Select Committee on Agriculture Minutes of Evidence

Examination of witnesses (Questions 40 - 59)



  40. I hope they do compete with you in the north. Did you take into account, when you made the decision, that it was not going to lie down and die?
  (Mr Siddall) Their decisions are their decisions. Our job is to look after HRI and the core capability of HRI. Our mission is quite clear: to deal with research and development for horticulture in the UK. We have too much capacity. We had to close a site and we chose Stockbridge. The reasons we have given many times are clear. We believe they are the right reasons, others do not. Whatever happens to Stockbridge is not our problem. We realise it might be difficult in the light of current developments and that they are going to cause some undue competition. We did not anticipate that. We do not think it is in the best interests of UK horticulture, actually, and we really feel that our duty is to concentrate on the main job which we have, which is to look after the core capability of HRI.

Mr Todd

  41. Mr Siddall, you are someone who has made a business in management outside of horticulture.
  (Mr Siddall) Yes, I have been accused of this before, I seem to remember.

  42. So have I! Do not worry. I am conscious that you must have advised your colleagues who are less experienced in this on the risks involved in this closure should an alternative body take over this site and successfully trade in a niche in your market place. I think your accountant has indicated that if that were to happen that would place HRI at significant risk of a further need to make substantial reductions in its cost base. Is that a reasonable assumption?
  (Mr Siddall) No, I do not think it is. I certainly take your point that there were risks here. I do not think we saw the risks in the way that they have actually turned out. Hindsight is a wonderful thing.

  43. You did not think that these guys would say "I think we can do this job for ourselves"? I must admit that would have—in your business and mine—been an obvious risk.
  (Mr Siddall) I do not think it is up to me to comment on the viability of what they are proposing. I think this is up to them. Our view is that there is a certain amount of money to go round in this sector and it is not sufficient to support all of these activities. So we wish them well, but we have severe doubts.

  44. You think that they will talk a lot but it will not come off?
  (Mr Siddall) It might well come off because it will be supported by local funds, but I do not think it will be viable.

  45. But while it trades it will have a significant impact on your ability to generate revenue.
  (Mr Siddall) I think "significant" is a word which we would probably—

  46. Let us quantify it. We have heard £650,000, perhaps a bit more.
  (Mr Temperley) The total turnover of Stockbridge House is of the order of £1.2, £1.3 million.

  47. You have assumed that virtually all of that will be transferred straight into other HRI activities.
  (Mr Siddall) Most.

  48. If that were not to happen, then that would really have a major impact on whether this restructuring was going to be successful at all.
  (Mr Siddall) No. I think the point we need to make clear is that the type of business we are talking about here, even the commercial contracts which have been referred to, at Stockbridge House is not actually what we see as the future business that HRI will be looking for. It comes under the heading of "sweating the assets". It is actually producing crops which we do not see as our primary task. Our primary task is to do with the science and the development and the linking of those things through to the benefit of the industry. That is what we do.

  49. Just to get absolutely clear, your business assumption was that in the short term income would transfer to other parts of HRI but in the medium term this was not a sector you were particularly keen to focus on anyway.
  (Mr Siddall) That is right.

  50. You would be, therefore, happy for the funds that are allocated to be allocated to other bodies, either a successor at Stockbridge or universities, or whoever else?
  (Mr Siddall) Yes, I think that is right, and it does come back to your earlier point about a monopoly; we are not a monopoly provider. We are subject to risk, we are subject to competition from universities which are subsidised. As you have seen from Professor Payne's submission, they are coming in at cut prices with which we cannot compete. So competition is nothing new. That makes us even keener to make sure that we have got the business proposition of HRI clear and that we are concentrating on getting business from those sectors which will remunerate us best and for which we have the best capability. We have got an excellent team of scientists, we have a well-established capability—

  51. Has that message got across to your customers, that you are basically in the medium term saying goodbye to a large chunk of their business and saying "Well, actually, that does not turn us on very much, because it does not make a return on our assets. Please do place it somewhere else."?
  (Mr Siddall) That is not correct. I really wish to—

  52. Fair enough. This is your opportunity to get that message really clear about your strategy, because that is what I think I am getting from my question.
  (Mr Siddall) There is a long answer to this, I am afraid. It goes back to the initial assumptions behind the commercial strategy of HRI, which was launched in the sort of late-1990s, associated with the name of HortiTech. The idea there was that HRI had surplus capacity. It had been known for many years that HRI had that surplus capacity. Again, Professor Payne's paper (I commend it to you) does cover this; he was the Chief Executive at the time. He said that at that time we shied away from closing more sites and we went for "Let's try and do something on these sites because they are free". Unfortunately, that was the HortiTech strategy which the board, at that time, supported and MAFF supported. That, effectively, got us into areas of work which are not, as we see it now, the core business of HRI. It is not actually science, and it is not actually technology transfer, but it is actually production. There is no group of people who shouted louder than the growers themselves when they saw what HortiTech was up to, and when HortiTech started to get into trading with China and importing plants for use in the UK, which was one of the bright ideas that arrived late in the history of the previous incumbent, there was hysteria, I am afraid. We do not do this. We are devoted to the industry and bringing science and technology to the industry as fast as we can, and we know that we have to be better at that and that our lines of communication with growers and consumers are not as good as they should be. So that is the rationale. We do not want to go back to the days of planting things for the sake of filling our capacity, filling our fields and filling our glasshouses.

  53. Even if it has customers?
  (Mr Siddall) It has customers but it does not—

  54. But they do not pay enough of a return?
  (Mr Siddall) It is very marginal. Certainly the future strategy of HRI will not be successful on that basis.

  55. Can I suggest to you, lastly, that it would help if you produce a very clear mission and strategy for your customers which gets across, I think in rather sharper terms than you put it to us, exactly what this business is about and, perhaps just as critically, what it is not about?
  (Mr Siddall) Yes, I agree. Thank you for that.

Mr Jack

  56. For the record, why was Stockbridge House built where it is?
  (Professor Wilson) For the history of Stockbridge House, my goodness that is long before my time. I believe it was compulsorily purchased during the war, I do not know which war. I was not born. My understanding is that it was put there, initially I think rhubarb featured highly in its programmes, and obviously salad crops and so forth. Why it was acquired by ADAS, or run by ADAS, or built by ADAS and became part of HRI, I am sorry I cannot fill in the history. One could equally argue for building an institute or a site in Cheshire or in Dundee.

  57. The reason I ask that question is just to seek from a scientific standpoint that in your judgment there is nothing unique about the micro climate, the soil or any other characteristic about Stockbridge House which makes that a special site? Because, as Mr Mitchell elicited earlier in his line of question, there is a strong sense of feeling that the northern half of England is being abandoned as far as horticulture research is concerned and combining Lancashire with Yorkshire you would have, if you like, across that band one of the most important locations for horticultural crops, both protected and field.
  (Professor Wilson) The proximity argument is a clear one and this was why we expected some of the reaction we got. I am advised by those who participated in the discussions, and indeed in the decision making, that micro-climate was a feature particularly in favour of Efford, which sat in the light corridor and the soil quality was a feature of Kirton which sits on the black soils of Lincolnshire and all that business. None of those arguments I heard from any of my horticulturalist or agronomist friends and colleagues in HRI. No-one spoke up on any of those criteria that Stockbridge House had to be maintained.

  58. You are not convinced by the good Yorkshire phrase "Where there's muck there's brass"? In the main there are lower operating costs in the northern half of the country. Is it more expensive to do the type of work which Stockbridge House has undertaken at other locations or is it the same?
  (Professor Wilson) It is exactly the same. Our staff pay rates are the same.

  59. Right. During the campaign, and particularly as reported in the august publication The Grower—I may say I read it every week for any Grower representative who might be here, please keep sending me the magazine—
  (Professor Wilson) I have come to read it.

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