House of Commons Hansard Debates for 18 Jan 1994

(a) the making by the Coal Authority established by the Act of charges for things done in the exercise and performance of its powers and duties ;

(b) the imposition of charges to corporation tax by provisions relating to the taxation of persons to and from whom property, rights and liabilities are transferred in accordance with schemes under the Act ; and

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Agriculture

1.13 am

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack) : I beg to move

That the Farm and Conservation Grant (Variation) Scheme 1993 (S.I., 1993, No. 2901) dated 24th November 1993, a copy of which was laid before this House on 30th November, be approved.

This scheme came into existence after a major review of help to farmers in 1988. As a result, the conclusions reached reflected the need at that time to introduce assistance for farmers to help curb production. It was decided that aid should be switched away from investments intended to increase productive capacity and that the benefits to farmers should be in the form of help with conservation schemes and schemes to benefit the environment.

To that end, I must start by making some announcements about improvements to the farm and conservation grant scheme

[Interruption.] We have decided to provide additional assistance in three ways. First, through grants to help farmers with the costs of capital works to open up access to farmland. They will underpin further assistance because we shall return to the House to seek its approval shortly on matters connected with access and environmentally sensitive areas. Also we have decided to give grant aid to people in the poultry industry to deal with poultry waste, just as grants are available for assistance with other livestock wastes. Finally, we want to extend the life of the special package of grants for the Scilly Isles offered under the farm and conservation grant scheme for a further year while we consider the longer term needs of growers on the islands. I hope that the House will agree that those are three small but important ways in which we are trying to develop the measure to the benefit of our farmers.

I shall now mention the rates of grant. As the hon. Member for Workington (Mr. Campbell-Savours) said from a sedentary position, there are reductions. However, those measures have to be viewed in the context of the overall position of farm incomes. Farmers in the dairy sector have benefited significantly, especially from the on-farm schemes to deal with waste, and it is perhaps worth reflecting that in recent years dairy incomes have steadily increased. In 1991-92 incomes increased by 11 per cent. I expect that last year's 1992-93 forecast of a 19 per cent. increase in that sector will be fully realised.

In the beef sector there have been increases in incomes and in beef special premium and suckler cow premium. Those have been substantially increased and will increase further up to 1995. Finally, for those farmers in the less favoured areas, total direct subsidies will be worth about £550 million in 1994.

Mr. John Greenway (Ryedale) rose --

Mr. Jack : Will my hon. Friend allow me to make a little progress? I do not want to detain the House unnecessarily.

The fact that grant rates under the scheme are to be reduced should also be viewed in the context of what that will mean in terms of the expenditure next year on the farm and conservation grant scheme. I must draw the attention of the House to the fact that that will amount to about

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£27 million--only £2 million less than the peak expenditure in this financial year. That indicates the continuity of help that we are providing under the scheme, because much help is in the financial pipeline and is reflected in that expenditure.

Mr. Greenway : Perhaps it is as well that my hon. Friend continued a little longer, because he has just mentioned the point that I wanted to discuss. He is right to say that many dairy farmers have benefited enormously from the recovery in incomes and from the grant while it was 50 per cent. It is fair to say that those farmers who have money in the bank have made use of that. The farmers who now have schemes in the pipeline are the poorer farmers, who will lose out as a result of the cut to 25 per cent. Does the Minister think that there is a case for saying that those farmers who had a scheme at the planning stage and ready to go ahead should receive the 50 per cent. anyway?

Mr. Jack : Those farmers who submitted acceptable plans prior to 1 December 1993 will receive the old grant rate, as witnessed by the amount of money that I said was already in the pipeline.

Several hon. Members rose--

Mr. Jack : I hope that hon. Members will allow me to make a little more progress.

The rate of grant, such as it was at 50 per cent., was above the European Community then maximum level of 35per cent. We did that as a pump-priming exercise, to encourage farmers to take up that important opportunity to deal with farm wastes. It is worth pointing out that we have already paid out more than £115 million in grant in the four and a half years since the scheme was announced in February 1989. At that time, the intention was to spend about £50 million only in the first three years of the scheme.

To answer my hon. Friend the Member for Ryedale (Mr. Greenway), about 9,000 farmers have already taken advantage of the scheme. Its success is demonstrated by the fact that in 1989 nearly 600 serious pollution incidents were attributed to agriculture. The figure in 1992 was less than 200.

Mr. Cynog Dafis (Ceredigion and Pembroke, North) : Very many farmers still have not been able to carry out works in relation to pollution. I am worried that some of them, because they cannot afford the costs, will sell their quota. To all intents and purposes, that will mean that the farms they occupy will cease to be viable units. That will lead to further fragmentation and amalgamation of units, and make it that much more difficult for young people to enter the industry because the farm sizes will constantly increase as a consequence.

Mr. Jack : The hon. Gentleman might have had a point if I had been saying that we intended to end the grant scheme altogether. But I have described a remarkable take-up ; 9,000 farmers have participated. The hon. Gentleman mentioned young people coming into farming, and I can think of no finer way to respond to that point than to remind him that the proposal to reform tenancy law has come from the Government.

As I was saying, the grant will continue, but at the rate of 25 per cent. The other area affected by the proposals is conservation, involving hedges, stone walls and traditional buildings.

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Mr. James Wallace (Orkney and Shetland) rose --

Mr. Jack : Before I take the hon. Gentleman's intervention, I draw the attention of the House to the fact that the farm conservation grant scheme came into existence at a time when many of the environmental schemes that have subsequently been developed were at a very early stage.

Mr. Wallace : The Minister has told us that there will be a reduction in the grant. Is he aware that already farmers in my constituency have told me that, because of that reduction, they do not intend to proceed with projects that they had hoped to undertake ? Will he confirm that, under the current regulations, if certain action is not taken on waste disposal, it will be possible for environmental health officers to close a farm down ? Against such a background, how is it possible to justify cuts that are stopping investments necessary for environmental and even for statutory reasons ?

Mr. Jack : The fact that I can say that 9,000 farmers have already decided to minimise their risk of being penalised for pollution by taking up the grant shows me how aware the farming community is. I recently visited a farm in Cumbria where a substantial amount of work had been completed and more plans were in the pipeline. The people there were glad of the assistance, which had helped them to modernise and improve their farm. I saw no evidence that they intended to diminish their attempts in that direction, taking advantage of the scheme.

Mr. Peter Hardy (Wentworth) rose --

Dame Elaine Kellett-Bowman (Lancaster) rose--

Mr. Jack : I want to make progress. Perhaps I shall give way to my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) in a moment.

In connection with the conservation and environmental aspects of the grants, I have already told the House that the scheme was introduced when other schemes, such as that designating environmentally sensitive areas, were in their infancy. In January 1993, six new environmentally sensitive areas were established, and six more are expected to be launched in March. By the year 1996-97, expenditure in the United Kingdom on such areas, which provides assistance for many of the types of scheme covered by the farm and conservation grant scheme, will total about £63 million. There will also be benefits in terms of farm conservation activity from parts of the agri-environment package, details of whose timetabling and introduction we shall announce later this year.

The House should also take into account the fact that the Department of the Environment has a budget of £105million to deal with schemes such as the Countryside Commission's countryside stewardship scheme, the hedgerow incentive scheme and the work undertaken by English Nature. All of those are complementary to the work of the farm and conservation grant scheme in connection with hedges, stone walls and traditional buildings.

Dame Elaine Kellett-Bowman : I am glad that my hon. Friend has mentioned hedges and traditional stone walls. Surely it is more important to spend money on those, especially in our part of the world, than on encouraging access to the hideous set-aside land.

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Mr. Jack : My hon. Friend is right to draw attention to the idea of the typical landscape--in Cumbria and the north-west, for example. That is the aspect that I am discussing. As I explained, in addition to our farm and conservation grant scheme, which will continue to provide assistance for such work, a range of other schemes funded by the Department of the Environment will also enable similar work to be carried on. Those complementary schemes show why it is justifiable in our scheme for us to reduce the grant rates in that area.

Mr. Hardy : Will the Minister give way?

Mr. Jack : I want to come to a conclusion, as many other hon. Members want to speak and I am sure that the hon. Gentleman will have an opportunity to do so.

The third element in the grant scheme, which is coming to an end, deals with matters connected with horticulture. It is a matter of sadness to me as I made my living in the horticultural business before coming into the House. Although there was help for horticultural buildings, especially glasshouses and modernisation grants for orchards, less than 9 per cent. of eligible holdings took up the orchard replanting grant and less than 4 per cent. took up the greenhouse replacement grant.

Clearly, much work needs to be done in that area and I can assure the House that I shall take into account the problem with grant schemes in the work that I am undertaking to consider horticulture as a whole.

I commend the motion to the House and I hope that hon. Members will understand that, on the Conservative Benches, there is no diminution in our wish to provide assistance to farmers, in our effectiveness in dealing with farm waste, in the commitment of the Government to provide funding for environmental concerns and in the complementarity between schemes from the Ministry of Agriculture, Fisheries and Food and those from other Government Departments.

1.25 am

Mr. Elliot Morley (Glanford and Scunthorpe) : There are parts of the supplementary estimates which we on the Labour Benches welcome. Those are the parts that the Minister has rightly outlined : grants for access, changes in provisions concerning poultry waste and the extension of support for the Isles of Scilly.

However, overall, the statutory instrument is a major blow to the farming community. It represents substantial cuts in environmental and conservation management. Unless the Minister will give some indication that he is prepared to take the statutory instrument away and consider it again, we shall have no alternative but to vote against it, because the changes are not to the advantage of the farming community, nor do they meet a number of commitments that the Government have made, as I shall outline.

The changes are a double blow. They are not only a direct blow to the farming community because of the loss of capital grants, but a blow to the wider issue of protecting and managing our countryside. I remind the House that the intentions of the scheme, as printed in the foreword of the original farm conservation grant scheme handbook were as follows :

"The Farm and Conservation Grant Scheme is designed to help farmers maintain efficient farming systems while also meeting the often heavy cost of combating pollution and conserving the countryside and its wildlife. The scheme focuses

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on those investments which cut costs by updating existing resources and those which help to achieve good countryside management. A special priority of the scheme is to help farmers install and improve waste handling facilities to avoid the risk of pollution. I am sure that those are worthy aims, which the whole House should fully support. There is a shift in support payments for such objectives and such schemes which are exactly the kind to which we in the Labour party give high priority. We want to see the large amounts of public money being diverted towards such aspects of the CAP. The scheme is comparatively modest in comparison with the total sums of available agricultural support. The scheme totals £74 million this year. To put that in perspective, it is well below 10 per cent. of the £840 million spent on set-aside and the arable payments scheme. Even though the scheme is modest, grants for conservation schemes are to be cut from 50 per cent. to 30 per cent. in less favoured areas, and from 40 per cent. to 25 per cent. elsewhere. Capital grants for the handling, storing and treating of waste are to be cut from 50 per cent. to 25 per cent. Grants for the repair and reinstatement of traditional farm buildings are to be cut from 35 per cent. to 25 per cent. in less-favoured areas and to 20 per cent. in other areas. It is estimated that those cuts will bring about savings of about £12 million in the current year. I contrast that with total Government spending of £2.5 billion on the CAP in the current year. Such comparisons put into perspective the amount being spent on conservation management.

The National Farmers Union parliamentary land use and environment committee this morning--

Mr. Tim Devlin (Stockton, South) : Yesterday morning.

Mr. Morley : Not according to the parliamentary day.

That committee pointed out that the great advantage of such a scheme is that it is available to the whole country and that, unlike schemes such as environmentally sensitive areas, valuable though they are, it applies to the 85 per cent. of the countryside outside less favoured areas and environmentally sensitive areas. Such cuts, therefore, are detrimental to the whole countryside.

The scheme can be said to have been successful, unlike many agricultural support schemes. There has been a good take-up, and spending on waste handling facilities in particular has increased from £64,000 in 1989, to a peak of £23.4 million in 1991-92, and to £21.1 million in 1992-93. That demonstrates the tremendous investment that has been made in the farming community to deal with the problems of agricultural waste and its potential for polluting waterways. Cuts in grant are a major blow to the livestock sector and they will affect the investment plans that many farmers, particularly those who do not have large sums of money available to them, have been planning. Of course, they have a knock-on effect on the environment and on jobs.

Mr. Jon Owen Jones (Cardiff, Central) : Will my hon. Friend comment on the likely adverse effect on watercourses of cutting grants to subsidise the treatment of waste? According to a recent report from the National Rivers Authority, in Wales the number of pollution incidents, from farms in particular, has increased alarmingly over the past few years.

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Mr. Morley : My hon. Friend is right. Over the years, agricultural run-offs have accounted for a large proportion of pollution incidents in waterways. There has been a recent reduction, but that is a tribute to the scheme and it is a reason why the scheme should not be cut when there are tangible gains in capital grants to deal with potential pollution problems.

It is worth raising a query which was referred to me by the Country Landowners Association, which shares my concern about the impact of cuts in grant. If capital grants for livestock waste are to be reduced, will the Government consider diverting some resources into grant-aiding the separation of clean and dirty water on livestock farms? That would reduce the volume of muck to be disposed of and it would also help the farmer and the environment. Is it possible to divert resources to such a purpose?

Apart from livestock waste, the grants have helped greatly in respect of environmental features such as shelter belts, trees for shading stock, the enclosure of grazed woodlands, traditional field boundaries, bracken control, the regeneration of heather and grass moorland, and the repair and reinstatement of traditional buildings. Again, the House will agree that those are important objectives and that they deserve support in terms of cuntryside management. I shall focus on traditional field boundaries. I refer, of course, to hedges and dry-stone walls. Both features of the agricultural landscape are attractive, functional and important conservation features.

The loss of grant assistance for the reinstatement of hedges is a serious blow. Indeed, a recent Government survey revealed that there was a net loss of 23 per cent. of hedgerows between 1984 and 1990 and a substantial increase in derelict hedges because of a lack of management.

I wonder how the cut in grant for landscape features such as hedgerows squares with the Government's manifesto pledge to introduce legislation to protect hedgerows. What has happened to that pledge ? Is it yet another broken promise to add to a litany of broken promises ? Is the Minister prepared to urge his counterpart in the Department of the Environment to introduce the legislation which was promised many years ago and which is very necessary ? Many miles of hedgerow continue to be lost or destroyed. Indeed, there is a case for increasing the amount of grant available for hedgerow planting, rather than decreasing it, as the statutory instrument does. A measure for features such as hedgerows is too important to be left to the private Bill procedure, although I know that hon. Members, including my hon. Friend the Member for Wentworth (Mr. Hardy), have campaigned for a long time for such legislation. We had a private Bill on hedgerow protection. I regret that Tory Members wrecked it by talking it out and ensuring that it did not get on the statute book. If they continue to use such wrecking tactics, the Government need to introduce proper legislation to meet their manifesto promise.

Dame Elaine Kellett-Bowman : Although I am in favour of hedges, there were certain disadvantages to the private Bill. It would have put the power into the hands of local authorities, which often do not know much about farming. I would rather have the power to deal with hedges with the Minister of Agriculture, Fisheries and Food or the farmers themselves but not with local authorities.

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Mr. Morley : Obviously, there is an argument about the detail of the Bill. But dealing with hedgerows in terms of planning was a logical way forward. The Bill was supported by Ministers. If they think that the way forward is to introduce hedgerow legislation as part of planning controls-- of course, they drafted the detail of the Bill--I assume that they think that it is the best way to proceed. Although the hon. Lady has her disagreements, I am sure she would agree that we do not need this statutory instrument.

The introduction of legislation is the right way forward, although we could argue about how it would work. I still think that it is important for the Government to give hedgerow protection some priority and to ensure that they abide by their commitment. Certainly, they do not abide by that commitment in this statutory instrument. The Council for the Protection of Rural England rightly argues that what we need in terms of agricultural policy is an increase in countryside management and the support that goes with it. As for dry-stone walls as a field boundary, the CPRE refers to surveys which show that there has been a 10 per cent. reduction in the amount of dry-stone walling on agricultural land. Of course, such cuts do not impact simply in terms of conservation features and conservation management : they also impact on jobs in the rural economy. Many people are trying to acquire new skills, or relearn old skills, in terms of hedge laying, tree planting and rebuilding dry-stone walls. Indeed, a colleague of mine is encouraging the reinstatement of dry-stone walls on his farm. He told me that the person who is doing the work has taken on an apprentice to learn the skill. That work is supported by the grants. I wonder how many people will lose their jobs and their income as a result of the cuts in grant. Such grants would otherwise have encouraged the reinstatement of these important features.

The same applies to the renovation of traditional farm buildings. In many parts of the country farm buildings are an important part of the landscape, and not only is their reinstatement valuable as a landscape feature but there are employment opportunities for acquiring and implementing traditional skills which are much needed within the rural economy.

I do not see how cuts of this kind will benefit the rural economy or rural communities. Not only will the cuts have an impact in terms of conservation features, but they are particularly badly timed in terms of the Government's commitment to publish a biodiversity plan which I understand will be published on 26 January. I wonder how the Minister can argue that the cut can meet the Rio commitments made by the Prime Minister for meeting biodiversity. Is that yet another broken promise which we can add to the list of commitments which have been given ?

Is the Minister aware that a survey published last November by the Institute of Terrestrial Ecology underlined the losses to wildlife species and the importance of hedges in maintaining their populations ?

Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury) : Does the hon. Gentleman agree that in the Cotswolds, where there is a large proportion of stone walls, those stone walls are disappearing because they are simply too expensive to keep up ? The hon. Gentleman quoted from a report by the Institute of Terrestrial Ecology. The reason why hedgerows are disappearing is simply because they are becoming derelict.

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The proposed Hedgerows Bill would have had no effect on that. If the hon. Gentleman and his hon. Friends wish to keep up such landscape features, the only way is to have a proper management plan under such schemes as the countryside stewardship scheme. There is considerably more money available for that scheme from the Department of the Environment and the hedgerow incentive scheme from the Ministry of Agriculture, Fisheries and Food than is available under the farm conservation grant scheme, which is merely--

Mr. Deputy Speaker : Order. This sounds like a speech, and not an intervention. Interventions are supposed to be brief.

Mr. Morley : I have put in perspective the sums which are available for farm conservation grants. Those sums are tiny in terms of the global commitment made by this country on the common agriculture policy.

I say to the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) that it is true that it is expensive to maintain and repair stone walls. It is often difficult to find people with the skills to do so. However, cuts in grants will do nothing to assist hedgerow maintenance. I would have more respect for the hon. Gentleman on such issues if he had not been one of the main culprits in wrecking the Hedgerows Bill which was put before Parliament. I should have thought that, if he wants to be taken seriously on such matters as landscape protection, he should make sure that there was a proper facility or provision to protect such things as hedgerows, rather than wrecking the Bill in the way he did.

Mr. Clifton-Brown : The simple reason, as my hon. Friend the Member for Lancaster (Dame Elaine Kellett-Bowman) pointed out, was that we did not want local authorities which do not understand about growing hedgerows interfering and telling farmers what to do. That would not have been the right way forward and would have been bureaucratic. The hon. Gentleman criticises me personally for wrecking the Bill. I have a record of a net gain of one mile of hedgerows on my farm.

Mr. Morley : I return to the original point that Ministers drafted the Bill, and they felt that local authority planning was the correct mechanism. While I do not doubt his commitments, that is no excuse for wrecking a Bill which many people were anxious to see put on the statute book.

I return to the issue of the impact of biodiversity. Is the Minister aware of the detailed farmland bird census which was carried out by the British Trust for Ornithology? That census demonstrated the dramatic losses of many of the once-common farmland birds. The Royal Society for the Protection of Birds calculated that the numbers of grey partridges have fallen by 73 per cent. during the last 20 years. If the hon. Member for Crawley (Mr. Soames) were here, he would share my concern at the decline of a species such as the grey partridge.

The measure also includes grants for heath and moorland reinstatement. Heath and moorland are vital to threatened species like the sand lizard, which is a red data book species. The proposals to reinstate habitat have been cut by the statutory instrument. How does all that square with the Rio declaration which the Prime Minister signed

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and which supports the biodiversity convention and protection when the Government are taking measures to cut the kind of support systems that are protecting biodiversity?

We need clear objectives and targets in terms of protecting species and habitat. How can cuts in a measure like this achieve that? Did MAFF consult the Department of the Environment about the statutory instrument? Will the DOE set targets for habitat protection and restoration? How will the cuts allow the Government to comply with the European Union habitat directive? That is particularly important, as the Government are already on record as saying that they will meet the requirements of the habitat directive precisely through measures of this kind.

If the Government are going to cut the farm conservation grant scheme, how will they meet the commitments that they have already made with respect to the habitat directive? Is that yet another broken promise to add to the list? Those issues, in addition to conservation and the impact on farmers, are important in terms of the overall commitment and responsibility that the Government should have for our countryside and environment.

The welcome aspect of the statutory instrument relates to the grants for access to agricultural land. The Opposition have been arguing for that for sometime. We welcome the grants for the provision of gates, stiles and footbridges. We believe that encouraging farmers to allow public access to their land is a valid use of public money. We hope that that will succeed. It is therefore a matter of regret that such positive measures are outweighed in the measure by the negative impact of the overall cuts in grant. Given the overall reduction, will the Minister confirm what I understood from his opening remarks? Are the new grants for support for access to come from the budget for the farm conservation grant scheme or has there been diversion from the agri-environment programme to fund the improvement? I am working on the assumption that that is not the case because the Minister said that there is to be a further announcement about the agri-environment package and support for public access. I would be grateful if the Minister could confirm that we are not talking about diversion from the agri-environment package.

That point is important because the agri-environment package is not exactly a generous scheme. A joint report by the CPRE, the Ramblers Association and the Royal Society for Nature Conservation demonstrated that green payments to farmers, including

environmentally sensitive area schemes, amounted to £2.31 per hectare on a United Kingdom average, while set-aside and arable payments amounted to a somewhat larger £45.39 per hectare on a United Kingdom average. That is a considerable difference, particularly in terms of value of money.

There is a great deal more value for money with regard to conservation and environmental support as part of agri-environment packages than simply paying farmers to keep land in set-aside. Farmers in my constituency share that view. They would rather see public money being spent on positive schemes which the public can appreciate and see than on the negative set- aside scheme. Cutting environmental payments under the farm and conservation scheme while £840 million is spent on set-aside and arable aids, shows lack of commitment to environmental management. The cuts will produce minimal savings this year and will undermine a good value-for- money scheme. They will also undermine the

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ability of farmers to protect and manage our countryside, and they breach the Government's commitment to the habitat directive and the biodiversity treaty. I urge the Government to withdraw the instrument and to think again on the matter. If they do not, they will stand accused of breaking yet more promises, adding to a record that is already littered with broken promises, and of a shift away from responsible management and protection of our countryside rather than giving the commitment and support that our farmers and our countryside deserve.

1.50 am

Mr. Kenneth Carlisle (Lincoln) : I am glad to take part in the debate. As a farmer, I do not think that, in a time of economic stringency, it is at all unreasonable to reduce grants. Grants still remain to spur the planting of hedges and shelter belts, and farmers are increasingly likely and increasingly encouraged to do that off their own bat. The hon. Member for Glanford and Scunthorpe (Mr. Morley) rather ruined his speech by exaggerating the effect that such fairly modest cuts would have on the countryside. I am sorry that he lost his balance.

When drainage grant was about 20 per cent. lower than what is proposed in the legislation, it was a spur for many farmers to continue with drainage schemes. Moreover, it is in the general interest of farming to be weaned from grants. We do not want to be the one sector of society that is continually encouraged and fed by grants to do what is fairly natural work in the maintenance and stewardship of the countryside.

I understand the reasons for the measure. It is necessary for farmers to share the general stringency that the rest of the country faces at a time when we are seeking to reduce public expenditure. The concern that has been generated about the reduction in grants is understandable because we all want to conserve and increase the wildlife value of our countryside. It is certainly not right to be complacent about what is being done to make the countryside a better place for wildlife and to rebuild some of the depleted stocks. I am convinced that we can and should do more, and this is a unique opportunity to do that. The obvious way is not through grants and small measures of the type that we have been debating, but by using the vast sums that are available under the set-aside scheme. As the hon. Member for Glanford and Scunthorpe said, last year farmers were paid about £840 million to set aside nearly 1.5 million acres. We are speaking of sums that are 100 times more than the relatively modest cuts in the measure.

Few of us who have anything at all to do with the land are pleased by the set-aside regime. We certainly feel that the existing arrangement is of little benefit to wildlife. In addition, the management of the set-aside regime is costly and, as a farmer, I do not think that it improves the fertility of the land or assists in growing crops in the following year. Under the set-aside regime, there is a massive opportunity and a real challenge to improve our efforts to help conservation and wildlife. We have a real opportunity to make set-aside of lasting benefit to conservation.

One such measure that we are moving towards is permanent set-aside. Set- aside along the edge of a wood can be of permanent benefit to wildlife.

We also have to accept that, to achieve real benefit to wildlife, we have to manage some areas. Where we manage the countryside, we increase the benefit of that countryside to wildlife. Let me give two examples. Britain has a

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shortage of lowland heathland. The reinstatement of heathland requires a low level of grazing. It would be valuable if we could secure that.

If we want really good permanent pasture, we need a regime of mowing for hay at a late date without adding fertiliser. If we could secure through the Common Market some measures by we which could have limited cropping from land, the advantages to conservation and wildlife would be huge. That is what we want, and it would produce real value for money from the huge sums being spent.

If we could secure the proper management of set-aside combined with growing areas under the environmentally sensitive area scheme and many other schemes--for example, the management of ancient woodlands--we could continue making real efforts to reconstruct valuable habitats on a grand scale and we would be spending the huge sums of available money effectively.

In conclusion, I certainly accept the modest measures proposed this evening. We should be weaned from grants and contribute to the national economic efforts, but I cannot accept our continuing failure to make set- aside work creatively for conservation. I should like the Government to be absolutely certain that the measures we take with other members of the European Community in the next few years ensure that set-aside land is of lasting benefit to the environment. 1.57 am

Mr. Paul Tyler (North Cornwall) : I am delighted to follow the hon. Member for Lincoln (Mr. Carlisle), because he has shown yet again that there is a groundswell in the House--an increasing tendency to realise that set-aside is central to the Government's problems with agriculture and with the misinvestment of resources in agricultural development.

When the former Minister came back to the House waving a piece of paper and saying that he had achieved peace in our time, he claimed reduced surpluses, reduced costs and reduced bureaucracy as major benefits from his common agricultural policy reform package. Initially, the Liberal Democrats were alone in the House in taking the view that the dependence on set- aside, especially rotational set-aside, would be the seed of the decline of the whole policy. In fact, it had built into it its own calamitous conclusion. I very much endorse the views expressed this evening about the way in which, sadly, the cuts that the Treasury has made in agricultural support have been on the wrong targets. That has to be the message that hon. Members on both sides of the House have to express to the Government.

I hope that the Minister will be able to explain to us, if he speaks again tonight, how precisely the target has been selected out of all the targets that could have been selected by the Treasury in making cuts, when there is such a clear view among the agriculturists, conservationists, the general public, taxpayers and Members of the House that the real target should be the huge sums being paid in arable area compensation for rotational set- aside.

In the meantime, as hon. Members have already said, there is an element of double-speak or double standards in that the proposals are being brought forward at this juncture, when the Department of the Environment is to publish its biodiversity action plan within a few days. I hope that the Government will reiterate their support for

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the European Union habitats directive. How could any Government square the reiteration of that support with those cuts and those proposed targets for economies ?

The National Farmers Union has made it clear that the great value of the farm and conservation grant scheme is that it is generally applied, extremely popular, nationwide and comprehensive and all farms are eligible, wherever they are. It is not selective and does not depend on lines on maps. Surely that is the way to proceed if we want all farmers--not only a few in particular areas--to sign up to wider environmental and community benefits.

The organisations that brief hon. Members of, I am sure, all parties have emphasised the fact that the take-up of the scheme has been unique in that it has been so cost-effective and has led to real improvements. The most popular take-up has been for investment in waste handling facilities and the scheme has been one of the best run of any Government. As the hon. Member for Ryedale (Mr. Greenway) said, the people who now wish to benefit from such schemes were not making large profits before and therefore had no ready cash to invest. We are therefore penalising the least well-off--in the dairy sector in particular--when it should be the other way around.

What message are the Government sending to the industry and to the country ? In recent weeks, I have been to the borders of Scotland, to North Yorkshire and Somerset and, of course, to Cornwall, to meet dairy farmers. I do not think that the hon. Member for Lincoln has as many dairy farmers in the city of Lincoln as I have in my constituency. The diary farmers in particular know only too well that the scheme is of practical help to them. It is a deplorable day when cuts are made simply because the Treasury finds it easy to make them. That is the real reason for the cuts ; it is not because the Minister felt he had found the correct target for reductions in costs. On-farm waste management is a major problem, as has already been mentioned. Of course there is room for significant improvement. The National Rivers Authority and other organisations outside government have emphasised that fact and, in the interests of a long-term environmental policy, it is extremely important that there continue to be improvements.

It is significant that the grant scheme makes no great difference to the profitability of an individual holding ; indeed, it may increase costs on the farm. Nor does it make any difference to the productivity of a particular enterprise. There is no benefit to the farmer. The benefit is to the environment and the wider community and, one hopes, to the Government's long-term environmental objectives. The Minister referred to increasing income. What we are discussing is not a matter of income. It is not intended to help the farmer to make a bigger profit. Indeed, it cannot do so, but it can achieve other benefits for the community and the environment.

My hon. Friend the Member for Orkney and Shetland (Mr. Wallace) said that the NRA can effectively close a dairy farm enterprise if it does not meet the appropriate waste management standards. The scheme is not merely a voluntary addition to help farmers do a better job, or make a bigger profit, but has much wider advantages.

I remind the Minister that it was his right hon. Friend the Member for Mid- Norfolk (Mr. Ryder), who is now the Patronage Secretary--that shows how far the Minister can

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