HL Deb 23 April 2001 vol 625 cc6-10

2.50 p.m.

Baroness Miller of Chilthorne Domer

asked Her Majesty's Government:

Whether they believe that the impact of foot and mouth disease upon the rural economy can be alleviated.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty)

My Lords, the most important way to help rural businesses adversely affected by foot and mouth is to bring back their customers and restore confidence. The Government are stressing that Britain is open for business and encouraging the reopening of attractions and footpaths in line with MAFF guidance and veterinary advice on risk assessments. In addition, tourist boards are strongly promoting what attractions are open.

The Government have also introduced a range of measures to alleviate the impact in rural areas. That initiative is being rigorously pursued by the agencies responsible. The Rural Task Force, upon which a Statement will be delivered later today, is monitoring the results and considering measures to help kick-start the rural economy once the outbreak of foot and mouth has been eradicated.

Baroness Miller of Chilthorne Domer

My Lords, I thank the Minister for his reply. Does he accept, however, that the rural economy was already in crisis before the foot and mouth outbreak? If the noble Lord visited some rural parts of the South West over Easter—I visited Cornwall and Devon—I am sure that he would agree that the rural economy in the region is in melt-down, not only because of the lack of tourists but also because local people in the area are forced into more inactivity than is usually the case. Does the noble Lord also agree that small businesses, which make up 90 per cent of rural businesses, are suffering most? Do the Government really believe that they are doing enough in the face of this crisis which comes on top of an already extremely severe period for the rural economy?

Lord Whitty

My Lords, I accept that there were a significant number of problems in the agricultural sector prior to the outbreak of foot and mouth and that the latter has obviously very drastically exacerbated such problems. However, the tourist industry was previously in relatively good shape in most of our rural areas. Like the noble Baroness, I spent some of the Easter break in Cornwall, Devon and Dorset. I noticed that there were a number of tourists in those areas. Nevertheless, the noble Baroness is correct to say that there are serious problems for the rural economy as a whole, especially for small businesses. That is why the package of measures of short-term help we have provided relates primarily to help for small businesses of all sorts within rural areas. Much effort is already being directed towards helping such businesses.

The Countess of Mar

My Lords, does the Minister appreciate that some businesses will never get back their customers? I have in mind, for example, a local milking machine fitter who was busy installing a very high-tech system for a local farmer. However, as soon as the farm became part of an infected area, the fitter came off the job. The farmer then had his cows killed. So the farmer now has a half-fitted milking machine system; the supplier will never get his money; and, indeed, the original supplier will never retrieve his money. Hundreds and thousands of little businesses all over the country are collapsing because of this crisis. It is not just the tourism industry that is suffering. Can the noble Lord please make clear what help is being given to people like the milking machine fitter I mentioned?

Lord Whitty

My Lords, there will inevitably be some very serious problems of that nature. The knock-on effect of the crisis in the agricultural sector will no doubt be severe in many sectors. We have provided help for businesses, which will eventually recover but which are faced with short-term cash flow or demand problems, in the form of hardship rate relief, deferral of rate payments, extended time to pay, and improvements in the small businesses' service and the small business loans guarantee scheme. Therefore, businesses that have a future will find some relief from such pressures. But, inevitably, there will be problems of the kind outlined by the noble Countess. It is very difficult to see how we can deal with all such problems.

Baroness Mallalieu

My Lords, although the measures just outlined by my noble friend are all valuable in their own ways, does he accept that none of them will save some of the small businesses that are essential to the survival of rural communities in areas like the South West where the noble Baroness and I spent the Easter break; for example, many small shops? Will the Government contemplate giving some direct aid to essential local businesses which must survive but will not survive until people return to the countryside? That, realistically, will not happen until the rotting carcasses have gone and the burning has ended. Will my noble friend consider help to keep those essential businesses going for the next three months?

Lord Whitty

My Lords, the measures that I mentioned are directed primarily at helping just such businesses. In addition, as noble Lords will know, the Government have announced very substantial rate relief of several different sorts for small businesses in rural areas. Undoubtedly, there is a serious problem here. However, it is not the Government's position that we are able—or, indeed, that we would regard it as sensible—to provide loss of income cover for all such businesses. It is not the Government's business to be the insurer of last resort. Therefore, there are bound to be problems of this nature following such a very severe agricultural crisis. I recognise that that is no great comfort to those businesses to which my noble friend referred, but I believe that many of the measures currently in place will provide at least some comfort for a range of such businesses, and that they will also provide the basis for a rural revival once the disease has been eradicated. We must make it clear to everyone that the prime objective of the Government is the rapid eradication of this disease, which will bring relief to rural areas.

Lord Howell of Guildford

My Lords, does the Minister accept that one further burden for those in the rural economy is that many homes, shops, streets and villages are still under water? Those people are suffering most severely from the horrors of finding their properties flooded, so much so that the noble Lord may have noted that an offer of food parcels and help for the suffering British rural towns and villages was received just the other day from Mozambique. Can the noble Lord tell the House what is the Government's strategy—not the tactical details—for ensuring that these appalling floods that have, on top of everything else, caused a great deal of suffering will really be tackled with a new vigour so that they do not continue to recur?

Lord Whitty

My Lords, I am not sure that the Government are in total control of the climatic conditions that cause flooding. There have been inappropriate developments in some areas; indeed, a lack of precautions in some areas both on agricultural and on developed land have aggravated flooding problems. The Government have indicated that they intend to direct major new resources and efforts to restricting the effect of flooding where such measures can be effectively implemented. However, there will inevitably be areas that will continue to be subject to flooding when severe flooding occurs.

Earl Russell

My Lords, further to the Minister's reply to his noble friend Lady Mallalieu, can he confirm that those businesses to which the Government are prepared to extend help include rural post offices and sub-post offices? Will the noble Lord also confirm that to make such help effective it is necessary to give thought to the interleaving of the requirements of the service with the requirements of European competition law? To that intent, will the noble Lord direct members of the Government to pay attention to the extremely helpful opinion offered to Commission 6 of the Committee of the Regions on 30th June 2000, which distinguishes between help for a service and help to any particular competitive business? Does the noble Lord consider that this is a line upon which sensible progress is possible?

Lord Whitty

My Lords, I regret to say that I have not seen the opinion to which the noble Earl refers. I recognise that some European initiatives have been directed towards protecting services in remote and rural areas. It is possible that that opinion would be helpful in that respect. Nevertheless the Government have already made a major commitment to the rural post office network through supporting the Post Office's own priorities and through granting rate relief to post offices. We are putting pressure on the Post Office and the banks to ensure that rural post offices are in a position to provide a wide range of services to people in rural and less accessible urban areas and thereby slow down and, if possible, end the decline in rural post offices.

Baroness Byford

My Lords, is not a clear message on what is or is not open the best help for rural areas at the moment? Apparently in Leicestershire restrictions have been lifted and yet a farm at Hinckley had a confirmed outbreak as recently as 30th March and there were two earlier outbreaks. Therefore, the county council is unsure as to what it can and cannot allow to be opened. In last Friday's Leicester Mercury there were calls for restrictions to be lifted in the whole of the county. At the moment the picture is still confused. As the Minister will know, I have spoken on behalf of rural post offices on many occasions in this House. However, they are still closing at the rate of two a week and the universal banking system is not in place. Can the Minister give us better news on that matter too?

Lord Whitty

My Lords, constructive discussions are taking place with the Post Office and the banks but it will take time to put a system in place. However, the Government are committed to providing a universal ban king service.

As I understand it, restrictions have been lifted in one area of Leicestershire but not in the area to which I believe the noble Baroness referred. The Government try to make clear where restrictions have been lifted. It is for MAFF to decide whether to lift them entirely nationally. The opening of footpaths or other access points is very much a matter for local decision in line with local veterinary and MAFF advice. The opening of rights of way in different counties is decided at that level and therefore varies. I was gratified to note that over Easter in many parts of the country a significant number of rights of way were open to tourists.

Lord Hardy of Wath

My Lords, does my noble friend accept that while the agricultural economy has been seriously affected, the tourism and recreational holiday businesses, which are important in many areas, would hardly have thrived over the past eight weeks, given the nature of the English weather?

Lord Whitty

My Lords, as I said earlier, the Government regrettably have not yet achieved control over the English weather. We can mitigate its effects in certain circumstances, but we did not do very well over Easter in that regard.

Lord Tanlaw

My Lords, is the noble Lord satisfied that rural post offices and rural businesses that are trying to diversify have adequate access to broad band data transmission?

Lord Whitty

My Lords, the Government have indicated their commitment to extend broad band access to all areas, including rural areas. Concerns about how the planning arrangements are operated area by area are being addressed.

Baroness Sharples

My Lords, the noble Lord mentioned that banking facilities in post offices will be available. When will they be available?

Lord Whitty

My Lords, I missed the first part of that question.

Baroness Sharples

My Lords, when will banking facilities in post offices be available?

Lord Whitty

My Lords, banking facilities are already available in post offices; it is a matter of extending the range of those services. That matter requires detailed and complex agreements with the banks and is under discussion.