Sixth Standing Committee on Statutory Instruments, &c.


Tuesday 12 February 1991


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The Committee consisted of the following Members:

Chairman: MR. JMES HILL

Arnold, Mr. Jacques (Gravesham)

Churchill, Mr. (Davyhulme)

Clark, Sir William (Croydon, South)

Curry, Mr. David (Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food)

Davies, Mr. Ron (Caerphilly)

Hamilton, Mr. Neil (Tatton)

Howarth, Mr. Gerald (Cannock and Burntwood)

Jones, Mr. Ieuan Wyn (Ynys Môn)

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

Lloyd, Sir Ian (Havant)

Macdonald, Mr. Calum (Western Isles)

Martlew, Mr. Eric (Carlisle)

Neubert, Sir Michael (Romford)

Pike, Mr. Peter L. (Burnley)

Smith, Mr. Tim (Beaconfield)

Soames, Mr. Nicholas (Crawley)

Speller, Mr. Tony (Devon, North)

Williams, Mr. Alan W. (Carmarthen)

Mr. M. P. Hamlyn, Committee Clerk

3 Sixth Standing Committee on Statutory Instruments, &c. Tuesday 12 February 1991

[MR. JAMES HILL in the Chair]

Farm Diversification Grant (Variation) Scheme 1991

10.30 am

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Curry): I beg to move, That the Committee has considered the Farm Diversification Grant (Variation) Scheme 1991. The scheme removes from eligibility for grant one category, and one category alone, of investment under the 1988 farm diversification grant scheme. It does not apply to Northern Ireland, for which a measure which will undergo a similar process. The category to be removed is tourist accommodation—bed and breakfast, chalets, redundant farm buildings that are used as cottages and permanent caravan sites. Grants remain for bunkhouse barns and camping barns, for feasibility studies and for marketing. We have decided to drop the tourist element from grants for three reasons: first, the rate of return is low; an average investment of £28,000 yields a return of about 11 per cent., which is the lowest by a long way of any of the categories eligible for grant. Secondly, a farmer is able to increase the capital value of his holding under the grants by converting to residential accommodation. That was criticised by the National Audit Office, and its criticisms were echoed by the Select Committee on Public Accounts. We recognise that it is not reasonable that grant can accumulate capital values on a farm. Thirdly, unfair competition from the guest house and hotel sector had to be taken into account. We decided to keep bunkbarns and camping barns eligible because their costs of conversion were much lower. The average investment made is about £12,000 or £13,000 less than for the other form of accommodation. The accommodation offered is spartan and cannot easily be put to residential use. All applications received before 16 January will be honoured.

10.32 am

Mr. Peter L. Pike (Burnley): I do not intend to detain the Committee for long because this in not a major issue and the Minister has given the three reasons why the Government have proposed this change. Bunkhouse accommodation is a different type of accommodation from that being deleted. Tenant farmers have told me that restrictions in their leases do not give them the same freedom to take advantage of diversification. We all appreciate that the intention of diversification was to assist farmers in raising additional income from non-agricultural purposes as part of the overall measures to reduce total agriculture output in Europe. I accept that the Minister will not be able to respond to that problem today and may wish to respond at a later date, 4 but I put that concern to him as it has been expressed to me in the past few days by tenant farmers. For the reasons given by the Minister, we understand and recognise that investment in bunkbarns and camping barns has a low yield. Competitors in the hotel and guest house sector, particularly those in rural areas who may be fighting to survive, complain about the Government making grants to farmers because, as the Minister rightly said, it gives them a slight edge and increases the capital value of their assets. That has been questioned by the National Audit Office. We will not vote against the scheme, but I ask the Minister to consider the plight of tenant farmers, who face not only the same problems as other farmers but the additional difficulty that sometimes they are not allowed to take advantage of the scheme because of restrictions on their leases.

10.36 am

Mr. Nicholas Soames (Crawley): In my capacity as a member of this Committee, as I have just been reminded by my hon. Friend the Member for Tatton (Mr. Hamilton), I am here to observe rather than to take part. In fear and trepidation, therefore, I wish to make two points to my hon. Friend the Minister. First, my hon. Friend will agree that it is a pleasure to see the landed interests of the Labour party on parade this morning and taking such a close interest in these matters. It is heartwarming to know that the Labour party is turning its charming attention to rural areas. The scheme is important as it will provide further help for hard-pressed farmers, particularly in areas of less advantage. Is my hon. Friend the Minister aware that, for example in Norfolk and Wiltshire, some marvellous barns are, unfortunately, knocked down simply because they cost too much to repair? I should be grateful if he would consider whether further assistance could be given to enable farmers to preserve and maintain the integrity of the countryside. Although these buildings are of little architectural importance, they are beautiful old buildings. If a little money were put into them and they could be saved, they would make welcome accommodation as bunkhouses and camping barns. My second point is that I hope that my hon. Friend the Minister realised when he was addressing us the grave sadness that he would have caused our late and greatly lamented Friend the former Member for Eastbourne, Ian Gow. He would have been deeply saddened to hear that the scheme does not apply to Northern Ireland. He regarded it as a disgrace that one part of the kingdom was not governed in the same way as another. I very much hope that the Gow factor will be taken into account when legislation such as this is passed. Thirdly, it is a source of much pleasure to Conservative Members to know how hard my hon. Friend the Minister and the Ministry are trying to assist farmers at this difficult time. It is slightly odd that the Committee is considering the scheme on 12 February, which by common consent is today and also the birthday of the person whom Ian Gow used to call his servant, whereas it came into force on 16 January, without the sanction of the House of Commons. I am anxious to know what has happened to the moneys that have been disbursed between 16 January and 12 February. They have not been subject to the permission of Parliament, and I would have thought that my hon. Friend 5 would seek to advise the Select Committee on Public Accounts that such profligacy by the Ministry is not the normal state of affairs. That is all I propose to say, except to congratulate my hon. Friend the Minister on so clearly setting out an admirable scheme.

10.38 am

Mr. Curry: I shall respond in detail to the points that the hon. Member for Burnley (Mr. Pike) made on tenants. He will know that the Government are launching a consultation document on farm tenancies to deal with the many properties in that sector. I should like to make three points in reply to my hon. Friend the Member for Crawley (Mr. Soames), whom I think of as one of life's natural bunk-bedders. First, the farm conservation grant scheme specifically deals with the renovation of traditional farm buildings. I should be willing to send him details of that scheme. Secondly, a 6 parallel measure will apply exactly the same rule in Northern Ireland. Although that is not embodied in the scheme, I give him the undertaking that the same rules will apply to Northern Ireland. Thirdly, I assure him that no moneys have been disbursed since 16 January, other than those that flow from approvals made before the closure of the scheme. Any application which was made before then and which has been processed in the normal way will be subject to the normal rules of the House on disbursement. No moneys will have been disbursed since 16 January without the specific authorisation of the House, because that is when the shutters came down for the scheme.

Question put and agreed to.

Resolved, That the Committee has considered the Farm Diversification Grant (Variation) Scheme 1991.

Committee rose at nineteen minutes to Eleven o'clock.


Hill, Mr. James (Chairman)

Curry, Mr.

Hamilton, Mr. Neil

Howarth, Mr. Gerald

Jones, Mr. Martyn

Neubert, Sir Michael

Pike, Mr.

Soames, Mr.

Speller, Mr.

Williams, Mr. Alan W.