Farming and Rural Communities

– in the House of Commons at 4:00 pm on 19th January 2005.

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Photo of Sylvia Heal Sylvia Heal Deputy Speaker 4:00 pm, 19th January 2005

I inform the House that Mr. Speaker has selected the amendment tabled by the Prime Minister.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs) 4:16 pm, 19th January 2005

I beg to move,

That this House
regrets that self sufficiency in indigenous food and drink products has fallen significantly since 1997;
supports the principle in CAP reform of decoupling support from production but believes that the Government has failed to consider the implications for the countryside and food security of its inept implementation of this reform by creating a complex system of entitlements and cross compliance wholly contrary to the objective of simplification whilst failing to reduce the current burden of regulation or to enable farmers to compete with imported food not produced to British standards;
laments the fact that there are now more officials in the Department for Environment, Food and Rural Affairs than there are dairy farmers in Britain, and that the workforce in agriculture has fallen by 15 per cent.;
recognises that many landscape features of the English countryside were created by historic farming practices and believes that the promotion of biodiversity and care of the countryside is best achieved by a profitable agricultural industry;
and considers that the continued attacks on the countryside through unacceptable levels of development, an obsession with wind farms and the closure of rural services are the actions of a Government with no instinctive understanding of the needs of farming and rural communities.

For 57 years, successive Governments of Britain have encouraged British farmers to produce more of our food. By 1997, those farmers, together with those responsible for the genetic improvement of our crops and livestock and for pesticide development, had almost tripled domestic food production. Of course, there has been a price to pay for that success. In parts of the country, the landscape changed as hedges were removed and fields were drained, and some of the early pesticides proved to have serious consequences for our wildlife. However, almost all of that stopped at least 20 years ago. Indeed, since 1980 the woodland area of this country has increased by 29 per cent. and many species of birds have recovered, although I accept that not all have done so.

There has been a further price to pay, involving money. We now have higher food prices and higher taxes. Since the early 1980s, there has been an increasing clamour from all political parties for reform of the common agricultural policy. That reform began in earnest in 1992, but the changes that came in on 1 January this year are far more dramatic. Before I address those changes, I want to reflect on what has happened in the past seven years under this Government.

After that tripling of farm output, it has now fallen by 5 per cent. Farming incomes have fallen by 8 per cent. in real terms and the labour force has decreased by 15 per cent. Self-sufficiency is down by 4 per cent. We have had an outbreak of foot and mouth disease, but we still do not know how that disease got to Burnside farm. Apparently, it arrived in swill, but there has been little or no effort to find out. Bovine tuberculosis has rocketed by 65 per cent. and is destroying our cattle herds in many parts of the country while the Government sit on their hands paralysed. Only last week, the Minister said that this did not affect dairy profitability. It was this Government who broke up Milk Marque, and the dairy industry is now on its knees with an income last year of just half the minimum wage.

Photo of John Greenway John Greenway Conservative, Ryedale

I am grateful to my hon. Friend for giving way so early in his speech. Is he aware that more than a dozen major milk producers in my constituency have stopped production in the past two years? Almost every month, there is a dairy herd for sale. On self-sufficiency, we have a balance between sugar production and sugar consumption in this country. Does he agree that that should be the target for any negotiations on the reform of the sugar regime?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I am sure that virtually any Member who represents a rural constituency will be able to tell a similar story about the decline of dairy herds. It is happening across the country. Of course, all of us understand that things must change and, as I shall say in a few minutes, they cannot go on as they were—

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

Will the hon. Gentleman give way?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

In a moment.

The dramatic decline of our dairy industry poses potentially huge problems for our rural communities and the rest of the country. Later, I shall suggest measures that a Government with a real interest could take to try to improve things.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

In a moment.

I also want to touch on the issue of sugar, which my hon. Friend Mr. Greenway raised, and which I had intended to raise later. He referred to it in the context of self-sufficiency. He is absolutely right that the sugar regime needs to be reformed, and I made it clear in the House last week that we accept that. That reform, however, must allow the most efficient producers and processors in Europe, which includes British farmers and British Sugar as an organisation, to compete with the less efficient producers in Europe. He referred to the fact that we only produce 50 per cent. of our requirement in this country. Traditionally, we have imported the other 50 per cent. from the African, Caribbean and Pacific countries, which puts our market roughly in balance. There is no reason why our sugar beet industry should be forced to take unnecessary quota cuts if those cuts are not first imposed on those responsible for the surpluses that are dumped on the world market.

I was extremely disappointed, and I believe that the whole sugar beet industry will have been disappointed, that when I asked the Secretary of State in the House last Thursday whether she would stand up for British sugar producers and oppose the change in the mechanism that the Commission has proposed—which would mean that quota cuts would hit British farmers unfairly, instead of attacking those who produce the surplus —she categorically refused to confirm that the Government would resist those proposals. That was a derogation of responsibility for the British industry.

Photo of David Heath David Heath Shadow Spokesperson (Home Affairs)

The hon. Gentleman is extremely fair. He knows that I and many other Members who represent dairy farming areas have spoken repeatedly about the difficulties that dairy farmers face and the loss of profitability. I had thought that he entirely agreed on that, and I think that he has indicated that he does. I am surprised, however, to read that one of the proposals in the Conservative party's James review is to recover the entire costs of the Rural Payments Agency from hard-pressed farmers. How will that help dairy farmers in my constituency?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I am not often fair to Liberals, and perhaps that will teach me a lesson for being so. The short answer is that the hon. Gentleman has misunderstood the proposal in the James review, which is that the whole of the Rural Payments Agency should be outsourced. The responsibility for managing the whole framework of payments is ridiculously expensive and complicated, and I shall refer later to the bureaucracy that is now involved. That needs to be outsourced, and it will be.

Photo of Mrs Gillian Shephard Mrs Gillian Shephard Conservative, South West Norfolk

I had thought that my hon. Friend was going to be fair to everyone else, and now he is just being fair to me, for which I am grateful. I want to refer back to his remarks on sugar. It is one thing, of course, for the Government, as the Secretary of State apparently did in the House last week, to stand by while the sugar industry goes to wrack and ruin, but it is quite another not to plan some kind of strategy for the future of those farmers who, in the past, have successfully grown sugar beet. Will my hon. Friend comment on what might be put in place so that the land could still be farmed and people still profitably produce a crop, in the light of the Government's total inaction?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

Yes, my right hon. Friend is absolutely right to stand up for sugar producers in her constituency and across the country. It is a very important crop, both in rotational terms, for example biodiversity, and, as I said earlier, in relation to food security. What we must do is reform the sugar regime to allow, wherever possible, the less developed and ACP countries to continue to send their sugar into the European market at a slightly higher price than they would otherwise get on the world market—or there is no advantage to them in doing so—but at the same time allow our producers to continue if they are efficient enough to do so.

We all accept that there must be an element of price cutting, although nothing like the percentage originally proposed by the Commission. That would mean a number of producers going out of business, particularly in some of the high-cost European countries. The Commission should be working with those countries on a restructuring programme to remove their quotas from the system. If the sugar quotas of the high-cost producing countries were cancelled, the need for any further quota cuts would diminish dramatically. If cuts are needed they should, as I said earlier, be imposed on those responsible for the surpluses that are being dumped on the world market and are destroying the sugar trade for other producers. I hope that that is helpful to my right hon. Friend.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

Obviously, the hon. Gentleman is right—dairy farmers are struggling all over the country. Part of the problem is that a fair price is not being paid by the supermarkets. The processors are holding the price down, and it is continually being pushed down. That is a major barrier to the success of the dairy industry. What we should be doing is seeking a way to ensure a fair farm-gate price, which would enable the dairy industry to survive. I remind Ministers that we should have more meetings with supermarket representatives and put more pressure on them. Does the hon. Gentleman agree with that?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I have a lot of sympathy with that, but I hope the hon. Gentleman will forgive me if I do not go into much detail now because I want to deal with the whole issue of supermarkets later.

Photo of Paddy Tipping Paddy Tipping Labour, Sherwood

The hon. Gentleman mentioned the James review. Will he confirm that it recommends cuts of £894 million in the DEFRA budget, £112 million in the Rural Payments Agency budget—that cannot be achieved merely by outsourcing—and £47 million in the Environment Agency's budget, when we ought to be cleaning up the environment and tackling pollution? Those are big cuts that will affect front-line services. The hon. Gentleman has got a cheek calling for this debate today.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

What the Government seem to have completely overlooked in the James report—probably intentionally—is that it is not just about cutting bureaucracy, although that is critical. It issues a challenge: it asks whether Government are doing things that Government should not be doing, and whether by doing those things they are imposing extra costs on farmers and every other sector of society.

The hon. Gentleman mentioned the Environment Agency. I know that he takes an interest in such matters. He should go and talk to all the farmers in his constituency who are constantly afflicted by inspectors for this, that and the other, many of them from the Environment Agency, imposing new rules and regulations that will not actually help to improve the environment. The hon. Gentleman and I agree about the need to do everything possible to improve the environment, but that causes unnecessary extra cost, which is what we are trying to weed out of the system.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I hope that my hon. Friend will allow me to make a little more progress.

Behind all the failings that I have described has been a very regrettable attitude from the Government. My hon. Friend the Member for Ryedale mentioned food security, which is perhaps best put in context by a statement issued by DEFRA at the time of the 2003 royal show. DEFRA said

"National food security is neither necessary nor is it desirable."

That, I think, underlines the absence of Government thought processes when it comes to the importance of farming and food production.

It is not just a case of the direct farming issues that the Government have neglected and the damage that they have caused to the countryside. The motion refers to other issues, including the erosion of the green belt and the absorption of villages into our conurbations, while the Deputy Prime Minister's proposals could mean the building of another 1.2 million houses on our greenfield sites. Some 58 per cent. of rural households have no regular bus service, and bus journeys outside London have declined. Our woods and forests and our timber industry have also declined. Funding for private woodlands stands at just over £18 million, compared with more than £300 million for state sector woodlands.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

In a moment.

The Government are obsessed with wind power as the sole source of renewable energy, even though it would leave a huge environmental footprint on the countryside. Yet they have done virtually nothing to promote the real contribution that the countryside could make to renewable energy through biofuels and biomass. The 20p per litre reduction in duty on biofuels is simply not enough to trigger the industry, notwithstanding the Government's commitment to achieving 0.3 per cent. of fuel from renewable resources this year. That figure has to be increased or supplemented by a renewables obligation. On biomass, there has been a deafening silence for the past seven years—until the setting up of a taskforce just two months ago.

Photo of Mark Todd Mark Todd PPS (Rt Hon Baroness Symons of Vernham Dean, Minister of State), Foreign & Commonwealth Office

The hon. Gentleman and I have talked many times about rural issues, and he will concede that we often agree on them. He mentioned bus services in rural areas. In South Derbyshire in 1997, 17,000 passengers were carried on community transport, which in essence serves the rural parts of my area; now, 72,000 are carried. Perhaps that experience is reflected more widely, or perhaps my area is unique.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

That is not reflected more widely. I shall not dispute the figures for the hon. Gentleman's constituency as one would expect him to know better than others about such matters, although that is not always true of certain Members. The national statistics clearly show a considerable decline in the overall distance travelled by buses and in the number of passenger miles travelled outside London.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I declare my interest in this subject, as listed in the register. Does my hon. Friend agree that part of the problem in farming today is DEFRA Ministers' lack of understanding of how the industry works? They have come up with one of the most complicated schemes that could possibly be imagined for the single farm payment—the historical and regional systems mixed together—and they have still to come up with the final details. Yet crops need to be planted urgently, within the next few weeks.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

My hon. Friend is entirely right and I hope to discuss that issue in due course.

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Business, Innovation and Skills), Shadow Minister

Is my hon. Friend aware that British Sugar has put in a planning application for a bioethanol plant to be installed in the beet factory in the constituency of my right hon. Friend Mrs. Shephard? British Sugar has made it clear that if the duty differential were more favourable and sensible, it would make such planning applications in respect of all its factories.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I am grateful to my hon. Friend for reminding me that, as he rightly says, British Sugar has put in a planning application for a bioethanol plant. However, it has made it clear in public statements that such applications are dependent on further Government action to ensure viability as far as possible. As I said earlier, the simple 20p duty reduction is not enough on its own. Further surety is needed and the Government have more than one option: another duty reduction or the introduction of a renewables obligation on fuel retailers. If we are to develop bioethanol and, even more urgently, the biodiesel sector, which is wide open to exploitation if the market can be created, we need to be certain that such a market will exist in a few years' time, not just tomorrow.

In the past seven years, we have witnessed a catalogue of neglect of, and disdain for, our rural communities and values, as my hon. Friend Mr. Clifton-Brown suggested. Yet now the countryside faces its biggest economic change since 1947. Let me make it absolutely clear that the Opposition entirely endorse the principle of decoupling support from production, but very few people—be they farmers, politicians or commentators, let alone the general public—fully appreciate the scale of the change taking place. As my hon. Friend has just said, the Government's introduction of the new arrangements has been a shambles. They have introduced an extremely complicated, hybrid scheme without really understanding the complexities of the situation. The entitlement rules have been trickled out over the past few weeks, right up to 1 January when the scheme commenced.

Many of the rules are still unclear. For example, many farmers traditionally lease land for the growing of one crop, usually a root or other vegetable crop on a rotational basis, from different farmers. They still do not understand whether they get the entitlement or whether the farmer who owns the land gets it. It is likely that the entitlement will fall down the middle, because neither party will satisfy the 10-month occupancy rule. That is one example of the ridiculous and absurd situation that has arisen.

Instead of a simple system of payments linked to the environment, we have a system that leaves some people farming without a payment and others not farming but receiving a payment. Only a Government ignorant of what farming business is really about could have introduced such a scheme.

Photo of David Drew David Drew Labour/Co-operative, Stroud

I admit that it is a spatchcock of a proposal, but the difficulties arose because even the NFU was greatly split over it, let alone the other farm organisations. It could be argued that the Government could have shown greater leadership, but the proposals were bound to upset someone. Does the hon. Gentleman agree that we have the best of what could have been proposed?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

The term "a spatchcock of a proposal" deserves to be put in bold capitals in Hansard. It sums up the situation. It is not the fact that we have a hybrid scheme that is the problem—it is the fact that the Government announced it in March 2004 without any understanding of the complexities of sorting out who would be entitled to it and how it would work. Despite all that, they insisted on introducing the scheme on 1 January. They fundamentally misunderstood the task on which they had embarked and that is what has caused the shambles, the dismay and the distress felt by so many farmers.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

I entirely agree with the hon. Gentleman's analysis that the competence of DEFRA is in question, given that it made an announcement without at the same time making clear its assessment of its impact. Nor did the Department properly lay out how it would overcome the obvious complexities involved in delivering the new scheme. What is the view of the Conservative party and which options, of those available to the Government, would it have chosen?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

The hon. Gentleman is not keeping up with the real world in which we live—

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

The hon. Gentleman is a Liberal Democrat.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

Well, I suppose it is hardly surprising, then.

The fact is that the Government made their decision back in March and, like it or not, we are lumbered with it. That is the system that we are going to get. If the hon. Gentleman wants to ask me questions about what we would do, he must also say what the Liberal Democrats would do if, by some unbelievable circumstance, they were to be able to do something. As always, of course, the Liberal Democrats can say what they like because they know that they will never have to do it.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I will give way to the hon. Lady and then I will move on.

Photo of Kali Mountford Kali Mountford PPS (Mr Des Browne, Minister of State), Home Office

I am grateful to the hon. Gentleman for his generosity in giving way. I have listened carefully to his speech so far and am fascinated by it. However, will he now move on to such schemes as the rural bus partnership scheme, the rural train partnership scheme, the village renaissance scheme and the market towns initiative? Will he discuss village schools and other aspects of our rural communities?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I intend to move on, and I am grateful to the hon. Lady for inviting me to do so.

As a result of the complexity of the scheme that we have just discussed, it was widely believed that the Rural Payments Agency could not make any payments until well into 2006, despite the target of December 2005. We know now, because it was announced literally two or three hours ago by the agency, that that will be delayed until February 2006 at the earliest. That is a direct result of the complexity of the system that the Government introduced. We need a specific undertaking by the Government that those delays will be recognised and, if necessary, an interim payment made. The cash-flow implications for farmers of the 14-month delay originally envisaged between their last integrated administration and control scheme payment and their first single farm payment were bad enough. If the gap is going to be 16, 17, 18 months or more, the cash-flow implications are entirely unacceptable.

Cross-compliance and what farmers have to do to receive payments are another feature of the new system. Farmers must obey a huge list of statutory requirements. That sounds fine—of course people should obey statutory requirements—but farmers will pay twice. They will pay the penalty for breaking the statutory requirement and they will also lose their single farm payment. The Minister must explain the justification for that double whammy. Perhaps the starkest example of the Government's gold plating of regulation is to be found in the rules on cross-compliance, including the rules on good agricultural and environmental condition. Annex IV of the European regulation defines good agricultural and environmental condition in just 13 short lines. The Government's statutory instrument consists of 700 lines. Last week, farmers received three books on cross-compliance, including 36 pages on soil management and 44 pages on habitat and landscape. That illustrates more than anything the Government's contempt for farmers and their complete failure to understand that farmers know far more about managing their land than Labour Ministers.

What is going to happen now? It is widely believed that the reforms will result in a further fall in domestic production. That matters, because increasing imports of food have a damaging effect on the environment, both through global warming and through the destruction of local environments where food is produced. Equally important, we face massive increases in world demand for food because of population growth and prosperity, which will result in an estimated 50 per cent. increase in grain demand by 2025. In the short term, there is a risk of disease, and we have already seen how avian flu in south-east Asia has suddenly removed supplies of poultry meat from our market.

The Government do not seem to care. They have not made any assessment of how much production will fall or what will happen to our land when it is taken out of production. How much of our food manufacturing industry will move abroad if raw material is not produced here? That sector employs another 500,000 people. Some people estimate that hundreds of thousands of acres of grass will not be cut or grazed. No doubt, the Government will point to the entry level scheme, which is fine as far as it goes. However, £30 per hectare will barely cover the costs. Ministers say that the scheme requirements are little more than things that most farmers have been doing anyway. They are right, but farmers have being doing those things as part of profitable farming. If there is no profit in farming and no margin in ELS payments, they will not be done.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

My hon. Friend is quite right—we should produce food in this country. However, we have one of the worst balance of payments records that we have ever had. In the dairy sector alone we have a £700 million deficit. Is that not a disgrace, as we could produce that food ourselves?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

It is indeed. I shall take one more intervention and then I shall move on to that very point.

Photo of David Burnside David Burnside UUP, South Antrim

I hope that the hon. Gentleman will cover in his speech the greatest capital cost to be borne by farmers over the next year—the implementation of the nitrates directive. In Northern Ireland alone, for 22,000 farmers managing 32,000 farms it will cost £237 million, with only £30 million available through the farm waste management scheme. That massive capital cost will be imposed on farmers throughout the United Kingdom during the next year. What will the Conservative party recommend that the Government do, or what will the Conservatives do if they are in power to alleviate that massive capital cost to our farming communities?

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I was not intending to refer to the nitrates directive, simply because there are so many things that I want to mention, but the hon. Gentleman is right to raise that point. It is another huge imposition on farmers. The answer is clear: we must press for much longer derogations from the directive and ensure that its implementation does not cause the massive capital cost to which he refers. That relates to my overall point about the gold-plating of regulations.

We need a real vision of what we want from our farming industry and of what we expect in the countryside, but that vision is woefully absent from the Government. In contrast, the Conservatives believe that domestic food production is important and that our rural environment is best cared for by working with the farmers who occupy it. As a result of the changes, some farmers may decide to stop farming and others will refocus their business on leisure, but for those who continue the most important feature of change is the need to get nearer the market and to produce for the customer. For some, that will mean direct sales to the consumer, and for others it will mean adding value either individually or co-operatively—but for all of them it means being able to compete. British agriculture cannot continue to carry the superstructure of regulatory cost that it has borne in the past. Nor can it compete with producers who do not face those regulations.

What is the point of our egg industry becoming salmonella-free if we then import Spanish eggs stuffed full of the disease? What is the point of encouraging farmers markets if our abattoirs are being forced to close because of red tape? Last week, I visited a butcher who has his own small slaughterhouse—exactly the sort of enterprise that we all, on both sides of the House, want to support. He is licensed to kill, cut and retail meat, but if the animal belongs to someone else—perhaps another farmer—who wants to sell the meat at a farmers market, he is not allowed to kill and cut the beast, even though it would be going through exactly the same process as the meat he sells in his shop. A Minister with any real concern, and who wanted farmers markets to develop, would sort out such an absurdity.

What was the point of our healthy livestock being slaughtered during the foot and mouth epidemic when the Government do nothing to stop the illegal importation of perhaps 11,000 tonnes of meat, 200 kg of which even DEFRA accepts may be infected with the disease?

What about food labelling and the deceit that allows, for example, pigmeat grown abroad to be labelled British because it is sliced in this country, or that allows food to be labelled organic even if it is not produced to British organic standards? The Government have repeatedly refused to change the law, but we will— not just for farmers, but for consumers. We are not advocating trade barriers, but when we import food that is produced using methods that are banned in this country, the consumer has a right to know. Our farmers could then exploit our higher environmental and welfare standards, but without honest labelling they are operating with one hand tied behind their backs.

Market strength is also an issue. As we have heard already, many farmers complain about the power of the supermarkets. We must face up to the fact that supermarkets have provided a massive increase in the diversity of food available to the consumer—of course, that is in all our interests—but they dominate the buying chain. For example, 65 per cent. of liquid milk is sold by supermarkets. Clearly, the code of practice is not worth the paper that it is written on. It needs to be much tougher and transparent. The Office of Fair Trading is carrying out an audit—it would be wrong to presume its conclusions, which I await with interest—but, clearly, the present situation is entirely unacceptable.

Farmers need to work together. There is a need to change both the corporate and tax treatment of our farm co-operatives to enable them to become more effective and to make vertical integration possible, but even that is of little help if co-operatives are not allowed to become the serious players that they are not only elsewhere in Europe, but in the United States, Canada, Australia and New Zealand. All the other countries that advocate the free market allow their co-operatives to grow and become serious players in the industry. The Government's forcible break-up of Milk Marque has placed a large black cloud over the future of the co-operatives' ability to represent farmers' interests in the marketplace.

The countryside has many functions. It is home to 23 per cent. of our people. It produces 64 per cent. of all our food. It is the landscape that attracts millions of visitors each year—a landscape that has evolved over the centuries, much of it as a result of past farming practice. The people who live there have many interests and many careers, but they are being short-changed by the Government. They receive lower levels of service, fewer buses, fewer police officers and less standard spending assessment funding than their urban counterparts.

Agriculture is at the centre of our rural communities and it is far more important than its contribution to our gross domestic product suggests. It underpins many other rural businesses and much of our rural tourism, as well, of course, as the whole food industry. The Conservative party believes that agriculture can have a prosperous future producing food and energy crops, while caring for and constantly improving our rural environment.

Rural areas can again become thriving places to do business, rather than just dormitories, but they need a Government who have an instinctive understanding of rural life and of the interaction between its many parts, rather than a Government who impose their urban views. The Labour Government have shown that they cannot provide that—we can and we will.

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs 4:52 pm, 19th January 2005

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"welcomes the Government's commitment to farming and rural communities set out in the Strategy for Sustainable Farming and Food and Rural Strategy 2004;
applauds the Government's commitment to invest more than £500 million over three years in sustainable food and farming;
commends the reforms of the Common Agricultural Policy secured by the Government in June 2003, which will be implemented at the earliest possible opportunity in 2005;
congratulates the Government's record on public service delivery in rural areas;
further commends the £239 million allocated over six years to 2003–04 through the Rural Bus Subsidy Grant for new and improved rural transport services;
further applauds the increase in the resources available for regional development agencies to regenerate the rural economy;
further welcomes schemes in place to provide affordable housing in rural areas;
praises the efforts to retain the rural post office network;
further congratulates the Government's action to protect and enhance the rural environment;
and calls upon the Government to continue pursuing a strategy based on long term policies to regenerate British agriculture, improve rural services and revitalise the rural economy as a whole."

Today's debate gives us an opportunity to rebut the doom and gloom purveyed by the Conservative party. The future of our rural and farming communities is enormously important for this country, and this is a timely opportunity to remind the House of the considerable progress that we have made since 1997 in ensuring that those communities have a sustainable future—a future that would be taken from them if the cuts envisaged by the Conservative party were made.

The current CAP reform—the most significant change in the subsidy regime for 30 years—presents real opportunities for farming. Our economists estimate that, on average, farm incomes could rise by about £100 million relative to what would happen in the absence of the single payment scheme. Current farm incomes have shown welcome signs of recovery in the past four years and are now 80 per cent. above the low point in 2000.

It is clear from the opening speech that the Conservatives want to return to subsidised farming, instead of developing the sustainable future for farming that we are helping to bring about. The Conservative threat to the rural economy is spelt out in the James report. The Opposition propose a massive cut of £112 million in the budget of the Rural Payments Agency by 2007–08, just when the agency is about to deliver the new single farm payment. How much good will that do for farmers? As the RPA made clear today, it hopes to make the single farm payments in February 2006. Our promise is that that will be done as early as possible in the payment window. Of course, payments depend on a complex IT system, whose delivery timing depends on when the fully detailed information comes from European Commission. There is now massive investment in the streamlined system, and in following years farmers will get their payments at the earliest date within the payment window. The cuts envisaged by the Conservative party—it is not just outsourcing, so let us have none of that nonsense—would wreck the programme that is being designed and delivered in partnership with farming organisations.

The Conservatives want to save £47 million in the Environment Agency, but that would severely hamper its work to support businesses, especially small and medium-sized businesses, in acting against illegal polluters, such as fly-tippers, and pursuing deregulatory measures. Barbara Young, the agency's chief executive, made those points clear yesterday.

The figures keep changing in the drip feed of the James report, but the Conservatives must answer two questions, although Mr. Paice failed to do so in response to hon. Members' interventions. First, how can they claim to care about farming and rural areas if they are prepared to slash services, as the James report recommends? Secondly, how have they done their sums? Let us have chapter and verse on how they have worked out their figures. What do they intend to cut, and from where? We know only the total figures, which appear to be ill judged and dangerously threatening to the countryside. Such information is even not detailed on their website, and the hon. Gentleman could not answer those questions when he took interventions. Let us hear from Opposition Front Benchers exactly where the cuts will fall, or they will stand condemned by their silence. Our farmers need to know.

Photo of David Taylor David Taylor Labour/Co-operative, North West Leicestershire

Does the Minister intend to deal with the future of the Food Standards Agency under the proposed cuts? The scale of its activities would be halved, which would have a serious consequential effect on public health and almost certainly a knock-on effect on international confidence in the quality of British food.

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

My hon. Friend makes an important point. The Conservative party is dangerously slack in its approach to not only farming, the rural economy and the environment but the health of the nation.

Let us get the facts straight about the rural economy. It is vital that we do not confuse rural communities with farming communities. Farming remains at the heart of many communities, but it is by no means the dominant economic activity in the countryside, and we must keep that in perspective.

The majority of rural England is thriving. It is true that unemployment has fallen by 24 per cent. in urban areas since 1997, but it has fallen by 26 per cent. in rural areas. Rural communities generally are benefiting from the same economic prosperity as urban communities, with low unemployment and interest rates—the lowest for 40 years—and real growth of nearly 3 per cent. a year since 1997. The rural economy has benefited from our national economic success, not least because businesses of all types increasingly feature in rural as well as urban areas. Employees in our rural areas are more likely to work in sectors other than farming. Some 17 per cent. work in manufacturing, some 15 per cent. work in wholesale and retail, and some 9 per cent. work in hotels and restaurants, while only 7 per cent. work in farming.

Farming is now well placed to respond to the changes that it faces. Through the strategy for sustainable farming and food, the industry, consumers and the Government are working together to help farming to increase its competitiveness and reconnect with the market. I shall return to farming issues in a moment.

Rural services have been enhanced since 1997 due to the Government's concerted action. Let me give a few examples. The number of schools closing in rural areas was running at 30 a year between 1993 and 1997, but that has come down to an average of six a year since 1997. We are supporting more than 2,000 bus services a year through the rural bus subsidy grant. Such support would be slashed under the Conservatives, yet they have the cheek to talk about fewer buses. We are providing £150 million a year to support the rural post office network, so the number of closures has fallen from more than 300 a year to about 100 a year. As we promised, there are now more than 100 primary care one-stop or mobile units providing care to people in rural areas.

We are neither satisfied nor complacent because many rural communities face real challenges and problems. Farmers are not having an easy time—I shall address some of the problems in a moment—but let us debate these real issues on the basis of evidence, rather than myth and misrepresentation, which was all that we heard from the hon. Member for South-East Cambridgeshire.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

The Minister is aware that many of the jobs being created in the countryside are seasonal with a very low cost base. That is what is happening in places such as Exmoor. Does he not understand that we are looking for a long-term commitment and long-term jobs, not seasonal jobs?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

The hon. Gentleman is wrong. There are low-paid jobs in urban and rural areas, but the Government's success in delivering broadband access to rural areas is giving a wide range of businesses that previously could operate only in urban areas the opportunity to operate in rural areas. That is happening because there are many intelligent entrepreneurs in rural communities—men and many women who are opening the sort of business that has never before been seen in rural areas. I say to the hon. Gentleman, with great respect, that he has not connected with the type of change that is occurring in our rural areas.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

Is it fair to say that the rural economy has benefited from the minimum wage, without which there would have been a lot of poverty in rural areas? It was the Labour Government who took that brave stance.

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

My hon. Friend is absolutely right. In addition, the working families tax credit has helped people in rural areas. There is a problem of low pay in such areas, but if the Labour Government are removed and a Conservative Government arrive, my God, it will affect the low paid and the unemployed in rural areas, and many now in employment will be unemployed.

Photo of Andrew Turner Andrew Turner Vice-Chair, Conservative Party

Will the Minister address a specific issue affecting livestock producers—the disposal of fallen stock? Livestock producers in my constituency face a difficulty in that only one organisation tendered to dispose of fallen stock under the Government's fallen stock scheme—the Isle of Wight Foxhounds. As I am sure he is aware, that group is likely to have far less income after 19 February and it will therefore be unable to continue to cross-subsidise the disposal of fallen stock. No other organisation is willing to dispose of fallen stock on the Isle of Wight. What reassurance can the right hon. Gentleman give farmers in my constituency on that important matter?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

We are aware of the specific fallen stock issue on the Isle of Wight and we are addressing it. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend Mr. Bradshaw, might have more to say when he winds up the debate.

Photo of James Gray James Gray Conservative, North Wiltshire

The Minister is enjoying himself at the Dispatch Box. Before he moves on from the minimum wage, will he tell us whether he would abolish the agricultural wages boards, as we propose under the James report?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

Certainly not. We believe that the AWBs continue to support the wages of agricultural workers, and I am sure that all of them will take note of the threat to their income that the hon. Gentleman offers.

Photo of Kali Mountford Kali Mountford PPS (Mr Des Browne, Minister of State), Home Office

A year ago in one ward in my area, the lowest wage was £18,000 a year and the highest was £30,000; now, the lowest is £22,000 and the highest is £35,000. Our economy is growing, but we want to be able to plan the local economy. We are working with the local regional development agency, Yorkshire Forward, on a market towns initiative. Are there any plans to give further support to such initiatives, so that rural communities such as mine can have planned development?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

Yes, indeed, there are. Following on from the announcement made in July by my right hon. Friend the Secretary of State, we are massively increasing the money that we put into RDAs and devolving finances to them, so that they can work with partners in their region and drill down to local areas, particularly rural areas, to support initiatives that we believe will create not only a healthy economy—we already have that in rural areas—but a vibrant one.

Photo of Mr Adrian Flook Mr Adrian Flook Conservative, Taunton

Earlier, the Minister defended Government spending as though it were a sacred cow, yet in the next few years his Government will spend £1 billion and more on culling cattle that have bovine tuberculosis. Why does he not accept that he will fail Somerset's dairy and cattle farmers in the coming years by not resolving the problem of bovine TB?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

We want to spend less and waste less money on unproductive measures. My hon. Friend the Under-Secretary of State will pick up on that point, which comes within his portfolio, in his winding-up speech.

I want to make one point clear for the Opposition, because it is about time they got in touch with reality. They portray people in rural areas as being not only disadvantaged but dissatisfied, yet the facts tell a different story. When we asked rural people whether they were content with services in rural areas, more than 90 per cent. said they were satisfied with their GPs, NHS dentists, opticians and pharmacists; 79 per cent. were satisfied with the quality of education provided locally; 85 per cent. were satisfied with the location of bus stops and train stations; and 85 per cent. were satisfied with the quality of child care offered. We can hardly argue with what the rural public—our customers—tell us. Opposition Members seem to talk to each other. The satisfaction expressed by rural people is the result of 180 Labour MPs doing so well in representing rural and semi-rural communities, or perhaps I should say that that figure is now 181.

Let me outline some of the key steps that the Government are taking to address the issues facing farming and rural communities. My right hon. Friend the Secretary of State outlined to the House her vision of sustainable rural communities and a fair deal for rural England when she launched the rural strategy 2004 on 21 July. Sustainable rural communities, and in particular affordable housing, are at the heart of our five-year strategy, because it has been raised with us by Labour Members who represent rural communities. I shall come to housing later.

The rural strategy encompasses all three pillars of sustainable development. First, it is about economic regeneration in rural areas. To help farm and other rural businesses be competitive and diversify, the Government are allocating an extra £2 million this year to improve business advice. We are also increasing the amount of money from DEFRA in the regional development agencies' finances from £46 million to £77 million next year.

Secondly, the strategy is designed to tackle rural social exclusion wherever it occurs and to provide fair access to services and opportunities for rural people. We are pushing more of our money down to the community to help communities have a place to meet, an effective representative body such as a parish council, and access to a community development worker. Thirdly, the strategy is about protecting and enhancing the natural environment. We are creating an integrated agency to address the natural environment, biodiversity and our landscape in a co-ordinated way so as to get maximum social and economic advantage from its work, as well as benefits in terms of conservation and biodiversity.

Whitehall does not always know best, so we are devolving decisions and funding closer to the people—the public, the customer, the community. Last October we launched a series of rural pathfinders across the country to pilot innovative ways of joining up service delivery at the local level, with local authorities taking the lead role. That counts: it matters to people. Yesterday I met representatives of the rural pathfinders from every region of England, and the enthusiasm with which they are responding to the opportunity is palpable.

Photo of Mr Paul Tyler Mr Paul Tyler Shadow Leader of the House of Commons

Does the right hon. Gentleman recall that Ministers believed that Whitehall knew best in the matter of right to buy? When the Conservatives were in power they forced rural local authorities to sell their council houses. Will the Minister produce some action, rather than words, on the matter by enabling planning authorities in areas such as mine in Cornwall to constrain the amount of housing stock that goes into the second homes market by planning control?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

Indeed, in the planning field we are helping rural housing authorities and those who are concerned to provide housing and to make sure that it is sustainable, not just a house for the short term. I will return to the matter.

I mentioned the enthusiasm about rural pathfinders in every region of England. It is also important to note that we are carrying out a major streamlining of our funding stream, from over 100 separate streams of funding to three broad funding programmes. That will make it simpler for everybody. To test whether the new arrangements are making a difference and to promote best practice, the Government are setting up the New Countryside Agency, whose role will be to assess how much impact Government policy and action are having. It will focus particularly on disadvantage and provide a powerful independent voice for rural people, advising Government, collecting views and experience across the regions and helping us to drive up quality and delivery at the local level.

It is interesting to note some of the issues that the Opposition did not raise. It is important to get the facts about crime in rural areas straight. Crime across the United Kingdom has fallen by 30 per cent. since 1997, and that is one of the Government's biggest achievements. People in rural areas are much less likely to experience burglary and vehicle-related theft, and rural adults are much less likely to suffer from violent crime than their non-rural counterparts.

Furthermore, fear of crime has remained considerably lower in rural areas than it is in urban areas. The British crime survey clearly shows that anxiety and worry about crime is less in rural areas compared with urban and inner-city areas, but we recognise that crime and the fear of crime continue to be a major concern for many people in rural communities. Only yesterday in the Standing Committee on the Clean Neighbourhoods and Environment Bill we agreed clause 1, which embeds environmental damage into the work of the local crime and disorder reduction partnerships. The Conservatives are so out of touch that they think that graffiti, litter and fly-tipping are urban problems that do not matter in rural communities. They are wrong.

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

Has the hon. Gentleman not read the Opposition's reasoned—or rather, unreasoned—amendment last week in which, in opposing the introduction of the Clean Neighbourhoods and Environment Bill, they said that the Bill focuses predominantly on urban issues while neglecting rural areas: their mistake, not ours.

Photo of Paddy Tipping Paddy Tipping Labour, Sherwood

Clearly, the Opposition have forgotten. I need not remind my right hon. Friend that there were just two contributions from the Conservative Benches, neither of which addressed not only environmental crime but the equally important issue of animal welfare.

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

My hon. Friend is absolutely right, and his was one of the 18 excellent contributions that we heard from Labour Back Benchers. In contrast to the Opposition, which is interested only in slash and burn in public services, the Government recognise the different needs of rural and urban communities. The rural policing fund has therefore been maintained for 2005–06 at £30 million, and I am pleased about that, not just as the Minister with responsibility for rural affairs, but because as a Home Office Minister I commissioned the research that led to that money, which addresses the particular needs of the 31 forces with the most widespread populations.

When listening to rural residents, one theme dominates—the need for affordable housing that will allow their children, and people with a connection to the area, to stay in their community. Mr. Tyler, who intervened on that point, was absolutely right, as are those of my hon. Friends who have raised the matter time and again. The Government have responded to that call through a number of measures. Before Christmas we announced specific measures to help local planning authorities allocate sites in villages for 100 per cent. affordable housing. That complements the rural exception site policy, which will be continued and which allows affordable housing to be built on sites that would otherwise not be available for development.

Through the Housing Corporation's rural programme we are funding sites that would otherwise not be available for development. Our target is 3,500 homes for the two years from 2004–05, but we are on target to exceed that number by producing over 4,000 affordable homes in rural areas.

But providing sites is only part of the story. In 2003 and through the Housing Act 2004, we introduced measures that retain a supply of affordable housing in rural areas by placing restrictions on the right to buy. In many villages where the supply of new social housing is limited, exercising this right has led to a diminished pool of affordable housing, and there are some who have exploited the scheme by selling on quickly to people with no local connections. That addresses precisely the point made by the hon. Member for North Cornwall. Hence, we introduced restrictions on the resale of right to buy homes in the seven national parks, the 37 areas of outstanding natural beauty and the 35 areas designated as rural for this purpose.

In addition, my right hon. Friend the Deputy Prime Minister recently gave local authorities scope to reduce the council tax discount on second homes from 50 per cent. to a minimum of 10 per cent. Authorities can use this money for affordable housing or for other services in line with local priorities. In Devon, for example, this income is being used to build more affordable housing where it is needed in rural areas. These are real measures helping real people. My own belief is that shared equity is the model that we should support and encourage with as much enthusiasm as possible, because such models of co-operative housing provide the opportunity for people to benefit from affordable housing and to get on the first step of the ladder of ownership, and allows that unit of affordable housing to be recycled to the next family that needs assistance.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

The Minister is aware that North Yorkshire national park made an announcement on the subject a couple of days ago, and Exmoor national park has been examining the issue for some time. If the national parks go down that route, will the Minister look to support their aspiration to keep low-cost housing for local people, and will the Government put a bit of backbone into the policy?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

We will certainly examine the details of the national parks' proposals, and I am delighted that they are engaging with the issue, which, as the hon. Gentleman knows, is an important matter in our national parks, as it is in many other rural communities. The issue is important in the national parks because of the need to limit developments that damage the local environment. It is possible to go too far, and we must examine the detail of the proposals, but I am happy publicly to encourage the engagement of national park authorities with the issue.

Photo of Mr Huw Edwards Mr Huw Edwards Labour, Monmouth

Will my right hon. Friend commend the shared equity scheme introduced by Lovells, the private house developers, in conjunction with Gwerin housing association? I welcomed the first tenants to use that scheme in Monmouth. Does the Minister think that such a model could be applied to rural areas as well as to small towns?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

I note my hon. Friend's point. I am not aware of that specific scheme and would like to hear more about it. It sounds like the sort of scheme that we should encourage.

Turning to farming, the strategy for sustainable farming and food remains our key policy. It is a comprehensive, long-term plan for the future development of the industry. It identifies how we can all work together to help farming to improve its economic performance and individual farmers to access the right training and advice for them, and to improve farming's impact on the environment. It is designed to support the farming industry through the current period of change and leave it well equipped to succeed in the future. The UK farming industry has a major role to play in meeting this country's food requirements, providing an attractive, well-managed countryside and contributing to the rural fabric, and we want a viable and sustainable farming industry that can do that.

The implementation of the strategy is underpinned by our approach to the groundbreaking deal on common agricultural policy reform in June 2003, which committed us to seeking the best and the most sustainable approach to farming not only in England, but in the UK generally. Decoupling—breaking the link between production and subsidies—is the main prize from the CAP reforms, and it will allow the industry to shape its own future. In other words, the industry will depend on its own initiatives rather than on the Government.

The real benefits that farmers can gain is why the new system will be delivered this year, which is the earliest possible date. The reforms and the delivery arrangements, which are based on a flat-rate area system, will help to reconnect farmers to their markets and will be free of many of the bureaucratic rules associated with production-linked subsidies, benefiting not only farmers and consumers but society as a whole.

Overall, the CAP reforms will deliver significant economic benefits to not only farmers, but everyone in the UK. The benefits are estimated at £400 million to £500 million a year at present exchange rates. Payments under the new single payment scheme will depend on meeting a number of environmental, animal health and welfare and food safety standards. Those measures are expected to improve the environmental performance of British agriculture. In addition, we have decided to introduce an additional rate of national modulation in England, which will provide additional funds for agri-environment schemes and, by protecting the countryside and its environment, a more sustainable farming industry.

We have adopted cross-compliance measures, which contain a mixture of common-sense farming practices and support for existing legislation, to bring all farmers up to the same minimum level. In addition to pillar 1 of the CAP, we are putting in £1.7 billion through the England rural development programme over the period 2000–06. Help is being provided on a variety of matters, including diversification, skills training and marketing. That means that we are making available £240 million a year compared with £56 million a year between 1993 and 1999, which is a fourfold increase in support.

Photo of David Kidney David Kidney Labour, Stafford

On red tape, which was mentioned by the Opposition spokesman, does not it follow that with one single farm payment there is one single system for applying for forms and one single system for inspecting farms? Is not that better than the 10 or so schemes that we had before?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

My hon. Friend is right—I am certain that that improvement will indeed benefit farmers.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

The Minister will no doubt have noticed that under the Conservatives' proposals their changes in outsourcing the Rural Payments Agency will, according to the James review, be

"funded by a handling charge based on subsidies paid".

Can the Minister reassure farmers who are anxious about late payment? Under the simplified system, if there is a late payment to farmers beyond 1 December this year, will farmers receive payments up-front where possible, and if it is not possible, will they be compensated for their loss of earnings as a result of delayed payment?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

Let me make it clear to the hon. Gentleman that we have said that we will pay as early as practicable within the payment window, which, as he knows, runs through to June of the following year. We want to bring the payments forward to the earliest possible point within the payment window. In the first year, that depends partly on the timing of information that comes from the European Commission. The hon. Gentleman, with his knowledge of the farming industry, knows full well how complex some of the delivery arrangements are. We try to make them as simple as possible for our farmers, but there are complications involved. The benefit will be our undertaking to make payments as early as possible within the payments window, which is not just for next year but for future years. We are in discussion with the industry, the banks and others to try to ensure that the situation is understood, and there is a promise to deliver. Farmers will know where they stand in the course of the coming months, well in advance of the December to June period. It is currently estimated that the payment will be made in February. It will be as early as we can possibly make it within the payment window, not only next year but in each successive year.

Of all the rural issues, I turn finally to one that has been much debated in this House—hunting with dogs. The Countryside Alliance, with Conservative Members following in its footsteps, has consistently misrepresented hunting as a town-versus-country issue, which it is not, and claimed that it shows that we are out of touch, which we are not. What I have said demonstrates the Government's achievements for the countryside. The facts speak for themselves.

Let me set out the main points of what is in truth a minor issue for rural communities. Members of Parliament, having voted 10 times in 10 years for a ban on hunting—

Photo of James Gray James Gray Conservative, North Wiltshire

The Minister seems to be fixated on hunting. Why is he talking about hunting when the motion does not refer to it, my hon. Friend Mr. Paice did not mention it and it has not been raised at all during the debate? Why is he so fixated on banging on about it?

Photo of Alun Michael Alun Michael Minister of State (Rural Affairs), Department for Environment, Food and Rural Affairs

Is the hon. Gentleman now embarrassed by his opposition to the Hunting Bill and his comments during its Second Reading? I turn to this issue particularly because Conservative Members have made a lot of song and dance about its impact on the rural economy. They have banged on about it time and again over many months. Indeed, Mr. Gray might like me to quote some of his comments. He said:

"There is no question but that the Bill will result in the deaths of perhaps 30,000, 40,000 or 50,000 dogs as soon as it comes in."

He went on to say:

"The same applies to many horses. They can more easily be reused for hacking, but many lower-grade horses are kept exclusively for hunting."

He also said,

"they are putting 8,000 people out of work."—[Hansard, 15 September 2004; Vol. 424; c. 1365–1368.]

In recent days, we have seen a statement from the Countryside Alliance indicating that we should not expect to see such a removal of dogs. Therefore, there is no threat to the people who are employed in that activity. It is interesting to see how that has disappeared from the agenda of Conservative Members.

Having shot the fox of the hon. Member for North Wiltshire, clearly to his great embarrassment, I want to say that I am pleased that the debate has been on farming and rural communities. The priority is to make the best use of the money that is invested in agriculture to reform farming and give it a sustainable future. The problems will not be solved overnight but we are working on them with the industry, farmers and those who represent rural communities and business in our rural areas.

Farming remains at the heart of many communities, despite being only part of the rural picture. We must balance our priorities for farming, for those who live in rural communities and for the nation. That is the Government's commitment and we will continue to deliver it.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs) 5:25 pm, 19th January 2005

I congratulate Mr. Paice on using precious time to debate an important subject that will affect many hon. Members. He raised some important issues in his presentation.

I agree with the hon. Gentleman about many matters but I was somewhat disappointed, given the fanfare of publicity with which the Conservative party announced the James review, that he failed to answer a question from my hon. Friend Mr. Heath. He asked why, if the Conservative party was so concerned about red tape and cost to the industry, overhead No. 63 in the James committee's main proposals about the Department for Environment, Food and Rural Affairs stated that a Conservative Government would deliver the outsourcing of the Rural Payments Agency,

"funded by a handling charge based on subsidies paid".

That will clearly be a cost to the industry.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

Let me make it clear that that does not mean a charge on farmers, as Mr. Heath implied. [Interruption.] I shall tell the Minister exactly where the money will come from. The outside agency will be paid a percentage of the total payment. At present, as the Minister knows, running the RPA costs 4 per cent. of the total payments. We believe that it can be done for half that amount. That money would go to the outside agency.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

I am grateful for that clarification. If the charge is based on the company outsourcing, I am sure that farmers will be relieved. However, the proposal requires clarity. If we find from studying further Conservative announcements that that is genuinely the intention, we will welcome it.

Photo of David Kidney David Kidney Labour, Stafford

The hon. Gentleman is performing a great service, because we ought to get to the bottom of the matter. I do not believe that Mr. Paice has provided a reassurance that we should accept. There would be a saving only because the taxpayer would stop paying for running the RPA. It is neither here nor there whether the total running cost is 4 per cent. or 2 per cent.—a fraction of the amount of subsidies paid. The important question is who will foot the bill. The hon. Members for St. Ives (Andrew George) and for Somerton and Frome (Mr. Heath) discovered that the bill would pass to farmers, who will be flabbergasted by that, because the money would come out of their subsidy. They would get the money net of the payment instead of the total payment that they receive now.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

I am worried that the reassurances that the hon. Member for South-East Cambridgeshire gave may unravel. That is why it is vital that the Conservatives make further clarifications and announcements. Perhaps they will try to clarify the issue further when winding up. At least they have taken on board the fact that there will be anxiety in the farming community if they propose such additional charges.

Photo of James Paice James Paice Shadow Minister (Environment, Food and Rural Affairs)

I think that the hon. Gentleman accepts what I said earlier: there is no intention that the payment for the outside agency would come from the payments made to farmers. It is simply a question of reducing the totality of the cost of running the Rural Payments Agency, and we would pay the outside agency a percentage of the total, which is exactly how the RPA is funded at present. Farmers will not pay.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

The hon. Gentleman says that I accept his earlier explanation. Of course, I do not accept everything that he says, because he earlier claimed that the Liberal Democrats were not in Government. Of course, we are in Government in Scotland, where we are implementing common agricultural policy reform. The Agriculture Minister, Ross Finnie MSP, is highly thought of in the farming community, and his implementation this year of the single farm payment north of the border is going ahead very steadily indeed. So the rather cheap remarks made by the hon. Member for South-East Cambridgeshire earlier were quite misplaced. Given that he is defending himself in this way, I worry that he doth protest too much. Perhaps, later on, we shall find out exactly what the Conservatives are proposing. Farmers will be concerned that their proposals would involve top-slicing the payments due to farmers, and I hope that we shall receive further clarification on that as the debate proceeds.

We could spend time going over the Conservatives' pre-1997 record on farming, but it probably is not worth while doing so now. I have just put down a sheaf of papers containing reminders of BSE and of the fact that we have IACS forms twice as long as those of other European nations because the Conservatives were gold-plating directives in the UK. I hope to keep my contribution to the debate relatively short, because I know that many others wish to speak, and I want to cover issues relating to farming and to DEFRA's management of schemes. I also want to look at the impact of the power of supermarkets on the market—as the hon. Member for South-East Cambridgeshire rightly did—and to follow up some of the Minister's remarks on affordable housing in the countryside. These issues are all important to people living in rural communities and to those involved in farming.

I and others have expressed concern that DEFRA Ministers appear to act as managers, observers and bystanders in regard to what is happening in rural areas, and that whenever we want a clear vision of the Government's rural policy, we often find it out from Lord Haskins in another place. I am not alone in dubbing him the real Secretary of State, the one who is providing leadership and vision for the Department. However, when he comes out with controversial quotes such as

"Farms will get bigger, and that's a good thing", he rather undermines the Government's claim to be fighting for all farmers. It is inevitable that farms will get bigger over time, as they always have done, and that farmers will leave the industry, but the fact that that seems to be welcomed by the Government is a matter of concern to those involved in farming. Farmers have been leaving the industry at an astonishing rate, and since Labour came to power, they have been doing so at a higher rate than at any time since the second world war.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

The hon. Gentleman is making a valid point. That is certainly happening in Cornwall. People are selling up in London and elsewhere and buying an enormous amount of farmland. This is forcing farmers out because they cannot afford to pay for the land. Does the hon. Gentleman agree that the Government have not addressed this problem in any way?

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

I agree that there is such a trend in many parts of the country. Farmers, especially dairy farmers in my part of the country and the hon. Gentleman's part of the country, are leaving in droves. The Government's figures demonstrate that the number of dairy farmers has fallen from 37,300 in 1997 to below 25,000. Approximately a third of all dairy farmers have gone out of business since 1997, which is clearly a catastrophic change to the countryside. In many parts of the country, farmhouses are being sold, and a small piece of privatised green belt, if we want to call it that, is being bought with it, possibly for hobby farming. Often, if not always, a change of culture also happens.

The nature of traditional farming communities is changing. The traditional farming community thatI remember, from my boyhood and upbringing in the far west of Cornwall, was one in which farmers were engaged in the local community and in which people could walk the land, irrespective of where local footpaths were. That was an interchange between the local community and farmers because they were very much one and the same. In many rural areas, a lot more private signs are being put up, with a lot more effort to try to redirect footpaths away from areas that have traditionally been walked in the past, as new people come in who do not understand country ways. That is sending shockwaves through many rural communities and causing unnecessary and unwelcome conflict in the countryside. I agree with Mr. Liddell-Grainger on that point.

The Minister rightly raised the issue of CAP reform. This is the biggest and most momentous challenge to rural communities. On balance, the Government made the right decision. Inevitably, we will have to move towards area payments at some stage, and the transitional approach taken by the Government gets the balance pretty much right. The decision taken north of the border, for example, was right for Scotland.

It is important, however, that the CAP and single farm payments be delivered with greater transparency and simplicity. With that greater transparency, and perhaps with freedom of information, I predict that taxpayers and the general public will ask increasingly what benefit they are getting from the payments being made to farmers, given that they will be less complex.

Photo of James Gray James Gray Conservative, North Wiltshire

The hon. Gentleman has a charming way of being all things to all men, all the time, on almost every subject. A moment ago, he said that Ross Finnie was doing well in Scotland with historic payments, and now he says that the approach in England is also going well. Can I ask him one quick question? In the unlikely event that he were the Secretary of State—let us imagine that for a moment, although I grant that it is not very likely—what would a Liberal Government have done?

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

Perhaps the hon. Gentleman needs to go on a learning curve: devolution results inevitably in differing policy in different places. The decision taken for Scotland was therefore right for the Scottish situation and the Scottish farming industry. He asks about what I would do were I Secretary of State— I think that he and I have about the same chance of becoming Secretary of State, and our chances are possibly greater than the Conservatives' chances, given their performance in the polls. I have already told the House that I think that the Government got the balance pretty much right. Certainly, over a seven to 10-year period, we need to move towards area payments. Clearly, in a 10 to 15-year period, it would be absurd and bizarre to find ourselves in a situation in which farmers were being paid on the basis of what they were doing 10 or 15 years previously, and they could be doing anything at that stage. There must be a transitional period. We must move in that direction and, inevitably, Scotland and Wales will have to do the same—but at their own pace, in their own way and on the basis that they make decisions at a time that suits them, rather than their being instructed by our Parliament.

I want to remind the Minister of issues that have undermined the confidence with which the farming community views the Department. There is concern, which I think he has picked up, about the date when farmers will receive their payments under the single payments system. Confidence is not encouraged by the way in which the Government handled the release of Jim Dring's report on Burnside farm in Northumberland at the beginning of the foot and mouth epidemic in February 2001, or the way in which they handled video evidence that arrived in the public domain towards the end of last year—by the lack of knowledge of that evidence, and the fact that it was not involved in the various foot and mouth inquiries that the Government commissioned.

Nor is the industry encouraged by the way in which the Government handled the regulations replacing the Animal By-Products Order 1999, failing to lay them before the House in 2003. They promised to implement a fallen-stock collection scheme in January 2004. Following further announcements, we were eventually presented with a scheme that is only just getting off the ground now, some 18 months after it was required to start. That too does not help.

I said that I would say something about the power of the supermarkets. As the hon. Member for South-East Cambridgeshire pointed out, the supermarkets can dictate market conditions to farmers. Their actions, and those of their chief executives and buyers, are of course entirely rational: if they do not put pressure on their suppliers and their competitors do, they will be at a disadvantage. We need a code of practice that distinguishes clearly between appropriate use of power and inappropriate abuse of power in the market.

The Government have not paid proper attention to that, although they have instituted inquiries. Since the first inquiry conducted by the Competition Commission in 2000, there have been others conducted by both the commission and the Office of Fair Trading. We are still awaiting the publication of the OFT's audit of the food supply chain, undertaken since the OFT reported on the operation of the supermarket code in February last year. The farming industry, however, wants action rather than further inquiries and reports. It wants a system with real teeth to ensure that farmers have a say, and can have an impact throughout the food chain.

According to yesterday's Tesco report, over the Christmas period Tesco had 29 per cent. of the grocery market. When the OFT examined the role of convenience stores last year, it concluded that if there is a discrete market in convenience stores there will be a discrete market in supermarkets as well. That gives Tesco about 40 per cent. of the supermarket sector—a much larger proportion of the market than was held by Milk Marque in 1999, a year before the Government decided to abolish it. At that stage, so far as we could tell, Milk Marque had some 29 per cent. of the market.

Photo of Lindsay Hoyle Lindsay Hoyle Labour, Chorley

There is clearly great concern within the farming industry about the way in which supermarkets react, and the hon. Gentleman is right: the problem is that when one supermarket drives the price down, its competitors have to continue to do so. What does he believe is the answer to ensuring fair play and a fair price at the gate for farmers, so that they can have a livelihood and make a profit? At the moment, that is not happening.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

I entirely agree with the hon. Gentleman and we Liberal Democrats would deal with the problem by, for example, strengthening the code. Far too much emphasis is placed on the use of rather grey terminology, as evidenced in appearance of the word "reasonable" throughout the document. That is very good for lawyers and the courts, but the use of much more measurable language would help those using the system.

The OFT's report of last February made it clear that farmers, farmers' co-operatives and suppliers are not using the code for fear of retaliation. We need a food trade inspector—operating within the OFT—to undertake in various sectors of the food supply chain the kind of proactive inquiries that the OFT currently undertakes, in order to identify and investigate malpractice, perhaps on the basis of information provided by the industry.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I commend to the hon. Gentleman the supermarket Waitrose, which has direct contracts with British dairy farmers and beef producers—indeed, it makes great play of such contracts—so that its sources can be fully validated. If other supermarkets were to follow the same line, the British agricultural sector would do much better.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

That is an interesting point. I have heard from all the main supermarkets and all claim that they are treating British farmers fairly. I do not mind the hon. Gentleman's using his intervention as a commercial for a particular grocer, and it is true that Waitrose has a good name in many circles in British farming. Even so, this is a major issue across the piece, and it needs to be tackled.

Photo of Mr Huw Edwards Mr Huw Edwards Labour, Monmouth

I have been following the hon. Gentleman's argument carefully and I commend the efforts that he and others have made to strengthen the supermarket code of conduct. Has he seen the recent report in the Farmers Guardian suggesting that the National Farmers Union, Farmers For Action and supermarkets such as Tesco are collaborating in order to get a 3p increase in the price of milk, half of which could be distributed to the producers and half to the processors? Does he commend such an initiative?

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

I certainly do. The last time Farmers For Action protested and erected blockades outside dairies and supermarkets, it achieved a 2p increase in the price given by Asda, at least, but as the hon. Gentleman well knows, it is questionable whether that benefit reached the farmers themselves. Moreover, one cannot simply establish and peg farm gate prices on the basis of protesting every six months or so; we have to have a system that is robust in the long term. That said, I entirely agree that the current farm gate price for milk is unsustainable for the majority of dairy farmers. Action is required to ensure that they are given fair protection in the market, which does not happen at the moment.

I do not want to take up too much of Members' time, but before I finish I want to emphasise a couple of points about housing. I was concerned on behalf of many people living in rural areas following the publication last year of the Kate Barker review. It pointed out that, as the hon. Member for South-East Cambridgeshire argued, large swathes of the countryside could be swamped by many thousands of houses, the prices of which would be well out of the reach of people on rural incomes, and that there is a consequent need for affordable housing in such areas. However, such an observation does not help people living in the countryside. As long as green land in the countryside has a hope value, people will not put their land forward for affordable housing. The only way to provide affordable housing in the countryside is to have strict control on planning and development. I know that that sounds counterintuitive, but that is the only way to deliver the exception—land that is strictly for affordable housing. Those sites will not be made available if we take a flexible, laissez-faire approach that allows any sort of development. People will not make land available for affordable housing in the countryside because they would inevitably receive a fraction of the value that they would otherwise receive for an unfettered permission to develop.

The Minister raised the issue of, and responded to concerns about, second homes. That issue certainly affects my constituency and many others. I campaigned for many years for the removal of the 50 per cent. council tax discount for second homes, introduced by the Conservatives, which meant that many millions of pounds was spent subsidising the wealthy when many thousands of rural folk on low incomes could not even afford a first home. I am grateful that the Government have mostly removed that unfairness by allowing local authorities to charge 90 per cent. of the tax for second homes. In my constituency, we have recently cut the ribbon on a new scheme—as the Minister said—which was entirely funded by the money raised by the additional charge on second homes.

Is the Minister aware, however, that in April next year his colleagues in the Treasury will introduce, through the self-invested personal pension, a system that will permit those with personal pensions to invest that money in second homes? I received some reassurance after a debate last year that that would not happen, but all the financial press is now promoting the scheme and saying that the tax advantages of the scheme could be used for the purchase of second homes. Many people in areas with large numbers of second homes will be very concerned by the potential impact of that scheme, and I hope that the Minister will consider it further.

Photo of Robert Jackson Robert Jackson Labour, Wantage 5:52 pm, 19th January 2005

This is my maiden speech as the first Labour Member of Parliament for Wantage. I am delighted to make it on a subject that is important in my constituency—farming and rural affairs. It is agreeable, I must say, to be sitting in my old place on these Benches.

I am just old enough to remember the respect and affection in the farming community for Tom Williams, the agriculture Minister in the post-war Attlee Government and the architect of the deficiency payments system, by which farming in Britain was supported until 1973. As the European common agricultural policy evolves away from the market intervention methods of the classical CAP towards the same sort of direct payments system adopted by Tom Williams, I observe that British farmers have nothing to fear and much to hope for from a Labour Government.

I first learned to understand the importance and value of farming in British life when I served as a Member of the European Parliament between 1979 and 1984. Ever since those days, I have had regular meetings every few months with local farmers. Indeed, I had such a meeting only last Friday night. I developed a custom of writing a detailed letter to the Minister after each of those meetings, reporting on them and posing the questions that had been raised. I am glad to say that I have always had full and helpful replies to those letters from Ministers in both Conservative and Labour Governments, and I thank my right hon. Friend the Minister for his contribution to that.

In a fit of over-excitement in the mid-1980s, I even wrote a pamphlet with the dramatic title, "From Boom to Bust? The Implications of CAP Reform for British Farming." As so often in politics, the reality turned out to be less dramatic. The argument that I want to make today is that while much has changed in the 25 years in which I have been interested in the politics of the rural economy much has also remained the same. There is strikingly little correlation between changes of Government and the trends, both positive and negative, in the rural economy.

For instance, no one involved in farming would deny that the biggest single factor in its changing fortunes is the exchange rate between the pound and the euro or, before its introduction, the ecu. That has not been mentioned in our debate, but a farmer once told me—correctly, I think—that it is always 60 per cent. of the problem. There is no doubt that British farming would benefit from stabilising that critical exchange rate by joining the euro. Perhaps I may be allowed in passing to make the party political point that the Labour party wants Britain to join the euro, while on this issue, as on so many others, I am afraid, the Conservatives have settled definitively into the politics of "Neverland". The fluctuating pound-euro rate is a critical factor that has continued to operate across the divide represented by the change of Government in 1997.

More positively, another factor of continuity is the United Kingdom's broad approach to reform of the common agricultural policy and to the wider issues of agricultural trade in the Doha round. Governments of both parties have pursued essentially the same policy of "decoupling" farm supports from production, ending export subsidies and promoting trade liberalisation. I have always supported those policies, and I have always found that my farming constituents understood and supported the principles involved, although not necessarily the details of implementation. Both parties in government have shown a lively awareness of the special problem of British farming in the European setting—our relatively large farm-size structure. Both have sought tenaciously, as far as possible, to resist CAP reforms that are biased against the interests of larger producers.

One of the biggest changes in the rural economy since I first became involved in the late 1970s is the relative decline in farming's contribution to the total economy, which has gone down from about 3 per cent. in 1973 to 0.8 per cent. today. Again, that relative decline has continued across the divide of 1997. That is also true of efforts by Governments of both parties to promote the diversification of the rural economy, in which my right hon. Friend Mr. Smith took a particular and welcome interest when he was Minister for Employment. One of the results of the study that he carried out on the Government's behalf was the important market towns initiative. To be party political again for a moment, I wonder how many of these efforts to support rural diversification would survive a Conservative Government planning a £35 billion cut in public expenditure?

Beneath those broad continuities of policy between Governments over time there is, of course, a host of current issues that come and go. For instance, at my constituency meeting with farmers last Friday I was asked to raise four issues—farm waste disposal and the local operation of the national fallen stock scheme; the threat of bovine tuberculosis; the "Discovering Lost Ways" project, which has not been mentioned yet in our debate; and the increasing burden of regulation. I shall write to my right hon. Friend the Minister for Rural Affairs and Local Environmental Quality in detail about those issues, but I hope that the Under-Secretary will say something about them in his winding-up speech. In particular, would he comment on the fact, relayed to me last Friday, that there has been no bidder for work in my area under the national fallen stock scheme? Could he also say something about how the Government intend to grasp the nettle of bovine tuberculosis and prevent it from spreading into Oxfordshire?

Before I conclude, let me briefly address two of those current issues. There is genuine concern in the local farming community about the possible negative implications of the "Discovering Lost Ways" project. We are all familiar with the way in which existing rights of way can be abused. Indeed, I take this opportunity publicly to thank my right hon. Friend the Minister for his active engagement with the problems of abuse, by 4x4 vehicles and motor cyclists, of the great, historic Ridgeway, which runs through my constituency. I suggest that the Government go easy on discovering lost ways, at least until the new regime under the Countryside and Rights of Way Act 2000 settles down properly.

The second point is about regulation. We should remember the background. The most important events in the recent history of British farming were the emergence of BSE, followed by the foot and mouth disaster. I note in passing that in both crises the Government of the day, Conservative and then Labour, followed closely the advice given by representatives of the farming industry. Indeed, some would say that they followed that advice too closely. I have told farmers in my constituency frankly, and I say it again, that after two such disasters on their watch—so to speak—it was inevitable that farming in Britain would be subject to a barrage of regulation, both from Brussels and from Whitehall. Equally, there is no doubt, as I am sure my right hon. Friend will accept, that some of that regulation is ill thought out, that sometimes there are inconsistencies between different elements of it, and that there are all sorts of glitches in its implementation, even including, sometimes, the coming into force of schemes before the details of how to comply with them has been vouchsafed.

The Government are currently carrying out a review, aiming for a strategy for better regulation of agriculture to be published in November. I shall do what I can from these Benches to encourage Ministers to take that issue seriously, as it is currently one of the biggest bugbears in the rural community.

At the beginning of my speech, I referred to Tom Williams and the way in which the post-war Labour Government won friends in the rural community. My speech has, I think, amply shown that on the big questions of policy those with a stake in the rural economy have much for which to thank the present Government and much to hope for from them. However, as I have acquired a perhaps undeserved reputation for speaking my mind, I say to the Minister in conclusion—I am sorry to end on this note—that some of that heritage of rural good will has been forfeited by the hunting ban. Of course, it was a free-vote issue, and support for the ban and opposition to it has always been on a cross-party basis. I attended a meet of the Old Berkshire hunt at Goosey on Saturday morning where I found admiring recognition of the contributions of my hon. Friend Kate Hoey and of Bernard Donoughue and Ann Mallalieu in another place.

The story has not yet reached its denouement. The experience of Scotland has shown that it is possible for lawful riding to hounds to continue even after a ban on hunting with dogs. I am pleased that the Government are taking time for the matter to be addressed by the courts, and I note that all sorts of detail about the implementation of the policy remain to be resolved. I believe that somehow a way can be found for the honourable traditions of the countryside to be preserved, and I look forward to making whatever contribution I can from these Benches to that worthy purpose.

The fact is that the Labour party, too, has a honourable place in the annals of the countryside, which the Government, with their wide-ranging policies for the rural economy as a whole, are doing well to maintain.

Photo of Peter Atkinson Peter Atkinson Assistant Chief Whip, Whips 6:03 pm, 19th January 2005

I am grateful to Mr. Jackson for at least one thing in his speech—the support of hunting. It is a pleasure to hear someone on the Labour Benches putting forward a sensible view on that sport. I agree with him about one other thing. He mentioned Tom Williams, a formidable Labour agriculture Minister. Mr. Williams was also a staunch defender of hunting and for many years resisted attempts by Labour party members to ban it. For such small mercies, Mr. Deputy Speaker, we are grateful.

The last debate in the House in Government time on the serious issues of agriculture and farming was on 12 December 2002. It continues to be a matter of regret that dealing with something of enormous importance to this country is constantly sidelined by the Government and has to be debated in the House in short Opposition and Adjournment debates. It is wrong that the whole practice of holding a substantial debate on agriculture has been abandoned by the Government. For me and, I think, for the farming community, that reflects the Government's view of agriculture.

My hon. Friend Mr. Paice quoted DEFRA officials saying at the royal show that agriculture was neither necessary nor desirable for this country. Those comments underline a great deal of the thinking that exists in government about the problems that face agriculture.

We have experienced one of the most dramatic changes in agriculture since the Agriculture Act 1947, and we are debating that change and all that flows from it not in a proper full-scale debate, but in a short Opposition day debate. The introduction of the single farm payment has been marked by chaos. Today is 19 January—a significant date in the life of my hon. Friend Mr. Bercow—and we are well into the new year, but farmers still do not know exactly what they should do. For example, livestock farmers in my constituency in Northumberland are still awaiting a host of details about their cost-compliance arrangements, which are fundamental to some of the decisions that they must make.

Photo of John Bercow John Bercow Conservative, Buckingham

I do not know how many farmers in my constituency or in the vale of Aylesbury as a whole have their birthdays today, but I can only say that I am intimately conscious of the fact that, such is the self-preservation of my hon. Friend, many people might reasonably conclude that I am 20 years older than he is.

Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means

Order. I am sure that there is general rejoicing at the birthday of Mr. Bercow and for the fact that his intervention today was rather shorter than the one yesterday.

Photo of Peter Atkinson Peter Atkinson Assistant Chief Whip, Whips

Thank you, Mr. Deputy Speaker. The Minister looks puzzled. It is a rather private joke, but we will enlighten him with a note later.

Photo of Bill Wiggin Bill Wiggin Shadow Secretary of State for Wales

I hope the Minister will be able to enlighten us. Fallen stock has been mentioned, and I am curious to find out what would happen to a sheep with an ear tag that fell into a river and was washed a long way downstream. Would the responsibility for dealing with that dead animal lie with the Environment Agency, or would it seek to trace the owner using the ear tag and get him to pay for the incineration of the dead animal?

Photo of Peter Atkinson Peter Atkinson Assistant Chief Whip, Whips

That is a good question. I hope that the Minister can answer it—I certainly cannot—and it shows one of the confusions that exist.

Returning to the serious subject of livestock farmers in the uplands, we think that, according to the cost-compliance regulations, the use of round cattle feeders will not be allowed because of the danger of the excessive poaching of the ground around them. If those things are not allowed under the cost-compliance regulations, the cattle will have to go inside much earlier in the season, which will have a profound effect on the economy of those beef-rearing farms. Clearly, the farmers will have to feed their cattle inside much more intensively as a result. That is one example of why it is important that farmers know the answers as quickly as possible.

The DEFRA roadshow, which will be launched any day now, will not reach the north country until the end of March. It first arrives at Carlisle on 17 March, which is St. Patrick's day—far too late for farmers to know exactly what to do. The beef sector will continue to struggle until farmers are clear about how they can develop their herds, and to do so, they need to know the details of how the cost-compliance schemes will work.

We have touched on the dairy industry. Where I live in north-east England, we are now down to a handful of dairy herds. Most of the farmers with dairy herds have either given up and gone away or turned to other things. That is amazing in this country. One thing that God gave this country was the ability to grow grass. We are located on the west of Europe; we have a brilliant climate for dairy farming, yet we face a £700 million deficit in the balance of payments on dairy products. A serious aspect of the problem is the fact that a substantial number of the new modern products that consumers want—such things as yoghurts—are produced abroad and imported into the UK, which leaves our farmers to supply the liquid milk and cheese markets. That is nonsense because we will not be able to encourage the food processors and manufacturers that create such new products to come to this country unless we have a proper supply of milk, and we will not have a proper supply of milk if more dairy farmers simply go out of business.

The Government seem unwilling to address the crucial problem of how to make smaller dairies more economic. We need to bring the profitability of those dairies up to that of the biggest, but that will not be encouraged while dairy farmers are battered from head to foot by supermarket competition, which is endlessly driving down the price of milk to such an extent that most dairy farmers would be losing money if they properly factored their labour costs into the equation.

Bovine tuberculosis is another major crisis facing the dairy industry. The Irish have been studying the effect of badgers on bovine TB since about 1997 and have recently reported. I am sure that the Minister is aware that in areas in which there was a substantial cull of badgers, the number of herds reporting TB reactor cattle dropped dramatically. There might well be criticisms of the methodology of the Irish survey, but it is the best evidence that we currently have to suggest that bovine TB can be controlled, albeit only with a programme of culling infected badgers. The Government stand accused of considerable complacency on the matter.

I shall be brief because I know that other hon. Members wish to speak. The Minister for Rural Affairs and Local Environmental Quality seemed to dismiss agriculture as a declining and unimportant aspect of rural life. Of course it has been overtaken by tourism and commuter jobs, but agriculture and farming still underpin the essence of rural life. The Government have a duty to maintain an important industry for the benefit of the countryside and the people who live in it.

Photo of Mr Huw Edwards Mr Huw Edwards Labour, Monmouth 6:12 pm, 19th January 2005

It is a pleasure to speak in the debate and I am especially pleased to follow my hon. Friend Mr. Jackson. I welcome him to these Benches and commend him on his courage for doing what many people in this country have done, especially in areas such as mine—realising that the Conservative party that they supported in the past does not represent the values that they think it should and changing the habit of a lifetime by coming over to the Labour party. My hon. Friend is welcome to speak to farmers and others in my constituency because his thoughtful contribution would be well acknowledged.

I do not agree with my hon. Friend's view on hunting. I represent a rural constituency in which there has been a tradition of hunting, but hunting is a fundamentally moral issue. I think that it is morally wrong to hunt with dogs for the purpose of sport, and remain of that view despite the fact that I fully acknowledge the need to remove foxes that are a threat to livestock and appreciate the contribution that the hunting community has made on fallen stock—that is one of the great challenges that remains.

My constituency of Monmouth is very rural. It was badly hit by the foot and mouth outbreak a few years ago, but there has since been a notable improvement in morale. Livestock prices in the beef and sheep sectors have increased, but there is no doubt that there is a continuing crisis in the dairy sector. The Usk valley used to be rich in dairy farms, but the number has diminished considerably. I commend the efforts of those who are trying to get a better price for milk producers. The Welsh Affairs Committee undertook an inquiry on prices in the livestock sector a few years ago and one of its recommendations led to the introduction of a code of practice. The code needs strengthening, however, so I commend all those who are doing their best to achieve that.

I recently met some tenant farmers in my constituency who told me that the price of raw milk is still only about 17 or 18p. They cannot make any profit from that. As tenant farmers, they face other difficulties, not least that of finding housing when they retire. Traditionally, they would have sold their stock when they ceased to trade in order to buy themselves a country residence, but that has become virtually impossible because of the price of housing in rural areas. Schemes such as shared equity schemes, which were mentioned earlier, should be encouraged. After the Housing Act 1919, clusters of council housing were developed throughout the countryside. Sadly, much of that has been sold as a result of right to buy. I was not fundamentally opposed to the policy, but I was against the failure to replenish social housing using the receipts from the scheme.

I come to the sale of woodland, an issue that has particularly concerned me recently. I commend Members on both sides of the House who have recognised the threat of the subdivision and sale of agricultural land. The hon. Members for Wealden (Charles Hendry) and for Isle of Wight (Mr. Turner) have taken up the matter. In my constituency it is the sale and subdivision not of agricultural land, but of woodland that is causing concern. As a result of the initiatives taken by the Government in England and now in Wales, local authorities have been given guidance to inform them of the scope that they have in planning regulations to introduce what are called article 4 directives, and thus ensure that they can override permitted development rights where there is a threat of the sale of woodland.

Hon. Members on both sides of the House will, as they travel through their constituencies and elsewhere in the land, have seen signs saying "Woodland for sale". I urge them to look at the website of the company selling the land so that they can see what might happen if such woodland was subdivided into small plots and sold to people who are led to believe that they can use the land for bonfire parties, parking their caravans and undertaking other activities that would not normally be acceptable in a rural area, and certainly not in an area of outstanding natural beauty such the Wye valley in my constituency.

My constituency has suffered as a result of the crisis in farming in the past 10 years. There was a time when I was summoned to angry meetings of farmers. I have not seen such meetings in recent years—I think that morale in the farming community has risen. I notice that a recent Farmers Guardian reported a new year and a new era of optimism, saying that there is a general feeling of optimism for the coming year throughout the industry, and that although accepting the introduction of CAP reforms on 1 January will represent the biggest challenge facing the industry for years, many look on it as a great era of opportunity. That is a more optimistic outlook for farming than is contained in the Opposition motion, which is particularly depressing and pessimistic.

The farmers in my constituency want to see new investment. I hope that we will get a new livestock market in or around Abergavenny in my constituency. That would be an important boost to the industry's infrastructure in Monmouthshire, in neighbouring areas of Wales and over the English border. Such an investment would be very welcome and I hope that the decision to invest in such a facility will be taken at the earliest opportunity.

I say to my hon. Friend the Minister that many of us on these Benches represent rural constituencies. We may take a certain moral view on hunting, but fundamentally we want to do our very best to help the farming communities in our constituencies.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold 6:19 pm, 19th January 2005

I am pleased to follow Mr. Edwards, who is one of the few sincere Labour Members who really understand farming.

I was particularly impressed by the speech of my hon. Friend Mr. Paice. He is one of the most knowledgeable people in the House on agriculture and he made some telling points, not least of which was when he, spurred on by my intervention, criticised the overly complicated hybrid system on single farm payments that the Government are introducing. I have a table here showing that the UK is the only country introducing such a complicated system—it is even more complicated than those of Luxembourg and Sweden.

We have different systems for England, for Scotland, for Northern Ireland and for Wales. Although I concede some regional differences, that strikes me as unnecessary complication from a single Brussels directive. To introduce such complexity at a time when the way in which the Rural Payments Agency works is being reformed seems like a recipe for chaos in the agricultural industry.

Photo of Peter Atkinson Peter Atkinson Assistant Chief Whip, Whips

Because Scotland has adopted a different system from England, farmers in Northumberland on the border will be at a disadvantage. Initially, beef farmers in Scotland will get bigger payments and will therefore be able to pay more for pedigree cattle.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Conservative, Cotswold

I entirely concur with my hon. Friend's point. He has great knowledge of agriculture, and I understand the difficulties he faces living on a border between two different systems. My hon. Friend the Member for South-East Cambridgeshire held up the number of leaflets involved in this overcomplicated system. Just imagine what French farmers would do if they received so many leaflets.

In an intervention, I mentioned the balance of payments deficit in the dairy industry. The problem is that we export the cheap dairy products—milk and milk powder—and import the expensive, value-added products such as butter, yoghurt and, in particular, cheese. That is a tragedy because we should be producing those value-added products in this country, instead of which we have a £700 million balance of payments deficit in that sector contributing to this country's £33.6 billion overall balance of payments deficit. Agriculture should not be adding to that problem.

On 1 January, in a move that we broadly welcomed, the Government abolished various subsidies to the beef industry, including the over-30-months scheme subsidy. The problem is that £300 a beast in subsidy is to be taken away. When we consider that a farmer has to get £720 a beast to make a profit, we begin to see the distortion affecting the market. I am not sure how that will settle down.

I want to discuss how the Government have allowed food processing to move out of this country. Almost no pig slaughtering is left in this country because the industry has moved to Holland. A big dairy co-operative was formed in Holland recently, at a time when the Government have weakened our co-operative efforts by weakening Milk Marque's ability to maintain a broad presence in the dairy sector.

I urge the Government to support the British sugar beet industry. We produce only 50 per cent. of the sugar that we consume, so there is no case for a disproportionate cut in European Community support for our sugar beet industry.

I also urge the Government strongly to support the biofuels initiative. The 20p per litre reduction in duty is welcome, but the present position is crazy: our wheat is sent across the channel to be processed into biofuel, which is then brought back to this country. We should be helping the biofuels industry and the jobs that it can create in this country. If Wessex Biofuels could get its useful initiative off the ground, it could use 375,000 tonnes of wheat.

In the context of sustainability, we should examine the supermarkets' actions carefully. I know that the Under-Secretary is very keen on sustainability. Tesco's biofuel is produced in part using palm oil derived from trees cut down in the rain forest. It would be far more sensible to have a home-bred biofuels industry than to rely on imported products.

The Government talk about the rural economy in their amendment, but in the past seven years I have seen in my constituency, which is highly rural, the closure of several post offices. Two Crown post offices closed only the other day, and a third, in Wotton-under-Edge, is now threatened with closure. They talk in glowing terms about their rural bus subsidy grant, but although they give £300 million to all the rural areas of England and Wales, they give a £1 billion subsidy for buses in London. Where is the fairness in that?

The Minister made a great fanfare about rural housing, but the fact is that the Government are building only half the number of affordable housing units that the Conservatives were building when they left office in 1997. They have no record to crow about there. Under a Labour Government, we have the highest number of homeless people that this country has ever seen, so there is nothing to crow about there either.

Far from farmers' morale being high, as has been asserted, they are being bogged down with unnecessary paperwork from the Government. They cannot see a sustainable future. The Government need to be clear about what they want farmers to do. Farmers ask merely to make a profitable livelihood, not to be bogged down in overcomplicated paperwork.

I am grateful to be called to speak in the debate. It is useful to be able to discuss the problems of rural areas. In my constituency morale is not high, it is sinking.

Photo of David Kidney David Kidney Labour, Stafford 6:25 pm, 19th January 2005

It is a pleasure to follow Mr. Clifton-Brown, and it is a pleasure to follow my new hon. Friend Mr. Jackson, who spoke earlier in the debate.

In so far as we pose in the debate the question, "Is there a future for UK farming?", I sincerely hope that the House will unite and answer that there is indisputably a future for British farming. I hope that we will work together to establish what still needs to be done to ensure that our farmers feel secure. If hon. Members will forgive me, I shall deal only with farming in my short contribution.

I begin with the CAP reform agreement last June. Surely the Conservatives accept that although in government they talked a good game on CAP reform, it was a Labour Government who secured an historic agreement that enables us to help farmers. The most important part of the agreement is the decoupling, at last, of the subsidy—the public payments to farmers—from production. The distortion of prices arising from that has caused many of the problems in farming in this country and around the world.

Now that decoupling has been achieved, we can press on with the recommendations of the Curry commission for reconnecting farming businesses with their markets. That is the important job for us to do. It will be a worrying time for farmers, having that prop taken away from them and having to focus on their markets. Our job in Parliament is to reassure them through the changes and make sure that they get to those markets. No more will there be butter mountains and wine lakes at public expense in the European Union.

In the agreement, the Governments of the member states had a choice of start dates. We chose the first possible date—1 January 2005. That is an indication of our determination to do the best for our farmers. Of course, implementation is different in England, Wales, Scotland and Northern Ireland, but that is the beauty of devolution. We should be glad of it, not disappointed.

Andrew George asked what taxpayers would get for their public subsidy. It is an excellent question, which now has an excellent answer. First, with single farm payments there will be cross-compliance, leading to some highly desirable public goods such as land management and the maintenance of rights of way, which are benefits to all taxpayers. With modulation and an enhanced stewardship scheme—the entry level and the higher level—we will be able to achieve much more in terms of biodiversity. I predict that growing attention will be paid to land management and flood defences. In future, conditions will be attached to stewardship schemes so that farmers can help the rest of us to avert floods such as those at Boscastle and Carlisle through the way that they manage their land upstream, so to speak.

I thank the officials at DEFRA who, at the end of last year, held a technical briefing for Members. I also praise DEFRA Ministers for that growing practice of the new Department. That briefing was the third that I have attended. In the past there were briefings on the control of illegal meat imports and on what the Government were doing about bovine TB. At the third briefing, Members were able to pursue in detail their questions about the new scheme for single payments, which I found extremely helpful.

Common agricultural policy reform did not harm the growing diversification of energy crops. In my constituency there is a very large biocrops scheme, which benefited in the past from grants from DEFRA and the Department of Trade and Industry, and will continue to benefit from payments under the single farm scheme and the set-aside scheme, as a result of the agreement. All those are benefits.

I want to say a word about how what we do for our farmers affects the rest of the world. At the moment, we are all paying a lot of attention to the help that rich countries can give to poor countries. Everybody knows about cancelling debt and giving aid, and most people are now convinced that trade is the best way to help in terms of liberalising access to markets for producers in poor countries, and agriculture forms an important market for them. However, as we learned with the EU's announcement of the "Everything but Arms" initiative, if such measures are rushed they cause great dislocation and harm to farming inside the EU. Sugar beet was a good example of jumping in and having to rescue the situation afterwards—and, as we heard from interventions during the opening speech today, it has not yet been rescued.

The sugar beet industry is keen on diversification, having seen what is coming, and bioethanol is an important by-product in which it is interested. As has rightly been said, the reduction in duty is helpful, but on its own it is not enough, and I support that industry and its calls for capital allowances and some kind of renewables obligations specific to the industry that will be helpful.

Another example of the effects on world trade of decisions taken inside the EU is provided by the egg industry, which yesterday hosted a reception on the welfare standards being set inside the EU and their effect on future imports from countries outside the EU that do not meet those higher welfare standards. It is very concerned about becoming more and more uncompetitive against people who obtain ever greater access to our markets. That is an important issue that it wants us to take into account. It is important for us in this House and in the EU to balance welfare issues with competitiveness issues for our farmers.

Just to repeat the point that I made in an intervention earlier with regard to the challenges about red tape, I accept that DEFRA's rule strategy is a great attempt to reduce red tape at every level, with more than 100 funding streams reduced to three, but basically the agreement that we have reached in the EU about the single payment scheme reduces 10 previous schemes to one, with one single system for application and one single system for inspection. If we can link that to what we are trying to achieve in Britain in terms of the whole farm approach to holding farms to account for the public subsidy that they receive, we will do a good job for farmers.

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater 6:32 pm, 19th January 2005

Is the Minister aware that the National Bee Unit is under threat? Does he realise that the bee unit is about to lose 20 per cent. of its income. Its funding comes from the Government and the loss of 20 per cent. will make a massive difference to it.

There are two types of bee inspectors—a regional bee inspector, whose job it is to look after the south-west, the north-east, or wherever—

Photo of Ian Liddell-Grainger Ian Liddell-Grainger Conservative, Bridgwater

He is the big bee, as my hon. Friend points out. The second type is the seasonal bee inspector, whose job it is to go round all the hives. At the moment the bees are dormant and doing nothing other than hibernating, I hope, although it is warm enough for them to go out. He is responsible for checking the bees and their quality in that period. The noble Lord Haskins has not got this seriously wrong.

The Minister will probably not be aware that a 20 per cent. cut in the income of the bee unit means that half the inspectors will go. Their number cannot be sustained. What does that mean for the bees? The bee inspector's job is threefold—first, to check swarm purity; secondly, to ensure that the quality of the hives is what it should be; and, thirdly, to check for bugs in the hives.

It may not come as any great surprise to Conservative Members that most of the diseases that we try to combat come from Europe, which is where the inspectors spend most of their time. But the Minister should be aware that the crying shame, or the disgrace, is that the Government put in £125,000, with the rest of the funding coming from Europe. The importance of the bee in agriculture, horticulture and just about every other culture, cannot be underestimated. Surely the Government should be championing good quality, healthy bees. The problem is petty-minded, stupid bureaucracy. What is the point of cutting money from a unit that safeguards something that is so important to agriculture?

The Government probably do not know that bees bring £120 million a year into agricultural industries through not only honey and beeswax, which is used for all kinds of different things, but importing and exporting different swarms. I have received a letter from a constituent, Rev. Ivan Selman, about that matter. He makes the point that the private benefit to beekeepers is estimated to be only £11.3 million and that many hobby beekeepers make little or no profit. Surely this is the crux of the matter: the people who produce honey do so because they want to and because they enjoy doing it; they do not do it because they make a fortune. We cannot expect to have healthy animals in this country if we do not have inspectors, and the Government, who have banged on about inspectors, must address the matter urgently.

Given the short time that remains, I shall turn to Exmoor national park. The Minister knows the effect of the ban on hunting on Exmoor. The ban will make a difference, it has made a difference and it needs to be addressed. This Friday, my hon. Friend Mr. Flook, Nick Harvey and I will have our quarterly meeting with the national park, at which we will discuss the problems that the park will face due to the hunting ban.

The Minister knows Exmoor national park's concerns, and I hope that he will manage to address some of them. They have been raised by not only hon. Members but members of the national park, the county councils, the district councils and the parish councils. The ban will cost up to £9 million across the park, which is a lot for an area such as ours, and we cannot sustain that loss. The Government intimated that they would examine the introduction of some form of financial inducement, and I wonder whether the Minister is prepared to expand on that point.

Somerset gets very little objective 2 funding: Cornwall receives objective 1 funding; Devon receives objective 2 funding; and Somerset receives a little bit of objective 2 funding. One of the problems in rural areas is that we cannot match such funding. The Minister is aware of that point, which we have discussed before, but we have not resolved how rural areas can raise match funding. The Government have been asked the question time and again, but we are still waiting for answers. The Government have not listened, because we have the same problems as Cornwall—in most cases, incomes are lower in Somerset than in Cornwall because of the housing crisis in rural areas, which many hon. Members have already eloquently discussed.

British Telecom is removing phone boxes, which it claims are not being used, from rural areas. Mobile phones do not work in many parts of Exmoor because one cannot get a signal, which is partly due to planning restrictions, but mainly due to the type of ground. The Minister says that he is looking to put money and help into rural areas. What is the point of rolling out broadband if homeowners in such locations cannot make phone calls? We prevailed on BT to try to reverse that decision, and I know that the Government have been involved, but the removals are still occurring. We are losing phone boxes across Exmoor and the Somerset Levels as we speak. Will the Minister consider intervening to try to persuade BT, which I accept is a private company, to stop that practice so that we can get back communication in our local areas?

Finally, may I draw the Minister's attention to the piece in this week's Farmers Weekly on bovine TB, "Call Time on Brock", which reports on the experiment in Ireland? It makes good reading and seems eminently sensible. I am sure that the Under-Secretary of State for Environment, Food and Rural Affairs, who has responsibility for TB, has examined the matter, and, given that the solution in the article seems sensible, perhaps he will mention it.

Photo of James Gray James Gray Conservative, North Wiltshire 6:39 pm, 19th January 2005

As so often in agriculture debates in this House, we have had a sensible, useful and relatively well-balanced debate with a great deal of expertise on both sides of the House. Leaving aside the Minister's introductory speech, which was slightly sullied by party politics, Government and Opposition Members have contributed a great deal to the debate.

Andrew George pointed out that more farmers have left the industry under Labour than at any time since the last war. He then got rather muddled, however, about how he supports the area-based payments under the mid-term review in England and the historic payments in Scotland. He is a Liberal, and he is all things to all men.

I pay tribute to Mr. Edwards, because in our index of the rurality of seats, Monmouth is the second most rural Labour seat, at 63rd. I shall return to that in a moment. He knows what he is talking about, especially with regard to the subdivision of farmland and the problems facing woodland.

My hon. Friend Mr. Atkinson, who knows farming inside out and back to front, highlighted a topic that has arisen throughout the debate—the threat to the beef and dairy industry from the complex introduction of the single farm payment. His comments were echoed by those of my hon. Friend Mr. Clifton-Brown and several other hon. Members.

Mr. Kidney said that he hopes that there is a great future for British farming, although he did not explain where it was to come from, and he seemed uncertain about whether Labour's promise to bring in the mid-term review might come back to haunt it in the fullness of time.

My hon. Friend Mr. Liddell-Grainger made some useful and interesting comments about bees—an extremely important, if comical, issue in the countryside.

Before I say anything else, I want to lay to ground a perfectly absurd spin that the Labour party is always coming out with—

Photo of James Gray James Gray Conservative, North Wiltshire

I fear that I do not have time to do so.

Labour Members are always saying that Labour is the party of the countryside. Indeed, I have here a rather good quote from none other than the Prime Minister, who declared in 1996:

"I love our countryside, I love the variety . . . for me it is the open spaces, the closeness to nature".

That sounds a bit like Monty Python's lumberjack sketch, although I have every confidence that the Prime Minister does not like to put on women's clothing or hang around in bars. It is all talk. Labour Members love the soundbite, but, as a farmer friend of mine said recently, "Soundbites don't butter no parsnips." There is a great deal of truth in that old Wiltshire saying.

The Minister claimed that Labour has 180 rural and semi-rural seats. I pay tribute to my hon. Friend Mr. Hayes, who, some time ago, did a huge amount of work to calculate which are the most rural seats in Britain, using population density, the number of people employed in agriculture, and a variety of other indexes. I have the list here. Of the top 200, two are represented by Labour—Carrick, Cumnock and Doon Valley and, at No. 63, Monmouth; the rest are exclusively represented by Conservative and Liberal Democrat Members of Parliament. The notion that Labour is the party of the countryside works only if one includes places such as Reading, East, Reading, West and Swindon. No doubt Exeter claims to be a rural seat, but it ain't. It is absurd to suggest that the Labour party represents rural areas. Happily, the work done by my hon. Friend the Member for South Holland and The Deepings has been published and is available in the Library for all to look at. The truth of the matter is that rural areas are overwhelmingly represented by the life-long friend of the farmer—the Conservative party.

Labour Ministers, in particular, know little about farming and seem to care less. That was amply demonstrated by the Minister's opening speech. He calls himself the Minister for rural affairs, but when he ventures into the countryside, which is rarely enough, he is about as popular as myxomatosis in a rabbit hutch. That, of course, was the expression used with regard to the arrival on the Labour Benches of the Minister's hon. Friend, Mr. Jackson. I hope that his strong support for the war in Iraq and top-up fees, his views on the European Union and the single currency and his strong support for hunting make him very welcome on the Labour Benches, but I suspect that the description, "about as popular as myxomatosis in a rabbit hutch", applies as much to him as it does to the Minister.

The contrast with my hon. Friend Mr. Paice is stark. He knows about farming; he was a farmer for many years; he has looked after this portfolio, in different guises, for a very long time; and he speaks with care, knowledge and balance on the issues—something that I myself would not necessarily claim to do.

Today's debate has had to answer a fundamental question: do we want to produce our own food? Do we believe that the Government have a duty to maintain a reasonable supply for the British people? Or are we content to become increasingly dependent on overseas countries: beef from Argentina, milk from France and Poland and chicken from Thailand? That is the way we are going. Our self-sufficiency in food has declined by 4 per cent. since 1997. We now have more DEFRA civil servants—14,460—than dairy farmers, of whom there are only 14,300.

The world's strategic reserve of food is at a historic low of 63 days compared with 104 when we left power. We have 63 days worth of food in the world today. Britain could contribute to that, but are we? The fundamental questions that arise from our debate are: can we carry on as we are? Is farming in terminal decline? Are we content to become ever more reliant on overseas producers, whose standards of animal welfare and human hygiene would often not be allowed in the United Kingdom? Any focus group would reply with a resounding no. We want to eat British food and we want to know where it comes from and how it is produced. However, under the Labour Government, the questions about the source of food and the method of its production are becomingly increasingly difficult to answer.

The Government's botched implementation of the single farm payment risks making matters even worse and turning our green and pleasant land into an urban playground or letting it decline into untended scrub land. There is a genuine risk of that and I call on the Government and the Under-Secretary to tell us how they will avoid that unwelcome consequence of the single farm payment.

The Government have not only failed on farming. We must remember that 14.1 million people live in rural districts and that the debate is not all about farmers but about rural life in general. The Government have failed to preserve village and rural life. Homelessness in rural areas has soared by 13 per cent. since they came to power. Rural property prices are 15 per cent. above national averages so that people on low wages cannot possibly afford to live in rural areas. Fifty-eight per cent. of households in rural areas have no access to any form of public transport and rural crime costs farmers £100 million a year when 98 per cent. of rural parishes have no permanently staffed police presence. Three thousand rural post offices are closed and continue to close at the rate of three a week, assisted by the ghastly Government.

The Deputy Prime Minister's changes to planning laws will, if anything, ensure that especially the south-east and the south-west will suck in businesses and houses from the north of England and ensure that the most environmentally sensitive and beautiful parts of at least the south half of the island will be concreted over as quickly as he can possibly achieve that.

The Government have failed to maintain villages. Funding from the national lottery for the village hall, so central to village life, has disappeared. They have done away with it and village halls will suffer. They have failed to preserve the rural way of life, abolishing hunting and now threatening shooting. Not only farming but the way of life is in crisis because of the Government. The entire way of life for 14.1 million people who live in villages and market towns is under threat. The villages, the churches, the halls and the whole approach to life will go. The Labour Government will turn the countryside into some sort of dormitory for their urban friends.

By contrast, our vision is of a living, vibrant countryside, with real people doing real jobs and living real lives. It is of a profitable farming industry, thriving rural businesses and a traditional way of life, which people in the countryside so badly need. All of that is fundamentally undermined by a quintessentially urban Labour Government.

Photo of Ben Bradshaw Ben Bradshaw Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Local Environment, Marine and Animal Welfare) 6:49 pm, 19th January 2005

Mr. Gray began by describing the debate as constructive and bipartisan, but he did not follow the tradition that he lauded.

It is a great pleasure to be winding up in our important debate. It is especially pleasurable to reply to a debate in which my hon. Friend Mr. Jackson made what he described as his maiden speech as the Labour Member of Parliament for Wantage. I should like to think that my hon. Friend was a friend of mine before he crossed the Floor, but he certainly is now. His speech was refreshingly unpartisan. It had historical perspective and drew on his experience as a former Member of the European Parliament.

My hon. Friend mentioned the issue that dare not speak its name in many debates on the state of the agricultural economy: the role of the exchange rate and the euro. He made an important point, and many of the most sensible commentators and, indeed, people involved in agriculture realise that the stability gained from joining the euro would mean enormous benefits. That is almost never debated.

My hon. Friend the Member for Wantage also rightly reminded the House that issues such as CAP reform and trade liberalisation have traditionally been bipartisan issues that have been progressed by Governments of both political colours. He pointed out that, whether we like it or not, under successive Governments the size of the agricultural economy as a proportion of the overall economy has shrunk from 3 per cent. in the early 1970s to 0.8 per cent. now. Another bipartisan issue that he raised was the balance that always has to be struck between regulation and food safety and animal health. That is a difficult balance for any Government to strike. He warned me that he was an assiduous letter-writer on behalf of farmers, and I look forward to receiving letters from him.

If I do not have time in the few minutes that remain to address all the points raised in the debate, I promise to write to hon. Members on those subjects. My hon. Friend the Member for Wantage mentioned the impact of the fallen stock scheme on his constituency, and I will certainly look into the suggestion that there might not be a collection service available in his area. I am assured by Michael Seals, the chairman of the fallen stock scheme—an industry-run scheme—that there is a nationwide network that extends even to the Isle of Wight. I shall write to my hon. Friend with the details that he has requested.

Mr. Turner was right to say that there were particular challenges in his constituency. Following negotiations, the fallen stock scheme and the local hunt have agreed a collection price and the collection scheme will go ahead. As the Minister for Rural Affairs and Local Environmental Quality said in his opening speech, there is no reason for the hunt on the Isle of Wight to disband. The Countryside Alliance has said that, as long as hunts stay within the law, many will be able to continue and to generate more income by taking part in the fallen stock scheme.

Photo of Ben Bradshaw Ben Bradshaw Parliamentary Under-Secretary (Department for Environment, Food and Rural Affairs) (Local Environment, Marine and Animal Welfare)

No, I am terribly sorry, but I have only 10 minutes in which to wind up, and Mr. Gray did not take interventions either.

My hon. Friend Mr. Flook, for Hexham (Mr. Atkinson) and for Bridgwater (Mr. Liddell-Grainger) raised the serious issue of bovine TB, on which I do not intend to spend a great deal of time, but it is important to say that this has been our first opportunity to discuss the issue following the publication, finally, of the results from the four area trials in the Irish Republic. We will of course take seriously any lessons to be learned from those trials, but it is important that hon. Members recognise that the situation in Ireland is rather different from that in the United Kingdom.

The scientists who conducted the Irish trials have said that the proactive culling that achieved the reduction in TB breakdowns in cattle is not a viable policy for the Republic of Ireland, so whether it would be viable in the UK is also open to question. I have asked the Independent Science Group to examine the results of the Irish trials to see whether anything can be learned from them. I accept that those trials have changed the debate. They have taken us away from the debate on whether culling badgers can help to tackle TB. We must now ask whether culling badgers in the way that was done in the Irish trials would be viable, cost effective and politically acceptable. Those are questions that all parties in the House will have to grapple with over the next few weeks.

Several hon. Members talked about the general state of farming, and it is important to recognise that it has gone through a difficult time for a number of reasons, although incomes have, in fact, risen by 80 per cent. from the low that they reached in 2000. We recognise that there are particular pressures on the dairy industry. Those problems were raised by Andrew George, and my hon. Friend Mr. Edwards talked about them in some detail. My hon. Friend quoted an article from this week's farming press, saying that he felt that there was a new spirit of optimism in the industry. I think that he is right, although we should not overlook some of the serious challenges faced, especially by the dairy industry.

The hon. Member for St. Ives pointed out that we are awaiting the outcome of the latest Office of Fair Trading report into supermarkets. We will study that report with interest. The Government have certainly not ruled out the need for further action if the report shows that there are problems that need to be addressed, although previous reports of this kind have not done so. In fairness to Mr. Paice, I should mention that he pointed out the positive role that supermarkets play in rural areas. They provide a service to rural people and offer them a much greater choice than previous generations ever had. I am as keen as he is, however, to make sure that they do not use their powerful position to the detriment of the farming industry.

One of the important statistics to remember when we debate the state of the dairy industry is the extremely big difference in profitability between some dairy producers and others. My constituency is urban, not rural, but I know farmers outside Exeter, and have friends who are farmers outside Exeter, and they tell me that there are huge differentials in the success of dairy farmers, both in terms of added value and costs. The differential that dairy farmers experience is 12p per litre, which does not indicate to me that this is just a problem of supermarkets and price. It is also a challenge to the industry to get to the level at which all are making those sorts of profits.

Several hon. Members talked about CAP reform. It is right to point out, as did my hon. Friend Mr. Kidney, that although there was a lot of talk in the Conservative party, over many years, about the importance of CAP reform, this Labour Government delivered that historic CAP reform back in the summer of 2003. It has been an incredibly complex issue, but we have discussed it with the farming community all along. One of my other hon. Friends pointed out that the farming industry was not united on how it wanted CAP reform to be implemented, but we have gone out of our way, all along, to take the farming industry with us, to listen to those voices and to try to devise a system that we thought was fair and that would deliver the public goods that were mentioned.

It was characteristically generous of the hon. Member for St. Ives to say that he thought that we had struck the right balance. His questions about the timing of the implementation of the single farm payment have been dealt with. We are confident that we can still do that early in the window that we have set out. I also note that, as was pointed out, in all the criticisms from the official Opposition on the single payment and the way in which it has been implemented, I did not hear a coherent alternative, and I never have done. We have heard such criticisms time and again in the House, but we are still waiting for a coherent alternative.

A number of other issues were raised, to which I have not got time to respond in detail now, but I will write to the Members concerned. The hon. Member for Bridgwater mentioned bees, and the hon. Member for South-East Cambridgeshire referred to reform of the sugar regime and the important area of biomass and the future of biofuels, to which the Government are committed.

In general terms, however, I was astonished that in a debate that was supposed to be about rural communities, the hon. Members for South-East Cambridgeshire and for North Wiltshire said almost nothing about employment, the environment, biodiversity, the health service, crime, schools, housing, poverty, transport or the overall economy. Are not those issues important for people who live in rural areas, as they are for people who live in urban areas? My region, the south-west, is largely rural, and has been perhaps disproportionately dependent on agriculture historically. It has also been the fastest growing region in the whole of England in the last three years. Nothing was said about the success delivered by this Labour Government to the economy and public services in rural areas.

In the constituency of the hon. Member for North Wiltshire, there are now 2,365 more nurses, and 849 more doctors, in his strategic health authority area. North Wiltshire has 290 more teachers than in 1997, and Wiltshire has 63 more police officers. Unemployment has fallen 63 per cent. since 1997. None of that was mentioned in the criticisms that he levelled.

That comes on top of announcements this week in the Conservative party's so-called James review, the Conservative Front-Bench's failure to stand up to their party leader and shadow Chancellor, unlike some other shadow Ministers, and to defend the savage cuts that the Conservative party now proposes to make in DEFRA's budget—

Photo of David Maclean David Maclean Chief Whip, Parliament, Chief Whip, Whips, Shadow Chief Whip (Commons), Opposition Chief Whip (Commons)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 189, Noes 322.

Division number 36 Farming and Rural Communities

Aye: 189 MPs

No: 322 MPs

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Nos: A-Z by last name


Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 308, Noes 182.

Division number 37 Farming and Rural Communities

Aye: 307 MPs

No: 182 MPs

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Nos: A-Z by last name


Question accordingly agreed to.

Mr Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.


That this House welcomes the Government's commitment to farming and rural communities set out in the Strategy for Sustainable Farming and Food and Rural Strategy 2004; applauds the Government's commitment to invest more than £500 million over three years in sustainable food and farming; commends the reforms of the Common Agricultural Policy secured by the Government in June 2003, which will be implemented at the earliest possible opportunity in 2005; congratulates the Government's record on public service delivery in rural areas; further commends the £239 million allocated over six years to 2003–04 through the Rural Bus Subsidy Grant for new and improved rural transport services; further applauds the increase in the resources available for regional development agencies to regenerate the rural economy; further welcomes schemes in place to provide affordable housing in rural areas; praises the efforts to retain the rural post office network; further congratulates the Government's action to protect and enhance the rural environment; and calls upon the Government to continue pursuing a strategy based on long term policies to regenerate British agriculture, improve rural services and revitalise the rural economy as a whole.