HL Deb 03 March 1998 vol 586 cc1095-7

3.4 p.m.

Lord Selkirk of Douglas

asked Her Majesty's Government:

What steps they are taking to reverse the decline in farm income in Scotland.

The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel)

My Lords, the Government have made it clear that they are committed to supporting a viable agricultural industry and have taken a number of important steps to help alleviate the current problems.

The Government paid £480 million in direct subsidies to Scottish farmers in 1997, an all-time record. We recently announced a further package of aid for the beef and sheep sectors which are the hardest hit. They are set to receive in Scotland a further £24 million.

In addition, the Government recently announced that charges for implementing specified risk material controls from 1st April 1998 will not be recovered from the industry. Also start-up costs for the new computerised cattle traceability system and running costs during its first full year of operation will be paid for by the Government. These two measures will save the UK livestock industry some £70 million in total.

The ban on British beef exports represents a serious handicap to our producers and we are taking all possible steps to have this ban lifted as early as possible.

Looking to the longer term, the Government's objective is for farmers to gain a larger proportion of their income from the marketplace, with a consequential reduction in centrally-funded support.

Lord Selkirk of Douglas

My Lords, I thank the Minister for his reply. I wish to declare a family interest in farming. Is the noble Lord aware that there is on average a 34 per cent. drop in farm incomes in Scotland? Will the noble Lord do his best to ensure that systems of regulation and support are as supportive to farmers in Britain as comparable systems elsewhere in Europe?

Lord Sewel

My Lords, the answer to the second part of the noble Lord's question is, yes. The noble Lord mentions the figure of 34 per cent. I do not dispute that figure but perhaps I may put it in context. Incomes today are higher than they were in the late 1980s and early 1990s. Perhaps I may give the noble Lord one specific figure. Between 1990 and 1995 aggregate farm incomes in Scotland increased in real terms by 308 per cent.

Lord Mackie of Benshie

My Lords, is the Minister aware that the paradise he describes does not exist and that the figures for Scotland will be worse than the 34 per cent. drop this year? If the noble Lord wishes to help the industry, surely the Government should have taken up the £940 million in January, as they could have done. The figure from the European Union has now dropped to £642 million. Why has that money not been taken up as it has been by other countries in Europe?

Lord Sewel

My Lords, in addressing the problem of the beef and sheep sectors, we put forward support for £85 million on a UK level which virtually reaches the ceiling available under the agri-monetary compensation system. So we have compensated the most hard hit sector for the adverse effects of currency appreciation.

I should point out to the noble Lord that the £940 million that is often referred to is not free money in any sense of the word. Fifty per cent. of that would have to be funded entirely from the UK taxpayer and, as a result of the Fontainebleau Agreement, of the remaining 50 per cent. 71 per cent. would have to be funded by the UK taxpayer.

The Countess of Mar

My Lords, as with all statistics, does it not depend how far back one goes? Does the Minister agree that between the 1970s and 1980s farm incomes fell by half, and by half again during the 1980s? They were restored to some extent after the reform of the CAP in 1992 and have now begun to fall again because of the problems with the exchange rate and the green pound.

A noble Lord

The question is too long.

The Countess of Mar

My Lords, does the Minister agree that it is only by increasing their efficiency and output, and by reducing labour, that farmers have survived this far? They are now down to the bone. Does the noble Lord appreciate how important it is that some help is given?

Lord Sewel

My Lords, perhaps I may point out that, taking a longer term perspective, aggregate income last year was still higher than aggregate income in 14 out of the past 25 years. I would also point out that the support given to agriculture in Scotland, at £480 million, is equivalent to the total budget of Scottish Enterprise and Highlands and Islands Enterprise, and represents support running at £14 per week for the average family in Scotland.

The Lord Privy Seal (Lord Richard)

My Lords, perhaps the House will allow me a few words. It seems to me—and I grant that it is only an impression—that the length of supplementary questions is somewhat on the increase. If it is indeed on the increase, I am sure your Lordships realise that it tempts Ministers into giving somewhat lengthy replies. I wonder whether I might draw the position to the attention of the House and hope that, next week, I will be able to rise and say how short the replies are.