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Ms Lawrence: Will the hon. Gentleman give way?
Mr. Evans: I shall give way in a moment, but I want to build up a little head of steam first. I have only 10 minutes, because I know that the Minister will want to answer many of the points that have been raised.
The £60 million increase in payments for the 60,000 United Kingdom farmers who claimed upland livestock subsidies was announced by the then Minister of Agriculture, Fisheries and Food in November 1996.
Ms Lawrence:
Will the hon. Gentleman confirm whether that £60 million was put in the spending plans that this Government took over?
Mr. Evans:
The £60 million would not have been in the Government's spending plans, because nobody could have predicted the huge scale of the BSE crisis. Some £1.4 billion was spent to support the agriculture industry after the rise of BSE. We are asking the Government to consider the needs of farmers in HLCA areas carefully, to ensure that they get the support that they desperately need. The Government seem to have pre-empted the review, even though, as we know, they love reviews.
In 1995-96, HLCA payments to Welsh hill farmers reached £27.2 million. A similar figure is expected for 1996-97. Planned expenditure for the next year is £36.4 million. Labour does not share our commitment to hill farming. The Government plan to announce a cut in the HLCA back to 1996 levels, wiping out the £60 million supplement. Such a move will fail to take into account the current trends in hill farming incomes. Government figures for 1994-95 show that 69 per cent. of farmers in the less-favoured areas of Wales had a net farm income of less than £10,000--and the Government have the nerve to talk about a minimum wage.
Cuts in compensation for Welsh farmers without reference to economic conditions and incomes in the hills and the less-favoured areas will mean savings for the Government, but cuts in income for all hill farmers, putting some of them out of business. The cuts will mean deprivation and depression for many rural villages. The Government are not listening to Welsh farmers, not consulting them and giving many of them no chance.
A recent National Farmers Union survey showed that farming incomes were back to below 1988-89 levels.
Mr. Chris Ruane (Vale of Clwyd):
Does the hon. Gentleman recognise the damage that the previous Conservative Government did to the rural economy? They presided over it for 18 years, during which there was Alar in the apple industry, anthrax in the pig industry, botulism in the food processing industry, listeria in the dairy industry, salmonella in the poultry industry, E. coli in the meat industry and BSE in the beef industry. Does he believe that that strengthened or weakened the rural economy in Wales?
Mr. Evans:
If the Government had sat back and done nothing to support the farming industry, with those problems, it would have been a complete disaster. I have already mentioned the enormous £1.4 billion support on BSE. The Government's reactions in the next three or four years will be interesting. There have been incidences of E. coli in Scotland since this Government came to power. We shall not scaremonger in the appalling way that certain Labour spokesmen did when we were in government. Some of the comments made when the BSE crisis began did not help hill farmers in Wales. I am sure that the hon. Gentleman will recall the right hon. Member for Camberwell and Peckham (Ms Harman) asking:
The over-30-months scheme provides farmers with compensation for the culling of cattle over 30 months as they come to the end of their working lives. The culling of cattle over 30 months was one of the conditions for the lifting of the beef ban agreed at the European Council of Ministers meeting in Florence in 1996. By the time of the general election, more than 1.2 million cattle had been culled under the scheme.
We have already heard how wonderful the Government are, with their pro-communautaire policies and their relations with our European neighbours. At the time of the BSE crisis, they said that the Conservative Government were not doing enough to lift the ban, but the ban has not been lifted since 1 May. We want the Government to do more. They said that they had good relations with Europe. They almost gave the impression that if they were elected on 1 May, the ban would be lifted on 2 May. That has not happened. It is damaging to the industry in Wales.
In March 1996, before the BSE crisis, the average price reported by the Meat and Livestock Commission for a grade 1 cull cow was 95.3p per kilo liveweight. That made an 800 kg cull cow worth about £760. With the new weight limits and prices, the same animal would be worth only £311, an enormous drop in farmers' incomes. The accusation against Welsh farmers, and against farmers generally, was that the system was being abused. That is an ill-founded, ill-considered accusation against hard- working, decent farmers. I ask that the Government take measures to review the decisions that they have taken, which are hitting farmers in Wales so hard.
On green pound revaluation, the value of sterling has risen strongly since the general election, caused at least in part by the four interest rate rises since 1 May. That has led to a further revaluation of the green pound and means that the value of common agricultural policy support prices in sterling has fallen. The agreement at the June 1995 Agriculture Council allowed member states to freeze
the green rate applying to CAP direct payments. We exercised that right to protect British farmers against revaluation. The freeze protects the value in sterling of more than 60 per cent. of CAP expenditure and is worth a massive £440 million over two years. To compensate for the effects of the strong pound, the Government can apply to the Commission for further compensation to help farmers whose CAP payments have effectively been reduced by the strong pound. The Government should take that course of action at the earliest possible time, which would go some way to helping Welsh farmers.
Mr. Llwyd:
Will the hon. Gentleman give way?
Mr. Evans:
No, I said that I would finish at 12.10 and I aim to do that.
The Parliamentary Under-Secretary of State for Wales (Mr. Win Griffiths):
I congratulate the hon. Member for Ceredigion (Mr. Dafis) on his success in the ballot and on taking the opportunity to raise matters of great importance to the rural communities of Wales. I also thank my hon. Friends the Members for Preseli Pembrokeshire (Ms Lawrence) and for Clwyd, West (Mr. Thomas) and the hon. Members for Brecon and Radnorshire (Mr. Livsey), for Ynys Mon (Mr. Jones) and for Montgomeryshire (Mr. Öpik), all of whom made thoughtful contributions.
"Does the Secretary of State acknowledge that public confidence on this issue is hanging by a thread?"--[Official Report, 20 March 1996; Vol. 274, c. 376.]
5 Nov 1997 : Column 265
Matthew Parris succinctly remarked the following day in his column that she then proceeded to cut it. I know that the hon. Gentleman was not in Parliament then, but some of the statements made by other Labour Members at that time were not helpful to hill farmers in Wales or any other farmers throughout the country.
A recent National Farmers Union survey showed that farming incomes were back to below 1988-89 levels. It also showed that 74 per cent. thought that the main reason for young people not taking up hill farming was the low incomes. The president of the Country Landowners Association has predicted that hill farmers face tough times unless the Government boost special payments to keep their incomes above the breadline. He said:
"HLCAs were originally brought in to compensate farmers for the natural handicaps to farming in LFAs. Now more than ever, this policy is justified and higher rates are needed for LFA farmers to survive."
By cutting the HLCA, the Government are acting ahead of the outcome of the annual review of the state of hill farming. It is like a judge passing a life sentence for murder before he has heard any of the defence's evidence. It is an irresponsible act worthy only of a Government who have shown themselves untrustworthy and unable to keep their word. They say whatever they feel like at the time. If it turns out to be inconvenient later, they simply drop it. It is a betrayal of our farmers' trust.
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