HC Deb 24 January 2002 vol 378 cc1000-1
6. Mr. Mark Simmonds (Boston and Skegness)

What discussions he has had with those in agriculture in advance of his forthcoming Budget. [27556]

The Economic Secretary to the Treasury (Ruth Kelly)

Treasury Ministers have regular contact with a wide range of interest groups and individuals, including those with an interest in agriculture.

Mr. Simmonds

I thank the Minister for that answer. Considering that the Government have overseen a crisis in agriculture and in rural Britain since May 1997, crops grown for biodiesel would provide an excellent additional agricultural income and substantial environmental benefits. In the Chancellor's 2001 Budget, he announced that biofuels would qualify for a 20 per cent. tax rebate in fuel duty. The Minister should tell the House why the environmentally superior biofuels have not been given the same duty rebate as the gas fuels, currently 40p per litre, and that that anomaly will be addressed to the benefit of agricultural incomes throughout the United Kingdom.

Ruth Kelly

I am absolutely delighted that the hon. Gentleman recognises the sense of the Chancellor's proposal in the previous Budget to introduce a specific rebate for biodiesel in the next Budget. We have been listening to representations on that subject. I believe that there will be significant environmental improvements as a result of that rebate and I am sure that the Chancellor will listen very carefully to the representations that have been made today.

Mr. Huw Edwards (Monmouth)

When my hon. Friend meets representatives of the farming industry before the Budget, will she discuss the increased resources that the Government have put into organic conversion, and the support that they have given to agri-environmental schemes such as Tir Gofal in Wales, which has been remarkably successful and was commended by those organic producers from my constituency whom I saw yesterday? Does she agree that the future for agriculture must be to support those family farmers who farm in an environmentally sustainable way, instead of giving disproportionate subsidies to large-scale producers in the east of England?

Ruth Kelly

I thank my hon. Friend for his comments. I certainly agree that the organic sector of our farming industry has an important role to play in the development of that industry. At the moment, I believe, about 2.5 per cent. of agricultural land is devoted to organic farming. There have been calls from the organic sector to increase that to about 30 per cent., which, at first glance, strikes me as rather ambitious.

However, I completely agree with my hon. Friend that we need to take the development of the sector seriously. We need to continue our strategy of moving resources away from production support and into measures that will contribute to environmental development. In future, we want a market-oriented agricultural sector that provides for sustainable development and meets consumer demand.

Mr. Nicholas Winterton (Macclesfield)

I shall meet members of Macclesfield and district National Farmers Union on Saturday morning, and I should like to take them a message of hope from the Government. Does the Minister accept that if we are to maintain the countryside and to produce from land within the United Kingdom that food which we can economically and properly produce, the Budget must include some assistance, incentive and encouragement for our farmers? Will the Minister give me that assurance, to take to my farmers on Saturday morning?

Ruth Kelly

I certainly ask the hon. Gentleman to pass on my warmest regards to members of his local NFU when he meets them. He can of course tell them that it is the present Government who have commissioned the Food and Farming Commission, led by Don Curry, to look at the development of the sector to ensure that it can be developed in a sustainable way. The commission includes stakeholder representatives from all parts of the industry, and we look forward very much to considering their representations.

I would also ask the hon. Gentleman to point out that it is the present Government who have led reform of the common agricultural policy within Europe. It is by forming alliances that the Government have been in the vanguard of reform and able to put forward the real changes that will matter in future to the agricultural sector.