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Mr. James Paice (South-East Cambridgeshire): I start by declaring my interest as shown in the Register of Members' Interests. I see that the Minister for Local Government and the Regions, the right hon. Member for North-West Durham (Ms Armstrong), wants to have a look at the register. I have a smallholding and an agricultural building and, therefore, on some basis, I might gain from the measures. The right hon. Lady, with her inquisitive mind, no longer needs to bother to look it up; I have told her.
What really matters is the issue raised by my hon. Friends the Members for North Shropshire (Mr. Paterson) and for Ribble Valley (Mr. Evans): that, despite the fact that foot and mouth has been ravaging the countryside for two and a bit months now, and that we have not had a single debate in Government time on that dreadful issue or on the way in which it has been handled, the Government can find a whole day for a Bill with just three substantive clauses, for which the Government ran out of speakers by 7 o'clock. They can find time for that, but not for a debate on the much bigger issue that faces the countryside.
When we consider that it is now six weeks since the First Reading of the Bill, we can understand that the Government are not using the utmost haste to help farmers, even in the way that the Bill proposes. We have heard a number of speeches, including several swan-songs from the Labour Benches: one voluntary one and some involuntary ones. I am impressed by the hon. Member for Stroud (Mr. Drew), who seems to believe that the population of Stroud think, sleep and talk of nothing but the regional development agency. That demonstrates why, in five or six weeks' time, the hon. Gentleman will be looking for a new career.
The background to this debate is the state of agriculture today, after four years of Labour government. My hon. Friends have given various statistics, including the fact that income from farming is down 27 per cent. on a year ago; of course, that is 27 per cent. down on what was already a record low. If we consider agriculture sector by sector, we find that for pigs and poultry, net farm incomes showed a loss of £8,000 a farm last year, compared to a profit of £15,000 two years ago. In the dairy industry, lower support prices--a major factor in the drop in milk prices--have meant that net farm incomes have dropped by 41 per cent. to £8,000 a farm in the past two years.
In the cattle and sheep sector, the incomes of lowland producers fell to £1,500 last year, and the incomes of hill farmers fell by 50 per cent. to £2,500. Even the arable sector has not escaped. The net income of cereal farms has dropped by 80 per cent. to £8,500 a farm. Not one of those sectors has earned the equivalent of the minimum wage in the past 12 months. The state of agriculture today is such that the net worth of farmers is 25 per cent. less than it was four years ago. That equity has gone out of the agriculture industry. Agriculture's contribution to the national economy is now down to just 0.8 per cent.: it was 1.6 per cent. just five years earlier. Its contribution has halved thanks to many of the Government's policies.
This debate is not just about foot and mouth disease. Indeed, it is not about the foot and mouth crisis at all, although my right hon. Friend the Member for Fylde (Mr. Jack) and my hon. Friends the Members for Banbury (Mr. Baldry), for North Shropshire and for Ribble Valley all quite rightly made the point that this measure has to be seen against the background of the crisis, which has come on top of all those years of decline.
It is always pleasant to stand at the Dispatch Box and welcome the conversion of the Government to a policy that was introduced by the Conservative party. On 21 May 1998, I stood here in an agriculture debate and called for rate relief to be extended to non-farming businesses on farm premises. That is recorded at column 1172 of Hansard. The response of the right hon. Member for Birmingham, Perry Barr (Mr. Rooker), who was then Minister of State responsible for these matters, at column 1173, was that he was not sure that he could agree with me on the subject of rates. I always welcome a sinner who repenteth.
I realise that the Conservative party understands more fully the situation in the countryside and the needs of agriculture. It is absurd that business rates are not paid if a stable or loose box contains pigs or calves, but are paid if it contains a horse. But, as my hon. Friend the Member for North Wiltshire (Mr. Gray) said, the situation is not even as clear as that. If a heavy horse is kept in a stable, rates are not paid, but if a light horse is kept in it, they are. That is plainly nonsense. Simply to extend the idea of 50 per cent. rate relief, as the Bill does, does not overcome that completely anomalous situation.
We must also consider extending the definition of agriculture to provide the agricultural exemption for land-based industries that are closely allied to mainstream agriculture. I mentioned the horse world, but another important sector is the game farming industry, in which we can see comparisons with what goes on elsewhere in Europe. Anyone who studies the sporting magazines in the spring will find a legion of advertisements for French-sourced game birds and eggs. This country is currently receiving, week after week, tens of thousands of French game eggs. In a few weeks' time, it will be receiving day-old--and older--chicks. The French Government value the role of game farming in the national agricultural and rural economy: this Government do not. It is essential that game farmers should be considered part of mainstream agriculture--as they will be under a Conservative Government--and receive full agricultural exemption.
We have heard a great deal about the role of diversification. Hon. Members on both sides of the House have made the point that it is not necessarily the panacea for all farming. Indeed, most agricultural advisers to whom I have spoken over the years have said, "Do not even contemplate diversification or think about a different sector of enterprise until you have got your farming business as efficient and modern as possible." For most people, diversification is merely an adjunct to their farming business, not a wholesale replacement for it, although there are examples of diversification taking over. As my right hon. Friend the Member for Fylde said, after the catalogue of disaster in the agriculture industry that I have recited, the question that arises is, who has the resources to invest in such diversification enterprises in the first place?
We cannot talk about the future of farming without considering its role in the countryside. Many hon. Members have referred to the tourist industry. My hon. Friend the Member for Ribble Valley referred at some length to the importance of that industry, and to why it is suffering. We have to understand that the features that encourage tourists to come to the British countryside are there because of farming, not in spite of it. Tourism is the root of so many farm-based visits. Visits to open farms, pony trekking and all sorts of other activities stem from people wanting to enjoy our countryside.
Listening to the Government, one sometimes might believe that the landscape existed in spite of farming, not because of it. No one planned the landscape and then considered how to farm it; it is the result of millenniums of farming. Farmers have created it for farming needs. To claim, as Ministers often do, that farming no longer matters and that we must concentrate on the landscape and the environment, turns thousands of years of agricultural development on their head. Only a party that did not fully understand the countryside could make such a claim.
The debate has raised several issues. First, there is the problem of the five-year period. It appears that, for the first five years of the Bill's existence, people who fulfil the criteria will receive the mandatory relief, but that those who take up the option in four years' time will receive only one year's relief. It is common sense to provide the relief only as a start-up aid, but granting it solely for five years, starting today, is not. The Minister suggested that she did not understand that the Bill would provide for that. The measure should grant any business five years' relief as long as the legislation remains in place. Businesses would thus know that they had five years in which to ease into paying full business rates on their diversification.
Secondly, let us consider third-party occupiers. Again, the Minister implied that her interpretation was different from that of Opposition Members, including the hon. Member for Somerton and Frome (Mr. Heath). The purpose of diversification is to generate further income, and most business advisers would tell farmers to get their farming right before starting to adopt skills that they did not have. Many farmers would prefer not to move into new ventures, but to allow others to use their buildings for such purposes. Various proposals for third-party occupancy of a stable include garden machinery, metalwork, woodwork and even do-it-yourself livery. It is therefore essential for discretionary rate relief to apply when the farmer leases part of his premises to someone
Thirdly, we should consider several activities that are closely allied to agriculture. It is absurd that neither mushroom farms nor on-farm processing are deemed to be agriculture. For years, farmers carried out some processing in the dairy sector, but that is no longer considered to be agriculture. Machinery rings constitute an effort by farmers throughout the country to share the enormous overheads on farm equipment. They are not deemed to be straightforwardly agricultural, and are therefore not entitled to the exemption.
Fourthly, we should examine planning. My hon. Friend the Member for North Wiltshire made several comments that excited the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who has apologised for her absence during the winding-up speeches. My hon. Friend's point was crucial. If farmers are to generate extra income, a relaxed attitude to planning is essential. The Conservative party will therefore provide deemed planning consent for all farmers for use of up to 1,500 sq ft of their agricultural property for non-farming activities.
Several hon. Members have referred to equestrianism, and my hon. Friend the Member for North Wiltshire brought his considerable expertise and knowledge to bear on the subject, including the dreadful decline in riding schools of some 21 per cent. in the past 12 years. Indeed, 272 such schools closed in the past 12 months. As my hon. Friend said, the Association of British Riding Schools and the British Horse Society have expressed anxiety that the aid for which the Bill provides could disadvantage existing equestrian establishments compared with new schools. He also reminded us that the horse industry is the second largest in the rural economy, accounting for some £2.5 billion.
The Government claim that providing five years' relief for start-up businesses was the right way in which to avoid the long-term disadvantages to which my hon. Friend the Member for North Wiltshire referred. I do not believe that that is the case. There is a problem of striking the right balance between helping new businesses without disadvantaging existing businesses. That principle extends beyond equestrianism, but the only way to tackle the problem for equestrianism is to adopt the suggestions of my hon. Friends the Members for North Wiltshire and for Ashford (Mr. Green) and provide the full agricultural exemption for all new and existing equestrian businesses.
The Bill also refers to village shops and we have had much debate about tea shops and what can be classified as a food shop. In my constituency, post offices are under threat in many villages--for example, in Fordham and Cottenham. Neither the Bill nor the Postal Services Act 2000 will help them because Government policies have put the future of our sub-post office network at risk. That problem cannot be resolved by a small amount of rating relief.
Clearly, it would be absurd to oppose a step in the right direction, especially as Conservative Members called for it three years ago. As my hon. Friends said, it will not make much difference on its own and, as I have shown, the foot and mouth crisis follows many years of declining incomes.
Farming is and must remain the centre of the rural economy; it is not simply an add-on. Many other rural businesses depend for their livelihoods on trade with farmers. Until we develop policies that allow farming to continue, measures such as the Bill will ultimately fail. We must restore agriculture to the position of strength that it enjoyed only five years ago.