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Mr. Deputy Speaker: Order. Before I call the next speaker, may I say to the House that a large number of hon. Members are seeking to catch my eye and, unless contributions are considerably shorter, many of them will be disappointed?
10.50 am
Mr. Richard Livsey (Brecon and Radnorshire): Mindful of what you said, Mr. Deputy Speaker, I shall try to be brief.
I wish to raise an urgent matter--the state of the United Kingdom sheep industry. Unless immediate action is taken, there will be an exodus from many of the upland areas of Britain. Despite the welcome news last week of the lifting of the beef ban, in practical terms that was largely a psychological lift--not much beef is likely to be exported in the near future as we have lost an entire market.
The Competition Commission report on the dairy sector has not brought joy. That was covered in a debate last week and was sufficient to make the president of the National Farmers Union in Wales announce that he was quitting dairy farming because he could not see any future in it.
I shall try to straddle not the divide between new Labour and old Labour, which was mentioned earlier, but the divide that still exists between the countryside and urban Britain. The vast majority of people in the UK are entirely ignorant of the crisis in the sheep industry. The situation is so serious that in earlier times it would have warranted a royal commission to investigate it and make recommendations.
The sheep industry is suffering as much as other sectors but receives scant publicity. It is the dominant industry in most of Wales, Scotland, Cumbria, north Yorkshire, the Peak district and much of south-west England. It also has
an important role in Northern Ireland. A contraction of the industry would cause much of rural Britain to be further depopulated, and the knock-on economic damage would be equally devastating. The impact on family farms would be enormous.
In my constituency this week, the Royal Welsh Agricultural Society is holding its great show--the largest in the UK in terms of the numbers of visitors. Forty breeds of sheep will be on show, more than at any other show in Britain. It is my duty to speak up not only for my constituents but for all sheep farmers in the United Kingdom. The past three years have been the worst for sheep farming that I can recall in a life that has been spent working in or very close to the livestock industry. Except during the times that I have been blessed to serve in the House, I have been much involved in farming matters.
In my constituency there are far more sheep than human beings--no fewer than 16 sheep to every person. I started my working life at the age of eight, droving sheep from the mart to the railway station and was paid small sums for doing so. Never have I been so worried about the future of the area that I represent and the upland areas of Britain. The root of that worry is the crisis in the sheep industry. I no longer have a pecuniary interest in the industry, but many people whom I know have.
Many hon. Members serve constituencies in which sheep farming plays an important role, and I am sure that they will understand my concern. It is no exaggeration to say that the future of areas such as rural Wales depends primarily on the recovery of the sheep industry. I have no doubt that the same is true in Scotland and vast tracts of rural England. It is not a matter for flippancy; nor is it a storm in a teacup. In debating sheep, we are discussing the future of hundreds of thousands of people and millions of hectares of the United Kingdom.
The average price of finished lambs at the farm gate has fallen by 40 per cent. over the past three years, and 30 per cent. over that in the past month. That has produced a similar decrease in the prices achieved by farmers for store lambs sold off the hills for further finishing on lowland farms, and also for breeding ewes. At the same time, the increase in the value of sterling has driven down the value of European Union subsidies received by sheep farmers, and returns for lambs as well. The sheep industry has suffered a multi-whammy, as there has also been a disastrous 40 per cent. drop in the value of wool on world markets.
The Government's figures show that average farm incomes in the hills have dropped by more than 40 per cent. in each of the past two years. With an average hill farm income in Wales standing at £5,000 per year last year, it is certain that many of those farms are operating at a substantial loss this year. They are also subject to a hill livestock compensatory allowance review, which will have a major impact on the industry.
It is clear that there is no return on the capital invested in the average sheep farm, when drawings are allowed for. I defy anyone to raise a family and live properly on such an income, let alone reinvest in a business. Unless the situation is turned around, there will be no investment in hill farming. To turn it around, the fortunes of the sheep industry will have to improve dramatically.
The tragedy is that the EU is short of sheepmeat. There is no overproduction of sheepmeat in Europe, but we cannot get enough of our sheepmeat onto the European
market to satisfy the demand that undoubtedly exists. It is intensely frustrating that our neighbours in France, for example, are getting prices for lamb that are 50 per cent. higher than those in Britain. Clearly, we have a marketing problem, not overproduction.
With too much sheepmeat left on the domestic market because it cannot be exported successfully, the big supermarket buyers hold the whip hand. They can force prices down through pressure on the meat processors. One has only to visit a livestock market to see the mobile phones, about which we have just heard, being used by buyers at the other end of the line to tell people in the ring how much they can bid. It smacks somewhat of a cartel.
A further problem is that there are too many old ewes producing hard-to-market small lambs. Last autumn they were practically valueless and have been kept on into the current season. We have many problems, but in the past fortnight we in Wales have started to construct a new all-Wales livestock marketing co-operative to try totackle some of them. Salvation will come through co-operation--particularly in England now that the regional development agencies, which may be able to help, have been set up--and the big dealers and the big supermarket buyers could be bargained with on a more level playing field.
There is a crisis in respect of cull ewes in the United Kingdom. We need to reduce their number considerably. A cull needs to be carried out, and I hope that the Minister will relay that to the Minister of Agriculture, Fisheries and Food. Sadly, the ewes that were not culled last autumn are now the equivalent of skeletons because they have been kept for a year too long. They are valueless and, sadly, but for the sake of animal welfare they ought to be sent to an incinerator. That would be the kindest thing to do. This year's cull ewes, which are coming down the line, will be culled, particularly from the hills, as a matter of the stratification of the sheep industry.
Hon. Members will know that last year the Irish introduced a scheme under which farmers were paid £15 a cull ewe to take them off the market. I believe that such a scheme would be of great value in the United Kingdom, but action needs to be taken now; by October, it will be too late because those ewes will be flooding onto the market. The French require whole carcases--not split carcases which were and still are the order of the day. They can deal with them, and there is a good case for reviewing the matter now that the position in respect of beef has slackened. Disposing of those cull ewes now would mean that there would be fewer lambs next season and stronger demand for next season's lamb crop, which would improve farm incomes and put some much-needed cash into farmers' pockets.
The wool industry is in crisis and the cost of shearing sheep is greater than the value of the wool. Only yesterday I was told of an upland farm on which it cost £1,200 to shear the sheep, but the value of the wool was £800, which is an astonishing situation. This season's lamb prices are down by £9 a head, gross margins will be down by 30 per cent., and I calculate that last year's average income on upland sheep farms was the equivalent of£2.70 an hour for a 39-hour week. Hon. Members should compare that with the £3.60 an hour paid as the national minimum wage.
Mr. Bill Etherington (Sunderland, North):
I am grateful for the opportunity to say a few words aboutthe chronic shortage of general practitioners in my constituency, which is causing great concern. I raised the matter about 18 months ago in a Wednesday morning debate, when my right hon. Friend the Chief Secretary to the Treasury was a Health Minister.
I shall not bore the House by going through a rigmarole on statistics. Suffice it to say that the Sunderland health authority area is estimated to be short of 30 GPs, which puts us above the national average for patients per GP: there are about 2,250 patients per GP in Sunderland against the national average of about 1,900. That local problem stands out because, paradoxically, it exists in a region that enjoys a ratio of GPs to patients that is higher than the United Kingdom average.
I have to give full credit where it is due: my hon. Friend the Minister of State, Department of Health, and his predecessor, who have been sincere and sympathetic, have attempted to introduce initiatives to ease the problem. I also give credit to Sunderland health authority, which is in the somewhat invidious position of trying to improve a situation over which it has little statutory control.
The nub of the matter lies within GP practices. I have spent many hours discussing this issue with various colleagues and I should place on record the fact that my hon. Friends the Members for Sunderland, South (Mr. Mullin) and for Houghton and Washington, East (Mr. Kemp) have also been closely involved. They have done what they can and, although they may not use my words and expressions, they generally agree with the thrust of my remarks.
When I looked into this problem, I found that it has been long standing and that it should have been foreseen. In many ways, it is a demographic problem because my area has more than its fair share of GPs aged over 50. I am grateful to the Northern and Yorkshire regional office of the national health service executive for providing me with statistics showing that of all the health authorities in the region, only Sunderland has a preponderance of doctors over that age. Although the majority of doctors in every other health authority are under 40, two thirds of general practitioners in Sunderland are over 50. That situation has probably come about because of a historical accident, but the problem needs to be tackled and no matter what is done at present that will still be the position.
I am putting down a marker because I do not want someone to say in 20 years that no one noticed these problems. They are with us now and unless they are dealt with vigorously, they will return with a vengeance,
whatever we do to provide short-term alleviation.No matter how much good will is shown by the Department of Health, the Sunderland health authority and the regional health authorities, they are dealing with a flawed situation and that flaw lies within the present system of GP practices.
For example, a practice of three GPs might look after 6,000 people, which is extremely reasonable considering that one GP in my area looks after 4,000 people. If one GP retired and was not immediately replaced, even though efforts were made to replace him, two GPs would be left to look after those 6,000 people.
One of the problems is that the system of payment in GP practices is little better than that for piecework: the more patients a doctor has, the more he is remunerated. Once GPs have become used to a much higher rate of remuneration, they have a disincentive to recruit partners. The system is fundamentally flawed and has beensince the NHS was founded. Moreover, it is having a deleterious effect in Sunderland. Although my area is 30 GPs short, only four practices have placed advertisements to try to find partners. One would assume that if practices are not placing advertisements, they are not trying to improve the situation.
The answer to the problem is salaried status for GPs. I know that the British Medical Association is not in favour of that and has fought against it since the inception of the NHS, but recent research shows that 93 per cent. of young GPs would prefer to be salaried workers rather than small business men running their own practice or partners in a practice. We are also considering the possibility of expanding the local university's medical service so that while young GPs are being trained within the university they can give some of their time to assist GPs in the area.
Unless the primary care sector is thriving and vigorous, the excellent initiatives that the Government are carrying out, such as health action zones, are bound to be blighted and may fail. As recently as last week, I met my hon. Friend the Minister of State, and I know that he is doing all that he can. However, we now face almost three months in which Parliament will not sit and I dread to think what the position may be when we return because, despite all the efforts, the problem is getting worse.
This is a matter not merely for the Government, but for all hon. Members. Are we satisfied that the current system of GP practices is working? I am not and I wish to lay down that marker. I urge the Government to put much more emphasis on trying to change the system so that, eventually, all GPs are salaried. It may be argued that that will cost more, but so be it. The current system is unsatisfactory. It cannot be only my constituency that has a shortage of GPs. The problem is inherent.
I give full credit to the Government, who are trying to alleviate the problem by getting more GPs on to the books, but ultimately, we must have a system in which, if there is a shortage in an area, both the health authority and the Department of Health can put it right. That does not seem to be the case. We are floundering around trying to see what can be done to alleviate the problem, instead of considering a solution which, in the long term, would prevent such a problem from arising.
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