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Opposition Day

[8th Allotted Day]

Rural Economy

Madam Deputy Speaker (Mrs. Sylvia Heal): We now come to the main business today. The Speaker has selected the amendment standing in the name of the Prime Minister.

4.38 pm

Mr. Colin Breed (South-East Cornwall): I beg to move,

What started as an agricultural crisis has quickly developed into a rural crisis, and now foot and mouth disease is affecting almost every region in the country, with tourism most badly hit. If nothing else, the present epidemic has emphasised the interdependence of so many businesses, especially those located in rural Britain. However, not even large cities have been immune from the effects of that terrible animal disease.

With the stench of burning cattle, the spectre of huge burial mounds and the disgusting sight of slaughtered animals lying for weeks on farms before disposal--and still more new cases each day--it is difficult to accept that the crisis is under control. That is even more true when so many farmers and businesses are facing a wipeout and everyone fears for their future.

Mr. John Burnett (Torridge and West Devon): Does my hon. Friend agree that my constituents should not have to bear the brunt of digging the Government out of the appalling mess that they have made of dealing with the foot and mouth crisis? Does he also agree that the burden should be shared and that unburied carcases should be disposed of in the numerous landfill sites up and down the country, not in pyres and huge burial grounds?

Mr. Breed: We all recognise the considerable problems faced by people in Devon. They bear a huge burden, given the enormous numbers of animals that have to be buried or burned. An enormous backlog remains. I suspect that Devon could not take all the animals involved. There must be different and quicker ways in which dispose of them: I do not believe that we can wait three or four weeks to deal with perhaps 100,000 animals.

Dealing with the crisis still appears to be more of an administrative and bureaucratic exercise run from Whitehall than a management job on the ground. Too often, confused and delayed instructions come out of London, and they sometimes contradict decisions made close to outbreaks of the disease. Comparisons with the way in which Scotland and Wales, under devolved Administrations, have handled the problem are pertinent.

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They reinforce calls from Liberal Democrat Members for the Ministry of Agriculture, Fisheries and Food to be absorbed into a new department of rural affairs. That would give focus, co-ordination and speed to the decision-making processes, and enable co-ordinated policy making for our rural areas in the future.

However, it is still annoying that so many issues remain unresolved that should have been finalised weeks ago. What is to be done for farmers whose cattle have gone over the 30-month limit during the period of restrictions? What about other animals that have passed their prime and lost their value? What about the cows that are drying off because artificial insemination men are not being allowed access to the farms?

Mr. Norman Baker (Lewes): Does my hon. Friend accept that there is another question to be asked? Would not it be appropriate to consider easing the movement of animals in areas that are free from foot and mouth disease, but not unaffected by it? I am referring particularly to the movement of cattle from winter quarters to summer pastures, which at present is not possible. Does my hon. Friend also accept that cattle are being moved from my constituency for slaughter in places as far away as Somerset and Essex? Would not opening up local abattoirs make it easier to deal with those animals, and minimise the risk of spreading the disease?

Mr. Breed: There is clearly a case for lifting some of the restrictions, and for redrawing some of the maps to allow some animals to be moved. That would relieve the pressure on the welfare disposal scheme, although there must be no compromise when it comes to ensuring that the disease is not spread. I hope that the Minister for the Environment will deal with that when he responds to the debate, as many farmers find themselves in the situation that my hon. Friend has described.

Farmers who do not have foot and mouth on their farms are also still suffering. In fairness to the Minister, it has to be said that he has acknowledged that and has acted to assure them that they will be assisted. However, if farmers had known what compensation and support they would receive they would not have spent so many weeks feeling so desperate

However, not only farmers have suffered. Other businesses are suffering too, and for help for them we find ourselves turning to a plethora of Government Departments, including the Department of the Environment, Transport and the Regions, the Department for Culture, Media and Sport, and of course the Treasury.

The financial measures so far announced by the Government are inadequate, given the depth of the crisis facing thousands of businesses up and down the country. The vast majority of businesses affected have nothing to do with agriculture directly, but foot and mouth has brought much collateral damage that is uninsurable.

The massive loss of business has been concentrated in areas of the country that not only are recovering from bovine spongiform encephalopathy but which are in any case among the poorest areas. The loss of income, jobs and business will devastate the rural economy and have a significant effect on urban communities.

It is therefore especially disappointing that the Government have failed to explain some of the details of their support package. For instance, will any tax deferrals

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be subject to interest? I believe that the applicable rate could be as high as 8½ per cent. Will the Government provide any assistance for businesses deeply affected by the crisis which, despite being in or near a rural area, are not located in one of the parishes identified for support?

What about value added tax? The Government have said that the Treasury and Customs and Excise will be "sympathetic", but what does that mean? Sympathy was not what was experienced by one of my constituents who called the Inland Revenue and was told that if he did not pay up the bailiffs would be sent.

At any time of calamity it is right to try and learn lessons and seek new ways forward. However, in many respects, the country and the countryside are now at a crossroads.

Mr. Brian Cotter (Weston-super-Mare): Does my hon. Friend agree that the £200 million support package announced by the Government, reinforced two days ago by the Minister for the Environment, seems rather disproportionate given that we expect losses of billions of pounds in trade for tourism and small businesses?

Mr. Breed: The Government have said that that package is a start, and we hope that there will be further proposals, with perhaps some announcements today. The amount of money currently spent will be dwarfed by the cost of the problem: businesses that fail will lead to unemployment, resulting in more unemployment and social security benefits to be paid. If money is paid out to enable those businesses to continue, the Government will not have to find the money to pay for those benefits.

The countryside is at a crossroads. Many commentators recognise the need for a national debate on how to manage food production in the future and ensure that the important rural economy is supported and enhanced, not decimated by this disease outbreak. There will be little future for many farmers and rural businesses if they do not receive adequate emergency financial aid immediately. The Government's modest attempts at emergency support have failed to recognise both the depth and breadth of the problem.

The Liberal Democrats have already published proposals for a combination of rate and tax deferrals, interest-free loans of up to £20,000, repayable over two years, as well as proper compensation for farmers whose business has been affected by foot and mouth but who do not qualify under present compensation rules because their animals have not been slaughtered. Such farmers include those with cattle now more than 30 months old, those who have lost out on agreed sales because they cannot move their animals and those whose cows are now drying off because they have not had access to AI men.

The businesses affected are widespread in their respective activity, geographical location and size, but collectively they are vital to the local economy and must have access to proper packages of financial assistance. The Government's proposals create an artificial divide. It is simply not fair that some are able to receive financial aid and others are not. I hope that the Minister will be able to clarify some of the problems that have emerged since the Government's announcements.

Let us take a few moments to consider the crossroads at which our country stands and look back down the road whence we have come to our present situation. Over

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40 years of recent history, the word "markets" has kept cropping up. First, there was the Common Market; it introduced the common agricultural policy which was designed to address the future needs of food production in post-war Europe. Its intentions were honourable, but no one now believes anything other than that it has failed and that the continued failure of politicians to carry out meaningful reform over many years has contributed to today's crisis.

The global markets and the growth of international trading, with the freeing up of trade barriers, have produced many benefits but also substantial risks and have played an important part in today's problem. It is obvious that over the years we have become complacent and lowered our guard against this disease because we had not seen it for several decades.

Supermarkets have produced considerable benefits for consumers but their current trading practices have greatly disadvantaged many primary producers. They have contributed to the trend of local cattle market closures up and down the country.

All those factors have combined to bring our agricultural industry and the rural economy to the point of collapse. We cannot turn back the clock to some nostalgic era of Old MacDonald and his farm. The chocolate-box image of country life is not realistic. Foot and mouth disease has created a hiatus in production and we must take this opportunity to consider whether we really believe that we can continue in the same direction with no further thought. Is this a road to national prosperity or is it the road to ruin?

Many people now believe that to continue in the same direction, which would bring about further farm amalgamation and reduction in employment with greater pressure on land and animals to produce more and more for less and less, is a recipe for disaster--both for the rural economy and for the country at large. That is unsustainable. The simplistic attitude that one cannot buck the market and that the lowest unit cost delivers the best consumer benefit would wipe out small family farms and change the fabric of the countryside and its environment, as well as destroying rural communities. Yet that is what we shall sleepwalk into unless we make a radical reassessment of our priorities and unless Government policies across all Departments are attuned to those new priorities.

For many years, the Liberal Democrats have argued that greater prominence should be given to the environmental and social considerations of agriculture. Economies of scale can be created through building farmers' co-operatives and sharing expertise and technology. Money can be recycled within communities by reviving local markets; from farm gate to processor, to retailer to plate--all in the same locality.

Liberal Democrat plans for agriculture include more money for rural development and a single countryside management contract for farm support. We would cut red tape and introduce an early retirement scheme for tenant farmers, linked to a new entrants' scheme, to reinvigorate the industry and bring in new, fresh ideas. We have constantly argued for balance in the UK economy--recognising the value of small business and the interdependence of rural businesses with agriculture at the heart--as well as paying attention to competitiveness and profitability. We need to reinvigorate the countryside and

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not see it become dormitory accommodation for city workers, with more intensive methods of production and the loss of a genuinely rural population.

The rural economy is certainly under threat; it has become the victim of a thousand cuts over many years and is quite simply bleeding to death. This latest blow could be terminal, but I believe it is not yet too late--although we may not have much more time. Emergency measures in the wake of foot and mouth will merely stem the bleeding. Only radical policy changes will ultimately restore the countryside to full health. Inevitably, it will take time to achieve that.

What is needed first is a determined effort radically to reform the common agricultural policy; recent--almost cosmetic--changes are not good enough.

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