Select Committee on Agriculture Minutes of Evidence

Examination of witnesses (Questions 180-199)



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.


  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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