§ Baroness Farrington of Ribbleton rose to move, That the draft order laid before the House on 20th June be approved [2nd Report from the Joint Committee].
§ The noble Baroness said: My Lords, in the absence of my noble friend Lord Whitty, I beg to move that the Home-Grown Cereals Authority Levy (Variation) Scheme (Approval) Order 2001 laid before the House on 20th June 2001 be approved. The purpose of this order is to make one small but significant change to the 1987 Home-Grown Cereals Authority Levy Scheme which sets the conditions under which the authority may raise levies from cereal growers, dealers and processors in order to fund its activities.
§ I should perhaps stress at the outset that this change is made at the request of the HGCA and reflects discussions which it has had with the various stakeholders concerned. Government have also carried out a consultation exercise on the change as required by the Act.1802
§ The Home-Grown Cereals Authority is a public body set up under the Cereals Marketing Act 1965. The order before us today amends the levy scheme; that is, the arrangements under which the authority collects the levy on cereals. Except where grain is sold directly into intervention, the first purchaser of the cereals collects the levy from cereal growers on behalf of the authority. The first purchaser, or dealer, pays the grower levy over to the authority together with the levy payable by the dealer on the transaction. This method of levy collection is both cheaper and more efficient than the alternative of requiring direct payments to the authority from 60,000 or so UK cereals growers. It means that more of the levy collected can be used to fund the authority's activities and less on administration.
§ Dealers are permitted to make a deduction from the gross amount of levy collected before passing the balance to the authority. This deduction—a kind of commission—provides dealers with some measure of recompense for the costs incurred in collecting the grower levy on behalf of the authority. The only change being made by the order before us today is to increase to 5 per cent from 3.7 per cent the deduction which dealers may make from the gross levy collected.
§ The increase is a result of an agreement between the different sectors of the industry that will, we believe, benefit all levy payers. It will benefit the dealers, obviously, because they will receive an enhanced contribution towards their levy collection costs. Other sectors of the industry will benefit as the agreement paves the way for them to have access to other funds. The order will come into force on 1st August 2001 in time for the first tranche of levy collection in the new cereals marketing year that started on 1st July 2001.
§ I have already explained that the legislation requires consultation. That consultation has been carried out and the results have been placed in the Library, along with a regulatory impact assessment in the usual way. I commend the order to the House.
§ Moved, That the draft order laid before the House on 20th June be approved [2nd Report from the Joint Committee].—(Baroness Farrington of Ribbleton.)
§ Baroness O'Cathain
My Lords, the Minister said there was consultation among dealers, farmers and so on of home-grown cereals. Was there unanimous agreement on this matter? I believe that, at a time when farmers are under an enormous amount of pressure, to increase the levy is yet another nail in their financial coffin. Although the main reason for the authority is to improve the production and marketing of UK cereals, one wonders whether it is essential that the level should be increased at this stage.
§ Baroness Farrington of Ribbleton
My Lords, the HGCA requested the change to the dealer percentage following approval by the board and a review by UKASTA, the dealers' representative body. The change has the immediate effect of saving money which would otherwise have been lost under the old 1803 system of attribution accounts. There was wide consultation and there was overwhelming support from all those consulted.
§ 10.45 p.m.
§ Lord Glentoran
My Lords, I have heard the answer to my noble friend's question and read the Hansard report from another place. Furthermore, the noble Lord, Lord Whitty, spoke to me in the corridor. The noble Lord assured me that there was nothing to worry about with the order. Of course I did not believe a word. I immediately went back to check Hansard. However, I am delighted to be able to tell the House that having read the contribution of my honourable friend James Paice, we, on these Benches, are totally happy and. I am delighted that the noble Lord put me on the right lines.
§ On Question, Motion agreed to.