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10.38 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Ms Joyce Quin): I congratulate my hon. Friend the Member for Selby (Mr. Grogan) on securing this debate. I certainly understand why he has chosen to raise this particular issue; it is not only important, but of enormous concern to Horticulture Research International staff, to its many customers and to my hon. Friend's constituents. I very much appreciate that in securing this debate, my hon. Friend has been motivated both by concern for the jobs of some of his constituents and by the concern to secure a viable horticulture industry, and horticultural research industry, in the United Kingdom. Like officials and other Ministers in my Department, I hold very dear those concerns about the horticulture industry and the horticultural research industry.

My hon. Friend began by referring to the danger of flooding at the site in his constituency. I join him in paying tribute to the efforts of those who have worked so hard in trying to ward off the problems caused by flooding in his part of the world.

The Government very much regret that HRI is having to take the action that it has announced, including the closure of its Stockbridge house site and the redundancies

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across the organisation. Indeed, it is important to stress that all HRI's sites are affected by the restructuring programme, not just Stockbridge house--although I fully accept the severity of the impact on Stockbridge house, as outlined by my hon. Friend.

I know that HRI's board and senior management are committed to providing every possible assistance for staff who are being made redundant. That includes career consultancy, resettlement training and access to independent counselling. MAFF has made available its own personnel and welfare services. That in turn includes doing our best to identify suitable vacancies at the offices of MAFF or our agencies. When my hon. Friend met my right hon. Friend the Minister of Agriculture, Fisheries and Food, they discussed some of these concerns.

The Government believe that however difficult HRI's restructuring measures may be, they are necessary to redress a very difficult financial situation and to ensure that HRI can continue to provide an efficient and cost-effective service into the future.

My hon. Friend mentioned some of HRI's financial problems, and it is true that it is forecasting an annual deficit for the four years ending March 2004 of about £2 million, falling to £1.3 million. Some £3 million must be cut from operating costs, and assets must be brought into line with foreseeable income streams. That is why the board and management had to review the financial strategy, and to take difficult decisions as a result. The horticulture industry and the farmers' unions share the view that to maintain HRI and provide for its crucial work for the sector, the restructuring is necessary.

The Government believe that HRI's board and senior management have assessed all the options and identified the one which, in their view, can best secure the organisation's future and maintain its service to the UK horticulture industry. HRI is a non-departmental public body, and decisions about the day-to-day operation of its business are, of course, matters for its board and senior management. It has an experienced board, which includes senior representatives of the horticulture industry, the scientific community and business.

I can assure my hon. Friend and the House that, as HRI's sponsor Department, the Ministry has scrutinised the plans very thoroughly. We have agreed to provide a grant of £4.5 million to enable the restructuring to be implemented. My right hon. Friend the Minister met my hon. Friend with a delegation from the industry on 21 September, to listen to their concerns directly and to discuss the restructuring plans, including the closure of the Stockbridge house site.

One of the points arising was the industry-funded work at Stockbridge house and its future. Not surprisingly, my hon. Friend referred to the arrangements that HRI has in hand to ensure that it can continue to deliver the important project work currently based at Stockbridge house, and its chief executive has given the Minister an undertaking that those arrangements will be fully discussed and explained to the industry.

To that end, HRI has had lengthy and detailed discussions with senior representatives of the industry to explain the rationale behind the restructuring plans and the arrangements for managing work currently carried out at Stockbridge house. I am pleased to be able to report

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that on 2 November HRI, the National Farmers Union, the Horticultural Development Council and the East Malling Trust for Horticultural Research issued a joint statement, in which they all committed themselves to moving ahead together for the benefit of the UK's horticulture industry. In particular, they have agreed to seek a satisfactory continuation at HRI of the important SOLA--specified off-label pesticides approval--work currently carried out at Stockbridge house.

The statement affirmed all those bodies' belief in a healthy and vigorous HRI, and in the need for all the stakeholders to work together to ensure that its valuable programme of work continues in such a way as to benefit the horticulture industry directly.

It is worth reflecting on the fact that the horticulture industry is a major contributor to the economy and to the nation's diet and health. My hon. Friend and I must have read similar briefing information before this debate, as I, too, want to refer to the fact that the farmgate value of produce exceeds £2.5 billion, which, as he said, is more than 15 per cent. of total UK agricultural output. That is a significant contribution. Horticulture receives very little support from the common agricultural policy, and has one of the freest markets in operation in agriculture.

Consumer preference has been a strong driver and the sector has shown itself to be tough, competitive and resilient. I want to stress the importance that Ministers attach to the future of the horticultural sector. As a Minister with a particular interest in the sector, I have had discussions with various people in the industry, as well as seeing for myself many of our excellent horticulture establishments. I am convinced that the sector can expand and can take the place of some of the produce that is currently imported, ensuring that in future we provide more of our produce domestically.

Current levels of public funding represent a firm commitment to HRI and to its work in support of the UK horticulture industry. MAFF continues to account for about 50 per cent. of its income. Since 1997, the Government have invested about £58 million in the organisation. HRI has also been awarded £2.26 million from the capital modernisation fund to create a new European centre for organic top fruit and nursery stock at its East Malling site.

I spoke of some of our imported produce being replaced by domestically grown produce, and that is especially relevant to organic production. There is considerable room for more such production here. The commitment to the new European centre was part of the action plan for farming launched by my right hon. Friend the Prime Minister at the farming summit on 30 March. In addition, HRI has been awarded £151,000 from the invest-to-save budget for collaborative projects with other public sector research establishments, and has recently been granted more than £11 million for capital investment and other purposes, including £4.5 million to enable the present restructuring plans to be implemented.

My hon. Friend, quite understandably, concentrated on plans for the future of the Stockbridge house site. May I respond directly to his request for a meeting with Ministers and officials about the developing situation regarding the future of the site and of HRI's work? I am happy to give him the assurance that we will have a meeting with him to deal with the issues about which he is concerned. He knows, however, that our intention is

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that once HRI vacates the site we shall sell it, so that the receipts will partly offset the cost of financing the restructuring plans, including redundancy payments to staff who are not transferring to other sites.

I know that there has been speculation about a possible role for MAFF's central science laboratory at York. As my right hon. Friend the Minister of Agriculture, Fisheries and Food announced on 6 October, CSL is considering the business case for consolidating some of its own research work at Stockbridge house when HRI leaves.

My hon. Friend referred to a scorched earth approach to the Stockbridge house site. I assure him that that is not the case. The discussions will include consideration of some of the facilities that already exist on that site, about which I know he is concerned.

My hon. Friend also referred to HRI's science activities. I do not believe, as some allege, that HRI is expanding its "high science" activities at the expense of its development role. Indeed, HRI's chief executive has given Ministers an assurance that it will continue to cover the full spectrum of research and development from basic research to the dissemination of research and development findings and good practice direct to the industry. I know that he is keen to strengthen further HRI's links with the horticulture industry, something to which I also attach considerable importance. The chief executive is also seeking additional funding schemes through public- private partnerships so as to stabilise HRI's financial position and ensure that it continues to benefit all its stakeholders.

My hon. Friend also spoke about the role of Tony Burne, who is on the board of Horticulture Research International. He is one of 10 members of the board, and

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although he also has a role advising Ministers and considering issues affecting research in this sector through his work at MAFF, he does not derive financial advantage from that role. It is important to say that. There has been a representative from MAFF on the board of HRI from the outset. In that sense, Mr. Burne is fulfilling a normal responsibility, which has existed from the beginning.

The Government believe that HRI has a good reputation for providing high quality research and development and services to its customers. As such, it is rightly--and should continue to be--the premier horticultural research establishment in the United Kingdom. Obviously, we intend the restructuring plans to reinforce that position and maintain the ability to service the United Kingdom's horticulture industry. The Government hope that all HRI's customers will rally round the organisation and give it their support. We believe that we have to look ahead, through this difficult restructuring, to the industry's ultimate benefit.

It is important to see this research work in terms of the wider research work that can benefit horticulture and agriculture. I also believe that it is important to consider such issues in a national and a regional context to see the role that horticulture can play in the development of regional economies as well as in the economy of our country as a whole.

I accept my hon. Friend's point when he stressed the importance--

The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Speaker adjourned the House without Question put, pursuant to the Standing Order.

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