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Surely there should be no such direct link. The one cannot simply be substituted for the other. Moreover, that is yet another one-year adjustment. The hill farmers will want to know what is to happen next year.

The most anger and resentment was caused by the lack of consultation. Conservative Members nod : they must be well aware that the way in which the decision was leaked in the farming press, the subsequent announcement just before the Christmas recess and the back-tracking statements that followed it caused immense damage to the reputation of the Minister, his team and the Government as a whole. That is evident from the number of contradictions in the statements that we have heard in the past few days.

Real offence was caused by the lack of consultation. The National Sheep Association--again, not a radical socialist group--said : "It would have given the sheep industry more confidence, and the Government more credibility, if they had consulted more fully with the industry and explained in more detail their change in direction."

The proposal to cut HLCAs is an attempt to undo the good work of successive Governments who have tried to protect and enhance the economic viability of the hills and hill farming. There has been a steady decline in the past 10 years ; given the devaluation of the green pound, this was a good opportunity to reverse that trend. We hope that Conservative Members who have been critical of the Government's decision will carry their criticism into the Lobby and that--instead of being present at this late hour simply at the behest of their Whips--they will vote for their hill farmers.

1.6 am

Mr. John Greenway (Ryedale) : I think you will recall, Mr. Deputy Speaker, that I first raised this matter on the Floor of the House some nine weeks ago, on the motion for the Christmas Adjournment. I think it significant that, on that occasion, my hon. Friends the Members for Taunton (Mr. Nicholson), for Macclesfield (Mr. Winterton) and for Tayside, North (Mr. Walker) spontaneously supported what I had to say. I do not recall much interest being expressed by Opposition Members. I doubt very much that many of them understood what we were talking about, and some of the interventions that we have heard tonight--this applies less to the speeches --suggest that, nine weeks later, not many of them understand it now.

I felt at the time that we could draw three clear conclusions. First, farmers in the uplands were deeply angry and upset by the decision : I said that forcefully at the time. Incomes had shown some improvement, but from a very low base. Secondly, it was clear to me that the HLCA settlement must be part of the overall public expenditure round, in which agriculture generally did extremely well. We all knew, I think, that we were unlikely to get much additional money from the Treasury, if any. We must face the inevitable fact that, when public expenditure is extremely tight, we cannot pick and choose which parts of an overall settlement we like and which we do not.

Mr. Foulkes : Will the hon. Gentleman give way?

Mr. Greenway : No ; many other hon. Members wish to speak.

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My third conclusion was that something must be done. The position, as it stood nine weeks ago, was not sustainable : in some way, income would have to be made up. Lo and behold, within a week my right hon. Friend the Minister of Agriculture, Fisheries and Food came back from the Farm Council and announced that the EC would help with a 1.5 ecu increase in the rural world supplement. The question of what that was worth was extremely complicated, as was the arithmetic involved in sorting out the effect of the green pound devaluation. My right hon. Friend then suggested that it was worth £1.41 per ewe. I made some inquiries and did some sums. Some weeks ago, I suggested to my right hon. Friend that the total value was understated by about 80p a ewe. It transpired that it was 79p a ewe. I am happy to settle for that. We have deducted £2.25 for hardy ewes under the HCLA payments and only £1.35 for the less hardy ewes, but both will get £2.20 more as a result of the rural settlement. In addition, as the Minister pointed out, there is a green pound devaluation that will provide a much-needed boost to hill farmers. I look forward to talking to mine again when they get the money. Will the Minister please ensure that they get it on time?

In all the circumstances, we have to accept the position now arrived at for this year. I am tempted to suggest that, had we been in this position nine weeks ago when this first leaked out and the Minister had to make a formal announcement, we might have avoided a lot of fuss, but such a facile view underestimates the difficulty that the ministerial team had in Brussels during the negotiations. Opposition protests are due to their lack of experience in these tough negotiations. We must now concentrate our efforts on the future. I have already said that the payments need to be on time. There is also a need for stability.

Can the Minister confirm that in the case of the rural world supplement, initially proposed by the Council of Farm Ministers to be for one year, the agriculture committee of the European Parliament has reported that, in its view, it should be for two years. That would provide welcome stability. I hope that the Minister will fight for that and get it.

There has also been criticism tonight of the fact that EC funding might not be as advantageous as United Kingdom domestic support. I do not accept that. I have talked at length to my farmers. They seem to think the exact opposite. We have a very tight United Kingdom public spending round. Although I do not underestimate the difficulty of getting money in Brussels for our farmers, the fact remains that there is greater certainty of payment. I accept that the value of sterling is a factor, but all that has to be taken into account in future reviews. Whether it is the HLCA mechanism, or whether it is the rural world supplement, the plain fact is that both mechanisms are income substitution. For that reason, they can be negotiated and agreed only on an annual basis.

I welcome also the fact that the Agriculture Select Committee is to look in detail into this matter. One of the points that I made during the Christmas Adjournment debate was that we needed to get rid of some of the mystery that surrounds the true figures. There should be a much more open review of the hill farm position.

We need also to consider the environmental dimension. Those of us who represent hill farm areas understand just how important hill farming is to the environment. We have some important

caveats--particularly that there should be no over-grazing and that we need to conserve the

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landscape. That must be worth a price to the farmers. We have environmentally sensitive areas in some hill farm areas. We have the north York moors farm scheme in my constituency. We have the Department of the Environment stewardship scheme. It is time that all this was rationalised so that farmers know just where they stand. Finally, and above all, it is very much now a case of restoring confidence among hill farmers in the future of hill farming. The events of the past nine weeks demonstrate that, while it is possible to make a lot of hot air and fuss about the issue, it is Conservative Members who have seen fit to take a very close interest in it. That is what we do week in, week out, month in, month out. That is why I believe that we should continue to support the hill farmers. Then they will continue to support us.

Mr. Ieuan Wyn Jones (Ynys Mo n) : On a point of order, Mr. Deputy Speaker. It must be extremely difficult in the Chair for you tonight. During a very short debate of an hour and a half, it is difficult for the many hon. Members who want to support the hill farmers in this campaign but who have not had the opportunity to make their views known. It is an extremely short debate for a very important matter.

Mr. Deputy Speaker : The Chair does not decide the length of the debate.

Mr. Mallon : Further to that point of order, Mr. Deputy Speaker. I realise the difficulties that you face, but the measure is much more punitive in Northern Ireland than it is in England, Scotland or Wales because of our agricultural structure. Unfortunately, because the debate is to last only for an hour and a half, no one from Northern Ireland has been able to make that case. I realise that it is not within your competency or ability at this stage to ensure that the case is made, but it is regrettable because of the terrible punitive effect in Northern Ireland.

Mr. William Ross (Londonderry, East) : Further to that point of order, Mr. Deputy Speaker. It will not have escaped your notice that the measure applies only to Great Britain, not to Northern Ireland. Therefore, if the Opposition would care to table another prayer on a Northern Ireland order tomorrow, we could have a further hour and a half's debate.

Rev. Ian Paisley : Further to that point of order, Mr. Deputy Speaker. The Minister made certain remarks about the statistics pertaining to Northern Ireland, but it should be put on record that the statistics that he gave were misleading and a slander on the hill farmers of Northern Ireland.

1.16 am

Mr. D. N. Campbell-Savours (Workington) : Hon. Members will have noted that the Minister of Agriculture, Fisheries and Food has failed to attend the debate. We are bound to ask whether he intends to vote--perhaps he is still filling envelopes with hill livestock compensatory allowance payments.

We have had an interesting debate, once again characterised by the Government's questionable use of figures. We believe that the Government stand accused of an inexcusable error of judgment only partially offset by the convenient reconsideration of rules, which has enabled Ministers to pull a rabbit out of a hat in the form of an

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extra 79p. I am afraid that the House will not be fooled. The Government have sought to justify their original error with a spray of statistics which, when tested, misrepresented the truth. Farmers, the Opposition and a large number of hon. Members rejected them. Who in their right mind could argue that a 25 per cent. reduction in the ewe price between 1988 and 1992 was in fact an increase, and then have the cheek to suggest that the worst year in living memory in the less-favoured areas be used as a baseline for calculating income growth? Who in their right mind could argue that special sheep annual premium payments offset HLCA cuts, without admitting that SAPs are variable payments which can be reduced as readily as increased? Indeed, we need a guarantee that if SAPs are ever reduced, HLCA payments will be increased to compensate.

Hon. Members have given innumerable examples challenging the Government's statistics on farm incomes. I commissioned some interesting research from the National Farmers Union in Cumbria. We took six farms and analysed incomes from 1983 to 1992. A representative sample of the research showed that in the period studied, on a farm of 500 breeding ewes, where livestock sales remained static in cash terms at just over £11,000, the net profit after subsidy, depreciation and interest on a £5,000 loan rose from £5,000 in 1983 to £7,000 nine years later in 1992. That farmer has been running a charity. No one else could have farmed more efficiently. He was and still is doing society a favour managing that land in the heart of the Lake District. We have exploited his good will.

David Keddie's work at Swansea university confirms that the position is the same in Wales. He shows in his detailed and exhaustive research of 400 households in several regions that farm incomes are miserly and far too dependent on peripheral activity. He shows that the more precarious the income the greater the pressure to increase stock levels. The fear of indebtedness is dominant. The reality is that, despite all the evidence, the Government have sought repeatedly to hide the truth. The truth was never an argument about offsetting national subsidy with European subsidies and green pound devaluations. It was a decision born in Whitehall to save money on the back of hard-pressed hill farmers.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy) : Will the hon. Gentleman give way?

Mr. Campbell-Savours : It is not possible this evening. In evidence of that I quote a letter from the Minister of Agriculture, Fisheries and Food to the Chief Secretary to the Treasury dated 6 November 1992 which says :

"Cuts in the HLCA rates will inevitably provoke strong criticism from the farming industry. The farming unions have made very clear to us that the industry's confidence will be dealt a severe blow if the recovery of incomes is undermined by Government action. They have pointed out that real hill incomes remain below their levels of a decade ago. And even following the recovery hill farm incomes remain at very low levels in absolute terms."

Then the Minister says :

"There is undoubtedly merit in the union's case."

That was a clear admission by the Government of the collapse in hill farm incomes in the United Kingdom. The letter proves that the Government desperately wanted the cuts and they did not care a damn if the hill farmers paid the price.

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I come now on a more constructive note to the wider issue of farm incomes. There is, without doubt, throughout the farming community, a developing consensus that farm incomes should not be over-dependent on public subsidy. That is the Opposition's view. Farmers have another option open to them and that is to secure a higher price for their products in the market place.

Lamb prices in the United Kingdom at auction are grossly depressed. British lamb is nearly the cheapest in Europe but the retail price of lamb throughout the Commuity is grossly inflated. Dead-weight United Kingdom prices are often half and less what they are in other parts of Europe, particularly in southern Europe.

Miss Emma Nicholson (Torridge and Devon, West) : Will the hon. Gentleman give way?

Mr. Campbell-Savours : I am sorry, I do not have time. Perhaps the hon. Lady can intervene next week on the Agriculuture Bill. The explanation is not only to be found in the demand for smaller lambs and seasonal buying, but equally in the nature of a meat trade in Europe which loads the lamb price at retail on the basis of it being a specialist product. Within 200 yards of the European Commission's offices in Rue de la Loi in Brussels three weeks ago, I found lamb being sold at £11.50 a kilo. The United Kingdom dead-weight carcase price on the same day was £1.80 a kilo. British lamb producers must break the stranglehold of a highly restrictive retail meat distribution network in Europe. That network, in the absence of real competition, is denying the European consumer cheap meat. United Kingdom meat exporters must rise to that challenge. United Kingdom lamb production must become far more market oriented. In a more buoyant market, arguments over subsidy will inevitably recede in importance.

The Government should take a far more hands-on approach to the development of United Kingdom meat exports. Exhibitions and the impressive work of the Meat and Livestock Commission are not enough. We need a meat export strategy which positively carves out a major proportion of EC markets for United Kingdom producers. If we cannot work through the existing retail networks, British multiple meat retailers should expand overseas. The Government can take the lead. The answer to this whole question is to be found not only in public subsidy, but in the wider European market place. In the absence of such a strategy, hill farmers will unfortunately need more and more help. That is why HLCA payments at this time are critically important to their survival.

The whole strategy has to change. Hill farmers need Government help. The Government must take the lead. The disequilibrium in the EC sheep market must be brought to an end.

Tonight's debate has been objective and constructive. Hon. Members of all parties have recognised the difficulties. We all want the industry to survive. In that light, I invite all hon. Members to support our motion. The hill farmers need our support. It will enable Ministers to bring back an order. If we win the motion tonight, that would be the radical, tactical and popular position to take.

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1.25 am

Mr. Deputy Speaker : I call Mr. Curry.

Mr. Alex Salmond (Banff and Buchan) : On a point of order, Mr. Deputy Speaker. You have an obligation to protect minorities in the House. You are aware that hill areas are concentrated in Wales, Scotland and Northern Ireland. Yet there have been no speakers from Scotland or Northern Ireland. What is more, the Ministers for Scotland, Wales and Northern Ireland have sat silent like stookies throughout the debate. We are about to be misinformed for the second time by the English Minister. This is abuse and I invite your protection and intervention.

Mr. Deputy Speaker : Order. The hon. Gentleman knows that this is a 90-minute debate and that the Chair cannot control the length of speeches. I made a plea and I regret that hon. Members did not totally respond to it.

Mr. Foulkes : On a point of order, Mr. Deputy Speaker. Is it not the case that the Minister of State can speak only with the permission of the House? He has already spoken and since we have here the Secretary of State for Wales, the Under-Secretary of State for Scotland and the Under- Secretary of State for Northern Ireland, all of whom deal with agriculture, they could adequately reply. I object to the Minister of State speaking again and I do not think that he has the permission of the House.

Mr. Deputy Speaker : Order. May I formally check that the hon. Member is objecting to the Minister of State responding?

Mr. Foulkes : Yes, Sir.

Mr. Deputy Speaker : Then the leave of the House is not granted. The debate may continue. I call Mr. Bill Walker. [Interruption.] Order. The House has requested an hon. Member from Scotland to speak and I have called one.

1.28 am

Mr. Bill Walker (Tayside, North) : Mr. Deputy Speaker, you can be assured that I speak for a part of Scotland that has uplands, mountains, and lots and lots of sheep. There is no doubt that my hon. Friend the Member for Ryedale (Mr. Greenway) illustrated the humbug and hypocrisy that we often see in the House. [Interruption.] In the debate before Christmas, which I, my hon. Friend and others attended, we noted the absence of all those caring faces that I see tonight. What has brought about the transformation ? I believe that it has been brought about because there is a three-line Whip : all these individuals who in the past have shown their enormous interest in the problems of my hill farmers by their absence are here tonight because the Labour party saw an opportunity to put on a three-line Whip. That was in the hope that they could exploit a situation that had developed, as is often the case where negotiations are required in Europe, so that agreements can be made in Europe and payments Mr. Llwyd rose

Mr. Walker : I shall give way to the hon. Gentleman if he is patient.

They saw an opportunity to exploit it, but they were mistaken, because when they tabled the motion they failed to realise that negotiations were continuing and that figures had been arrived at which were different from what they thought they would be.

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Mr. Llwyd : I do not know whether the hon. Member recalls that I am not a member of the Labour party, but it was in response to my question that the Minister made his statement about the HLCAs. We in Plaid Cymru and the SNP are concerned about what is going on and I dare say our Labour colleagues are as well. It is not good enough to say that it is convenient for all of us to worry about it. It is a great worry in the whole of Britain and it is time that the Conservative party grew up.

Mr. Walker : Where was the hon. Gentleman when we took the opportunity to debate this matter late last year ? He was not showing his care then.

Miss Emma Nicholson : In support of my hon. Gentleman, does he agree that the Opposition spokesman knew nothing about what he was saying? He was reading from a brief which did not bear any resemblance to reality. He was talking, for example, about the dead carcase weight price of lamb in English markets, and I assume in Scottish markets also, without realising that the point about hill-farmed lamb is that it is exported live and on the hoof, killed in the importing countries, such as Spain and France, and then stamped Spanish or French lamb and sold at a premium price.

Mr. Walker : I thank my hon. Friend for that helpful intervention. One of the great tragedies in the House is that often Members speak who have no background or experience. I do not accuse the hon. Member for Workington (Mr. Campbell-Savours) of that, because I recall standing with him in the Falkland Islands, when we looked out at a sheep farm. The hon. Gentleman said that it could be his constituency and I said that it could be mine, because we both represented hill farm constituencies. So I do not charge the hon. Gentleman with not knowing what is happening in his constituency, because he has always impressed me as knowing that.

Mr. Wilson : I am sure that the hon. Gentleman will recall that on many occasions in my six years in the House the issue of HLCAs has been raised at Question Time and during debates by hon. Members who are deeply concerned about the population and agricultural communities in the upland areas. On every one of those occasions there has been cross-party support for the concept of maintaining HLCAs, because everyone who cares about this subject realises that when we start eroding the HLCAs, we are eroding the ability to sustain populations in those areas. Does the hon. Gentleman realise that the only thing that has changed tonight is that Opposition Members are still saying what we have been saying throughout the years and that Conservative Members are having to find reasons to rationalise a complete change of position?

Mr. Walker : I thank the hon. Gentleman, because he is quite right. But--

It being one and a half hours after the motion was entered upon, Mr. Deputy Speaker-- put the Question, pursuant to Order [12 February].

The House divided : Ayes 245, Noes 283.

Division No. 155] [1.35 am

AYES

Abbott, Ms Diane

Adams, Mrs Irene

Ainger, Nick

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Alton, David

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

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Column 293

Armstrong, Hilary

Austin-Walker, John

Barnes, Harry

Barron, Kevin

Battle, John

Bayley, Hugh

Beckett, Margaret

Beggs, Roy

Beith, Rt Hon A. J.

Benn, Rt Hon Tony

Benton, Joe

Bermingham, Gerald

Berry, Dr. Roger

Betts, Clive

Blunkett, David

Boateng, Paul

Boyce, Jimmy

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (Dunfermline E)

Brown, N. (N'c'tle upon Tyne E)

Bruce, Malcolm (Gordon)

Burden, Richard

Byers, Stephen

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D. N.

Canavan, Dennis

Cann, Jamie

Carlile, Alexander (Montgomry)

Chisholm, Malcolm

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Connarty, Michael

Cook, Robin (Livingston)

Corbett, Robin

Corbyn, Jeremy

Cousins, Jim

Cryer, Bob

Cummings, John

Cunliffe, Lawrence

Cunningham, Jim (Covy SE)

Cunningham, Dr John (C'p'l'nd)

Dafis, Cynog

Dalyell, Tam

Darling, Alistair

Davies, Rt Hon Denzil (Llanelli)

Davies, Ron (Caerphilly)

Davis, Terry (B'ham, H'dge H'l)

Denham, John

Dixon, Don

Dobson, Frank

Donohoe, Brian H.

Dowd, Jim

Dunnachie, Jimmy

Dunwoody, Mrs Gwyneth

Eagle, Ms Angela

Eastham, Ken

Etherington, Bill

Evans, John (St Helens N)

Ewing, Mrs Margaret

Fatchett, Derek

Fisher, Mark

Flynn, Paul

Foster, Derek (B'p Auckland)

Foster, Don (Bath)

Foulkes, George

Fraser, John

Fyfe, Maria

Galbraith, Sam

Galloway, George

Gapes, Mike

Garrett, John

Gerrard, Neil

Gilbert, Rt Hon Dr John

Godman, Dr Norman A.

Godsiff, Roger

Golding, Mrs Llin

Gordon, Mildred

Graham, Thomas

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Gunnell, John

Hain, Peter

Hall, Mike

Hanson, David

Hardy, Peter

Harman, Ms Harriet

Harvey, Nick

Henderson, Doug

Heppell, John

Hill, Keith (Streatham)

Hoey, Kate

Hood, Jimmy

Howarth, George (Knowsley N)

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, Kevin (Doncaster N)

Hughes, Simon (Southwark)

Hume, John

Hutton, John

Ingram, Adam

Jackson, Glenda (H'stead)

Jackson, Helen (Shef'ld, H)

Jamieson, David

Johnston, Sir Russell

Jones, Barry (Alyn and D'side)

Jones, Ieuan Wyn (Ynys Mo n)

Jones, Lynne (B'ham S O)

Jones, Martyn (Clwyd, SW)

Jones, Nigel (Cheltenham)

Jowell, Tessa

Keen, Alan

Kennedy, Charles (Ross,C&S)

Kennedy, Jane (Lpool Brdgn)

Khabra, Piara S.

Kilfoyle, Peter

Kirkwood, Archy

Lestor, Joan (Eccles)

Lewis, Terry

Litherland, Robert

Livingstone, Ken

Lloyd, Tony (Stretford)

Llwyd, Elfyn

McAllion, John

McAvoy, Thomas

Macdonald, Calum

McFall, John

McGrady, Eddie

McKelvey, William

Mackinlay, Andrew

McLeish, Henry

Maclennan, Robert

McMaster, Gordon

McNamara, Kevin

Madden, Max

Mahon, Alice

Mallon, Seamus

Marek, Dr John

Marshall, David (Shettleston)

Marshall, Jim (Leicester, S)

Martin, Michael J. (Springburn)

Martlew, Eric

Maxton, John

Meacher, Michael

Meale, Alan

Michael, Alun

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Argyll Bute)

Milburn, Alan

Miller, Andrew

Mitchell, Austin (Gt Grimsby)

Molyneaux, Rt Hon James

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