During his discussions with the farming unions, does the Minister discuss the implications of the recent House of Lords ruling that income levy raised by the Meat and Livestock Commission is not VAT-recoverable? Is he aware that that represents a loss of about £2·5 million a year to the agriculture industry, and that to some people it is seen as the thin end of the wedge for the introduction of VAT on food? Does he intend to discuss the matter with the Chancellor of the Exchequer with a view to introducing regulations to amend that ruling?
As I think the hon. Gentleman has recognised, this is a matter for my right hon. Friend the Chancellor of the Exchequer and his colleagues. I am obviously aware of the concerns that have been expressed as a result of the House of Lords ruling. However, it has absolutely nothing to do with any question of VAT on food, on which the Government's position is entirely clear. There is no question of this being the thin end of the wedge.
Has my right hon. Friend discussed with the farming unions the question of livestock in respect of the set-aside proposals contained in the latest agreement? Does he agree that it is particularly important to the west of the country that the livestock sector should be kept strong, and that there should be no temptation to move the livestock centre of gravity towards the east into land that might otherwise have been used for grain production? Does he further agree that it is vital for this matter to be understood so that the full confidence of the livestock sector in the west of the country may be maintained?
I agree with my hon. Friend. In the decisions that I took on set-aside, and especially the decision not to take up the grazed fallow option, I had very much in mind the interests of the livestock sector, not only on the western side of England but in Wales and Scotland, and especially in the hill areas. Therefore, I understand the point of his question about the possibilities that might have arisen if we had gone for the grazed fallow option.
The other matter that my hon. Friend might be concerned about is whether we can achieve greater transferability of quotas in the dairy sector. From all the discussions that I have had with British farmers, I can tell my hon. Friend that I do not think that greater transferability of quota would undermine the livestock sector in the west. I assure my hon. Friend that. I am conscious of the importance of that sector to farming on the western side of the country.
I am sure that the Minister will agree that it is difficult for members of the farmers union, for his Department and for our friends in the EC to introduce a sensible policy that will be acceptable to the farmers of this country, will cut production and will ensure that they have a reasonable livelihood in the years to come. Does he further agree that, if 10 per cent. of the land in this country is taken out of production, the farmers will be able to produce even more, if that is their wish? Does he agree, therefore, that it is essential that we consult for a long period before we make a decision that may be wrong for the rural dweller, the farmer and the consumer in this country?
I can assure the hon. Gentleman that I consult and am in discussion all the time before taking decisions on matters that affect the agricultural community.
The need to take more land out of agricultural production arises simply because of the capacity to grow more from the land and, in any case, because of technological developments. I am anxious to ensure a reasonable transition that preserves the attractiveness of the countryside for all of us as that land comes out of production. That is the purpose of a number of the schemes that we have been pioneering recently.
I am very much aware of the problems. We have done all that it is possible for the Government to do within the context of the CAP, both earlier in securing for a proper period—not too long—a private storage aid, and as a result of the decisions taken in the Community in the price negotiations on the further reduction of negative MCAs. That means that, shortly, the negative MCAs in the pigmeat sector will have dwindled to almost nothing, provided we obtain final agreement on price negotiations. However, one of the problems currently facing the pig sector is the possible increase in feed costs, as a result of the drought in the United States.
When the Minister met the agricultural leaders, did he discuss with them the proposals to dump in Britain the domestic rubbish from New York and elsewhere? Did they tell him that the farmers and the British people are not prepared to become the garbage tip of the world, with the accompanying health and disease risks? Will he give the House an assurance that he will continue to refuse a licence for such applications?
We have not yet had discussions with the farming unions on this matter—nor have they raised it with us—but we have already been considering it carefully. In so far as it is our responsibility, particularly in relation to animal health, I assure the hon. Gentleman that we are considering it carefully.