§ 6.58 p.m.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)
My Lords, I beg to move that the draft Horticultural Development Council Order 1986, which was laid before the House on 3rd June, be approved.
This order is presented in accordance with the requirements of the Industrial Organisation and Development Act 1947. Its purpose is to establish a Horticultural Development Council for Great Britain, the primary function of which will be to commission research and development in horticulture. The order will empower the council to raise a levy for this purpose on sales of horticultural produce.
Before going into the details of the order I should like to explain a little of the background, and in doing so I should like to emphasise that there have been full consultations with the interested parties as required under the 1947 Act, and the draft order takes account of the views expressed. After taking soundings of their 471 members, the National Farmers Union, supported by the Horticultural Trades Association, asked my right honourable friend to conduct a poll of growers with a view to ascertaining whether they would support the establishment of a development council under the Industrial Organisation and Development Act 1947. A similar approach was made to my right honourable friend the Secretary of State by the Scottish NFU, and parallel polls were conducted in Scotland and England and Wales.
The result of the poll was a majority of roughly 2 to 1 in favour of a development council among those growers who were eligible to vote and did so. Having consulted further with the representative interests in the industry, my right honourable friend and the Secretaries of State for Scotland and Wales were satisfied, as the 1947 Act requires them to be, that the development council was desired by a substantial number of persons engaged in the industry, and they accordingly decided that a Horticultural Development Council should be established.
Perhaps I may say now a word or two about the substance of the order. This follows very closely the proposals put to growers in the prospectus which accompanied the poll forms. I would draw your Lordships' attention first to some of the definitions which are contained in Article 2 of the order. The terms "grower" and "horticultural produce" define those in the industry who will be liable to pay levy to the council. They are persons who grow any of the horticultural produce listed in Schedule 1 to the order and whose sales of such produce, excluding VAT, were more than £25,000 in the accounting year to which the levy relates.
The terms "levy period" and "relevant accounting year" relate to the levy collection arrangements which are detailed in Article 9 of the order. The levy will be collected in respect of "levy periods" from growers who in their "relevant accounting year" had sales of more than £25,000. When the council is fully in operation, it will collect its levy each autumn on sales in the growers' accounting years which ended in the preceding calendar year. Collection in the autumn will coincide with the period when most growers' cash flow is near to its peak.
Your Lordships will see that the period from the commencement of the order until 30th September 1987 is split into two levy periods, which will mean that growers will be called upon to pay two lots of levy during 1987. The reason for this is that the council needs to collect some money to fund R & D projects commencing in April 1987 but will not have compiled its register of growers and assembled the necessary staff and other things in order to do this in the autumn. Therefore, the collection in the spring of 1987 is in effect a deferral of the 1986 collection, and it is anticipated that it will be at a rate somewhat lower than the one-quarter per cent. maximum.
I apologise for having taken so long over that. Perhaps I may finish by saying a word or two about the articles in the order. First, the functions of the council are dealt with in Article 3 and Schedule 2 to the draft order, and are to promote or undertake scientific research and other inquiries, and to promulgate the 472 results obtained. Article 4 specifies the number of members to be appointed to the council and that all appointments shall be made by ministers. Articles 6 and 7 set out the arrangements for the registration of growers. Article 8 provides for returns and information to the council.
Article 9 provides for the council to raise a charge on sales of horticultural produce for the purpose of meeting the cost of carrying out its functions. Article 11 provides for returns of these sales. Article 9(2) provides for two deductions from the value of a grower's sales. The purpose of the first, which is the cost to the grower of any horticultural produce which he has brought in, grown on, and resold, is to ensure that levy is not paid twice on bought-in produce. The purpose of the second is to avoid the levy being paid on the value added by any processing of horticultural produce carried out by the grower. These allowances have been arrived at in consultation with growers' representatives, who agree that they are appropriate. Article 10 contains standard provisions permitting the council to borrow money and create reserves. Article 12 deals with offences under the order.
Finally, may I say that the Government are very encouraged by the positive way in which the horticultural industry has demonstrated its commitment to the importance of research and development. We believe that those who benefit most from R & D should contribute more directly to the cost, and growers are to be congratulated on being far-sighted enough to see the benefits of having their own body to decide on what R & D they wish to carry out and how to finance it. I am convinced that this is the right course for the industry to take, and I look forward to the council getting down quickly to its work on the industry's behalf. I commend the draft order to your Lordships' House.
Moved, That the draft order laid before the House on 3rd June be approved. [27th Report from the Joint Committee.] (Lord Belstead.)
§ Lord John-Mackie
My Lords, we must thank the Minister for explaining and putting forward the order to us. As usual, he has done it very clearly. It is a fairly straightforward order to which we can agree. It is simply to raise money to help to pay for research and development in the horticultural industry. This is to cover the £10 million and £20 million cuts which the Government made between 1986 and up to 1988.
I should like to ask the Minister this question. We had the argument when this cut was brought forward about two years ago as to whether it is £10 million and then another £10 million making £20 million the second year, or whether it is £10 million and £20 million the second year, making £30 million. I have just read the speech made by the Parliamentary Secretary to the Select Committee in another place, and it is not very clear. Reading what he says it looks very much like £30 million. I should like this cleared up for the benefit of everyone concerned.
As the Minister said, it has been agreed and all the bodies concerned, particularly the NFU, are reasonably happy about it. The Minister said that it 473 was a two to one majority in the poll, but I understand that it was a very low poll. Nevertheless, it is the fault of the industry if it did not take advantage of the vote.
The order covers a tremendous number of points which might arise. There is provision for someone who gets in produce, processes it and sells it again, so that he would not have to pay twice, and various matters such as that. As the Minister said, the industry is very satisfied with the order, and no doubt it will look forward to having some say in its research and development. I gather that the estimate is to raise about £3 million to replace the cut that was made—whether it is £20 million or £30 million; once we decide that. We cannot object to the order, and we give it our blessing.
There is a question I should like to raise on this order, and it concerns people who feel that their conscience will not allow them to join such a body. I have been approached by members of the Plymouth Brethren, and although I do not profess to understand their attitude I respect their sincerity. I have questioned them very carefully. They base their objections to joining such a body not only on their religious beliefs—which are very firm on the subject of being forced to join a body that they do not wish to join—but also on the EC Declaration of Human Rights. Article 18 says:Everyone has the right to freedom of thought, conscience and religion; this right includes freedom… to manifest his religion or belief… in practice".Then Article 20(ii) says:No-one may be compelled to belong to an association".The Human Rights in the United Kingdom pamphlet also makes the point about everyone having the right to freedom of thought, conscience and religion, and this right includes the freedom to manifest this in practice.
It seems to me that they have a point here. They are not in any way not wanting to pay the levy. It was brought up in the Select Committee of the House of Commons. They make it perfectly clear that they want to pay the levy but to pay it direct, not through an association of which their religion prevents them becoming members. I should have thought that it would not be outwith the wit of the Government to find some way to satisfy these people on their rights that they have very clearly put to me, as well as their religious beliefs.
§ Lord McNair
My Lords, in general, we also thank the Minister for introducing the order so clearly, and we welcome it. I think the Minister has satisfied me that it is desired by a substantial number of people engaged in the industry.
If I may go straight to the details of it, in Article 4, "Constitution of the Council", I ask whether two persons are enough to represent the interests of persons employed in the industry. There are a fair number of employees in horticulture, and to have two out of 20 representatives on the council does not seem to be very generous representation for them.
In paragraph (4) of the same article it says:two persons having special knowledge of matters relating to the marketing or distribution of products of the industry".474 Perhaps I should declare a defunct interest in that up to about 15 years ago I was a grower and in those days I used to regard greengrocers as my natural enemies because of the exorbitant mark-ups they put on my produce, especially in the case of florists engaged in the ghoulish trade of wreath-making. However, I recognise that these people are necessary, and above all that packaging is extremely important. I should like to ask whether distribution and marketing somehow includes packaging. I take it that it does.
Articles 8 and 11 deal with returns. We must hope that the Minister will exercise a restraining influence on the council to thwart the inevitable bureaucratic tendency to ask for more returns than are strictly necessary. Growers are not very good at paper work and they do not like it. The council will be far more effective and successful if it can win and deserve the goodwill of the growers.
In the schedule of the different products I looked very hard to see whether I could find any omissions. The only possible one I found is that, whereas roses include stock for budding, the same inclusion is not made for fruit trees, ornamental trees and shrubs, all of which are frequently budded or grafted.
Finally, I shall refrain from asking the Minister whether he agrees that, whereas a tomato is undoubtedly a fruit rather than a vegetable, rhubarb cannot possibly be described as a fruit and therefore presumably must come under the heading "Vegetables".
§ Lord Belstead
My Lords, I am grateful to the noble Lords, Lord John-Mackie and Lord McNair, for their reception of this order. The noble Lord, Lord John-Mackie said—and it is true—that this is in the context of reductions in government funding. It is a fact that £10 million has been cut from the provision for R & D expenditure in the current financial year, 1986–87, and £20 million will be cut from the provision for next year, 1987–88. However, I would make the point that we shall still have some £21 million of government money flowing into research and development for horticulture. In addition to that, it is hoped that this levy will raise an amount in excess of £2 million. I think that the noble Lord was perhaps £1 million too high in his estimate. Those who are planning the council hope for a figure in excess of £2 million. Undoubtedly there will be some overheads to meet, although I am glad to be able to tell your Lordships that the ministry will certainly try to give some assistance with the setting up of the council.
Specifically, we intend to provide an interest-free loan of £130,000 to be repaid before the end of this financial year. In addition, provided they are wanted, the ministry will provide conference facilities and support services until the council is in a position to provide these facilities from its own resources. Therefore, we shall try to do our bit to get the council off to a good start.
The noble Lord, Lord John-Mackie, then asked me a specific question about Plymouth Brethren, the Exclusive Brethren, who, as he has said, have not said that they do not wish to pay the levy, but do not wish to belong to an association which would collect the levy. My honourable friend the Parliamentary 475 Secretary, in speaking of this order recently in another place, gave an undertaking that we would try to find a solution to the problem, which might be an administrative arrangement whereby some members of the Exclusive Brethren could perhaps pay the levy via an intermediary. I should like to endorse that undertaking to your Lordships today and give an assurance that we shall try to find a way through this particular problem. I am grateful to the noble Lord for raising this point.
The noble Lord, Lord McNair, asked whether two representatives of the interests of the employees on the council were enough, and the noble Lord also referred to the two representatives who will have knowledge of marketing and distribution, which I am advised does indeed include packaging. There was of course quite a bit of consultation about this before the poll was conducted. I think that we should wait and see how the council progresses. The representatives of those who are employed will be on all fours with those who will be independent—there will be only two independents—and those who have knowledge of marketing and distribution. It is only those who run into double figures, who will be representative of the growers, who will be in the majority. I like to think that the other representatives will think that the composition of the council will be fair, but no doubt that is a matter to which we can return if, within the industry, it is felt that the balance is not right.
I have noted what the noble Lord said about trying to make sure that there is not too much bureaucracy. I am sure the noble Lord has noticed that the order contains articles enabling the council to collect information; otherwise the council would be in an almost intolerable position. However, I am sure that on its side it will try to keep down its costs, overheads and bureaucracy. I am sure that the noble Lord, Lord McNair, would say that that will be for the benefit of growers as well.
Finally, as the noble Lord knows, the produce covered excludes apples and pears because of the Apple and Pear Development Council; it excludes mushrooms, because the mushroom growers are carrying out their own research and development; and it excludes hops, because the hop growers are also carrying out their own research and development. There is one other exclusion.
§ Lord Belstead
Yes, my Lords. As I understood it, the noble Lord asked me a question about hardy nursery stock. I hesitate to suggest that I am the possessor of knowledge of which the noble Lord is not, considering that the noble Lord has personal experience of this, but I believe that the particular examples he gave me fall within the hardy nursery stock category. The nursery stock people were very closely consulted before this order was brought before your Lordships' House.
§ Lord John-Mackie
My Lords, I should like to thank the noble Lord the Minister very much for his assurances to the Plymouth Brethren; I am sure that they will be delighted. At the same time I should like 476 to ask why he is imposing a levy to raise money for this R & D when he turned down my suggestion of a levy to pay for ADAS.
§ Lord Belstead
My Lords, that is an ingenious question and rather a fast ball. As we shall have the pleasure of dealing with the Report stage of the Agriculture Bill next week, perhaps I may consider my reply and deliver it when we next meet on that Bill.
§ On Question, Motion agreed to.