HL Deb 19 February 1990 vol 516 cc100-4

8.58 p.m.

The Earl of Strathmore and Kinghorne rose to move, That the draft regulations laid before the House on 31st January be approved—[8th Report from the Joint Committee].

The noble Earl said: My Lords, these draft regulations, which apply to Great Britain, further amend the Hill Livestock (Compensatory Alowances) Regulations 1984. Comparable regulations have also been made in Northern Ireland. They bring into effect the increased rate of hill livestock compensatory allowance (HLCA) for hardy breed ewes in the severely disadvantaged parts of our less favoured areas, to be paid under the 1990 scheme which the Minister of Agriculture, Fisheries and Food announced in a statement in another place on 30th January.

Your Lordships will be familiar with the system whereby financial support in the form of headage payments on beef cows and ewes is given to livestock producers in our less favoured areas. It is a long-standing one, dating back to the 1940s. Since 1976 that assistance has operated under European Community legislation, currently the EC Structures Regulation 797/85. These payments are designed to compensate for the permanent natural handicap affecting farming activity in the less favoured areas, the objective being to ensure the continuation of livestock farming in the hill and upland areas with a view to preserving the rural fabric by keeping people in the less favoured areas and conserving the countryside. The European Community contributes 25 per cent. of eligible expenditure.

The agriculture departments traditionally carry out each autumn a thorough-going review of economic conditions in the hills and uplands in conjunction with representatives of farming interests. The 1989 review showed that average net farm incomes of livestock producers in our hill and upland areas are forecast to fall in 1989–90 in real terms though this followed an increase in real terms in 1988–89. This year's forecasts suggest that in particular incomes for specialist sheep producers in the high hill areas will come under pressure and, as noble Lords will know, there is very little scope for diversification into other activities in these areas. The particular difficulties currently being faced by the specialist sheep producers in the high hills, we believe, justify an increase in the rate of compensatory allowance.

The draft regulations now before the House will increase the level of allowance paid for hardy breed sheep kept on severely disadvantaged land by 75p from £6.75 to £7.50 per animal. All other HLCA rates and conditions will remain unchanged for 1990. The increased rate will cost an extra £5.2 million in a full year. This will bring total HLCA payments up to a figure of some £125 million a year—a very substantial figure—which clearly demonstrates the Government's full and continuing commitment to support the livestock sector in the less favoured areas.

Finally, I should refer to some significant changes to the HLCA rules stemming from the decision by the Council of Ministers last November to amend the EC structures regulation. These changes will not take effect until 1st January 1991 and are not therefore of immediate relevance to the regulations before the House today. If I might summarise, the purpose of these regulations is to give extra assistance to livestock producers in the most disadvantaged parts of the less favoured areas where farming conditions are very difficult and where government assistance is of crucial importance if we are to maintain a farmed landscape in the areas concerned. I commend them to the House.

Moved, That the draft regulations laid before the House on 31 st January be approved.—[8th Report from the Joint Committee.]—(The Earl of Strathmore and Kinghorne.)

Lord Carter

My Lords, the House will be grateful to the Minister both for explaining the regulations and for the welcome announcement of an increase of 11 per cent. in money terms in the HLCAs for ewes on the higher hills. As the noble Earl said, the income of these farmers has been quite severely depressed in recent years. They face very hard farming conditions. There will be a review in autumn 1990 and the noble Earl can be assured that we shall all be watching it very carefully to ensure that the full needs of the farmers in the LFAs will be met by the increase next year.

As the noble Earl will know, there is a problem for beef and sheep producers even in the disadvantaged areas and not the LFAs. It is a pity that no action has been taken to assist these very hard-pressed farmers. With that proviso, I am very glad from these Benches to repeat the welcome for this announcement.

Earl Peel

My Lords, while fully accepting the principle of the HLCA payments as laid out by my noble friend, for the purpose principally of supporting the social structure of farming communities within the less favoured areas, I must express my deep concern as to what effect such a system has had, and perhaps more importantly is still having, on the upland environment. There is no doubt that the use of headage payments—I stress the word headage—simple though these may be to administer, has resulted in the loss of many thousands of acres of heather moorland and consequently valuable wildlife habitat.

This has occurred either directly through the specific increase in sheep numbers or indirectly through certain farming practices which have evolved since the war when the present subsidy system, as we know it, started. But whichever way we look at it, headage payments are supporting a system which in this day and age is, in my view, unacceptable and totally incompatible with environmental requirements. Despite the registration of ewe numbers under the Commons Registration Act 1965, huge amounts of heather have been and are still being eaten out on common land and elsewhere.

The statistics are innumerable. The NCC has calculated that 70 per cent. of the heather coverage has now disappeared in Cumbria; 40 to 50 per cent. in the North Yorkshire Moors and 40 per cent. in the Yorkshire Dales. I believe the situation is even worse in Northumberland. Another figure which I recently read and which I find quite astonishing is that the RSPB has calculated that 1–75 million acres of heather have disappeared in the United Kingdom since the war. More importantly, that disappearance is continuing. In addition to that, between the years 1980 and 1989, 2 million sheep have appeard as regular stock ewes in the less favoured areas.

Furthermore, with the proposal—my noble friend on the Front Bench made reference to this—to phase out the variable premium in favour of increasing the ewe premium and the HLCA payment, the problem is likely to get considerably worse. I realise that there are suggestions that there should be a limit of a thousand ewes per holding, but that is fairly meaningless as most flocks are well under that. Even so, I am sure that there will be ways in which most people will be able to circumnavigate that problem through partnerships, and so forth.

As I said earlier, I fully accept the need to provide some type of support within the less favoured areas. There is no doubt about that. We must maintain the social structure, but at the same time I believe that support must work more closely with the kinds of operations that we now see under the ESA, the environmentally sensitive areas system, where payments are made more on acreage than on a headage basis and there is a firm commitment to environmental objectives. That is crucial. I urge the Government, who have done so much recently to help restore the balance between agricultural output and conservation, to look again at this most unsatisfactory and outdated system of headage payments within less favoured areas. Public money cannot continue to be seen to be aiding and abetting severe environmental damage. There are alternative systems. We must start implementing them immediately.

The Earl of Swinton

My Lords, I should like briefly to support my noble friend Lord Peel. None of us wants to see hill farmers with their backs to the wall. They are, it is fair to say, the salt of the earth in many cases. The last thing I should like to see is their having a bad living and starving. The effect of what my noble friend has said about the disppearance of the heather moorland is that instead of sheep farms we see forestry. Once the land has been overgrazed by sheep, it becomes sick, and there is then no alternative but to plant trees.

Forestry, with all respect, does not employ local people as much as farming. Therefore it is in the interests of hill farmers themselves that a more sensible system than this should be worked out. My noble friend on the Front Bench said that this had been going on since 1940; that is, for 50 years. Surely after 50 years it is time to look at the matter more sensibly and try to make it work more in line with conservation.

The Earl of Strathmore and Kinghorne

My Lords, we have had a short and useful debate on these draft regulations and I am grateful for the comments that have been made. I thank the noble Lord, Lord Carter, for his contribution and I shall attempt to reply to my noble friends Lord Swinton and Lord Peel.

I have listened with great interest to what noble Lords have had to say about the need for action to maintain and indeed restore our heather moorlands. There is no doubt that there have been substantial losses in heather moorland, the causes of which have been explained so forcefully today. Of course ecological overgrazing by sheep in the uplands has played its part. Air pollution and the wider use of the countryside by urban populations have also contributed in certain areas. I well understand the calls for action to arrest the decline and specifically for some redirection of the agricultural support regime in the uplands with that objective.

There are wider pressures for encouragement to farmers to pursue agricultural practices which are beneficial to the environment. The Government have responded positively to those pressures in recent schemes. I mention the environmentally sensitive areas, the farming and conservation grants and the farm woodlands schemes, all of which have these objectives in mind. A further possibility for action specifically directed at the uplands has been secured only very recently through the amendment to the EC legal provisions which will allow member states to take account of environmental requirements in the HLCA scheme. The Minister has already made clear his intention to consider these possibilities very carefully over the months ahead. I do not think that I can say more this evening.

As I acknowledged in my opening speech, the specialist sheep producers in the high hill areas are experiencing particular difficulties at this time. I believe that the additional assistance the Government are now proposing to give them is fully justified.

Earl Peel

My Lords, before my noble friend sits down, he said earlier that he regarded air pollution as one of the reasons for the disappearance of heather. I think that this is perhaps a rather far-fetched argument. To my knowledge there is no evidence to substantiate it. From what I have seen, it is certainly not the case.

On Question, Motion agreed to.