HL Deb 01 December 1987 vol 490 cc1007-43

8.14 p.m.

The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Baroness Trumpington.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD STRABOLGI in the Chair.]

The Earl of Cranbrook moved Amendment No. 1: Before Clause I. insert the following new clause:

("Grants in respect of de-intensified farming.

—. (1) The appropriate authority may, with the approval of the Treasury, by scheme provide in relation to any one or more parts of Great Britain for the payment by the appropriate Minister to the owners and lessees of land of—

  1. (a) grants towards expenditure which has been or is to be incurred for the purposes of or in connection with the de-intensification of land in agricultural use, or for the management of land that has been so de-intensified;
  2. (b) grants for abating any financial loss which has been or will be suffered in consequence of the de-intensification of land in agricultural use.

(2) The provisions of subsection 2 of section I below shall apply to any scheme made under this section.

(3) The power to make such a scheme under this section shall be exercisable by statutory instrument and such a scheme shall not be made unless a draft of it has been laid before, and approved by resolution of. each House of Parliament.

(4) It is hereby declared that any function conferred on the appropriate Minister by or under this section is to be treated as a function connected with agriculture for the purposes of section 17 of the Agriculture Act 1986 (duty to balance interests when exercising functions connected with agriculture).

(5) A grant paid by virtue of a scheme under this section shall be paid out of money provided by Parliament.

(6) In this section— agricultural use"—

  1. (a) in relation to England and Wales, means agricultural use within the meaning of the Agricultural Act 1947: and
  2. (b) in relation to Scotland, means agricultural use within the meaning of the Agriculture (Scotland) Act 1948.
"the appropriate authority" and "the appropriate Minister-have the same meaning as in section I below. de-intensification" means a reduction in yield of specified products per hectare or in the number of specified livestock units per hectare of land contained within an agricultural unit (within the meaning of the 1947 Agriculture Act) by at least one fifth from a date specified in the scheme.")

The noble Earl said: Although this amendment broadens the scope of the Bill, it is entirely in accordance with the Bill's existing aims and mode of operation. First, it is an enabling measure. Secondly, it gives powers to agriculture Ministers to offer grants for initial costs, for expenditure on specified management procedures or for the abatement of financial loss incurred by a participating farmer. Thirdly, detailed provisions will he implemented only after subordinate legislation, which will require a positive resolution of both Houses. I have placed the new clause before Clause I because I regard it as of focal importance in a Bill bearing the title Farm Land and Rural Development Bill. The proper activity of farmers is farming.

I should perhaps declare an interest. I am a farmer. I am also a salaried council member of the Natural Environment Research Council. I apologise to my noble friend Lady Trumpington for being unable to take part in the Second Reading debate and thereby presaging my amendment today. I do not take that as an excuse to make a Second Reading speech but I shall remind the Committee briefly that the reform of the common agricultural policy is probably the greatest unresolved problem in the European Community at the moment. I noticed a headline in the newspaper today referring to crisis talks again in Copenhagen.

The major problem within the Community is overproduction. The Commission is aiming at a 20 per cent. reduction in surplus commodities, starting with cereals, beef and wine. There is at the same time very serious concern over the impact of modern farming methods, stimulated by the success of the common agricultural policy, on the environment. By the environment I mean wild animals, wild plants, water quality, soil condition and everything that pertains to the natural environment. This concern is shared by many farmers. At present many farmers are hard-pressed to see their way out of the dilemma facing them.

In explaining the amendment, I have to exercise a little of the vocabulary of agriculture and agricultural policy. I need perhaps to attach a small glossary. "Extensification" is the term in vogue in the European Community documents and related discussions. "Set-aside" is a procedure to remove land from agriculture. This is one of several options available for reducing agricultural output. The Bill in its existing clauses is intended to encourage first, diversification—the diversification of farm business outside strictly farm activities; and secondly, conversion—the conversion of farmland to non-farming use, notably woodland. My proposed new clause would encourage farmers to continue to do what they do best—that is, to farm—but simultaneously to lower their output and to lessen the impact on the environment. This process is de-intensification.

Examples of de-intensification are not specified in detail in the new clause. There are many possibilities. For instance, there could be restrictions on the use of fertilisers or sprays in general or as specified by type or composition. A model of this nature might be based on the research that has been done by the Game Conservancy with considerable success. This important work has identified chemicals that are specific to their targets—specific to the pests or the disease-causing organisms—and have lessened or no injurious side-effects on other wildlife. The use of such sprays in carefully controlled quantities at carefully chosen growth stages and at particular times of the year is beneficial to the environment.

Another example could be organic farming whereby artificial chemicals and artificial fertilisers are foresworn altogether. Another could be traditional grassland stock management while yet another could be a mosaic of cultivated and non-cultivated land such as wider field margins or grassland strips in cornfields, as has been advocated as a result of some of the Game Conservancy research.

I would emphasise that de-intensification means management by farmers using methods with which they are familiar. The land remains in use as farmland, It is not diverted to other uses either temporarily or permanently, and it is not put out of use. I regard this point as one of considerable strategic importance. When we are planning extensification, de-intensification, conversion or diversion it is essential to the nation that we retain adequate national resources of fertile farmland.

Practices of de-intensified, low output farming that also favour environmental conservation are the subject of research at this moment—research given national priorities. I have mentioned already the Game Conservancy research. I could also mention the research that is promoted by the joint working party of the AFRC, the NEDRC and the ESRC that was set up under the chairmanship of Sir Hans Kornberg, following recommendations made by the Select Committee on Science and Technology of your Lordships' House under the chairmanship of the noble Lord, Lord Adrian.

I could mention the work of the Institute for Terrestrial Ecology within the Natural Environment Research Council. There was a major workshop only last Friday at Grange over Sands in Cumbria at which representatives of the Institute for Terrestrial Ecology, the NFU, the CLA, the Countryside Commission, the Council for the Preservation of Rural England and the Royal Society for the Protection of Birds were all represented. They were discussing the issues highlighted in this new clause.

De-intensification, as proposed in this new clause, would demand the skills of good husbandry coupled, for the farmer, with the satisfaction of sound environmental management of the land. It will keep farmers occupied where they want to be, living and working as they wish to do. Within the general debate on Community agricultural policy and structural reform, including proposals for extensification, set-aside and so on, there has been widespread recognition of the important role to be played by de-intensification.

This is seen first in the report on the socio-structural policy in agriculture produced by your Lordships' Select Committee on the European Communities. Paragraph 94 of the report said: In whatever way that the Commission's proposals are implemented, the Committee are convinced that farming land should not be left to go to scrub. Conservation of the landscape entails continuity of land management. The Committee endorse the dictum that conservation should generally he achieved through farming and not instead of farming".

The Countryside Commission in its document, Shaping a New Countryside, proposed that the, Government should seek to ensure that any new schemes introduced to deal with agricultural over-production make a positive contribution to the conservation of the natural beauty of the countryside and its enjoyment by the general public, as well as to the social and economic well-being of the farming community. Set-aside, and any more general reduction in the intensity of farming, should not be considered to be mutually exclusive means of reducing production. Where schemes to set land aside are considered, there should be"— This is item (b)— encouragement for schemes which also aim at less intensive management of the land remaining in production". That is what this clause provides for.

The Nature Conservancy Council has also reported in a paper entitled Conversion and Extensification of Production, Implications and Opportunities fir Nature Conservation. Paragraph 5 says: There are two principal ways by which extensification of production can be effected: by diverting land into other uses … and by reducing intensity so that the production per unit area goes down. Both methods offer significant opportunities for combining the objectives of reduced agricultural production with those of nature conservation". Paragraph 41, dealing with cereals, says: As well as land diversion, general measures to reduce the intensity of cereal production would be valuable for nature conservation. Lowering the levels of fertiliser input, especially applications of nitrogen (to grasslands as well as to cereals) could help to reduce the pollution of wet meadowland, streams and river systems". On grassland, the paper says: The aim should be to lower the intensity of grassland management over the whole of any farm entering the scheme, with particular emphasis on the rough grazing element, and on other areas of permanent grass where semi-natural plant communities remain, whether in complete or fragmentary form. Simple guidelines could he produced for the identification and management of grasslands of nature conservation interest, which could be applied by farmers entering the scheme". These are examples of well-informed professional bodies which have considered exactly such a scheme as is outlined in the proposed amendment and have pointed to the way in which it can be achieved.

In addition, the requirements of this new clause are designed to be compatible with the European Community Regulation 1760/87. This regulation has to be implemented by April 1988. By "implementation", we understand that it has to be assimilated into the national legal and regulatory system. Regulation 1760/87 requires a 20 per cent. reduction in the output of commodities which are in surplus, starting with cereals, beef and wine but moving on, after a certain time, to other commodities.

Farm plans that led to de-intensification to the extent that output was reduced by one-fifth could be one important route for achieving such targets. Therefore, adoption of this amendment would provide the necessary powers for implemention. It would emphasise a positive policy of concern for the environment which has been so ably and, I may say, admirably pursued in European Community circles by this Government. Our Ministers at the Environment Council have been commendably successful in promoting environmental concern as an integral element of Community agricultural policy, and long may they continue to do so.

But in addition, as a purely national instrument, incorporation of this clause into the Bill would broaden the scope of combined management of the rural environment for the joint benefit of its human inhabitants and its natural wild plants and wild creatures, and the inanimate elements of rock, soil, and water on which they, and on which we also, utterly depend.

I believe that the powers contained in this clause are not to be found in the 1970 Act. They need to be available to our national agriculture Ministers in order to give full scope for development of forms of agriculture that will provide a livelihood for farmers without jeopardising national land resources while at the same time preserving and sustaining the natural environment. I beg to move.

8.30 p.m.

Lord Carter

I should like on behalf of the Opposition Benches to welcome and support this amendment. As the noble Earl, Lord Cranbrook, said, it is an important amendment and in principle we support it. We have some reservations on the detail, as the noble Earl would expect.

De-intensification is an ugly word, but it explains exactly the purpose of the clause that the noble Earl has introduced. On the 20 per cent. reduction in yield, in some years we achieve that as a result of the weather without even trying. Obviously, there will be a great deal of difficulty in administering such a scheme. The choice of the base year will he critical and the regional variations will be important. Notwithstanding that, we feel that it is the basis of a good idea.

As a farmer I would welcome the reduction of inputs if that meant a saving in cost and thereby a reduction in my working capital. There would be the environmental advantages to which the noble Earl referred. There would be a marked difference in different areas of the country in response to the reduction in inputs. For example, a reduction in the use of nitrogen would have a different effect on the thin chalk in Wiltshire compared to the deep and easy working loam which I know that my noble friend Lord John-Mackie farms.

The great advantage of the proposed system of de-intensification is that it enables one to farm less intensively but on every acre. That is the important point, because it is the effect on labour and machinery use which is important. If we opt for set-aside, about which we shall hear in later debates, a factor which we must consider if we do nothing to the land is the reduction in jobs in the countryside. Any system which reduces the intensity of output but still means that we work every acre, as the noble Earl is suggesting, will have a beneficial effect on farm jobs.

For example, when we turn to deal with set-aside, the Government must deal with the problem of the loss of nitrates through leeching and from fallow ground being higher than from anything else one can do to the land. Anything which keeps a crop on the land, helps us to work it and to keep men employed but reduces the intensity of output and has the difference made up by government grant is to be welcomed. Also it avoids the disadvantage of farmers receiving a grant for doing nothing. The scheme will be voluntary but it will be difficult to administer and to police. However, any scheme which will be introduced will be difficult.

I shall be interested to hear the Minister's views as regards the effects the proposals will have on negotiations with the EC on the set-aside and extensification proposals. Further, if the scheme is introduced now, will it have any effect on the money which we might receive from the EC by way of grant? In principle, I am pleased to say that we support the amendment.

Viscount Ridley

Like the noble Earl, Lord Cranbrook, I regret that I was unable to welcome the Bill at Second Reading, which I would happily have done, but I do so now. I promise not to make a Second Reading speech.

Suffice it to say I have already earmarked a large area of land for a wood which I hope will become known in the future as the Trumpington Plantation. It will ensure my noble friend's name on the Ordnance Survey for all time. I shall fill the wood with trees which are attractive to red squirrels, because I know that she is particularly fond of those animals.

I should like to support the noble Earl's amendment most heartily. I do so on behalf of the National Trust, which has asked me to say that it strongly considers it to be a good amendment. The National Trust is one of the country's largest landowners, although it is not a farmer in its own right. It has a great deal to say in such matters as landscape, and feels that an amendment of this kind would be preferable to non-farming or set-aside.

Like the noble Lord, Lord Carter, I dislike the word "de-intensification"; it is murdering of the English language and perhaps we can find a better word. It will never be easy to decide what it means or how it works. I am sure that we shall need an enormous army of bureaucrats to find out how to operate and pay for it or enforce it. I am sure that it will lead to a crime in that the offence of "re-intensification" will he creeping hack and we shall be growing more wheat than we ought. They are all problems which are perhaps not appropriate to develop tonight.

This is an enabling Bill and it seems to me to be right to enable something like this to be considered if the European agricultural Ministers can agree on anything at all. The Committee will also be aware that the CLA and the NFU welcome the amendment. Like everyone in the agricultural industry, they ask the Government to give a lead as to what has to be done. Those bodies are in the great distress of not knowing where to turn. Without such guidance I fear that farmers will continue to strive to maximise production as far as possible so that they are not caught out, as some dairy farmers were when D-day arrived and they did not have quite enough milk that afternoon, their quota being adjusted accordingly to an artificial baseline. I think that guidance is urgent if it can be given.

As the noble Lord, Lord Carter, has said, perhaps there is evidence that the Almighty is fed up with waiting for the agricultural experts in the EC to come to a decision about set-aside. The wet weather has probably compelled us to set aside far more than we would otherwise have dreamt of doing. In parts of England there are still fields to harvest, and a great deal of land which should have been sown to wheat now never will be, certainly in my part of the world.

I make two further brief points. One form of de-intensification, which I am sure we should explore thoroughly, is to use less nitrogen on arable land. I spoke about this matter at some length in a previous debate and I have no intention of repeating any of the arguments which were put forward at that time. My noble friend Lord Belstead said that it was too difficult, but ever since then it has become clear that we shall be forced to do something about the over-use of nitrogen, difficult or otherwise, whether by rationing or, as I would wish to see, by taxation to pay for some of the de-intensification programmes which we may require. If it is possible to tax whisky and tobacco, surely it is possible to tax nitrogenous fertilisers. I believe that that would make a substantial contribution to the problems faced by agriculture and it should be looked at again.

The second point I should like to make is that in any de-intensification programme which may take place the first to suffer will be the farm workers, whose numbers will inevitably he reduced. This will mean that fewer will be replaced as they retire and, sadly, others may have to be made redundant as has happened over the past 40 years since the war. I can see that process accelerating. If there is to be any help in this painful contraction of the industry, I am sure that the most humane and useful help that can be given will be towards helping the early retirement of farm workers who will no longer be needed. It will ease the considerable distress which can follow agricultural redundancy.

I do not wish to go into the matter in detail but I hope that it can be considered if the amendment is passed. I have pleasure in supporting the amendment.

Lord Kilbracken

Surely the opposite of intensive is extensive. Therefore, as it is now becoming fashionable, I hope that we can in the future talk about "extensification" rather than "de-intensification".

Baroness White

I too hope that we stick to one definition rather than two interchangeable ones. As the noble Earl, Lord Cranbrook, mentioned, the European Community speaks of "extensification". By that it means that one grows less intensively but still using the land. I do not wish to detain the Committee at this relatively late hour, but I have received representations from a number of environmental bodies in England and Wales strongly supporting the amendment now before us.

Set-aside may be appropriate in a few situations but it is not an attractive remedy for the question of surpluses. If we can keep land in use, and possibly abandon some of the less attractive methods of intensification, I believe that that would be looked at favourably by many people.

Many Members of the Committee have received representations from the Country Landowners' Association to the effect that the scheme will not be easy to administer, whereas set-aside is relatively straightforward. I think that it would be defeatist not to try to adopt the practices advocated by the noble Earl simply on the grounds that the bureaucrats cannot find a comfortable way through. I hope that the Government will take seriously this proposed amendment. It meets with considerable support in many parts of the countryside. As I understand it, it will fit in more comfortably and acceptably with what we are hound to do in the near future by the arrangements of the European Community, that is, the reduction by one fifth in various areas.

I do not know what the Government are proposing to do because I do not think that they have issued details of their intentions on this point. I hope that the Minister will be able to enlighten us. There is no doubt that there is considerable support for the amendment.

Lord Borthwick

One way of curing this problem rapidly is to bring back horses. If the land is repopulated with horses, we shall save a great deal of trouble. We cannot produce nearly so much without them. I put forward the idea; I do not know whether it is a good one.

We are talking mainly of arable land at present. I come from sheep and hill country, and we give consideration to our sheep and our cattle. There are ways in which they can be stocked with the same labour but this results in fewer sheep and cattle. I do not think that we should do that because it means importing from abroad. Why should we give up what we need and then have to import? We can give up grain but we are already producing more grain than we need. We are certainly not producing more cattle and sheep than we need. We should think about these matters and return to more primitive agriculture if possible. That will keep our stock going and it will certainly cut down our arable land.

Earl De La Warr

It is important that in farming debates we take the opportunity to raise those subjects that seem to be the most important. The question of de-intensification is certainly in everyone's mind, and I am sure that it is in the Government's mind. We know that certain proposals will come from the Commission. I look forward, as will other noble Lords, to knowing the Government's thinking in this respect. I believe that we should spare my noble friend from having even to consider accepting the amendment. The timing is wrong—although the timing of the debate is first class and we should not ask her to go further than giving us some useful thoughts from the Government.

Lord John-Mackie

The noble Earl, Lord Cranbrook, said that he did not want to make a Second Reading speech. It would have helped if he had given some guidance on how the grants should be paid, whether per tonne production or per gallon of milk. How would they be worked out? I know that the Bill is an enabling measure. The noble Earl will probably say that it is the Government's job and not his. I hope that he may be able to give us some guidance.

The Earl of Cranbrook

I envisage that the payments will be related to the loss of income consequent on reduced production, which inevitably would have to depend on some base line determination, as the noble Lord, Lord Carter, said.

8.45 p.m.

Baroness Trumpington

We have heard a clear and persuasive explanation of the amendment by my noble friend Lord Cranbrook. I have listened with great interest to other noble Lords who added their voices in support. I was grateful for the words of my noble friend Lord De La Warr. I was grateful also to my noble friend Lord Cranbrook for his kind remarks concerning the environmental support work done by our Ministers in the EC. I promise the noble Lord, Lord John-Mackie, that I shall not make a Second Reading speech! I wish also to thank my noble friend Lord Ridley. I look forward to walking in the woods that he may plant—although they may be rather short woods when I walk through them! I may even, although I doubt it, in the words of the old song, wear a nest of robins in my hair.

I know that several noble Lords will be very disappointed that I cannot accept that the clause be added to the Bill for legal and perhaps rather technical reasons that I shall explain. First, however, I deal with the rather separate point of the case and scope for a measure of de-intensification as advocated by my noble friend Lord Cranbrook. The important point is that this regulation, while it specifically provides for schemes of the set-aside type, does not exclude an approach involving de-intensification as defined by the noble Earl. The Government have in fact put a great deal of thought into how the regulation could be implemented, and my right honourable friend the Minister intends to publish a consultation document very shortly suggesting ways in which the EC scheme might be given effect in the United Kingdom. We hope to receive ideas from the very wide range of bodies to be consulted on how they think we should proceed, and we shall consider all these views very carefully before making final decisions. Our minds are certainly not closed to the kind of ideas the noble Earl has put forward, although on the other hand it would be quite premature for me to suggest what the Government's views will be, since this would clearly imply that we were not serious about the process of consultation.

I should also point out that any scheme eventually made would be set down in a statutory instrument under the European Communities Act, and would be subject to debate in both Houses of Parliament. There would therefore be opportunities for debate on the Government's considered proposals, including the extent to which they provided for reductions of yield as proposed by the noble Earl.

My noble friend mentioned his ideas about the method of de-intensification: for example, field strips, organic farming, and so on. Many of these ideas are among the possibilities that will be considered in our consultation exercise.

I refer now to the discussions about set-aside taking place in the Council of Ministers. In connection with agricultural stabilisers, there has been discussion also about possible methods of set-aside. We shall have to see what emerges before we can assess the implications for the implimentation of schemes in the United Kingdom. We put forward this set-aside idea in our presidency. We feel even more strongly that such an approach has an important role to play. I should also make clear the Government's belief that to be most effective these kinds of measures to reduce production of surplus products should be taken on a Community-wide basis so that the production decreases which we secure in the United Kingdom are not simply matched by increases elsewhere. On both extensification and on any further set-aside measures that may emerge we must work on a Community basis.

I turn to the issue of de-intensification. My noble friend Lord Cranbrook has produced some persuasive arguments as to why de-intensification is a desirable option, especially in environmental terms. Many of these I would not deny, and as I have said our minds are not closed to these ideas. We shall continue to study them as we work up a UK extensification scheme. However, I have to say that the practical difficulties are considerable. I agree with the noble Lord, Lord Carter, with regard to administrative difficulties. A number of questions need convincing answers. A scheme of this sort would involve establishing base levels of production for every participating farmer and for each of his specified crops and for his livestock. Your Lordships will recall the difficulties surrounding the introduction of milk quotas where relatively good base data existed. That gives some idea of the problems.

Milk quotas can he policed through deliveries to dairies. How can we hope to keep track of the production of every farmer of a whole range of products? This would involve a veritable army of agricultural enforcement officers if the scheme were to operate on any scale. Furthermore, how do we allow for the vagaries of the weather? What happens when a bumper harvest pushes output back up to near its original level? Rules for adjustments, in such circumstances, would need to be devised and fairly administered. I hope that I have said enough to indicate the very real practical problems of this approach. But, as I have said, our minds are not closed.

I should now like to turn to the legal problem which this amendment poses. The main legal point is that enabling powers already exist in Community legislation for the Government to introduce a scheme which could, in principle, embrace de-intensification using the European Communities Act. To that extent, the taking of powers to make a national scheme as provided for in this amendment, is unnecessary. Indeed, it could cause concern about overlapping powers. My advice is that it would appear contrary to Community law for provisions so similar to a Community regulation to be enacted in domestic legislation.

The noble Lord, Lord Carter, put a question straight to me on the effect of money from Europe. Extensification grants are to be 25 per cent. funded by Community funds; the amount to be received by the United Kingdom will depend on the number of farmers who take up the opportunity.

Therefore to sum up, there are two points which I feel I must emphasise. First, as I have already explained, the Government are on the point of issuing a consultation document designed to invite views on ways of achieving the objectives of the extensification regulation. Our minds are not closed to forms of de-intensification, as advocated by my noble friend Lord Cranbrook. But, equally, it would be quite premature and counter-productive for me to give any government commitment at the moment on this matter.

We are treating the process of consultations, which will involve a very wide range of bodies—225 at the count at the moment—in this matter, and we are treating these issues seriously. We must, however, wait to see what views we receive. Secondly, the clause is in fact legally unnecessary—probably in fact directly contrary to Community law.

For those reasons, I very much regret that, although I have noted with interest all the points made, I cannot accept the amendment of my noble friend.

Baroness White

Can the Minister perhaps enlighten us as to whether, in the document she has been referring to which is to be forthcoming shortly, it will deal with the matter which was discussed by those of us who went from one of the Select Committees of the House (in February, I think) to Brussels—that is, in regard to the very difficult question of a base line from which any scheme is to be calculated? Unless that is going to be dealt with in the document, it will make it very difficult to reach any sound judgment at all.

Baroness Trumpington

The noble Baroness has raised an important point, and one of the reasons why I welcome this short debate is the fact that note will be taken of this debate in the consultation period which is to follow.

The Earl of Cranbrook

My noble friend has referred to a consultative document which is very shortly to be produced. I shall be most grateful if she can assure us that this document will be available before consideration of this Bill reaches Report stage. I think it is extremely important that we should have this document available to us for consideration.

I noted that my noble friend intends that the Regulation 1760/87 shall be introduced by statutory instrument under the European Communities Act. In my speech about the amendment I also made it clear that I felt that this was a useful power for the Government to adopt for their own purposes for purely national ends. In reply to that, my noble friend has said that, first, it is very complicated. I agree that it is very complicated. But I can perfectly well describe the system for collecting VAT. I can then remind the Committee that every farmer pays VAT, and that that is enforced by rather few inspectors and rather strong laws.

My noble friend raised the serious problem of overlapping powers, which, I must confess, I do not understand. I feel it is essential that I should have the opportunity to look at this issue very closely because it seems that if what she said is correct—and I have no doubt that there is good foundation for it—it would actually be legally impossible for a new clause of this nature to be introduced into the Bill. It seems to me to be very peculiar because it is not at all, according to my understanding, how the EC operates. Therefore, with the proviso that I retain the freedom to come back to that particular issue at Report stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 [Grants in respect of farm businesses]:

Lord John-Mackie moved Amendment No. 2: Page 1, line 9, leave out ("has been or is to be incurred") and insert ("is authorised").

The noble Lord said: I am grateful to the noble Baroness for agreeing to my speaking on Amendments Nos. 5 and 6, and I hope this will speed things up a little. Quite frankly, I want to say here and now that myself and noble friends on this side of the Committee take a dim view of an important matter like this coming on at 8.30 at night. I think some better arrangement could have been made. I do not know who was responsible (whether it was the Government Whip or our Whip) for accepting the arrangement.

Having said that, these amendments are probing amendments for clarification. Clause 1(1)(a) says: has been or is to be incurred". Of course, this is an enabling Bill, and I know that when it comes to statutory instruments matters may be clear. But farmers who are affected by the Bill do not even read it. They will presume that they will accordingly get a grant for any work that they have done—in other words, there would be no prior approval.

As I understand it Clause 2(1)(a) again says: which has been or is to be incurred". There is to be no prior approval for the planting of trees, so there is confusion between the two clauses. I presume that no prior approval is required for planting trees because if you get a forestry grant you have to get approval from the Forestry Commission, and that is the reason. There have been cases, although not many—certainly not in Scotland—of people planting trees without a forestry grant. In that case, a difficulty might arise there.

At the end of paragraph (a) it says: land that has been so converted". I add the words "in the past". I should like to know how long before was this land converted? Was this something that was done 20, 10 or five years ago? Some of us know these things because we read the Explanatory Memorandum and the clauses. However, I think it should he clear in the Bill itself. We thought that the word "authorised" covered it much better than the expression: has been or is to be incurred". I beg to move.

9 p.m.

Baroness Trumpington

I think it would be appropriate for me to explain the power which Clause 1(1)(a) would confer on Ministers. It relates to the type of expenditure eligible for grant. not to the procedures by which that expenditure is approved or authorised. The amendment proposed is therefore—excuse me for saying so—not relevant to eligible expenditure. As I explained at Second Reading, it is our intention to make these non-capital grants subject to approval by Ministers before expenditure is incurred, powers for which are contained in subsection (2) of Clause 1.

As drafted, the scheme can allow for grant to be paid either before or after it is incurred. The words, has been or is to be incurred", are similar to those of the capital grants provision in Section 29(1)(a) of the Agriculture Act 1970. Our intention is that the scheme for non-capital grants will be paid only after the expenditure has been incurred, but we would not wish to lose the flexibility which the clause currently permits.

In relation to Clause 2 and Amendment No. 5, which we are taking at the same time, similar arguments apply and again we intend under our plans for operating the farm woodlands scheme to approve each application before any payments are made. We shall in effect be operating a system of prior approval.

I am not quite sure why the noble Lord, Lord John-Mackie, wishes to take Amendment No. 6 at the same time. However, let us have a go. I understand that the purpose of this amendment is to extend the enabling powers in Clause 2(1)(a) so that grants can be paid for the management of existing farm woodlands; that is, woodlands which have been planted prior to the introduction of any scheme made under this provision. I am advised that the addition of the words "in the past" does not alter the meaning of line 12, and hence this amendment is unnecessary to achieve the result which I understand the noble Lord, Lord John-Mackie, wants.

As things stand, the Government are not intending to include grants for management of existing woodlands in the proposed farm woodlands scheme. A number of those who responded to our consultation document urged us to do so.

There are two main reasons why we decided against it. First, it is an important aim of the scheme to divert land from agricultural production and thereby assist in the diminution of agricultural surpluses. Obviously grants for management of existing woodlands would not contribute to that aim. Secondly, there is not the same loss of agricultural income to the farmer from bringing existing woodlands into better management as there is from planting trees on productive agricultural land. Annual payments to abate financial loss would therefore not be justified.

However, the amendment would enable grants to be paid towards expenditure incurred. Such grants can already be paid by the Forestry Commission under existing powers provided by the Forestry Act 1979; and, for example, the broadleaved woodland grant scheme introduced in October 1985 is designed to encourage the rehabilitation of existing broadleaved woodland and substantial grants are available under that scheme for restocking and regeneration. Neglected woodlands under 20 years of age may also qualify for grants in certain cases.

Finally, pilot projects have been established with assistance from the Government on ways of assisting farmers and other woodlands owners with rehabilitation work on derelict woodlands. Some noble Lords may have heard of Operation Sylvanus in South-West England and a similar project in Wales, whose name I have great difficulty in pronouncing, Coed Cymru. It is hoped that these projects will in due course provide useful indicators for wider application. Since this final amendment which we are discussing en bloc adds nothing to the Bill, and in view of what I have said, I should be most grateful if the noble Lord would withdraw all three of his amendments.

Lord John-Mackie

I must thank the noble Baroness very much indeed, but her last piece of advice I cannot take. I can only withdraw Amendment No. 2 and we will see what happens when we come to Nos. 5 and 6. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 3:

Page 2, line 22, at end insert— ("( ) It is hereby declared that any function conferred on the appropriate Minister by or under this section is to be treated as a function connected with agriculture for the purposes of section 17 of the Agriculture Act 1986 (duty to balance interests when exercising functions connected with agriculture).").

The noble Lord said: The purpose of this amendment is to discover whether Section 17 of the Agriculture Act 1986 covers the non-capital grants which will be made under Clause I of this Bill. Your Lordships will remember that there is a requirement on the Minister under Section 17 to balance the interests of agriculture, the rural economy, amenity, conservation and public enjoyment.

The wording of the amendment that I am proposing is identical to that in Clause 2(4). We should like to know why, if the subsection is required for Clause 2, the woodlands clause, it is not in Clause I dealing with diversification grants. If the amendment is not accepted will the Minister accept that there is a danger of public money being used to grant-aid activities which are of little public benefit and which may damage one or more of the various interests which the Minister is supposed to look after under Section 17?

The objects of Section 17 of the Agriculture Act 1986 which I mentioned must surely be taken into account when grants are made under Clause 1. Indeed the Minister's own explanatory note on Clause 2 dealing with woodlands, which she was kind enough to send me, states that there is the, same duty on Ministers in relation to farm woodlands as already applies to them when exercising functions in relation to agriculture". If this duty applies to Ministers when exercising their functions in relation to agriculture, why does the Bill not say so in Clause 1 to make the position absolutely clear? I beg to move.

Baroness Trumpington

Strictly speaking this amendment is unnecessary because the functions which will be conferred by or under this clause are connected with agriculture so that Section 17 of the Agriculture Act 1986 already applies to them.

The Committee will remember that I confirmed that point during Second Reading. Still I do not want there to be any misunderstanding. I understand the anxieties that have arisen as a result of the expressed provision in subsection (4) of Clause 2. I wish to make clear that Section 17 applies in the case of farm woodlands. To resolve any doubt that may as a result exist I should like to accept the principle of the amendment proposed and I shall bring forward an amendment on Report. I hope that in the light of that offer the noble Lord will graciously withdraw his amendment.

Lord Carter

This is the first attempt that I have made to move an amendment in this House. I am delighted that the noble Baroness has accepted it and I hope that that is habit forming. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 1 shall stand part of the Bill?

Lord Sandford

I take this opportunity to raise a small but important point before we leave this clause. I have given my noble friend notice of this. As my noble friend has said more than once and as we all understand, this part of the Bill gives Ministers the powers to bring forward a scheme of grants for diversifying farm businesses. She was of course quite right to say that we shall have a debate on the scheme but we all know perfectly well and she knows perfectly well that that debate by long established convention cannot bring about any change in the scheme. Therefore we have to get things right while the enabling legislation is before us.

My noble friend is also perfectly right in saying that we have to work within the CAP guidelines, much as we may dislike the CAP as a whole. That is undoubtedly true but I submit to the Committee that it is not the CAP guidelines which are hampering and hindering us but the very considerable lack of experience in the Ministry of Agriculture, Fisheries and Food as to how to bring about diversification. We are also hampered by a lack of understanding as to the underlying philosophy which will have to prevail in future. That was set before us with admirable clarity by my noble friend Lord Cranbrook when he was here. However the answer of my noble friend the Minister indicated that that had not been effectively grasped within her department.

Experience in the fields of both conservation and diversification could have been obtained, acquired and built up in the department from any time after 1981 when it was given the powers to give advice in those two fields under the Wildlife and Countryside Act, Section 41. But it was not and the expertise now, instead of being shared, still resides in the planning authorities. As my noble friend will recall from her distinguished service on the Cambridge City Council, it is the local planning authorities which prescribe through planning and development control what should be conserved and how businesses should be diversified in the city and in the country.

So it is important to get the matter much clearer than it is at the moment as regards how the planning control over farm businesses will be related to grant giving to farm businesses. There is nothing in the Bill about that. Undoubtedly there will be something about it in the scheme, although we must be sure that it will be right. There was nothing about it in my noble friend's opening speech on Second Reading although she did in response to the noble Lord, Lord John-Mackie, say a word or two about planning in her winding-up speech. But that I think was all and that, if I may say so, was not at all clear. I ask my noble friend to be a bit clearer now.

I presume from what she says, but I should like to have it on the record, that the farmer will have to obtain planning permission for whatever farm business he proposes to set up and for which he is seeking grant as a prior condition of applying for grant. Where planning control and the giving of agricultural grants inter-react at the moment as they do in the national parks, that is the position. A farmer wishing to obtain a farm capital grant in a national park has to go along to the national park planning authority and through the process known as notification obtain that authority's agreement that his scheme meets its requirements. Then he is in a position to go along and talk to ADAS about his grant. I imagine that that will be the situation under the scheme but I should be grateful if my noble friend could make that clear. I have to say that if she cannot do so at this point I shall have to table an amendment on Report.

Baroness Trumpington

I was grateful to my noble friend for giving me warning about this. He will not be surprised that I do rather take exception to his words about the lack of experience in my home team. I have the utmost confidence in it and I add only that ADAS also has a complete service, the Rural Enterprise Advisory Service for Diversification. The number of staff in that field has recently been increased.

Turning to the question of planning permission, the revised DoE planning guidance, Circular 16/87, to local authorities issued in May emphasises the need to foster diversification of the rural economy. It points out that many commercial and other activities can be carried on in rural areas without causing unacceptable disturbance. It states that the proposals for the re-use of redundant buildings, as with all planning applications, whether in the countryside or in green belts, should not be rejected unless there are specific and convincing reasons which cannot be overcome by attaching reasonable conditions to the planning permission.

The Government are firmly committed to that policy. Obviously, decisions are for the planning authority in the first instance. However, all developers have the right of appeal to the Secretary of State as a long stop.

My noble friend Lord Sandford asked whether Section 41 of the 1981 Act will apply to diversification. The answer is, yes. The national park authorities will be consulted. Applicants are being advised in both the scheme literature and in the capital grants application form of the need to get planning permission before they start work. Grant may be withheld where a claimant fails to satisfy us that he has obtained all the necessary consents. I hope that satisfies my noble friend.

9.15 p.m.

Lord Sandford

I am most grateful to the Minister for her latter remarks which put the matter clearly on the record. I think it would have helped if that had been said categorically at the beginning of our consideration of the Bill or if it had appeared on the face of the Bill. However, I am completely satisfied. I am delighted that ADAS has at long last —six years after it might have done so—taken on additional staff to handle the matter.

Clause 1 agreed to.

Lord John-Mackie

Perhaps the Deputy Chairman of Committees can tell my why Amendment No. 4 was not called on Clause 1.

The Deputy Chairman of Committees (Lord Renton)

I understood that Amendment No. 4 was being discussed when I went into the Chair. If that is not so, I apologise and I must not pass the blame to my predecessor. With the leave of the Committee I shall now call Amendment No. 4.

Lord Gallacher moved Amendment No. 4: Page 3, line 3, leave out ("adjacent land") and insert ("suitable land nearby").

The noble Lord said: Amendment No. 4 is concerned with the definition of a farm business which is contained in the Bill. The Bill as it stands defines a farm business as something that must be carried on by a person who has an agricultural business at the same time on the same or adjacent land. The amendment is specifically concerned with the words "or adjacent land".

We on this side of the Committee ask ourselves whether the words "adjacent land" may not, in some cases, prove to be too restrictive for the farm business to qualify for the non-capital grants provided for in the Bill. Therefore, the amendment is of an exploratory nature in order to see whether the words are too restrictive and whether another form of words which is less restrictive may not he preferable.

Obviously a farmer will prefer to develop a farm business on his own land if it is suitable for the business he contemplates. However, adjacent land may be less suitable, depending on the nature of the business proposed. I do not want to speculate as to the circumstances in which particular businesses may or may not be suitable. But farmers are entering into a new ball game and it may be that when they take professional advice about the development of new businesses, they will be told, "It is a worthwhile venture, but not on the land which you have adjacent at the moment".

Such land, for example, may be less accessible for people who, it is hoped, will patronise the business as customers. Access to adjacent land may be difficult. There may be narrow roads, or it may be too far from a highway. Farm access sometimes possesses those characteristics. It is all right for the normal agricultural business but it is less suitable for developments of a different character. In particular the all-purpose motor car trade which dominates so much of our lives these days may not be entirely suitable for a particular venture on an adjacent piece of land. A modern retailer, for example, both in food and non-food will tell you that in developing a business these days he looks at car parking first and other considerations afterwards. Unless the car parking is right he is not particularly interested in any site. The flight from our town centres bears ample testimony to this.

It is fair to say that the same conditions and characteristics may apply to farmers as they seek to diversify in the manner which the Bill sets out to encourage. Another factor is that the farmer may not own or he able to rent adjacent land for a variety of reasons. We need not speculate about those either.

It might be desirable to ask ourselves whether a less restricted form of words would better achieve the purpose which the Bill has in mind. We have suggested the words "suitable land nearby". We are not entirely convinced that those words are impregnable or that they could not be bettered. They have the merit of expressing an alternative to "adjacent land." It seems to us that they have the merit of giving some flexibility in the matter and because of these factors I shall be interested to hear the response of the Minister to them. I beg to move.

Lord Stanley of Alderley

Before my noble friend replies I should like to support this amendment. Strangely enough a similar situation occurred on my farm with a self-pick farm shop. It was not satisfactory to put it on our land and we had to put it somewhere else. I hope my noble friend will think about this quite deeply.

Lord Hesketh

I again ask the Committee to consider this in the context of the proposed scheme for capital grants in order to explain the working of the definition of a farm business. As we have already touched on the relationship between the capital grants for diversification and the non-capital grants for feasibility and marketing, I hope it will be helpful if I explain this in a little more detail.

The grants for capital investments in things like farm holiday accommodation, livery stables and food processing are being introduced under existing powers, namely, the 1970 Agriculture Act as amended by last year's Agriculture Act. Since we already have the necessary primary powers we have not thought it right to delay the introduction of the capital grants until a scheme for feasibility and marketing grants can he introduced alongside it. The three statutory instruments embodying the capital grants were laid before your Lordships' House on 18th November and we shall be debating them very soon since the scheme is due to come into operation on 1st January.

We intend the capital grants which are due to come into operation on 1st January and the grants for enterprise feasibility studies and the assistance towards marketing costs which this Bill will enable us to introduce to be complementary elements of a complete package to help on-farm diversification. This means that we would like the coverage of all the three elements and the conditions of eligibility to be similar. I hope I shall be forgiven for pointing out that that means that our hands are not entirely free when it comes to determining the terms of the feasibility and marketing grants. The question of "adjacent land" is a good example of this.

We propose restricting marketing and feasibility grants to an agricultural holding and the land adjacent to it, because that is how the capital grants are restricted. The reason they are restricted in that way is as a result of an amendment to the 1986 Agriculture Act introduced in this House. I was not present then but I am sure other Members of the Committee will recall that my noble friend Lord Peel put forward an amendment enabling agriculture Ministers to pay grants for capital investments in ancillary activities, "carried on on the same or adjacent land", to an agricultural business.

My noble friend's amendment was both warmly and widely welcomed by this House and as a result the Government introduced an amendment of their own in very similar terms. That was the origin of Section 22 of the 1986 Agriculture Act under which capital grants are now being introduced. It would be unfortunate and confusing if we were now to agree to a different geographical coverage for the feasibility and marketing grants. In the light of this explanation, I ask the noble Lord to withdraw the amendment.

Lord Gallacher

I thank the noble Lord for his reply. The Committee will agree that he has made much of the capital grant position and is in effect telling the Committee that, having agreed to a form of words for capital grants, we are consequently bound by that form of words for revenue grants. I was always taught that there was no connection between capital and revenue expenditure, though I always had great difficulty in making the distinction.

Nevertheless, it would be somewhat premature to write off this question on the basis of the explanation given by the noble Lord, Lord Hesketh. Now that he has reminded us, I recall the circumstances of the 1986 debate. The concession to which he refers had to be wrung from the Government. At that time, if we had attempted to widen the scope of the concession, we might have got the Government in a mood to say that they would not be prepared to make a change in favour of capital grants. Therefore, the form of words in the 1986 legislation was very much a concession a crumb from the rich man's table, so to speak, in legislative terms.

There is no reason why the two Acts of Parliament need differ. It will be regrettable if someone who really has a desirable project is denied the opportunity of revenue assistance for the project simply because the adjacent land is either non-existent as far as he is concerned or is considered totally unsuitable by his advisers on the business in question. If we want to see the degree of diversification which the Bill purports to introduce the name of the game will have to be flexibility; otherwise there may be a scheme on paper which in effect is useless because of the regulations surrounding it. However, I do not wish unduly to delay the Committee, especially in view of the fact that this amendment was nearly not called, but I shall carefully study what the Minister said and may decide to come back on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees

In order to get the Committee properly back on course I must once more put the Question, Whether Clause 1 shall stand part of the Bill.

Clause 1 agreed to.

Clause 2 [Grants in respect of farm woodlands]:

[Amendments Nos. 5 and 6 not moved.]

Lord Moran moved Amendment No. 7:

Page 3, line 15, at end insert— ("(c) grants towards expenditure which has or is to be incurred for the purposes of, or in connection with, the improved management of woodlands on farms; (d) grants for abating any financial loss which has or will be suffered in consequence of the exclusion of livestock from woodlands on farms.").

The noble Lord said: In moving Amendment No. 7 I thank the noble Baroness for the most helpful letters she has sent to me clarifying points in the Bill. I think that she has already said something about existing woodlands in commenting on Amendment No. 6 in the name of the noble Lord, Lord John-Mackie. However, I should like to make a point about the woodlands which I know best—those in the uplands.

Many existing farm woodlands in the uplands are suffering very badly from the effects of razing and neglect. Many birchwoods in the Highlands and Pennines and oakwoods in Wales, the Lake District and Argyll are unable to regenerate because stock eat all the tree seedlings which emerge. Unless measures are taken to resolve this, many woods which are valuable for wildlife and landscape as well as for shelter and other agricultural purposes will simply disappear as the old trees die off.

My amendment would enable agriculture Ministers to pay grants for the fencing of farm woodlands to exclude stock and permit regeneration. This would ensure the safe future of many woodlands in the uplands. Many of these woods are frequently grazed and used as shelter for stock, especially in winter, and schemes to fence and regenerate parts of those woodlands, while retaining the remaining woodland areas for stock shelter, would have long-term agricultural benefits by retaining their shelter value and also benefit conservation.

Farmers entering the scheme will have to qualify for and receive Forestry Commission grants before grant under the farm woodland scheme can be paid. Forestry Commission grants are not available merely for the fencing of woodlands. The Forestry Commission requires further work, such as felling and sometimes planting, which may not be needed in many of the circumstances about which I am thinking.

Paragraph (c) presents a means by which agriculture Ministers can offer capital or management payments in circumstances where they will not duplicate Forestry Commission grants and where payments will be of a high value for farm stock management and conservation.

National park authorities have many such small schemes which are successful. Northumberland has over 30 schemes, limited mainly by the availability of funds. A similar scheme is operated in the Brecon Beacons park, but budgets are small and only a small proportion of the upland is in national parks. Of course there are no national parks in Scotland where the scheme would have its greatest application.

Ministers accept the value of woodlands to farmers in the uplands. The fact that they have announced that 3,000 hectares of woodland will be permitted on unimproved land in the disadvantaged areas shows that. That allocation would be more beneficial to farmers and conservationists alike if it were used for the management and conservation of existing woods rather than for the planting of moorland which has no trees at present. Valuable existing woodlands are thus neglected.

Paragraph (d) would enable Ministers to make annual payments for existing woodlands taken into the scheme under paragraph (c) where stock is excluded from woodlands which are currently used for grazing. That land is at least as important to a hill farmer as open hill because it also provides shelter. It is normally considered part of the agricultural holding. I therefore believe that those woods should qualify for the £30 per hectare annual payment proposed under the scheme for woodlands on unimproved land.

As I understand it, payments of the type I am suggesting, under paragraphs (c) and (d) are not ruled out by the Bill. Clause 2 gives Ministers enabling powers to make them. I hope that in the circumstances that I have outlined the noble Baroness is prepared to accept the amendment.

9.30 p.m.

Lord John-Mackie

I think that we can agree with the noble Lord's amendment, especially paragraph (d). Many farmers use woodlands for shelter for stock. To take that stock out and to leave the woodlands for environmental purposes would mean a loss. I asked the noble Earl, Lord Cranbrook, how he would estimate that loss. I wonder whether the noble Lord, Lord Moran, has any ideas. It may be difficult to give a figure. Cattle would have to be taken out of the woodlands for the winter and that may be difficult to administer. I can see the point however. If farmers do that and the woodland is next to pasture, it must be fenced. Fencing is expensive nowadays.

I know what happens to woodlands when they are fenced. Glen Affric in Scotland has one of the oldest Scots pinewoods. The Forestry Commission was given it to manage by the Nature Conservancy Council. It fenced a third of it to see what would happen if the wildlife was kept out. There is an extraordinary difference in the regeneration now that deer, rabbit and everything else do not have full play there. There would be a double benefit from the second part of the noble Lord's amendment, and we shall support it.

Baroness White

I hope that the Minister will look favourably on the amendment. I have a small property not far away from that of the noble Lord, Lord Moran. I watched the hill on the other side of a small valley to see what happens to the scrub oaks, which are such an attractive feature of some of our upland landscape in Wales, if we do not fence it and keep out the sheep. The sheep eat the saplings and the wood does not regenerate. Ultimately it falls to pieces and is invaded by bracken, which does not help anybody. There is undoubted substance in the ideas behind these proposed additions. I hope very much that they can be taken seriously.

I should perhaps mention that I have been approached concerning woodlands in national parks. Those of us involved with national parks and with the upland areas in the various less favoured areas, such as environmentally sensitive areas, and all the other designated areas in Wales—we have very few hectares which are not designated something or other in our rural areas—are concerned about the reference made by the noble Baroness in her Second Reading speech at col. 1091. The noble Baroness referred to the 3,000 hectares which were to be grant aided to turn unimproved land in severely disadvantaged or disadvantaged areas into woodland. I may feel it necessary to move an amendment—I have not had time to do so yet—at Report stage following the representations that I have received. We are unimpressed by the suggestions made with regard to Wales that one should endeavour to plant 3,000 acres on unimproved land. At £30 per hectare. in the light of the remark by the noble Baroness that one has to plant 2.500 trees per hectare to make it worth one's while, there will not be much change for any farmer who embarks upon this exercise. I have not put down an amendment at the moment. I give notice that I may wish to do so at Report stage. Meanwhile, I should like to support the amendment proposed by the noble Lord, Lord Moran.

Baroness Trumpington

We have recently discussed a very similar amendment to the first part of the noble Lord's amendment in paragraph (c). I am sure that the noble Lord would not wish me to repeat identical arguments on that.

The second part of the amendment, paragraph (d), would provide for annual payments for the regeneration of farm woodlands currently used for grazing. In this case, it could be claimed that there would be some savings in CAP support expenditure but these would be extremely small if not negligible. My understanding is that livestock are normally allowed into woodlands either for shelter, or even by accident because of lack of fencing, rather than to take advantage of the grazing value of the woodlands. Any loss of agricultural output resulting from fencing off the woodland is therefore likely to be very marginal and in no way comparable to the likely loss from planting trees on improved agricultural land.

However, as I mentioned in response to the last amendment on which I as speaking, the Forestry Commission already offers grants for the rehabilitation of existing woodlands and these include grants for natural regeneration of broadleaved woodland. These are substantial grants ranging from £600 to £1,200 per hectare payable in three instalments. The first instalment is payable on completion of approved work designed to encourage regeneration, such as, as the noble Lord, Lord Moran said, the fencing out of livestock. But he was correct to say that it was not available for fencing only. However. fencing costs are one of the costs that are taken into account in fixing the grants. The second instalment is paid when an adequate stocking of young trees has been achieved, and the third instalment five years later. Since these grants were introduced under the broadleaved woodland grant scheme in October 1985 there has been an encouraging level of uptake for them.

In view of the existence of these grants, the powers that the Forestry Commissioners already has and the power that agriculture Ministers will have under Clause 2(1)(a) of this Bill, we do not believe that the extra powers proposed in this amendment would be justified.

Lord Moran

I am grateful to the noble Baroness for her reply, though naturally I am disappointed by it. If she were to come to Wales to see the oakwoods that the noble Baroness, Lady White, and I know, and to see the crowds of sheep in them she would understand the thinking behind the amendment.

It is unfortunate that the Government are not prepared to extend the scheme to existing woodlands. I recognise the point that the noble Baroness made and I should not wish to press the amendment further tonight, so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 8: Page 3, line 30, at end insert ("such terms to allow the lessee of agricultural land to participate in the scheme with the approval of the owner of the land, such approval not to be unreasonably withheld;").

The noble Lord said: This amendment arises from a question that I asked during the Second Reading debate regarding the rights of tenant farmers to obtain the various grants available under the woodland scheme. We know that a number of agricultural organisations, such as the NFU, the CLA, the Tenant Farmers Association and the RICS, have all agreed on model clauses for insertion into tenancy agreements to deal with the planting of woodland, but as I understand it this can only be with the agreement of the landowner or the landlord. The Minister was kind enough to write to me to confirm that if the landlord says no the tenant farmer will not he able to take part in the woodland scheme.

I appreciate the difficulty but I hope that the Minister can also appreciate the argument that lies behind the amendment. We all agree that it is very important for the Government to get maximum take-up of the woodland scheme if the target they have set themselves of 90,000 acres over three years is to be achieved. It seems unfair that tenant farmers should be restricted in their ability to apply for the scheme.

The amendment is designed to recognise the right of a landowner to approve the change of use to woodlands but to place a requirement on the landowner not to withhold his approval unreasonably. I beg to move.

Baroness Trumpington

This is a complex and difficult area as your Lordships will recall from discussions during the passage of the Agricultural Holdings Act in 1983 and 1984. This Act represents a balance between the interests of landlord and tenant which was only achieved after long debate.

It is because of the need not to upset this balance that the industry, with our encouragement, is drawing up model clauses to insert into tenancy agreements and a model forestry lease where this is more suitable. Both landlord and tenant representatives are involved in discussions on these texts which should ensure that in practice tenants are able to participate in the farm woodland scheme.

The effect of the amendment would be to make it a condition of the scheme that a landlord's consent should not be unreasonably withheld. In other words, it is an attempt to give the tenant the right to participate. Although it seems reasonable, I think there are problems about this idea both from the tenant's and the landlord's point of view.

First, let us look at the legislative and procedural aspects with a particular eye to the tenant. "Unreasonable" is an imprecise term. An arrangement which seems perfecty reasonable to a tenant might seem unreasonable to his landlord. Provision would therefore have to be made for the resolution of disputed cases by arbitration or through the courts. It might also be necessary to provide for arbitration over consequential alterations in the tenancy agreements; for example, over the division of the thinnings or the timber crop. This would necessitate further detailed legislative provisions and might encourage litigation, which we are all anxious to avoid because of the cost to tenants and landlords.

Secondly, let us consider the landlord's position. Forestry is a very long-term commitment and except on those holdings where statutory succession applies and there are eligible and suitable successors, it is probable that the woodland enterprise will outlast the tenancy. The landlord may have long-term plans for his estate and they may not be compatible with the planting of woodland on the holding. Furthermore, commercial woodland is not agriculture and a landlord could not have envisaged his tenant establishing a woodland on part of the holding when he originally let the land.

I would be very wary about what could be viewed as retrospective government interference in the arrangements between the two parties which have been agreed. Use of the power might also act as a disincentive to new lettings. This is not in the long-term interest of the tenanted sector. For all these reasons we cannot maintain our unbeaten record and I would ask the noble Lord to withdraw his amendment.

Lord Stanley of Alderley

Before the noble Lord answers, I do not think that my noble friend should be too worried. While rents are at the height they are today it would not be feasible for the tenant to take up the incentives offered in the scheme.

Lord Carter

When the noble Baroness accepted the sense of the first amendment that I moved I thought it would be too good to last. If the amendment is agreed to, the landlord's approval will still be required. We are not denying that. We ard trying to ensure that the approval is not unreasonably withheld. On a number of amendments this evening the Government have produced legal arguments to say that the amendments will not stand up. The phrase "not to be unreasonably withheld" is well known and well tested in law, but I understand the thrust of the Minister's argument. I shall read Hansard and I reserve the right to come back on Report if necessary. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.45 p.m.

The Earl of Radnor moved Amendment No. 9:

Page 3, line 42, at end insert— ("( )(a) If the index of average earnings for the month of December 1988 or any subsequent year is higher than it was for the previous December then, unless Parliament otherwise determines, any grants which may be provided for by a scheme under subsection (1) above shall be increased for 1989 or any subsequent year by the same percentage as the percentage increase in the index of average earnings. (b) The references in this subsection to the index of average earnings are references to the index of average earnings for employees in agriculture and forestry published by the Department of Employment.").

The noble Earl said: In moving the amendment, I must declare an interest in that I run a forestry business. The amendment seeks to preserve in real terms the grant that may be given to farmers who take land out of orthodox farming and put it into forestry. As the Committee will know, Clause 2 seeks to do just that.

At Second Reading my noble friend Lady Trumpington kindly gave us a glimpse of what those grants should be, and for how long they would persist. They were based on various geographical areas and types of tree. If I remember rightly—because it was the most pertinent aspect—the types of tree were conifers and hardwoods. The period during which the grant would be given on a per hectare basis was for hardwoods 40 years and for softwoods 30 years. I may be wrong but that is how my memory serves me. What is important is that it is quite a long time.

The Bill which enables the grants to be given does not take into account the fact that these grants may well be seriously eroded in real terms. It leaves it in a loose manner, if I may say that, to the discretion of the Minister or the powers-that-be to decide when presumably these grants should be updated in the light of circumstances or indeed whether they should be updated at all. That is not very encouraging for anybody who might wish to take land from farming and put it into woodland.

Forestry grants are not new. It may be new to have one to take land out of farming and put it into woodland, but there has been a long history of forestry grants since the inception of the dedication scheme. Since I think my father was then deputy-head of the Forestry Commission I was one of the first people to join it, because I could not say no; and I have not regretted it except in one serious matter. The grants which were originally promised—because it was a bargain that one entered into; a management plan in return for both the planting grant and the maintenance grant—did not keep track over the years with the expenses incurred. This was to such a serious extent that I looked up Basis 2 grants.

From the year 1970 to 1986, wages, believe it or not, went up 726 per cent.; but the grants in broad figures—I am only 1 per cent. out, and they are a little complicated on Basis 2 because they go on so many hectares—went up roughly speaking by 94 per cent. for the planting grant and the maintenance grant by 84 per cent. It was to avoid this sort of situation happening again that I put forward this extremely important amendment. If anyone thought that they should entertain this scheme without the protection that I am talking about, I can only say that they would be ill-advised.

To get to the smaller details of the amendment, I decided—together with others, I must admit—that the important index was the labour index because forestry is basically a labour-intensive industry. The other big input in my experience is management, and that in turn is related back to wages. Therefore, this convenient index that the Government produced has been put into the amendment.

I may say before I sit down that this amendment has the support both of the National Farmers' Union and of the Country Landowners' Association. I think it is of importance. I cannot see any objections to it. I cannot believe that the Government wish to start off with one sum and then keep their options open for 30 or 40 years in such a way that there is a possibility that people who enter the scheme in good faith will suffer. It would be much better if this was followed and people knew that the grant they were getting would persist properly and in its true value until such time that money started to come in from the trees. I beg to move.

Lord Carter

We on this side of the Committee support the amendment. It is an important amendment, as the noble Earl, Lord Radnor, said. If the Government are serious in their wish to have arable land converted to woodlands, the farmer must have some guarantee that the various payments that he will receive under the scheme will be indexed in some way to increase over time. As we all know, the crop cycle in woodlands is from 20 to 40 years, and much can change in farming in that time. It is by no means certain that the surpluses and the pressure on prices will continue for the next 20 to 40 years. If it does, we shall all be out of business.

The woodland scheme will have to compete with the set-aside scheme. As a farmer, I am much more likely to opt for the set-aside, or perhaps de-intensification, than for the woodlands scheme, but I would certainly be attracted to woodlands if I could be sure that there would be some sort of guarantee provided that would mean that income from the woodlands would increase over time.

Indexing is not unknown in legislation. I am sure that the Ministry will have heard the views of the Treasury on this matter. Timber is a long-term and long-run crop and some form of income growth should be guaranteed if—to repeat the remark I made in respect of the previous amendment—the Government are to achieve the target acreage that they want.

Under the previous amendment we heard that there will be model clauses, tenancy agreements and the forestry lease. In time the landlord will want a review of his rent under the forestry lease and I presume that he will be hoping for a review upwards. Obviously all the other costs will increase over time. The Government are asking for a long-term commitment from the farmer and conditions could easily turn to his disadvantage half way through the life of the plantation.

We hear from the noble Earl, Lord Radnor, that in the past forestry grants have been rendered derisory by inflation. Being extremely sensible, he tied the index to the cost of labour and manpower, the single and most important cost in forestry once the trees are planted. Therefore, a sensible index is being proposed for the adjustment of income. A sensible index has been chosen. This is a sensible amendment and we support it.

Lord Monk-Bretton

I should like to speak in favour of my noble friend's amendment. We have already heard stressed the very long-term nature of forestry, even longer than is the case with agriculture. I should like to stress in particular the fact that in the 1920s and 1930s many landowners rented land to the Forestry Commission for use as forestry on a 99 year lease. The contract was made and it is history now. But it was rented at the rate of 2s. 6d. an acre and the owners are still receiving that amount. A great deal has changed in the meantime as we all know.

That is all very well, but if we wish to encourage more people—people not necessarily of large and substantial means—there is no doubt that they cannot be treated in that way. It is exactly that with which the amendment deals and I think that it should he given careful consideration.

Lord Sandford

I hope that my noble friend will resist this amendment because it goes too far. There is a good deal of public sympathy for the farmers and the landowners over the mess in which they have been landed by the CAP. However, I put it to the Committee that that sympathy has limits.

People working in every industry besides agriculture have spent the last 15 years facing the icy winds of recession as best they can. Meanwhile, farmers and those in agriculture have been protected by import control from overseas competition. They have been selling most of their products in managed markets. They have been supported by substantial grants and subsidies. For instance, in many cases, the hill livestock compensatory allowance amounts to 50 per cent. of the farm income. They have been exempt throughout this period—unlike the rest of the country—from paying any rates. And they are still exempt from planning control. In these circumstances, while a great deal of sympathy is still being shown to the farmers, I think that if they push things too far they are asking for trouble.

Earl De La Warr

I should like to express regret that my noble friend has seen fit to introduce this somewhat acid argument into what has hitherto been a useful and friendly discussion. That said, I shall not pursue it or the reasons for it. I remind the Committee that the Bill is concerned not with charity or pity for farmers but with voluntary set-aside of one kind or another. We are trying to induce farmers to do something that will be in the national interest.

Some of us think the terms that have been suggested may not be as productive as we should like. However, the terms proposed are terms that the Government genuinely believe will bring farmers into the scheme. The additional suggestion made by my noble friend Lord Radnor is in line with the underlying thesis of the Bill, that is, that we are trying to get farmers to do something. To guarantee them against the ravages of inflation to some extent cannot be said by anyone in their wildest imagination to have anything to do with pity or charity. It is to do with offering a proper and useful inducement.

10 p.m.

Lady Saltoun

The country desperately needs to grow more trees. We import approximately 92 per cent. of our timber requirement at present. The Government know this and I hope that they too want more trees to be grown. The noble Lord, Lord Sanderson of Bowden, certainly knows it. He heard all about it at a Forestry Society meeting that we both attended this evening.

The way to ensure that more trees are grown is to make it worth people's while to do it. One has to hang a carrot in front of the donkey. If the carrot is not fresh and juicy enough the donkey will not move.

Lord Stodart of Leaston

I have been moved to speak by the remarks of my noble friend Lord Sandford. He may remember an occasion some 17 years ago when we both attended a meeting in the Dartmoor area where I thought that MAFF, as opposed to the Department of the Environment, had won the argument. It seems that that is not the case.

While I agree with everything that my noble friend Lord Radnor said, I am slightly more cynical than he is. As the result of a certain amount of experience. I do not believe that the Treasury is full of goodwill for forestry. My experience tells me otherwise. I do not know whether my noble friend the Minister finds otherwise. Given the common sense with which she has impressed noble Lords since she took her place on the Front Bench, I profoundly hope that things are about to change and that we shall receive an answer tonight that many of us, particularly noble Lords on the Opposition Front Bench, will find slightly surprising. I trust that my noble friend the Minister is fully aware—I am sure that she will be—that her noble friend Lord Sanderson of Bowden has committed himself in no small way. If I may make reference to it. I notice that he is undergoing a slight flush—or perhaps this is embarrassment, or pleasure—at my reference to his considerable advocacy of the need to grow more trees and more timber. It is, if I may say so—speaking as someone who does have about 120 acres of timber on an 800 acre farm—to my mind absolutely essential that there should be long-term security for what is a very long-term venture.

Therefore I wholly support this amendment which does tend, I think, with absolute logic—despite what my noble friend Lord Sandford has said rather provocatively—to provide a basis for what is going to be desperately needed in this country: that is, timber in the next few years.

Viscount Ridley

I think that my noble friend Lord Sandford needs some support since he is not here himself. Despite all that has been said, I really do not think you can write an index-linked subsidy for what is effectively 40 years into a Bill of this kind. It is kicking the gift horse—wherever you kick gift horses—and I am quite sure that it would be absolutely wrong to try and write this amendment into the Bill.

This Bill is exceptionally generous when you add to the figures which we were quoted the fact that normal Forestry Commission grants are available as well. Despite what my noble friend Lord Radnor has said, a lot of them have been updated, although not adequately, but to some extent. Therefore to ask for more is, in my opinion, to risk all. As the noble Lord, Lord Sandford, has already said, farmers have got a had name and I do not wish them to get a worse one.

Baroness Elliot of Harwood

I should like to support the amendment of the noble Earl, Lord Radnor. As the Committee know, I live in the middle of the biggest forest area in Scotland. The change in prices and costs during the years in which I have been there is simply colossal. If you are going to say that the grants that have been given are limited to what in any given moment is allowed, it does not bear any relation to what is happening on that particular land.

If you want—as I understand the Government does—land to go into forest, you must make it possible for those people who are to do this to earn a living; you will not be able to earn a living if you keep prices and the grant at the same rate as they have been, for example, for the past 10 or 15 years. This does not bear any relation at all to what the costs are. I support this amendment very strongly.

Lord Carter

It would be unreasonable if all the farming comment in regard to the remarks of the noble Lord, Lord Sandford, were to come from one side of the Committee. If all that he has said were true, perhaps he could explain why the real income of farmers in this country has declined by 40 per cent. in the past 10 years? Furthermore, even if what he has said were true, what has that to do with the fact that the farmer is looking ahead to the next 40 years at what is, at the moment, a fixed income from the woodlands scheme?

Lord Hesketh

This amendment seeks to guarantee the level of annual payments to farmers throughout the life of the scheme. The present proposals of the Government allow for payments to continue for up to 40 years. However, farmers may be understandably concerned about whether their calculations on entering the scheme may not be upset by, for example, policy changes in the meantime. Indeed, 40 years is a long time; but, then, forestry is a long-term business. By accepting applicants into the scheme the Government commit themselves to continuing the payments. But it is not possible, even by means of this proposed amendment, to bind a future government as to the level of those payments. Nor, we would argue, is it appropriate to do so. Policies do indeed change and any fixed formula can lead to distortions. The annual payments which we shall be making are intended to be related broadly to the loss of agricultural income, but we need flexibility particularly over a 40-year period to allow for movements in agricultural incomes over the next 40 years and to adjust payment levels to what seems appropriate to achieve the desired level of uptake.

The Government therefore believe that the sensible course is, as we have proposed, to undertake to review the rates of payment periodically in the light of all the relevant factors. We envisage that reviews will take place in year three when the scheme is reviewed generally and at intervals perhaps of every five years thereafter.

The new rates have been widely welcomed. One of the factors that we took into account in deciding on the rates was that farmers might he put off by the uncertainty as to what future reviews of grant rates would produce. In a way it is voluntary set-aside of a timbered nature, as the noble Earl, Lord De La Warr, said, but the fact of the matter is this. At the end of the day the cornerstone of the woodland scheme is that it is voluntary and as a voluntary scheme, with regard to this amendment, the final question is this: should the taxpayer be asked to shoulder a further liability over and above what has already been acclaimed as a generous and innovative scheme before that scheme has even had a chance to prove its viability? For these reasons we cannot accept the amendment.

Lord Stanley of Alderley

Before my noble friend makes up his mind what to do, I am concerned by the reply of my noble friend on the Front Bench, because it implied to me that the amendment is too expensive. It may be said that it is too expensive but if any scheme is to work it requires sufficient funds. If the Government do not intend to put sufficient funds forward to make this or any other scheme work to reduce our surpluses, then we will continue as farmers to be in the muddle that we are in today.

I suspect time and time again—and I am sorry to say this to my noble friend—that the Government paper over the cracks rather than tackle radically the root problem that we have, and I am sorry to say that my noble friend's reply reinforced this sad opinion.

Lord Hesketh

I must once again draw my noble friend's attention to my final remarks. The tragedy is that this scheme has not yet even been given a chance to succeed or fail.

The Earl of Radnor

I am very grateful to everybody who has spoken in this debate, both those who are for the amendment and those few who are against it, which in a way led us away from the main question and on to other matters. I shall certainly not speak for a long time again but I must pick up two points which are important.

If this Bill has such wide support why, I wonder, do the Country Landowners' Association and the National Farmers' Union support the amendment? The two things do not quite seem to tie up. So far as periods of review are concerned, during the period of the Basis 2 Forestry Commission grant that I mentioned, which ran from 1970 to 1986, there were two periods of review. I do not consider that is enough. I think it is a bad pattern that could be put into the future.

What this amendment does is to make the payment quite fair and index it to the costs that the farmer will incur if he goes into forestry for those 30 or 40 years. It seems utterly reasonable to me and, in view of the measure of support for it that there seems to be in the Committee, I am afraid that I shall have to ask for its opinion.

10.14 p.m.

On Question, whether the said amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 25; Not-Contents, 30.

Bathurst, E. Kagan, L.
Carmichael of Kelvingrove, L. Killearn, L.
Carter, L. Monk Bretton, L.
Cocks of Hartcliffe, L. Murray of Epping Forest, L
De La Warr, E. Nicol, B.
Elliot of Harwood, B. Pitt of Hampstead, L.
Elwyn-Jones, L. Radnor, E. [Teller.]
Forbes, L. Saltoun of Abernethy, Ly.
Fortescue, E Stanley of Alderley, L.
Gallacher, L. [Teller.] Stodart of Leaston, L.
Hacking, L. White, B.
Jay, L. Wynford, L.
John-Mackie, L.
Airedale, L. Long, V.
Arran, E. Mackay of Clashfern, L.
Beloff, L. McNair, L.
Belstead, L. Montgomery of Alamein, V.
Borthwick, L. Moran, L.
Brabazon of Tara, L. Morris, L.
Caithness, E. Renton, L.
Carnegy of Lour, B. Ridley, V.
Cullen of Ashbourne, L. Sanderson of Bowden, L.
Davidson, V. [Teller.] Sandford, L.
Denham, L. [Teller.] Skelmersdale, L.
Dundee, E. Strange, B.
Harris of Greenwich, L. Swinton, E.
Hesketh, L. Trumpington, B.
Johnston of Rockport, L. Ullswater, V.

Resolved in the negative, and amendment disagreed to accordingly.

10.22 p.m.

Clause 2 agreed to.

Lord Moran moved Amendment No. 10: After Clause 2, insert the following new clause:

("Duties of Agriculture Minister

—(1) The provisions of this section shall have effect for the purpose of amending certain sections of the Agriculture Act 1986 which apply to the duty placed on certain Ministers under section 17 of that Act.

(2) In subsection (7) of section 24 of the said Act of 1986 (short title, commencement, consequential amendments, repeals and extent) after the words "sections 4 to 6, 8, 9, 10, 11," there shall be inserted "17,".

(3) In subsection (2) of section 17 of the said Act of 1986 (duty to balance interests in exercise of agricultural functions) for the words "(b) in relation to land in Wales or Scotland," there shall be substituted "(b) in relation to land in Wales, Scotland or Northern Ireland,".")

The noble Lord said: The amendment looks very complicated but its purpose is simple and important. It is designed to bring Northern Ireland into line with the rest of the United Kingdom so far as Section 17 of the Agriculture Act 1986 is concerned.

The Minister made clear on Second Reading that the grants under the Bill will be available in Northern Ireland. She said that under Clause I an Order in Council can be made under Schedule I to the Northern Ireland Act 1974 enabling the Secretary of State for Northern Ireland to instate a similar scheme there and that Clause 2 specifies that the Secretary of State for Northern Ireland already has the necessary powers to make the sorts of payments which she described.

After the Second Reading of the Bill, I discovered that Section 17 of the Agriculture Act, referred to by the noble Lord, Lord Carter, which puts a duty on agriculture Ministers to maintain a reasonable balance between four things including agriculture and conservation applies in England, Wales and Scotland but not in Northern Ireland. That seems odd, particularly as many of the policy initiatives in the field of agriculture which we are now taking apply in Northern Ireland. An example is the environmentally sensitive areas. The farm woodland scheme is to be introduced into Northern Ireland under existing legislation. It will parallel the scheme provided for elsewhere in the United Kingdom under Clause 2 of the Bill. It will be unsatisfactory in my view if the balancing duty does not apply in Northern Ireland.

I suggest that the balancing provision really is needed in Northern Ireland. To give the Committee some very brief examples, pollution from farms is a major cause of river pollution in Northern Ireland. In fact 78 per cent. of the incidents in 1985 emanated from farms. Grant aid is given to farmers to construct adequate effluent disposal facilities but in 1986 these grants were withdrawn because demand had outstripped the fund. They were restored on 4th November but for quite a long period they were not available. This seemed a good illustration of a failure to balance conservation against agriculture.

Another example is land drainage. In England and Wales most of the main arterial drainage authorities, the water authorities, now undertake routine wildlife habitat surveys before a scheme is carried out. These are not carried out in Northern Ireland, with damaging effects upon conservation.

Lastly, there is the Blackwater improvement scheme, which is a vast scheme to create more agricultural production. The Bill is dealing with the problem of excess agricultural production. This is a scheme producing more agricultural production and doing great damage to conservation. Once again there was no comprehensive wildlife survey to identify areas of conservation interests before the scheme was begun.

I believe this balancing scheme is needed very badly in Northern Ireland. It works very well in Great Britain and it should work well there.

I put down this amendment because I believe it is important that in administering grants under the Bill Ministers in Northern Ireland should be guided by the same balancing provision that guides Ministers who are responsible for other parts of the United Kingdom.

I realise that the amendment goes rather wider than this particular Bill and that it may be appropriate to introduce the balancing provision in Northern Ireland in some other way. I would have no quarrel with that.

I hope that the noble Baroness will be able to assure the Committee that in some way or other this anomaly will be corrected and Northern Ireland brought into line with the rest of the United Kingdom so far as this balancing provision between the four duties is concerned. It clearly ought to be. I beg to move.

Baroness Trumpington

The Government certainly have no quarrel with the noble Lord's intention in seeking to apply Section 17 of the Agriculture Act 1986 to Northern Ireland. However, I am advised that there are legal problems with this new clause.

First, it can be argued that the amendment is not strictly relevant to the Bill. The Bill provides for making grants for farm business and woodlands. The noble Lord's amendment seeks to extend the duty of Ministers to achieve a conservational balance under Section 17 of the Agriculture Act 1986 over the whole range of ministerial functions relating to agriculture in relation to land. It applies to many other functions besides that of making grants for farm businesses and woodlands.

Conservation is a transferred matter in relation to Northern Irish legislation. That is to say, it is a matter which was declared to be a transferred matter by the Northern Irish Constitution (Devolution) Order 1973 (SI 1973/2162), that is, a matter to be dealt with by the appropriate Northern Irish instrument of government. The present Bill carefully avoids legislating for Northern Ireland in respect of Clauses 1 and 2. Equivalent Northern Ireland legislation would he promoted by means of an Order in Council made under the Northern Ireland Act 1974 or by a scheme made under Northern Ireland legislation.

The Committee may feel that it should not legislate for those transferred matters for which other appropriate constitutional machinery exists. However, I offer the noble Lord, Lord Moran, a bonne bouche at the end because although we cannot accept this amendment the Secretary of State for Northern Ireland has asked me to pass on his assurance that the spirit of the provision in Section17 of the Agriculture Act 1986 will be observed in Northern Ireland. I hope that having heard what I have said, the noble Lord will agree to withdraw his amendment.

10.30 p.m.

Lord Moran

I am grateful to the noble Baroness both for what she said at the end of her remarks and even more for what she said at the beginning. If the Government have no quarrel with my intention in seeking to apply Section 17 of the Agriculture Act 1986 to Northern Ireland, then I am confident that the noble Baroness and her colleagues will find a way of achieving that objective. I am glad that the Government share my wish to see that balancing provision extended to Northern Ireland. In the light of what the noble Baroness said, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

Lord Carter moved Amendment No. 11: After Clause 3, insert the following new clause:

("Departmental responsibility for Development Commission

. In section I and Schedule 1 of the Miscellaneous Financial Provisions Act 1983 (establishment and duties of the Development Commission) for references to "the Secretary of State" there shall be substituted "the Minister of Agriculture. Fisheries and Food" except in subsection (5) of section I (authorisation of compulsory acquisition of land).")

The noble Lord said: This amendment has been tabled to bring out the argument that says that the responsibility for the economic health of the countryside should be handled by the same department which has responsibilities for certain aspects of the environmental health of the countryside, the proposed undiversification scheme and the farm woodlands scheme.

We all agree that the merging of the Development Commission and COSIRA is wholly desirable and moving the amendment provides an opportunity to congratulate the two organisations on the excellent work that they do. If the merger is seen as providing part of the wider rural development plans that the Government want—and it is indeed in the title of the Bill —then we feel that the merged organisation should report to the department which is involved with the setting up the new farm enterprises as a part of rural development. This is part of a wider argument for a department of rural affairs responsible for the economic and environmental health of the countryside, which should perhaps also include the Countryside Commission and the Nature Conservancy Council.

There is widespread support across the whole political spectrum and all organisations involved in agricultural and rural matters for such a department and I hope that the Minister can reflect this widespread support by accepting this amendment as at least a start in the process.

Indeed, the explanatory notes circulated by the department state: The function of the Development Commission is to keep under review all matters relating to the economic and social development of rural areas and to carry out measures which are likely to further such developments. Therefore, I feel that there is a strong argument for bringing the Development Commission within an expanded department to eventually form the nucleus of a department for rural affairs. I beg to move.

Baroness Trumpington

I have a lengthy speaking note on this. If the noble Lord wishes me to read that speaking note, I shall gladly do so. However, owing to the lateness of the hour, I hope he will understand that I speak in shorthand when I say that the Government believe that it is both logical and sensible for the Secretary of State for the Environment to sponsor the Development Commission. We consider that there is no case for changing the legislation. I hope the noble Lord will agree to withdraw his amendment.

Lord Carter

I would have hoped that the noble Baroness would have made a longer speech were she prepared to accept the amendment. I understand what she is saying. This argument will not go away. We shall return to it on Report. But owing to the lateness of the hour, and the brevity of what the Minister said, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Remaining clause agreed to.

House resumed: Bill reported without amendment.

House adjourned at twenty-three minutes before eleven o'clock.