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1.15 pm
The Parliamentary Under-Secretary of State for Wales (Mr. Gwilym Jones): I congratulate the hon. Member for Ynys Mon (Mr. Jones) on securing this important debate. I thank him for his acknowledgement of what was necessary to enable both of us to appear here this morning--the unusual coincidence of the Welsh Grand Committee's sitting ending just as this debate was due to begin--and for giving notice of the matters that he intended to raise.
The hon. Gentleman's concerns and my opening of the Royal Welsh winter show in Builth Wells yesterday seem to have coincided. Indeed, I was struck by the similarity of what the hon. Gentleman said about the importance of agriculture to the rural economy with what I said yesterday, to which this morning's Western Mail has helpfully given full coverage.
The hon. Gentleman asked about the support that the Government give to people entering the agriculture industry. Both the quota schemes that currently operate in the beef and sheep sectors include special arrangements allowing new entrants access to quota from the sheep and suckler cow scheme national reserves. The introduction of farm business tenancies will help to ensure that more land is available for new entrants to rent.
A wide range of courses is available to prospective new entrants through agricultural colleges. New entrants can also take advantage of the extensive range of training courses that are available through ATB-Landbase and other training providers. We are working with ATB-Landbase to raise awareness of skills gaps and deficiencies, and the benefits to both new and established businesses of strategic business planning and training.
The agricultural element of the objective 5b programme is partly financed by the European agriculture guidance and guarantee fund, which provides opportunities for the farming community in relation to business development, agri-tourism and countryside enhancement. Young
farmers have been identified as a priority group to receive benefit from that programme. Training and enterprise councils also have a role to play through business start-up activities, and business links will be an important contact point for new entrants seeking advice on business set-up and development matters.
I can tell the hon. Member for Ynys Mon that, at the end of 1994, bank borrowing advances were lower than they were in 1993. That reduction reflects the improvement in incomes that occurred in 1992-93 and 1993-94. Last week, we announced that the 1996 rates of hill livestock compensatory allowance would be maintained at 1995 levels. That is a positive step, which demonstrates our continuing commitment to upland farmers, despite another tight public expenditure round this year.
Net farm incomes are forecast to increase by an average of 13 per cent. in the less-favoured areas as a whole in 1995-96 compared with 1994-95. Notwithstanding reductions in HLCA rates in 1993, real-terms incomes in 1995-96 are still 27 per cent. above the average for the difficult years of 1990-91 and 1991-92. That economic data, which form the basis of the autumn review, did not support the farming industry's call for a restoration of the amount cut in the previous year. The forecasts do not take account of the recent devaluation of the green pound, which will result in a further increase in sheep annual premium rates from 1995 and an increase in suckler cow premium scheme and beef special premium scheme rates from 1996.
Going beyond our determination to sustain current hill livestock compensatory allowance payment rates for a further year, I am aware of the anxieties that have been expressed about the recent statutory instrument relating to a number of eligible sheep in the disadvantaged region. I reiterate what has already been said in the Welsh Grand Committee: that was a technical amendment necessary at the time in order not to prejudice the outcome of the autumn review. The final decision on the stocking rate will be taken once we have a clearer idea of the exchange rate that will apply for the 1996 scheme. Meanwhile, producers should understand that the exchange rate fluctuations that have forced that amendment mean that the payment rate will be at least that of 1995--£2.44-- and probably higher.
It must be remembered that hill livestock compensatory allowances are neither the only nor the most financially significant of the subsidies being paid to farmers. As my right hon. Friend the Secretary of State for Wales explained at the Welsh Grand Committee, planned expenditure in the next financial year on the three main market support schemes--the sheep annual premium, the suckler cow premium scheme and the beef special premium scheme--is £43 million, 28 per cent. higher than expenditure only two years ago.
Concerns over the safety of beef have increased recently. I think that the hon. Gentleman would join me in saying that we must not overreact to that issue. There is no scientific evidence of a link between bovine spongiform encephalopathy and Creutzfeldt-Jakob disease. The latest report from the national Creutzfeldt-Jakob disease unit confirms that there has been no change in the epidemiological or clinical characteristics of CJD since the occurrence of BSE. The incidence of the disease is similar to that in countries with no BSE or scrapie.
All the available evidence continues to confirm the Government's view that the feed ban will lead to the disease's end. The number of suspect cases of BSE reported up to October 1995 was nearly 43 per cent. lower than the same period in 1994. The Government have introduced a comprehensive range of measures, based on the best independent scientific advice available, to safeguard the public from any remote risk to human health from BSE. Beef is recognised as safe by the Department of Health's chief medical officer, and I freely say that I find that advice totally reassuring. I am more than content to continue eating beef on a very regular basis.
I think that the hon. Gentleman will agree with me about the considerable inroads that we have made in Wales in implementing schemes approved by the European Commission.
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy):
The greatest step that the Minister and the Government could take would be to introduce an early retirement scheme, favoured by the European Union and in fact, to a large extent, financed by it. Why will not the Government put their hand in their pocket and do the right thing?
Mr. Jones:
As I have tried to explain before to the hon. Gentleman, when making spending decisions, one must make choices about priorities. I was going to acknowledge later that his party is the exception in that it is committed to increasing taxation on the people of Wales.
[Interruption.] The people who had to go to the High Court or wherever else may also be in favour of it, but he and his small party say that the people of Wales should pay higher taxation.
I know that, if his party's policies were followed through to the ultimate and we were separated from the rest of the United Kingdom, we would pay very high taxation, but decisions must be made: either we put taxation up--and I believe that we are absolutely right in responding to the public demand to return to cutting taxation--or we must take money from elsewhere. I invite the hon. Gentleman to volunteer whether we should take it from health, from education or wherever else to fund such a scheme, if we do not increase taxation. I acknowledge that there is a difference between us on that matter. He is in favour of increased taxation.
I remind the House of the considerable progress that we have made in Wales in implementing schemes approved by the European Commission. Schemes for Wales encourage farming methods that will help to protect the Welsh landscape and habitats, and provide opportunities for people to enjoy the countryside. New measures approved by the European Commission include an organic scheme launched on 1 September 1994, a countryside access scheme launched on 8 September 1994, a habitat scheme launched on 9 January 1995, and a moorland scheme launched on 1 May 1995.
Wales has six environmentally sensitive areas, covering about one quarter of the land. On 1 March this year, new payments to promote public access were launched for all Welsh environmentally sensitive areas. The environmentally sensitive areas scheme is innovative, in that it was the first to adopt a "whole farm" approach rather than to target individual habitat types. It has been approved by the European Commission, along with the
Countryside Council for Wales's pilot Tir Cymen scheme, which also has a strong agricultural and environmental focus. Taken together, environmentally sensitive areas and Tir Cymen schemes cover about a third of the agricultural areas in Wales.
I think that the hon. Member for Ynys Mon will have heard me say at Welsh questions on Monday that Tir Cymen is to be reviewed at the end of its planned five-year life. I am confident that the review will consider all the points that he has in mind.
We are paying 99 per cent. of management agreement claims within the two-month charter target, but we are taking longer than I would wish to process new applications. That is partly because we are providing farmers with more help in preparing their applications, which takes time, but in the end it will lead to a better arrangement.
It is in the long-term interests of farmers, consumers and taxpayers that there should be a fundamental reform of the common agricultural policy. At present, other European Union member states remain to be convinced of that, but the European Union's commitments under the general agreement on tariffs and trade and the potential accession of eastern European countries make change inevitable. We need to move away from a production system to a market-driven one. Any change must allow a period of transition during which farmers can adjust, but now is the time for producers to consider how best to meet the market's demands. The industry in Wales is well placed to meet the greater challenges of a more competitive market.
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