HL Deb 14 May 1987 vol 487 cc809-11

8.25 p.m.

Lord Belstead rose to move, That the order laid before the House on 8th April be approved. [18th Report from the Joint Committee. ]

The noble Lord said: My Lords, I beg to move. As your Lordships may be aware, the Home-Grown Cereals Authority was set up in 1965 and given the general duty of improving the marketing of home-grown cereals. Since its establishment, the authority has become a well respected part of the cereals industry, providing the industry with in particular an authoritative market intelligence service. It also funds a limited range of research and development and acts as agent for the Intervention Board for Agricultural Produce for the purchase, storage and sale of intervention grain and rapeseed. These latter activities are fully funded by IBAP, while its market intelligence and research and development activities are financed by an Exchequer contribution of £200,000, representing less than 50 per cent. of annual expenditure, and by a small levy paid by dealers in and processors of home-grown cereals. Last year this levy brought in some £500,000.

In 1985 the Government announced that they would be looking to the agriculture industry generally to fund an increased proportion of agricultural research and development and that continued government funding of Food from Britain would be dependent on matching contributions from the industry. At the same time there was considerable discussion within the cereals sector of the possibility of setting up a body to promote the export of British cereals. These various developments led to a round of discussions last year involving most parts of the industry, in which it was agreed that all these activities should be funded through an increased levy which would be split between growers, dealers and processors. It was also agreed that these different sectors of the industry should contribute in varying proportions to the new activities; research and development, Food from Britain and the new Cereals Export Development Committee. For example, growers alone would contribute to Food from Britain, and growers and dealers would contribute the new export committee, while all three sectors—growers, dealers and processors—would contribute to research and development work. So far as the growers were concerned, this agreement was endorsed by a poll of producers. Following that, further consultations ensued with the industry before the order which I am putting before your Lordships was laid.

Under this order, there will be three separate levies: a grower levy, a dealer levy and a processor levy. The dealer and processor levies will be collected separately. The grower levy will only be collected separately if a grower sells his grain into intervention; in other cases it will be included in the dealer levy and the dealer will be entitled to collect a contribution equal to the grower levy from the grower. Splitting the levy into these three separate elements will make it possible to share the cost of the new activities that the HGCA is to finance on the lines agreed by the industry last year. I have already referred to a second change, which is that in future sales into intervention will be subject to levy.

A third change is that the definitions of "dealers" and "processors" have been widened, to give a more comprehensive coverage of those who purchase cereals. In particular, those who process cereals for use in their own enterprises will now be subject to processor levy.

Fourthly, the new scheme covers a wider range of home-grown cereals, adding rye, maize, triticale and mixed corn to the wheat, barley and oats covered by the existing scheme. In general, therefore, the new scheme has a wider coverage than the existing one, and should ensure that the cost of the new activities which the industry has agreed to finance will be shared by all those involved in the industry.

The order we are debating today does not set out the rates for the new levies introduced by this scheme. These will be proposed in a further order which will, if the present order receives the approval of Parliament, be laid before Parliament once the authority has submitted its estimates for the coming financial year.

As I have said, this new scheme is a more comprehensive coverage than the existing one and will affect a greater proportion of those involved in the cereals industry. In view of this, my right shonourable friend has been reviewing the representations of those involved in the industry on the authority. Currently, nine seats on the authority are allocated to representatives of dealers and processors. We have sought nominations for these appointments from the organisations representing the agricultural supply trade, the milling industry and the maltsters.

My right honourable friend has now concluded that it will be appropriate to widen the number of organisations from whom nominations are sought. He has accordingly asked organisations representing the agricultural co-operative sector, the poultry industry and the grain shippers to nominate possible members of the authority. To make this possible, those organisations already providing members of the authority have been asked to accept fewer seats on the authority. The Government are most grateful to them for agreeing to these requests.

This new scheme has widespread support in the cereals industry and demonstrates the confidence that industry has in its future. I commend the order to the House.

Moved, That the order laid before the House on 8th April be approved. [18th Report from the Joint Committee]—(Lord Belstead.)

Lord Carter

My Lords, at the outset I declare an interest as a grower of cereals and rape seed. I believe that I am in the unique position of having taken part in the grower poll. I voted in favour of the levy. Therefore noble Lords will not be surprised to know that I shall be supporting the Motion this evening. It is important, and essential for the operation of the HGCA, that it is in force by 1st August.

I am aware of the discussions which have taken place in the industry. The order has the full support of the industry, particularly in the change of representation of the authority. Therefore from these Benches I support the Motion.

Lord Belstead

My Lords, I am particularly grateful to the noble Lord for two reasons. First, it was good of the noble Lord to say that not only from the point of view of the Opposition Front Bench was he in favour of the levy, but personally he voted in favour, because every vote counted. It was very important, if I may say so, that the poll went the way that it did.

Secondly, I am grateful to the noble Lord for saying that the consultations were thorough. I rather slid over the question of consultations, because I felt that my speaking note was rather long. However, the consultations were very thorough and I am grateful to the noble Lord for underlining that point.

On Question, Motion agreed to.