Agrimonetary Compensation

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 8th November 2001.

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Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport) 11:30 am, 8th November 2001

What recent discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on applications for agrimonetary compensatory amounts.

Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury

Treasury Ministers are in frequent contact with my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs on a wide range of issues.

Photo of Anne McIntosh Anne McIntosh Shadow Spokesperson (Culture, Media and Sport)

Does the Government's refusal to apply for monetary compensation for farmers indicate that they see no viable future for British farming?

Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury

We clearly understand the difficulties that the farming sector faces. This Government have drawn down agrimonetary compensation, in contrast to the Opposition, who never drew down a penny of it. However, in the current climate, the case for agrimonetary compensation must be well made and it is better to pursue a targeted approach which encourages the sector to develop in a way that will help it to progress.

We are achieving that through the England rural development plan, under which support is given for rural development and agri-environment schemes, and by continuing our efforts in Europe to reform the common agricultural policy. That is the right way forward for the industry, rather than putting more money into a quick fix or help for the agriculture sector.

Photo of Paddy Tipping Paddy Tipping Labour, Sherwood

Was not the right to agrimonetary compensation substantially signed away by Lady Thatcher at Fontainebleau with the effect that 80 per cent. of funding for agrimonetary compensation comes from the taxpayer, which is not the case for our European partners?

Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury

I thank my hon. Friend for his comment, but I would argue that the original justification for the Fontainebleau decision still stands. That justification is that the rebate compensated the UK for its relatively low level of EC receipts. [Interruption.] I understand how excited the Opposition get when those issues are raised.

Photo of Hugo Swire Hugo Swire Conservative, East Devon

Given the Minister's reply to my hon. Friend Miss McIntosh, there can be no one left in the country who believes that the Government care about farmers and others living in rural communities. None the less, does the Minister agree that there is a reason to give Devon county council compensation for instigating its own inquiry into foot and mouth—an inquiry that will cost £25,000—in the absence of a Government inquiry into the disease?

Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury

As the hon. Gentleman is no doubt aware, the Government are committed to achieving a sustainable future for the agriculture sector. Agriculture has been given a high priority, not least because of its considerable difficulties in dealing with foot and mouth disease.

We are committed to compensating farmers as far as possible for the effects of the disease. Not only have we matched funding to voluntary organisations for the relief of distress, helped farmers on a case-by-case basis and compensated them for the effect on their farms and the welfare of their animals, but we are putting significant sums into the rural economy in general. We will continue to approach the matter rationally, so that we can pursue a viable strategy for the industry's future.

Photo of Paul Flynn Paul Flynn Labour, Newport West

Is not it reassuring that, in the recent general election, Labour recorded the biggest vote in its history in rural areas and returned its largest ever number of MPs from those areas in spite of the continuous barrage of whining and whingeing from the Opposition?

Although there is great sympathy with the farming industry for its recent problems, before that period the contribution of the farming industry in England to gross national product was less than 0.5 per cent. while manufacturing industry's contribution to gross domestic product is more than 20 per cent. Is not it right to look to the coming crisis in the manufacturing industry now, to make sure that aid is given where it should properly be given—to the manufacturing industry?

Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury

My hon. Friend rightly points out that the Government's commitment to the rural economy was recognised at the last election, as it was at the previous one. Of course, we must consider the real difficulties in which the agriculture sector finds itself, and we are committed to working with farmers and those employed in the rural economy to think of a viable strategy for the future. That is why the Government are in the vanguard of pressing for reforms to the common agricultural policy in Europe, and of diverting money right back to the rural economy and away from the production subsidies that have done so much to create the problem in the first place.

Photo of Henry Bellingham Henry Bellingham Conservative, North West Norfolk

Surely the point is that this money was available and the Government did not apply for it. Is the Minister aware that the average income of west Norfolk grain farmers has fallen to £5,000 a year? They have been getting rid of staff and cutting expenditure on local services, and they feel that this treatment is extremely shabby. Surely it shows that the Government do not care about the countryside.

Photo of Ruth Kelly Ruth Kelly Economic Secretary, HM Treasury

As the hon. Gentleman knows, that is altogether untrue. I take his comments as yet another Opposition plea for more public spending and I want the Opposition Treasury team to spell out exactly how they would meet such commitments. The right way forward for the industry is to enable it to restructure sensibly and rationally, so that it can compete in an efficient market. That is what we are helping it to do.