§ 4.43 p.m.
§ Lord WALLACE of COSLANY rose to move, That the Farm Capital Grant (Variation) (No. 2) Scheme 1978, laid before the House on 6th June, be approved. The noble Lord said: My Lords, noble Lords will no doubt recall that this Statutory Instrument was laid before Parliament on 6th June 1978 and was made to give effect to the undertakings given on 22nd March 1978 that we would give extra financial assistance to farmers and growers whose land, buildings, roads, fences and other works or facilities had been badly affected by the abnormal storms and blizzards of the winter. I shall not keep your Lordships' House very long because I am sure we are all in sympathy with the purpose of this Statutory Instrument. It is, however, rather more complex than the previous 1978 Variation Scheme, which dealt with the restoration of flooded land, and I shall try to cover only the more salient and important points.
§ Noble Lords will see that the Statutory Instrument came into operation on 7th June 1978; that is, the day after it was laid before Parliament. Its continuance is of course subject to the will of Parliament. As I explained when we debated the earlier Variation Scheme, no disrespect is involved in bringing the Statutory Instrument into effect before there has been an opportunity for debate. The primary legislation—Section 29 of the Agriculture Act 1970—permits us to do this. Noble Lords will, I am sure, understand that we acted as we did so as to be able to make cash available as soon as possible for farmers or growers whose buildings and other works had been seriously affected by the abnormal blizzards and storms this winter. We have particularly in mind the disastrous events of 30th-31st October 1977 and 28th-29th January 1978 in Scotland; 11th-12th November 1348 1977 in North-West England and Wales; 11th-12th January 1978 on the East Coast and in Kent; and 15th-19th February 1978 in South-West England and Wales.
§ What the Statutory Instrument will do, if Parliament approves, is to allow us to give 60 per cent. grant (as opposed to the normal rates of 20 per cent. or 30 per cent. available under the Farm Capital Grant Scheme, 25 per cent. or 40 per cent. under the Farm and Horticulture Development Scheme and 25 per cent. under the Horticulture Capital Grant Scheme) for replacing or reconditioning to their former condition buildings destroyed or damaged by the abnormal storms and blizzards. For similar operations on roads, fences, bridges, culverts, river banks, farm flood protection banks and other related items, as set out in the Schedule to the Statutory Instrument, the grant will be 50 per cent. except in less-favoured areas—broadly, the hills—where it will be 70 per cent. Grants for these operations are now at 20 per cent. for the lowlands and 50 per cent. for less-favoured areas under the Farm Capital Grant Scheme, and 25 per cent. and 50 per cent. respectively under the Farm and Horticulture Development Scheme.
§ Your Lordships will wish to know that special account is taken of Scottish circumstances. In Scotland, there will be special grants for replacing or reconditioning the banks or channels of watercourses affected by the abnormal storms, generally at 75 per cent. but at 85 per cent. in less-favoured areas. These grants reflect the Scottish farmers' position under the Farm Capital Grant Scheme 1973. Incidental operations, such as replacing electricity or water supply services in destroyed or damaged buildings, will also qualify for grant at the higher rate.
§ Noble Lords will have noted that the scheme before your Lordships' House is a United Kingdom Scheme. It will run in parallel with the Farm Capital Grant (Variation) Scheme 1978, which Parliament approved in April and provided higher grants for the restoration of flooded land to its former level of productivity. As we did for that scheme, we are taking advantage of Article 92.2(b) of the Treaty of Rome, which allows special aids to 1349 alleviate the effects of natural disasters. In this way, these special aids are not subject to the EEC's Farm Modernisation Directive. This means, my Lords, that they are not affected by the various restrictions contained in the Directive. One of these is a maximum amount of investment per labour unit which can qualify for grant, so that this limit will not apply to any of the work. The limitations on investment aids for pig enterprises and the total bar on grant for egg and poultry enterprises will also not apply.
§ Noble Lords will also wish to know that, in addition to providing the higher rates of grant, we are relaxing a number of statutory and administrative rules. I have already mentioned to your Lordships those relating to limits on expenditure. Others are the requirement to obtains prior written approval; the requirement that the income from the farm business must reach a certain level; and the special income test governing eligibility for the higher less-favoured area grants. In addition, certain tests usually applied to horticultural grants, such as an appraisal of the value of the investment to the business and the need for the business to have been in existence for at least 24 months to qualify for grant, will also not apply under these arrangements. Furthermore, my Lords, in the badly affected areas, we shall not apply the normal administrative rules relating to written prior approval for work to items which, although not covered by the Schedule to this Statutory Instrument, are nevertheless included in the main Farm Capital Grant Scheme. I refer to works and facilities such as electricity or water supply installations in their own right. Such items, however, will not attract the special rates of grant.
§ I must explain to your Lordships that this scheme, even more than the earlier Variation Scheme, breaks new ground, and for this reason contains some special features to ensure proper administration. Noble Lords will notice that the winter period is defined as extending from 1st October, 1977 to 31st Marsh 1978. However, only expenditure incurred on or after 1st November 1977 will qualify for the higher grants or exemption from the normal rules. Moreover, we need to be able to ensure that the higher grants are given only for buildings and other works 1350 destroyed or damaged by the abnormal weather of the past winter. For this reason, we require written intimation by 31st July 1978 that the farmer or grower considers that he suffered damage from those storms. This would enable inspection to be made to determine with reasonable certainty that we are dealing with genuine applications. I am sure that your Lordships will appreciate the importance of this. Formal applications may, however, be submitted up to and including 31st July 1979. This should give farmers or growers adequate time to prepare the detailed plans and specifications that may be necessary; but, as was the case for the first Variation Scheme, we have set a time limit for completion to encourage farmers and growers to get on with the necessary work quickly. We hope that applications will be submitted as soon as possible. I commend this scheme to the House and trust it will receive full approval.
§ Moved, That the Farm Capital Grant (Variation) (No. 2) Scheme 1978, laid before the House on 6th June, be approved. —(Lord Wallace of Coslany.)
§ 4.52 p.m.
§ Lord SANDYS
My Lords, the House will be grateful to the noble Lord, Lord Wallace of Coslany, for explaining the order which is now before the House. I think the difficulties that the Government have been up against in regard to the timetable are well appreciated on this side of the House, and I think it is a matter of congratulation that they have been expeditious in handling claims. My remarks will be related to questions concerning the rather longer term. Your Lordships will be aware that Article 92(2)(b) of the Treaty of Rome (which has been referred to already in the speech of the noble Lord, Lord Wallace of Coslany) permits special treatment to be given to those who have suffered loss or damage as a result of special weather conditions. But one must think particularly carefully about the question of weather insurance here.
I should like to draw your Lordships' attention to the Answer to a Question for Written Answer in another place on 22nd March 1978. It is not long and perhaps I may quote it. The Answer is from the Secretary of State for Scotland and the words are:It is, of course, a firm principle that the Government do not pay compensation for losses 1351 due to natural hazards, especially in food production where the weather is a factor to be taken into account every year; nor do they cover insurable risks.That is in the Official Report for 22nd March 1978, at cols. 554 and 555.
The Secretary of State at that time had not the advantage of this order in front of him. Nevertheless, there are very significant words there. Those are the closing words which he used:… nor do they cover insurable risks.In the longer term undoubtedly it will be a matter in discussion for the Minister of Agriculture and the National Farmers' Union in this country to investigate in some depth the question of what are insurable risks and what are not insurable risks in this regard.
Unhappily, the definition of "abnormal weather conditions" is something very difficult to be achieved. In the particular cases referred to by the noble Lord, Lord Wallace of Coslany, these have been identified. But, if I may respectfully suggest this to your Lordships, some weather conditions affect particularly the agricultural areas affected by high tides. These are particularly subject to the problems which occurred during the East Coast floods of some years ago, and it is a matter of continuing anxiety that a situation may arise where sea walls, dykes and sea defences may be breached in some future tidal conditions.
I hope that the Government will give special attention to this area. From these Benches we welcome the relaxation of the rules, particularly as they regard the question of written prior approval and also the special income test governing eligibility. These appear to be both practical and sensible arrangements and to assist particularly in regard to early payment where need is a paramount factor. I should like to thank the Government for their expeditious handling and I hope that they will continue to pay close attention to what advice is given them by the National Farmers' Union in this country.
§ 4.57 p.m.
Lord WALLACE of COSLANY
My Lords, as far as I can at short notice, I should like to reply briefly to the noble Lord, Lord Saydys. The question of insurance has come up again. It was raised 1352 in another place, So far as insurance is concerned, it has always been the Agriculture Department's policy to accept the industry's normal practice on insurance. Thus, for agricultural buildings we expect insurance only against fire and, therefore, we would not expect farmers to be insured against storm or flood. If any insurance payments are received they would be offset against the cost of the work, as only expenditure actually incurred by the applicant can be eligible for grant. So far as growers are concerned glass houses and similar structures are normally expected to be insured against storm damage and any insurance payments, therefore, will be offset. It is not normally possible, as I have already said, for other farmers or growers to insure against flood. That is generally the position on insurance. If there are further detailed points on this, I will be pleased to advise the noble Lord and will endeavour to give him an answer to his question of flood in future disasters.
It is difficult to take practical steps against the occurrence of abnormal weather of any kind other than to ensure that meteorological warnings are given as early as possible. That is the job of the Meteorological Office. In passing—and I have seen some of this in operation at Bracknell—I believe that there is very close contact between the farmers and the special services for farmers in giving warnings of unexpected bad weather in particular. The British Isles are susceptible to sudden changes which are difficult to predict. That is the "statement of the year" considering the present summer. These may be in both the type of weather and its severity. Standards of building and other facilities are constantly being improved, but it would be impossible to provide them to a strength that would withstand every weather condition.
So far as sea flooding is concerned, reviews by the water authorities in England and Wales and by the Ministry are continuing. A number of schemes for improvement are either in progress or are being designed. In other cases, work is being speeded up so as to seek completion before next winter's storm tide season. It is a fact that extra financial assistance is being provided for sea defence work. The Chancellor of the Exchequer announced in his Budget Statement that additional 1353 allocation will be made for sea defence work this year. The sum involved is £2 million which has now been allocated to water authorities. With grant rates of up to 85 per cent., this will result in additional Government expenditure of about £1¾ million this year. So far as possible, the Government are doing what they can. If the noble Lord wishes to raise matters later I shall be only too delighted to give him the information.
§ On Question, Motion agreed to.