HC Deb 29 July 1998 vol 317 cc341-5W
Mrs. Dean

To ask the Minister of Agriculture, Fisheries and Food what are his Ministry's spending plans for the next three years following the Comprehensive Spending Review; and if he will make a statement. [54382]

Mr. Nick Brown

The results of the Comprehensive Spending Review for MAFF, and the spending plans that have resulted from them, were summarised in Chapter 18 of the White Paper on "Modern Public Services for Britain: Investing in Reform" (Cm 4011). The key figures for MAFF are as follows:

£ million
1998–99 1999–2000 2000–01 2001–02
Domestic (England) 685 744 711 751
of which:
Current budget 551 589 590 572
Capital budget 134 155 121 179
BSE (UK)1 689 495 466 459
1 Includes Intervention Board expenditure

These figures do not include payments made by the Intervention Board under the Common Agricultural Policy (CAP). I am making a separate statement today about the Intervention Board's spending plans. A major uncertainty at this stage is the impact that Agenda 2000 will have on our spending plans. Details of the additional provision needed to meet the UK's Agenda 2000 commitments will not be known until the negotiations in Brussels have been concluded.

MAFF will have a new aim: To ensure that consumers benefit from competitively priced food, produced to high standards of safety, environmental care and animal welfare and from a sustainable, efficient food chain; and to contribute to the well-being of rural and coastal communities".

MAFF will also have the following key targets for delivery by the end of the Parliament:

  • set up the Food Standards Agency and establish a new role for MAFF;
  • resolve the problem of BSE and take action against other animal diseases;
  • press for reform of the Common Agricultural Policy and reduce its cost to consumers and taxpayers;
  • work to sustain and enhance an attractive and accessible countryside;
  • encourage the restructuring of the farming and fishing industries.

I should like to explain in more detail how the CSR settlement will impact on MAFF's programmes over the next three years and assist the Ministry in pursuing its new aim and delivering the reforms set out in the White Paper.

Protecting public health

Protection of the public will continue to be a top priority. The White Paper explained that food safety would be put on a new footing through the establishment of the Foods Standards Agency (FSA) and that MAFF would have new targets for reducing the incidence of animal diseases that have implications for human health.

We have made it clear that over time the Government will recover from the food industry more of the costs of financing food safety work and protecting the public, in a way that is administratively simple and fair to small business. For the CSR period, the Government intend to recover from industry the new costs associated with the FSA. The final amount to be recovered cannot be determined until nearer the launch of the Agency, but over the CSR period it will not exceed £50 million a year.

Sustaining and enhancing the countryside

Another key priority is caring for the environment. We will continue to expand the areas under agreement under the major agri-environment schemes. Subject to the approval of the European Commission we propose from next year: to enhance the payment rates under the Organic Aid scheme on the lines of the recommendations which were published in April. I will announce the full details as soon as possible. As explained in the April announcement, I plan that those who joined the existing scheme on or after 2 April will be able to switch to the new scheme on the first anniversary of their agreement; to introduce new upland options into the Countryside Stewardship scheme and to make those new options available as part of the planned upland experiments in the Forest of Bowland and on Bodmin Moor; to keep open the pilot Arable Stewardship scheme for a second and third year in 1999 and 2000; and to fund improvements to the six Environmentally Sensitive Area (ESA) schemes which are under review this year on lines similar to the improvements made in the 16 ESAs which were reviewed in 1996 and 1997.

The Government remain wholly committed to maintaining the environment and social fabric in the hills, but have concluded that the support mechanisms should be modified to address those objectives more specifically.

The Hill Livestock Compensatory Allowances (HLCA) scheme will continue until it is replaced by new arrangements flowing from the Agenda 2000 proposals. These proposals currently envisage a move away from payments based on the number of sheep and cattle to a system of area-based payments with more clearly defined environmental objectives. We will consult extensively on our proposals to ensure that all interests are taken into account.

We will bring the Nitrate Sensitive Areas scheme to a close. Existing agreements will run their course and applications already received will be processed and authorised under the existing rules. Since the last application period under the present scheme closed on 6 July, no further applications will be considered. However, we will also consider the scope for retaining at least some of the benefits gained under the Scheme, including the possibility of future enhancements to the Countryside Stewardship Scheme.

Rural development

We will continue to encourage rural development in the various Objective 5b areas with both EU and national funds.

In addition, we shall (as the CSR White Paper indicated) be taking steps to improve co-ordination of the MAFF and DETR countryside programmes to ensure that the Government's countryside and rural policy objectives are fully met.

Flood defence and coastal protection

The level of investment in grant aid for flood and coastal defences will increase significantly, unlocking the door to more new schemes over and above those which we have already indicated that we will consider for grant aid in 1999–2000. This demonstrates our determination to provide increased protection for the developed and natural environment which is currently at risk from flooding and erosion.

Conserving fish stocks and securing a sustainable future for the fishing industry

We will continue to conserve fish stocks for future generations and encourage a reduction in excess catching capacity in the fishing fleet.

There will be additional provision for the commissioning of a new marine research vessel to replace the two aging vessels currently operated by the Centre for Environment, Fisheries and Aquaculture Science (CEFAS). This will enhance MAFF's contribution to conserving fish stocks and reducing marine pollution.

New provision will also be made towards restructuring of the fishing fleet, to complement the effort control arrangements already introduced. We will also be continuing the range of other grant assistance currently available to the fishing industry and the ports in which it is based.

Securing a more economically rational CAP

MAFF will continue to press for reform of the CAP to reduce production related subsidies, redirect support towards environmental and social objectives and cut the cost of the CAP to consumers and taxpayers. Reform along these lines, as acknowledged in the CSR White Paper, will result in a period of transition for British farmers. The Government will help with this restructuring where it sensibly can.

I have decided, however, not to introduce at this stage an early retirement scheme for farmers. While the response to our consultation showed clear support for the principle of an early retirement scheme, the limitations imposed by the current EU rules were regarded by the majority of respondents as inappropriate to the UK and a major bar to uniform and effective uptake. I consider that the Agenda 2000 rural development proposals should provide the flexibility to introduce a scheme better adapted to UK circumstances and we will take forward this work under those proposals.

There will be additional funding to modernise the administration of CAP payments to farmers. A new integrated IT system, incorporating a Geographical Information System (GIS) to control area data for CAP schemes, will enable the Ministry's Regional Service Centres to deliver payments more efficiently and cost-effectively. And they will help safeguard the taxpayer's interest.

R&D

We will be seeking a greater contribution from the industry to the funding of that part of the Ministry's research programme from which industry benefits directly. The Postgraduate Agricultural and Food Studentships Scheme will be closed to new applicants. However, we shall continue to fund a substantial and wide-ranging research programme in support of the Department's aim and objectives, ensuring that priority areas such as food safety and consumer protection are maintained.

BSE

Expenditure on BSE will continue to fall as the incidence of the disease in cattle declines. After widespread consultation with industry interests, my colleagues and I have decided that it would be inappropriate to maintain the Calf Processing Aid Scheme in the UK. Its continuation would distort calf prices in the short term and artificially constrain the production of home-reared beef in the medium term. It must be borne in mind that we will continue to make a very significant contribution to balancing the European beef market by operating the Over Thirty Months Scheme for cattle, at very considerable expense to the UK Exchequer. The Government have therefore decided that the Calf Processing Scheme will close on 30 November 1998.

The Government have also decided that 1998–99 will be the last year in which the UK participates in the EU Surplus Food Scheme. We have been disappointed in the uptake of this scheme and we know that charitable organisations distributing beef under it have found the rules overly bureaucratic.

Conclusion

MAFF's spending plans over the next three years demonstrate the Government's continuing commitment to protecting consumers, caring for the environment and creating the conditions for a competitive and sustainable industry. Focusing on the needs of the consumer will restore confidence in food. That in turn will benefit the farming industry.

Mr. Evans

To ask the Minister of Agriculture, Fisheries and Food (1) when he plans to publish the conclusions of his recent consultation on agricultural restructuring; [53188]

£ million
1998–1999 1999–2000 2000–01 2001–02
CAP (non-BSE programme) 2,616 2,503 2,458 2,658
of which:
Current budget 2,582 2,422 2,369 2,569
Capital budget 34 81 89 89
CAP (BSE programme) 591 436 417 412
of which:
Current budget 486 375 364 359
Capital budget 105 61 63 53
CAP Administration (non-BSE) 46 45 46 46
of which:
Current budget 44 43 44 44
Capital budget 2 2 2 2
CAP Administration (BSE) 13 22 22 22
of which:
Current budget 13 22 22 22
Capital budget 0 0 0 0

The role of LB is to operate the Common Agriculture Policy Guarantee Section with the UK as economically, efficiently and effectively as possible in accordance with the policies laid down by Agriculture Ministers. I have commented separately on BSE in my answer covering MAFF.

CAP Programme Expenditure

CAP expenditure in the UK is annually managed Expenditure and will be subject to review. The forecasts take into account known changes in scheme operations and anticipated levels of activity.

The capital budget consists almost entirely of intervention purchases of cereals, beef and milk and milk products.