Agricultural Land and Buildings

Part of Orders of the Day — Finance Bill – in the House of Commons at 10:45 pm on 10 July 1985.

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Photo of Mr Jim Nicholson Mr Jim Nicholson , Newry and Armagh 10:45, 10 July 1985

I support what hon. Members have said on this subject. Like my hon. Friend the Member for Londonderry, East (Mr. Ross), I have an argicultural interest and am well aware of the problems that are being caused to the industry in Northern Ireland.

The proposed changes will greatly add to the difficulties of those engaged in agriculture. The proposal to extend the 10-year write-off period to 25 years will mean many agricultural buildings becoming obsolete and having to be replaced by more modern ones even before the old ones have been written off. My right hon. Friend the Member for South Down (Mr. Powell) outlined the position correctly when he referred to the various types of agricultural building, and I will not go over the ground that he covered.

The present system has been in operation for over 40 years and has proved adequate. We are asking for farmers to be given a reasonable period in which to adjust to the changes. Cash flow is vital to any business, including farming. In the long term and the short term, cash flow plays an important part, and I urge the Minister to consider the types of people who will be most affected by the changes.

In Northern Ireland, the small family farmer will be the hardest hit. The young farmer trying to get started at the bottom of the ladder will be hard hit as well. The proposals will be most damaging to those people. They will not be able to claim relief through the reductions in corporation tax. Few, if any, small farmers will be able to alleviate their problems if there is no offsetting.

11 pm

How many farmers are incorporated? Such farmers are few and far between in Northern Ireland. Farm businesses have already suffered from the changes in plant and machinery allowances which were introduced last year. I am informed — I may be corrected on this — that the changes will cost agriculture more than £400 million in the five-year transitional period. We must consider also what will happen in the transitional period for building allowances. Judging by present ceilings, the change could cost agriculture another £400 million.

Unfortunately, the changes can lead only to a severe decrease in investment in agriculture. Because the small farm system in Northern Ireland means that it is necessary to apply a more intensive system of agriculture than in other parts of the United Kingdom, this policy will be to our detriment. We live in a time when technology can transform any sector. This feature is most pronounced in the intensive sector of horticulture. Existing buildings can become obsolete and outdated within a short period. Will the Government award any recognition to this point, as it will concern us in the future?

Agriculture is facing a difficult time and it is unwise to add an extra burden. I ask the Financial Secretary to reflect on the changes last November in the farm capital scheme when the amount available was reduced by £40 million. My hon. Friend the Member for Londonderry, East referred to this week's announcement on the scheme. We can expect another large slice to be taken from the farm capital scheme. That is another reason why the Financial Secretary should afford the amendment consideration and support. Such a proposal, if passed, would have far-reaching consequences for United Kingdom agriculture, and more particularly for Northern Ireland.