§ Lord Colwynasked Her Majesty's Government:
To give details of the additional aid proposed for the glasshouse industry and the marginal land area, and the proposed changes to the capital grant scheme.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (The Lord Belstead)We have today laid statutory instruments before Parliament modifying the capital grant schemes to reflect new orders of priority and changing circumstances and to continue the process of simplification begun by the previous Minister of Agriculture, Fisheries and Food. With the exception of the Agricultural and Horticultural Co-operation Scheme (AHCS), the changes, which are detailed in the attached schedule, will come into effect immediately and will apply under the Agriculture and Horticulture Grant Scheme (AHGS) to expenditure incurred after 30th November, and under the Agriculture and Horticulture Development Scheme (AHDS) to new applications or to variations received under that Scheme or the Farm and Horticulture Development Scheme (FHDS) after that date.
To assist the glasshouse sector, we propose to increase the rate of grant under the AHGS from 22½ per cent. to 37½ per cent. for the replacement or improvement of existing heated glasshouses, including thermal insulation, and allow businesses to invest up to about £30,000 above the present 6-year ceiling of about £100,000 where this extra investment is wholly incurred for eligible energy saving facilities. Under the AHDS the rate of grant for the replacement of existing heated glasshouses will be increased from 32½ per cent. to 50 per cent. But there will be no change in the investment ceiling for individual businesses. These changes are in line with the Government's policy of encouraging economy on the use of energy and its specific commitment to help the glasshouse industry. Their value to the industry is estimated at some £2 million per year.
We wish to provide greater incentive for hedge planting and improvement, the construction and rebuilding of stone walls and planting of shelter belts, in recognition not only of their agricultural importance but also their value in enhancing the upland landscape. Consequently, the less favoured areas rate of grant on these items will be increased by 10 percentage points to 60 per cent. At the same time, grant aid for hedge removal, where this is carried out as an essential part of another improvement, will be discontinued. Grant aid towards hedge removal has, since 1976, been restricted to this one item and continuation is no longer justified. Its withdrawal will eliminate from the capital grant schemes all forms of assistance towards the costs of removing hedges.
As part of our policy of concentrating incentives on the most important items of capital investment, only the main framework of buildings will in future qualify for AHGS grant, and not the internal fixtures and fittings. Furthermore, in order to bring the AHGS into line with the ANDS, pig and dairy units above a certain size will no longer qualify for grant under the AHGS for any items which directly benefit those 791WA particular enterprises. They may however continue to qualify for grant on investment in field drainage and other land works.
Grant will no longer be available under AHGS, AHDS and FHDS for the drying and storage of grain to be sold off the farm, or for machinery, plant and equipment (except for boilers and energy saving equipment for glasshouses and facilities for market preparation of harvested horticultural produce being sold fresh). The reclamation of land and the improvement of grassland outside the less favoured areas will also cease to be eligible under the AHGS. Finally, the standard rate of grant under the AHGS will he reduced from 22½ per cent. to 20 per cent., except in the case of the time-limited orchard replanting scheme introduced earlier this year, for which grants will remain at 22½ per cent.
We will continue to make provision under the AHGS for investments by cereals co-operatives, but at reduced rates of grant. We are also making consequential reductions in grant where similarities exist with the other grant schemes. From next April we are also making available an additional £0.2 million for applications for non-capital grant.
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SCHEDULE OF CHANGES TO CAPITAL GRANT SCHEMES Standard Rate (%) Less Favoured Areas Rate (%) Horticultural Business Rate (%) A. EEC Scheme The replacement of or improvement to existing heated greenhouses (including the supply and installation of thermal insulation) Nil (Nil) Nil( Nil) 50 (32.5) The provision, replacement or improvement of permanent hedges, walls (and associated gates) 32.5 (32.5) 60 (50) 32.5 (32.5) and shelter belts 5 (5) 60 (50) 32.5 (32.5) B. National Scheme Provision etc., of: —agricultural buildings 20 (22.5) 20 (22.5) 20 (22.5) —buildings for drying and storage of grain for consumption by livestock kept on land 20 (22.5) 20 (22.5) Nil (Nil) The replacement of or other improvement to existing horticultural production buildings (including thermal insulation) Nil (Nil) Nil (Nil) 20 (22.5) The replcement of or improvement to existing heated greenhouses (including the supply and installation of thermal insulation) Nil (Nil) Nil (Nil) 37.5 (22.5) The provision etc. of buildings for horticultural use other than horticultural production buildings Nil (Nil) Nil (Nil) 20 (22.5) Electricity or gas supply 20 (22.5) 20 (22.5) 20 (22.5) Waste disposal systems 20 (22.5) 20 (22.5) 20 (22.5) Water supply and storage 20 (22.5) 50 (50) 20 (22.5) Field Drainage 30 (37.5) 60 (70) 30 (37.5) Flood prevention works 20 (22.5) 50 (50) 20 (22.5) (For Scotland only) 50 (50) 60 (70) Nil (Nil) Land Works: —roads, paths etc. 20 (22.5) 40 (50) 20 (22.5) —pens, dips, stells etc. 20 (22.5) 50 (50) Nil (Nil) —hedges, walls and associated gates 20 (22.5) 60 (50) 20 (22.5) —permanent fences and associated gates 20 (22.5) 50 (50) 20 (22.5) —shelter belts Nil (Nil) 60 (50) 20 (22.5) —grassland works (including reclamation Nil (22.5) 50 (50) Nil (22.5)* Orchard grubbing 20 (22.5) 20 (22.5) 20 (22.5) Stakes and wirework for hops 20 (22.5) 20 (22.5) Nil (Nil) Watercress beds Nil (Nil) Nil (Nil) 20 (22.5) These changes will, as my right honourable friend the Minister for Agriculture, Fisheries and Food announced on 17th November, save about £30 million per year. Nevertheless, we are satisfied that these modified capital grant schemes will continue to help the industry to modernise and adapt, as they have done now so successfully for many years. We will, however, be assessing the effect of these changes on investment in the sectors affected.
We can also announce our plans for providing additional assistance to the marginal areas, in the 1984–85 financial year, in recognition of their special difficulties. When these areas are given less favoured area status by the Community, they will become eligible for LFA rates of capital grants, with the one exception of the provision of roads, grids, bridges, et cetera, for which the new standard rate of grant will apply. In addition, the Government will introduce HLCAs in marginal areas. For planning purposes we have in mind headage payments of about half the present LFA rates, but the actual rates would fall to be determined as part of the autumn 1984 review of the HLCAs. We have always keenly recognised the case for helping the marginal areas and we are sure that the measures proposed will restore confidence there.
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Standard Rate (%) Less Favoured Areas Rate (%) Horticultural Business Rate (%) C. Co-operative Scheme Provision etc. of: —Buildings, facilities or land improvements, other than for grain storage or drying 30 (32½) N/A N/A —Buildings, facilities or land improvements for grain storage or drying 15 (22½) N/A N/A —Plant and equipment for grain storage or drying 10 (15) N/A N/A Note:
*Reclamation etc. only.
Items no longer eligible for grant are: (A) AHDS: (i) Removal of hedges. (ii) Buildings for drying and storage of grain for off-farm sale. (iii) Agricultural plant, equipment and machinery. (iv) Plant and equipment for the harvesting, storage or production of horticultural produce except glasshouse heating equipment (including boilers). (B) AHGS: Items (i), (ii) and (iv) above. (C) AHCS: (i)Potato harvesters and grain drying equipment used on farm. (ii) Horticultural production and harvesting equipment.