Agricultural Investment Order

Schedule 6 – in the House of Commons at 12:00 am on 24th April 1972.

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11.10 p.m.

Photo of Mr Peter Mills Mr Peter Mills , Torrington

I beg to move, That the Agricultural Investment (Variation of Rate of Grant) Order 1972, a copy of which was laid before this House on 27th March, be approved. In my right hon. Friend's statement to the House on 1st March on the Government's determinations following the Annual Farm Price Review, he announced that it had been decided to switch about 60 per cent. of the fertiliser subsidy to end prices to give the farming industry greater flexibility in the application of resources. Hon. Members will have an opportunity to debate the reduction in fertiliser subsidy when the new rates, to come into operation on 1st June, are submitted for the approval of the House. The order for this will be laid tomorrow.

Horticulturists, however, are not able to recoup the loss of the fertiliser subsidy through end price awards in the Annual Review, and as announced it is proposed to offset the loss to them by increasing the combined grant rate for improvements carried out under the Horticulture Improvement Scheme from 35 to 40 per cent.

At the moment, growers receive a basic rate of grant under the Horticulture Act, 1960, of 33⅓ per cent., and this cannot be changed without fresh legislation. In addition they receive a 1⅔per cent. supplementary grant under the Agriculture Act, 1967, which can be varied by order. The Variation Order we are now considering will increase it to 6⅔ per cent.

This total combined grant rate of 40 per cent. will be available—subjectto the approval of the House—from 10th April, 1972, in respect of applications made and the provision of facilities eligible under the Scheme and installed on or after that date. The increase in the grant is equivalent to an injection in a full year of approximately £750,000 into the United Kingdom horticultural industry at the present rate of applications under the Scheme, which should give the industry as a whole at least as much as it is losing by the reduction in the fertiliser subsidy.

The increase in the effective rate of grant under the Horticulture Improvement Scheme will direct assistance to the field in which it can best help the industry to equip itself yet more effectively. Growers have not been slow to invest in the equipment of their holdings, with Horticulture Improvement Scheme assistance, and upwards of £85 million worth of work has been approved for grant since the first Scheme was introduced in 1960. That is no small figure.

The higher supplement will make the Scheme that much more attractive and the industry has accepted this means of making good the loss of income attributable to the reduction in the fertiliser subsidy. In view of the consideration that has always been needed by and accorded to the horticultural sector, I hope the increase will receive acceptance here today. I have no hesitation in commending the increased rate of grant to the House or in asking for approval to be given to this Statutory Instrument.

11.13 p.m.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

Not for the first time in the past week or so, it is my pleasant duty to congratulate a virgin Minister on his maiden speech from the Dispatch Box. We are glad to have the new Parliamentary Secretary facing us. We have already encountered the hon. Gentleman as a maiden Minister in Committee, but it is only right to welcome him to the Treasury Bench in the Chamber.

It is also my pleasant duty to welcome another attractive force to the battery of Ministers and aides-de-camp facing us. I refer, of course, to the hon. Member for Keighley (Miss Joan Hill), who has been appointed P.P.S. to the Minister. If nothing else, her presence will help make more pleasant the hours that we spend facing one another in agriculture debates.

There is certain merit in the Parliamentary Secretary's first speech in the House. Whereas on his first ministerial appearance in Committee he refused everything that we put to him, we are glad for his generosity on this occasion. We hope that the new broom that he brings to the Department will affect some of his colleagues on the Government Front Bench.

We welcome the increase. Indeed, we are forced to welcome it. Conditions have been imposed upon the industry by the Government's actions and this is an attempt to rectify what they have done. As I say, we welcome the increase as a lifeline towards the industry.

We are not so sure that we welcome some of the reasons for the increase. It is swings and roundabouts with a vengeance when the Government, having brought in an Annual Price Review which slashes the fertiliser subsidy, have to come back a month later with a special order to increase the grant to try to restore the loss in the subsidy. This is a curious way for a non-interventionist Government to behave. But, as in other spheres, their record in the movement away from intervention and direct support does not provide roses even in the field of horticulture. Therefore, they are rectifying one mistake.

There is another reason besides the switch in the fertiliser grant, to which I want to return. I refer to the difficulties that the industry envisages as we move into the Common Market. I thought that the Minister might have referred to the need to give direct support to the industry in this way. I hope that it is not one of those things wrapped up in the voluminous regulations which I have been trying not to work my way through, but to sort out over 10 hours today which might be effected on our entry.

We know the problem. Because of our climate, the industry will have to incur extra costs in the provision of glasshouses, and so on, to compete on something approaching level terms with the great horticulture industry of the Common Market. If we are to enter the Common Market, it is right that we should be given this kind of support.

Is the switch from fertiliser subsidy to this form of grant the right way to do it? I should have welcomed some exception on fertiliser for the horticulture industry.

The Minister said that we would get greater flexibility in the use of resources by leaving it to the individual to decide. With some of the difficulties facing the industry, it will be a difficult decision to make. The cut in the fertiliser subsidy to the industry could have been rectified by taking a separatist approach to it. That would seeem a logical step to take.

The hon. Gentleman said that this proposal will equal the loss on fertiliser subsidy to the horticulture industry. I think he said that no more will equal the loss. On what does he base his figures? It seems a difficult equation, because both depend on take-up. Take-up will depend on what confidence the industry has following our entry into the Common Market. I do not see how that equation could be made. Therefore, for that reason, I think that the fertiliser problem could have been dealt with in a separate, direct way. That is not disputing the need for the extra investment.

Finally, the Minister referred to £85 million already approved. I take it that that refers specifically to the horticulture industry. To what period is the Minister referring? Is that since the passing of the 1960 Act, and nothing more? This is a good figure. The hon. Member for Worcester—

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

Worcestershire, South. The hon. Gentleman always gives me the impression of being the Basil Brush of the Tory Party. However, I am glad to get his agreement.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

I will do a little mental arithmetic for the hon. Gentleman if he cannot do it for himself. It is 12 years since 1960, and 12 into £85 million gives an average of £7·08 million per annum, which seems quite a reasonable figure.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

The hon. Gentleman can count, too. We have depths upon depths on the other side of the House. It seems a reasonable take-up, and I think that the hon. Gentleman agrees with me.

The industry is keen, and what we want an assurance about tonight is that the kind of equation that has been made has been made with confidence and the take-up will continue to equalise fertiliser and show that the industry is prepared to meet the competitive strain that will be put upon it.

I conclude with those few words of general acceptance of the Minister and general acceptance of the order.

11.20 p.m.

Photo of Mr John Wells Mr John Wells , Maidstone

I, too, welcome my hon. Friend on making his first speech at the Dispatch Box on a horticultural topic and I hope that in all his future horticultural speeches from that Box he will support the industry in the generous way that he has done this evening. We appreciate the way in which my hon. Friend has begun. We hope that he will continue in that way and will not alter in the future.

I welcome, too, my hon. & learned Friend the Minister of State at the Home Office. His presence on the Front Bench is obviously nothing whatever to do with any subsidy business. Undoubtedly, he is here because of the vast horticulture industry that he is building, which is one of the greatest disgraces of the Government, and if my hon. Friend the Parliamentary Secretary truly wishes to help British horticulture—and that is what the order is about—let him talk to his hon. & learned Friend and let us cut back on the empire building in horticulture by the Home Office.

I must come strictly to the order and welcome it and say how vital it is that money should be injected into the able—and abler—sections of the industry. There is no doubt that the switch from fertiliser subsidy, which was paid to the inefficient and the efficient, to this new method will put the same amount of money—or I think my hon. Friend said a little more money—into the industry as in the past, and it will be put in the sector in which it is most needed in order to build up the industry so that it can compete with the hard times that undoubtedly lie ahead. When these hard times that lie ahead for certain sectors of the industry are considered, I hope that my hon. Friend will have early words with the Financial Secretary to the Treasury, not about getting the cash for this proposal but about the value-added tax situation, which is very worrying in the non-edible sector of British horticulture.

I understand that the grant that we are considering will be available to all sectors of British horticulture—in the edible, ornamental and nursery stock sectors. It is essential that those sectors, which will be sadly hit by VAT, should be protected by their Minister of Agriculture, and I urge my hon. Friend to speak earnestly and soon to other Ministers before they undo the good that he is doing tonight. The Minister of State at the Home Office is doing immeasurable harm to British horticulture. The Financial Secretary is doing the same. Let us continue to get support of this kind from the Ministry of Agriculture.

11.24 p.m.

Photo of Mr William Hughes Mr William Hughes , City of Durham

May I add my congratulations to the plethora of well-deserved praise that has been showered on the Parliamentary Secretary.

Whereas, at least theoretically, fertiliser must be considered as a land substitute, grant is a capital substitute, and what we are doing by this order—and it is very welcome—is effectively altering the balance between adding to the land content of horticulture and wishing to increase the capital content of it. The capital, of itself, need not add to the land content. It may, or it may not.

In improving the capital grants system, perhaps the Department is not aiding the long-term interests of agriculture in the way suggested by the hon. Member for Maidstone (Mr. John Wells) and perhaps more general fertiliser grants for horticulture, particularly for the area about which he was speaking, would be of more importance.

This is a problem for the plant breeder and for root stock in the horticultural flower market. It is difficult to see how those in this sector will recoup their losses from the fertiliser subsidy under this improvement grant. It seems that certain areas in horticulture will be discriminated against by the change involved in the price review and from this desirable improvement in the grant. What additional help to disadvantaged parts of the industry does the Department have in view, given that this change gives a partial advantage to some sectors of horticulture which are denied to others?

11.27 p.m.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

I wish the voice of the horticultural growers of the Vale of Evesham to be heard in this short debate.

I sent to the Minister this morning an inquiry about the horticultural improvement scheme and I asked him to state in a form that I could convey to my anxious growers a declaration whether the scheme would continue after the expiration of the transition period in 1974. The scheme has two or three years to run and a number of my growers are already expressing anxiety about the trend of events when 1974 is upon us.

It is a very rough equation indeed to say that the loss of income derived from the fertiliser subsidy scheme, which has now been terminated, in the context of horticulture, can be made good by improvement grants. Only a relatively small number of horticultural growers apply for improvement grant. Many of them have already improved their holdings to the maximum with the aid of grant and they will not wish to apply for grant in the remaining short period of the transition era, until 1974, and therefore will obtain no offset against the loss of the fertiliser subsidy.

I appreciate that what is being proposed tonight can only be rough justice for horticultural growers and that it is possibly the best that the Ministry can offer, but I wish the Minister to recognise that it is very, very rough justice indeed and will apply only to those horticultural growers who can still use this short remaining period of transition before 1974 to improve their holdings.

I hope that the Minister, whom I congratulate on his accession to the Treasury Bench after a long period as Chairman of the Conservative Party Agricultural Committee, will explain these points; or, if he prefers, will answer my letter in great detail. I have to meet the members of the Pershore and Upton-upon-Severn branch of the NFU in my constituency on 5th May next. I have asked for a reply to my letter by 2nd May, which is eight days from now, so that I may give assurances to these growers in what is undoubtedly the richest horticultural producing area of Britain.

11.30 p.m.

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , North Angus and Mearns

As the one Member of the Government Front Bench who has not been singled out for special treatment, I am glad to reply to the points that hon. Members have made in this short debate.

I was interested in the strictures of my hon. Friend the Member for Maidstone (Mr. John Wells) on my hon. and learned Friend the Minister of State, Home Department, because in Scotland I combine both responsibility for agriculture and home affairs. I vividly remember a visit I paid to one of our prisons in Scotland where I enjoyed some of the best chutney I had ever tasted. It had been made from the most excellent tomatoes.

I assure my hon. Friend that I realise that there is considerable skill in some of these establishments in Scotland and that my hon. and learned Friend with responsibility south of the Border will be aware that the produce of some of these establishments is of a very high standard. My hon. Friend the Member for Maidstone can take comfort from the fact that the presence of my hon. and learned Friend the Minister of State on the Front Bench ensures that his barbs have gone home.

The hon. Member for Durham (Mr. Mark Hughes) and my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) raised a matter which must obviously concern any of us who know the horticultural industry. I would not deny that there is an element of rough justice involved when an adjustment takes place in the aid an industry gets. When the manner in which help is given is altered, one cannot be certain that those who will benefit from the increase or who will get the improvement grant will be the same as those who previously benefited from the fertiliser subsidy. In that respect I accept what has been said. The very much wider issues touched upon by the hon. Member for Durham will be more appropriately debated on the Fertiliser Order later. This change has been accepted by the National Farmers' Union. This is perhaps one of the most important single points I can make tonight, despite the criticisms which have been made, although again one cannot say that exactly the same people will benefit.

The glasshouse sector is probably the biggest single client as regards horticultural improvement scheme money. Under the 1966 Scheme £46 million went to the glasshouse enterprise, £9 million went for vegetables, £8½ million for fruit, and £3 million for hardy nursery stocks. These figures indicate that it is not simply the glasshouse industry which has benefited.

Even in horticultural holdings which do not have glass there are various other improvements by way of roads, ditching, hedges, and so on, which are eligible for help. My hon. Friend the Member for Worcestershire, South says that many horticulturists in his area have been efficient and have improved and invested. From 1st January, 1971, we extended the benefits of this scheme to co-operatives. Whereas some growers may have benefited in the past as individuals, as a result of this Government's action they will now be able to get much more benefit as co-operatives.

Photo of Sir Gerald Nabarro Sir Gerald Nabarro , Worcestershire South

How can an asparagus grower benefit? When we enter the Common Market we shall have to face fierce competition from French asparagus growers. I am the Vice-President of the Vale of Evesham Asparagus Growers Association. I am due to attend the Association's annual meeting and luncheon in May. I want to know what I am to say to asparagus growers there assembled and how asparagus growers will benefit.

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , North Angus and Mearns

Like other sections of the community, the asparagus growers are in good hands in the representations they have and in those heading their industry. I do not have much practical knowledge of asparagus growing, and I would bow to my hon. Friend's obvious knowledge and experience. Asparagus growing requires drainage and roads for access just as do other crops. It also requires facilities for packaging and grading. Therefore, my hon. Friend can assure his asparagus growers that they, too, can benefit. I hope that asparagus eating as well as growing will increase in this country. Only as a result of eating can growing prosper. I am sure that my hon. Friend supports it in the eating as well as in the growing.

Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North

I believe that the great things they do in Worcestershire, South include growing wonderful apples——

Photo of Mr Arthur Lewis Mr Arthur Lewis , West Ham North

Can the Minister explain to his hon. Friend what will happen if and when we enter the Common Market and the apple trees and the hon. Gentleman's orchards are grubbed up?

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , North Angus and Mearns

I look forward to hearing the interventions of hon. Members for urban constituencies, but I had hoped that the hon. Gentleman was rising simply to give views on how to grow asparagus in West Ham, North. I should be straying out of order if I allowed myself to follow the line he suggested.

The hon. Member for Renfrew, West (Mr. Buchan) spoke about the EEC, and my hon. Friend the Member for Worcestershire, South also mentioned it. The scheme is due to expire in April, 1974, and we shall be examining closely both the circumstances of the United Kingdom industry and the provisions for assistance under the EEC regulations. Obviously at this stage I cannot commit myself to a date for the possible replacement of the present horticultural improvement scheme by any revised form of assistance, or to the form which possible future assistance might take, but I can assure the House that our entry to the EEC next January will not mean sweeping away our present grant system overnight.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

I am not too happy with the hon. Gentleman's assurances. We have all paid tribute to the success of the scheme. The Minister is saying that the regulations will have to be examined to see what replacement there can be.

But that is what all the negotiations were about, and it is what we were supposed to have been voting about. He does not know what grant aid scheme there will be for the industry, when the present scheme is to expire in only two years.

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , North Angus and Mearns

As is customary in my debates with the hon. Gentleman, he jumps to his conclusion before hearing the argument. He always intervenes before hearing what is to be said. The hon. Gentleman should go into the EEC regulations more deeply before making some of his wide criticisms. The farm structure directive recently published by the EEC provides for an EEC scheme of assistance for fanners and growers who are prepared to implement plans for the development of their farms with the object of bringing them up to certain standards of viability.

The important point, the point which all those who wish to find fault with the Common Market consistently seek to ignore, is that what the EEC has done does not rule out further national aid for our farmers.

The most important point, so often disregarded, is that if I said we would bash ahead, willy-nilly, with our own schemes to an unspecified date it would be against the interests of the industry. In looking to what kind of schemes we have after our present schemes expire, we must pay attention to the kind of help available through the EEC, and at the same time use all the national aids we can to help meet the particular needs of our industry. How far we should rely in the longer term on the EEC on the one hand and, on the other, how far assistance to our own industry should be supplemented under separate national schemes are matters to which we shall be giving the most serious consideration in consultation with the industry.

Photo of Mr William Hughes Mr William Hughes , City of Durham

Regulation 265 of 1970 of the Commission lays down that the amount of premium for uprooting pear trees, apple trees and peach trees shall be determined on the basis of 800 units of account per hectare. That is mandatory. That is not the same grant as is available as of now and as is en- visaged for uprooting in this country. To tell us in the face of that directive that we are permitted to do what we will is to mislead the House.

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , North Angus and Mearns

I am not misleading the House. The hon. Member, with his built-in distaste for anything European, overlooks that certain forms of help are available under the EEC regulations. What I find most significant is what has been decided most recently, not in the past: and what has been decided most recently does not rule out national schemes. What we are discussing tonight is a national scheme. That is what I am interested in, and that is what I am recommending to the House.

I have answered the various observations that hon. Members have made. I am disappointed in but not surprised by the attitude of some Opposition Members. The hon. Member for Renfrew, West is as grudging as ever about any scheme, whether agreed by the industry or not. It is difficult to get any praise from the hon. Member. The hon. Member for Durham is usually more welcoming, but when he hears a mention of the EEC the blinds come down over his eyes and everything is darkness and threat. We want the industry to take up the scheme only with the agreement of the industry and its producers, and I have no hesitation in recommending the scheme to the House.

Photo of Mr Norman Buchan Mr Norman Buchan , Renfrewshire West

Would it not have been possible to deal with the subject of fertilisers directly, perhaps by the introduction of an improvement grant?

Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , North Angus and Mearns

We are dealing with the scheme before us tonight and the way in which we have dealt with the matter has been accepted by the industry. Of course there are alternative ways, but we think that this is the most effective. The industry has accepted it as such and I am sure that the opinion of the hon. Member for Renfrew, West does not weigh very much in the light of all that.

Question put and agreed to.

Resolved,That the Agricultural Investment (Variation of Rate of Grant) Order 1972, a copy of which was laid before this House on 27th March, be approved.