HL Deb 16 February 1989 vol 504 cc352-9

7.20 p.m.

The Earl of Dundee rose to move, That the scheme laid before the House on 2nd February be approved [8th Report from the Joint Committee].

The noble Earl said: My Lords, it is only about a month since this House debated the statutory instruments which closed our previous farm capital grant scheme, the Agriculture Improvement Scheme, to new applicants. At that time my noble friend Lady Trumpington explained that the new grant scheme, which had been announced by my right honourable friend the Minister in November, was still subject to discussion in Brussels. I am glad to report that these consultations were successfully completed at the end of last month, thus enabling us to lay these new instruments before Parliament for approval.

Your Lordships will be aware that the main thrust of the new scheme will be directed away from encouraging general increases in productive capacity towards more clearly defined targets reflecting our current priorities. These are for measures to combat on-farm pollution; to assist farmers with the costs of conservation; to continue special help to the horticulture industry; and to maintain rather than increase productive capacity in the extensive livestock sector. Given the marked shift in the balance of expenditure under our previous scheme (the Agriculture Improvement Scheme) in favour of the less favoured areas we have also redressed that a little by cutting the differential between less favoured areas and non-less favoured area grant rates. Indeed, in the case of a few items—in particular, pollution control—where the pressures on farmers are as acute in the lowlands as in the less favoured areas we are introducing a uniform rate of grant.

Let me now say a little more about some of the details. My right honourable friend the Minister announced in November that he had secured provision of up to £50 million over the next three years for grants on pollution control. This has enabled us to set a 50 per cent. grant rate for this type if investment. This will be the highest rate of grant ever offered for effluent facilities in the lowlands where, with the predominance of dairy farms, the potential for pollution is particulalry severe. This substantial increase in the lowland grant rate underlines our firm commitment to dealing with the problem of pollution caused by farm operations. Not only have we made a substantial increase in the lowland grant rate, we have also extended the coverage of the grant to include fixed disposal piping and safety fences. In addition, we have lifted a number of the restrictions on grant which previously applied to the intensive livestock sector.

We shall continue under the new scheme to aid investments in conservation, such as hedges, traditional stonewalls, shelter belts, stiles and footbridges. These will attract the new rates of 40 per cent. in the lowlands and 50 per cent. less favoured areas. At the same time we are increasing to these levels the rates for heather burning and bracken control. In addition we are introducing three new conservation grants for the regeneration of heather moors and native woodlands and for repairs to traditional farm buildings. The former will aid farmers for fencing stock out of heather moors and broadleaved woodlands for a period to allow natural regeneration. This should lead in time to better grazing and shelter for stock as well as increased conservation benefits.

Farmers will also be able to claim grants for the repair and reinstatement of buildings made of materials traditional in the locality—what is described in the schedule to the regulations as vernacular buildings—provided they undertake to keep these buildings in agricultural use for a period of 10 years. These grants will not only enhance the landscape and help to prevent dereliction; they will also enable the farmer to use existing assets more profitably.

As will be seen, we are continuing assistance towards agricultural improvements to investments which do not increase surplus production. We do not consider it right any longer to grant aid to new buildings and roads. Grants which maintain the productive capacity of grazing land, such as reseeding and regeneration, fencing, energy-saving facilities, flood protection and replacement of under drainage are, however, being retained. These grants are of particular importance to hill farmers and to the extensive livestock industry. As under the Agriculture Improvement Scheme this category of grants will be available only to farmers who have an approved improvement plan.

Finally, as far as the horticulture sector is concerned, we see a strong case for continuing our programme of grants to assist the industry with the replacement of heated glasshouses and the installation of heating systems. The grants of up to 40 per cent and 35 per cent. for these items will be available from December when those still available under the Agriculture Improvement Scheme come to an end. We are also reintroducing, from the start of the F & CGS, grants for orchard replanting. These will be at 35 per cent. under improvement plans and 25 per cent. outside a plan.

My right honourable friend's earlier announcement about the changes to our system of farm capital grants was warmly welcomed by those who are concerned with the future of agriculture and the countryside. By that I mean not only conservation bodies but also the National Farmers' Union and the Country Landowners' Association among others. In particular they have welcomed the increased grants for pollution control which will help many small businesses tackle what is a costly problem to remedy but one of pressing importance.

We believe that the Farm and Conservation Grant Scheme responds to the current needs of the industry. It shifts the emphasis away from the increased production of unwanted surplus products and towards further help with investments which enhance our countryside. It also continues the well-established principle of offering additional support for the less favoured areas. I commend the draft regulations to the House, and I beg to move.

Moved, That the scheme laid before the House on 2nd February be approved [8th Report from the Joint Committee].—(The Earl of Dundee.)

7.26 p.m.

Lord Gallacher

My Lords, may I first thank the noble Earl, Lord Dundee, for explaining the import of the conservation grant scheme and the regulations attaching to it. I spoke in some detail from this side of the House at col. 400 on 19th January about this matter, so I am not proposing to repeat those remarks as the scheme confirms what we were told then and indeed further confirms the Written Answer announcing the prospect of change at col. 249 of the Official Report of 29th November 1988.

We are told—as indeed we knew—that one part of the scheme is backed by Community finance. So it has necessarily had to have the approval of the European Commissioners. That approval having been granted, the question naturally arises as to how much of the scheme now before us is still capable of amendment in the light of anything earth-shattering which may be said here tonight, or indeed may have been said in another place about it. If the answer is that not much of the scheme is capable of change by reason of the Community requirement, if would be interesting to know whether the Minister can say anything about consultation between the Ministry of Agriculture and other interests prior to drawing up the details of the scheme now before us. For example, if there was consultations with organisations can we be told which organisations? Alternatively, if the scheme is entirely devised by the Ministry, then it would be useful to know that.

We give a general welcome to the scheme, in particular to its emphasis on conservation matters and the environment in general. We support the increased rates for effluent disposal, and for hedgerows and shelter belts. We regret the reductions of grant in less favoured areas, except for heather burning and bracken control. Although the Minister has given reasons by way of explaining why these reductions have taken place, I think it would be fair to say that they will not be welcomed in less favoured areas.

The new grant of 35 per cent. for repair and restoration of traditional buildings is welcome, but we wonder whether that percentage will suffice to arrest decay, particularly as traditional building materials are costly. Labour costs in undertaking such work at some distance from the builder's own premises may add to overall costs. The Farm and Conservation Grant Scheme 1989 is nationally based, targeted at those who spend at least half of their time in agriculture and derive at least half of their income from it.

An object of the grant, as the noble Earl has said, is to help maintain vernacular buildings. I have added to my store of useless knowledge this evening by the use of the word "vernacular" which, for me, has always had a single context. Now it has another. The justification is that these vernacular buildings, if maintained, will make a contribution to maintaining the landscape. Therefore, we wonder whether the grant for their maintenance should not be available to anyone who has responsibility for such buildings and is prepared to maintain them and keep them in agricultural use.

Again, as I have said, these buildings are costly and they are not necessarily suited for modern agricultural use. So we wonder whether this limitation as to eligibility for the grant of half time in agriculture and half income from it should be looked at again in the light of the conservation aspect of this question.

Turning briefly and finally to the interpretation clause at page 2 of the regulations, this has cropped up before in your Lordships' House. I do not think it was answered particularly then, so I raise it again tonight. This refers to the interpretation given to the word "contractor" at page 2 which, means any person who enters into an agreement to supply agricultural work or services in connection with agricultural land". That as a definition can stand by itself quite properly. However, when we come to paragraph 3 on page 8, where the question of eligibility for grants in respect of contractors is spelled out, that states: Where a person eligible for grant under paragraph (1) above is a contractor, it shall be a further condition of eligibility that he has entered into a written agreement with the occupier of the land on which the eligible business is carried on which is expressed to continue in force for a period of not less than seven years from the day immediately preceding the day on which the improvement plan is submitted. If "contractor" means contract farming, then a contract with a duration of seven years probably makes sense. But if it is "contractor" in the sense in which it is interpreted at page 2, I am bound to say that general experience is that there are very few contracts of such long duration in agriculture; that is to say, one does not bring in a man to do contract work and say to him: "If you come in, you can have a contract to do it for seven years."

So we wonder whether this confusion is bound up with the definition or whether, if the definition is to stand, the period of seven years is more of a disqualification than a qualification. With that query and the other points I have made, we welcome the changes which the scheme now before us provides.

7.30 p.m.

Lord McNair

My Lords, I, too, thank the noble Earl for his explanation of these orders. I have to apologise to your Lordships for the fact that they landed on my desk rather late in the day today, but I shall do my best. My chief feeling on reading them was one of sympathy with the farmers who will have to try to understand them. I am afraid that the farmers who will do best out of this rigmarole are those who have access to a very clever accountant, and they are not necessarily the farmers who I would most want to see helped.

Of course we welcome the general tendency towards what one might call the green aspect, the conservation aspect. Perhaps I may make one or two detailed comments. The main question we have to ask is: will these regulations taken as a package help to keep farmers farming viably on the less helpful upland areas, many of which are threatened with depopulation? In particular, I question whether the 25 per cent. support for liming is high enough. Lime, like good honest muck, is one of the things you can put on the land without endangering your downstream neighbours, and I understand that the Ph value of some of our rivers has sunk to a dangerous level.

Lastly, why was it thought necessary to exclude cider apples and perry pears from the grants for replacement of apple and pear orchards? These are beautiful things. Many of them are somewhat superannuated and could well be replanted. I ask: what have the Government against cider and perry?

Viscount Ullswater

My Lords, I should like to thank my noble friend Lord Dundee for introducing the Farm and Conservation Grant Scheme and the Farm and Conservation Grant Regulations. I welcome the fact that the scheme has been extended to encourage the regeneration of native woodlands and heather moorlands and to assist in the cost of repairs to vernacular buildings. One part of the scheme governed by the Farm and Conservation Grant Regulations is backed with EC finance. It therefore has to be targeted to those who spend at least half their time in agriculture and derive at least half their income from it. However, the other part of the scheme governed by the Farm and Conservation Grant Scheme 1989 is nationally based.

The Government propose that anyone carrying on an agricultural business should be eligible to apply for a grant under this scheme with one exception. That exception is to be found under the heading "Restrictions on payment of grant" which is Section 4(1)(e) on page 8 and which refers to repairs to vernacular buildings. In this instance alone, applicants will have to demonstrate that they spend at least half their time in agriculture and derive at least half their income from it.

If the object of the grant is to help maintain vernacular buildings because of their contribution to the landscape, then the grant should be available to anyone who has responsibility for a building and is prepared to maintain it and keep it in agricultural use. Vernacular buildings are frequently unsuited to the needs of modern farming. To the extent that they are part of our heritage, their maintenance is likely to benefit the community and to be welcomed by the public at large.

To limit grants in the way proposed is divisive. Why should part-time farmers be treated differently from full-time farmers? It also implies that only those working in agriculture should be eligible for grant aid. This would rule out landlords who have a statutory obligation to repair tenants' buildings from applying for the grant unless they themselves are working farmers. That is inappropriate, as in some cases the tenant would have little interest in maintaining a building, but his landlord who would will be ineligible. Again I ask: why should these landlords be discriminated against in this way?

In the context of the scheme as a whole, it seems illogical that those who are eligible to receive grant aid for the protection of areas of grazed woodland and heather moorland from livestock should be denied grant to maintain vernacular buildings. I might add that there would also be an increase in bureaucracy, as it would require Ministry staff to check applicants' occupations and sources of income. I think the point should be made that conservation grants should be made available to all those who can achieve the functions laid down in the schedule to this scheme and should not be limited to one sector of the agricultural community.

I should like to ask my noble friend whether the proposals in the scheme are now written in stone, and if not whether he would be prepared to bring this problem to the attention of his right honourable friend. If they are so written, will the Minister be prepared to monitor very closely the take-up of the grant for the repair of these particular buildings, to make sure that the discrimination written into the scheme is not affecting the conservation objective proposed, and to review it accordingly?

The Earl of Dundee

My Lords, we have had a useful but necessarily short debate on the new scheme. I am grateful to noble Lords for the general welcome they have given to it. I should like to respond to one or two of the points that were made.

The noble Lord, Lord Gallacher, asked whether it would be possible to make changes to these statutory instruments. Statutory instruments cannot be amended as a result of this debate. However, the scheme will be monitored and in the light of experience it could be amended by other statutory instruments if necessary at a later stage. The noble Lord also referred to consultations with other organisations on the preparation of the new scheme. Those consulted included the Countryside Commission, the Nature Conservancy Council, the Forestry Commission, English Heritage, the National Farmers' Union and the Country Landowners' Association, among others. The noble Lord also commented on the position with respect to contractors and mentioned the fact that contracts last for seven years. That covers share-cropping arrangements, but I shall write to the noble Lord on the matter.

The noble Lord, Lord Gallacher, also suggested that the level of grant for vernacular buildings was inadequate. That is a term which he said was new to his vocabulary, and it is certainly new to mine. The 35 per cent. grant is similar to grants of 40 per cent. offered by English Heritage for grade I and grade II buildings. English Heritage grants are discretionary. Farm and Conservation Grant Scheme grants will be available to farmers satisfying the conditions for eligibility even where the buildings are of lesser importance than those qualifying for grants from English Heritage.

Turning to the comments of the noble Lord, Lord McNair, I was intrigued by his reference to cider apples and perry pears. Special help has been targeted on dessert apples and pears because that is where foreign competition is keenest.

The noble Lord also touched on the theme of the less favoured areas and suggested that the cuts in grant rates imply that the Government are lessening their commitment to hill farmers. I do not believe that is so. The cuts in less favoured area grant rates are small and still leave a significant level of grant for anti-pollution and conservation work. Farmers in less favoured areas will get 50 per cent. grants which will apply to a wider range of items. For investment in production facilities such as grassland reseeding and regeneration, which are given a lower priority under this scheme, the grant will still be 25 per cent. All grants, except those for effluent facilities and traditional buildings, will be offered at a higher rate in the less favoured areas than in the lowlands. That is despite the fact that the pressures for improved conservation management are, if anything, even greater in the lowlands than in the hills.

My noble friend Lord Ullswater asked whether it is true that grants for traditional buildings will be confined to those spending half their time in agriculture and earning half their income from it, and if so what is the justification for that restriction. It is true that that condition will apply. I think that it is entirely reasonable that it should because this is, after all, a scheme for farmers. Other bodies such as English Heritage have wider responsibilities for the conservation of historic buildings of particular importance. Their grants, which are discretionary, will be available on rather different eligibility terms.

Under the Farm and Conservation Grant Scheme we are concerned to help farmers to maintain traditional buildings in agricultural use or to restore them to such use. We are not grant-aiding conversions to living accommodation, craft workshops, and so on, or offering assistance for country dwellers in general.

My noble friend also asked how the restrictions on the grant would affect landlords and tenants. We should normally expect a grant application to originate with the tenant and that he would have consulted his landlord before starting work. However, the landlord may well receive the benefit of the enhanced value of a reinstated traditional farm building. It is for landlords and tenants to discuss and agree on the most appropriate grant-aided investment programme for the holding.

I hope that those comments may be of some help to your Lordships. Once again, I commend the draft orders to the House.

Baroness White

My Lords, before the noble Earl sits down, perhaps he could enlighten me on one point, which I feel sure is familiar to every other noble Lord in the House. When reference is made to a part of a person's income, what happens to the income of his wife? On most farms the wife works just as hard and for quite as long as her husband.

The Earl of Dundee

My Lords, I hope that I am right in saying that the two would be taken together.

On Question, Motion agreed to.