Lords Sitting of 1 December 1999

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lichfield.

Identification of Disaster Victims
Lord Bradshaw Lord Bradshaw asked Her Majesty's Government:
Whether inquiries have been completed into the reason why the original estimate of casualties in the train crash at Ladbroke Grove proved to be exaggerated; and what actions are being taken to prevent such a situation arising in a future civil disaster.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, I think it is widely understood that, owing to the horrific destruction in same of the coaches, it was not possible to be confident that the number of deaths could be assessed solely from the remains which were found. Since there was no record of the number of people travelling on the train, police estimates had to take into account the rep arts they received of people who were missing and might have been travelling on it. Of course, it took a little time before the police could be sure that people who had been reported missing had turned up safely. They al ways made clear, however, that the estimates they produced were of the maximum possible number of casualties. Whether the media, in turn, always made that clear, I cannot say. There are no specific inquiries under way on the matter. Far from apportioning blame to anyone, I should like to take this opportunity to congratulate those police officers, and indeed all those in the other emergency services, who were involved in coping with this appalling tragedy.
Lord Bradshaw: My Lords, I thank the Minister for that reply. I should like to associate myself with the sentiments he has expressed concerning the emergency services. It concerns me, however—and I shall happily be corrected—that the details of those who telephoned in, using the number advertised on television, were recorded on a card index system. I seek an assurance from the Government that, in any future emergency—whether on the railway or, God forbid, an air crash, terrorist incident or whatever—the Metropolitan Police will have access to the most up-to-date computer system possible in order to record accurately the name of the caller and the possible victims, and to be able to cross-reference the names quickly: for example, with the numberplates on vehicles in car parks and addresses on electoral registers. In that way, the hysteria that built up in the press could be avoided. Will the Minister give an assurance that the best efforts will be made to prevent any exaggeration of casualties by making use of the most up-to-date call system management available?
Lord Bassam of Brighton: My Lords, the noble Lord seeks an assurance rather than an Answer. All I can do is offer the reassurance that the Metropolitan Police do have such a facility at present. I have been there and looked at the system. It seems to work perfectly well and adequately. The police were in a difficult position. They had to provide the best possible estimates. The figures that were given initially rapidly came down. After a few days we learnt more precisely the number of fatalities. I am sure that the whole House will join me in congratulating the police and all the emergency services on the way in which they dealt with the families affected and the careful and caring approach that they adopted. The services can take great credit from the way in which they worked during that very trying time.
Lord Stoddart of Swindon: My Lords, I strongly sympathise with the police in the dilemma they faced in publishing the figures. However, I hope that some thought will be given to this matter. I live in Reading, where the whole population were in mourning, believing that 50 people had been killed in the rail accident. There was a message from the Queen, and a memorial service was held for those who were believed to have died. Yet the only person killed who had lived in Reading was one of the train drivers. So the whole town was in mourning when 50 people had not in fact been killed. Members of the community are a little put out that they should have been placed in that position. I hope that the Government and the police will be able to do something about this. I, too, repeat and emphasise my admiration for the police and the community services.
Lord Bassam of Brighton: My Lords, my noble friend makes a valid point. The police were careful to try to check and clear every name they could from being involved in the crash. Sadly, there was much public speculation which was beyond acceptable standards and well over the top. We live in a media goldfish bowl and can expect that that will happen when tragic events take place.
Lord Cope of Berkeley: My Lords, I, too, sympathise with the police in those extremely difficult circumstances and pay tribute to them. At the same time, I was slightly surprised that the Minister seemed to say that no consideration was being given to the matter. It appeared to me that at least internally, if not in Lord Cullen's inquiry, some consideration should be given to whether methods of handling relatives in such a situation could be improved. There is always something to learn from every major incident and I hope and expect that the police will seek to do that.
Lord Bassam of Brighton: My Lords, again, the noble Lord makes a valid contribution to a continuing discussion and debate. From my knowledge, I am sure the police will review all their practices and procedures to find out whether they can improve the quality of their performance.

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However, one area where they have made great strides in recent years is in the way in which they make contact with the families affected and deal with the distress, unhappiness and uncertainty that the families face. They should be congratulated on that work, a tremendous effort has been put in by them. On behalf of the Metropolitan Police, I extend an invitation to the noble Lord to visit the control centre which dealt with the difficult circumstances that they encountered on that tragic day.
Lord Janner of Braunstone: My Lords, looking at the wider issues of preventing such disasters in future and dealing with the present one, and providing future deterrents, will my noble friend please tell the House whether prosecutions are likely to take place? Will they include individual directors and managers in accordance with the provisions of the Health and Safety at Work etc. Act?
Lord Bassam of Brighton: My Lords, I am grateful to my noble friend for the question. The Deputy Prime Minister announced that a public inquiry would be undertaken by Lord Cullen. The question of prosecutions and so on must be a matter for the police and the Crown Prosecution Service. They properly deal with those difficult and complex issues and I am sure they will deal with them with great professionalism.
Lord Campbell of Alloway: My Lords, will the noble Lord kindly deal with the second part of the Question:
"What actions are being taken to prevent such a situation?"
Lord Bassam of Brighton: My Lords, I thought I had answered that point. There is to be a public inquiry. We know that Sir David Davies, the President of the Royal Academy of Engineering, is to report back by the end of the year with his initial assessment of the effectiveness, practicability and cost of train protection systems. The inquiries undertaken have been very thorough. One point that has impressed me particularly throughout is the way in which the Health and Safety Executive, in particular, has brought forward as much information as it could in an open and transparent way. It has put it firmly in the public domain so that we can all make judgments on how best to proceed in policy terms.

Lone Parents: New Deal Interviews
2.45 p.m.
Lord Northbourne Lord Northbourne asked Her Majesty's Government:
Whether they have any plans to call young single mothers with children under four years old for interview under the New Deal, and, if so, whether pressure or inducements will be used to persuade them to go out to work.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, letters inviting lone parents to contact a personal adviser are currently sent to those whose youngest child is over five. The Government have announced that invitation letters will also be sent to lone parents with three and four year-olds. The New Deal for Lone Parents is a voluntary programme. Lone parents are not pressured into looking for work, but many realise that measures introduced by the Government mean that work pays and offers the best route out of poverty for them and their children. Parents with younger children are knocking on our door to come into the New Deal. That is why we are responding as we are.
Lord Northbourne: My Lords, I thank the noble Baroness for that helpful Answer. Does she agree that many mothers will be relieved to hear that they will not be forced or encouraged to go out to work? Does she further agree that the interviews might form an appropriate point of contact at which young mothers could be given information about support services for parents and parenting which are available in their locality? Will she consider instructing her department and jobcentres to keep in close contact with the Government's new National Parenting Institute and with the Parenting Forum so that such information can be disseminated in that way?
Baroness Hollis of Heigham: Yes, my Lords. On the first part of the supplementary question, about 44 per cent of young lone parents who come forward and who come on to the New Deal have children under the age of five. We are responding to that pressure.
The noble Lord is right as regards the second part of the question. I was happy to be present at the launch of the National Parenting Institute yesterday. Research shows that one in two people thinks Britain does not encourage parenting skills. One in three parents would not know where to go for help with family problems. That is why we are launching the National Parenting Institute and following the path suggested by the noble Lord.
Lord Astor of Hever: My Lords, what direct evidence do the Government have for their claim that the New Deal is responsible for helping lone parents to work rather than the strong economy inherited from the previous Conservative administration?
Baroness Hollis of Heigham: My Lords, the lone parents on the New Deal tell us that the New Deal has turned their life around. Of those who come for interview, about 85 to 90 per cent join the programme. One quarter of those have already gone into unsubsidised jobs; others are on training programmes. New lone parents tell us that the New Deal matches their needs. I suggest to the noble Lord that his question is a bit rich, coming from a party which would apparently require lone parents, with children from the age of 11, to go into work or lose benefit, a party opposed to the New Deal, which offers training

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support, opposed to the minimum wage, which offers a decent return, opposed to the working families' tax credit, which would make work pay, and opposed to the national children's strategy. Perhaps, in the light of that, the noble Lord would like to revise his question.
Lord Hylton: My Lords, will the Minister take note of a scheme pioneered by voluntary bodies within the City of Westminster? Through it, unsupported mothers can bring their children to a crèche while they learn childcare skills which will make them employable. Could that scheme be multiplied throughout the country?
Baroness Hollis of Heigham: My Lords, any lone parent who conies into the New Deal not only has a personal adviser but access to training up to NVQ1 and NVQ2. NVQ2 is approximately equivalent to A-level. While they are in the New Deal and receive training across local government they are entitled to free child care and access to those courses. Therefore, the City of Westminster scheme is broadly replicated across the country.

Lone Parents: New Deal Interviews

  Working Time Regulations: Review
  2.49 p.m.
  Baroness Turner of Camden Baroness Turner of Camden asked Her Majesty's Government:
  What they intend in regard to the Working Time Regulations review, announced at the conference of the Confederation of British Industry.
  The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, comments made by the Prime Minister at the CBI conference were in respect of the amendments to the regulations laid before Parliament on 19th October. The amendments address the requirement to keep records for workers who have opted out of the working time limit and extend the scope of the unmeasured working time exemption. The amendments have been approved by both Houses of Parliament and will come into force the day after they have been affirmed by the Secretary of State. At present there are no plans for a review or for any other changes to the Working Time Regulations.
  Baroness Turner of Camden: My Lords, I thank my noble friend for that response. Is my noble friend aware that many unions, including my own (the MSF)—I hereby declare an interest—believe that the Government's amendments weaken any impact that the regulatory authorities might have and place workers under pressure to volunteer for work, even where the employer has not sought prior agreement to exceed the 48-hour limit? Is my noble friend also aware that it is well within the powers of the Commission to insist on the amendment to the regulations in line with its policy?
  Lord Sainsbury of Turville: My Lords, I do not believe that these two amendments in any way weaken the essential thrust of the legislation. The legislation gives workers clear rights and it is up to them to take advantage of them. The amendments apply only to those who freely work more hours than their employers require of them. Anyone can change his mind at any time and opt back into the directive. I do not believe that this weakens the legislation in any way.
  Lord Mackay of Ardbrecknish: My Lords, is the Minister aware that it will come as a great surprise to people at the CBI conference who heard the Prime Minister speak that his speech about far too many regulations referred only to the rather paltry amendment which was being taken through the House at the time? Does the Minister agree that the audience at the CBI conference was rather led up the garden path by the Prime Minister who seemed to be making a much more robust attack on over-regulation than the picture which the noble Lord now attempts to paint?
  Lord Sainsbury of Turville: My Lords, it was quite clear that on that occasion the Prime Minister was referring to these amendments. Therefore, it is up to the members of the CBI to judge his remarks in that context.
  Lord Razzall: My Lords, does the Minister accept that, although the many changes made continuously to the panoply of fairness-at-work regulations may well be desirable, there is a significant problem particularly for small and medium-sized enterprises in knowing exactly the current state of regulation? What steps will the Government take in that regard?
  Lord Sainsbury of Turville: My Lords, it was part of the regulations that statutory guidance would be given following their introduction. We shall produce a new version of the booklet. The booklet is still factually correct, but in the light of comments that we have received we believe that we can make a better job of it.

Offshore Oil Industry: Jobs
2.53 p.m.
The Earl of Caithness The Earl of Caithness asked Her Majesty's Government:
What steps they propose to take to save the 3,000 jobs threatened at Scottish offshore fabrication yards.
Lord Sainsbury of Turville: My Lords, the Government have already taken action to support the industry by forming the Oil and Gas Task Force which carried out an unparalleled consultation exercise involving all parts of the industry, union and government, and reported recently. Already many recommendations have been implemented, including capital gains rollover relief on asset transfers. All of this is aimed at making the United Kingdom

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Continental Shelf an attractive place for investment, which is the only way to secure long-term UK employment.
The Earl of Caithness: My Lords, given that many of us recall the fuss made by the Labour Party in opposition when the smelter at Invergordon was closed, demanding that the Conservative government take their responsibilities seriously—as they did—will the present Government take their responsibilities seriously in relation to what are far greater job losses and do more than simply set up a task force? The Government are now presiding over the biggest ever clearance of workers in the Highlands.
Lord Sainsbury of Turville: My Lords, it should be understood that there is more involved than the setting up of a task force. The task force has worked very closely with the industry and has produced a whole series of recommendations. Those recommendations include work on supply chain management, which may lead to savings of as much as £1 billion a year; help in improving exports; a new website to promote licensed trading; and a change to the tax regime. Those are very substantial measures which go to the heart of the problem; namely, that if this industry is to maintain its current level of operation it must do two things—deliver cost-effective facilities for smaller fields and look at overseas markets and build on its success in areas like exports. Last year it exported nearly 30 per cent of its output.
Lord Hardy of Wath: My Lords, while recognising that the task force can be extremely helpful, does my noble friend consider that the increase in oil prices in recent months may well stimulate the level of extraction that is required if the fields are to be properly harvested? Does my noble friend believe that the increase in prices together with the task force may lead the oil companies to reconsider their investment policies?
Lord Sainsbury of Turville: My Lords, obviously lower oil prices had a very adverse effect on investment plans. It is greatly to be hoped that with increased oil prices we shall see a return of confidence in the industry. It will take time for that confidence to return, but we hope that together with the oil price the measures we have taken will help.
Lord Campbell of Croy: My Lords, does the noble Lord agree that these yards have served well both the offshore industry and Scotland? I was the Secretary of State who in the early 1970s assisted in their creation by enabling accelerated planning permission to be given. That meant that the Forties field, the first in the British sector, was not delayed as might otherwise have been the case. Since then there have been lean periods with few orders but governments have been able to help. Will the present Government make a special effort now?
Lord Sainsbury of Turville: My Lords. I hope I have made clear that the Government are taking all sensible steps to help the industry, which has been a great success story. The fact remains that as the North Sea matures geologically with the discovery of far fewer large fields, the industry will have to accept reduced demand for larger platforms, and action must be taken both to improve cost-effectiveness for smaller fields and to look for exports. That is the basic strategic thrust of what the industry must do. We shall give the industry all possible help to achieve that. I hope that I have indicated some of the many ways whereby, through working closely with the industry—a central part of the strategy—we seek to help the process.
Lord Taylor of Gryfe: My Lords, is the Minister aware that there has been a good deal of criticism about the expansion of the North Sea oil industry from so-called environmental lobbies, including Greenpeace? Does he accept that any restrictions that may be imposed from that source will severely damage the facilities we are now discussing?
Lord Sainsbury of Turville: My Lords, the court case initiated by Greenpeace means that there will be some delay while we consider the implications. That will not be helpful to the industry. However, we are looking at matters as speedily as we can.
Lord Lang of Monkton: My Lords, does the Minister agree that the industry, particularly the construction sector, needs long-term stability, given the cycle of the offshore oil business? In that context, does he also agree that the protracted, and ultimately inconclusive, review of the tax regime undertaken by his right honourable friend the Chancellor has had an unsettling effect on the industry? It is a highly competitive industry with other parts of the world very keen to attract the construction sector and oil companies equally interested in investing, given the difficulties in the North Sea and west of Shetland. Against that background, will the noble Lord seek to persuade his colleagues in government to desist from interfering in the industry's long-term interests?
Lord Sainsbury of Turville: My Lords, as the tax review was undertaken at the express request of the industry, and, so far as I know, in a perfectly sensible time frame, with some changes made to the benefit of the industry, it is not entirely fair to say that the problems of the industry can be attributed to that. The problems can he attributed to a fundamentally changing situation to which the industry has to adapt. We have looked, I think very fairly, to see whether we can do anything as regards the tax situation to help the industry. We have made one significant change on the roll-over relief on licences which is of great importance to the industry.
Lord Hughes of Woodside: My Lords, is the Minister aware that when the noble Earl, Lord Caithness, asked the Question, and the noble Lord, Lord Campbell of Croy, asked a supplementary question, we thought we would have to congratulate the Conservative Party on

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its conversion to caring about those who work in the industry? Following the question of the noble Lord, Lord Lang, it appears that it has reverted to type in blaming everything on taxation and trying to find ways for their friends to avoid paying tax.
Lord Sainsbury of Turville: My Lords, I can only refer back to the fundamental situation—a change in the nature of the challenge that the industry faces. It is up to the Government to work with the industry to help it as much as possible. As I clearly indicated, that is what we are doing.
Lord Forsyth of Drumlean: My Lords, is this not a catastrophe for the Highlands? The workers who will lose their jobs will not be inspired by the establishment of a web site. Is my noble friend's point not correct? It is the failure of the Chancellor of the Exchequer to spell out precisely the long-term tax regime and the liabilities on the industry, both prospective and retrospective, which are leading to the lack of investment which results in these people losing their jobs. Will the Government take some responsibility for that and set out a programme to help secure future work in the North Sea for Scotland, or will they simply ignore the plight of people in the Highlands?
Lord Sainsbury of Turville: My Lords, I shall deal, first, with the website. That was undertaken in conjunction with the industry. It is to enable the trading of licences, which is of great interest and importance to the industry. The production of a web site is not a negligible matter to be swept aside. It is a key part of licence trading which is important to the industry.
The Chancellor of the Exchequer spelt out clearly the tax position as regards the industry. That has been established. We have made some changes to it. The situation is not to do with the tax regime. The industry—it faces a changing environment—has cut back on investment at this stage.
Lord Razzall: My Lords, would the Minister care to comment on the apparent conversion of the Tory Opposition to interventionist economic policies which they did not practise in office, with devastating consequences to these people?
Lord Sainsbury of Turville: My Lords, I was recently provoked by another noble Lord on the Liberal Democrat Benches to comment on the Opposition's policies. I can only say on this occasion that I should be interested to know what they are suggesting and whether it might come into the category of a subsidy.
Lord Monro of Langholm: My Lords, the Minister does not seem to realise the urgency of the situation. The long-term policy of oil and the ideas he has floated in the Chamber today will not help 3,000 men and women who will be out of work in the very near future. Can the noble Lord make clear who is responsible? Is it the Scottish Executive, the Scottish Office in London, the alleged Cabinet committee looking after
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Scotland, or the Department of Trade and Industry? There seem to be many wheels in the cog and none is turning correctly.
Lord Sainsbury of Turville: My Lords, the situation is quite the reverse of what has been suggested. The problem has been known for some time. Far from having to be pushed into taking action, as I have clearly stated we have already taken action to a considerable extent. The DTI has a responsibility which it is exercising very properly.
Lord Mackay of Ardbrecknish: My Lords, is the Minister aware that people in the Highlands will notice in his contribution a considerable lack of urgency? They will also note that the Liberal Democrats do not seem to care very much despite the fact that their leader is the Member of Parliament for the constituency in which many of the jobs will go. Can the Minister not take on board that the Government should look urgently at how, whether by a new tax regime or other means, they can encourage new development in the new fields to the west of Shetland and in that way bring some work to these yards? If we do not gain a sense of urgency, I can tell the noble Lord that the yards will never build another item for the North Sea.
Lord Sainsbury of Turville: My Lords, these exchanges demonstrate that we are the party which cares about what is going on in the industry and which has already taken considerable action and that the other side is coming very late in the day without clear proposals. No proposals have been put forward. Many statements have been made about wanting to help. We have already taken steps which include a new and clear regime of bringing new exploration online.
The Earl of Caithness: My Lords, notwithstanding what the Minister has told us, does he agree that a forecast in September of this year stated that the loss of 3,000 jobs was the mere start to the loss of a further 7,000 jobs—that a total of 10,000 jobs would go? That is a quarter of the workforce.
Lord Sainsbury of Turville: My Lords, we never sought to hide that if the industry is unable to take action to reorientate itself to the new demands upon it in terms of cost-effective facilities for smaller fields and overseas work, it will lead for certain to a loss of jobs. There is no denying that. Those are the economic facts. The industry, with the help of the Government, has to find new markets for its products. In the long term that is the only way that jobs can be kept secure.

Business of the House: Debate this Day
3.7 p.m.
The Attorney-General (Lord Williams of Mostyn): My Lords, on behalf of my noble friend the Leader of the House, I beg to move the Motion standing in her name on the Order Paper.

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Moved, That the debate on the Motion in the name of the Earl Ferrers set down for today shall be limited to five hours.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

The Countryside
3.8 p.m.
Earl Ferrers Earl Ferrers rose to call attention to the countryside; and to move for Papers.
The noble Earl said: My Lords, at the outset, I should declare an interest. I live in the countryside and I am and always have been financially involved in agriculture and all that goes with it.
Perhaps I may also be allowed to express my gratitude to all those who, in this last curious election, cast their votes in such a way as to enable me to remain a Member of your Lordships' House: one of 42. I am deeply grateful.
Lord McIntosh of Haringey: My Lords, fishing!
Earl Ferrers: My Lords, I was not fishing. I was paying a compliment of gratitude—which the noble Lord, Lord McIntosh, does not always do. However, I cannot resist commenting that those hereditary Peers who are here have more legitimacy—to use the horrible word which the noble Baroness the Leader of the House loved using—than anyone else. We have been elected. Everyone else has been appointed. I gave noble Lords the chance of being elected by putting down an amendment, but they said that they did not want it. They may have become frightened that they might not be elected. So others are appointed; we are elected. I know that noble Lords will not mind my referring to that. We were given such fearful stick in the past Session that I thought it right to get the matter of supremacy in the correct position.
I believe we all agree that, for whatever reason, we love and need the countryside. The countryside is facing the biggest crisis it has faced in the past 60 years. The prime mover for a successful countryside is a successful agriculture. When one has a successful, profitable agriculture, the countryside benefits too. The corn merchants, machinery manufacturers, suppliers to the industry and the village shops benefit. The countryside gets looked after. Hedges and woods are planted. Money is spent on the protection of the environment.
However, if one has an unprofitable agriculture, all those things tend to go. At present, every part of agriculture is under stress. During the past two years, the returns for the livestock sector are down by 60 per cent—that is the cash which farmers receive for their animals and out of which they have to pay the expenses of keeping them.
During the past four years, the price of wheat has fallen from £140 to £68 a tonne. The price of milk has fallen from 26p to 17p a litre. Yet in Ireland it is 25p a
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litre; in Denmark it is 25p a litre; in Germany it is 23p a litre; and in Holland it is 22p a litre. But in the United Kingdom, it is only 17p. There is not much "common" about that aspect of the common market.
I have never understood how Milk Marque is supposed to be acting against the public interest when it purchases its milk at some of the lowest prices in Europe. I should have thought that it was the consumer who was benefiting and that it was the dairy producers who were being disadvantaged.
Sheep farmers are in despair. One told me the other day that he had sent 38 sheep to market and he got a bill—he got a bill!—for £2.40. A week later he sent another 38 sheep to market and received a cheque for £7. The third week he shot 30 sheep. But he still managed to smile and I admired him for that. The only amusing thing to come out of that incident was a Matt cartoon in the Daily Telegraph showing a farmer not shooting his sheep but shooting a jar of mint jelly.
Some of the worst hit people are the hill farmers and the small farmers. If the hill farmers are broken, a sector of our agricultural life and our national character will go. The net income of hill farmers—that is the money which, as it were, they can jangle in their pockets, use for living expenses and have available for re-investing in their business—has fallen disastrously. For hill farmers in England, it has fallen by 20 per cent this year to £4,500. In Wales, it has fallen by 37 per cent to £2,700. In Scotland, it has fallen by 48 per cent to £1,700—£1,700 for living and re-investment. It is a crippling state of affairs.
A similar story can be told about pigs. The price at which a farmer can sell his pigs now is 30 per cent less than it was two years ago. And so one can go on.
The BSE crisis may be nearly over, but it has devastated our fine herds. The one bright light is that the Government are going to remove the beef on the bone regulations. I congratulate them on that. Of course, they should never have been imposed in the first place. But we all do stupid things in our lives and Governments do stupid things, too. We must be glad that they have seen the light and changed their mind and I congratulate the noble Baroness on both those acts.
It is odd, though, is it not, that the purpose of devolution was to enable Scotland and Wales to look after their own affairs and England to look after its affairs, but when England's Ministers are advised that they can safely allow the regulations to be removed, they say that they must wait until Scotland and Wales can agree to do so too. Why, after devolution, should England have to wait for the agreement of Scotland and Wales when Scotland and Wales do not have to wait for England? That is a pretty absurd example of devolution.
A short time ago, an editorial in the Daily Telegraph was entitled "Farewell Farming". I thought that that was a hideous indictment of the agricultural situation; one which showed an attitude of total despair and which depicted a situation which I do not think will happen. Nor is it one which we should allow to happen.

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In 1960 there were 3,000 million people in the world. There are now 6,000 million people. It is reckoned that in the next 25 years that number will rise to 12,000 million. For the population of the world to multiply four-fold in 65 years—with all the land which will have to be given up to houses, cities, factories, roads and so forth—there is no place for long-term despair about agriculture. Nor is there any wisdom in taking agriculture for granted. What there is a place for is short-term, very deep concern.
There is no use in the Government saying that the answer lies in the reform of the common agricultural policy. Of course, the CAP needs to be reformed for all kinds of reasons, but that is not the solution to the present situation. And, anyhow, I fancy that the Government will find that an uphill task. It has been going on for years with no very discernible results—for the simple reason that there are too many countries which like the position as it is and there are too many countries which need to agree to change but often do not wish to do so. But we have to keep on trying. Quite a lot of the problem stems from the high level of the pound. This is a common market where we are supposed to operate on a common level.
There is a mechanism which allows countries to have access to funds when they are being penalised by a distorted currency. Since 1997, in the region of £1,000 million of Community funds could have been made available to United Kingdom agriculture. But, because under the Fontainebleau formula the Government would have to pay a substantial contribution towards that payment, the Chancellor would not agree to it—other than for some £130 million. He would rather see the industry go to its knees and good people go bankrupt.
When so much is said about the cost of the European Community to this country—and especially the cost of the CAP—it is almost beyond belief that the Government will not make available that which is available.
On another tack, I hope that the noble Baroness will not say that the Government have already helped the industry to the tune of £150 million. What they have done has of course been very helpful, but all they have done is not impose charges upon the industry which they had proposed to impose. Indeed, the pig and meat industries are suffering crippling costs because of the high hygiene standards which are imposed upon them. We now have the toughest regime for meat quality in Europe. Yet meat hygiene costs are expenses which our industry has to meet, but which our continental competitors do not. So there is not much "common" about that, either!
Then we have the proposed pesticides tax. That would be an added penalty for an already distressed industry and it would be grossly unfair if it were to be imposed on United Kingdom agriculture but not on that of our competitors. It seems unbelievable that the Government could even consider that, and I hope that the noble Baroness will tell us that they have dropped the idea.
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I hope that the Government will also be able to do something—and by "something" I mean quite a lot—to lessen the bureaucratic burden which is placed on agriculture and on the countryside. It is easy enough to add to red tape, but, as your Lordships well know, once there, it is fiendishly difficult to remove.
The Department of the Environment, Transport and the Regions—in which I once had the happy privilege of being an ornament—loves organising and controlling everything. I had the dreadful privilege of moving the last business of the previous Parliament, which was the hedgerow regulations. I have told your Lordships previously that I simply hated it! The regulations were completely incomprehensible to me, even with the help of the officials who had drafted them. I tried to stop them, but, as usual, my views did not count for too much, and they were swept along in a tide of pre-election euphoria.
Now, I gather that the Government are considering controlling the planting of Cupressus Leylandii because they can grow too big and be offensive to one's neighbours. I hope that, on reflection, the Government will consider that to be absurd and will have none of it. If we are not careful, we will find ourselves having to get a licence to plant a daffodil and another licence to pick one! You really cannot impose such strictures on the countryside. And anyhow, it is not the Government's business to mess everyone else about.
Yet they do. Now they want to ban fur farming. Mr Elliot Morley says that this is justified on the grounds of public morality. I do not know from where he draws such weird ideas. I do not wish, for choice, to have my morals drafted for me by Mr Elliot Morley any more than I would wish, for choice, to have them drafted for me by the noble Baroness the Leader of the House—nor indeed by my noble friend the Leader of the Opposition. Heaven knows where that would take us! It really is not the Government's business to talk about morals and then to take public action. What about the Canadians, the Muscovites, the French and the Swiss? Are they all morally beyond the pale because they wear furs? I have never understood why it is that to put the skin of an animal on one's back or on one's head is morally reprehensible, but to put the skin of an animal on one's feet, as everyone does, is perfectly acceptable. Perhaps it is simply a question of placement. Or perhaps it is simply the Government getting into one of their intellectual tangles.
And what about all those noble Lords who have been queuing up like people at a bus stop to come to your Lordships' House? What is the first thing which they do when they come in? They don their parliamentary robes, all covered with ermine, or, if that is too expensive, with rabbit. Is that wrong? Is that going to be stopped too? Or will it all be replaced with seersucker? Perhaps your Lordships do not know what seersucker is, but I have no doubt that the Minister knows all about it, and I fancy that she would not think much of it.
Then, the Government still want to ban fox-hunting. More bans. It is funny that all those bans are being proposed, and yet only three Members on the

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Opposition Back Benches are taking part in this debate to stand up for those great bans. The Government are producing all those bans. The Prime Minister said that as long as he remains Prime Minister, shooting and fishing will be preserved. If I might respectfully say so, that is a remarkably naive attitude to take. First, he will not be Prime Minister for ever. Secondly, once the anti-blood sports lobby has achieved its objective of banning fox-hunting, it will then turn all its fire-power onto shooting and fishing and will try to whip up a frenzy about that too.
Why do the Government have to carry on this myopic crusade against the sports in which they do not happen to participate but which others are perfectly happy to enjoy? I wonder whether it is because the Labour Party has received financial support from the International Fund for Animal Welfare. Before the election they received £1 million from the Political Animal Lobby, which is a pressure group attached to the International Fund for Animal Welfare. The International Fund for Animal Welfare has an annual income of £32½ million. It is not, as one might expect, a charity. It is a private company. It raises money from all over the world and it dispenses it wherever it pleases for so-called animal welfare causes. Mr. Brian Davies, who founded the fund, is a Welshman who now lives in Canada. He was paid £1 million on parting company with the organisation.
That organisation, or its offshoot, has provided the Labour Party with £1 million and an additional £100,000 since the election. Perhaps that explains why the Government feel obliged to ban not only fox-hunting, but fur farming too. It looks rather like Formula 1 all over again, with cash for legislation.
However, I congratulate the Government on doing away with the fuel duty escalator which automatically increased annually the fuel duty by 6 per cent above the RPI. It was yet another example of how the United Kingdom put itself at a commercial disadvantage with our competitors in Europe. A 1,000 litre tank of diesel costs £610 in the United Kingdom, but only £325 in Belgium.
Another example of the absurd bureaucracy with which we are involved is the protection of cormorants and other such birds. Once a bird gets on to the list of protected species, no power on earth—not even a Minister, because I tried it—can remove it. "Research"—another fine-sounding word which is often a waste of money—must be undertaken to see whether the numbers of the birds have now recovered and whether it is therefore no longer justified to describe the species as endangered. That costs about £5 million and takes about five years, during which time the birds have, of course, increased even further in number and have meanwhile hoovered up all the fish from the rivers. Of course, the fish are not "endangered", only the predators. We really ought to be more careful about what we sign up to. The regulations are supposed to be a benefit.
When the Newbury by-pass was built, your Lordships may remember that a site of what is called Desmolina's Whorl was found. That is a form of snail,
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which is only the size of a biscuit crumb. Everyone became terribly excited and said, "Change the route of the by-pass", or "Build a bridge over the snails". I said, "For goodness' sake, we can't be so absurd as to build a bridge over the snails". "Oh no, Minister", was the reply. "We wouldn't do that because the snail does not like shade"!
I mention that because we really are in danger of becoming absurd. There is a rabbit warren at Blaby in Leicestershire which has been designated by English Heritage as a scheduled monument. A rabbit warren! I really wonder sometimes whether we have not all gone completely mad. You cannot see it because it is all under-ground. You cannot dig into it because it is a scheduled monument. But what you can do is to have an archaeological dig—an archaeological dig on a rabbit warren. What happens if the residents expand their premises without planning permission? Do they get fined or sent to prison? The idea is absurd. But why should human beings be punished in a way in which you would not punish rabbits? Before long, someone will have the idea of designating a wasps' nest as an ancient monument.
I suggest to your Lordships that English Heritage is making a complete fool of itself by behaving in that way. The trouble is that, whichever party happens to be in power, there are those who feel that the more sites and objects which are protected indicates our dedication to the protection of the environment. I suppose that in some ways it does. I am afraid that I take the view that the increase of those regulations and restrictions indicates that we have distanced ourselves from reality and from common sense.
There are so many issues to be discussed under the subject of "the countryside". I wish to refer to only one other; that is, genetically modified crops. I believe that the way to deal with such issues, which can whip up such a fury and frenzy of anxiety, is to test them to see whether they are dangerous or safe. They can be tested only by growing them and putting them under scrutiny. It does no one any good to go, as Greenpeace has, under Lord Melchett, on the altar of publicity, to trespass on other people's land and to cut down their crops.
Agriculture and the countryside are important to all of us. The countryside is not merely a recreation ground for townsmen, a haven for wildlife or a haven for protected species of beetles and plants as well; nor is it merely a workplace for food production. It is of course all of those things. But, above all, it is a living, changing entity which is home to a wide cross-section of,
"all sorts and conditions of men",
and women, and birds and beasts and plants. But it depends on prosperity for those objectives to be achieved.
It is all too easy, wherever we go through life, to find that our lives are ones of complaint, of discontent or of envy. But there is more to life than that. Life is actually wonderful. It is full of good things too. If we are not careful, we spend our time dwelling on the things that have gone wrong and taking the things that have gone

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right for granted. They might very well not have gone right. Fortunately, the beauty of nature and the serenity of the countryside should engender peace and contentment both to the visitor and to the resident. Despite our present dramas, we should never forget how lucky we are. My Lords, I beg to move for Papers.
3.28 p.m.
Lord Haskel: My Lords, I am most grateful to the noble Earl, Lord Ferrers, for giving me the opportunity to speak in this debate. The noble Earl claims to be more legitimate than he was when he attended the House before the recent State Opening. I wonder about that, because I wonder about the legitimacy of the electoral college which elected him.
I should like to respond to the point that the noble Earl made about Mr Brian Davies. I happen to know Mr Brian Davies quite well. The noble Earl is misinformed about him. As he is normally a fair person, I would have expected him to mention that Mr Brian Davies is also an ecologist of great distinction who has the interests of the countryside at heart in the work he carries out.
The noble Earl, Lord Ferrers, paints a picture of farming as a declining industry in deep trouble. However, I am delighted to see that he is not downhearted—and I think that he is right. I suspect that if the noble Earl were 30 years younger he would look at the picture that he has drawn and see an industry deep in change, but full of the opportunities that change always brings: new products, new markets, new ways of doing things and new ways of satisfying changing customers.
However, I do not want to speak about farming. Nobody is more surprised that I am to find myself speaking in this debate. Unlike the noble Earl, Lord Ferrers, I am a city dweller. I like being a city dweller. To me, the countryside is a wonderful place to explore on foot or, even better, by bicycle—in good weather, I hope—and to leave after a suitable period of time.
So I do not want to speak about farming, nor about fox hunting; I do not want to speak about BSE or the CAP or subsidies to the countryside. I want to speak about the people who live in the countryside. I was rather disappointed that the noble Earl had very little to say about them. Some weeks ago I attended a seminar on social exclusion in rural areas and that has encouraged me to speak about those who live in the countryside.
The seminar was organised by the Smith Institute; I declare an interest as chairman of trustees. The institute drew to our attention a most wonderful set of data. The data are based on 17,000 people born in one week in 1958, and 16,000 people born in one week in 1970. Ever since, those people have been visited periodically, and almost certainly will continue to be visited. The information is now kept at the Institute of Education, and researchers are still in touch with 11,000 people from the 1958 cohort, and some 9,000 from the 1970 cohort.
The data contain a wealth of information on people's lives, their families, their education, and their work. Particularly fascinating is the pattern of the
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obstacles and opportunities that they have encountered in their lives from birth to middle age. During a discussion with a young woman MP, Yvette Cooper, the suggestion arose that those longitudinal studies would be particularly useful for looking at the pattern of life in rural areas.
Thanks to generous funding from the Country Landowners' Association, Professor Pynner and Professor Heather Joshi studied the data. Their task was to look at social exclusion, not poverty. Poverty is often associated with social exclusion, but social exclusion deals with the lack of participation in the normal activities of adult life. Yesterday we discussed that briefly at Question Time.
The results were very much as one would have expected. I make no apology for that because—perhaps for the first time—there is statistical data about social exclusion in the countryside. A particularly interesting point about the study was the social change between the 1959 cohort and the 1970 cohort. Of the first cohort, about two-thirds had left school at the age of 16, and in 1974, when they entered the labour market, almost every one of them moved into some kind of job. The 1970 cohort, who left school in 1986, entered a very different world. Many found themselves in training schemes, many of which never led to work. Some just lived on benefit until the 1988 Act restricted that possibility for young people.
The nature of their employment is also interesting. Of course, agriculture ceased to be the mainstay of rural employment some years ago. Very little farming is labour-intensive these days. The seasonal work that can be picked up may ameliorate social exclusion but will not actually end it. The studies showed, for example, that the south-west of England had the highest rate of self-employment in the country because the people there have multiple jobs—many of them casual. Children return to their family homes helping their families in the winter, sometimes after working in the seaside resorts or in other summer occupations.
All that indicates the very narrow and undemanding range of employment opportunities that are available. So perhaps it is not just a lack of dynamism that forces people into exclusion; it may also be due to a low sense of personal worth resulting from their surroundings.
Homelessness was shown to be a major problem in some rural areas. People who migrate to the countryside for retirement, pushing up house prices in rural areas, create difficulties. Transport is a major factor. The distance between the north and south coasts of Devon is the same as the distance from London to Birmingham. If there is work in another part of the county, the problems of transport become central. The vicious cycle of needing a car to get to work, but needing work to be able to afford a car became obvious from the data. I suppose that that explains why car ownership is greater among rural households is at 84 per cent whereas nationally the figure is 69 per cent.
The obstacles to participation are not simply isolation. I was interested to learn how in rural areas well-off people live in similar locations to excluded

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people, so aid cannot be provided by geographical location. Needy individuals have to be served rather than needy areas. That is difficult because in a village of 100, those in need can be in single figures, whereas those in need in an urban area may be gathered together in a housing estate occupying a similar geographical area as a village but they can number hundreds, or even thousands.
The pattern of migration is also interesting. Migration does not occur from the small villages to the big cities, but from the small villages to small and medium-sized towns. The smallest settlements seem to lose populations while small towns are growing quite dramatically. That seems to be the pattern of movement. That drift from rural to urban areas leaves behind an ageing population in rural communities. Naturally they will be less economically active, less likely to be mobile and less likely to be picked up by those who look at the overall picture. Urban disadvantage is readily picked up in the national picture, but rural disadvantage less so.
If the Government are to ensure that the rural dimension is fully reflected in their policy-making, the Minister's work will have to take on a much broader dimension. The problems relating to social exclusion in rural areas spread across many departments, including those responsible for education and employment, for transport and housing, for agriculture, and the DTI. That is a real challenge for joined-up government.
An important responsibility is to co-ordinate all those aspects of rural affairs and to draw them all together. I suppose one joined-up way to look at the matter is the notion of rights, responsibilities and obligations: the rights of citizens to education, occupation, opportunity, family life, housing and health; the obligation of the Government to provide them and the responsibilities of citizens to use them.
The Government know that they cannot leave such matters to the market-place. The Government have declared war on social indifference with national policies, such as the New Deal and the national minimum wage. I am sure that those factors already help. The Government have made a good start with local policies by trying to improve rural transport with the increased sums announced in the Budget to provide new and enhanced rural bus services in England.
I hope that the Government will ensure that the rural dimension is fully reflected in wider policy-making, and that in the forthcoming White Paper we shall see a co-ordinated rural agenda that will make social exclusion in rural areas a thing of the past.
3.38 p.m.
Lord Mackie of Benshie: My Lords, I thank the noble Earl, Lord Ferrers, for introducing the debate. I agree with the noble Lord, Lord Haskel, that the body that elected the noble Earl perhaps was not exactly a democratic one, but they were persons who showed good choice. They put at the top of the list the
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noble Earl, Lord Ferrers, which shows an electorate with very good sense. I did not care for some of the others, but the first choice was good.
I was interested in the noble Earl's criticism of the Milk Marketing Board, which was abolished by the Tory government. It held up the price of milk to a reasonable extent. Farmers prospered and the price of milk to the consumer was lower. But it was abolished. I wish the Government would think again about an organisation of that sort.
Again, one must congratulate the noble Earl, Lord Ferrers, on finding the £1 million given to the Labour Party from an unpopular source. That is a brilliant reaction to the terrible trouble the Tories are in at the moment. I enjoyed his speech greatly.
My only criticism is that the debate relates to "the countryside" and the noble Earl dwelt, as I will, rather too much on agriculture. The noble Lord, Lord Haskel, treated agriculture with the normal contempt associated with the urban dwellers of this country. They have been urban dwellers for more generations than most of the urban dwellers of Europe and are therefore not very sympathetic to poor farmers like me and others.
As the Minister knows well—she will, however, understand why I must press the case—the countryside is in extremely poor shape at the moment. Agriculture and its associated industries are the mainstay of the countryside and the people in it. We must accept that. Of course, far fewer people are now directly employed in agriculture. But the countryside should be populated by people who have some interest in it rather than those who treat it purely as a place to stay while their money and leisure is taken in the city.
The countryside is inhabited and shaped by people. The environmentalists are keen on biodiversity, as am I. I practise it on my farm. But people are more important than peewits. The shape of agriculture is what matters. We look after biodiversity but we cannot shape a major industry in the interests of the lesser inhabitants; in other words, the peewit. It must be shaped for the economic benefits of the country. The noble Earl produced the figures relating to population; they will soon impact very hard on this country.
We view the countryside as a base and where our friends live. We must also consider the needs of our areas. We have an interesting situation in Angus. It is a beautiful county. We have all sorts of scenery and all sorts of biodiversity. But we have some extremely bad planners. And planning needs to be considered when we talk about the shape of the countryside. I can point to appalling private building sites which look like Toytown and cannot be pleasant to live in. I can point to nice houses—farmhouses—ruined by the taking out of beautiful astragal windows and the putting in throughout of one sort of double glazing.
Some of our planners are good. The planners in Fife, for example, have done good work. In Angus some good work has been done. But the best work in Angus was done at Dyke Head in the parish of Cortachy. Nine houses were built in a group. They were built in traditional style. They were spaced out and were

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affordable by local people in the country who cannot pay second-house prices. At first it was said that they would not be let to local people; that terrible people would come in with the rents paid by the DSS. Sure enough, some of the houses were let and the rents paid by the DSS. But there has been no trouble. It is a delightful, rural group of houses. The people who live there like them, whether or not the rents are paid by the DSS. It is astonishing what a good community it is and how it has affected the people therein. How did all that happen? Because the Earl of Airlie insisted, when he sold the land, that the houses be built in traditional form and in good taste. So there are some good-hearted, traditional landlords after all.
Socially, we must look at what happens when people are not of the countryside but are living there. If they are not members of the local church and local community in some way or other, they cannot be good for the area. If we are going to make anything of the countryside, people must have the chance to make a living there. There are all kinds of examples of how to do it and how to spread it. But the Government must give encouragement and help with the establishment of small businesses in order that the people who live there will really be "of" the country.
The Government must also look properly at marketing. Denmark has a massive, competent co-op which has been running for years. It markets, manufactures and advertises with enormous success. It is an enormous organisation whereas Milk Marque in England is being broken up. The Danes are trying to form a giant co-op with the Swedes, which will be an enormously influential body able to help—not dictate—the price given to farmers. It is important that the Government realise that and give some encouragement. They must help to reverse the process of the break-up of Milk Marque or help the bodies into which it is to be split. Either way, marketing and exploiting the virtues are absolutely essential for the future prosperity of farming.
That is the lesson we want the Government to learn. At the same time they must give attention to the fact that people are leaving farming without a penny. In the north of Scotland, where the college of agriculture works with the financial accounts of farms, it is apparent that farmers are leaving the industry without a penny to take with them. A decent retirement scheme is essential. The countryside and farming will survive; it will prosper in an entirely different way. But there must be opportunities for the small farmer to survive, whether with outside employment or with niche employment on the farm. We cannot have an agricultural industry consisting wholly of large farms.
3.48 p.m.
Lord Palmer: My Lords, I too thank the noble Earl, Lord Ferrers, for initiating this important and timely debate. As always I greatly enjoyed his amusing and pertinent opening remarks.
In many ways I feel rather a fraud taking part today as I am a resident of Scotland, like the noble Lord, Lord Mackie of Benshie, and, sadly, the Scottish
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countryside is now a devolved matter. But I am doing so having been born and brought up in England. I live only 10 miles from the Scottish-English border and all our southerly views from home are of England's beautiful countryside.
As the noble Earl mentioned, the countryside is interlinked with the prosperity of agriculture. As the House was told in no uncertain terms by noble Lords last Monday, and, again, last Thursday, agriculture is going through the worst crisis in living memory. Figures released this week show that the situation is far worse than many of us feared. I believe that urgent action is required.
It must not be forgotten that the countryside suddenly did not happen; nor is it set is aspic. It is the result of centuries of careful management by farmers and landowners who over the generations have dedicated much time, effort and money into producing what we have today.
I turn to greater access to the countryside, which I am sure many other noble Lords will mention. I hope and pray that before any Bill is drafted Her Majesty's Government will consult fully—and here I really mean "fully"—with all the relevant bodies, most especially the CLA and the NFU, both of whose membership are the guardians of our rural environment. It must not be forgotten that, in order to have a healthy countryside, it is absolutely vital to have a profitable agricultural industry. At the moment, I fear that Her Majesty's Government seem oblivious to the fact that farming, forestry and field sports are vital to the prosperity of the countryside. This is a point that I beg and implore the Government to take on board before it is too late.
On the contentious issue of' hunting with hounds, I would like to place on record once again for the future that if a ban on hunting with hounds does become law, three things would happen. First, the life of not one single fox would be preserved. It must not be forgotten that foxes are vermin and have to be controlled. Secondly, many thousands of rural jobs would be lost; and, thirdly, the rural environment, the countryside that so many love, would not he conserved in the way it is today. Surely the Government have more important things to legislate on or, indeed, to give parliamentary time to. After the Hyde Park rally, I remember that there was the most wonderful editorial in the Daily Star—of all newspapers—which stated something along the lines of, "Let's have a Bill to ban banning". How very right that editorial was.
I have four questions to ask Her Majesty's Government, all I believe of equal importance, three of which I asked last week and to which I received no reply, despite giving the officials of the noble Baroness, Lady Blackstone, a copy of my speech in advance of the debate on the gracious Speech. The first refers to renewable energy from agricultural crops. I make no excuse for raising this once again in your Lordships' House because I believe that North Sea oil will not last for ever. Will Her Majesty's Government give a firm commitment to spending more on research and development in this area? The amount spent at the moment is a pathetic, paltry £1.1 million per annum.

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I also feel passionately about double green energy—biodiesel manufactured from waste edible oils. Europe produces half a million tonnes of biodiesel, America is also a tremendous manufacturer of biodiesel. But what about the United Kingdom? Well, it produces nothing at present. The UK could produce 90 million litres of this double green, recycled and renewable energy at a fraction of the cost of our European counterparts.
Biodiesel produced from waste edible oils offers one of the most unique packages for energy conservation in the United Kingdom. It is already extensively used within Europe and America. It is blended with low sulphur diesel to produce a cleaner renewable fuel that may be dispensed from garages without any modifications to existing equipment. Why is this environmentally-friendly fuel not being considered and promoted? If it were, we would have a serious competitive industry in the United Kingdom.
Who is going to listen? I just hope and pray that Her Majesty's Government will. I quote the late Lord Montague of Oxford in his final contribution to this House:
"I turn to a new area: the waste edible oil industry. It is stated that it has identified another interesting possibility: recovered oils and fats. Is that true? I do not know; but who jumps on it to have a look? Apparently no one has that responsibility. The Government need to have technologically specific policies to ensure that developments still in their infancy do not become overlooked".—[Official Report, 5/11/99; col. 1141.]
I really believe that the Government must do something and urgently.
Secondly, will Her Majesty's Government give a commitment that trials of GM crops can continue in safety for those growing them? Thirdly, will Her Majesty's Government agree to pay in full, as mentioned by the noble Earl, Lord Ferrers, the agri-money compensation allowances to farmers and producers and to register well before the 31st March deadline with the Commission?
Finally, I want to make a further plea for the A1 to be dualled between Edinburgh and Newcastle. This would greatly improve access to the beautiful Border countryside. Many of us who have been campaigning for years for this dualling believe that it will save lives and that it will also save the ridiculous expense of advertising every few miles on this part of the A1 how many accidents have occurred, whether they were fatal or otherwise.
Her Majesty's Government have stated on numerous occasions that they wish to govern for the whole country. We must all hope and pray that in reality that also means the countryside. I think it would be true to say that all of us taking part in the debate today feel passionately about the countryside. We must develop a long-term strategy for the countryside, not one that will simply paper over the cracks. This strategy must involve landowners, farmers, growers, the entire food industry, all government agencies—I know that my noble friend Lord Carnarvon will mention this later—and the
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Government, so that British agriculture and the British countryside can flourish once again. This great nation surely deserves nothing less.
3.56 p.m.
The Lord Bishop of Lichfield: My Lords, I, too, am most grateful to the noble Earl, Lord Ferrers, for initiating this debate. I should also like to thank the previous speaker, the noble Lord, Lord Palmer, for introducing and holding to this note of urgency about the situation.
It so happens that my own diocese has a population of over 2.5 million people dispersed across a considerable area of the West Midlands. The countryside in this region is among the most diverse in Britain, with patterns of life created by mixed and varied farming over many generations. We can grow anything that can be grown in Britain. We have an equable climate; we have good rainfall; and we have a profusion of habitats for our native species of wildlife. In addition, and importantly, our countryside is a green lung for communities such as Stoke-on-Trent, Wolverhampton and the Black Country, which is also within our diocesan borders.
However, additionally and crucially, as the noble Lord, Lord Palmer, said, the economy of the countryside is an integral part of the West Midlands economy as a whole. The countryside accounts for a quarter of our population, while agriculture generates nearly 30 per cent of the region's gross domestic product and provides 30 per cent of its jobs. Our countryside matters to the future of the whole West Midlands region. And yet, and yet, in too many places I have to report a depressed rural economy and countryside population. Indeed, in some places, we may even be looking at the abandonment of farmland, such is the seriousness of the situation.
It is the opinion of one informed observer that this last year of the present century, 1999, could be a serious watershed for the agricultural industry in the West Midlands, for the shape of our landscape, and for our rural communities, particularly in the lowland areas of our western side of England. Staffordshire, for example, has 4,643 farm businesses and there are 4,733 farm businesses in Shropshire, mainly family farms. Only 24 per cent of those farms—this is important—are of over 50 hectares, and most of these are in the livestock business. But, critically, just one-third of these larger farms account for 80 per cent of the total farm production of the region. We surely hope that these larger farms will continue to expand into the 21st century, providing a bedrock of downstream employment and competing with world markets both in quality and production.
However, I must stress that for the other two-thirds farming is bleak and stress levels are at an all-time high. My own diocese, along with the NFU, has been active in setting up rural helplines to help people in our countryside who are in great distress. Farm incomes are plummeting. Families are staring at the following bleak possibilities: the possibility of loss of business and loss of income; the possibility of defaulting on

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pension policies and insurance policies; the loss of the family home; the dispersal of magnificent herds and flocks bred with pride over many generations; and the necessity to move away, probably to a nearby town, because of the relentless planning system and big house prices which often conspire against any chance of a family staying within their own community.
I declare an interest here because many of the families I describe support, and are the backbone of, our rural churches. At the moment many families suffer a sense of deep failure through no fault of their own. If they stay in the community, this group of farmers will join the hidden poor of the countryside which, as the noble Lord, Lord Haskel, rightly emphasised, can lead ultimately to social exclusion.
It is critical that this Government take the lead and make an open and intellectual commitment to our farmers in order to restore pride, morale and confidence in this industry. How can the Government encourage young people to see agriculture and land-related industries as a good career? Why are our agricultural colleges having to fill their places with so many non-mainstream courses to survive? Why are so many fewer young people applying to such colleges in my region as Rodbastan, Walford and Harper Adams? Like many others I look forward to the forthcoming rural White Paper and to the new countryside Bill mentioned in the Queen's Speech. We watch with interest the submission this month to the European Community of the EC rural development plan.
I conclude with three questions to which I hope that the Minister may be able to respond. First, can the Government stake their claim with Europe to ensure that reformed CAP schemes for rural development will rechannel agri-environmental funding into the agricultural sector in order both to assist specialist markets and to manage the countryside? Can the Government co-fund any such funding from Europe?
Secondly, in the coming White Paper, can the Government focus on helping us to breathe new life into our historic market towns? For example, in east Shropshire a partnership of the Countryside Agency, of local and parish government and the chamber of commerce is co-operating to revitalise Wellington, Shifnal, Albrighton and Newport. The aim is to fulfil the real potential of these towns, to make them lived-in communities and hubs of the rural economy and to give them pride in themselves as places in which to live.
Finally, and perhaps most importantly, can the Government's next Comprehensive Spending Review tackle the inequities resulting from the higher cost of delivering public services in rural areas? Can they do something about the distortion in the calculation of grant caused by inappropriate yardsticks of need and the lack of consideration of the kind of services, for example, recreation, which rural authorities want?
I must emphasise that these factors are having a serious impact in Shropshire and Staffordshire where police force budgets are the lowest in the country and where children in our rural schools receive hundreds of pounds less per child than any others in the United Kingdom as a result of the nonsensical formulas involved.
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There are others in your Lordships' House who understand much better than I the mechanisms needed for the revitalisation of this vital part of our national life. However, may we please first put in place not only the Government's, but also the country's, firm and visible support for all those who live and work in the countryside, along with rightful pride in their contribution to our economy, to our environment and to our leisure?
4.6 p.m.
Lord Jopling: My Lords, I begin by doing two things. First, I declare my interest as a farmer. Secondly, I add my warm congratulations to my noble friend Lord Ferrers on introducing this timely debate and on his extremely fine opening speech. He frequently used a word which I had intended to use several times; namely, "despair". I believe that there is real despair in the countryside now which I have never seen before in my lifetime and have only heard about from my elders with regard to the years between the two world wars.
Yesterday the press published the annual forward "leak", as I believe it is known, with regard to farm income figures for the past year. We read in the press that the average net farm income in the less favoured areas in the United Kingdom—my noble friend Lord Ferrers mentioned this—has now sunk to £2,000 a year. This is in spite of huge subsidies which are paid to the less favoured areas each year. There has been a worsening of the situation for many years whereby the subsidies paid to those in the hill areas amount to more than the income that is gained. These farmers now have an average net income of £2,000 per farm per year. Farming is not like any other business because in almost all cases income has to cover compensation for the effort of the farmer, the hours he has put in, and interest on his investment.
As I say, the situation is extremely bad in the hill areas, the less favoured areas, but I am also particularly concerned about those farmers in marginal areas. Their land is still poor but it is slightly too good to qualify for hill farming subsidies. Many of them are small, tenant businesses. The farmers do not have the value of the land to fall back on as a cushion. In the old phrase, they do not have much fat on their backs.
When I had responsibility for these matters years ago I was able to find a small amount of money for the marginal farms. But I suspect that the very alarming figures for the hill areas which we read about yesterday in the press shroud a much worse situation in the marginal areas which cause me so much concern. I have felt over the years that those farmers who did not receive hill subsidies had a harder prospect than their friends and colleagues who farmed a little further up the hill.
One of the most alarming things that we read yesterday in the press was that more than 20,000 farmers and workers have quit the industry over the past year. That is a highly worrying situation. We must hear from the Government what they intend to do about that.

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What I am about to say has been said before in this debate, but it is important to keep saying it. Agriculture is the powerhouse of the countryside. If it is doing very badly indeed, its plight filters down to all the ancillary businesses which live off the farming industry. At the present rate of progress my fear is that we are only a year or two away from seeing derelict land in this country which no one wants to farm. I can remember only once in my life seeing derelict land in the United Kingdom and that was when I visited Northern Ireland many years ago. I do not know how many noble Lords have seen derelict land. It is not a pretty sight.
I am sure that many speakers in this debate will suggest matters which the Government could take up and actions which they could take to stem the decline, despair and bleak prospect which face the countryside at the moment.
I conclude by saying as strongly as I can to the Minister that there is one thing which the Government should not do and that is to dismantle MAFF at this time. I have been hearing persistent rumours in the recent past that on 1st April next year, when the Food Standards Agency begins its work, a very large chunk of MAFF's activities will be removed to that agency; and that the Prime Minister has it in mind to swallow MAFF into the Department of Trade and Industry. I warn the Government that if they were to do that they would be demonstrating in the clearest possible way their lack of interest in the countryside. Dismantling the department would add hugely to the despair and cause confidence to decline more steeply from its present low level.
If the Government want to boost the morale of country people, they should reorganise MAFF, bearing in mind that responsibilities for food standards are being taken away. It should be reorganised as a department covering all countryside matters as well as agriculture and fisheries. Responsibilities for the countryside now lie in other departments, particularly in the Department for the Environment, Transport and the Regions, which is much too big. The department could easily absorb those responsibilities. If MAFF were to be swallowed up into the DTI or some other department, it would put the Minister in charge of agriculture and fisheries on the level of the Minister of State. In my time in the Council of Agricultural Ministers I do not recall any agriculture Minister who was not in the Cabinet in his own right. I am sure that it would very much downgrade the influence of the United Kingdom in the Council of Agricultural Ministers if the United Kingdom were represented in those circumstances by only a Minister of State. Above all, I believe that the downgrading of the department—which I believe and understand to be a very real prospect at this time—would depress even further the current despair in the countryside.
4.15 p.m.
The Earl of Carnarvon: My Lords, I would very much like to thank the right reverend Prelate the Bishop of Lichfield whose very human speech was a very special addition to this debate, so sincerely introduced by the noble Earl, Lord Ferrers. Like him, I have many interests to declare in this important debate—farming, strategic planning, houses open to the public and country sports. But today I am concentrating on one, the contribution made by country sports to the countryside.
Only last week I was chairing a meeting of the Standing Conference on Countryside Sports looking at the role of the agencies, three of which were presenting papers after Mr Michael Meacher, the Minister, had introduced the debate.
In discussing the forthcoming Bill on access, some of the fears of those who farm or who are involved in land management and forestry, were partly put to rest when we heard the Minister underline the position of woodlands which he said were not to be made accessible; and later on, when the noble Baroness, Lady Young of Old Scone, expressed the need that all dogs would have to be kept on leads. Unfortunately, the noble Baroness is not in her place. She gave an excellent explanation of the work of English Nature, even though tempted by the noble Earl, Lord Peel, to get a touch of Langholme fever at odd times.
I have been a very keen supporter of access for many years, particularly when I became the first chairman of the Countryside Committee of Hampshire County Council. During those years in the early 1960s, the county council bought by agreement or leased over 5,000 acres of land of high landscape value to take the pressure off honeypot areas like the New Forest. That was a very successful exercise completed only with the help and co-operation of landowners only too willing to share their beauty spots with those who wished to visit them.
The success of this venture, which gave access to downland, waterside and hill tops, was due to a great extent to the way in which the landowners were approached by the local authority which accepted that certain areas of the estate were very sensitive to intrusion which would disturb both shooting and fishing.
Those who own and work the land are only too pleased to co-operate with statutory authorities if those authorities are understanding of the very severe difficulties that now face both farmers and landowners, large and small. Some give and take is very necessary if relationships in the countryside are not to reach breaking point. That could mean damage to the environment affecting those who live in the countryside and the visitors, and could also be detrimental to flora and fauna.
It was not clear to many of us during the standing conference discussions how closely the main agencies—English Nature, the Countryside Agency and the Environment Agency—work together. It would seem that there can be conflicts between them in the emphasis that they place on particular issues and

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between concerns about the management of wildlife and landscape and those who manage the land. We now have yet another quango—the regional development agency—as a further bureaucratic layer.
Having listened to the presentations given by English Nature, the Countryside Agency and the Environment Agency, it seems essential that they should work together towards a common objective, the management of the countryside as a whole, rather than each one pursuing its own agenda. Those of us who have to manage the countryside for farming, for forestry, for country sports, for access and for amenity, need clear messages and soundly based guidance. I hope the Minister will take an interest in those last few words.
4.21 p.m.
The Earl of Selborne: My Lords, like others, I must first of all declare an interest as a farmer and as chairman of the Agricultural Mortgage Corporation. I also have other agricultural and countryside pursuits. I thank particularly my noble friend Lord Ferrers for his invigorating introduction to the debate. I shall follow him in the observations that he made very trenchantly about the unerring ability we have in this country to make ourselves less competitive rather than more competitive. We shoot ourselves in the foot—and that is as close as I shall get to following the country sports' metaphor.
It is a pleasure to follow the noble Earl, Lord Carnarvon. Some years ago I served on Hampshire County Council with him. I can vouch that the number of initiatives he started when he was chairman of the planning committee and chairman of the county council are great beacons and examples for other local authorities.
Although it comprises a minority sector of the rural economy, agriculture still remains a highly important percentage of it. As the right reverend Prelate reminded us, it is something in the order of 30 per cent in many areas.
We still lack in this country a clear strategy of what the Government and society as a whole expect from United Kingdom agriculture. The Minister may think that that is a bit hard, but time and time again Ministers have told us their aspirations and what they expect from agriculture. For example, paragraph 5.6 of the discussion document published by the Government in February of this year, which paves the way for the White Paper that has been mentioned, states:
"The Government wants to see the farming industry adapting to meet the challenges of changing consumer demand, world trade liberalisation and new techniques in agriculture".
That is a very fair summary. I do not quarrel with any of it. However, I suggest to the Government that they should not worry about agriculture taking up new techniques. It is already an industry which is peerless in terms of following research and development and implementing it. A lot of the problems come from the
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reluctance of the rest of society—and, indeed, the Government—sometimes to understand the implications of new technology.
If we want British agriculture to be competitive, it will have to move fast to compete with lower cost production systems around the world. There is an inability to realise that if we do not have a competitive agriculture system, the rural economy will ultimately suffer.
An example of this muddled thinking, the inability to think through what we mean by "competitive agriculture" in the face of world trade liberalisation, was demonstrated in a document from the Minister's agricultural advisory group, three members of which came from the Government Benches. The report is entitled Europe's Agriculture The Case for Change. On the whole, it is a wide-ranging and interesting discussion about the future of the common agricultural policy and it has a lot to say about rural development strategies. However, paragraph 4.3 shows where it falls into total confusion. It states:
"In so far as the CAP can be held responsible for stimulating intensive livestock production within a commercial culture which treats farm animals as tradable objects, disquiet over publicly funded support for such activities is itself a significant driver for change".
The report goes on to promote the case for the development of less intensive and alternative systems of production.
That is very much the fashion. Everyone seems to think that commercial, and therefore intensive—a word charged with meaning—production must inevitably have lower environmental benefits or greater environmental impacts. It is open to the implication of being less satisfactory in terms of animal welfare. That may or may not be the case. The size of the unit, the size of the scale, is irrelevant. Clearly what is important is the system of husbandry. If we had the evidence, I suspect it would show that the standard of husbandry has no correlation to the size of the unit. Rather charged words like "intensive systems" or, alternatively, "extensive systems" simply confuse us.
One can imagine the astonishment farmers must feel when they read that there is something discreditable about using animals as tradable objects. That is what agriculture is all about; agriculture exploits animals. One may not like the language, but that is what agriculture is all about. I do not know whether those shepherds who were watching their flocks by night 2,000 years ago would describe themselves as "intensive"—perhaps the right reverend Prelate will tell us—but I am absolutely sure that they were trading in their sheep. So let us not have any of this nonsense that there is something reprehensible about agriculture trying to trade, and to trade competitively. If one trades in livestock, that is the nature of one's agriculture.
The Government tell us that we need to be competitive. Let us not have any more muddled thinking about preferring intensive to extensive. Let us

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make sure that we have environmentally sound agricultural systems in which the food can be marketed as the best of environmental produce.
I am absolutely sure that we have some of the best welfare standards in the world. It is one of the areas in which we have put ourselves at a competitive disadvantage. We have rightly imposed restrictions on the use of husbandry systems which are widely used on the Continent—for example, in pig meat production—and we are about to do the same with battery cages for hen production. But what has happened? We have already lost a considerable share of our pig meat market.
The consumer is delighted to hear that we have imposed those much stronger husbandry regulations—and any market research would confirm that the consumer would continue to like to have a say in this—but when it comes to making a choice in the shops, if the consumer is asked immediately after purchase, "What determined you to buy that produce?", the answer is, "Price". In other words, the connection simply is not made. That is not a criticism of the Government; it is a criticism of much of the meat industry, the agricultural sector as a whole and, by implication, the consumer. If we want to put in place systems which are environmentally benign, with strong animal welfare advantages, we shall have to carry the message through to the consumer.
I suspect that one of the reasons we do not do that is that we are rather ashamed of the fact that we are trading in livestock; that we are exploiting animals. Once we pull our punches on that, we go on to fail to draw attention to some of the fairly nasty practices adopted by other producers around the world who are in direct competition with us. We need to say so. We should simply say that we are going to go for these rather more expensive systems. If we are going to deliver these environmental benefits—which, I am absolutely clear, is part of agriculture's role—we shall have to say that our competitors are aborting their cows in order to keep a tight calving pattern; that they are using chemicals that we would not dream of using, but they do the job. They have a very tight calving pattern, which means that one can buy some very cheap butter in the market. That may be considered a dangerous practice, but we should know it.
It is not the job of British agriculture to rubbish the competition, but the Government should support consumer organisations. Let us take, for example, what happens with refrigerators. If one buys a refrigerator, one finds on the back some kind of code which tells one whether it is environmentally benign or whether it emits ozone-depleting chemicals and the like. We could do exactly the same with agriculture. We could have a code based on the agricultural regulations of our competitors which says, "This produce is likely to have been produced from an environmentally benign system" or, "a less environmentally benign system". If the country in question uses practices which we consider to be undesirable, clearly it would have a lower coding than ours.
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We have one advantage in agricultural production in this country which, I believe, farmers like myself often do not acknowledge as a great advantage; that is, the sophistication of the buyers of the multiple retail outlets. They require us to have total traceability and to conform to protocols which are by no means like regulations; they are much tighter. We take that advantage, which has been forced on us, for very good reasons, and we should take it right through to the consumer. If we could label our produce in the multiple retail outlets so that the consumer is able to trace it back to a precise farm—not just to the region, but to the actual farm—I believe that we should gain a great advantage.
I should like to see consumers taking an equal interest in the provenance and quality of their food. They should point out, quite rightly, if they believe that our practices are perhaps too intensive or if there is some correlation which I do not know about between intensive production and poor environmental animal husbandry standards. By all means, they should point out those matters and agriculture should address the problems. We should be proud of the products of the British countryside. At the moment we sell ourselves short.
4.30 p.m.
Lord Harrison: My Lords, I believe it is wholly appropriate that this House should turn its mind to the countryside. After all, this is the traditional Chamber of county and country. However, I am astonished that the party opposite has instigated the debate. They, after all, should hang their heads in shame for what they have done to Britain's countryside, to the people who live and work there and to those of us who visit it recreationally.
During the last war and the period of the post-war Labour governments, the British people dug for victory. I remind the noble Lord, Lord Jopling, that in the past two decades in rural Britain the Tories have dug for defeat. Their political interference in the countryside in the application of the free market economics of malign neglect and malevolent negligence has left our rural areas without direction and in disarray. The mad cow crisis was only the culmination—
Baroness Byford: My Lords, I thank the noble Lord for giving way. There is some disquiet on our Benches about the opening of the noble Lord's speech. I believe that it was totally unjustified. Is he suggesting that my noble friend Lord Ferrers should hide his head in shame for introducing today an extremely important debate? Although it is not a political point which I would normally make, when I look at the lack of people sitting on the Benches opposite and at the list of speakers, I am taken aback by the tone of the opening of the noble Lord's speech.
Lord Harrison: My Lords, I thank the noble Baroness for that intervention. However, I shall go on to detail and substantiate why I make the points that I do. I return to the point which I was making.

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The mad cow crisis was only the culmination of a bovine philosophy, inflicted on the land, which promoted estrangement at the expense of the community in our rural areas. In the 1980s, as chairman of Cheshire County Council's countryside committee and as a member of Cheshire Rural Voice, I witnessed the fraying of the ties that knit communities together. First, I saw the stamping out of rural post offices, then the early closing of small schools on financial, not educational or social, grounds. There followed the illiteracy of scaling down library services to our small towns and villages, and the derailing by privatisation of the trains and buses that might carry the people from field to town to obtain the services now expunged from the countryside. Even then, rural shops and pubs had their last orders called early by the then government, who claimed to be the farmer's friend. That was "rural vice", not "rural voice", perpetrated by the party opposite.
No wonder that in the countryside today people are living lives of quiet desperation because of those desperado deeds. And no wonder that it is now Labour, not the Tories, who are farming votes in Britain's countryside, as recently evidenced in the by-election in Eddisbury, which I proudly represented in Europe for 10 years. If William Cobbett were to retrace his steps in the countryside today, he would indeed assert that the British people had been taken for a "rural ride" by the previous administration.
I should like to say a word or two about who should speak for the countryside. I confess that I am a fully paid-up, brick-built townee. However, in my years on Cheshire County Council, and latterly as an MEP with a vast rural constituency, I hope that I made an effort to learn about the countryside. Indeed, I was most grateful to colleagues in the CLA and in particular in the NFU for taking me out on a regular basis to look, learn and listen to their countryside yarns of hopes and fears. Indeed, I have come to the view that there are advantages in being an outsider. Sometimes you see things more clearly with no mud on your shoes or boots and from the other side of the farm gate.
Similarly, I believe there is a danger that country people and those who represent them may believe that they have a unique and a decisive grasp of country lore and life. I was never more irritated as a county councillor than when some of my agricultural colleagues queried my right to speak and vote on country matters simply because I was a city dweller. Imagine the green wellie boot being on the other foot; imagine those of us who represent city constituencies debarring our country cousins from speaking on town matters on the ground that they lack urbanity on matters urban. Indeed, the lasting impression I have of those who live in Britain's rural areas is that they feel thrown together because of their isolation. They believe themselves to be misunderstood and mischaracterised. I think that they have a point. That
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is why I am proud that since their inception this Labour Government have made strenuous efforts to respond to the changing needs of the countryside, not just in the area of fox hunting, although that debate has at its heart the refining sensibilities of the British people regarding animal welfare.
Incidentally, I am moved to remark on the unfortunate event that saw seven foxhounds crushed to death by a train in Hampshire last weekend. In the 1980s when I was responsible for leading the political pack on banning fox hunting on Cheshire County Council land, one of the arguments which persuaded me to vote in favour and to encourage drag hunting as a safe alternative was the evidence of a Cheshire train driver. He experienced the danger to trains and their passengers presented by unsupervised hounds recklessly crossing rail lines in pursuit of a fox, imperilling the lives of train passengers.
I ask the Minister to take into account two other aspects in formulating and developing the Government's modernising rural programmes and policy. After all, we must look to the future. The first concerns the European Union and small businesses. The Government have shown themselves a present and past master at negotiating within the single European market for the benefit of Britain, especially with regard to lifting the beef ban. No one will forget the shrill trumpeting on this issue of the party opposite when in government. When they were in charge of the mad cows, they demonstrated very ably how to lose friends and fail to influence people in Europe. As to the beef on the bone ban, they have gone from being bone idle to being bone headed.
Can the Government now build on the good work of adopting and adapting sensible European programmes like LEADER and PRISMA, which aim to help small firms—often high-tech ones—to take root in Britain's countryside? The wonder of the Internet and related technologies miraculously have made SMEs natural grazers in today's countryside. The opportunity to supply worthwhile jobs in our rural towns and villages through such schemes and technologies must be harvested with enthusiasm.
The second aspect, again related to the single market, concerns the single currency. Many traditional industries like agriculture, where many farmers have opened euro accounts with the enthusiastic support of the NFU, and many newer industries like tourism, where the foreign tourists of the future will bring the euro as well as the pound to spend in the countryside, require us to prepare for the eventuality of the euro in the lanes and villages of rural Britain. Will the Government give thought, perhaps in conjunction with the NFU or the Countryside Alliance, to preparing an impact assessment of the euro on our rural life. That is a piece of work which would never be wasted, whether Britain joins now, next year or never.

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Such initiatives would be consonant with the Government's desire to prepare their people for the future. After all, however much we might regret it—pace to the noble Earl, Lord Ferrers, and to the noble Lord, Lord Jopling, who stated that agriculture was the powerhouse of the countryside—we have to recognise that farming is no longer the pre-eminent industry in the countryside.
Lord Mackie of Benshie: My Lords, which industry is pre-eminent?
Lord Harrison: My Lords, I was about to make the point that, apart from the other industries that exist in the countryside, leisure and tourism are catching up fast.
Let me conclude by telling your Lordships that the largest public meeting I ever addressed concerned itself with leisure provision in the countryside in the form of the Conservative government's plans to privatise Delamere Forest in Eddisbury, to rob it from the people of Cheshire. Fortunately, the Robin Hoods of the party opposite were repulsed and today we celebrate the fact that the green lung of Cheshire, with which the right reverend Prelate the Bishop of Lichfield will be familiar, remains open to, for and used by the people in this part of England's green and pleasant land.
4.41 p.m.
The Earl of Caithness: My Lords, I am not certain for which inner city election the noble Lord, Lord Harrison, is standing. His speech was good tub-thumping stuff but I do not think it was very relevant to the debate or very accurate.
I commend my noble friend Lord Ferrers on introducing this important debate, which some of us will take seriously. If one flies over Britain today, one is often reminded of William Blake's words of "England's pleasant pastures", with its copses, hedges and stone walls. The noble Lord, Lord Palmer, was right to remind us that those were all created by human beings, who have manicured nature to produce the beautiful countryside that we can see from the air. The only mess that has been made of the countryside is that one state institution, the Forestry Commission.
When one comes down from the air to ground level, one finds, as we have heard today, a very different story. It is a story of a people who have been told how to run their lives by city people who have failed to run their own lives satisfactorily. My noble friend Lord Ferrers mentioned farm incomes. Under the present Labour Government farm incomes have been cut by half. Under the previous Labour government farm incomes were cut by half. The only difference is that this Government have done it in half the time their predecessors took to do it. My noble friend Lord Jopling reminded us that farm incomes today are £2,000 per farm, which is not a very satisfactory state of affairs. But in Scotland last year farm incomes were £416 per farm. That contrasts with £4,615 per farm in
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1997–98 and £20,546 in 1996–97. My noble friend Lord Jopling was right to take this to its logical conclusion. If farm incomes drop at the present rate, one will have job losses. The countryside cannot afford further job losses. Yet between June 1998 and June 1999 we lost more than 20,000 farming jobs, and those jobs, I hazard a guess, will never come back to the industry. They will never return. They have not historically and they will not in the future.
The noble Earl, Lord Carnarvon, mentioned a good deal of what I wanted to say about access to the countryside. I do not have his expertise and I therefore listened to him with great attention. The noble Lord, Lord Haskel, said how much he appreciates the countryside. He said that he could go there when he wants to and come away when he wants to. But where were the ramblers after last year's storms? Who cleared the footpaths after the gales blew down the trees? Who opened up the bridle ways? It was not the ramblers; it was the farmers; it was the people who earn their everyday crust out of farming. By the time the people from the towns decided that the weather was warm enough and that the footpaths would be dry enough to walk on again, the work had been done by those who live there. I wish to add only one point to what was said by the noble Earl, Lord Carnarvon. What really worries me about the right to roam is that it has a higher priority for some of those who wish to do it than actually understanding the countryside and the people who live there and over whose land they want to walk.
I turn to an aspect of the subject that has not so far been mentioned. I know that my noble friend Lord Peel will say more about it. I refer to crime in the countryside. A survey of farmers for BBC1's "Countryfile" showed that 55 per cent had been burgled; 45 per cent had suffered vandalism; 33 per cent had suffered verbal abuse; 20 per cent had suffered arson; 10 per cent had suffered physical abuse; and 40 per cent thought that crime was on the increase. Those are horrifying statistics. Sue Rhodes, the wildlife crime analyst for Humberside Police, commenting on the gangs of hare poachers who cause havoc in her area, said:
"Nowadays if an officer sees a transit van parked down a dark lane he dare not open the door".
She went on:
"People in the area are frightened to death of them".
Those poachers will not pay any respect to a government Bill that seeks to outlaw the hunting of hares by hounds and dogs. They are beyond the law. Unless more resources can be given to the police in rural areas, crime will continue to increase and people's lives will be threatened on a regular basis.
I hoped that the noble Earl, Lord Carnarvon, would say something about houses because he is an acknowledged expert in the south east. The Government's proposed housing policy for the south east will lead to a trail of destruction. No wonder the press had to tell us that the Prime Minister has yet again had to come to the rescue of his right honourable friend the Secretary of State for the Environment,

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Transport and the Regions, Mr Prescott, when he suddenly realised that what Mr Prescott had said was in fact what he wanted to do. Mr Prescott had said:
"The green belt is a Labour achievement and we mean to build on it".
Where will the Government put these houses? Do they know how many houses they will put in the south east? How much of the green belt will be destroyed in the process? I hope that the noble Baroness who is to reply will give me answers to those points.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, I shall be delighted to try to cover all the points that have been made. Perhaps I may say that I accept that in a debate like this it is right that noble Lords should feel able to criticise in contentious terms aspects of the Government's policy. But I think that a little bit of what is sauce for the goose is also sauce for the gander. I wonder whether noble Lords on the Opposition Front Bench wish to intervene in the noble Earl's speech because they seemed to find it desperately offensive when the noble Lord, Lord Harrison, made comments with which they did not agree on aspects of the previous government's policy.
The Earl of Caithness: My Lords, how policies are commented upon in this House is also important. At the moment, those living in the countryside feel under very severe threat. By and large, they are a resident, predominantly white, small and persecuted minority. It is one thing not to understand the problem, but it is a totally different thing not to try to tackle it and not to care. I believe that that is a charge of which this Government stand guilty.
For that reason, perhaps the right reverend Prelate the Bishop of Lichfield will agree with me that, rather than the words of William Blake in "Jerusalem" that I mentioned earlier, a quote from Tennyson is more apposite. He described his parishioners as depressed people, many of whom wanted to abandon farming. In the poem "Maud" Lord Tennyson said:
"I am sick of the Hall and the hill,
I am sick of the moor and the main,
Why should I stay? Can sweeter chance ever come to me here?
O, having the nerves of motion as well as nerves of pain,
Were it not wise if I fled from the place and the pit and the fear".
4.51 p.m.
The Lord Bishop of Durham: My Lords, I am afraid that I must begin my contribution with an apology. It may be necessary for me to leave a little before the end of the debate in order to return to the north east before milking time. Of course I feel privileged to be sharing in the debate when so many experts and practitioners—those who live and work in the countryside—are taking part. So far it has been an inspiration.
I am particularly grateful to the noble Earl, Lord Ferrers, for introducing such an informative debate. I was interested in the distinction he was attempting to draw between animal rights and human rights. I heard a tale the other day of a lady walking down the street
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wearing a fur coat. She was accosted by animal rights protestors with the words, "What poor creature has had to die so that you can wear that coat?", to which she replied, "My mother-in-law". That may serve as a lesson to all of us in public speaking. We must ask the appropriate question if we want to get the appropriate answer.
It was heartwarming to hear the speech of the noble Lord, Lord Palmer, especially when he referred to safety on the A.1. I am so glad that he did that. Some noble Lords will have heard of the tragedy we experienced in the diocese of Durham recently when three priests died in a road accident on the same stretch of road. I was also pleased to see the noble Lord, Lord Prior, sitting in his place earlier in the debate. Many noble Lords will know that he chaired a famous commission that resulted in the Church of England report entitled Faith in the Countryside. Although that report is almost 10 years old, it still serves as a bible on countryside matters and sits on many of our shelves. Indeed, it has reinvigorated and inspired a good deal of activity by the Church in the countryside. We are planning to hold a special 10-year celebration within the next few months.
I should like to reaffirm the Church's continued commitment to the countryside at a time when we have seen the post office, the school and other community amenities closing down. The parish church and indeed the chapel are determined to maintain their presence in an increasingly ecumenical way. In spite of a reduction in the total number of the clergy, we are still committed to manning the countryside, and of course the vast majority of parish churches are still active. Church buildings continue to be widely used. That is a tribute to those loyal local people—readers, churchwardens and many other volunteers—who keep our churches open, presentable and beautiful places that evoke contemplation. The focus for those people is of course the Creator God, but their beacon is the parish church which is used by the whole village community and is admired and visited by so many from outside.
Those communities are not helped by the imposition of VAT on repairs to church buildings. Often a few church people bear the responsibility for maintaining a medieval historic building that stands at the heart of a rural community and to which the whole community—of any faith or none—looks to represent the very core of that community. However, to those few people who strive to maintain the church, it presents a dilemma of priorities: should they spend all their time raising money in order to maintain the building on behalf of all the rest, or should they spend some of their resources of time and money carrying out many other activities for the church—not least in service to the community and the provision of good worship? For the moment, the Church of England continues to maintain those churches and does so gladly, but it may not always be possible for it to do that as costs rise and rural populations decline. For that reason, I ask the Government once again whether they intend to retain VAT on historic church building repairs, or do they propose, at some point in the future,

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to look at this again and perhaps seek to amend the law so that parish churches, which represent the heart of our countryside, may remain part of the glory of it?
The Church of England is in the countryside because it embraces a theology of creation which has at its heart the concept of a countryside that is living, is working and is responsible. It will be a living countryside by demonstrating life in all its diversity. In other words, it will continue to live if it remains a balanced community and is not distorted by age, wealth or skills. Much of our countryside is in danger of losing that balance because of the migration of young families. For example, fewer than 20 years ago the small and delightful village of St John's Chapel near the head of Weardale up in my part of the world had a population of 103 children. Now it has only 38.
That example underlines the importance of schools. I affirm again the Church of England's commitment to the continued provision of schools, many of which serve our rural communities. Twenty-five per cent of the nation's primary school children attend Church of England primary schools. However, the closing of village schools has a particularly disastrous effect on the provision for learning. For St John's Chapel a library of any kind is 22 miles away, while a swimming pool is 14 miles away. Public transport is at a premium for many young people. Family life in rural areas is under threat, as many clergy can testify from their pastoral work, and to which my noble friend the Bishop of Lichfield has already referred. We must seek to reverse the trend towards fragmentation. Families are held together when social relationships integrate them into the community. Buying, selling, growing, employing and enjoying social life together are essential elements of living. They provide the historic continuity and loyal mutual commitment which are of the essence in many village communities.
The Churches wish to continue playing their role in keeping living communities right at the heart of the countryside. If we fail, then much else of the living countryside will be under threat. However, to sustain such a living community, it must also be a working community. I cannot stress too strongly the plight of farmers in the north east, especially hill farmers in the Pennines. Other noble Lords have testified to similar concerns in other parts of the country. Today stories abound of farm sales and of the deeply sad personal circumstances of many farmers and the consequent effect on their families.
That has happened in the main because of the decline in sheep markets and pig farming. In 1955, 80 lambs would have purchased a tractor. In 1997, 80 lambs will purchase one-quarter of a tractor. A farmer told me recently that he had just had his hair cut. The cut cost him £4.50 and he thought that was good value. But he pointed out that he would have to cut the hair of 150 sheep to pay for his one haircut.
If hill farming collapses, not only a way of life but an environment will be under threat. That leads me to saying that a living and working countryside must also be a highly responsible one. Diversification and the welcoming of tourists are options that are taken up in
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many areas. But tourism and second homes must not be allowed to develop at the expense of the living rural community, or indeed of ecological and other environmental balances. Those depend on sustaining good farming practices and a full-time resident population aware of, and in partnership with, the benefits that nature in creation has given us. Without that element of responsibility, there will be no recognisable countryside for visitors to enjoy.
Lord Mackie of Benshie: My Lords, before the right reverend Prelate sits down, do bishops have a dispensation to ignore the customs of the House and excuse themselves from attending the rest of the debate? I have noted that it often happens.
The Lord Bishop of Durham: My Lords, I am not aware that we have any extra privileges. If it is the House's wish, I shall certainly stay and catch a later train. I am at such a distance from the north east and I have an appointment first thing in the morning. It presents some difficulties when that convention has to be obeyed. I promise that I shall try to avoid that kind of excuse in future.
Baroness Byford: My Lords, we on these Benches are very understanding, and Members on the Government Benches appear to be in agreement. We all try to observe the convention, but we are grateful for the contributions of noble Lords even if occasionally they are not able to be present for the conclusion of the debate. The Government may wish to comment.
Baroness Hayman: My Lords, I do not think that we should debate the general principle. A principle has been laid down and we should not undermine it. Equally, all of us appreciate the contribution of the right reverend Prelate. I do not think that any of us would want him to be unnecessarily delayed this evening.
5.2 p.m.
Lord Plumb: My Lords, first, I declare an interest. I have been involved in agriculture practically all my life, among a number of other activities. As a farmer, I have always regarded myself as being among the custodians of the countryside. Perhaps in replying the Minister will comment on that. As a custodian of the countryside, I suggest to the noble Lord, Lord Harrison, that leisure and tourism are certainly important; but will they be so important if we take the heart out of the countryside and neglect agriculture? We hear stories, as we did from the right reverend Prelate, about large numbers of people, particularly young people, moving away from the countryside. What will be left to interest those who visit it?
I rise in particular to support my noble friend Lord Ferrers, and I thank him for introducing the debate. It is particularly important at the present time. It is a pleasure and encouragement—indeed, it gives us great inspiration—to hear such fine comments from two right reverend Prelates. The right reverend Prelate the

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Bishop of Lichfield represents a diocese that I know well. The right reverend Prelate the Bishop of Durham represents a totally different area, one that contains many small farms and farming families, who are in extreme difficulty at present. I hope that the important statements of the right reverend Prelates will be well presented throughout the country.
In a previous debate on this subject, the right reverend Prelate the Bishop of Bath and Wells reminded us of the necessity of a level playing field for farmers. He registered the importance of that idea for the archives of this great building. Many speakers have recognised the present crisis in agriculture and the inevitable pressures on the countryside as a whole.
Over the years, many of us in this Chamber have witnessed the struggle and progress of British agriculture and its different stages: its contribution to the economy; the growth in productivity; the elimination of so many plant and animal diseases; the high-quality products that are now being produced through the advantage of science and technology; and the healthy landscape—anyone who has not noticed that when travelling through our wonderful countryside is not very observant. My noble friend Lady Thatcher, when she was Prime Minister, said in opening the Royal Show that if the rest of industry in Britain was as efficient or productive as British agriculture, the economy would be in much better shape. An example has been set in the countryside by those involved in the agricultural industry.
As we move towards the end of this millennium and into the next, we are witnessing a catastrophe of unprecedented proportions. Farming resilience is being tested to the limit and the future does not offer much cause for optimism. At present, many farmers would be grateful for the bone from the T-bone steak that they are attempting to sell.
Many of my noble friends have mentioned the possibilities, or lack of them, for the future of young farmers. There are young farmers present today, listening to the debate. They tell me that they have the courage to face the challenges ahead. They are prepared to cut costs and to diversify, as the countryside demands. They are prepared to work hard and efficiently to keep British agriculture afloat. They want to use their own slogan; they want to put the "young" back into "Young Farmers". I shall be interested to hear the Minister's reply. She may comment on the possibilities or otherwise for their future.
Part of the crisis that we presently face is not of the Government's making. The cost of the BSE crisis may reach £5 billion overall by 2001. We have received government aid arid agri-monetary compensation from Brussels, which has helped, but it is too little, too late. It could have been paid earlier, and paid in full, as every other country in the European Union has done when its farmers have been in a similar position, through the strength of their currency against those of other countries. Competing in an unfair market is impossible and unnecessary when a mechanism is available to correct it through currency exchange.
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Equally, we are faced with imports produced under less stringent animal welfare conditions and the high cost of the red tape affecting farmers and those who work in slaughterhouses, manufacturing, processing and so on. I am pleased that the Government have at least accepted the need to examine the position and that a committee is reviewing the whole question of red tape and bureaucracy.
I believe that consumers are getting the message, but do they understand that growth promoters in the form of hormones are accepted in the United States and elsewhere by those who buy them? The products can be marketed here. Do consumers realise that over 65 per cent of soya produced in the United States and elsewhere is genetically modified? Of course, there are methods of checking products coming in, but it is difficult to check every kilo of soya in a 2 million tonne product that comes into this country. Do consumers realise how much junk food we consume in this country? It is £2.7 billion worth, probably coming from imported products. We consume more than Italy, France and Spain together.
As we debate the issues, policy-makers are at this moment trying to discuss a move to globalisation of trade in Seattle. In the last round, the United States made it clear—this was supported by their own Farm Bill—that they wanted to remove all subsidies. Last week, Senator Glickman, the Secretary for Agriculture in Washington, announced an emergency package for struggling farmers of 22.5 billion dollars. He said with great pride, "This is the highest in history".
So much for free trade policies. This morning on television I saw the demand by President Clinton that Europe's common agricultural policy must remove all subsidies. Of course, the common agricultural policy is being reformed; it is moving in that direction. No one will mind that, so long as we can have fair play and the level playing field which is so important to it.
It is extremely difficult for farmers to understand why we restrict production with quotas and set-asides, while other exporters talk about expansion. We know that expansion is necessary in many parts of the world where half the population is starving. In her reply, perhaps the Minister could suggest a way of survival, when regulations drive people in one of the country's most efficient areas out of business. Chickens have not been mentioned, but I mention them now because the point applies to all other products too. One producer whom I know well has been driven out because of the regulations concerning his business. All it does is to export our industry and jobs overseas, where welfare, food safety, and global warming regulations are minuscule compared with our own.
So we must be protected from what we call "cheap" food policies—unfair policies and unfair imports coming from other countries. Does the Minister accept, or is she aware, that for countryside conservation to provide what the public wants, a viable agriculture is essential? There are no medals for going bust. Low level environmental payments are no substitute for profit.

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I also ask what measures are in hand to enable efficient, hard-working farmer-businessmen to make a living. They know how to farm, but if they have to cut back on maintenance and the necessary nutrients, it would be like living off our seed corn. I hope that the Minister agrees that it would be disastrous to follow the woollen industry of 130 years ago.
Finally, will the Minister encourage the Government to act on the growing problem of TB in badgers and cattle? To country people, this is a far more intractable priority, and welfare, economic and health issue than fox-hunting. I shall accept the noble Baroness's answers in writing, if she prefers to send them to me.
5.13 p.m.
The Earl of Sandwich: My Lords, it is an honour to follow the noble Lord, Lord Plumb. I wish he could have continued for the next few minutes as well, because we all know of his great experience and personal interest in world agriculture. It is a privilege to speak in this debate and I am grateful to the noble Earl, Lord Ferrers, for the opportunity to have another beef!
That aside, the farming news is still grim. The economic weather forecast seems continually bleak and farmers are already looking ahead to the deficits of the coming season. Every year, I wonder whether my farming friends and neighbours in Dorset will still be there in 12 months' time. Every year I am relieved and delighted that somehow they have remained, and yet many of them are the marginal farmers whom the noble Lord, Lord Jopling, mentioned.
Destitution is never far away and there are already small signs of change: a downward rent review, sold off grass keep, a farm worker laid off or a new source of income off the farm, taking up the opportunities for change mentioned by the noble Lord, Lord Haskel.
So why do things apparently stay the same? The first reason is the outstanding quality of our farmers. The second is the pride we all have and which has been described in preserving our countryside, including the churches, schools and fabric of village life.
As a nation which seriously expects a dwindling farm industry to pick itself up, look beyond the farm to alternative forms of income, welcome more visitors and become caretakers as well as tillers of the soil, we are asking a great deal. We are lucky to have farmers at all after those demands. It is an almost impossible task in a normal year, let alone another one of falling prices, incomes and investment. The NFU has reported a 20-year low in investment and a 62 per cent fall in real income over the last three years, as the noble Earl said. It is a crisis that would defeat most small businesses. Yet farmers are still being asked to carry heavier burdens as regards food standards, access and field sports and at the same time to care better for the countryside. They have not ceased to care for it. As the substantial employer, they already know that they have a wider duty to the community through their
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management of the countryside. In fact, while they suffer hardship, they have made sure that hedges and fields and paths are looking as good as they ever have.
The take-up of environmental schemes like countryside stewardship and organic conversion has been impressive. I hope that, when the Minister confirms this, she will explain why there is so little money available for a myriad of small schemes and diversification schemes which the Government have rightly identified as inevitable and which yet seem to attract farmers into a maze of financial culs-de-sac. The noble Lord, Lord Palmer, mentioned one important future source of income: renewable energy and biofuels. I hope that the Minister has prepared an answer for him.
Farmers well know that their future depends on wider and still unanswered questions like European Union enlargement and world trade. In my experience, they have a more developed global view than that of the general population. It was farmers in Britain, after all, who responded so quickly to the Africa famine appeals, and joined in the send-a-tonne and send-a-cow campaigns. It was not only East Anglian and Sussex farmers sitting back on their intervention prices who responded, it was all farmers, those in the West Country and Scotland. I know farmers who travelled to countries like Ethiopia and the Sudan when it was thought that our food surpluses were the solution. They turned out to be part of the problem. Those farmers now support longer term development projects and organisations like Farm Africa and SOS Sahel.
I believe that farmers, however conservative they are in their budgeting and accounting, still have this wider sense of responsibility. Many would like to contribute to a new world order. They would never demonstrate at Seattle, but they can see the way free trade winds are blowing in the World Trade Organisation. They would like to see fairer restructuring of world agriculture and agricultural trade, including more initiatives to reshape the common agricultural policy. They recognise the importance of the environment in today's world. They have demonstrated their eagerness to adapt to new environmental conditions. They do not accept the watery provisions of Agenda 2000, which, as the House of Lords Committee reported in May, seem only to postpone the inevitable decisions to restructure agricultural support and do away with the massive subsidies in preparation for the juggernaut of enlargement.
I take seriously the observation of the noble Earl, Lord Selborne, about competitive agriculture and his suggestion last week about guaranteed average income instead of subsidies. These solutions should be given serious consideration. The Government are making the right noises and have made some minor improvements. I grant that rural transport is changing. In our part of the west of England we now have some bus services. But in my view the Government are not emphatically on the side of farmers. If they do not want to be judged in future as the Government who abandoned the industry to the free market—surprising

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as it seems, that is a real possibility—they need to make significant proposals before the next election above all to convince the people of the countryside.
5.20 p.m.
Lord Dean of Harptree: My Lords, as a countryman born and bred and living in a village, I very much welcome this debate and, like other noble Lords, am grateful to my noble friend Lord Ferrers for introducing it. I also welcome the Countryside Alliance, which is successfully focusing people's attention—above all, the Government's—on the many problems that are faced in the countryside. It is not normal for country people to demonstrate. The fact that they are doing so shows that there is deep disquiet and that many believe that their way of life is threatened by an urban-minded government who do not understand or sympathise. It is true that this disquiet was triggered by the threat to hunting, but there are many other problems which have already been mentioned.
All noble Lords who have spoken have mentioned farming. Those of us who are familiar with that activity are aware of the traditional phrase "up horn, down corn"—or the other way round. That illustrates that there always have been, and always will be, ups and downs in farming, but the trouble is that at the moment particularly for agriculture they are virtually all "downs" and the situation is getting worse. As my noble friend Lord Jopling said, this affects a whole series of enterprises in the countryside: farm workers who are laid off; seed and feed merchants; the suppliers of agricultural machinery; shops; garages and vets. Only last weekend a leading expert told me of the troubles that we are laying in store in threats to animal health. We also have the bureaucratic nightmares that are closing down rural abattoirs. The response of the Government to the farming problems has been slow and inadequate. So often it has been too little and too late. The Government must do more to help farmers out of the trough in which they are sinking.
My noble friend Lord Caithness referred to law and order. It is an unhappy fact that rural crime is on the increase, particularly burglary and vandalism. In the country the cry continues to go up, "We never see a policeman". There is no substitute for the regular presence of a policeman who knows people and is known by them. We now have a number of community policemen and school policemen in various parts of the country, and that is a step in the right direction. In many villages there is Neighbourhood Watch, where local volunteers are prepared to help the police rather than pass by on the other side. While these developments are welcome, country people will not be reassured until there is a stronger local police presence.
The right reverend Prelate the Bishop of Durham mentioned local schools and churches. In many of our villages the church is the pride and joy of the community, but the burden of maintenance must be borne by very small congregations. Expensive repairs are required. Those repairs are made more burdensome because of the imposition of VAT. I can assure the Government, as I did the previous one, that
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we shall go on pressing for the exemption of church repairs until they stop making excuses and do something. Many of our local schools have closed under governments of both colours. That is a big loss to village life. As the right reverend Prelate pointed out, many of these are Church schools. When such a school closes it breaks the link between the Church and education which is so important in this secular age. I welcome the Government's announcement that there will now be a presumption against the closure of village schools. That is good news, and I hope that the policy will be effective.
I turn to housing. The right to buy on favourable terms has converted many families in the countryside from council tenants to home owners, but that can be done only once. There is now an acute shortage of affordable housing. In many instances when young couples gets married they must either move away or live with their in-laws. In part that is because in-corners have forced up the price of houses in villages. I do not suggest that we need a new generation of council houses to deal with this problem. I believe that these days it is more appropriate to give additional help to housing associations and the like which can provide houses for rent that are within the means of country people.
Shops and post offices are vital to villages. They provide not only goods but a service. Those of us who live in the country are familiar with many conversations that take place in village shops. "Charlie hasn't been in this week for his ounce of tobacco. I wonder if he's all right. We must find out"—and they do so. That important service which the village shop provides is certainly not available at a supermarket. The Government have done something to relieve the burden on village shops. While that is very welcome, the fact remains that they are fighting a losing battle. So far as concern post offices, they may face a new threat. If payment of benefit is removed from them it is absolutely essential that they are given encouragement to diversify; otherwise, the closure of village post offices will be substantially accelerated.
There is a whole series of other problems related to health, transport and work, but I do not intend to bore your Lordships by going any further. I summarise the position by saying that these problems do not involve a vast increase in expenditure. Most problems need a change of atmosphere in which decisions are made, pump priming to encourage voluntary effort or a modest reallocation of resources to countryside projects. I hope that we shall have a favourable response from the noble Baroness when she comes to reply.
5.28 p.m.
Lord Davies of Coity: My Lords, I too am grateful to the noble Earl, Lord Ferrers, for introducing this debate on the countryside. When introducing the debate the noble Earl referred to the fur trade and fox-hunting. I understood him to say that there were only three noble Lords on these Benches who stood up for bans. He will be relieved to know that I have no intention of making any reference whatever to bans.

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Perhaps not surprisingly, out of 14 speakers in the debate, 11 have emphasised agriculture. Therefore the debate could equally have been to call attention to agriculture. I am conscious of the difficulties that the agricultural industry is facing. I have a great deal of sympathy for the industry. But, as the debate is on the countryside, perhaps I shall be forgiven for dealing with countryside circumstances other than agriculture.
It is not my intention to speak for long, and essentially I shall be focusing on one specific point: that everyone, whether living in an urban or rural environment, should as far as possible be afforded the advantages provided by both nature and man. However, it seems to me that, when we debate the countryside, too often there is a tendency to drift away from the differences in urban and rural environments and somehow to conjure up perceived and often exaggerated differences between those who live in one area and those who live in another. If that is not always overtly expressed, it is certainly an underlying feeling.
Of course I concede that at one time, in particular during the Industrial Revolution, there would have been a greater difference between the two groups. Those living and working closely together in urban developments—for example, in areas of mines and mills—identified closely with one another in such communities. However, those living and working in the countryside, and spread out, identified more with the elements—the weather, the seasons and the land—than with one another.
But we have moved on. Ever increasing means of communication have seen to that. Trains, buses and, even more so, the motor car with a network of motorways, draw people and communities ever closer together. The radio, telephone, now mobiles, and the television, now satellite, bring instant experiences into every parlour, not only from this country but from the world over. So to talk in terms of two societies, one urban and one rural, defies the reality of our one integrated society. Of course there are differences. But those differences are not necessarily demonstrably greater between exclusively urban and exclusively countryside dwellers. No longer can we draw a clear distinction between urban and rural dwellers.
Some people work in our towns and cities and live in the countryside. Many people move from the countryside to urban areas and never return. Some who have been born and brought up in towns and cities move to the countryside to live and work. Many of those born and brought up in the countryside come to the cities for university education. Some return, and some do not. So when lines are drawn between one group and another, let us be cautious that those lines reflect reality.
The world in which we live is often called a global village. That being so, let us imagine what we in the United Kingdom are by comparison. Let us see how we compare geographically with countries in Africa, Asia and the Americas as well as some in Europe. We are one nation, one people, and, although we are all
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different, those differences do not essentially stem from whether we live and work in the countryside or in our towns and cities.
We must not neglect the fact that the countryside itself is different. In East Anglia, where I lived for 10 years, we have a wide expanse of flat land and the uniqueness of the Norfolk Broads, whereas in Wales we have the mountains and the valleys; and in the north of Scotland we are inspired by its mystery and remoteness. We describe Kent as the garden of England and I was told a long time ago that Wiltshire was the pantry of England. So when we refer to the countryside we must remember that our countryside is not uniform but is itself different.
The Labour Government have a manifesto commitment to provide greater access to open countryside. This will give those who choose greater opportunity to enjoy the benefit of what nature has created. That is not to abuse or damage, but to enjoy the wide open spaces, the landscape and the wildlife that nature provides in our countryside. By the same token, those who live and work in the countryside must always be able to enjoy the benefits that man has created in our towns and cities, such as theatres, museums, art galleries and universities.
I welcome the countryside amenity and conservation Bill because it recognises that such measures improve the quality of life for all of us. It removes perceived and exaggerated differences between respective sections of our society, and it is another step towards drawing all our people together in a one nation society.
5.35 p.m.
Earl Peel: My Lords, I, too, thank my noble friend Lord Ferrers for introducing the debate. I congratulate him on what I might call a typical Ferrers speech. It was factual, witty and poignant. I agree with everything he said about red tape. It is strangling the countryside. The issue must be addressed.
The Government can be under no illusions as to the strength of feeling in this House about the need for them to take a more pragmatic and sympathetic approach towards the countryside. The truth is that the feeling out there in our green and pleasant land is one of anger and frustration. Your Lordships have made your views very clear not only in this debate but in other recent debates in your Lordships' House. However, one topic has not had the airing it deserves. I refer to rural crime. I wish today to address most of my remarks to that.
To illustrate the strong feeling that rural people have on the subject, a 1998 survey by the Countryside Agency's predecessor, the Countryside Commission, found that 68 per cent of people in the countryside were very concerned about crime, and that the issue topped the list of rural concerns, coming above traffic problems and green belt development. It is, therefore, particularly extraordinary that in its document The State of the Countryside, the new Countryside Agency failed to mention rural crime or policing in any of the list of key rural services.

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The latest published crime figures from the Home Office demonstrate that the police have achieved a 19 per cent reduction in crime over the past five years. That is clearly to be welcomed. They should be congratulated. Perhaps the Government should also be congratulated; I cannot differentiate between the extent to which that has occurred in the past two years and other years. Clearly there has been a marked decrease and one must congratulate the Government on that.
The figures in rural areas are less clear. Listening to local people and reading local newspapers, I suggest that the problem is increasing. A recent article in The Times at the weekend gave what I can only describe as a chilling report of how big-time crime operators are now moving into rural areas. My noble friend Lord Caithness gave figures from the BBC 1 programme "Countryfile". I shall not repeat them, but they are horrific.
The other aspect which concerns me is the repeated victimisation which occurs on so many farms. It is a debilitating experience for anyone, in particular at this time when farmers are experiencing such harsh economic times. I suspect, as The Times reported, that much of that is due to the fact that criminals who are becoming thwarted by the more efficient and sophisticated crime prevention methods employed in urban areas are moving out to the rural areas, which they regard as being a soft touch. In other words, the success of the towns and cities is working against the countryside, and clearly that matter has to be addressed.
In 1997, 92 per cent of parishes had no police station, compared with 89 per cent in 1991. Now many rural communities have taken up their own initiatives in an attempt to tackle crime, as my noble friend Lord Dean mentioned: Neighbourhood Watch, Car Watch, Sheep Watch, and many different "watches". In my part of the world, we now have Dales Watch. I discussed the matter recently with my chief constable. He said, "Quite frankly, our local police force simply would not be able to cope in rural areas if it were not for those local initiatives." I also acknowledge the fact that the Home Secretary has introduced crime and disorder partnerships as part of the Crime and Disorder Act 1998 specifically to encourage and develop the relationships between police, local authorities and local groups. Perhaps it is too early to see how it is working, but the initiative was worth taking and I wish it well.
However, the problem is that local communities involved in such schemes will soon lose confidence if the police fail to deliver as a result of a continuing lack of resources. One upshot of all that is local security groups setting themselves up as custodians of law and order in the countryside and frightening people by putting pamphlets through letter boxes encouraging them to subscribe to such schemes. That is happening more and more and many local people who cannot afford to be involved in the schemes are increasingly afraid because others are putting them under pressure to do so. Then there is a split in local communities.
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Many such groups are cowboy operators and they have no accountability to local authorities or to the police. It is a most unsatisfactory situation.
One of the many examples of the seriousness of the situation comes from Cumbria. The chief constable is quoted as saying that government underfunding could force him to close another 20 of his smaller police stations and concentrate officers in major towns. The same force has already closed 10 rural stations and recruited civilians to 70 officer posts in order to cope with a £2 million shortfall. No wonder the criminal fraternity is turning to the countryside; they see it as a soft option.
Of course I appreciate only too well the need for budgetary constraints. However, surely, policing any community must be regarded as a cornerstone for any civilised society. Furthermore, if we are to encourage investment in rural areas and create the new businesses and jobs which are so necessary to take up the slack in the traditional agricultural activities that are disappearing, investors must have the confidence to do so. A proper law enforcement system is essential to that.
One of the principal reasons behind the lack of investment in policing in rural areas is the inadequacy of the police funding formula. It fails to take into account what is now known as the "sparsity factor". I believe that the sparsity factor cuts across many aspects of rural life and hinders local authorities in their attempt to deliver many different services at the same costs as their urban counterparts. The right reverend Prelate the Bishop of Lichfield referred to this issue in his excellent speech.
In reply to a Written Question asked by my right honourable friend David Maclean on 25th November, the Government stated that there was general agreement that a sparsity factor had been detected but less agreement about how to include it appropriately in the police funding formula. The Government reply went on to state:
"the Government will need to be satisfied that the research has provided a final answer to this question, which is beyond dispute or challenge.".—[Official Report, Commons. 25/11/99; col. 183W.]
For heaven's sake, if all government decisions were based on achieving full agreement, frankly, nothing would ever happen! On the face of it, this looks like a fudge and yet another example of the countryside getting a raw deal.
It is clear that the Government must accept the sparsity factor. Will the Minister ask her right honourable friend the Home Secretary and her honourable friends in the Home Office to act positively on this important issue?
I have a further comment to make on policing. I noticed that the Home Secretary announced at the Labour Party conference that he would provide an additional 5,000 police officers over the next three years. There is no news as to how they will be distributed, or whether they will be forthcoming, but the Government have spoken of a bidding process and have said that their salaries will be ring-fenced. In my

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home county of North Yorkshire, that would mean about 50 additional police officers, which is excellent. However, I am told that, if the present underlying funding continues to fall, a further 100 staff will be laid off, thus making a nonsense of such a commitment and negating any advantage.
Therefore, whichever way one looks at the issue, the indications are not good. I urge the Government to ensure that rural communities are given the level of crime prevention that they deserve.
Finally, I turn briefly to another subject. My noble friend Lord Ferrers mentioned fox hunting. I had not intended to mention it, but I recently read Ken Livingstone's announcement that he might be prepared to take a Private Member's Bill through Parliament banning the hunting of foxes with hounds. I was interested because I had always believed that Ken Livingstone was a tolerant person who understood minority groups. I was also interested to note his comment that one of the reasons he is against fox hunting was because foxes are attractive and intelligent. Presumably, that implies that it would be all right to hunt them if they were ugly and stupid.
Ken calls himself a man of the people. I say to him, "If so, go to Cumbria and to Wales and talk to the people whose lives will be affected. Spend some time with them and find out what the subject is all about. But do not try to pick up cheap votes on the back of the countryside in order to become mayor of our capital city".
5.46 p.m.
The Earl of Listowel: My Lords, it was good to hear the contribution of the noble Lord, Lord Harrison, whose experience is different from that of other speakers today. He said that there would be an uproar if country dwellers were not allowed to make laws affecting people living in the inner cities. As someone who has worked with young people in the inner cities, I would feel most uncomfortable about country dwellers making legislation affecting those living there, just as I would tend to have no confidence in an education Minister who had not been state educated or taught in a state school.
I am an agricultural landowner. My farther used often to warn me against the evil of absentee landlords. At the time, I could not understand the reason for his concern. After all, my tenants are determinedly independent and their rights are protected by statute. Looking back, I see that he may have been remembering our absentee forebears, the Hares, who spent most of their time away from their Irish estate. Then the landowner could greatly affect the lives of his tenants and did indeed need to be more in touch with his people.
Today, rural business is suffering and very many small farmers, especially livestock and tenant farmers, are going out of business. They depend on government to help them through this period of difficult and painful change. So I would urge the Government not to allow themselves to become out of touch with those
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whose business is the countryside. So far as possible, I hope they will listen most attentively to those within their ranks who have had experience in rural business; to those in the other place from rural constituencies; and to those inside and outside Parliament who make their living from the land.
Can the Minister say what is being done to encourage civil servants advising the Government on rural matters to gain experience of working with those most affected by policy; for instance, livestock and tenant farmers in the South West and in the Borders? How many civil servants in the Minister's department have visited farms and put on green wellies? There is nothing that can replace a deep understanding of the countryside and what it means and personal experience of working on the land and in the countryside environment.
5.49 p.m.
The Earl of Onslow: My Lords, it is excellent for one elected Peer to follow another elected Peer whose grandfather was the last governor-general of Ghana.
I must declare an interest also, in that I am a landowner in Surrey; I regret to say, a much smaller landowner than was my grandfather or my great-grandfather. In the 1930s agricultural slump, my grandfather persuaded people to come from Wales to take some of his rented farms at extremely low prices.
The history of agricultural boom and bust has continued for a long time. After the 1846 repeal of the Corn Laws, an agricultural slump was forecast in the United Kingdom. That slump did not actually arrive until the 1870s, with the invention of the binder and the opening up of the American West and the American grain trade. That slump lasted more or less until the 1914 war. The 1914 war produced a temporary but prosperous agriculture because of the U-boats in the Channel and the Atlantic. The 1930s agricultural slump followed.
That slump was in a way reversed by the war. The war influenced all agricultural thinking beyond anything. After the war there was a really marvellous Minister of Agriculture. Tom Williams, to his eternal credit, made absolutely certain that no fox-hunting ban was passed by the 1945 Labour government. He was succeeded in the Wilson government by the late and much-loved Lord Peart. All those Ministers understood the important role played by the agricultural industry in the country's affairs.
There was also the Boyd-Orr report, which emphasised that we had to produce because the third world was going to starve. It was deeply influenced by U-boats in the Channel. To a certain extent we were subsidised right up until the mid-1980s for production at all costs. Since those subsidies ceased, the poorer areas have done far worse. The poorer areas tend to be the most picturesque areas. The people who have least harm done to them by an agricultural slump are the grain farmers in the Beauce and those in Sussex and Hampshire. They carry enough fat to withstand the catastrophic fall in prices.

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As one of my noble friends said, the price of wheat was £140 per tonne and it is now £64 per tonne. I admit that the price of £140 per tonne was at a time when the Chinese harvest failed and wheat prices went through the roof, so it is not totally fair to quote that high price as the norm. However, even taking that into account, the prices of wheat, grain, cattle, sheep and pigs have gone through the floor.
I suspect that the noble Countess, Lady Mar, will talk about slaughterhouses, although I have not asked her. She signifies that she is not going to speak about them. That is a pity, because she is quite qualified to do so. The slaughterhouses have been regulated out of existence. The cost of slaughtering an animal here is astronomical compared with the Continent. The regulations specify that six people must check every single animal. That is crazy as a regulation. I accept that that is not all the fault of the present Government; the previous government set them on that way with the Meat Hygiene Service, when local authorities were doing a perfectly adequate job. However, that is another story.
Regulation on our slaughterhouses has been increased, followed by the gold-plating of EC regulations. A gentleman produces the original Aylesbury duck and slaughters them himself. It appears that the EC has passed some regulations on the home slaughtering of ducks. We have gold-plated that regulation by saying that he cannot sell his ducks dead outside his own local authority area. Your Lordships should listen to this because it is lovely. If a man from a smart restaurant in Cumberland goes to the slaughterhouse and says, "Please may I have 12 ducks?" and pays for them, he may then return to Cumberland and the ducks can be sent by post. That is because he has purchased them within the local authority area. If, however, he picks up the telephone and says, "Please, O duck killer, send me 12 dead ducks by post", they cannot be sent by post because he is outside the local authority area. That is a silly way of running anything.
The EC regulation says nothing about the local authority area. We put in that stipulation just for fun. Even worse, he cannot appoint a chum as an agent to go in with his credit card or his pounds, shillings and pence—or whatever we now use as a currency—and say, "Here is my money, please send the ducks up to Cumberland". He must come down to the farm himself, say, "Please sell me the ducks", go back, and then they will be sent to him. It is impossible to think of anything so stupid.
The hygiene regulations for slaughterhouses have become worse. There is a new regulation on hygiene for pig units and battery chickens which imposes a cost of £18,000 on a modest-sized intensive pig unit. Our competitors in the rest of Europe do not have to bear those charges. That is what is so unfair and so wrong. It has not saved one single tummy bug in a single human being. I shall be prepared to lay my bottom dollar on that. It is regulation for the sake of regulation, followed by the fun of writing regulations, followed by gold-plating them. The industry cannot be prosperous if that is how we behave.
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I touch briefly on hill farming. The problem of the hill farmers not being looked after is due to the common agricultural policy, which is a problem common all over Europe and not unique to Britain. In the Massif Central and Burgundy in France there are deserted villages because the common agricultural policy has failed in its social purpose. Where do we go from here? It seems to me that we should go for free trade in food production with the minimum of sensible regulation and a major amount of subsidy, which will cost much less than the common agricultural policy, for what—for want of a better description—I shall call "gardening and game-keeping". That is looking after countryside activities which are totally uneconomic.
We have a blessed countryside. It is so varied that it changes every 20 miles. It is like English and Scots accents which change every 20 miles. I have no objection to a large amount of public access to the countryside, because if we as landowners or farmers are in receipt of a subsidy, that subsidy is a tax paid by our fellow subjects. Therefore we cannot deny them access to the land. However, it should be done by agreement and co-operation. I know very few landowners who are not totally reasonable in the access which they allow. That should be encouraged.
We are blessedly lucky in the land that we own and love. It is our duty to share it as much as possible. It is equally our duty to ensure that the countryside is not merely a farm factory. That farm factory is essential for its prosperity, but there are other activities which must take place in it. Above all, do not clobber it with unnecessary regulation and banning. I have not had time to deal with the subjects of fox-hunting and fur farming, but I shall do so at a future date.
5.59 p.m.
Lord Beaumont of Whitley: My Lords, I too thank the noble Earl, Lord Ferrers, for introducing this debate. I believe that his speech deployed the maximum amount of reasonably good jokes to conceal the maximum amount of rather bad argument. I take the example of trying to put the rather cruel farming of mink for their fur on a par with the use of leather for our shoes from animals which almost certainly had to die anyway.
Earl Ferrers: My Lords, everything has to die.
Lord Beaumont of Whitley: My Lords, everything has to die, as the noble Earl says.
However, I thank the noble Earl for introducing the debate, as it has turned up a number of extremely good speeches. I mention the contribution from the right reverend Prelate the Bishop of Lichfield and the speech of the noble Earl, Lord Onslow, which we have just heard. I thought that speech was an extremely important contribution to the debate as a whole, although I do not necessarily go along with his final endorsement of free trade.
I agree with what the noble Earl, Lord Ferrers, said: that the countryside is important and that it is not the countryside unless it is the home of farming. I do not

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pretend that that is an axiom; I merely say that, almost without exception, those of us who have lived in a healthy working countryside will recognise it as an important truth. The noble Earl, Lord Ferrers, was absolutely right to say so. As I told your Lordships in a recent debate, recently I travelled through New England. I did not travel through countryside but through forestry or suburbia or both, made from good farmland by the evils of free trade. To help the countryside, one needs to help farming.
This weekend I went to a farming world conference entitled "Farmers—Are they an endangered species?" Except for an NFU economist who pointed out that a few clever, imaginative farmers could survive by diversifying, the answer was yes, they are endangered. Not only are they endangered but, in fact, they are committing suicide by the score.
The countryside is for producing food—but food that is healthy, palatable and does not have to be taken long distances, but feeds its own hinterland. I believe that it is time that we started reversing the move towards extreme free trade—almost all extremes being bad. The first and most important step would be to take agriculture and food production back from free trade into the area of food security. Many noble Lords have lived through a period when food security was very important to this country. In a difficult world, however much globalisation we have, that will not go away. I should not like to live in a country where there was not a certain amount of food security. Indeed, in some places like Tanganyika there is a move towards area food security. That means ensuring that local farmers are able to feed the people who live around them and that the people produce the food in return for a living wage. That would not, as is falsely suggested, harm developing countries because it would not encourage or allow dumping.
I found the recent debate on the CAP distressing. It seemed to me that the only reasonable speech was that of the noble Baroness, Lady Miller of Chilthorne Domer, because she did not emphasise monetary income as the measure of efficiency. Of course, monetary income is important. This debate, to a large extent, has been about monetary income and in no way would I detract from that. We have to ensure the monetary income of our farmers. But what about efficiency as regards the conservation of our soils and the welfare of our animals? Plenty of other efficiencies must be put on an equal par.
In that debate, speaker after speaker said that we have subsidised inefficient farmers. However, the farmers referred to were efficient producers and conservers but were being driven out by the big boys, by the farmers who sit in offices in the City and who have the time that small farmers do not to sit on NFU committees and to resist modulation on behalf of the small farmers.
The Green Party, which I represent, asks for a number of matters to be considered in agricultural policy. I shall list five: safe, healthy, nutritious food seen as a basic human right; sustainable, smaller-scale, organic farms encouraged, creating more local jobs;
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financial support and education for farmers converting to organic farming; taxes to discourage the use of pesticides and artificial fertilisers; and natural, free-range, low-drug animal-rearing practices encouraged. I should have thought that few countrymen would quarrel with those points. We need them. They are all sensible and essential.
We have had a good, valuable debate. Unless we can make the Government take rather drastic steps to protect our farms and our farmers—especially our small farms—we shall lose the countryside as we have known it all our lives; we shall lose a lot of hardworking worthwhile citizens from the land, and we shall lose a long tradition that we should preserve.
6.6 p.m.
Lord Rotherwick: My Lords, the countryside, as we comprehend it, is the product of centuries of development and dedication. In medieval times England and large tracts of Scotland and Wales were heavily forested. In order to see for miles one had to find a clear day and get above the tree line. In succeeding centuries trees were chopped down both for housing and for ocean going ships, particularly oaks for fighting ships, pasture land was enclosed with hedges and walls and the spaces between the trees became larger and more frequent.
In this century we have seen an extraordinary increase in the building of houses. A questionable 1 million new houses are now sought in the south east by the Government. On top of that, today I read that this year there has been an influx of around 400,000 migrant workers and a larger increase in the number of asylum seekers than before. Coupled with the number of refugees, that figure rises to half a million people. I question where they will all find their houses. Along with the building of factories and industrial units and enormous road-building programmes to allow for a tenfold increase in car numbers, the demands on the countryside have been enormous, resulting in an irreversible erosion of farmland hectares.
As a farmer and land manager I have studied the words of some of the great and the good of our time. First, Richard Wakeford, chief executive of the Countryside Agency, said:
"A countryside without farming is unthinkable; farms need to provide good incomes, which in turn sustain many secondary businesses".
His boss, Ewen Cameron, Chairman of the Countryside Agency, said:
"Agriculture amounts to less than one tenth of the rural economy and an even smaller percentage of rural employment. But its true significance is much greater because farmers are the stewards of four fifths of our landscape".
Those 50,000 rural businesses are involved in farming, forestry, water resource management, environment land management, and so on. This year agricultural incomes in the UK are expected to total less than £2 billion compared with £4.8 billion in 1996.
That dramatic fall has been caused in part by the beef ban, the strong pound hitting other exports, the collapse in the price for pigs, milk, beef, lambs, arable

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produce and so forth. Government influence many of those factors. This government influence could have been more beneficial to farming. For example, the beef ban was an unnecessary ban to appease our European Union partners that could have been lifted a month or so ago. But we had to wait for Scotland and Wales to agree. This Government enabled the tail to wag the farming industry.
The reliance on imported products is alarming both from the point of view of the continuation of our own agriculture industry and from that of the advisability of handing the feeding of our people to overseas countries. As our farming industry's competitiveness is eroded by the EU and government laws, much of our imported food is produced under regulations less stringent than our own high standards. Many of our imported meat products are produced in ways less kind than under our own higher welfare and environmental standards. This year has seen a 23.5 per cent increase in pig meat imports. That means that 23.5 per cent of pigs eaten in this country now are reared under less favourable conditions.
Unfortunately, many of the countries in the world are busy reducing their growing medium by covering it in buildings, by exhausting its goodness, by spoiling it with chemicals and so on. As recently as spring 1998 the chief executive of Britain's Natural Environment Research Council, Professor John Krebs, talking of the effects of global warming and climate change wrote that,
"In the case of food supply, a predictive model might show that past gains (that is, in agricultural productivity) had been made at a price that could not be paid at an increasing level into the future".
We must take the long view. Our countryside is the result of hundreds of years of change and more recently of the care and commitment of generations of farmers and land managers. They have planted and tended the hedgerows; built and repaired walls; dug the ditches; ploughed and harvested the fields and filled the pastures with livestock, producing that outstanding countryside that has encouraged people to visit it. The farmers recouped their costs from the price commanded by their arable and livestock products. But for how long can they continue to subsidise the beauty of the landscape when the money they earn is falling steadily and the costs heaped upon them by a series of British and European laws and government stealth taxes are rising just as steadily?
The British countryside is a huge national asset but it is a fragile asset. We must take our time in deciding what, if anything, to do with it to meet the aspirations of those who maintain that, because it is a national asset. it should be suitably accessible to all those who wish access to it. It must not be used as a political football to advance the careers of would-be or nearly has-been politicians, as my noble friend Lord Peel said.
Farming is in crisis and the Government must not talk rhetoric but take action to influence the rebuilding of this great industry and its return to profit. If the countryside is to remain a desirable, attractive and viable part of our heritage, the caretakers of that countryside must have the bureaucratic fetters
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loosened and their industry must be allowed to prosper. Profitable farming is the key to the maintenance of our countryside.
What steps are the Government taking to rebuild our farming industry and its profitability? What steps are they taking to reduce red tape and produce a fair market place such as that in which the farming industry has historically competed so brilliantly?
6.14 p.m.
The Countess of Mar: My Lords, I too, thank the noble Earl, Lord Ferrers, for tabling this debate today. I must declare an interest as a specialist cheese maker, a farmer's wife and a member of the Countryside Alliance.
We need to decide what we mean by the term "countryside" and, once we have that definition, what we expect of those who are its custodians. Is the countryside the landscape that we now know and love—a backdrop for our leisure and recreation, a haven for wildlife, a green lung for our urban population and a reminder of who we are as people? Alternatively, is it the workplace for a steadily diminishing minority, evolving as the demands of consumers and governments change? Opinions seem to have become polarised, though I believe the countryside is a bit of both.
The majority, who comprise our urban population, rightly regard the countryside as part of their heritage. However, too many of them seem to have lost touch with their ancestral origins. In their imaginations they see chocolate box villages surrounded by wild tracts of hillside and meadow over which they and their dogs can roam freely. They perceive the farmer as a feather-bedded sponger who must do their bidding because it is they who pay him through their taxes. Their rural counterparts, who must earn a living from and in the countryside, feel beleaguered in the face of rapidly diminishing incomes, a loss of markets for their products and erosion of their freedom by bureaucrats and pressure groups who appear to have no concept of the real world of farming.
As other noble Lords have said, our landscape is our heritage. It is of real value to our economy, and a vital—in the sense that it is living—part of our nation, though it appears on no balance sheet. If we want to retain our countryside, there is a price to pay. Farmers do not, by any means, capture all the economic benefits of their stewardship. The whole population is not well served by attempts to turn our agriculture into a production machine, striving to compete in an unequal world market encouraged by production-based subsidies. How can we compete with ranches in Australia and South America or with hog farmers in America? We must look at other methods.
The barley barons of East Anglia rule over a hinterland devoid of people, employment opportunities, affordable housing, schools and public transport. Upland communities have disappeared because the previously mixed economy, which once supported a small community, has been replaced by

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sheep and suckler cows. The net effect of production-linked subsidies is that they distance the producer from the consumer and encourage single product concentration. They blur the self-correcting mechanism of market distortions and force farmers to ask for more, much as the drug addict begs for another fix to ease his pain. Ultimately they are pernicious and damaging to those they were intended to protect.
British farmers are currently paying the price for a quarter of a century of dependency upon EU attempts to control agricultural production. Older farmers knew about market cycles and hedged against them with mixed farming; hence the adage, "Never put all your eggs in one basket". They kept a range of farm animals and poultry and they understood the value of rotating arable crops with grassland to maintain the structure and fertility of the soil.
The parish in which I live is interesting in that we have examples of both cultures. There is a farm shop that sells a combination of home-grown vegetables and soft fruits with goods bought in from further afield. There is an enterprising family who diversified from milk production alone into asparagus and pick-your-own soft fruits for the summer and free-range geese and turkeys for the winter. One couple has orchards from which they sell apples and pears; another sells the meat from their own Aberdeen Angus cattle as well as home-grown dried flowers, and my husband and I produce goats' milk and cheese as well as home-produced black Welsh mountain lamb. We all sell directly to the consumer either from our farms or through farmers' markets and, while we are not making our fortunes, we are managing to survive and maintain our little bits of landscape. Interestingly, we do not depend upon subsidies.
The rest of the land in the parish—several hundred acres—is either owned or rented by two very successful brothers. We always know which crops are in the high subsidy bracket because those are the ones they grow. When sheep and cattle were receiving high subsidies and high market prices, they had sheep and cattle—despite the fact that they would be the first to admit that they are not stockmen. Everything they do is on a grand scale. It will be interesting to see, in the coming years, who are the survivors.
If we want our rural landscape to remain, we must, first, accept that it will never be static. Secondly, we must support the rural economy as an integrated entity. We need to recognise that, while agriculture is the heart of our countryside, there is inter-dependency between farming and other businesses. The survival of rural society as a whole depends upon a mixed economy. This includes the village shop and post office, the local pub, the garage, the church and schools, as other noble Lords have said. Above all, it includes people; indeed, the noble Lord, Lord Haskel, will be interested to hear me say that.
If people are driven away because of the lack of facilities or employment opportunities, there will be no community and no one to conserve our landscape. What tourist or town dweller will want to visit the countryside in order to admire a tangle of bramble,
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gorse and bracken, I wonder? I am pleased that moves are now in train to divert subsidies away from production. The knock-on effect this should have is that rural workers and businesses remain local, a broader economic base should encourage diversification and local producers will be able satisfy many of the needs of the local community by adding value to their products. I think very much along the same lines as the noble Lord, Lord Beaumont of Whitley, as regards this point of view.
But, and this is a very big "but", we also need to be aware of the dangers posed by over-prescription and a heavy-handed bureaucracy, both of which stifle innovation and growth. I recognise that public health, food safety and animal welfare should be given priority. However, as the Minister is only too well aware, I believe that regulation should be fair, reasonable and based on sound scientific knowledge—not upon ideas plucked out of the air by officials who have probably never set foot in a farmyard, or the results of pressure from vociferous and sentimental minority groups.
A former Prime Minister once said:
"There is no such thing as society".
Unfortunately, we have been reaping the harvest of her philosophy at the cost of the bonds we used to have with our fellow citizens. I am pleased to see that the noble Lord, Lord Davies of Coity, has now returned to his seat because I believe that this is what he was saying. The unlimited pursuit of private gain leads to bankruptcy of the body public. Its unpleasant manifestations are growing daily more acute—a lack of concern for the rights of others, declining moral and spiritual values, emotional stress and sociopathic crime, for example.
The countryside is an essential safety valve for the urban population for it enables them to recharge their batteries, to widen their horizons and to find their identities as people. Thus, the welfare of those who live and work in the countryside should be a matter of concern to the whole population. It makes economic sense. In the last analysis, the countryside shapes the kind of society we wish to bequeath to our children. As John Winthrop said in his City Hill speech:
"We must delight in each other, make each other's conditions our own, rejoice together, labor and suffer together, always having the community as members of the same body".
6.23 p.m.
The Earl of Liverpool: My Lords, it is a great pleasure to follow the noble Countess, Lady Mar, because it gives me the opportunity of paying tribute to her as one of the Members of your Lordships' House who has done more than most to champion the plight of the farming community. I was most interested, as I am sure all noble Lords were, in her thought-provoking remarks.
I have no interest to declare. I do not own rolling acres. However, I have lived most of my life in the countryside and many of my friends are farmers or own land as, indeed, do a number of my family.

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Therefore, I speak as one who enjoys the countryside but who has at present, quite happily, no responsibilities within it.
I am delighted that my noble friend Lord Ferrers has given the House the opportunity to have this debate today. Like him, arid other noble Lords, I agree that it is no exaggeration to say that the countryside is under threat as never before in this country. Farming is, unquestionably, at its lowest ebb since the 1930s. We are told that millions of new homes will have to be built and that there are not enough brownfield sites to accommodate them. So the countryside will have to take the strain.
The ever increasing number of cars on the roads means that congestion is set to increase and, therefore, presumably new roads will have to be provided, introducing additional environmental pressures and putting million; more acres under tarmac and concrete. In the same vein, the motorist is being increasingly penalised. But cars in the countryside are not a luxury, especially in places which are not served by public transport; they are a necessity. I believe that further strains are placed on the countryside by out-of-town shopping centres that have created their own pressures, not least on the more rural traders and shopkeepers.
I believe that it is our duty to seek ways to enable all our countrymen to live in harmony—and the fragile interplay between the rural and urban areas is one of the most important aspects to make sure we get right. As the countryside adapts to its new pressures, the Government need to integrate agricultural, environmental and rural policy. As my noble friend Lord Jopling said earlier, this cannot be done if, as has been mooted, MAFF is put into the Department of Trade and Industry.
However, I believe it can be done by establishing a new department for countryside and agriculture, with a Secretary of State in the Cabinet reporting direct to the Prime Minister. I understand that this idea has not been greeted with enormous enthusiasm by the Government. That is a shame because there is certainly a full-time job there. Such an appointment would do much to make our farmers, and those who derive a living from working in the countryside, feel that they are not some forgotten breed.
With so many pressures bearing down on the countryside, it seems extraordinary to me that the only piece of legislation heralded in the gracious Speech was a Bill to create a statutory right of public access. Add to that the continuing, creeping repression of traditional sporting pursuits and I believe that noble Lords will agree with me that there is not much for the hard-pressed farmer to rejoice about.
I am focusing on farmers. I hope that I shall be forgiven to doing so. I know that some noble Lords feel that this slightly narrows the debate, but it is the issue on which I should like to focus. Farmers have suffered the slings and arrows of outrageous fortune for the past four years at least. Although there was some welcome news yesterday that the beef-on-the-bone ban will be lifted before Christmas, many of them
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simply cannot foresee a return to profitability in their lifetimes. This is borne out by the fact that over 5,000 farmers came out of the industry between June 1998 and June 1999. In fact, the overall number of working farmers and wives in the industry fell from just over 211,000 to 201,000.
I believe that that trend is accelerating. The average age of the working farmer in this country is increasing and the younger generation are now far less inclined to follow their fathers. The reasons are fairly obvious. The risks far outweigh the returns. The stress factor is enormous, as a number of noble Lords mentioned, including the noble Lord, Lord Beaumont of Whitley, and the right reverend Prelate the Bishop of Lichfield in a thought-provoking speech. Farmers have no confidence that the Government have the capacity to protect their interests, and the new working hours directive will inevitably create further cost burdens.
Moreover, farmers are increasingly becoming paper farmers. It is now normal for farmers to have to devote two full working days a week to form-filling; indeed, it is no exaggeration to describe farming as being in a "regulatory quagmire". The gracious Speech gave some small glimmer of hope that regulatory burdens would be reduced. We shall have to wait and see, but I suspect that, sadly, it may be too little, too late.
Farmers do not feel that the playing field will ever be level with their European partners. I am sure that noble Lords will know that if one confirmed case of BSE is found in a French herd, the entire herd has to be slaughtered. Not unnaturally, this has led to French farmers becoming extremely skilled at digging deep holes very quickly! Indeed there is a well worn joke in the farming community with which I shall burden your Lordships: French farmers do not suffer at all from CJD disease; they only have JCB disease. I am told by my friends in the farming community that in Belgium the veterinary profession has become adept at finding alternative causes of death when their farmers' stock is affected.
The BSE catastrophe will linger on, but it beggars belief that the effect of actions taken to control it have cost the taxpayers of this country literally billions of pounds and have put many farmers out of business given that the number of definite and probable cases of nvCJD in this country over the past five years totals 48. While every case is to be regretted and each one is a human tragedy for the family concerned, I feel that we must get this in context. Taken as an average this figure represents fewer than 10 cases per annum. The number of road deaths in this country exceeds 3,500 per annum. Therefore, I fear that we have got the whole matter out of proportion. However, let us hope that as regards beef we are now about to return to some kind of trading normality with our neighbours.
However, there is less hope for the pig farmer where the use of sow stalls is, I believe, still legal in many countries whereas it is quite rightly banned here. However, that increases production costs and makes it virtually impossible for our farmers to compete. As many noble Lords have already stated, at present pig farmers are losing up to £25 on each pig sold.

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Furthermore, apparently, chickens are being imported from Thailand at prices which undercut the prices charged by our farmers—and who knows on what those chickens have been fed and what standard of animal husbandry has been observed. The fact is that we are importing food produced under conditions which are less stringent than those by which we are regulated. My noble friend Lord Selborne referred to this matter and sensibly suggested that specific labelling might be the answer.
We are told that we must increasingly accept that we are living in a competition-led economy. Tariff barriers are already low and are set to come down further. The reform of the CAP is progressing apace. I have friends who farm sugar beet. They are fearful that with the abolition of tariff barriers altogether they will no longer be competitive compared with cane sugar growers.
So where is the ray of hope for farmers? Is it surprising that the suicide rate in the industry is rising? In 1997, there were 59 tragic cases and in 1998 that figure had risen to 72. That represents an increase in one year of 25 per cent. The figures are not yet available for this year, but I hope and pray that when they are published they will not show a similar rise.
We need to see the finest example of joined-up government to dig ourselves out of the hole in which farmers find themselves. There is a crisis which is not only looming; it has already loomed; and at the moment it is not being properly addressed.
I return to remarks that I made earlier and ask the noble Baroness in all seriousness whether the Government might give consideration to the appointment of a Minister for the countryside and agriculture because, without such an appointment, we may be close to reaching the point of no return in our management of the countryside. We simply cannot stand idly by and allow that to happen.
Lord Haskel: My Lords, before the noble Earl sits down, I put it to him that we gain absolutely nothing from categorising the French in rather a derogatory manner. I believe that that is out of place in a debate in this House.
The Earl of Liverpool: My Lords, I am sorry that the noble Lord, Lord Haskel, takes that view. I referred to reports that I have seen in newspapers. I know that it is completely "off message" to say that my wife is French and that I obtained her approval to make those remarks in your Lordships' House today.
6.35 p.m.
Viscount Bledisloe: My Lords, I start by declaring an interest. My family own land on the borders of Wales and Gloucestershire where we conduct various countryside businesses including farming, and particularly dairy farming. For a sizeable part of this debate I was detained in a committee room in your Lordships' House and therefore I apologise if, more than usual, I repeat points which other noble Lords have already made better.
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Although this debate is about the countryside and not merely farming, as many noble Lords have said, one cannot disconnect the two. I suggest that it is a complete fallacy for people to say that, because fewer people are now directly employed in agriculture, agriculture, in which I include forestry, horticulture and so on, is no longer the essence of the countryside. Agriculture remains vital to the prosperity and the viability of countryside communities and to the physical and visual state of the countryside. That point cannot be emphasised too strongly.
The noble Earl, Lord Ferrers, to whom we are all grateful for introducing this debate, and many others have given cogent figures to illustrate the appalling state of farming. The most frightening one that I heard the noble Earl mention was of a Scots farmer's income of £1,700 a year; that is, £35 a week. If a farmer is expected to live on £35 a week because he is in business on his own account, how does that accord with the Government's concept of a minimum wage?
As a dairy farmer, I shall give your Lordships one statistic. In the past four years the price of our milk has fallen by 30 per cent in a high cost activity. My farm has all the advantages in that it is situated on a main road which is convenient for deliveries and collections. We have enough land to enable us to expand if we want to. We have managed to find the capital to modernise our plant. But what business activity with high costs can stand a drop of 30 per cent in the price of its product? How much worse is the situation of the small, remote family farmer whose farm is situated at the end of a long lane in Wales and who is unable to expand? He suffers cost differentials with regard to the price for collecting his milk and is unable to obtain bulk discounts. He may have no capacity to expand either in terms of space or money.
I fear that there is no prospect or reason why this situation should improve. Many of your Lordships have spoken of farming being a cyclical business. I confess that I am unable to see any reason why this cycle should pan out, rise or do anything else. It is quite frankly unrealistic to assume that farming in this country, with its limited area of land, its relatively high cost of labour, and its mass of regulation, of which so many of your Lordships have spoken, can compete with the prairies of America—as mentioned by the noble Countess—or the areas of the world where pay is low. It is a constant surprise to learn how ignorant of the truth of this situation are so many of our population. I believe it is largely the fault of people who live in the countryside. In the past we have always assumed that people would realise how the countryside worked; that there would be many Members of this House and of the other place who had a country background and therefore there was no need to educate. That situation has gone. We fail at our peril if we do not teach people how the countryside works.
That ignorance is widespread and was well demonstrated by the first speaker from the Government Front Bench, the noble Lord, Lord Haskel, who told us that the farming industry was full of opportunities. I would like to see the noble Lord

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being brave enough to say that to a group of farmers. He would be lucky to escape with his life. It would be amazing if he had his trousers on when he left.
Lord Haskel: My Lords, perhaps I may remind the noble Viscount of the context in which I said that. I was referring to the fact that, if the noble Earl, Lord Ferrers, were 30 years younger, instead of seeing farming as a declining industry, he might see it as an industry in change. As we all know, when an industry is changing it presents difficulties and opportunities at the same time. That was the point I was trying to make.
Viscount Bledisloe: My Lords, perhaps the noble Lord would like to visit the group of farmers I postulated and tell them what changes could be made to remedy the situation. I shall be interested to receive a copy of his speech to them.
There is constant talk of diversification. There is a limit to which one can do that. God forbid, but let us suppose that we double the number of golf courses and caravan parks in this country. They would take up a minute proportion of the area being farmed and benefit very few farmers.
What is frequently forgotten is that farming now produces so much more food than it used to because after the war a very deliberate decision was taken that this country would never again be as dependent on imported food as it was during the war. At that time this country was very nearly brought to its knees not through military defeat, but because of the sheer difficulty of importing food. It may be thought that that policy is out of date. I have never heard any government say that they have consciously resiled from it. They would be brave to do so.
The urban view is that other industries have gone into decline and that is bad luck. Factories have to be shut and something else has to be done. One cannot shut the countryside. In many urban minds I believe there is a view of a blissful countryside returning to its natural idyllic condition, unfarmed and looking very much as it does at the moment, but with a plethora of beautiful flora and fauna. That is ignorant rubbish. If farming were no longer to take place, most of the countryside would revert to impenetrable scrub, devoid of beauty, impossible of access and very short of flora and fauna of any kind. We would then be left with a situation where farmers have to be re-employed at vast expense, and with no self-satisfaction, to keep the countryside in a manner which the urban dweller would like. That is not a possible or desirable solution. It is necessary that people appreciate these facts if the countryside is to have a future.
Lord Palmer: My Lords, before my noble friend sits down, he interestingly remarked that he is receiving 30 per cent less for his milk. Can he confirm that the consumer is paying that same percentage drop for milk in the supermarkets?
Viscount Bledisloe: My Lords, I believe that is entirely right, except on occasions when supermarkets
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use their enormous power to sell milk as a loss-leader in order to persuade customers to buy their other products.
6.44 p.m.
Baroness Miller of Chilthorne Domer: My Lords, I thank the noble Earl, Lord Ferrers, for bringing this debate to the House this afternoon. It has been very informative, not least in the way that some noble Lords have fallen into the trap of polarising the countryside debate. I believe that we have failed to recognise that a time of change for the countryside is difficult. We have turned from blaming the European Union, the last government and this one, civil servants for not going about in their wellies enough and Belgium and France. Everyone carries some blame, but this afternoon we have been somewhat short on solutions.
I particularly appreciated the speeches of the right reverend Prelates because they looked more for solutions than blame. I particularly regret that we appear to be blaming the urban population for not understanding the countryside. The noble Viscount, Lord Bledisloe, made the point that we need to educate people. That is right. I do not believe that the noble Earl, Lord Caithness, appreciated the role that some people have played. For instance, he quoted the clearing of footpaths after a storm. In fact, many people from towns and villages and conservation volunteers, often from urban areas, go to the countryside to offer their time and services for badly needed conservation work and footpath clearing. Although there is much further to go in educating us as to the future for the countryside, I do not believe that we should simply blame our urban population for its ills.
This debate has quite rightly been about the state of agriculture. Many noble Lords have quoted statistics which I shall not rehearse except for one example. Agriculture is in a dire state this year. The noble Earl, Lord Ferrers, and a number of other noble Lords said that 20,000 farmers and farm workers left the industry over the past year. That leads to the point made by noble Lords as to what should be done with land if it becomes derelict and a wilderness. Will it revert to horsey-culture perhaps, which we see developing more widely? Many noble Lords have contributed to the debate on the basis that horses provide a pleasant leisure activity. I agree. However, I do not believe that a countryside populated simply by horses would be desirable.
We need to address the fact that some areas of our agriculture can remain competitive on the world. stage. But the Government must take a firm line on how that is to be achieved. I cannot better the example of the ducks given by the noble Earl, Lord Onslow, and the red tape review that needs to take place. We on these Benches are glad that the Government have made a start on reviewing red tape and regulations with a view to cutting and simplifying the system. For instance, the Government need to address the meat hygiene service charges in order to enable farmers to compete on the world stage, if that is what they seek.

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I am surprised this afternoon that we have not heard more about what we hope the Government will do in Seattle as regards upholding the requirements that the noble Earl, Lord Selborne, outlined for labelling. That is a crucial area. Perhaps we could have the right to label food so that consumers can make a choice by buying British food that has been produced to high animal welfare standards. I am sure that the Government would be pleased to do that. I would like the Minister to comment on what the Government will say in Seattle on the subject.
Agenda 2000 CAP reforms will be an opportunity for our countryside, but we must define what we are looking for. MAFF still regards agriculture as one package. In its consultation document Agriculture: The Way Forward, it states that it wants farming to be,
"Competitive, diverse, flexible, responsive to consumer wishes, environmentally responsible and an integral part of the rural and wider economy".
I believe that that is too wide. The demands that are being made need to be rethought.
As many noble Lords have outlined, competition and diversity sit uncomfortably together. The Government want the industry to be competitive—the industry wants to be competitive—but we as a nation want the countryside to be diverse. We should allow the industry to be competitive, but diversity comes at a price. Until now, neither the Government nor the public have been willing to pay the price for the number of other benefits that they have had on the cheap—a well cared for countryside, with hedgerows, dry stone walls, biodiversity and so on. There is never enough money to go round in schemes such as the Countryside Stewardship scheme or the organic scheme; they are permanently oversubscribed.
The noble Earl, Lord Ferrers, and the right reverend Prelate the Bishop of Durham mentioned particularly the situation in our upland areas. I make no apology for going into this matter in a little detail. Noble Lords will appreciate that at the moment it is of particular concern.
The upland areas are frequently our most beautiful landscapes—they bring in tourists—and they are areas to which the new access legislation will apply. To farm there is very hard because of the physical constraints. But farming in upland areas has created the very landscapes that people enjoy. In the past the balance between environmental concerns and viable farms led to the hill farmers compensatory allowance scheme. That was based on headage and so drove up the stocking rates. It is right that MAFF should be making an effort to introduce a scheme which is less environmentally detrimental.
The aims of the scheme are to contribute to the maintenance of the social fabric in upland rural communities through support for continued agricultural land use and to help preserve the farmed upland environment by ensuring that land in less favoured areas is managed sustainably. Those are worthy aims. The scheme is out to consultation and I should like to mention some details. There is still an
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opportunity for some thoughts about the scheme to be considered. The way it is drafted now, it seems that in some regions hill farmers will suffer a considerable drop in income. At a time of crisis for hill farmers, that seems a strange way to go.
Can the Minister tell me whether I am correct in understanding that, for example, in the south west, if livestock numbers from the 1998 less favoured areas are used, when the new scheme is implemented by 2003, the HFA payments will have fallen by some £500,000, which would be about 12 per cent?
Interestingly, the scheme makes no links with the fact that there will soon be another added complication and cost for farmers who farm open access areas. When the legislation comes in, undoubtedly they will have to put more time and effort into farming those areas. I wonder whether we should not have a scheme which aims to promote the farmed upland environment and which links the fact that there will be access to those areas, rather than the complicated enhancement schemes proposed.
If the main aim of the scheme is to help small family farms to go on farming in their traditional way in difficult places, the enhancement offered under the scheme should be kept simple, perhaps a fixed amount per hectare, with a higher rate for the first 50 hectares to favour the small family farms. It is apparent from the consultation and the responses that at the moment the enhancement criteria are complicated. I am short of time and I cannot go into the way the stocking rates are looked at; but, quite frankly, it is another bureaucratic nightmare. We should not be getting into another bureaucratic nightmare at a time when we are trying to get out of them.
Lastly, perhaps the Minister can say what will happen to the many farms that straddle lowland and less favoured area boundaries? What of the stock on those farms. Farmers will have a nightmare working through the paperwork about which animals are kept on which bit of land and when.
Before moving to some of the other crucial issues concerning the countryside, I should like to recommend to your Lordships a book I have been reading which is in the Library. It contains the selected writings of Richard Mabey, with whom many of your Lordships will be familiar. He has been writing about the countryside for many years. These are his writings over the past 30 years, defining the views and politics of the countryside and so on. I found it inspirational.
As to post offices, at the moment the Post Office is spending substantial sums on automating its systems. It is regrettable that at this point the DSS is bringing in the automatic credit transfer which may well threaten rural post offices, not necessarily because people will not be using them to collect their benefit, as in the past, but because people used to do their shopping in the rural post office when they collected their benefit. That has not been sufficiently appreciated.
Can the Minister comment on whether the small business service will include agricultural businesses? How small is small? The small business service in rural

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communities will need to offer services to very small businesses, particularly to a large number of businesses which employ fewer than five people.
The right reverend Prelates the Bishop of Lichfield and the Bishop of Durham and the noble Earl, Lord Peel, mentioned the sparsity factor in local government settlements. That is a long-term and unjust burden that local authorities in country areas have had to bear. They have had to deliver services. They want to deliver services to the same standards as elsewhere—they are being judged on those standards—but they have not had the money to do so. I believe that the settlement this time for other services—which include tourism, economic development and supporting projects such as farmers' markets—has been reduced because the Government have focused extra money on specific service areas.
Finally, I urge the Minister to consider the Government's commitment to providing adequate match funding for the rural development regulation. I do not expect her to comment on the point made by many noble Lords—including the noble Lord, Lord Jopling, and the noble Earl, Lord Liverpool—about the reorganisation of MAFF into a rural affairs ministry. But I have asked the question a number of times and I have been told that it is a matter for the Prime Minister. That is a matter of regret. It would be interesting to debate how and in what way MAFF should be reorganised.
I thank the noble Earl for introducing the debate. I have found it very interesting. Although there are a number of areas that we have not covered, it has moved the arguments forward.
6.57 p.m.
Baroness Byford: My Lords, I, too, should like to thank my noble friend Lord Ferrers for introducing this important debate. The contributions made have demonstrated the breadth and depth of the concern that we have in the House for farming and, twinned with it, for our countryside. They go hand in hand, together. Many of us are concerned for the economical future of farming and for the well-being of our countryside. All around the House speakers in the debate have highlighted both concerns. I shall not be able to mention every contribution, but I hope that I can do justice to the tenor of the argument.
As days passed by, I found myself asking what I understand by "the countryside". Indeed, other noble Lords have posed exactly that question. I was surprised to find that it was a difficult question to answer. It is nearly an emotion—and there lies the rub of my and, I suspect, other people's understanding of the countryside.
Over the past 10 days we have had three important agricultural debates: first, the response to the gracious Speech; secondly, the report from the European Communities Committee's findings on CAP and Agenda 2000; and today's major debate, moved so ably by my noble friend. On all of those occasions the theme coming from the various speeches expressed the dire state of our current farming industry; the need for
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a level playing field; the increasing regulatory burdens; the effect this has had on the farming industry; and the increasing numbers leaving the industry—sadly, some 20,000 this year, as was mentioned again today. Other noble Lords have mentioned the income of farmers, which varies from the average income of hill farmers of £2,000 down to that in Scotland, mentioned by my noble friend Lord Caithness, where it is a mere £416. Those are frightening examples.
We on these Benches feel that perhaps it is time to take stock and for the Government to stand back and to stop lurching from one crisis to another. I realise that in some ways it is not easy for a national government to do that because now we all operate not just within the EU but within a global market. Therefore, this issue has great implications for we farmers here today. However, if the Government can stand back and stop papering over the cracks, they can tackle the core problems. I believe that some of the suggestions made from all sides of the House today provide good examples of the problems which we need to tackle.
I know that other noble Lords have expressed their disappointment at the outcome of the CAP reforms, which have only added to our problems. Indeed, I know that the Minister and her colleague in the other place have reflected the Government's disappointment that the reforms did not go further.
This week we have learned from Seattle that the USA and the Cairns Group see the future of agriculture in a very different way. They are not constrained by our higher welfare standards. They do not have our desire to enhance the environment; indeed, their environment is very different from ours. Their view is that if we wish to enhance our environment and to have higher welfare standards, we should arrange for that to be done, but not as part of a trading agreement. I believe that that is where the core problem lies. They feel that our Government should finance such projects from our own resources rather than expect resources to come from an overall EU or world-wide budget.
For the USA and the Cairns Group bloc, food is food; and our subsidy schemes are unacceptable. That is slightly ironic as the Americans have deficiency payments and crop revenue assurance schemes, which we would regard as subsidies. UK farmers set the highest welfare standards but, as other noble Lords have said, they do so at great cost. In many cases, that makes us uncompetitive with other countries in the global market.
While proper labelling, which has been mentioned by other noble Lords, would at least help the consumer in making a choice, it is not the only answer. Personally, I welcome the Government's initiative—indeed, we give the Government credit on many occasions—in setting up the task force to consider how we can reduce our regulatory burden. I plead that that should be done urgently. As each week goes by, yet more farmers go out of business and leave the industry.
Although we have some idea of the Government's proposed countryside legislation, there are many areas where we are not sure about the detail. We on these

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Benches welcome the greater protection for our wildlife, but we await the detail which will be laid down in the respective Bills.
Today we have heard that the countryside is the result of constant change, assimilated over time by people whose business is the countryside. We have also been made aware that the rural scene is a workplace, as is a car factory or a solicitor's office in a city or town. I fancy that instant access to the latter would be denied on grounds of convenience, health and safety, and loss of earnings. I can see no reason why such factors should not apply when we talk of giving access to the countryside. Such issues as owner liability, compensation, shooting days, the closed 28 days for breeding purposes and the keeping of dogs on leads are all crucial to those whose incomes are derived from organised shoots. They are equally important to those who keep sheep on our hillsides. As other noble Lords have mentioned, if farmers and land managers are not allowed to be commercially viable, the very moorland that people wish to walk over will be destroyed and will return to shrubland.
Open access nearer to one's home is favoured by the majority of people, who want to walk with easy access, take their dog for a walk, ride a bike, go on organised outings and have access to organised car parks and well-signed pathways. Those are their priorities. Although I suspect that we hear a great deal more from the comparative minority who want to ramble and have open access to mountain, moorland and heathland, they should not forget that, for the majority, that is not a priority.
Many noble Lords have illustrated graphically why our countryside must be allowed to remain a living and economically viable entity. Without that, the very thing that people wish to visit and see will not be there.
In truly thought-provoking speeches, noble Lords have reflected that not only are farmers struggling, but that local communities, too, are feeling their demise. That point was made clearly by the right reverend Prelates, the Bishops of Lichfield and of Durham. Rural social deprivation is real; isolation in many cases is acute; and suicides, sadly, are the outcome of such difficulties. At a time when, increasingly, fewer people are employed on farms, there is less opportunity for people to discuss their difficulties on a one-to-one basis. It is, indeed, an extremely worrying time. Therefore, the Government must deal with a tight balance between work, rural living and personal leisure pursuits.
I ask the Government what will happen to some of their schemes, which we warmly welcome. For example, the Countryside Stewardship scheme is over-subscribed and, I understand, will be closed for the next 18 months; the habitat scheme is also to be closed; and moneys paid to the ESAs are to be redirected. All those issues will have added implications for those who work on our land. I wonder whether the Minister could reply to that point, although she may not be able to do so tonight. We are concerned about the number of changes being made to the schemes.
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I do not want to end on a totally negative note. However, I feel that there is much that the Government could do, even now, within their discretion. For example, have they come to any conclusions about assisting older farmers with early retirement packages? I know that it is possible for them to do so. Have they any plans to "pump prime" a scheme to help young farmers who wish to enter the industry? Again, I should like to add my weight to those who have mentioned the importance of young people entering our industry. Will the Government consider easing planning restrictions on farm buildings to enable those who wish to leave the industry to do so? As mentioned earlier by one of my noble friends, that point particularly concerns buildings for battery hens which will have to be upgraded. Will the Government allow farmers to make such conversions more easily than is sometimes the case? Those are practical issues which I believe the Government could, and I hope will, take on.
Many of the questions raised by my noble friends today have a direct bearing on agricultural incomes. But times they are achanging. The onrush of the world trade talks threatens to bring Europe and the CAP into opposition with others. The CAP should have been severely overhauled in the preparation for the trade round but, sadly, Berlin scuppered that. I wonder whether the Government and the European Union will have sufficient time to implement their long-term policy of securing a stronger market orientation in which our farmers can work. Those are real and important issues.
In my last few minutes, perhaps I may move back to the countryside. Many people who live and work in the countryside are not employed directly in farming but are in allied or linked industries. For many of them, the countryside is only as it is because we work it. It incorporates our fields, woods, hedges and ditches, to which many noble Lords have referred. However, one issue is of particular concern to them, as it is to parish councils. I refer to the ever-increasing traffic along country roads. Too many vehicles travel too fast on roads which are inadequate for the weight, length and power of the vehicles—a matter which causes anxiety to parents, horse riders and walkers.
I have not been able to touch on many of the points raised by other noble Lords. However, perhaps in conclusion I may refer to three issues. The first is the whole question of the SSAs, to which other noble Lords referred earlier. My understanding is that in London the SSA for an average person is £1,350 but in the shire counties the figure is £750; and that is at a time when it is more expensive for us to provide those services. Secondly, will the Government give greater thought to what they can do to help tenant farmers? Farmers who own their land at least have a buffer behind them to help them in difficult times, but our tenant farmers have great difficulty. Thirdly, I should like to pick up on the question raised by my noble friend Lord Jopling. Agriculture must be the priority, whatever ministry takes part. As I said at the beginning of my speech, without a strong farming presence, the

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countryside we know and love would just not be there. I look to the Minister to set out the Government's thinking in that area.
7.10 p.m.
Baroness Hayman: My Lords, like all other noble Lords who have spoken in the debate, I pay tribute to the noble Earl, Lord Ferrers, for allowing us the opportunity to debate subjects which could not be fully covered in the Queen's Speech debate, when we naturally focused on areas of legislation rather than the areas of broad-ranging policy which have been illustrated today. I know of noble Lords' concern on that point.
As we have come to expect from the noble Earl, he introduced the debate in a witty and wide-ranging fashion. He even spoke about his legitimacy. I think we can probably all agree that the noble Earl is probably best designated as the primus inter impares in this House. If we did it in that way we would not have to have a contentious debate about the relative legitimacy of either set of the impares. I shall leave it at that. The noble Earl is probably in a better position than I am because I am still trying to work out from the contribution of the noble Lord, Lord Rotherwick, whether I am an incompetent politician on the way up, which seems highly unlikely, or an incompetent politician who is clapped out and on the way down—
Noble Lords: Neither!
Baroness Hayman: My Lords, it has been an enormously wide debate, reflecting the range of issues that are involved, as the noble Baroness, Lady Byford, said. when we conjure up an image c f the countryside. We have dealt with a great many matters agricultural. But, equally, we have dealt with matters of social deprivation, the environment, education, transport and crime. That emphasises the point made by the noble Baroness, Lady Miller, and the noble Countess, Lady Mar, that this is not an area in which we can or should polarise or suggest that the interests of one group of people are diametrically opposed to, are different from or do not coincide with the views of their fellow citizens who may live in different parts of the country.
I was thinking about how I would respond to the right reverend Prelate on the issue of market towns. I am sure that that issue will be touched on in the rural White Paper because of the importance of market towns to the rural economy. But, equally, they are urban areas and the urban White Paper, which has been developed in tandem and in parallel with the rural White Paper, must recognise how we can make those thriving urban centres ones to which the rural population can relate.
Perhaps I may deal with one or two of the minor matters. I feel that I should reassure the noble Earl, Lord Ferrers. I was worried about his protected rabbit warren when I first heard of it. I am reliably informed that the proposal from English Heritage—it is only a proposal—is to designate a medieval structure built by
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people for rabbit farming rather than by rabbits for rabbits to live in. So there will perhaps be something to preserve.
Earl Ferrers: My Lords, I am deeply grateful to the noble Baroness. I found that out myself yesterday, but that makes the whole thing even more absurd.
Baroness Hayman: My Lords, I thought the noble Earl was going to say that it would have spoilt his joke if he had admitted what he had found out yesterday. As far as concerns the Newbury snails, I can draw on past experience. The noble Earl made a wise decision in the snails' benefit because, as I understand from my time as Minister with responsibility for roads, they were relocated and have thrived in their new location and are breeding better than ever.
While I am on the issue of roads, perhaps I should respond to the noble Lord, Lord Palmer, who referred to the dualling of the A.1. I know, again from a previous incarnation, that that is a matter of great concern to him. He will appreciate that specific road schemes are not now within my hands or purview, but I have some sympathy with him on the accident record on that stretch of road. I shall take the opportunity to ensure that my noble friend Lord Whitty, whom I am sure the noble Lord has lobbied anyway, is made aware of his concerns on that area.
Another matter that is not in my hands is the future of MAFF, to which the noble Lord, Lord Jopling, the noble Earl, Lord Liverpool, and the noble Baronesses, Lady Miller and Lady Byford, made reference. I shall repeat the mantra that it is a matter for the Prime Minister. But that is not to say that it should not be debated in this House or that Members of this House should not express a view on it. It is just rather difficult for MAFF Ministers to express a view on it. I hope that noble Lords will understand that. Equally, it is difficult for MAFF Ministers to express a view on matters of taxation, which are for the Chancellor of the Exchequer. The issue of a pesticides tax was raised today. Noble Lords will be aware that we understand the concerns of agriculture and have made clear that those will be well considered in any government decisions in that area. The noble Lord, Lord Dean of Harptree, and the right reverend Prelate the Bishop of Durham referred to VAT on church repairs. I shall ensure that my right honourable friend the Chancellor has his attention drawn that issue.
The noble Earl, Lord Listowel, asked whether MAFF staff and civil servants appropriately understand farming, and the noble Countess, Lady Mar, also has views on that subject. In all areas of government it is important to ensure that people who are involved in advising Ministers about policy have some experience and vision of the areas concerned. When I have donned my green wellies and gone out, the farmers to whom I have spoken have been very appreciative of MAFF, particularly of the regional service centre staff, and feel that they are very involved regionally and have an understanding of those areas.
The Countess of Mar: My Lords, the local civil servants know about us, but I would welcome onto our

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farm any civil servants from Whitehall to see what we do so that they get some idea. The noble Baroness may know about the exchange chap we have for the specialist cheese makers who is having his eyes opened.
Baroness Hayman: My Lords, we are doing a great deal in terms of the Modernising Government initiative in having that kind of valuable interchange of ideas. That interchange of ideas and the recognition that those of us who spend most of our time in the city but enjoy some time in the countryside, and likewise those who spend most of their time in the countryside but enjoy some time in the city, must understand the other's view point are extremely important. Indeed, the polarisation that crept into some of the contributions made in the debate is not helpful to anyone.
In relation to the West Midlands, the right reverend Prelate the Bishop of Lichfield reminded us how important the countryside is for his urban parishioners. Indeed, the noble Baroness, Lady Miller, and other noble Lords drew attention to the services that are provided in the cities and by city dwellers within the countryside. As one who was brought up in Wolverhampton, I certainly related to the way in which the rural areas in the right reverend Prelate's diocese provide not only leisure but a completely different perspective on life for those who dwell in cities. To some extent I disagree with the point made by the noble Earl, Lord Listowel, that one may make the distinction that either side does not have the right to contribute to debates on the future of the countryside or of the town. I believe that such problems are better solved when a range of perspectives are brought together. We should not exaggerate the differences between town and country but rather we should understand the common causes, while not in any way jettisoning the perspectives of those who have long experience of a certain area.
We need to protect the rural environment while ensuring that we continue to enjoy the countryside. The grave problems facing the farming industry must be recognised, while at the same time—this point has been made by several speakers—the perspective of customers and consumers has to be clearly understood. Only by doing that will we ensure the future success of the industry.
Many speakers, including the noble Lord, Lord Palmer, the noble Earl, Lord Ferrers, and the noble Lords, Lord Mackie of Benshie and Lord Plumb, pointed out that this debate is taking place at a time when the farming industry is facing the most severe difficulties. The noble Lord, Lord Jopling, used the word "despair". It is true that enormous personal and family problems have been caused by the current widespread depression in farming. Last year, farm incomes were already very low, and this year the forecast suggests that the situation will be similar. Telling figures were given by several speakers in the debate. After a period of relatively good incomes in the early 1990s, in real terms farm incomes have now dropped back below the levels of a decade ago.
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The noble Lord, Lord Dean of Harptree, noted that the depression has now spread widely among the different farming sectors and that it is no longer a matter of one sector thriving while another struggles. We are seeing a much more widespread situation of depression. Concern for those affected has been demonstrated in contributions from all sides of the House. Noble Lords recognise that this not only affects the individuals directly involved in farming but impacts on related businesses and businesses ancillary to farming. Indeed, the consequences are potentially worrying for the landscape, the environment, animal welfare and a whole range of other related issues.
The Government are taking the situation very seriously. In September my right honourable friend the Minister announced a major review of the regulatory burdens on agriculture. Several noble Lords, including the noble Lords, Lord Plumb and Lord Rotherwick, and the noble Earl, Lord Peel, made the point that those constraints are keenly felt and that this is an important issue. The three major working parties covering the priority topics of meat hygiene, the IACS scheme and inspections and the intervention system are reaching the end of their work. We hope to receive their reports this month. I can assure the House that the Government are committed to rooting out unnecessary red tape.
Equally, we need to look at exactly what regulation is unnecessary. We must recognise that some constraints need to be in place, especially in terms of the legal framework under which we operate—often a European framework. While there is no desire to gold-plate, we cannot under-implement and then complain about other countries' implementation.
The Earl of Onslow: My Lords, I thank the noble Baroness for giving way. Her speech so far has been quite excellent and the sooner she takes over the job now undertaken by Mr Brown the better.
Having said that, I see a major problem when UK governments take regulations emanating from Europe and then add bits onto them, sometimes verging on the edge of legality. This fault applies not only to the present Government. Our side was just as bad. Can the noble Baroness make a great effort to ensure that this is stopped?
Baroness Hayman: My Lords, I can certainly assure the noble Earl that we are looking at that point. I know that Ministers now closely scrutinise individual proposals to ensure that we do not over-implement. Occasionally it may seem that over-implementation is taking place. However, when one examines the issues in more detail, that view is not necessarily accurate. For instance, I have been assured that the poultry hygiene regulations are essential. We must take cognisance of the fact that we could get into very great difficulties with the EU on this matter. The EU in turn could then create problems in terms of payment of subsidies should we not implement appropriately in this area. However, I have listened carefully to the words of the noble Earl. The issue of ducklings by post

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is one that I shall look at as soon as I return to my office. I regret that I cannot respond directly on that point today.
Several noble Lords raised the matter of hill farming. That sector has been under great pressure. We have provided more support there. An extra £60 million has been allocated to hill livestock compensatory allowances for 1999 and 2000. The noble Lord, Lord Palmer, and the noble Earl, Lord Ferrers, asked about agri-monetary compensation. I believe that the noble Earl, Lord Caithness, also raised the issue, although I may be incorrect on that. The Government have made available some £264 million of agri-monetary compensation to ensure that farmers do indeed have access to a level playing field and are not unnecessarily disadvantaged by the strength of the pound. It is an unpalatable fact that the previous government chose not even to apply for any of the £153 million of compensation that was made available in January and March 1997.
The issue of easing the cost of regulation was raised by several noble Lords. The noble Baroness, Lady Miller, referred to it in detail. For at least the duration of the current comprehensive spending review, the Government are committed to paying for cattle passports, which amounts to £22 million per annum. Furthermore, they are committed to meeting the cost of specified risk materials inspections, which amounts to another £18 million per annum. Those are necessary safeguards in the wake of BSE. Equally, today my right honourable friend the Prime Minister announced another easing of the cost of regulation on the industry. Concerns have been expressed by many noble Lords about the cost of the Meat Hygiene Service. Charges will be frozen for this year at a cost of £7 million, and we have pledged that charges for next year will not rise above the rate of inflation. I hope that that will be welcomed by noble Lords.
A new marketing drive is to be established by MAFF and the Meat and Livestock Commission to explore the scope for more activity on beef export promotion, using a proportion of the £6 million contained in the recent aid packages. It is hoped that that will give some help to the beef industry which, as has been pointed out many times today, has been so gravely injured by the BSE crisis.
Many who have spoken in the debate today pointed out that agriculture is not the only source of employment in the countryside but equally that it is central to achieving the wider economic, social and environmental objectives for rural areas, even though agriculture as a source of employment has declined as a proportion of the whole workforce in many areas. As the noble Countess, Lady Mar, illustrated, these days agriculture is seldom the single source of income for farming families. I can tell the noble Earl, Lord Sandwich, that the Government are not abandoning farmers to the market without concern for them. Our long-term policy for agriculture is to secure a more competitive and sustainable industry with a stronger market orientation. Several speakers have welcomed that. The noble Earl, Lord Selborne, spoke wisely on these issues in a very thoughtful speech.
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I agree with the noble Earl on the importance of consumer understanding and information, so that issues such as differing welfare regimes in different countries are understood. Those who, as one set of citizens, want to see higher animal welfare standards should also recognise the implications that that has for them as consumers. We have nothing to fear in making these matters clear in the marketing of British produce.
Stronger market orientation was our philosophy in pressing for a radical reform of the CAP. Although the outcome of the Agenda 2000 negotiations did not go as far as we should have liked, it represented an important step in moving the common agricultural policy in the right direction, as was acknowledged by the noble Lord, Lord Plumb, and others. That change also gave us the opportunity provided by the Rural Development Regulation. For the first time, it provides a chance for the long-term redirection of agricultural support so as to encourage sustainable and enterprising rural economies and communities.
The regulation recognises the wider contribution that farmers make to rural areas and the need for farmers to diversify their businesses as they adapt to changing market conditions. I believe that that was the context in which my noble friend Lord Haskel referred to opportunities. Certainly, those opportunities are being grasped by many farmers. That is not to suggest that there are not mainstream and deep-rooted problems for farmers, but there are ways in which value can be added. The regulation also recognises the need to encourage enterprise through the rural economy, in part at least to enable it to adjust to the decline in the direct contribution made by agriculture. The points relating to diversification and support for rural industries have been made.
The noble Lord, Lord Palmer, sought a comment on renewable energy from crops and wastes. We are considering carefully, in the context of the Rural Development Regulation, possible support for energy crops. We believe that value for money from short rotation coppice is better than that from bio-diesel. I suspect that the noble Lord may not agree, but that is our view. We are considering whether we can increase R&D funding in that area.
In responding to the noble Lord, perhaps I may comment on the trials of GM crops. It is in the interest of everyone, as the noble Earl, Lord Ferrers, said in his opening remarks, that we have the information from real farm-scale evaluations as regards the implications for the environment—not least to answer the questions of those who have the gravest doubts about the introduction of GM crops. We are committed to a rigorous assessment of the safety of the trial release of GM crops in the environment. Equally, I would say to the noble Lord, Lord Palmer, that we are committed to openness. We do not want it to be done by stealth. That would not be in anyone's interest. But given that attitude, there must be responsibility on the part of those who seek to undermine the only method of obtaining the information on which judgments for the future can be based.

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A number of speakers mentioned the rural White Paper. More can, and should, be done to ensure an integrated and effective approach to rural areas. That is why we are examining the ways in which we can serve and enhance the countryside as a resource and amenity for all through the rural White Paper which is to be published next year. I assure noble Lords that the White Paper will adopt a holistic approach in exploring how a wide range of policies, encompassing the work of many government departments, agencies and local authorities, can support rural communities.
The rural White Paper will consider the impact of policies on many of the areas raised by noble Lords during the debate; for example, crime and policing, about which the noble Earl, Lord Peel, spoke; education, referred to by the right reverend Prelate the Bishop of Durham; transport; and housing. It will explore how those issues fit together. The White Paper will discuss how to foster sustainable communities and will examine how our development and regeneration policies will assist deprived rural communities. My noble friend Lord Haskel was right to point out the evidence regarding rural deprivation and the possibility of severe social isolation and exclusion within rural areas, and how we can give all rural people the opportunity to play a full part in the economic vitality and sustainable development of our society.
I would say to the noble Baroness, Lady Miller, that it will be in that context that the issues concerning rural post offices, to which we have given some scope for more commercial freedom, and small business services will be approached.
Several noble Lords asked about the possibility of EU funds for rural development measures, particularly for over-subscribed agri-environmental schemes. That forms part of the consultation that has been taking place on the Rural Development Regulation. We have consulted, for example, on such issues as an early retirement scheme; help for young farmers; and, above all, the principle of modulation referred to by the right reverend Prelate. I am afraid that I cannot give him the answers as regards the decisions on match funding and modulation, which have still to be made; but I can tell him that it will not be long before that information is available. There has been concern about the low level of historical funding that we inherited; it does not give us a strong base from which to work. We shall be pressing within Europe to ensure that the overall level of funding is examined for the next round.
I am conscious of the time, so perhaps I may deal briefly with points made by the noble Lord, Lord Palmer, and the noble Earl, Lord Carnarvon, in regard to the countryside amenity and conservation Bill, the widening of access to the countryside and ways in which we can promote people's enjoyment of it while recognising the need to preserve the livelihoods of those who work there as well as wildlife and the environment itself.
Fifty years after the landmark National Parks and Access to the Countryside Act, we shall be bringing forward new countryside legislation early next year.
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The Bill will fulfil two important manifesto commitments: to strengthen the protection of wildlife, and to give people greater access to the countryside. It will demonstrate our determination both to secure effective protection of our finest habitats and species and to ensure that more people have the opportunity to enjoy our wonderful natural heritage—and, as several noble Lords suggested was important for those who live in towns, to understand the countryside better.
The noble Lord, Lord Palmer, asked whether we would consider the views of the CLA and others in the passage of the Bill. We have held extensive consultation with interested organisations over the past two years. Equally, during the parliamentary stages of that Bill, especially in your Lordships' House, we shall consider carefully the views expressed by the CLA and others.
Funding for rural services was raised by several noble Lords. The issues of scarcity and support for services through local authority grant systems are well recognised. They will be an underlying theme in consideration of rural policies. Because of the need for "joined-up government", for ensuring that we make all the departments involved play their part, it has been announced that there will be a cross-cutting rural review in the context of the next spending review which I hope will be helpful.
The noble Earl, Lord Caithness, asked specifically about how much more green belt would be destroyed by our Government. I have to say: a great deal less than was destroyed by his. In their last year of office, the Conservative government took 1,200 hectares out of the green belt. Since May 1997, there has been a net gain of almost 30,000 hectares. I hope that the noble Earl will find that reassuring.
On the issue of fox hunting raised by the noble Lord, Lord Palmer, the noble Earl, Lord Peel, and others, I was glad that in today's debate the impression was not given, as sometimes happens, that it is the predominant or only issue of concern in the countryside. Nevertheless, it is right that the facts about hunting should be properly assessed and balanced in a dispassionate way, before any legislation is considered. The noble Lord, Lord Burns, is in the Chamber; he has an onerous task.
The Earl of Onslow: My Lords, that is an interesting development. Is the Minister saying that no Bills will be supported in another place until the noble Lord, Lord Burns, has reported? If he reports that a ban will cause economic distress to the countryside, is the Minister saying that the Government will pay immense attention and listen? I thought she went rather a nice long way down that line. I liked it.
Baroness Hayman: My Lords, that makes me extremely nervous. The promise that has been given of government time and assistance for the legislation does not in any way pre-judge the outcome of the inquiry. The inquiry will look into the practical aspects of different types of hunting with dogs and the impact on the rural economy, agriculture and pest control; on

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the social and cultural life of the countryside; on the management and conservation of wildlife and on animal welfare in particular areas of England and Wales. The inquiry will also consider the consequences of any ban on hunting with dogs and how any ban might be implemented. It will take evidence from all interested parties. The noble Earl, like me, will have to await the inquiry's findings before deciding what any response will be. The inquiry is independent of government, and the promise of a Bill bears no relation to the work of the inquiry. It is for Parliament to decide whether hunting is right or wrong, but I am sure that the work done by the noble Lord's committee will help every Member of Parliament to make up their minds on this important issue.
Lord Beaumont of Whitley: My Lords, it is not for Parliament to decide whether hunting is right or wrong. It is for Parliament to decide whether hunting should be made illegal. That is very different.
Baroness Hayman: My Lords, that is what Members of Parliament will do in their function as legislators. I am happy to illustrate that. How we legislate, in the best of all possible worlds, reflects how we feel on issues with regard to whether certain things are right or wrong. That applies particularly to matters on which we have a free vote, like hunting. Perhaps the dichotomy is not as great as the noble Lord suggests, but he is right to be pedantic about the language. It is for Members of Parliament to legislate, not to go into areas of personal morality. I have spoken at some length and beyond my time.
Baroness Miller of Chilthorne Domer: My Lords, perhaps I pre-empt the Minister, but I raised specific questions on the hill farming allowance. I should be happy if the Minister could write to me with a reply.
Baroness Hayman: Yes, my Lords. The proposed hill farming allowance scheme will be operated on data we collect now, so it should not involve any additional bureaucracy. However, I shall write to the noble Baroness on the other point.
Earl Peel: My Lords, inevitably in a debate such as this, which has been wide ranging, the number of questions posed to the noble Baroness is great. She has done a remarkable job in attempting to answer them. However, inevitably she will not be able to answer them all, and some relate to other departments. I always thought it was a tradition of this House that where questions put specifically to the Minister were not answered at the Dispatch Box, she would arrange for letters to be written to the noble Lords concerned. Can she confirm that she will do that?
We had a wide-ranging debate when we discussed the gracious Speech but, unfortunately, environment and agriculture were rolled up with education. The noble Baroness, Lady Blackstone, was answering questions on matters with which she was unable to deal. However, none of us has ever had a response to the questions we posed in that debate. Perhaps the
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Government will keep to this tradition and ensure that we receive proper written responses to questions not answered at the Dispatch Box.
Baroness Hayman: My Lords, the noble Earl has saved me a minute of my speech. I was going to say that I would write to noble Lords whose points I have not been able to cover in my reply. I am sure that my noble friend Lady Blackstone equally intended to do the same. It sometimes takes rather longer than one would wish for the workings of government to grind on, particularly when it involves different departments. I am sure that points raised both in the debate on the gracious Speech and today, which neither my noble friend nor I have been able to cover, will be specifically dealt with by letter.
I am grossly out of time and I shall, therefore, end by thanking the noble Earl, Lord Ferrers, for giving me such a challenging task in winding up.
7.47 p.m.
Earl Ferrers: My Lords, as the noble Baroness discovered from the noise around the Chamber as she sat down, she has done a remarkably good job with great style, understanding and charm. It has not been an easy subject to cover; it has been wide and it is impossible to try to brief oneself for every eventuality. I add my thanks and congratulations to the noble Baroness on what she has done.
I also thank all noble Lords who have taken part in the debate. One point which came out clearly is that agriculture and the countryside are in a bad state, a state of depression and anxiety. It must be addressed. The noble Baroness understands the problem and I hope that she can get her colleagues in government to present themselves in such a manner that people in the countryside believe the Government do care. I do not like to say so, but at the moment people in the countryside do not believe that the Government understand or care. I hope that they will do their best to make their understanding come over better.
I was glad that the two right reverend Prelates took part in the debate. The right reverend Prelate the Bishop of Lichfield made a sensitive and human speech, saying that he had seen the anxieties of people faced with having to get rid of their homes and businesses and sometimes not being able to provide money for their pensions. The right reverend Prelate might meet those problems more than other people.
I am also grateful to the right reverend Prelate the Bishop of Durham for participating in the debate. I was sorry that he was bullied by the noble Lord, Lord Mackie of Benshie, who accused him of trying to leave early. It is true that there is a convention that one stays to the end. Equally, the noble Baroness, quite rightly, said she understood if, for various reasons, people had to leave. However, the poor right reverend Prelate is sitting here having missed his train with a task to undertake early tomorrow. It is all the fault of the Liberal Democrats.
I was glad to have the opportunity to hear three government Back-Benchers, the noble Lords, Lord Haskel, Lord Harrison and Lord Davies of

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Coity. They said that they had come from the towns. That is good because the countryside encompasses not just the countryside. People in the towns participate in the countryside and it is of importance to them. It is also important that we have a contribution from them. The only point I sought to make was that, since the Government intend to undertake some substantial measures in the country, whether it be fox-hunting, fur-farming or access to the countryside, I would have thought that we would have had contributions from some noble Lords on the government Back-Benches who live in the countryside, know about these matters and would back up the noble Baroness. As it was, she was left rather bereft of such assistance, albeit supported vigorously by her urban counterparts.
I am grateful to noble Lords for having taken part in the debate. It has given us the opportunity to discuss a wide section of an important part of the countryside, and I hope that the Government will take note of what has happened. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

Personal Pensions
7.51 p.m.
Baroness Dean of Thornton-le-Fylderose to ask Her Majesty's Government when they will take steps to end the present mandatory requirement on personal pension fund holders to purchase an annuity at the age of 75.
The noble Baroness said: My Lords, first I thank the small band of noble Lords who are to take part in this short debate tonight, particularly my noble friend the Minister. I am sure that at the end of the proceedings on the Welfare Reform and Pensions Bill my noble friend believed that he had seen the back of the issue of annuities for some time to come. I note that the noble Lord, Lord Higgins, has escaped tonight and that his place is taken by his noble friend Lord Astor of Hever. On 11th October the noble Lord, Lord Higgins, tabled an amendment to that part of the Bill concerned with stakeholder pensions. It called for the removal from the Bill of the requirement to buy an annuity related to a stakeholder pension. If noble Lords look at col. 65 of Hansard for that day, they will see that I went into the Division Lobby in opposition to that amendment.
It may assist if I make clear at the outset what my Question does not seek to do. I do not favour the abolition of the mandatory requirement to buy an annuity related to a pension; nor do I seek to increase the age at which a person is required to start taking income from a pension fund, which is 75. In the context of my Question I propose that the age be increased from 75. I did not specify an upper age, but I propose that it be 80. Therefore, at the age of 75 a person holding a pension fund would be required to start drawing down taxed income from the fund but would not be required to convert the fund into an annuity until the age of 80.
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I believe that it was in the 1950s that the age was increased to 75. In those days there were far fewer people covered by pension schemes. Certainly, no one was covered by some of the schemes that we have today. Most were covered by occupational schemes, although it was a smaller number than today. Most of those pensions would have been defined benefit schemes which, by and large, would not be caught by this provision.
The Association of Insurance Brokers tells us that this year about £10 billion will mature for draw-down or conversion to annuities. There is a view in the industry that in 10 years' time that figure will have risen to £50 billion. We are talking about the investment of a substantial amount of money in a way that does not deny to the Chancellor the right to income tax from the benefits but also allows for the investment for which the person has saved all his life to give a decent return. Herein lies the core of my concerns. Interest earned from annuities has halved in the past decade and that accounts for a considerable amount of money. That is because the returns from gilts have been reduced.
I do not believe that my Question this evening in any way runs counter to or dilutes the national policy of this Government, and previous ones, to try to encourage people to save for their retirement. Having benefited from tax allowances, at the time of their retirement they should not try to manipulate the money that is available in a way that takes unfair advantage of the tax breaks that they have received.
I have looked at the situation today. I do not know what the Minister will say this evening. It may be said that there are a variety of methods and that people do not have to choose simply a fixed term annuity. For example, there is the draw-down option introduced in 1995. There is also the possibility of going for a fixed annuity whereby there is a guarantee of up to 10 years from the date of purchase. There is a joint annuity for couples. Having taken out the annuity, it ceases only at the point when both partners pass on.
It may be argued that there is flexibility. However, I suggest that there is a big price to pay for that small degree of flexibility. In the case of a variable annuity, in every case the costs are higher and the returns lower and the people whom they hit are not the wealthy. People have said that this is about helping the wealthy; it is not. The people most affected by the current situation are those on low incomes who find it difficult to accumulate pension funds of any substantial size. Of the various options to try to protect pension funds, they are the people who pay the highest charges in proportion to their schemes.
It may be argued that to take an annuity is almost like trying to win the lottery. It depends on the day when one assesses the fund that is to give a return for the rest of one's life irrespective of the health of the market. The events of the past decade in relation to gilts are not new. Those of us who have been involved in occupational pension schemes over the years have seen schemes in which the majority of funds have moved from gilts to equities. That has been a painful

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process but as a result there are much healthier occupational pension schemes. However, this provision relating to annuities lags behind. Because those variable options cost more, the majority of people go for annuities only for themselves because they give the biggest return. If the individual passes on within a very short time of taking out the annuity, the consequence is that the whole fund reverts to the life company.
Pensions are complex and there are lots of anomalies, many of which cannot be resolved. Some argue that someone who smokes heavily and does not look after himself, and therefore has a shorter anticipated lifespan, under the current arrangements could take out an annuity and receive a better return than an individual who does not smoke and has looked after himself because he is assessed actuarially as having a longer life expectation. That seems crackers in anyone's book. Such anomalies are almost exaggerated by the straitjacket with regard to annuities.
I was shocked to learn that if, in a contractual annuity, the return exceeds the permitted maximum by more than 3 per cent, the Inland Revenue requires that the balance between the 3 per cent and whatever was achieved is reverted into the reserved with-profits funds of the life company. It is there to provide for under-performance. If there is no under-performance in the lifetime of the pension holder, the sum being held reverts to the life company as a windfall profit. I find that difficult to accept. That anomaly may be part of the fall-out from the requirements of the pensions legislation.
I tabled the Unstarred Question out of concern for low income people, and the increasing number who have personal pensions, as we have all been encouraged to do. The debate is not about the large funds of the wealthy. A large fund is not affected in the same way as is the present annuity system.
I support the principle of encouraging people to save for retirement. It is not a new interest; I have done so all my working life. There was a provision that if your company had an occupational scheme you were required under your contract of employment to join that scheme. I believe that the removal of that requirement was a retrograde step.
The Government have made progress in introducing stakeholder pensions. The concept is good. I am sure many people will join stakeholder pensions. However, there is a view—I support it—that without changes in the present annuity provision which allow greater flexibility, and allow the pension fundholder to be a customer in the truest sense of having choice, the take-up will not be as great as one might have expected.
I know enough about pensions to realise that every proposal for change presents a problem. There is perhaps difficulty about the funding. Nevertheless, a range of ideas should be considered. A range of ideas has been tried elsewhere. Some may choose Ireland as an example. I do not. It is too soon to use the scheme in Northern Ireland as an example. However, there are
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schemes in the United States. A scheme in South Africa has been running for some years and has proved effective.
Lord Astor of Hever: My Lords, the noble Baroness mentioned Ireland and then referred to Northern Ireland. To which was she referring?
Baroness Dean of Thornton-le-Fylde: My Lords, I thank the noble Lord for that intervention, giving me the opportunity to correct what I said. I referred to Ireland, where a £50,000 minimum is required.
I can understand the Treasury's concern about the loss of income from tax. One could say that, if one delays the annuity until 80 years of age, as I seek—only that is not enough; one needs to consider the whole reform—and starts to draw down at 75, if one passes on before 80 the Treasury could have a call on the balance of the existing fund at that time. Equally, I would argue that inheritance tax should take care of that aspect.
One could look at fixed term annuities, to be reassessed actuarially at the end of that fixed term. One could remove the requirement—new regulations would be necessary—that the annuity should be non-commutable and provide that one should be able to go back and do that against certain criteria. There may well be pitfalls. I do not put those suggestions forward as a panacea. But a review is necessary.
There are only about four kinds of product available at present. If we are to have a community which is saving for retirement—small though the amounts that individuals can afford may be—they need to have proper advice and proper choice as a consumer.
The Government have demonstrated recently that they are on the side of the consumer as regards the fixed interest mortgage issue. One had agreements reached between the consumer and the company. The Government have said that that is not fair in the interests of the consumer. We now need the Government to adopt that kind of consumer concern. I think that I am right—the Minister will correct if I am not—that the Government are considering the drawdown issue. I hope that they are looking at the maximum age limit of 75. I am aware that there was a parliamentary Question in another place. I am equally aware that the Minister replied that the Government would come back to the issue in due course. Perhaps the Minister can indicate how long "due course" means.
Some of us have been negotiating for many years for people's future provision. Pensions are savings. They are part of a person's income. They are part of a person's earnings. It is a wide issue. It not about avoiding tax. It is not about providing pitfalls for people who want to avoid the commitments into which they have entered. It is about giving people a choice, and ensuring that when they enter into agreements they get a fair return.

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I shall appreciate answers from the Minister to the questions that I have asked today.
8.6 p.m.
Lord Willoughby de Broke: My Lords, I am grateful to the noble Baroness, Lady Dean, for raising the question of pensions, especially as she is so clearly a long way off from being a pensioner herself. However, I was somewhat disappointed to hear her say that she does not seek to eliminate the need to take up an annuity. That is exactly what I think we should be discussing tonight.
I declare an interest. I am exhibit A! I am a pensioner; and I am a cross old pensioner too. I receive a very small taxed income from the annuity which I have taken out. Now that I have taken out the annuity, three-quarters of the money that I have saved over 35 years belongs to the pension company. It does not belong to me, my heirs or my estate. It belongs to the pension company. I think that that is unfair and inequitable. It is true that I could have delayed taking the annuity until I was 75—even, under the noble Baroness's suggestion, until I was 80. By that time I shall probably be too gaga to care what I do with it. However, if, having taken my annuity, on my 75th birthday I take my celebratory cruise and have a heart attack during a particularly vigorous game of deck quoits, again three-quarters of my enhanced fund goes immediately to the pension company. It is extraordinary.
The situation is rather like those men who try to sell you tarmac. If someone came to your door and said, "Now, squire, I've got a very good offer here. You'll absolutely love it. You give me nearly all your life savings and I'll give you a small income until you die", you might be a little upset and set the dog on him. It is exactly the same situation; there is no difference.
Something more imaginative is required from the Government. I am surprised that the noble Baroness did not go some way towards meeting that need. For example, the PEP scheme was excellent. It has been replaced by the slightly less excellent and more complex ISA. But when one puts money into a PEP scheme it is out of taxed income. The Treasury wants its slice and gets it because all contributions to PEPs or ISAs are from taxed income. The Treasury has had its tax. But one then builds up a tax-free fund. It is free of capital gains tax and of income tax. A retirement fund into which one can pay all one's life—it is up to the Government to state a minimum time before qualifying—would at least allow people to save and to keep that.
The noble Baroness is right to say that the issue is vital because it is about people's incomes; but it is also their capital. Under the present arrangement, three-quarters of it is given away to the pension company. It is that to which I object and I am sorry that the noble Baroness did not go further in her comments.
The Government may well be concerned that people who are receiving tax-free gains will spend it on riotous living, slow horses or fast women. But that would not
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be the case because people are more financially aware. We are continually lectured about making provision for our old age. Every newspaper carries a financial section; there are financial programmes on radio and television; there is even a 24-hour financial service on television; and the Internet is full of financial advice. People are more financially aware than they ever have been and the Government's concern that "pensioner prodigals" will spend all their money and then throw themselves on the mercy of the state is without foundation.
It would make more sense if people, having saved all their lives, were allowed to keep their pension pot and dispose of it as they wish; whether on buying high interest coupons, low interest stocks, a property to let or whatever. They would be spending their own money; money which they had saved all their working lives.
That is the important point I wish to make. The Government will get their money early when people contribute to the scheme and those who have contributed to the scheme will have their own capital. The only losers will be the pension companies. My Lords, how very sad!
8.12 p.m.
Lord Brooke of Alverthorpe: My Lords, I am grateful to my noble friend Lady Dean for tabling this Unstarred Question. I was present for the debates on the stakeholder pension funds on 24th June and 11th October and I voted against the amendment proposed by the Opposition on that latter date. Those debates were strictly within the confines of stakeholder pensions, but we are having a different debate today.
I regret that I must advise the noble Lord, Lord Willoughby de Broke, that I am not here to speak strongly for the total abolition of annuities I intend to speak on similar lines to my noble friend. It is an important topic and it is useful to have a general debate rather than the confrontational exchange which took place on 24th June and 11th October. There will be a commonality of view in some areas and I hope that from the Minister we shall gain an understanding of how we might move forward. Having read his firm response on 11th October—he nods—I hope that he will not be so firm tonight.
We must take note of what is happening around us because pension provision affects many people. The 1995 figures indicate that under existing pension arrangements at least 5 million individuals will have to purchase annuities. Moreover, with the shift from defined benefit occupational pension schemes to money purchase schemes—that is happening to many employees—the number is likely to grow.
The Government should take note of the fact that the simmering discontent with the present means of providing retirement income through annuities will grow. I hope that the Government will be conscious of that. Indeed, it continues to be one of the topics which figures regularly in the money pages of the financial press—and, in my view, with increasing justification. I speak not on behalf of the rich, but on behalf of

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many people who continue to have to work long and hard to try to build up reasonable pensions in order to have a reasonable standard of life in retirement.
Therefore, I hope that the Government will listen carefully to the case not for total abolition but for change. I also hope that they will avoid the bureaucratic knee-jerk reaction which can come from government departments, particularly the Inland Revenue with which I have had a long association. They do not always react in such a fashion, but I imagine that as regards this topic they may believe that there is special pleading for a minority, that few people are affected by it, and that those who are probably well heeled and seeking to enhance their opportunities for further tax breaks. Like my noble friend Lady Dean, I contend that that is not the case or the purpose behind our argument.
I understand and appreciate the Government's caution about introducing changes. That was expressed by my noble friend. Even with the present declining rates, annuities give certainties, which is important. They provide a level of security for pension income that is a reassurance not only for the recipient, but also for governments, especially after they have provided tax relief for the contributions made during the years.
Annuities also help to limit dependency on the state, for which all governments aim in the longer term. I strongly argue that those factors need to be taken into account and be part of any annuity changes. I want to subscribe to such principles and I believe that the Government will continue to do so. We need to write them into future changes.
The Government also need to take account of the changes which have taken place in society during the relatively short time since the 1986 Social Security Act and the introduction of personal pension plans in 1988; for example, longevity has significantly increased. People are receiving better healthcare and better food. They take more exercise and are staying fitter. Fewer than 10 years ago, a 65 year-old man could expect to live until he was 79 and a woman until she was 83. Today, a man of 65 will probably live until he is 85, if not 87, and a woman until she is 87. A big change has taken place, therefore.
Furthermore, people are working differently from what was the fashion in the 1960s and 1970s; for example, there are now 4 million self-employed people as against only 1.5 million in the early 1980s. The Inland Revenue forecasts at least 5 million in self-employment soon. As IT spreads, we shall see more people working in different ways; working from home, for themselves or on a contractual basis.
Importantly, many people need to work longer, not just into their 70s but into their 80s, too. The demography of the future labour force will require more people to work even longer. The Government will need that. People will not only be fit enough to work, but I suspect that many people will want to do so. Furthermore, a substantial number of people will have divorced perhaps twice and married a third time and will have seen their pension provisions scattered in
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a number of different directions. They will need to continue working to try to build up a reasonable pension because they will perhaps not have access to those to which they contributed earlier. There is a case for looking at how we can give support to those people. They will want to continue making contributions towards building good pensions which will provide a reasonable standard of living in retirement and for care in old age—for which, again, the Government are changing the provisions.
In the immediate future I can see no reason why the current legislative requirement for money purchase pension holders to purchase an annuity no later than age 75 should not be reviewed and be increased to, say, age 80. The age of 75 has been the upper limit for many years. I do not know from where it was plucked in the first instance, but it was certainly stipulated in the 1986 legislation and when pension plans were introduced in 1988. On an index link to the changes in longevity, looking at a period from the last decade to this one, there is at least a case that it should be reviewed and revised upwards. I am not certain how far it should go, but we should have a serious look at extending it up to the age of 80.
The principal advantage of such a change is that not only will people be able to make contributions for a longer period but they will also be able to purchase their annuity at the time which would be to their best advantage. Furthermore, if the existing income draw-down provisions were applicable between the ages of 75 and 80, that would be beneficial also—not to many people, but it would provide some benefit. I should like to hear whether my noble friend the Minister is prepared to give, in the light of the arguments which we have been advancing, some more favourable consideration to possible changes. That might possibly even include indexation of the age limit as a factor to be examined. Again I see him scowling, as if to say, "No, I am not prepared to do so", but those are issues that we should look at carefully and not dismiss lightly. If we do so, we are ignoring changes which are taking place around us.
It may be feared that those are tax-aided arrangements which could accrue lump sums or savings rather than pension schemes. I am conscious of that and I do not want to see that happen either. There are many anomalies and loopholes in the inheritance tax legislation which would not cover some problems that could arise on that front. I suggest that those can be plugged. Indeed, I urge the Government to start turning their attention to inheritance tax reform and reorganisation. However, those factors should not be a reason for not looking for more flexible applications of annuities to provide opportunities for better returns, yet with safeguards to meet the Government's aims that I mentioned earlier.
We need to stimulate a more imaginative and innovative response from the life insurance industry than we have had so far in its offerings to its customers. I suggest that if any life insurance people listen to this debate or read it in Hansard afterwards, they should start to pay attention—as are some of the banks—to people's other greatest asset next to pension plans;

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I refer to their homes, their houses. Is it not time to start thinking about making a link between the two so that pensioners might be able to look forward to more flexible annuities with more flexible overall packages which provide for an even better income stream in retirement and would, in particular, enable them also to have good care in old age?
8.24 p.m.
Lord Taverne: My Lords, I begin by declaring not one interest, but two. First, I am chairman of an insurance company, Axa Equity and Law Life. Secondly, I have a personal interest, because at the age of 75 I shall be forced to have a fixed annuity which I should much rather avoid. From the point of view of personal interest, I greatly hope that the suggestion made by the noble Baroness is followed by the Government.
However, I shall consider the issue not from a personal point of view, nor indeed, from a corporate point of view. I begin with what appears to be the suggestion in the Unstarred Question—although I gather that the noble Baroness gave a different interpretation to it—that we should, in effect, abolish the present mandatory requirements.
On the face of it, the Motion seems very reasonable. Of course, what the noble Baroness said was very reasonable, as one should expect. A fixed date can undoubtedly be difficult. Interest rates may rise rapidly and unpredictably. I defy people to predict the future of interest rates. Economists are extremely good at telling one tomorrow why what they predicted yesterday did not come true today. Interest rates can rise and fall unpredictably. A great difference can be shown by a matter of timing, even within a period of six months. There is an element of a lottery, as the noble Baroness pointed out, which can certainly seem extremely unfair.
However, I have considerable difficulty with the Motion and I may even have some difficulty with the interpretation given to it by the noble Baroness. I turn first to the Motion. The fundamental question is why tax relief is given to pensions. The simple reason for that is because the state has a considerable interest in people providing pensions for themselves. Therefore, it encourages tax relief and savings. The tax relief for pensions is extremely valuable. It has the classic EET form: there is exemption for the contributions, exemption for the income as capital, and tax for what comes out.
The tax-free lump sum is an anomaly in that, and has been so for a long time. At some stage, I expect that the Chancellor will have a go at that tax-free lump sum. It is kept because many people have made their plans on the basis of receiving such a sum and it therefore seemed harsh to deprive them of that.
There are two advantages if there is a postponement of the age at which the annuity—which is the equivalent of a pension—has to be fixed. First, the capital continues to be available with tax-free income, from which a certain amount has to be drawn which is
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of course taxable. Secondly, by postponing the annuity one receives a higher rate of annuity. However, if the mandatory requirement is abolished and people need not take out the equivalent of a pension at all and may then pass on the estate through inheritance, often avoiding inheritance tax, it seems to me that one is rather over-egging the pudding and providing a considerable advantage by way of tax relief.
Tax relief is a wonderful thing to have but one man's tax relief is another man's tax burden, and another woman's tax burden. One cannot be generous and give tax relief all round because other people still have to pay corresponding taxes. Therefore one has to examine whether, in some ways, tax relief can be over generous. One must compare pensions with other forms of savings. Because of the large contributions which can attract the exemptions, tax relief of that kind—if there is no liability at the end and further advantages are obtainable—is far greater than that which can be obtained by other forms of saving such as ISAs.
Therefore I believe that the Motion, if interpreted purely, would be stretched too far. Is 75 even such an intolerable age? The noble Lord, Lord Willoughby, says that the whole system of annuities is unfair because one may die the day after one takes one's annuity. He said that he might die on his cruise playing deck quoits. I should have thought it far more likely that, following the example of many in this House, he will live to a ripe old age and that it is the insurance company that will lose. For one person who dies and therefore gives a great benefit to the insurance company, another person lives to a very ripe old age and the insurance company loses, which balances out. If people live longer, then rates will be lower If people die earlier, then the annuities can be more generous and it will balance out.
Lord Willoughby de Broke: My Lords, the money that one has saved goes into the pension fund not just when one dies, but when one takes the annuity.
Lord Taverne: My Lords, of course, the money goes to the pension fund—in order to pay the annuity. That is the nature of the bargain.
It seems that it was right to extend the age beyond 65 because life expectancy is so much longer. People now have 10 more years to make a choice. During a period of 10 years it is likely that interest rates will go up and down. People may miss their chance when interest rates are high or they may be unlucky or badly advised. It is a lottery. I do not see how that can be avoided if a pension becomes fixed. The nature of defined contribution pensions is that the employee or the individual takes the risk. The great advantage of defined benefit pensions is that that risk is then taken by the employer.
Should the age limit be extended to 80? I have no dogmatic views on that. It seems to me that if one gets close to the age of life expectancy—as the noble Lord, Lord Brooke, pointed out, for those who have reached

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the age of 65 that is still well above 80—the advantage of the annuity tax-relief system begins to edge too close to what is perhaps an exceptional advantage.
On the other hand, I believe that the question should be looked at again. Many of the suggestions made by the noble Baroness should be examined. As we live longer, I believe that from time to time the age limit will have to be raised. The other day a Dutch population expert predicted that babies born in the year 2010 will live to be 115. I hope that people will work longer. People are likely to be fit for much longer.
In my old age I have taken up running. The other day I read in a magazine about a highly competitive veteran athletic club where the over-60s held world championships and the 100 metres was won in a time faster than that of the Olympics of 1892. It is incredible how the physical abilities of people have changed.
On balance, looking at the tax advantage of the pension system, one should compare it with other forms of savings and the tax benefits that they give. On the whole, I am inclined to conclude that at the moment 75 is a reasonable age, but I am open-minded on the matter. I do not think that anyone should be dogmatic about it. As time goes on, I believe that the age limit will have to be raised.
8.32 p.m.
Lord Astor of Hever: My Lords, the House is grateful to the noble Baroness, Lady Dean, for introducing this important debate. As one would expect from someone who was on the Occupational Pensions Board and who lists pensions as among her special interests, the noble Baroness speaks with great authority and clarity on the subject. I look forward to hearing the response from the Minister. I know that he has a great deal of personal experience in this area. The debate has been characterised by contributions from noble Lords who are also experts. As a pensioner, my noble friend Lord Willoughby de Broke spoke with great authority.
As the noble Baroness used the word "when" in her question and not "if", I hope that there is cause for optimism, although I understand that she seeks only to raise the age from 75 to 80. At Report stage of the Welfare Reform and Pensions Bill, the Minister told the House that the Government were monitoring the annuity position and that the Inland Revenue was conducting a special exercise to assess how the current arrangements on income drawdown and annuity purchase were working in practice. I also remember that the Minister assured the House at that time that Gordon Brown was able to walk on water. If the Chancellor can do that, surely he can resolve the problems associated with forcing personal pension fund holders to purchase an annuity at age 75!
On 30th June in a debate on pensions in the other place, the Minister of State, Stephen Timms, said that the Inland Revenue's review would be published in the autumn. Today being 1st December, by my reckoning autumn has been and gone and we are well into winter. Therefore, can the Minister tell the House when we may have the results of that important review? I hope that the answer will not be "in due course".
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Recently annuities have been the subject of much focus. As I am sure the Minister will be aware, Members of Parliament on all sides are finding that many constituents approaching the age of 75 are unhappy about the requirement to purchase an annuity. Indeed, I am advised that surveys show that about 98 per cent of people approaching the age of 75 are unhappy about it. I agree with the noble Baroness, Lady Dean, that it is not just the rich who are affected but also people on low incomes. This is not just special pleading for minorities, as the noble Lord, Lord Brooke, said.
The steady fall in long-term interest rates is seriously reducing the value of pensioners' incomes in retirement derived from an annuity. According to the Financial Times, in the autumn of 1997 annuity rates were at their lowest level for 40 years. In the past 10 years annuity rates have fallen from around 16 per cent to 8 per cent, halving income that a newly retired person with the same lump sum would receive.
I assure the noble Lord, Lord Brooke, that I do not want to be confrontational, but on these Benches it is our clear view that the requirement to buy an annuity at the age of 75 should be abolished. Indeed, this campaign has been driven for some time by the Conservatives, particularly by my honourable friend the Member for Arundel and South Downs, Howard Flight.
We want individuals to exercise a greater degree of choice for themselves. We want greater flexibility to allow those who have saved into a fund more control over their hard-earned savings to enable them to take advantage of a broader range of investment solutions. From a public policy standpoint, the issue of annuities is important, not least because of the Government's desire to promote stakeholder pensions. That has already been touched on.
If the annuity rules relating to 75 year-olds were to stay as they currently are, I believe that professional best advice would suggest that many of the target market would be better served by putting their money into an ISA rather than into a stakeholder pension. Whether or not it was in fact the best professional advice, human nature would probably produce that result.
When viewed by those with perhaps less to save, the choice would be between a stakeholder pension and an ISA. With an ISA they could put money in when they chose to but withdraw it when they chose to. If they have the discipline to continue saving until their retirement, they could use the fund as they saw fit. With a stakeholder pension the choice will be to put money into a stakeholder pension as flexibly as with an ISA, to have that contribution grossed up for tax, but to be forced to leave the money there until they retire and then be forced to purchase an annuity with everything they have saved. Put in those stark terms, as many pensions experts do, it is likely that many will choose the ISA route rather than the stakeholder route.

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In the light of that, does the Minister agree that compulsory annuities for all the moneys saved in a stakeholder pension scheme could damage the attraction of the scheme? If so, what action do the Government intend to take to redress the situation?
I draw the Minister's attention also to the range of more flexible arrangements such as equity-linked, variable drawdown and term annuities that are currently found in the United States, Australia, South Africa and Ireland. Though the noble Baroness may disagree, the Irish pension system is particularly interesting. Pensioners there buy a basic annuity and are then free to do as they like with the rest of their pension pot. Will the Minister consider looking at such arrangements to see whether they would have any merit in this country?
The problem facing those coming up to 75 is now serious. Government policy must respond. The issue will not go away, and Ministers in the other place accept that. I hope that the Minister will bring the House, and the many people approaching retirement age, some good news tonight.
8.40 p.m.
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Taverne, said that there were considerable difficulties for economists in making the kind of forecasts necessary to understand these issues well. It is not just economists. I remind him that the solicitor of Jeanne Calment of Arles made a deal with her when she reached her 90th birthday. The deal was related to her flat in Arles—in French it is called viager—that while she lived, he would pay her an income and when she died he would inherit the flat. Madame Calment lived from the age of 90 to the age of 122. When she died the solicitor was already dead. I hope that noble Lords will not get themselves in that sort of position.
I am grateful to my noble friend Lady Dean for introducing this debate. As she said, we debated the issue of annuities for stakeholder pensions in this House on 24th June and 11th October, and my noble friend Lord Brooke is right in saying that I gave a firm reply to the debate at that time, though he is right also in saying that what I was replying to was a different proposition from the Opposition Front Bench to that which my noble friends have been putting forward tonight. I am still grateful for the opportunity of saying it again, though whether I give any more reassurance to the Opposition than I did at that time is extremely doubtful.
Let me explain the present situation. Currently, people in personal pension schemes—that is, defined contribution schemes as opposed to defined benefit, occupational or final salary schemes—must use their pension fund to purchase an annuity. They do not need to do that at the point of retirement; instead they can choose to draw an income from the pension fund by a process commonly known as the "income drawdown". That has been in place since 1995. But they must purchase an annuity by the age of 75 at the latest.
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Income drawdown is a useful facility for providing people with a degree of flexibility over the timing of their annuity purchase, but it is not a panacea for all the perceived ills of annuities. I shall come on to the reasons why in a moment, but I should like to say a little more about annuities and why there is a requirement to purchase them.
The purpose of a pension is to provide a person with a secure, reliable, life-long income when he or she stops earning. As the noble Lord, Lord Taverne, rightly said, that is why we give tax relief on the contributions to a pension fund. Of course nobody knows how long retirement will be, so it is difficult to plan for the income to last and at the same time to maximise the level of that income. That is why we "annuitise" it; that is why we set up annuities which, in simple terms, insure the length of a person's life.
Annuity rates are decided by life expectancy, combined with yields from secure long-term investments such as gilts. I can say to my noble friend Lady Dean that they are not normally based on individual life expectancy; they are based on the life expectancy of all annuitants and do not relate to an individual's own life expectation. There are exceptions. There are different annuity rates for smokers. My noble friend Lady Farrington would obtain a better annuity than I would, though my dissolute life would probably overcome that if we were going to personalise it. Nevertheless, the essence of pooling arrangements underlies the basis on which annuities are given. Of course individuals who die young benefit the pool. Those who live longer draw from the pool as the noble Lord, Lord Taverne, said. It is not a matter of the money going into an insurance company. My noble friend Lady Dean talked of the whole fund reverting to the life company as a "windfall profit". That is simply not the case. The calculation and the market for annuities is competitive. It is based on the life expectancy for all people and there must be a balance between those who gain and those who lose.
Baroness Dean of Thornton-le-Fylde: My Lords, I thank my noble friend for giving way. Clearly he misunderstood my point. I did not say that the whole fund would revert to the life company as a windfall profit. I was referring to the amount above the maximum return on a contractual annuity whereby, if the earnings were above 3 per cent, it was that element that was a "windfall profit" to the company; that then went into the company's funds if the annuitant died.
Lord McIntosh of Haringey: My Lords, I shall come on to this point. That is why there are a variety of possible annuities available. It is a competitive market and if what is being offered is not competitive, then it is up to the person who has the fund from the personal pension to shop around to find the best. The average life expectancy affects the rates that life companies are able to offer for annuities and, as my noble friend Lord Brooke confirmed, people are liking longer. That is feeding through into lower annuities with the same pool of funds having to be stretched out to last longer.

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Inflation is another factor that affects annuities. As a result of this Government's prudent handling of the economy, we now have inflation under firm control. During the time of the previous government, inflation averaged 6.6 per cent; under this Government it has been steadily reducing and now stands at 2.2 per cent. Interest rates mirror inflation. That means that they too have dropped and that has contributed to annuity rates coming down.
But there are two sides to the coin. It is not accidental that with low interest rates the capital value of equities has increased. Pension funds invest heavily in equities so people have larger funds with which to buy their annuity. With low inflation the real purchasing power of the annuity will last well into the future.
As I indicated to my noble friend Lady Dean, we should not forget that people have a choice, not only in the timing of their annuity purchase, but also in being able to shop around for the best annuity deal on offer. The noble Lord, Lord Astor, asked for more flexibility. Holders of personal pensions have the facility to exercise an open-market option when they buy an annuity. They may not only choose the best rate, but may also decide which type of annuity best suits their needs. Many people choose a flat-rate annuity where the level stays fixed for the rest of their life, but there are also index-linked annuities which guarantee to keep pace with inflation, and the newer breed of "with profits" annuities where pensioners can share in the returns from the investments of the annuity provider. The last category has been well developed by the insurance industry and answers the claim that innovation is not taking place.
Of course, the insurance industry and the Government are keen to find further ways of developing flexibility, from the Government's point of view, within the principles that govern pension funds. We will look at any country to see whether there are better ideas. The noble Lord, Lord Astor, referred to the Irish Republic. But that is a restrictive scheme. It has a substantial minimum pot before it comes into force and is severely restricted in the number of people who are allowed to make use of it.
Some people would say that annuities are poor value because of the lack of a competitive market, but we do not have any evidence in that respect. One of the virtues of annuities is that they are relatively simple compared to other financial products. This allows providers to reduce their overheads so that the costs and commissions paid on annuities are much lower than those for income drawdown, for example, which requires intensive fund management.
High costs is one of the reasons why income drawdown is unlikely to be suitable for most people. Costs, combined with high investment risks, mean that providers will generally recommend drawdown only for people with large pension funds. A number of noble Lords, including both my noble friends and the noble Lord, Lord Astor, said that they were arguing not only on behalf of the rich. I accept that that is their intention, but the fact is that some providers specify a
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minimum level of around £100,000, while others say that it needs to be as high as a quarter of a million pounds. Few people have funds of that size. The contention that drawdown provides only for a minority is backed by a recent industry report indicating that there were only around 30,000 people in income drawdown arrangements. Therefore, that means that 30,000 people will be as upset at the age of 75, as noble Lords opposite seem to think will be the case.
The reason is very simple: the typical value annuity is bought with a pension fund of less than £30,000. A fund of that size could not sustain the risks associated with drawdown. The investment return on the fund must cover not only the income taken out, but also the high administration costs, inflation, and the fact that life expectancy does not remain constant but actually increases with age. To achieve the return needed, a substantial proportion of the fund must be placed in volatile investments. So there is a significant possibility that the value of the fund may fall rather than rise. This risk can be managed by a large fund using a comprehensive spread of investments, but a smaller fund would be much more vulnerable. That is not the way to secure a life-long income for retirement.
The proposal made by the noble Lord, Lord Higgins, in his amendment to the Welfare Reform and Pensions Bill, and which is reflected in the wording of the Question—although not in the speech—of my noble friend Lady Dean, is not about providing a better pension for the majority of people in this country. But that would not be a reason for opposing an easement for a minority if it could be shown to be beneficial and justified. So we must return to the purpose of pensions and the justification for spending the equivalent of £13 billion of public money a year in subsidising private pensions through tax relief.
The purpose of a pension is to provide a secure income throughout retirement. People will not then be likely to have to fall back on state benefits. If the pension were not secure—through no fault of the pensioner, necessarily, but perhaps, because of poor investment decisions—he or she might lose their pension income. The state would then end up paying twice over. Many of the people who have been lobbying Ministers to remove the 75-years age limit do not even need to draw their pension income; they already have security in their retirement.
Perhaps I may return to the issue of the need to charge tax, which would be necessary if we were to make substantial changes to the annuity requirement. There is a misconception that the annuity requirement is about the Inland Revenue taking back the tax reliefs given. It is not. It would be quite straightforward to recoup tax in other ways. As the noble Lord, Lord Taverne, pointed out, the essential point here is that pensions are not vehicles for passing wealth between generations. If they were to become so, as they might if the age 75 requirement were removed, we would have to reconsider the system of pension tax reliefs. We would also have to consider the consequences for other types of private pensions. In particular, we would have to consider the threat to

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defined benefit pension schemes—occupational pension schemes—which might lose out if people were to leave them. It might make some of them non-viable and we would have a particular problem with unfunded public pensions, which could involve a considerable risk of expenditure for the Treasury.
I turn now to the point my noble friend Lady Dean made about the artificiality of the age 75 requirement and her proposal that it should be increased to the age of 80. The problem here is that the longer an income withdrawal arrangement continues, the greater the risk of depletion of the pension fund, leaving the pensioner reliant on state support. I am not saying that there will never have to be changes; indeed, life expectancy changes make that an inevitable consequence at some time. But change of the kind proposed by my noble friend would run the risk that we would depart from the essential purpose of pension arrangements; namely, to provide a secure income throughout retirement. As I believe the noble Lord, Lord Taverne, acknowledged, the current age 75 requirement strikes a reasonable balance between minimising the risk of the fund depleting too quickly and allowing a good measure of flexibility to the individual who can choose when to buy an annuity over a period of up to 25 years.
Perhaps I may conclude on a positive note. The Government are committed to improving pension provision in this country for all sections of the community. We have already made good progress with the proposals put forward in our Green Paper, which was published last December. Those proposals were taken forward in the Welfare Reform and Pensions Act and we are working in partnership with
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the pensions industry further to develop and implement these ideas. We have received a great deal of support, for which we are grateful.
The pensions industry has also helped us to look at income drawdown. As has been said, the Inland Revenue has reviewed with industry representatives the current rules for personal pension income drawdown to see whether the rules are working well, or might be improved. That is important because, if we can streamline the process, it may assist the industry to provide a better product. However, as I said, that does not mean that changes in life expectancy may not cause changes in the age requirement in due course. Although the review is complete and the recommendations are currently being considered by Treasury Ministers, I have to say that the invitation which was issued by Stephen Timms (then the Minister for Social Security) on 11th March of this year—for anyone else outside to come forward with positive suggestions—has not achieved any positive results. No suggestions have been made for improvements other than those which have been drawn out in the course of the consultation process.
Therefore, I must return to what Ministers in the House of Commons have said. The Government recognise people's concerns. We are encouraging the financial sector to come forward with possible alternatives, but they must be practical and must address the central purpose of a pension. The Government believe that it is important for people to have a secure, reliable income for the whole of their retirement. It is not clear at present that anything other than an annuity can do this.
House adjourned at two minutes before nine o'clock.