CEREALS (GUARANTEE PAYMENTS) ORDER 1971 (Hansard, 29 March 1971)

§ LORD DENHAM

My Lords, I beg to move that the draft Cereals (Guarantee Payments) Order 1971, which was laid before the House on March 2, be approved. With permission, I would suggest that it might be convenient for noble Lords to discuss at the same time the next following draft Order—the Cereals (Protection of Guarantees) Order 1971 which was laid before the House on the same date. My Lords, the Government have reviewed the price guarantee 1068 arrangements for cereals and the Orders now before your Lordships' House will give effect to the changes we feel are necessary. The Guarantee Payments Order places the deficiency payments to wheat and rye growers on a new basis and brings to an end the storage incentive arrangements which form part of the present Scheme. The Protection of Guarantees Order reduces the number of records and returns needed for the administration of the arrangements.

I will deal first with the basis of the payments to growers of wheat and rye. As noble Lords may be aware, the subsidy is at present paid on tonnage sold and the system includes a rising scale of storage incentives. The draft Guarantee Payments Order changes this by relating the payment to the acreage harvested—the method already in operation for the other cereals. What we are proposing, therefore, is a simplified Scheme dealing with all cereals in the same way. This system was, in fact, acceptable to the previous Administration and it is in line with this Government's philosophy of placing the onus for decision on the man concerned—in this case the grower. The existing Scheme to some extent frustrates this.

I should like to say a little about the savings made possible by these two changes. Your Lordships will realise that a sales scheme must involve administrative arrangements that are unnecessary if payments are related purely to acreage. There must be claim forms on which to quote the sale details, and we must require full records to be kept and to be available to us so that we can verify these sale details. And, of course, to ensure access to this information it is necessary for dealers in cereals to be specially registered with the Agricultural Departments. By contrast, the acreage Scheme proposal simply involves the grower in completing one form after he has finished sowing and a second after harvest. There is no need for records; no need for dealers in cereals to be registered.

The draft Protection of Guarantees Order therefore includes no provisions on these matters beyond a requirement that the records required to be kept by the existing Order are retained for two years from the end of the cereal year to which 1069 they relate, so that checks can be made on past claims. The change will, therefore, ease the present burden on merchants and cereal growers alike—and both sides have made it clear to us in the past that it really is a burden. But, not least, the change will make possible a very worthwhile saving of something like £250,000 by the Agricultural Departments, since the cost of the storage incentives is currently running at about one-third of the total cost of the Cereal Scheme. These Orders, then, make provision for the simplification of a complicated scheme and clear the way for considerable administrative savings. I commend them to your Lordships' House.