HL Deb 05 April 1973 vol 341 cc439-40

4.30 p.m.

EARL FERRERS rose to move, That the Farm Capital Grant (Variation) Scheme 1973, be approved. The noble Earl said: My Lords, there are two Motions down on the Order Paper, one in my name, and one in the name of my noble friend Lord Polwarth, which refers to Scotland, and the House may find it convenient if these are discussed together.

The purpose of the Variation Schemes is to reduce the standard rate of grants from 30 per cent. to 20 per cent. for works and facilities for which application for grant is made on or after March 22, 1973. This change was notified to the House on March 21, when I repeated the Statement made in another place by my right honourable friend the Minister of Agriculture on this year's Annual Review. The Government welcome the substantial increase in capital investment on farms in recent years, an increase which reflects the improvement in farm incomes and the confidence of farmers in the prospects for the agricultural industry in the European Community. These prospects for expansion provide an incentive to maintain the right level of investment, and the rise in farm incomes has increased farmers' ability to finance the cost. In these circumstances, the Government consider that it is no longer necessary for them to provide such a large amount of direct financial assistance for the generality of works and facilities covered by the Farm Capital Grant Schemes.

The amount spent by the Government on grants for capital improvement on farms has increased from £36.5 million in 1970–71 to £57.6 million in 1971–72, and is expected to be over £74 million in 1972–73. In the current year, 1973–74, we estimate that the amount will rise to nearly £93 million. The reduction in the grant will save some £15 million in a full year, but we have made no cut in the special rates of grant for drainage for improvements to hill land or for remodelling works which are needed because of an approved farm amalgamation.

In 1972 the agricultural industry invested £167 million in buildings and works. This was 19 per cent. more than the investment in 1971, which was itself a record. Against this background, and given the thriving condition of British agriculture to-day, I am confident that the industry will be able to maintain an adequate level of investment with the rates of grant set out in these two Statutory Instruments. I beg to move.

Moved, That the Farm Capital Grant (Variation) Scheme, 1973, be approved.—(Earl Ferrers.)

On Question, Motion agreed to.