Horticulture Research International

HC Deb 06 November 2000 vol 356 cc131-8

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Touhig.]

10.24 pm

Mr. John Grogan (Selby)

Stockbridge house near the village of Cawood is a horticultural research facility in my constituency. Like everything else in Selby at the moment, it is very wet indeed, and it would be remiss of me not to begin this debate by noting that, last week, the whole site and, indeed, the whole village of Cawood were under imminent threat from flooding. The products of years of research at Stockbridge house were threatened but, fortunately, owing to the heroic efforts of many villagers, led by parish council chairman David Jones, the flood waters were kept at bay. However, many of my constituents further downstream were not so lucky.

For years, I have been accustomed on Thursday morning to seek out as my first read of the day a copy of the Selby Times. Since Horticulture Research International's shock announcement in September that it was closing Stockbridge house from the end of March 2001, my reading habits have changed. At Thursday breakfast time, I now turn first to a paper called the Grower. As chronicled in the Grower, the normally classy world of horticulture has been in turmoil in recent weeks.

I want to do three things in this debate. First, I want to outline the importance of the horticultural sector and the current programme of research. Secondly, I want to discuss and examine the restructuring plan of Horticulture Research International and, finally, I want to suggest a way forward that will preserve the integrity of the restructuring plan—which, after all, Ministers have approved—while giving a new future to Stockbridge house.

Horticultural output has risen steadily over the past few years. The farmgate value of horticultural produce is £2.5 billion and makes up more than 15 per cent. of the UK's total agricultural output. A recent study by the Ministry of Agriculture, Fisheries and Food indicated that, of 11 autonomous sectors studied, horticulture is the most important for value added. The UK horticulture industry is characterised by many small and medium-sized businesses, which is why our research capacity is important. Many horticultural businesses find it hard to get the information that they need to develop their products, protect them from disease and find new markets.

Our debate will focus on the role of Horticulture Research International, a non-departmental public body, and it is worth noting that it is one of only 28 contractors for MAFF's programmes. In 2000–01, 80 per cent. of planned spending on horticultural research and development is expected to go to HRI. HRI's health is crucial to the industry, but it is essential that it has strong competitors to keep it honest. As the recent report of the Select Committee on Agriculture vividly described, HRI is, to put it bluntly, in a bit of a financial mess. Since 1990, MAFF has pledged £125 million of research and development contracts to HRI and invested £60 million in restructuring plans.

The Select Committee discussed the recent failure of the HortiTech business unit that was launched with a fanfare by the current HRI chairman, Mr. Peter Siddall, in 1998. The unit was designed to generate commercial income by transferring technology to industry and creating a commercial philosophy throughout HRI. HortiTech income is about £2.7 million, compared with a target of £4.35 million. The relative failure of HortiTech is the root of HRI's financial problems. The restructuring plan announced in September by Mr. Siddall involved a loss of about 150 posts—including about 50 at Stockbridge—which is more than 20 per cent. of HRI's total work force. Jobs will be lost as a result of the failure of the board and its chairman to balance the books.

Stockbridge house, to the astonishment of the industry, was chosen for closure. Of all the development sites run by HRI, Stockbridge house seemed to be in the strongest financial position, as Colin Harvey, chairman of the Horticultural Development Council, observed. Fifty per cent. of HRI's £22 million annual income comes directly from MAFF. However, MAFF funds only 10 per cent. of Stockbridge house's costs, with 47 per cent. coming from the Horticultural Development Council—in effect, the growers who pay the council a levy—and the remaining 43 per cent. from commercial organisations.

HRI's website boasts that "over the years" Stockbridge house has built up a worldwide reputation as a practical centre for horticultural research and development. The SOLA—specific off-label approval—programme of pesticides research is particularly important to smaller growers. That is based at Stockbridge house. It provides them with the crop protection products that they need to remain competitive. Indeed, the programme is funded largely by the HDC. Mr. Siddall's plan depends on closing Stockbridge house, but transferring the contracts to other sites. There are practical difficulties in doing that.

Other criticisms of HRI's plans are as follows: first, there was a complete of lack of consultation with the industry. The management tactics employed might have been learned by studying a National Coal Board management manual from the 1980s. As the Tomato Growers Association put it in its press release: The Tomato Growers Association views with dismay the announcement by HRI of the intended reduction of more than 20 per cent. in its staff numbers and, in particular, the closure of its Stockbridge House site. Had HRI consulted the industry over its plans, it would know that Stockbridge has recently enjoyed the closest working relationship of any HRI site with glasshouse salad crop growers, and not just those in the north of the country. The TGA has no confidence that HRI can maintain or replace the expertise which is threatened by the closure … As an example, research on the control of spider mites, which is led by Stockbridge staff, is seen as pivotal to the achievement by growers of their objective of eliminating all pesticide use in UK tomato crops. There is a strong feeling that HRI is turning its back on its original objectives. When it was set up in 1990, its brief was to carry out horticultural research and development and to transfer the results to the UK horticultural industry— very much an applied practical brief, the sort of work that Stockbridge house excels in and that growers throughout the country, particularly in the north, find so useful.

I quote The Commercial Greenhouse Grower editorial of last month: The industry has made its voice very clear on the Stockbridge House closure. It feels badly let down that it was not consulted, but if you read the evidence submitted by HRI's chairman Peter Siddall … to the House of Commons Agriculture Select Committee you get the answer. In his evidence Mr. Siddall aptly made clear that re-shaping HRI meant "more science and less development." And just in case we are accused of taking phrases out of context he also said "It is about focus, focus on science and the higher value end of the spectrum. On consultation, it was shameful that, when Mr. Siddall announced his plan, no one had bothered to check with MAFF about the future of the tied cottages at Stockbridge house. Families who had given their working lives to the site were left for weeks wondering whether they would lose not just their jobs, but their homes. Thankfully, my right hon. Friend the Minister of Agriculture, Fisheries and Food has intervened to secure those homes.

There is an element of civil service politics about all this, which reveals the limitations of the model of a non-departmental public body. When I was invited to an extremely useful meeting with the Minister to discuss the matter, sitting on his left was one Mr. Tony Burne, his chief adviser on research. Wearing his other hat, Mr. Burne is on the HRI board. In effect, he was advising the Minister on a restructuring plan costing the taxpayer more than £4 million. As a member of the HRI board, Mr. Burne had already approved that plan and committed himself to it.

I draw three conclusions from that evidence. First, as regards the status of HRI, there is wide consensus on the immediate way forward. As long ago as 1993, the HRI management statement referred to intended primary legislation which will establish HRI as a statutory corporation with functions and powers to carry out its remit and define its relationship clearly with MAFF. Who knows? Given my new found knowledge on the subject, I might be persuaded, if I am successful in the forthcoming ballot, to introduce a private Member's Bill on the subject.

That brings me to my second conclusion. I will want first to see a new chairman of HRI. Mr. Siddall should emulate Kevin Keegan and not seek reappointment to the role when his three-year term is up in January 2001. No one in the industry has been impressed by the aggressive attitude that Mr. Siddall has adopted, most notably at a recent meeting with the National Farmers Union and the HDC, which he needs to win over. Apparently, he banned the chief executive from attending a previous meeting with the HDC.

Mr. Siddall is a management consultant by trade. His website, Siddall & Company, reveals the following philosophy: With our clients we act as catalyst, coach and safety valve so that groups can work together more effectively. Our clients regard us as trusted thought partners. Enough said—HRI is too important to be an experiment for a management consultant.

The final conclusion is on the future of Stockbridge house and HRI. Earlier, I mentioned the fact that, for HRI's restructuring plan to work, HRI has to keep on-side the seven key research scientists at Stockbridge house and the HDC. None of the key research scientists are prepared to move, because of family reasons. The HDC has expressed concerns about HRI's ability to fulfil the SOLA contract at another site.

Last week, a very constructive meeting was held between representatives of HRI, the National Farmers Union and the HDC. There now seems to be a real and shared commitment to ensuring a viable and effective approach for HRI. Chief executive Professor Michael Wilson is now adopting a more pragmatic approach, making it clear that he does not rule out in the future employing the services of some of the seven key research scientists at Stockbridge house, perhaps on a contractual basis. The HDC is particularly keen that some of their skills should be employed in fulfilling the extremely important SOLA research programme.

Last week, I spoke to Professor Wilson on the telephone. He told me that he would not stand in the way of another body—perhaps the Central Science Laboratory, in York, which is another arm of MAFF and in need of glasshouses—taking over the site, and that it was up to that body to draw up a business plan. Indeed, if Professor Wilson is to contract work for the SOLA programme to some of the current research scientists, they will need continuing facilities at Stockbridge house. It is possible that some or all of the staff based at Stockbridge house could be transferred to CSL, saving some of the redundancy costs. There are also moves among local growers to establish a Stockbridge house trust to fund work on the site. I formally ask Ministers for a meeting within the next month to discuss those ideas.

Last week, I also asked Professor Wilson what he thought of accusations that HRI would implement a scorched earth policy at Stockbridge house so that no one else could take on a viable site. He assured me that the glasshouses would remain untouched, but made no commitment on the tractors and other equipment.

It is also a little unclear to what extent HRI is willing to provide financial and personnel information on Stockbridge house to enable CSL, or anyone else, to prepare a business plan for the site. Perhaps Ministers will consider dispatching the ubiquitous aforementioned Mr. Tony Burne, chief research adviser to MAFF and HRI board member, to encourage all the parties involved to give a fair chance for alternative plans for Stockbridge house to be prepared and to be carefully considered by Ministers, as my right hon. Friend the Minister of Agriculture, Fisheries and Food promised to do in his most recent press release on the subject.

10.38 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin)

I congratulate my hon. Friend the Member for Selby (Mr. Grogan) on securing this debate. I certainly understand why he has chosen to raise this particular issue; it is not only important, but of enormous concern to Horticulture Research International staff, to its many customers and to my hon. Friend's constituents. I very much appreciate that in securing this debate, my hon. Friend has been motivated both by concern for the jobs of some of his constituents and by the concern to secure a viable horticulture industry, and horticultural research industry, in the United Kingdom. Like officials and other Ministers in my Department, I hold very dear those concerns about the horticulture industry and the horticultural research industry.

My hon. Friend began by referring to the danger of flooding at the site in his constituency. I join him in paying tribute to the efforts of those who have worked so hard in trying to ward off the problems caused by flooding in his part of the world.

The Government very much regret that HRI is having to take the action that it has announced, including the closure of its Stockbridge house site and the redundancies across the organisation. Indeed, it is important to stress that all HRI's sites are affected by the restructuring programme, not just Stockbridge house—although I fully accept the severity of the impact on Stockbridge house, as outlined by my hon. Friend.

I know that HRI's board and senior management are committed to providing every possible assistance for staff who are being made redundant. That includes career consultancy, resettlement training and access to independent counselling. MAFF has made available its own personnel and welfare services. That in turn includes doing our best to identify suitable vacancies at the offices of MAFF or our agencies. When my hon. Friend met my right hon. Friend the Minister of Agriculture, Fisheries and Food, they discussed some of these concerns.

The Government believe that however difficult HRI's restructuring measures may be, they are necessary to redress a very difficult financial situation and to ensure that HRI can continue to provide an efficient and cost-effective service into the future.

My hon. Friend mentioned some of HRI's financial problems, and it is true that it is forecasting an annual deficit for the four years ending March 2004 of about £2 million, falling to £1.3 million. Some £3 million must be cut from operating costs, and assets must be brought into line with foreseeable income streams. That is why the board and management had to review the financial strategy, and to take difficult decisions as a result. The horticulture industry and the farmers' unions share the view that to maintain HRI and provide for its crucial work for the sector, the restructuring is necessary.

The Government believe that HRI's board and senior management have assessed all the options and identified the one which, in their view, can best secure the organisation's future and maintain its service to the UK horticulture industry. HRI is a non-departmental public body, and decisions about the day-to-day operation of its business are, of course, matters for its board and senior management. It has an experienced board, which includes senior representatives of the horticulture industry, the scientific community and business.

I can assure my hon. Friend and the House that, as HRI's sponsor Department, the Ministry has scrutinised the plans very thoroughly. We have agreed to provide a grant of £4.5 million to enable the restructuring to be implemented. My right hon. Friend the Minister met my hon. Friend with a delegation from the industry on 21 September, to listen to their concerns directly and to discuss the restructuring plans, including the closure of the Stockbridge house site.

One of the points arising was the industry-funded work at Stockbridge house and its future. Not surprisingly, my hon. Friend referred to the arrangements that HRI has in hand to ensure that it can continue to deliver the important project work currently based at Stockbridge house, and its chief executive has given the Minister an undertaking that those arrangements will be fully discussed and explained to the industry.

To that end, HRI has had lengthy and detailed discussions with senior representatives of the industry to explain the rationale behind the restructuring plans and the arrangements for managing work currently carried out at Stockbridge house. I am pleased to be able to report that on 2 November HR1, the National Farmers Union, the Horticultural Development Council and the East Malling Trust for Horticultural Research issued a joint statement, in which they all committed themselves to moving ahead together for the benefit of the UK's horticulture industry. In particular, they have agreed to seek a satisfactory continuation at HRI of the important SOLA—specified off-label pesticides approval—work currently carried out at Stockbridge house.

The statement affirmed all those bodies' belief in a healthy and vigorous HRI, and in the need for all the stakeholders to work together to ensure that its valuable programme of work continues in such a way as to benefit the horticulture industry directly.

It is worth reflecting on the fact that the horticulture industry is a major contributor to the economy and to the nation's diet and health. My hon. Friend and I must have read similar briefing information before this debate, as I, too, want to refer to the fact that the farmgate value of produce exceeds £2.5 billion, which, as he said, is more than 15 per cent. of total UK agricultural output. That is a significant contribution. Horticulture receives very little support from the common agricultural policy, and has one of the freest markets in operation in agriculture.

Consumer preference has been a strong driver and the sector has shown itself to be tough, competitive and resilient. I want to stress the importance that Ministers attach to the future of the horticultural sector. As a Minister with a particular interest in the sector, I have had discussions with various people in the industry, as well as seeing for myself many of our excellent horticulture establishments. I am convinced that the sector can expand and can take the place of some of the produce that is currently imported, ensuring that in future we provide more of our produce domestically.

Current levels of public funding represent a firm commitment to HRI and to its work in support of the UK horticulture industry. MAFF continues to account for about 50 per cent. of its income. Since 1997, the Government have invested about £58 million in the organisation. HRI has also been awarded £2.26 million from the capital modernisation fund to create a new European centre for organic top fruit and nursery stock at its East Malling site.

I spoke of some of our imported produce being replaced by domestically grown produce, and that is especially relevant to organic production. There is considerable room for more such production here. The commitment to the new European centre was part of the action plan for farming launched by my right hon. Friend the Prime Minister at the farming summit on 30 March. In addition, HRI has been awarded £151,000 from the invest-to-save budget for collaborative projects with other public sector research establishments, and has recently been granted more than £11 million for capital investment and other purposes, including £4.5 million to enable the present restructuring plans to be implemented.

My hon. Friend, quite understandably, concentrated on plans for the future of the Stockbridge house site. May I respond directly to his request for a meeting with Ministers and officials about the developing situation regarding the future of the site and of HRI's work? I am happy to give him the assurance that we will have a meeting with him to deal with the issues about which he is concerned. He knows, however, that our intention is that once HRI vacates the site we shall sell it, so that the receipts will partly offset the cost of financing the restructuring plans, including redundancy payments to staff who are not transferring to other sites.

I know that there has been speculation about a possible role for MAFF's central science laboratory at York. As my right hon. Friend the Minister of Agriculture, Fisheries and Food announced on 6 October, CSL is considering the business case for consolidating some of its own research work at Stockbridge house when HRI leaves.

My hon. Friend referred to a scorched earth approach to the Stockbridge house site. I assure him that that is not the case. The discussions will include consideration of some of the facilities that already exist on that site, about which I know he is concerned.

My hon. Friend also referred to HRI's science activities. I do not believe, as some allege, that HRI is expanding its "high science" activities at the expense of its development role. Indeed, HRI' s chief executive has given Ministers an assurance that it will continue to cover the full spectrum of research and development from basic research to the dissemination of research and development findings and good practice direct to the industry. I know that he is keen to strengthen further HRI's links with the horticulture industry, something to which I also attach considerable importance. The chief executive is also seeking additional funding schemes through public-private partnerships so as to stabilise HRI's financial position and ensure that it continues to benefit all its stakeholders.

My hon. Friend also spoke about the role of Tony Burne, who is on the board of Horticulture Research International. He is one of 10 members of the board, and although he also has a role advising Ministers and considering issues affecting research in this sector through his work at MAFF, he does not derive financial advantage from that role. It is important to say that. There has been a representative from MAFF on the board of HRI from the outset. In that sense, Mr. Burne is fulfilling a normal responsibility, which has existed from the beginning.

The Government believe that HRI has a good reputation for providing high quality research and development and services to its customers. As such, it is rightly—and should continue to be—the premier horticultural research establishment in the United Kingdom. Obviously, we intend the restructuring plans to reinforce that position and maintain the ability to service the United Kingdom's horticulture industry. The Government hope that all HRI's customers will rally round the organisation and give it their support. We believe that we have to look ahead, through this difficult restructuring, to the industry's ultimate benefit.

It is important to see this research work in terms of the wider research work that can benefit horticulture and agriculture. I also believe that it is important to consider such issues in a national and a regional context to see the role that horticulture can play in the development of regional economies as well as in the economy of our country as a whole.

I accept my hon. Friend's point when he stressed the importance—

The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at six minutes to Eleven o'clock.