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4.52 p.m.

Lord Palmer: My Lords, it is a very great privilege and honour on behalf of the whole House to be able to congratulate the noble Baroness, Lady Thomas, on her excellent maiden speech. She is, outside the House, a well known campaigner for many causes. Today, inside the House, she has proved to be a speaker of great distinction, despite the problems with her voice. I am glad that we did not have a squeak or a croak; but we congratulate her most sincerely. Few of your Lordships may know that she has conducted carol services in such diverse locations as Moscow and Havana. If today's performance is anything to go by, I feel certain that in a year's time she will be conducting your Lordships. I hope that we shall often hear from her.

With help from the right quarters and careful planning, I believe that there is an exciting future for some sections of agriculture; but let us first dwell on the serious black spots—the danger areas, if I may so call them. I refer first of course to the hill farmers. I remember when I represented Scotland on the European Land Owning Organisation that I had the honour to invite its president to come to Scotland on a fact-finding mission. He was to see for himself the terrible problems facing the landowner and the farmer. I shall never forget when he looked at a barren, snow-covered Glenshee mountain face how difficult it was to persuade him that it was home to 3,000 blackface ewes. The plight of the hill farmer, I am sure, will be pointed out later by the noble Lord, Lord Geraint.

The hours that those poor people work, their conditions of work, remind one of Victorian sweat houses. Their net income pro rata must be the lowest in the country. In 1992-93, 30 per cent. of all hill farmers

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earned less than £5,000 per annum. Their incomes have in fact now fallen back to 1991-92 levels. Over the past two years Her Majesty's Government have cut the HLCAs as incomes rose, and I believe that it is now their moral duty to restore them to 1992-93 levels. I must make a plea that they are not further cut in the Chancellor's Budget.

I also make a plea that the price of petrol does not go up in next week's Budget. When it is increased, people living in rural areas are severely disadvantaged as they have no option other than to use their own transport. I know of one farmer who has a round trip of 102 miles to buy a pint of milk and a loaf of bread. I am sure that many of your Lordships, particularly the noble Lord, Lord Mackie of Benshie, may have even further to travel. In the countryside it is a very serious consideration.

The Government, I believe rightly, have set a low inflation course, as we heard in the gracious Speech. To raise the tax on petrol would, however, fuel inflation and defeat the Government's aim. Fuel in rural areas, it must not be forgotten, is already considerably more expensive than it is in urban conurbations. The noble Viscount will remember well what it was like to live in the scenic Cheviot Hills, far distant from shops; and, sadly, today there are a good deal fewer of those than when he lived there. The noble Earl the Minister is well respected within the farming industry, and I hope that he will mention these points to his right honourable friend the Chancellor.

At this juncture I should just like to say how grossly unfair I believe it is to impose VAT on fuel. Last summer —which, even in Scotland, was considered hot—I guarantee that every person living in a small cottage in the countryside lit a fire. I do not believe that the same could be said for a small cottage in the home counties, and therefore VAT on fuel is a tax upon where one lives. For the elderly in particular I believe that this is terribly unfair and discriminatory.

As we all agreed in the debate on 10th October, the CAP needs to be reformed, and, as the noble Earl, Lord Onslow, said, "pulled up by the roots". It saddens me greatly that this is due to total incompetence. If we think back to the 1970s, we were told, "More food is required. Drain the wetlands, and here is a grant". Now we are told, "Stop. Set it all aside; and here is a grant to do so". I believe that it is madness—total madness—and I do believe that Her Majesty's Government must take measures to ensure that that type of situation does not happen again.

Another black spot is the appalling plight of the pig farmers whose incomes are now less than they were 20 years ago—20 years ago, my Lords! If we compare these hard-working pig farmers—or indeed the hill farmers—to Eurocrats sitting on large, inflation-proof pensions, with mega holiday entitlements and not a particularly onerous workload, I feel certain that the comparison would be unjust, unfair and positively immoral. I am sad that the noble Lord, Lord Bruce of Donington, is not in his place today, because I feel certain that he would be one of the first to agree.

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Enough of the gloom—and how much I enjoyed the maiden speech of my noble friend Lord Phillips, and the little bit of optimism that I detected in it! After the war, farmers accepted the challenge to change and to adapt; and what a great success they have made of that challenge. I believe many of us are now ready for a further challenge, but with short-term help from Her Majesty's Government—and I emphasise "short-term". Given the tools, the advice and research, we can restore land use to a full capacity and thus maximise the income not only for rural communities but also for the country as a whole.

There is, I believe, no reason why industrial crops cannot make considerable contributions to our balance of payments, and here I am referring to bio-fuels, straw, bio-mass chemical production, which includes lubricants from oilseed rape, biodegradable plastics and paper from cereals and sugar.

Let us hope that research done in this countries is not, as so often happens, developed for use elsewhere. It is a horrific statistic that here in the UK the Government spend 2.1 per cent. of GDP on research and development, which is almost a full percentage point less than what is spent in Japan. I strongly believe that a co-ordinating centre needs to be set up to maximise the use of all research and development being carried out all over the country so that we can compete on a world-wide basis.

We must all believe in the future but we need a helping hand from the Government to set us on course. I end with a quotation from the then Minister for Agriculture, Mr. Gummer, who said at his party's 1990 conference,

    "Under this Government the future of farming is secure".
It may well be too late; but, for all our sakes, let us hope and pray that it is not.

5 p.m.

The Earl of Selborne: My Lords, I consider myself particularly privileged to be participating in a debate with two such notable maiden speakers. As a member of the Royal Commission on Environmental Pollution, which reported recently on transport, I naturally followed with particular interest the noble Baroness, Lady Thomas of Walliswood. I agreed with so much of what she said.

The noble Lord, Lord Phillips, in his excellent maiden speech, made it evident that during the years we have had much opportunity to work together. I am only too delighted that he is able to contribute to our affairs. It will come as no surprise to your Lordships to hear that at the first meeting of the Select Committee on Science and Technology after its reconstitution the first item will be to co-opt the noble Lord as a member.

I was delighted too that he reminded us how dependent agriculture is on the biological sciences, even on molecular biology. I could not help remembering that when, as an apple grower, I spoke to a distinguished audience of scientists I was able to remind them that even the physical sciences were once totally dependent on apple growers. After all, where would Newton have been without us?

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My noble friend the Minister began by referring to the Earth Summit. The national action plans, which have been produced in order to meet our commitments made at that summit, form a good framework within which all our environmental policies must be set. I detect agreement from all sides of the House that we require a holistic approach to environmental issues. It is also agreed that the Government must set the framework and that they have done so in the four documents which constitute the response.

Equally, we acknowledge that the Government have taken on commitments which imply ultimately a degree of regulation. The Montreal Protocol on ozone depletion requires us to phase out the use of such chemicals. That requires regulation. The commitments relating to CO 2 levels that we entered into at the Climate Change Convention will require massive intervention either with economic instruments or by regulation. The Biodiversity Convention also implies the meeting of stringent targets.

We also accept that it is much easier to work in a European or international context because the element of unfair competition cannot be so obviously used as an excuse to do nothing. We have recently seen legislation to implement the habitats and species directive of the European Union.

Nevertheless, there is a debate which my noble friend Lord Crickhowell put most cogently. It is between industry and the environmentalists on the balance of regulation as against the balance of voluntary agreements. To put it another way, it is the balance of green taxes against incentives of one kind or another. In a sense, that debate is encapsulated in the two words "sustainable development". It implies, on the one hand, that environment is considered but, on the other hand, that development is essential for the economic prosperity which we clearly recognise as an objective for all nations. Perhaps in our debate we have talked too much about the environmental agencies, and we must not have a Second Reading debate. However, the debate has been polarised by our reading between the lines on whether the Government intend to deregulate environmental issues or to impose firm standards on industry, including the public at large. Clearly, people are unsettled by those issues. As my noble friend Lord Crickhowell made clear, at times the Government's attitude has been ambivalent at best.

It is reasonable to explore the extent to which regulation is appropriate and the extent to which it may be undesirable. Industry is clear that its competitive status should not be jeopardised by inappropriate regulation. It is also clear that without economic growth it is difficult to see how we shall pay for the measures that will be required for environmental enhancement.

The first and obvious conclusion to draw is that we must beware of inappropriate regulation. That is not as uncommon as it may sound. Many of us recognise that the nitrate level for drinking water of 50 parts per million was an example of inappropriate regulation. It was not based on good scientific evidence and it put an enormous cost on water companies. That money could have been much better spent on other areas of the environment.

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A more obvious example is the German waste recycling system. It was full of good intentions, but the proposals, which were badly thought out and regulated, caused total chaos in recycling industries throughout Europe.

Equally, industry recognises that in that regard some regulation is necessary. The gracious Speech refers to an industry-led scheme for recycling. The proposal comes from industry itself and is an excellent way of ensuring that it will be widely adopted. However, it requires regulation, as is recognised by the CBI and other bodies.

In some sectors we have suffered because our competitive status has been hindered by a lack of clear regulation. The refrigeration industry in this country appears to be losing its market share. The reason is that the domestic market is not regulated as stringently as some of the markets to which it is exporting. The result is that we are importing refrigeration goods that are unacceptable in other markets and clearly we are not in a position to export elsewhere. Our motor manufacturing industry lost an opportunity to market the catalytic converter merely because our regulation was not pressing as fast as other markets. With hindsight, the catalytic converter was bound to be introduced but, alas, we were not forcing our technology to adopt the new systems.

In essence, it must be accepted that regulation should be based on good science. The noble Lord, Lord Phillips, reminded us that the regulation of biotechnology should be based on good science. It must be based on well-informed, well-disciplined risk assessment. Again, perception and risk assessment are often different. However, at the end of the day, regulation must be based on firm risk assessment and not merely on what people perceive. The Consensus Conference, referred to by the noble Lord, Lord Phillips, is important in bringing to the public the issues in a way that is easy for us all to understand.

Cost benefit analysis is another area that causes considerable consternation among environmentalists. Everyone must accept that there must be an element of cost benefit analysis. Clearly, it is unacceptable to have environmental measures at any price. It may be that the discipline of cost benefit analysis is not yet sophisticated enough. How does one take a long-term view about the value of a species? How does one prevent discounting short-term advantage? Rightly, those are the issues about which environmentalists are concerned. It is not a question of discarding cost benefit analysis but of making sure that it is sufficiently robust to include such kind of information.

I welcome the fact that the new agency to be chaired by my noble friend Lord De Ramsey will now be given very much more specific terms of reference in the legislation. I understand from my noble friend the Minister that the agency will now be asked to further the conservation as appropriate. I agree with the noble Lord, Lord Crickhowell, that that means some very clear objectives—for example, reports to the Secretary of State and to Parliament each year as to how much has

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been achieved and against what parameters. We must know precisely how positive measures have been taken to promote environmental issues.

As the debate is about agriculture and the environment, perhaps I should declare an interest as a farmer. I should also declare a number of interests on the environmental side. I am a member of the Joint Nature Conservation Committee, of the sustainable development panel and of one or two other things.

As regards agriculture, we have an industry which is highly imbued with any amount of economic instruments available to be adapted if one so wishes. Yet, at present, we have area payments, set-aside and price support, all of which deliver very little environmental benefit. It would not be beyond the wit of man, even if we were to concede that we could reduce the support for agriculture—as clearly must happen —to realise that we could get very much greater environmental benefit out of that degree of economic involvement in the industry.

I do not much mind whether one goes for the organic farming system, to which reference has been made, or for extensive or intensive farming systems. One must have sustainable agriculture. However, leaky systems are unacceptable. I believe that noble Lords will recognise that one can get just as many leaky systems from extensive farming as one can from intensive farming. We must ensure that the system protects soils, waters and air.

I am all for favouring market niches, if that is what organic farming represents. But please let us understand that, by sustainable agriculture, we mean competitively produced food of high quality, especially safety quality, produced by environmentally benign systems which also take account of animal welfare considerations.

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