past, when incomes have fallen we have raised HLCAs. That has been the Government's policy, we are committed to it and I shall stick to it.

Mr. Nicholas Winterton

Does my right hon. Friend accept that he has clearly said that although the income of hill farmers, especially sheep farmers, has risen marginally, it has been from a very low level? Does he accept that in some cases the cuts that he is making in HLCAs can turn a small profit into a loss?

I have seen the projected accounts for two of my sheep farmers in the Peak park. They are likely to make a loss this coming financial year based on the HLCA payments that they will receive, including the increase in extra help that my right hon. Friend mentioned. That will not enable them to make the contribution to the maintenance of the Peak park that so many people consider to be so important, especially the restoration and maintenance of dry stone walls.

Mr. Gummer

I think that my hon. Friend cannot be right in his figures. As the total amounts have gone up and every ewe will attract an additional payment of £1.80 this year, those farmers cannot go into loss because of some cut. Overall, there has been no cut for each farmer. A quarter of the farmers that we are discussing receive payments specifically designed to maintain dry stone walls because they are in environmentally sensitive areas. I have yet again increased the amount available for that.

My hon. Friend is very careful in his defence of his constituents and I honour him for that. However, there can be no answer other than to say that the Government have increased the support for agriculture in the hills. We are committed to that. A man with 1,000 ewes receives £30.000 in subsidy.

Mr. Tyler

Does the Minister agree that it all depends where we start? Will he confirm that the average level of farm incomes in the upland areas has dropped to almost a quarter of what it was in 1982? An answer that the right hon. Gentleman gave to my hon. Friend the Member for North Devon (Mr. Harvey) showed that the severely disadvantaged areas have had a cut of 45 per cent. for higher rate sheep and 60 per cent. for lower rate sheep. Will he confirm that had there not been a devaluation of the pound, he would have had to increase HLCA payments this year?

Mr. Gummer

The facts of the matter are that sheep farmers are getting more this year than they were last year and that we considerably subsidise sheep farming. Sheep farmers' incomes have risen by 50 per cent. in the past two years. Many others on low incomes cannot say the same. I am committed to go on helping the sheep farmers in the hills so that they can look after the hills properly. The hon. Gentleman represents a party which rightly asked for compensation when incomes fell, but is not prepared to act accordingly when incomes rise.

Mr. Jonathan Evans

Does my right hon. Friend accept that it would he fairer to see the £20 million recovered across the whole of agriculture rather than from the farmers who are on the most meagre of incomes? My right hon. Friend has already recognised that we are dealing with a low base year, but he knows that, according to the figures that he has placed in the Library, the proportion in terms of income is in the low thousands of pounds. Will my right hon. Friend outline to the House why the cut has not been spread across agriculture as a whole rather than imposed only on the poorest farmers?

Mr. Gummer

My hon. Friend seems to have missed the fact that a further £70 million or £80 million has gone directly to the hill farmers because the additional payment is made on each ewe. In those circumstances, lowland sheep farmers are facing particularly tough problems. I made sure that payments on cattle in the hills and the high hills were kept up because there had been no reduction in incomes there. When we have to make cuts it is right to ensure that they are made in the areas where there are significant increases. We cannot ignore the fact that every farmer in that situation is receiving more from the taxpayer this year than he did last year.

Dr. Strang

Surely the Minister appreciates that the hundreds of hill farmers who converged on Parliament earlier this week are perfectly well aware of the £1.80 increase in the premium to which he referred. But if income is cut by 50 per cent., as happened to them, an increase of 100 per cent. on that figure is needed to return to the original level. When will the Minister understand that the industry is so disturbed about this because he seems to be saying that he is prepared to cut their incomes in order to prevent them from reaching a level which gives hill farmers a reasonable return for their labour and increases investment in the hill areas?

Mr. Gummer

But £470 million a year of taxpayers' money goes into the hill areas. We are increasing that amount this year at a time when Government expenditure is being severely curtailed. At a time when many have had no increase in income at all and some have seen their incomes fall, we are significantly increasing the incomes of those people. Therefore, the hon. Gentleman is talking tosh.