§ 5.50 p.m.
§ Lord STRABOLGI rose to move, That the draft Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1976, laid before the House on 29th June, be approved. The noble Lord said: My Lords, your Lordships will remember that the Hill Livestock (Compensatory Allow 68 ances) Regulations, which implement the livestock subsidy provisions of the EEC Directive on the Less Favoured Areas, provide for compensatory allowances to be paid to farmers in hill areas on breeding cows and breeding ewes. Shortly after 1st January, when these regulations came into force, the Council of Ministers increased the maximum rates payable under the Less Favoured Areas Directive from 50 to 52.5 units of account for each livestock unit. The overall financial limit which is imposed on the total allowances payable in respect of each hectare of eligible land is set at the same level and was therefore similarly increased. Following the Annual Review of Agriculture, it was decided that the United Kingdom rates of compensatory allowances should be increased by £4.50 to £29 and the overall financial limitation to 52.5 units of account, which is about £29.90. Both these changes occurred too late to affect the initial 1976 payments to hill farmers, but these amendments to the principal regulations will, with the approval of Parliament, enable any supplementary payment due to farmers to be made at an early date.
§ In addition to these increased rates, which I am sure will be very acceptable to your Lordships and to the farmers concerned, this amending order also makes two minor technical changes to the regulations. The first of these relates to Regulation 3(4) of the principal order and substitutes the word "in" for "throughout the greater part of". The reason this change is being made is to remove any doubt as to payment of grant on changes 69 of occupancy when, for example, a new occupier (perhaps a son) takes over with the eligible land the previous occupier's herd or flock in the latter part of the year preceding the qualifying day.
§ The second change relates to Regulation No. 6 and widens the powers to apportion, for the purposes of determining payment for eligible land available, to more than one claimant. The need for this arises primarily from the difficulties of apportioning common land. Some claimants for compensatory allowances who have grazing rights on a common do not always take advantage of these rights. The regulation on apportionment— Regulation No. 6—as originally worded, refers only to land being grazed, whereas under the regulation governing the financial limitation—Regulation 3(4)—it is possible, when assessing a claimant's maximum entitlement, to take into account land which he has the right to use whether or not he does so in practice. The amendment is designed to bring the two regulations into line and to enable common land to be apportioned to claimants to whom such land is available as a result of their legal grazing rights, whether or not they exercise those rights in any particular year.
§ Both these two alterations stem from the experience gained in operating the new rule which imposes a limit on the payment per hectare. This has shown the need to be able to apply the rule with more flexibility. I hope the House will see fit to approve these amending regulations so that any supplementary payments may be made as quickly as possible. I beg to move.
§ Moved, That the draft Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1976, laid before the House on 29th June, be approved.— (Lord Strabolgi.)
§ Lord SANDYSMy Lords, the House will be grateful to the noble Lord, Lord Strabolgi, for bringing the full details of this order before your Lordships. The details of the extended terms of compensation will indeed be welcomed in the industry as a whole. There are three questions which I should like to ask the noble Lord and of which I have previously given him notice.
70 First, will the terminal date for the order coincide with the 1977 Farm Price Review? Secondly, can a farmer who claims a State retirement pension remain eligible to claim the hill farm allowances and continue farming? Thirdly, what contribution does the FEOGA fund make towards this arrangement under the order?
§ Lord LLOYD of KILGERRANMy Lords, may I join the noble Lord in thanking the Minister for explaining so clearly the scope of these amendments to the regulations? I have no questions to ask the Minister and I should merely like to say how much we on these Benches welcome the amendment to Regulation No. 3, which deals with matters relating to changes of occupancy and makes it much easier for people wanting payments. Also, we welcome the modification to Regulation No. 6, which widens the powers for payments of more than one individual and, in particular, enables people who have rights over common land to obtain some kind of compensation. We are grateful to the noble Lord for explaining these regulations so clearly.
§ Lord STRABOLGIMy Lords, I am grateful to the noble Lords, Lord Sandys and Lord Lloyd of Kilgerran, for the welcome they have given to these regulations. The noble Lord, Lord Sandys, asked me three questions and I am grateful to him for having given me prior notice, as he said. First, there is no terminal date for these regulations. Member States are at liberty to change the rates within the limits of the Directive. Any changes of rate in the United Kingdom would normally be a matter to be decided after the annual review and any subsequent change in the regulations would require the approval of both Houses.
The noble Lord also asked me about retirement pensioners. A farmer in receipt of a State retirement pension is not required to sign the five year undertaking to remain in farming. A farmer who has signed an undertaking will be released from it when he starts to receive his State pension. The allowance will continue to be paid to State pensioners, I am glad to say. As your Lordships will remember, the original Directive did not permit this and indeed the matter was raised in your Lordships' House. I am glad to say that 71 we were able to get this difference of treatment removed, although each member country has to bear the full cost of the livestock subsidy paid to pensioners. In other words, this particular subsidy does not come out of FEOGA.
I was asked about the extent of the FEOGA grant. Expenditure by Member States in pursuance of the Directive will attract reimbursement by the guidance section of FEOGA, currently at the rate of 25 per cent. This means that FEOGA will contribute about £12 million of the United Kingdom's annual expenditure in 1975 on the new allowances, which are estimated at just under £50 million. The United Kingdom is expected to be a net beneficiary under the Directive. I hope that that has answered the three points.