Comprehensive Spending Review

Lord Plumb Excerpts

Monday 1st November 2010 Lords Chamber

[Lord Plumb]

My Lords, we have had the privilege of listening to some interesting, varied and sometimes provocative speeches today, but I have not yet heard anyone speak of British agriculture, which is the one group that can really help our country’s economy. I am proud to be involved in British agriculture—I declare my interest as a farmer—so I will speak on the spending review’s implications for agriculture and horticulture as well as for the future role of the Department for Environment, Food and Rural Affairs, which faces substantial cuts. We have to examine where those cuts will come and what effect they may have.

Defra has not always been the flavour of the month with many farmers because the unnecessary complications in the single farm payment and the rural development schemes cause burdensome expense. Every tree, building, rock, hedge, ditch, pole or pond that impinges on grazing or cropping areas has to be identified as a result of the gold-plating of European policies. I hope that, following the spending review and the reduction in bureaucracy and red tape, farmers can get on with their farming and show much more effectively and clearly the economic value of food and energy production to the nation, through growth, efficiency and innovation.

However, it is necessary to look way beyond the farm gate to the food chain as a whole. Collectively, the agrifood sector accounts for 6.7 per cent of the total economy of this country and generates some £85 billion in GVA to the United Kingdom economy. Many people are surprised to learn that 3.6 million people are employed in agriculture, which equates to 14 per cent of total employment in this country. The United Kingdom food and drink industry accounts for 5 per cent of total exports, with over £14 billion generated through overseas sales last year.

The credit crunch has awakened food patriotism among consumers and has increased dedicated supply chains, which are a feature of the agrifood sector. We know that farmers are more aware than most of the challenges of limited resources and climate change. Farmers recognise that they can contribute to developing renewable energy markets and emerging technologies. The biofuel market is a classic example. That market is developing very quickly—we should catch up with some other European countries before too long—and is often delayed only by planning consent.

We recognise that Defra has undergone substantial restructuring in recent years, so it is important to determine its future structure as soon as possible. There is obvious uncertainty and speculation among the bodies under review, including the Agriculture and Horticulture Development Board, the Environment Agency and Natural England. Natural England plays an important part in teaching through school visits to farms. I speak from experience, as 34 schools have adopted my son’s farm so that children can see what is going on in the countryside. At the same time, it is appropriate for Government to restructure antiquated regimes, such as the Agricultural Wages Board, and to refocus spending priorities and delivery.

I have many questions for the Minister about the details of the spending cuts that I know are under consideration. With a 33 per cent cut in expenditure, am I correct in assuming that £174 million will come from a reduction in running costs? What are the savings in administration? Money is overdue for payment from Brussels for the higher level scheme. Will that be delayed? Farmers are telling me that the scheme has already been delayed for some considerable time. Will the savings on the rural development programme of £66 million apply just to the environment scheme? If the sterling-euro exchange rate is a factor, is there any provision for unexpected movement? What exactly are the department’s spending commitments on animal health? One could go on with these questions, which have to be put.

Minister, I do not expect an answer tonight, but please take note of those questions, because they are real and they are being asked. I hope that in doing so, you will know that farming is at the heart of the financial recovery and is willing to play its part in doing everything possible to reduce the deficit. I am confident that it will.