Home-Grown Cereals Authority Oilseeds Levy Scheme (Approval) Order 1990 (Hansard, 21 June 1990)

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington)

rose to move, That the order laid before the House on 18th May be approved [20th Report from the Joint Committee].

The noble Baroness said: My Lords, the instrument before us is concerned with oilseeds. It introduces a new scheme for levying producers of oilseeds in order to fund certain areas of oilseeds research and development. The Government announced last year that from 1st April 1991 agricultural research and development work that has been identified as near market would no longer be supported by public funding. The Government believe that such work, from which industry derives direct benefit, should be funded by industry. The Government will, however, continue to support strategic research and research into areas of environmental concern.

1105 At present my department spends between £500,000 and £600,000 a year on near market oilseeds research. Expenditure on this work will be phased out by 1991. Against that background the Government recognised that a suitable mechanism was needed to enable the oilseeds industry to raise funds for near market research. Following discussions last year with interested organisations, it was agreed that the best way of proceeding would be to introduce a statutory levy scheme for oilseed crops to be administered by the Home-Grown Cereals Authority (HGCA). The levy would be raised from oilseed growers but for administrative efficiency it would be collected at the point of first sale of the crop. Such a scheme was overwhelmingly supported by growers in a poll carried out last year. Over 77 per cent. of UK growers were in favour.

As a first step towards the establishment of an oilseeds levy scheme it was necessary to extend the remit of the HGCA to cover oilseeds. This was done last year when Parliament approved the Cereals Marketing Act (Application to Oilseeds) Order 1989. The present instrument, which establishes the levy scheme itself, is the second necessary stage of the legislative process.

After consultation with interested parties, the HGCA presented a draft levy scheme to agriculture Ministers. Having completed their own consultations, the Government have decided to ask Parliament to approve the HGCA's draft scheme without modification.

The scheme imposes a levy in respect of rapeseed, linseed, soyabeans and sunflowerseeds grown in the United Kingdom. It requires the levy to be paid by dealers who purchase these oilseeds or by intermediaries acting on their behalf or on behalf of overseas purchasers and by growers who sell direct to the intervention board. The scheme empowers those dealers, or their intermediaries, to recover an amount equal to the levy from the grower. In all cases, therefore, it is the grower who ultimately bears the cost of the levy.

The scheme also provides for the registration of those parties paying the levy and allows the HGCA to require them to keep records of purchases and sales of oilseeds, which the authority may inspect, and to make half-yearly returns. In the event of non-payment, the HGCA is empowered to recover the levy as a civil debt.

A separate order, subject to negative resolution procedure, setting the rate of the oilseeds levy for 1990–91 at 50p per tonne, plus 15 per cent. VAT, was laid before the House on 8th June. On an average UK harvest of around 1 million tonnes of oilseeds, this rate of levy would raise around £500,000, for the industry to spend on R&D. This amount is comparable to that spent by government on near market work at present. The HGCA has set up an oilseeds R&D committee to determine how the levy money should be spent. The committee will liaise with other commissioners of oilseeds research.

The introduction of the levy scheme is widely supported by the oilseed industry and I believe that the scheme now before the House provides a most 1106 suitable vehicle for encouraging effective on-going funding for oilseeds R&D. I have a few final words. I hope the noble Lord, Lord Gallacher, for whom I have the greatest respect, not to say affection, will not take it amiss if I say I am sorry that the noble Lord, Lord Carter, is not in his place in the Chamber this evening as I am well aware how long and assiduously he has campaigned for an R&D levy for oilseeds. I commend the statutory instrument to the House. I beg to move.

Moved, That the order laid before the House on 18th May be approved [20th Report from the Joint Committee].—(Baroness Trumpington.)

§ Lord Gallacher

My Lords, I shall begin by thanking the noble Baroness for explaining in detail the order and its purpose. I should say at once that we are in support of the order, which we recognise as being desirable and necessary. It advances considerably the Minister's policy of inviting the industry to undertake the funding of what is designated as near market research. While it is fresh in my mind I should also say that the noble Lord, Lord Carter, whose absence the Minister quite properly regretted, told me before he departed your Lordships' House that I was to say on his behalf that he had been advocating just such a levy for at least 10 years. Apparently virtue has its reward.

We are particularly pleased that the levy follows a poll of growers and that 77 per cent. of those voting in that poll were in favour of the levy. That provides a very good basis for its introduction and a very good justification for the levy. We are in no doubt that the levy is fully justified and that the Home-Grown Cereals Authority will make good use of the money in what is an important and growing area of activity by British farmers. It may be even more important if, as a result of the GATT negotiations, the offer by the Community to make some concession on grains in favour of some relief as regards imported oilseeds and the like finds favour with GATT and becomes part and parcel of the GATT arrangements. That would seem to us to justify even more research into the oilseed industry.

There is only one query that I should like to raise with the Minister, which is procedural. She will be aware that the Joint Committee on Statutory Instruments, in its 20th report, had some things to say about the order. They did not disturb me unduly because, quite frankly, questions of vires and the like are way beyond me. I remember that as a student I had acute difficulty in understanding what the word vires meant in the first place. Nevertheless, it is a fact that the vires of the order was questioned. On the whole I am satisfied by the response that the ministry has made to the comments by the joint committee about vires.

There is also the question of recovering through the courts payments not made under the order. Apparently that is to be done summarily in magistrates' courts in England and Wales, but the joint committee was concerned that no corresponding procedure exists in Scotland and only a limited correspondence of procedure exists in Northern Ireland. On reading the joint committee's

1107 comments I believe that it would have favoured civil court action if debt should arise under the order.

There was also a query about the power being given to the Home-Grown Cereals Authority —whose work in the whole area of cereals I greatly admire —under the order to require growers covered by the scheme to submit half-yearly returns giving such information as the authority may require. Again, the Joint Committee on Statutory Instruments thought that to give the Home-Grown Cereals Authority such wide powers was somewhat excessive. In any case the committee thought that the powers were being sought under the wrong section of the enabling Act of 1965. Without entering into any controversy on that aspect, I have noticed that again the ministry has accepted in effect that in a future alteration to the order it will seek some rectification of the powers under which the Home-Grown Cereals Authority may seek information from growers of the kind which would be useful to it and which I believe, on the basis of its track record, will be well used by the authority and will not be excessive.

I was also interested in the comment made about the negative instrument which is to be tabled setting the amount of the levy. I have heard with great alarm and some despondency that VAT is to be included in the levy. I give notice that I hope to come back later to find out why such a commendable and worthy cause as research of this kind should be subject to VAT. I remember a lady for whom I have great respect saying that the letters VAT stood for very awkward tax. In this context it is not merely awkward, it is unfair as well. But that will keep for another occasion. In the meantime we welcome the order and again I thank the noble Baroness for introducing it.