Select Committee on Agriculture Minutes of Evidence

Examination of witnesses (Questions 160-179)



Mr Mitchell
  160. In respect of what "businesses" mean in part B of your terms of reference where you were asked to draw up specific guidance for public and businesses in accordance with veterinary advice.
  (Mr Meacher) I am slightly puzzled by that question. The two main objectives of the Rural Task Force are, firstly, to set down the basis on which people can make a visit into the countryside, which we have been discussing at some length just now—and that applies, I suppose, to members of businesses as it does to members of the public—and secondly, about how to ensure the survival and regeneration of small or indeed other businesses who may be affected by foot and mouth. Those two are different questions. I am reminded that I think you are probably referring to tourism guidance which has been given by DCMS to owners of attractions.

  161. Right. So it has come out separately to them?
  (Mr Meacher) Yes, separately.

  162. The final related question, or to do with access, is that there have been some reports that farmers have wanted roads closed or limited access. It has been said that in some cases it is found that there are not sufficient powers in the hands of the local authorities actually to close the roads down. Is that true, or do the powers exist?
  (Mr Meacher) The highways authorities only have power to close roads for traffic reasons. However, I understand that MAFF legislation does allow them to make an order—I think it is under the Foot and Mouth Order 1983—with powers for MAFF to close roads where it is necessary for disease control. So it is possible to do this. I am aware of concerns about these. When I went down to Devon someone strongly bent my ear about the need to close roads leading into Exmoor, and I am aware that police have informally stopped access to some roads. I would repeat, though, that MAFF veterinary advice continues to be that the closing of roads—the closing of tarmac roads—is not necessary, but the powers are there to do it, if the highways authority cares to apply to MAFF for the use of those powers.

  163. You are not saying that you want to encourage people from Cumbria who want to go for holidays in Norfolk, are you? What do you think the feelings of a boarding-house keeper in your constituency would be if they got a booking for two nights from somebody in Longtown?
  (Mr Meacher) I was asked a question as to what if someone came from the most affected areas to a totally uninfected area. I do understand the force of the question, and I suppose that it is possible. I think it is unlikely. Again, they would be expected, wherever they come from, to obey the same rules which are based on safety first. We must obey safety-first rules. We must do nothing in terms of access to the countryside which in any way endangers the spread of this disease, but I think that can be reconciled, I repeat, with not total close-down, and we have to find that reconciliation, but one which protects the farmers and their interests. That is the prime concern.

  Mr Mitchell: Now one perhaps cynical question. I was somewhat upset, during the miners' strike in the 1980s, at the lack of support for businesses in the mining areas which were hit by a year-long strike, who got nothing. Looking at it cynically, rural businesses, particularly tourism, are hardly going to make money anyway, because who in their right mind is going to go into the countryside in this weather anyway? They are going to be either conning you for money they would not have got because nobody wants to go in this weather, or you are going to be stuffing money into their mouth to keep them quiet for an election.


  164. He is a member of the Labour Party.
  (Mr Meacher) I suspect that many members of HM Treasury will be arguing along those sorts of lines. We seriously do have to be careful. This is always a problem in a situation like this where there will be people who try to get a free ride, who try to hitch on the bandwagon. Again, we have this very difficult task of ensuring that the deserving get real help that they need, whilst preventing people just taking advantage. It is difficult.

Mr Öpik

  165. I will explain the reason why I am asking quite a lot of questions. It is because, as you know, Powys is probably second or third affected in the UK, because we are coming up against all these issues at the moment. One request is that you keep the Ramblers' Association directly informed, if you are not doing so already. Christopher Sparrow from the Ramblers' Association described the extreme willingness of them to keep their membership close to what needs to be done, but a slight frustration because they do not feel they are in the loop at the moment for that kind of guidance. Maybe they are, but that is the point.
  (Mr Meacher) I am sure they are in touch with us. They are not members of the Task Force. I do not think they have sought to be, and nor do I think that would be appropriate. I am sure we will be open with them about the situation. I am certainly not in any way trying to be secretive or conceal the situation as we see it from their point of view, but I am grateful for the fact that they well realise the gravity of this and they are behaving very sensibly, as I would expect.

  166. If you did, I am sure Chris Smith would never forgive you, as he does a lot of walking. On the question of advice, I am using this for a specific example, but I know there are a lot of general issues. As you know, there are lots of festivals on in the countryside, especially in June and August. We have got something called the Newtown May Festival in Powys. They are trying to decide whether the guidance is that they should cancel their event or not. It is on 8 May. The Welsh Assembly have said it should not go ahead, but it is not taking place on agricultural land, it is in a town. It sounds like the kind of event that you have implied should continue, so the request is, what should they do? Should they go ahead, should they not? They will respect the guidance, whether you give it now or later. As I say, I think there are a lot of towns who would be looking for this kind of answer as a precedent for their own action.
  (Mr Meacher) I am sure that is right. Indeed, just before I came to this Committee I actually had a situation not dissimilar to that, which has arisen in my constituency, and I am sure this is generalised right across the country. I think the answer has to be that we must abide by the guidance. If that is still not clear enough, then of course the organisers of these events obviously wish them to go ahead, but they must get clearance from the local veterinary advice. That must remain the case if in any doubt. You can certainly consult the local authority, but the final arbiters in this matter are the local veterinary officers.

  167. This is rhetorical. I would like to say that they currently feel there is a conflict of advice from what they see on television from Ministers and what they are getting locally. Maybe the actual step there would be to clarify the lines of communication so that they get the same message from two different directions.
  (Mr Meacher) I understand people feeling that. People do want a very simple, clear, unequivocal message. Unfortunately, in the messy world in which we live, which has been greatly complicated by this outbreak, it is not as simple as that, even though I think when you come to examining it there is clarity. We want these events, festivals, sporting events, fairs to go ahead wherever they can, and that is the point—wherever they safely can—but the basis of deciding whether they safely can, whether it is national advice which makes it clear, as I am doing now, or local advice, is that the ultimate decision must be taken by the veterinary officers who know the local situation, and because no situation locally is ever quite the same, they are all different in some respects, the judgment must be made on the ground by that person and we must all abide by that.

Mr Paterson

  168. I have a quick technical point, given the possible announcement that might be made next week. The Rating (Former Agricultural Premises and Rural Shops) Bill is being brought forward. Will any other measures under consideration by the Task Force require legislation?
  (Mr Meacher) Not at the moment. The Rating Bill does bring forward the extension of the mandatory 50 per cent rate relief for village shops to pubs, petrol filling stations and foodshops up to a rateable value of £6,000 which we are actually increasing to £9,000. That does require legislation. We happen to have a Bill, fortunately, and we are able to apply an order to bring it forward, to accelerate it. The other proposals are the use of existing powers; the proposal for rate relief which we are proposing, which can be up to 100 per cent, paid for by Government to the extent of 95 per cent, 5 per cent local authority, available, as you know, up to a £12,000 rateable value ceiling, which would include 78 per cent—more than three-quarters—of the 390,000 businesses in rural local authority areas. What that means, if a business does get the 100 per cent rate relief, is that it could be worth £1,290 over a three-month period for a property at £12,000 rateable value. That is likely to be in excess of the rate bill. In other words, it is a complete rate holiday. That, I hope, is going to give very considerable relief. We estimate that it might be used by up to 50,000 businesses, but it does not require further legislation, it is an extension of existing powers.

  169. Why do you fix a limit of £12,000 on that?
  (Mr Meacher) It is an arbitrary figure. Indeed, it is no secret, of course, that we have been asked to raise it. I repeat that it does cover more than three-quarters of rural businesses in the hardest-hit areas. We think that is pretty well targeted aid. If we were to raise it to £15,000 or £20,000, it would enormously increase the cost, and it would be much less well targeted, so we think £12,000 is a reasonable compromise, but there is nothing expressly about the figure.

  170. Was it your decision or was it the Treasury's decision?
  (Mr Meacher) It was in discussion between us and the Treasury.

  171. What comes out of this, though, is that you have shown a very sympathetic attitude in the debate yesterday, and you have done the same thing today, but what we are not, I think, seeing is an understanding of the absolutely chronic, immediate, dramatic crisis. You have talked about business activities going on under current restrictions, but for some of them that is just not possible. I have a number of faxes here from businesses involved in country affairs. There will not be any season in my area for some activities—some turnovers are 89 per cent down. Equestrian businesses are not allowed out on the roads, they cannot go on them, they cannot go near animals. Their turnover is down 100 per cent. Hotels down 80 per cent. Pubs down 95 per cent. Garden visitors down 90 per cent. What you offered last week is encouraging them, and it sounds sympathetic. You considered help, you were very sympathetic, you were considering, you were going to make a proposal. However, what people need is not the denial of a negative, which is a tax, which you have done on rates, what they need is a positive. What I would like to address to you is the possibility of immediate fast loans. There has been the suggestion from the Conservative Party of a £10,000 loan to small rural businesses. How can that be pushed through the Small Firms Loan Guarantee Fund? How quickly can you do it? What is lacking is the immediacy. You are making all the right noises, you are consulting, you are talking about vast amounts of information, but these people who are faxing me in my constituency—so far with only two confirmed cases of foot and mouth—are going bust this week.
  (Mr Meacher) I understand the urgency with which you say that, and I wholly support that. I know I have been characterised as just considering, consulting, bringing up to date.

  172. I am quoting from your statement last week.
  (Mr Meacher) I actually think that the rate relief we are bringing forward—the extending of 50 per cent mandatory rate relief, and it could be 100 per cent if local authorities are prepared to grant it—and the wider rate relief which I have just spelt out, is very positive, tangible help. I think that if banks are prepared to extend lines of credit, that is real help. If the revenue departments do deliver deferment and rescheduling of VAT and PAYE, that is real help. I accept absolutely that over and above that, we should be looking at whether there should be an extension of the Small Firms Loan Guarantee Fund, how far that can be extended, whether that is adequate and, if it is not adequate, what further measures we can bring forward. I also accept that we should do that urgently, we should be looking at it this week. I accept that. However, I also do say to you that you are wrong, in my view, to give the impression that Government can somehow sustain the thousands, and possibly tens of thousands, of businesses that have taken one hell of an economic hit. The only way to protect those businesses is to persuade the public that they can safely return to the countryside. There is no other way. If one is simply going to say that Government has got to do it on its own, and we fail, then I think I plead guilty, because there is no way we can succeed, any government, in doing that. We have got to get people to understand that they can safely go back to the countryside and spend their money, not as a worthy act of patriotism, but because they enjoy it. I take the point that my colleague, Mr Mitchell, has been saying, that unfortunately the weather does not encourage people to go into the countryside, it actually encourages the foot and mouth virus, it does not encourage people to go out and enjoy themselves. However, we have got to do the best we can, and I am determined to get everything opened up that can be opened up. You have not asked, and therefore I will not spend time answering, about the National Trust, English Heritage, British Waterways, Forestry Commission, Historic Houses Association. It is just as important that we get them to open up wherever they safely can, because that then sends the message first of all that there are things that people want to go and visit and enjoy, and secondly that normality has returned. So I have been having discussions with them to try to encourage them to open up more, and this must be the main channel. The alternative which you have been stressing is secondary, but it is still important and it is still urgent. Give us a week and you can judge us.

  Mr Paterson: I think there is still a lack of urgency. You have mentioned rates, you have mentioned going to the banks about loans, you have mentioned VAT. I mentioned all of those three things in the statement when Chris Smith, the Tourism Secretary of State, came to the House of Commons two weeks ago, and I was accused of ranting and being party political. It is now your government policy, which I am delighted about, but I do think you are missing the plot that many of these businesses, even if you reopen the waterways, even if you do get help from the bank, are simply not going to have a season this year, they have missed it. There is not going to be a season.

  Dr Turner: That is a bit defeatist.

Mr Paterson

  173. I am not being defeatist. I am realistic. I am reading out faxes from real people whose businesses are down 90 per cent. There will not be a West-Mids Show this year. The man who supplies shows will not have a market. As that is a result of the failure of the state, by allowing this disease into the country, surely it is incumbent on the state to come to the aid of these people, and again not just by withdrawing a negative by saying, "We're not going to have a tax", but by offering a positive which is a loan? That is why I suggested the £10,000 loan from the Small Firms Loan Guarantee Fund, which is a positive help to these people now.
  (Mr Meacher) You are reiterating your case, and I do not want to spend too much time reiterating my answer. I gave a very full answer, and that is what I stand on. I do accept that further aid may be necessary. We are seeing how far the Small Firms Loan Guarantee Fund can be extended to achieve this purpose. If not, we will look, and are looking, at further aid, I do assure you, but I repeat, it is not the case that we write off tourism or recreation for Easter. There is going to be a big drop compared to previous years, there is no doubt about that, but we have got to work overtime to push up what would otherwise be an even lower total, and I have not given up my view that we can significantly increase what in the last two weeks may have looked like a complete wipe-out. I think we can considerably improve on that, and that is the drive we are now making.

  174. When could you have a decision on the loan scheme?
  (Mr Meacher) I cannot tell you which day. I spend all my time every day discussing these matters. Clearly, several different interests have to come to agree on this. I am anxious to settle this matter, but we are also—and this goes back to an earlier question—trying to collect data about the state of businesses. You have quoted some in your constituency, I am sure totally fairly. The problem about anecdotal evidence is that it is anecdotal evidence, it does need to be quantified. I have no doubt that it is accurate.

  175. Of course it is.
  (Mr Meacher) I have no doubt about that. However, one can quote any number of examples. We do need to have reliable national data. I do not wish to do a research thesis, I am not suggesting we have got the time or commitment to do that, but we have to have the systematic evidence which is going to persuade other departments that this is justified, and that is what I am desperately trying to collect at the present time.

Mr Borrow

  176. I think Mr Paterson has shown exactly why I should have asked the question which I did ask earlier on, about the need for evidence, because it is quite clear that not all political parties have a policy fully to compensate every business for every loss that they absorb that is from the outbreak of foot and mouth. I want to look specifically at the issue of hardship rate relief, which is the issue which is under the proposal to increase it from 75 per cent to 95 per cent funded by central Government, which I welcome. I recognise that the Government cannot give a promise to fund that 100 per cent, because it is an open cheque for every local authority to give 100 per cent rate relief to every rural business that comes into the category, but what I would ask you is if the Task Force is considering giving additional funding to the local authorities that are most severely affected? Certainly in those areas where we are dealing here with small shire districts who are having to pick up 5 per cent of the total rate bill, that in some cases will be quite a significant chunk of the budget of a small shire district council in a rural area, and I think we may well find that councils are not able to give the sort of relief that was intended under this provision, unless there is some willingness on the part of central Government to look at additional funding to cover that, albeit that has to be done on the basis of how severe the problem is in that particular area. I also think it may be necessary for central Government to look at giving additional funding to the most severely affected local authorities because of the additional costs which will fall to them in actually giving the service and backup that is needed to businesses and the wider community in these areas. Are those things being seriously considered now?
  (Mr Meacher) Yes, they are. We are certainly trying to concentrate on the areas of greatest need. That is certainly the sensible thing to do. The rate relief is concentrated on those 151 rural local authorities who are hardest hit. I accept also that if one is looking at aid to particular businesses, it is those which are in the infected areas, those which now are in designated areas from which the public may be excluded, whose earnings are therefore falling potentially to zero, who deserve the most help. We are looking at the best way to do that, whether it is through the Regional Development Agency, the extension, as I have indicated, of the Small Firms Loan Guarantee Fund, whether it is in terms of small business service in-depth consultancy advice as to how businesses can adapt in very difficult circumstances, whether it is by accelerating some of the proposals in the Rural White Paper, particularly in regard to market towns. These are all options which we are now urgently looking at, but they are all aimed at what you yourself say should be concentrated support for the local authorities and businesses most hard hit.

  177. Finally, perhaps I can touch on the wider issue of the promotion of tourism in this same context. Is there a recognition within the Task Force and Government that the promotion of tourism itself needs to be targeted, in the sense that there needs to be a recognition that there will be localities where the promotion of tourism is unrealistic for several months to come, because the only reasons tourists would go to those particular localities are to walk in the open countryside? Certainly promoting Mosedale, which is a beautiful area, I would say that 90 per cent of the people who go to Mosedale will go to walk on the Fells and certainly would not be welcome to go there, whilst there are other areas where targeted promotion of tourism either by central Government or local government could have a much more productive effect in achieving what is achievable in terms of preserving tourist businesses in rural areas.
  (Mr Meacher) Obviously in Cumbria, Powys, South Devon it is very difficult to achieve tourist development at this time, although there are parts in those areas—for example, East Devon—which are not wholly affected and where there are still opportunities which I think we should try to develop if we can. Of course, it is the other parts of the country also. Norfolk, which is as far away as you can get in many ways from the sources of infection, has suffered because of the climate of fear which exists that "Even if we have not got it now, we may get it tomorrow; it may come in mysterious ways, and we can't take any risks". It is trying to combat that, which is basically unscientific and where the risks are so low as to be negligible, but where the damage is huge and manifest, that we must concentrate our efforts, and that is what we are trying to do. If we can get tourism back into the 50 or 70 per cent of the country where there is absolutely no reason why it should not develop perfectly normally at this present time, I think we get the critical mass which we can develop into the more difficult areas, although being extremely careful. However, I do not think we can start in this area, it is the rest of the country which obviously has the best opportunities.

Mr Jack

  178. In your guidance to local authorities on rate relief did I understand you correctly that the rates holiday that you have granted so far—or should I say "rates relief"—only lasts for three months?
  (Mr Meacher) It lasts for three months in the first instance, yes.

  179. At what point would you take a view as to whether to extend that? Clearly, from the views that you have heard round the table, it is likely that businesses will have a long-term rather than a short-term problem in the context of their cashflows, will they not?
  (Mr Meacher) Yes, I accept that. Ministers have already long said that we are in for a long haul. No one, of course, knows how long that might be, and, of course, there are discussions which are in the media and are well understood to be taking place about the best strategy at this point to try to contain the disease, which could, in the next few weeks, have a significant impact. That is all relevant material in deciding whether to extend it. It may well be extended, but, as you know, Government is very cautious and we concentrate on the immediate period. I would estimate that certainly two months into the three-month period we most certainly have to take a view as to whether to extend it.

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