Agriculture and Horticulture Grant (Variation) Scheme 1984 (Hansard, 24 May 1984)

§ Lord Belstead
My Lords, I beg to move that the draft Agriculture and Horticulture Grant (Variation) Scheme 1984 be approved by your Lordships. This instrument relates to just one of the three schemes under which farmers in the United Kingdom can obtain capital grants on improvements to their businesses both in agriculture and in horticulture. Within these schemes grant may be obtained on improvements including buildings for livestock, horticultural production and storage; and land works such as drainage, grassland regeneration and shelter belts.
The changes which this present instrument would make to the Agriculture and Horticulture Grant Scheme are reflected in other instruments concerning the Farm and Horticulture Development Scheme and the Agriculture and Horticulture Development Scheme. These latter schemes are the ones which are sponsored and partly funded by the European Community, and under the terms of the European Communities Act they are only subject to negative resolution procedure in another place. That is why we are technically discussing only a single scheme, which is the one that needs the affirmative resolution of your Lordship's House. Under all these schemes the rates of grant vary depending both on the type of investment and on whether an investment takes place in an area designated as less favoured under Directive 75/268.
Again as I am sure that your Lordships will remember from a little earlier today at Question Time the agreement by the Council of Ministers earlier this year to redefine the United Kingdom's less-favoured areas to embrace for the first time in excess of 1.2 million hectares of disadvantaged land has been widely welcomed in this country. The statutory instrument which I am presenting now to your 392 Lordships results chiefly from that agreement which made it possible for the Government to fulfil their promise, made last November in another place, to make available further assistance to farmers with land located in the new areas designated as less favoured.
Under this statutory instrument farmers in the new LFAs would be provided with the existing higher rates of capital grant and, with only one exception, on the same investment items as in the original LFAs. The exception would be that farmers in the new LFAs would not be able to receive the higher rates of grant on roads, bridges and related items to which the standard lower rates will continue to apply.
It is our intention that these higher rates should apply to claims for grants received on or after 2nd May of this year provided that the expenditure concerned was incurred on, or after, 29th February of this year, the date when the extension of the less-favoured areas in this country was agreed by the Council of Ministers of the European Community.
This approach is important because it permits the maximum benefit to be derived from the formal recognition by the Council of the natural handicaps which exist in these new LFA areas. Your Lordships may already know that the level of aid paid in the LFAs is intended to reflect the extent of the permanent natural handicap involved. In general farming in the newly-designated areas is not handicapped to the same extent as in the original, high hill areas.
The new instrument will, in addition, allow us to differentiate between the old and new LFAs for the purpose of paying the hill livestock compensatory allowances. While the precise rate of those hill livestock compensatory allowances, which were payments on beef cattle and on sheep, will be decided in the normal autumn review of hill grants this year, we shall be consulting with the National Farmers' Unions and I anticipate that the HLCA rates in the new areas will, when they are brought into effect (we intend on 1st January 1985) be at approximately 50 per cent. of the hill rates of the old areas. Your Lordships might like to know that maps showing these new areas, now designated as less favoured, can be inspected at the Ministry's local offices, and copies are also available in the Library of your Lordships' House.
Your Lordships may also have noticed that we have taken the opportunity in this instrument to "tidy up" in certain other respects. When amendments were last made to the scheme in December 1983, dairy enterprises with more than 40 dairy cows became ineligible for grant on a range of items, mainly buildings for stock housing together with associated facilities. This was done to restrict the amount of Government aid going to a sector, the milk sector, which I do not need to remind your Lordships' House was in serious structural surplus and now, because of the very difficult decisions which have been taken in the Community, is still in some structural surplus, but we hope to a lesser extent.
On reflection, however, we have concluded that one of the changes introduced last December might have unwanted effects. This concerns the disqualification of waste disposal facilities for units of over 40 cows from grant under the scheme. Accordingly, we are now proposing to restore grant for waste disposal purposes 393 to dairy units of 40 cows or more, on environmental grounds. I am sure that there will be widespread agreement that proper waste disposal practices are essential. In restoring grant in this area we will not only be putting both small and large farmers on the same footing once again for this purpose but also, I hope your Lordships will agree, making some positive contribution to the protection of the environment.
Finally, there is one further technical clarification which is in the statutory instrument which I ought to mention because it is important in its own way, despite its complications, even for those who are familiar with this quite complicated scheme. The amount of investment which may be grant-aided is determined by the number of what are called labour units employed on a farm. There is a ban on aid to the poultry and egg sector for these purposes, and for this reason labour employed in looking after poultry and egg sectors of farms cannot be counted in the determination of the ceiling of grant-aidable investment. The amendments in the statutory instrument reflect more precisely the provisions of EEC Directive 72/159, which makes it quite clear that egg and poultry sectors of farms cannot be counted in for grant-aidable purposes.
Those are the details of the statutory instrument. I am sorry that my explanation has been rather lengthy, but the instrument is complicated. I beg to move.

§ Baroness Nicol
My Lords, we are grateful to the Minister for that clear explanation of what is a complicated subject. May I say that my noble friend Lord John-Mackie is extremely sorry not to be here. He had an appointment which he had to keep, and he has left me in his place. We welcome warmly the changes in this scheme, and I am particularly pleased on environmental grounds, as I heard part of the discussion earlier this afternoon and it seems that there will be some possible environmental benefits from it.
There are two points about which we feel that we must express disappointment. One of them is the exclusion of roads and bridges. By the very nature of the terrain in some of these areas, expenditure on roads and minor bridgeworks might well be heavy, and it seems a pity that they should be excluded from extra grants. We must accept it, I suppose, if that is the state that we have reached; but it does seem a pity, and perhaps on some future occasion we could look for an improvement in that area.
As far as the exclusion of labour on egg and poultry production is concerned, I am given to understand that this is not excluded in Northern Ireland. If this is so, would it not be more correct to have a uniform system throughout the United Kingdom? Perhaps the Minister would comment on that. If labour units in Northern Ireland are not excluded, what reason is there for excluding them here? With those two points, we welcome the variation.

§ Lord Belstead
My Lords, I am grateful to the noble Baroness. I, too, missed the noble Lord, Lord John— 394 Mackie, this afternoon, but he told me that he was unable to be here. I know that he has a hospital appointment, and I know that he has taken an interest in this particular order this afternoon. He has spoken to me, and I guess that he has also spoken to the noble Baroness; so I think he is with us in spirit, even if he is not actually here.
May I try to answer the two questions which the noble Baroness put to me? I am afraid I shall need to write to the noble Baroness about Northern Ireland. My advice is that under Community Directive 72/159, there is an absolute prohibition on aid to eggand-poultry production. It is for this reason that we have said explicitly in the present statutory instrument that you cannot count the work which you do in egg and poultry production if you are claiming grant; you have got to charge the work that you do in other parts of the farm. I was not aware that there was a derogation of this as far as Northern Ireland is concerned. I apologise to the noble Baroness for not being able to speak on Northern Ireland, but I shall certainly see that I get a letter to her on that specific point very quickly. Certainly, so far as Great Britain is concerned my advice is absolutely clear: that there is a complete prohibition on that form of production so far as an application for grant is concerned.
So far as roads and bridges are concerned, the noble Baroness (who, as I know, has a great interest in evironmental matters) will forgive me if I say that there are those who have knowledge of the environment who feel strongly that great care needs to be taken when driving roads up hillsides in this country. I have heard the noble Baroness, Lady White (who is not in the Chamber at this moment), speak in trenchant terms about this. Therefore, there may be some of the noble Baroness's noble friends who would take the view that perhaps we do not need to give too much subsidy encouragement to the building of roads and associated bridges, and other things, in the less-favoured areas.
Having said that, I should like to say on behalf of the Government that in looking where to put the extra money which is needed for the less-favoured areas—because we have always made it clear from the very moment that we made application to the Commission for an extension of the less-favoured areas that we would not rob Peter to pay Paul; that we would not take money away from the original less-favoured areas and give some of it to the new ones; and that it was going to have to be new money which we would have to find—we looked with the greatest care to see whether there were any farming operations which could still remain subject to grant aid, but at the lowland rate and not at the upland rate.
We felt that in this one area of roads and bridges the infrastructure in the new less-favoured areas was probably good enough, and it was for that reason—the noble Baroness may not agree with me—that we felt that this was the one exception we could make on the capital grant side in increasing the capital grants for the new less-favoured areas to the old less-favoured area rates. That at any rate was the Government's thinking. I hope that, with that explanation, maybe your Lordships will feel that the statutory instrument can be approved.