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Examination of witnesses (Questions 180-199)
WEDNESDAY 28 MARCH 2001
THE RT
HON MICHAEL
MEACHER, MP, AND
MISS SOPHIA
LAMBERT
Mr Öpik
180. I have a number of points about assistance
to farmers and also for related industries. Are you considering
specific financial assistance in restricted zones, for example,
to farmers who have not got the disease but they cannot move their
stock? The rationale here is that those individuals are even now
experiencing consequential losses without losing stock, and they
could lose their business because of the lack of turnover.
(Mr Meacher) I have to say to the Committee that that
is a matter for MAFF, it is a matter for Nick Brown, not for me.
I am exclusively concerned with non-farm business. I know he is
very well aware of this issue, but I think you should ask him
that. It is not my decision.
181. In which case, can I ask about related
industries. Would those be in your remit? For example, there is
a construction company in the middle of my constituency. The proprietor
of that company contacted me saying he is not a farmer himself,
he does no farming, but his workforce are normally employed on
construction on farm sites. They are not going anywhere at the
moment, they are not doing any work. Would that be in the remit
of your work or MAFF's?
(Mr Meacher) I think that would probably come into
the Rural Task Force, yes. I know that this separation of non-farm
and farm is somewhat artificial, the two are very closely interlocked.
182. So to use him as an example, as opposed
to the Newtown Fair example which I mentioned before, he is saying
that he is basically going to have to close his business, go into
bankruptcy within a couple of months possibly, or there is the
danger of it. I understand what you have said about business rates
and so forth. He is saying that in reality he will need something
like relief from PAYE, a holiday on paying tax and national insurance
contributions and so forth, because of the sheer turnover that
he has lost. Would that be something that you might consider?
(Mr Meacher) I am not a finance Minister, but my understanding
is that the legislation is very rigid and tight on this, that
there is not provision in the legislation to forgo payment of
VAT and PAYE. Indeed, I am sure that all Members in the room have
experienced constituents who complain that they have been driven
bankrupt because the Revenue is insisting on payment of VAT that
they cannot make. The Revenue does have that power, and, indeed,
I think actually has the duty to pursue payment of VAT which is
due. What we have said is that where there is flexibility in terms
of the timing of payments, we should use that. Of course, that
is only stacking up increased liabilities at a later stage, but
it might keep people going. The revenue departments have said
that they will deal with this as sympathetically as possible.
I keep saying that I want evidence where that is not being exercised.
Chairman
183. Can I seek clarification, Minister, about
aid responsibility? If you have a business based on a farm, a
bed and breakfast based on a farm or a barn conversion based on
a farm—or, I was going to say, a hikers' barn, but that
is probably the least likely, based on a farm—but not actually
related to the farm business, and there has clearly been a loss
there, under whose remit does that fall?
(Mr Meacher) That would be the Rural Task Force. We
are concerned with everything apart from actual agricultural activities.
184. Agricultural activities, not the type of
businesses?
(Mr Meacher) Yes. Bed and breakfast on a farm certainly
would come within our remit.
Mr Öpik
185. Thank you for that intervention. These
related industries, as Owen implied, are very close to bankruptcy
and do, in my judgement as well, need quite a dramatic financial
intervention. Therefore, accepting that if, indeed, the rules
are that we could not, for example, waive PAYE for now, would
you as a Task Force be willing to consider the rather radical
step of waiving the payments, of underwriting those PAYE payments
now, even if it is on a sort of a loan basis, to the Revenue and
then working it out later, if the alternative is bankruptcy?
(Mr Meacher) I am sorry, I am not clear what you mean
by "underwriting". Who does the underwriting? Do you
mean writing off?
186. No, I mean basically subbing the firms.
(Mr Meacher) Subsidising them?
187. Subbing the firms now and then working
it out perhaps through gradual repayment schemes once things are
off and running, so, for example, if the company in question has
a £5,000 a week tax bill, the Task Force might come to an
arrangement where you pay the £5,000—not the Task Force
but the Government—and then it is paid back over time by
the company once it is back on its feet.
(Mr Meacher) I do not believe that revenue departments
have that flexibility in the legislation. I think a better way
to achieve the same end would be the one which has been raised,
which is the provision of soft loans or interest-free loans. That
is the obvious way of trying to give further assistance. I repeat,
this is, as they say in the best Whitehall lingo, under active
review, but in this case I mean it.
188. Are you developing, and is the Committee
specifically considering, special measures for farming-related
industries? Is that an agenda item for the Task Force?
(Mr Meacher) Absolutely. That is exactly the area
which we cover—non-farm businesses who have suffered a significant
economic loss as a result of foot and mouth outbreak. That is
our remit. That is the group of businesses that we are trying
to help. I think I have said it all, so I will not repeat it.
189. You are quite right. Moving on to some
strategic questions, in the short term I raised a concern at the
beginning of our meeting today about making sure that MAFF and
the Task Force worked together. Can you just assure me that strategically
you are meeting, for example, as two bodies, perhaps on a fortnightly
or three-weekly basis, just to make sure that there are not conflicting
interests?
(Mr Meacher) I assure you that it is on a daily basis.
My officials certainly meet with MAFF officials once a day, twice
a day, three times a day, five times a day.
(Miss Lambert) I have some that are meeting most of
the time.
(Mr Meacher) I have, of course, Elliot Morley who
is Deputy Chairman of the Rural Task Force. I discuss these things
with him regularly. Nick Brown has had meetings at MAFF regularly
which I have attended. That has now been superseded, of course,
under the proper procedure, by a multi-departmental meeting chaired
by the Prime Minister. I do stress, and I really mean it, that
I do not think there is a problem about liaison. Because we represent
different interests and the protection of farmers, the protection
of interests, the tourist community and the rural businesses,
I certainly think there is no lack of constant effort to reconcile
those two interests, without overriding either. I repeat, our
paramount concern is to contain this disease, but consistent with
that there does need to be the closest working together, and I
can assure you that there is.
190. That is interesting, because obviously
the Task Force are spending most of their time on this, so the
answers to some of these questions seem obvious to you. The fact
that they were not obvious to me would imply to me that it is
probably going to be very helpful if your Task Force can think
of ways to communicate the clarity of purpose between organisations
to a wider field, because farmers would love to be reassured that
there is a commonality of purpose. They fear there may not be.
I am sure there is, from what you are saying. Maybe there is an
action step there?
(Mr Meacher) Yes, I think what you are saying is completely
right. So many people clearly say this sincerely. I find myself
slightly bewildered, because I do not think it is the issue which
people out there clearly believe it is. Clearly, the amount of
assurances that I, or Nick Brown or any of us give are not seen
as sufficient. There is still a view that the farmers do not want
people in the countryside, the tourist industry does, and therefore
there is conflict. If I could repeat what I said in my earlier
answer to you, things are never quite as simple in the real world,
and we actually have somehow to reconcile both of those. I think
we do that perfectly well, so long as we are absolutely clear
that the prime concern is the containment of the disease.
191. On the basis of what you are saying now,
I am even more convinced that we need absolute clarity. You said
before that the local vet and regional veterinary centre has got
the ultimate say and obviously should have the final say. That
is a useful finding. Can I suggest that it might be worth reviewing
how that sort of information is being communicated. The reason
I think there is a confusion is people do genuinely think they
are getting different advice from different directions, and maybe
that is one reason why many people think there may be a slight
conflict.
(Mr Meacher) I hope not. Everyone here will immediately
know the hotline number, which I need hardly repeat to you is
08456 071071, and that will give you local advice from the tourist
information centre and the local authority, which will certainly
be able to answer detailed questions about whether you can or
cannot do X locally.
192. Are you looking towards the longer term
both in the sense that the disease problem may last longer than
you think at the moment—let's dare to think of a scenario
where it may last eight or nine months—and the other related
question to that is are you thinking of a recovery plan? Are you
beginning to be organised for that?
(Mr Meacher) We certainly are. There are really three
stages to this which are very obvious. First of all, it is overcoming
this disease, getting on top of it, and I know it is an issue
whether the Government is or is not. We are not, in the sense
the number of new cases of outbreaks continues to rise dramatically,
but to a large degree we are in the sense they are overwhelmingly
in the areas of existing infection, but even that may change.
We have to overcome the disease, be seen to be reducing it, to
have it contained. In that circumstance I think we can then credibly
and plausibly come forward with a short term regeneration package
for businesses which, if they have survived, and I hope they have
survived, will need a lot of help in the short run. Then, thirdly,
there is the wider issue which many people have raised about what
we mean about sustainable agriculture. Nick Brown gave the Government's
view about the best evidence we have as to the source of this
outbreak. We all know the conditions involved in intensified agriculture—involving
very rapid movement of thousands of millions of animals on a regular
daily basis from Northumberland down to Essex to the abattoir
and cattle markets and then right back across the country the
next day—are conditions which maximise the spread of this
disease, which is quite apart from the issue of chemicals versus
organics. All of these are issues which we have to discuss. If
there is any silver lining in this dreadful, awful episode, it
is that it has raised the question of what we mean about sustainability
in agriculture far more dramatically than ministers ever could.
193. I will not ask for a response to this but
within that I hope you might consider radical moves such as even
abolishing business rates for 12 to 18 months during the recovery.
I am not expecting a response to that.
(Mr Meacher) I hear what you say.
Mr Öpik: Can I finish with a facetious
thought which will solve all the problems at once. Since sunlight
and ultra violet light does kill the virus and since it always
rains here, perhaps we should look at the cloud seeding techniques
which are used in China. They do it there before a major event.
It may solve all of our tourist and transmission problems in one
go. I do not expect a comment to that either.
Mr Jack
194. I want to talk about the level of expenditure
which has been committed to the various programmes you have outlined
but one technical point before I get into questions on that. Going
back to the question of rural rate relief, am I right in saying
that you have already designated 150 local authorities for whom
this applies? One of the worries I have, just to be entirely parochial
for the moment, in my constituency, the Fylde, is there are a
number of agri-based businesses which clearly have been hit by
the knock-on effects of events outside the Fylde. Touch wood,
we have not got foot and mouth but their businesses are suffering
in equal measure to those located in areas which do have it. Will
you be reviewing the number of the local authorities which can
offer this assistance to take into account the agri-based businesses
which are being affected by the knock-on effects of foot and mouth
elsewhere?
(Mr Meacher) I do understand that point and wherever
Governments draw the line there will always be businesses, people,
on the wrong side of it. The only alternative to that is you make
it totally open-ended. If that is not realistic, and it is not,
we do have to draw a line. However, if this line is drawn in the
wrong way, in a way which does not take into account a sufficient
number of businesses which are very deserving and clearly do need
assistance, we will have to review that. But I have to say that
decision has been taken in the first instance; 150 is a sizeable
number, we believe the cost of this rate relief, albeit confined
to those small businesses, is going to be quite substantial. Your
next question will be, how much, and I cannot tell you. It depends
how many claims, it depends on the extent of it, but it will certainly
be tens of millions of pounds I think. We will, I repeat, on all
of these measures have to keep them under active review. If they
are not sufficient for the purpose, we will change them.
195. Let me probe you, as you raised the question
in anticipation. The Prime Minister made it clear that there was
no limit on resources to tackle the outbreak of foot and mouth.
That is a fairly broad statement or it could be interpreted as
a very narrow statement, purely and simply focused on the slaughter,
burial and eradication of disease, but there are confines on budgetary
commission and budgetary constraints on other forms of help. Can
you give us some feel in terms of your contacts with the Chief
Secretary as to what steer you are getting from the Treasury about
where the limits are being drawn on this or are there as many
resources as needed to fight this outbreak?
(Mr Meacher) I think the Prime Minister was referring
to resources to contain and eradicate the disease. I think that
was unquestionably his prime concern, it remains the Government's
prime concern. I do not think any Government can say there is
no limit on resources but this is a very concentrated, focused,
logistical effort which is backed up by very substantial resources
to try and contain this disease which is the prime concern.
196. I can remember when BSE started, I can
remember when what one might call ball-park figures were worked
out for all the implications, and I can also remember Chief Secretaries
being confronted with those implications. Clearly anybody who
is taking the decisions where there is a financial commitment—just
as you were saying you could not tell us exactly what the implications
were for 150 local authorities for local rate relief—will
have pencilled-in a number, whatever that number may be. Are you
meeting resistance from the Treasury to whatever the number will
be, or have they said, "Well, if it is in that ball-park,
we will go along with it"? Do you have any kind of overall
assessment at this stage of the costs to Government of the programmes?
The point being, you have discussed a number of areas where you
would like to help, you have talked about the Loans Fund Guarantee,
you do not then want to disappoint people in the future having
raised their hopes by saying, "Unfortunately the Treasury
have constrained us". Give us a feel as to how those discussions
are going.
(Mr Meacher) I am sure, Mr Jack, as a former Treasury
Minister, you would be panicking in your Government if a minister
in another department went to a Select Committee and revealed
the detail of interdepartmental discussion with the Treasury.
I cannot do that. These things are being literally daily discussed,
and they are discussed not in terms of rigid departmental attitudes
but in terms of the enormity of the need for which there is abundant
evidence.
Mr Jack: To sum up, is the Chief Secretary being
sympathetic? Is he being very hard? Give us a flavour.
Mr Mitchell: Chief Secretaries are all sympathetic!
Mr Jack
197. Indeed, I know, but this one has a soft
side to him. He is hard and bites in public and chews your legs
off if you spend a penny when you should not, but on the other
hand he has to understand there is going to be a resource, and
I think the Prime Minister indicated this was going to come out
of the contingency reserve. What I am trying to get a feel for
is, is the Chief Secretary sympathetic and understanding to the
extent there will be proper flexibility shown? We are mounting
up a whole series of areas where help could be given, with the
emphasis on "could".
(Mr Meacher) You are inviting me to answer an impossible
question.
198. Go on, have a go!
(Mr Meacher) Of course, the Chief Secretary, in view
of his position, has to be cautious, and this Chief Secretary
is, as any would be, but he is also in my experience someone who
is clearly listening and taking serious account of what is happening,
and I think he is trying to be helpful. I cannot go beyond that.
199. Let me bring you back to something which
you can focus on. The Government have, with understandable generosity,
said you will match public donations to various funds. I know
from my own church there was a retiring collection over the last
two weeks to help with the Church of England Rural Fund, and other
churches may well be doing the same thing. Could you tell us what
the mechanisms will be to match those funds? For example, will
everybody have to collect the money up, or are there some interim
payments? Is the commitment open-ended or does it stop at a point
in time? Is there any restriction on how voluntary bodies may
disperse those funds? Can you tell us how that works?
(Mr Meacher) The fund will match public donations
made between 1 March and 30 June—again in the first instance—obviously
when the monies have been given for relief of rural distress.
We would certainly require some certification. This is not meant
to be a detailed cross-examination, but we would require some
certification that the money had been raised and it had been raised
properly for this purpose. We would also ask the voluntary body
or the church or whatever it was how it proposed to use the money.
I do not think there would be any difficulty about that and on
that basis the public money would be handed over to the voluntary
body.
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