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House of Commons

Wednesday 10 December 1997

The House met at half-past Nine o'clock


[Madam Speaker in the Chair]

Motion made, and Question proposed, That this House do now adjourn.--[Jane Kennedy.]

Rural Economy

9.34 am

Sir Robert Smith (West Aberdeenshire and Kincardine): I welcome the opportunity to discuss the rural economy and to raise some rural issues that are specific to my constituency. The rural economy plays a very big part in my constituency. However, as the past week's developments have focused attention on one specific aspect of the rural economy, I shall keep my remarks brief, so that other hon. Members can speak on that topic.

I shall address wider issues in the rural economy before addressing the prevalent issue. I should like to hear the Government's philosophy on, and perception of their role in, supporting the rural economy. Is such support a priority for Ministers? Is maintaining a vital rural economy a priority, or are they happy for the drift towards purely urban environments to continue depleting the rural base? Specifically, I should like to hear the Government's views on the future of objective 5b funding--which affects part of my constituency--of structural funds, and of efforts to preserve the rural economy.

The oil industry dominates the city of Aberdeen and its outlying commuter areas, affecting especially house prices. How do the Government propose to encourage affordable housing in rural environments, so that families can stay in those areas? There is a crisis in the north-east of my constituency, because the only people who can live there are those in well-paid occupations who commute into the city.

At the heart of the housing problem is the need for the Government to confront capital funding for public sector housing. As Liberal Democrat Members have repeatedly said, it is farcical that money invested in housing that guarantees a return to the Exchequer is treated the same as money that brings no return. The Government must examine their accounting processes so that investment can be made again in council and other public sector housing in rural areas. The sale of council housing, and the general failure to build new housing, is creating a serious problem of keeping people and indigenous industries--which would stay when oil moves on--in rural areas.

Especially in the north of Scotland, there has traditionally been a recognition that, wherever one lives, one should be connected to society. The history of hydro-electric, particularly, demonstrates the belief that people should have equal access to electricity supplies regardless of where they live. Opening markets and a market-driven philosophy in running the economy have increasingly attracted people to urban environments,

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which provide all the quality public services. The worry is that rural areas will be left out of transport links and be less well connected to infrastructure.

There has been a proliferation of telecommunications masts in all the juicy spots in my constituency. Rival companies have been gaining access to the mobile telephone market, yet vast tracts of my constituency have no access to that network. Similarly, the BBC is developing new broadcasting technologies that will involve more people in the media, but parts of my constituency do not yet have access to current technology.

The fear is that, with less-regulated utilities, people in rural areas will become increasingly unable to obtain services, to stay in their community and to participate fully in society. I should like to hear the Government's assurances that they will encourage and sustain activity in rural environments, rather than encouraging people to move to urban environments.

Another important issue is the future of rural transport. As hon. Members on both sides know, bus deregulation led to a major downturn in the availability of bus services, and to a reduction in the quality and use of bus services. Significantly, on the same day that the Secretary of State for the Environment, Transport and the Regions was encouraging people to get out of their cars and start using buses, the local bus service in Finzean in my constituency was completely cut. Will the Government explore more imaginative ways in which to encourage community buses? Perhaps community councils could provide minibus services so that people without cars can continue to live in the rural economy.

In the light of the present headlines, it is difficult to have a debate on the rural economy without turning to the most pressing problem affecting many of my constituents--the crisis in farming. I shall keep my remarks short so that other hon. Members can go into some of the detail.

I start with the underlying philosophical aspects of the problem. Since the war, there has been a tradition of the state being heavily involved in the agricultural economy. All parties have accepted that the state has that role. There has been an unwritten contract or partnership between the farming community and the state under which the state has interfered in and operated in the market. That has led the farming community to be dependent on the actions of the state.

The Government have recognised that the previous Government's handling of the beef crisis led to a delay in finding a solution and to even more burdens being placed on the farming community. Ministers recognise that the state has a responsibility, but they have failed to recognise that the Government should assist the farming community. I should declare an interest at this point. Although I am not active in farming, I own a farm.

The crucial point that my constituents make to me is that the Government have a chance to compensate farmers for the fluctuations in the green pound. So far, the Government have failed to make their intentions clear. They have implied that they will not compensate farmers, but they have not ruled it out. The easiest way in which to boost the farming economy would be for the Government to give farmers access to funds.

The rules of the European Union allow Governments to compensate farmers for fluctuations in currency. If the Government fail to compensate our farmers, they will be

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forcing them to operate with one hand tied behind their back in an open market. If the Government believe that the rules should be changed, they should change them. The rules should be changed not as a result of Treasury decisions, but after negotiations in the European Union. That is fundamental.

The beef crisis has not affected only farmers. It has also affected the hauliers who take the cattle to market, the abattoirs, the markets themselves and the whole food processing industry, which is vital to the north-east of Scotland. One farmer said to me, "I may be very green, but I always thought that we grew beef for our own consumption." Farmers see farming not as a business, but as a way of life. The Government have failed to take that on board. If the Government withdraw economic support, there is no escape route for farmers. That is why there are high rates of depression and high suicide rates.

I hope that the Minister will give us some answers on the wider issues of the rural economy. I also hope that he will give us not just a message of sympathy--the Government are quite good at that--but some hope of concrete action and a commitment that they will use the powers available to them to compensate farmers for the crisis in farming, which was of the previous Government's making.

9.44 am

Mr. Alan Hurst (Braintree): I am grateful for being called, Madam Speaker. I am also grateful to the hon. Member for West Aberdeenshire and Kincardine (Sir R. Smith) for initiating this debate on a Wednesday morning, when there is an opportunity for a number of hon. Members to make a contribution.

The hon. Member talked about Government interference, a point which needs greater investigation. I talked to a farmer in my constituency on Friday about the history of farming. Between the wars, there was such a severe and prolonged agricultural depression that, in parts of East Anglia, it was possible to have a series of fields for three years before being expected to pay rent. The plight of farmers matched the plight of those who worked in heavy industry in the north-east of England at the time. The state "interfered" to assist farmers, to guarantee food production and to guarantee our position in the world after the second world war.

The situation has changed since then. The whole emphasis of the common agricultural policy has been to stimulate production, a process which has gone hand in hand with rural depopulation. I do not mean that the number of people living in rural areas has declined, but that there are fewer people working in agriculture and agriculture-related businesses.

The House of Commons Library assisted me yesterday by providing figures for the number of people employed as hired agricultural workers. The figure for 1945 was just under 900,000; the figure for 1996 was 250,000. Over that period, there has been a 70 per cent. reduction in the number of those working on the land. More recent figures suggest that the figure may have fallen to an even lower level--perhaps to 156,000.

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The whole thrust of the CAP has been to neglect employment in agriculture as a means of earning a living. I hope that during the Agenda 2000 negotiations, the Government will follow up one of the points raised in the document, which says:

The policy thus far has not been to provide sustainable jobs, but rather the reverse. Even since 1992, there has been a substantial reduction in the number of people employed in agriculture.

My submission is that the way forward is--to use one of the jargon words that bedevil agricultural economics--decoupling. We should take away support and subsidy for production on an accelerated basis.

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