First Standing Committee on Statutory Instruments, &c.


Tuesday 28 June 1988



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The Committee consisted of the following Members:

Chairman: Mr Geoffrey Lofthouse

Davies, Mr. Ron (Caerphilly)

Dorrell, Mr. Stephen (Loughborough)

Ewing, Mrs. Margaret (Moray)

Godman, Dr. Norman A.(Greenock and Port Glasgow)

Gummer, Mr. John Swelwyn (Minister of State, Ministry of Agriculture, Fisheries and Food)

Harris, Mr. Davis (St. Ives)

Heathcoat-Amory, Mr. David (Wells)

Hicks, Mr. Robert (Cornwall, South-East)

Howell, Mr. David (Guildford)

Howell, Mr. Ralph (Norfolk, North)

Jones, Mr. Martyn (Clwyd, South-West)

Kellett-Bowman, Dame Elaine (Lancaster)

Macdonald, Mr. Calum (Western Isles)

Martlew, Mr. Eric (Carlisle)

Maxwell-Hyslop, Mr. Robin (Tiverton)

Mitchell, Mr. Andrew (Gedling)

Morley, Mr. Elliot (Glanford and Scunthorpe)

Stewart, Mr. Andy (Sherwood)

Helme, Miss P.A. Committee Clerk

3 First Standing Committee on Statutory Instruments, &c. Tuesday 28 June 1988


Draft Agriculture Improvement (Amendment) Regulations 1988

10.30 am

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): I beg to move, That the Committee has considered the draft Agriculture Improvement (Amendment) Regulations 1988.

The Chairman: With the agreement of the Committee, it will be convenient to discuss at the same time the other instrument, namely: The Agriculture Improvement (Variation) Scheme 1988.

Mr. Gummer: These are two seemingly unremarkable statutory instruments, but they are of great importance to the horticulture and pig industries. I shall deal with the horticulture proposals first. In 1983, we introduced a package of special assistance for the industry to prepare itself for Iberia joining the European Community and to enable it to compete. In 1985, we made certain alterations because of changes in the European Community rules, in that in certain areas, we could not offer quite such large grants as we had offered previously, and it was not possible to have so high an investment ceiling. The grant system that we were offering was due to come to an end on 30 November next, but last November, my right honourable Friend the Minister of Agriculture, Fisheries and Food—partly, if not predominantly, as a result of difficulties caused by the storm—sought to help the industry further by extending for a further year the enhanced rates for heated glasshouses at the rates of 45 per cent. for work carried out in an improvement plan and at 35 per cent. for non-plan work. Grants for heating systems will also continue at the current rates. The investment ceiling for plan work will be reduced to £74,000 from 1 December. These are the best conditions that we are now able to offer within the European Community. They were announced in the context of a package of measures following the October storm. We were also able to give a six-month extension for people who would have found it difficult to meet the previous requirements because of the considerable pressure on glass provision and the specialist work that needed to be carried out on glasshouses, particularly in the south of England. So, instead of letting rates drop back to the standard levels after November 1988, we decided to fix rates for replacing heated glasshouses at the rates set out in this instrument, which are the highest now allowed under European Community rules. We see this as an important contribution to 4 alleviating the difficulties caused both directly and indirectly to glasshouse growers by the storm. Growers will be eligible to start submitting applications for grant at the new rates on improvement plans from 1 September. From the same date we shall no longer accept applications at the current rates. That will allow for an orderly transition to the new arrangements. However, I should make it clear that growers who are unable to complete their investments as quickly as expected and so miss the 30 November deadline for submission of claims under the current arrangements, will qualify for grant of 45 per cent. on claims submitted in the following 12 months provided that their investment does not exceed the £74,000 limit. Our intention is to make the method as orderly as possible, while providing the maximum help that we can within the European Community. I hope that this will give the horticulture industry the security that it needs during what is not an easy time for it. I come now to the amendments affecting the pig sector. In Brussels earlier this year, we sought to change the conditions under which capital grants for pig production can be offered. This country, in particular, wanted to make sure that we did not extend pig production by the mechanism of capital grant because of the problem of oversupply in the industry and because of the more severe fluctuation in the pig cycle—largely because it has become an international matter, so changes are accentuated. When we finally reached agreement on 29 March, we decided to roll over for the period 31 December 1987 to 31 March 1988 the arrangements that operated in 1987. These allowed grant to be paid on the investments, but restricted the benefit to 400 pig places. That was to ensure that the aid went to those whom we most wanted to help. New arrangements will apply from 1 April 1988 which impose a ceiling of 800 places on the size of a qualifying enterprise and reduce the number eligible for grant to 300. We have tried to avoid legislation with retroactive effect and we seek to introduce the new arrangements from 8 August. Treasury authority has been given to make payments on an extrastatutory basis on investments carried out between 31 December and 4 August 1988. Grants will be given according to the European Community rules in operation at the time that the application was made. We have sought to implement what we agreed in the European Community, to safeguard those who have been caught in the time gap and to ensure that we use this for the purpose for which it was intended—not to help the large producer, but to help the small producer who is in difficulty, without extending production at a time when supply exceeds demand. The two instruments apply to Great Britain only. Parallel but separate measures will be taken by the Secretary of State for Northern Ireland.

10.36 am

Mr. Ron Davies (Caerphilly): I am grateful for the Minister's brief and lucid explanation. We welcomed the initiative taken by the Government in the 5 announcement on 30 November 1987 that assistance would be given to the glasshouse sector, which had suffered damage during the autumn storms, so we are happy to support the measure. There are, however, questions of detail which I should like the Minister to answer. In a written reply, referring to the possibility of delays in carrying out work because of the shortage of materials and labour the Minister said: "In the glasshouse sector I recognise that growers who have a plan currently in force under the AIS scheme may face problems meeting the closing date of 30 November 1988 because of setbacks caused by the storm and lack of availability of materials and labour. I am therefore proposing to extend the date of submission of grant claims for those with existing plans for six months to the end of May 1989.—[Official Report, 30 November 1987; Vol. 123, c. 412.] From the Minister's introduction to the schemes this morning, it is not clear to me whether that is still the case. Will he confirm that applications can be made until September 1988 for the higher rate, and that claims for grant can be made at any time after the completion of work until May 1989? If there are further problems this year or if there is a particular difficulty in the industry with materials or labour, will the Minister exercise the same flexibility next year as he has done this year? We have no quarrel with the amended regulations as they affect the number of pigs in the pig industry. Will the Minister explain, however, why he has taken the opportunity of these orders—which deal with storm damage in the glasshouse sector—to introduce the amendments, rather than introduced separate amendments relating to the livestock sector?

10.39 am

Mr. Gummer: First, I can answer in the affirmative the hon. Gentleman's question on horticultural grants. The six-month extension was for growers who 6 had a scheme at the time the storm hit them, so were affected under a present scheme. We are also concerned with those who did not have a scheme, so we have provided the continuation for those who did not have a scheme but who have work to be done. I put the regulations and the scheme together to meet as rapidly as possible the European Community requirements for which we fought. The step seemed necessary. We wanted people to know exactly where they stood so that we could bring the legislation forward, fix a date from which it would start and deal with the interim arrangements. We were worried that people would not know what was happening, and this instrument seemed a sensible opportunity to make it clear, not least because the pig industry has gone through a difficult time, almost entirely because of the world problem. What used to be a national cycle became a European cycle and is now almost a universal cycle, and the peaks and troughs are even sharper. The instrument has given me an opportunity to put the matter before the House. As the hon. Gentleman said, it is not a controversial issue. If the Committee agrees and the instrument goes through the House, the pig industry at least in one small area will be given the security that, unfortunately, it lacks in the bigger areas. I felt it wrong to hold back such a safeguard.

Question put and agreed to.

Resolved, That the Committee has considered the draft Agriculture Improvement (Amendment) Regulations 1988, Agriculture Improvement (Variation) Scheme 1988.

Resolved, That the Committee has considered the Agriculture Improvement (Variation) Scheme 1988.—[Mr. Gummer.]

The Committee rose at eighteen minutes to Eleven o'clock.


Lofthouse, Mr. Geoffrey, (Chairman)

Davies, Mr. Ron

Dorrell, Mr.

Ewing, Mrs. Margaret

Godman, Dr.

Gummer, Mr.

Harris, Mr.

Heathcoat-Amory, Mr.

Hicks, Mr. Robert

Kellett-Bowman, Dame Elaine

Macdonald, Mr.

Mitchell, Mr. Andrew

Stewart, Mr. Andy