§ 11 am
§ John Mann (Bassetlaw)
Unlike a majority of Members in the Chamber today, I was a mere candidate at the height of the foot and mouth crisis, and I lived on one of the largest beef farms in the country when the crisis broke out. I lived within 20 m of some of the finest livestock in the country on an estate that had a large number of both sheep and cattle. It is in a county that, to date and thankfully, has not been affected by a direct outbreak of the disease. The pressures on the farming community were near at hand and apparent, and I pay tribute to the prompt action taken by those in that community, not least in my immediate locality, who acted promptly and wisely to minimise the effects, on Government instructions and at the appropriate time.
In my constituency, it would be inaccurate to describe farming as the only sector affected by foot and mouth. Mine is a farming community that has declined steadily over the years under successive Governments. It would be honest and accurate to say that the community has been critical of all Governments during the past 10 to 20 years, and that applies particularly to tenant farmers, who form a very small section of the economy.
Half the land mass of my constituency is forested, which is unusual in England. Tourism is fundamental to the future growth of our economy and I want to speak about the impact on tourism, which is why I asked for this Adjournment debate. Next week, I shall give evidence to an inquiry at Finningley into an international airport and I shall try to persuade the inspector of the tourist potential of an area that has Sherwood forest in its midst. The area that suffered greatly because of foot and mouth.
In many rural communities, tourism forms the basis of the local economy and generates almost twice the revenue of livestock farming. In 1999, the total value of rural tourism was £12 billion. It supports an estimated 380,000 jobs and 25,000 small businesses. In spite of that, tourism is relatively weak because seasonal fluctuations in demand make the sector vulnerable to the impact of major issues such as foot and mouth.
When the first case of foot and mouth was confirmed, various measures were taken with the aim of ensuring that tourists did not contribute to the spread of the disease. Those measures included closure of footpaths, rights of way and heritage sites. Many land-owning organisations such as the Forestry Commission and the Royal Society for the Protection of Birds announced that they would shut their land as a precautionary measure. In my constituency, Hodsock priory had to shut down at the height of the tourist season while Clumber park, which is a major tourist attraction in the north midlands, also had to close.
Several hon. Members in the Chamber take an interest in angling. The angling tradition in mining communities is deep, longstanding and current. Perhaps the greatest impact on daily life for the ordinary person was the fact that anglers had to go elsewhere for their sport because the canal was closed.
Many local education authorities advised schools not to organise visits to areas where outside spaces were closed either as a preventative measure, as in 25WH Nottinghamshire, or because of infection. At Edwinstowe, which is two miles from my constituency, a major educational facility for children at local schools was closed for a long time.
There was bound to be an impact on tourism once public authorities communicated through the media their decision that the public interest was best served by considering the countryside to be closed for business. I want to concentrate on the impact on one section of the tourist industry, the Youth Hostels Association, which has a particular resonance in certain parts of the country and is especially important for my constituents.
In the three or four years when I worked towards becoming a Member of Parliament, I hoped that one of the first things that I could propose would be a new youth hostel in Clumber park to link with the youth hostel in Edwinstowe. That would create a proper tourist route, increase the number of beds available and put my area on the tourist map for overseas visitors. That has proved to be impossible, although such ideas are fundamental to regenerating the local economy. The potential for tourism in my area is as great as anywhere in the United Kingdom.
The decision to close the countryside resulted in a dramatic reduction in the number of guests at youth hostels. The YHA was formed in 1930 as a charity, and it is now a worldwide organisation. Its aim when it was formed, to which it remains true today, was:To help all, especially young people of limited means, to a greater knowledge, love and care of the countryside, particularly by providing hostels or other simple accommodation for them in their travels, and thus to promote their health, rest and education.It operates 230 youth hostels in England and Wales, which are mainly situated in rural locations, and it has 300,000 members.
I shall declare an interest: I have been a member of the YHA for 25 years. I was introduced to it by my father, who was in turn introduced to it by a teacher when he lived in one of the most deprived parts of Edinburgh. He was encouraged to leave the tenement blocks and go cycling in the Scottish borders at the weekend using youth hostels. Opening the eyes of those who live in inner cities remains the key social import of the organisation beyond the business of being in tourism, although that is also important.
The organisation has been transformed. I recall, from first using youth hostels as a young boy, one at Thirlmere in the Lake district with a reputation for its austere warden, 1945-esque blankets and the duties that each person staying there had to carry out in the wooden hut and the freezing cold. It was known for Spartan conditions, creaking bunk beds and large dormitories. It was also known for its regime—in by 10.30 and lights out by 11 o'clock. I can tell people of that generation or older that the organisation has been transformed to meet today's expectations, standards and qualities. The youth of today regard it as on a par with their expectations, not as something left over from yesteryear. That point must be made, because many have a vague memory but would not recognise the organisation today.
During the eight months to the end of October, the Youth Hostels Association lost 19 per cent. of its business across the network, and 24 per cent. in its rural 26WH parts. In the worst affected areas—the Lake district, Yorkshire dales and north-east—business losses have totalled 40–50 per cent. Although there was significant business recovery in the south towards the end of the summer, there is currently no prospect of replacing those losses.
§ Mr. John Burnett (Torridge and West Devon)
I am grateful to the hon. Gentleman for giving way, because I do not wish his point about recovery in the south to remain unchallenged. Does he accept from me as a south-west Member of Parliament that although there was some recovery in coastal areas, inland tourism in the south-west—especially in my county, Devon, and in next-door Cornwall—was very adversely affected and has a very low cash flow?
§ John Mann
I would not dispute that for one second. The YHA's southern recovery is explained by its significant number of London youth hostels. They remain the cash cow of the organisation. In spite of that, and in spite of the fact that the London tourist industry was strong towards the end of the summer, there has been a loss this year of £5 million from an annual income of £30 million.
The organisation has no significant reserves with which to meet such setbacks, apart from its properties. In the short term, it has had to borrow from the banks to meet cash flow requirements. Crucially, in the medium term, it expects to have to close and sell a significant number of hostels to survive and undertake essential investment for the future.
Investment is essential for any enterprise, and as the YHA is well run, that means continuing to maintain and upgrade the quality of hostels—bedrooms, showers, windows, roofs and information technology—and broadening its appeal to a wider section of society. Of the YHA's current guests, 35 per cent. are school and youth groups, 30 per cent. are from overseas—often young backpackers—25 per cent. are individuals, couples or friends, and 10 per cent. are families.
I want to single out one group that uses youth hostels or, rather, would have used them this summer but could not; it has used them in the past, and wishes to do so in the future. It is the Acorn youth trust, based in Bassetlaw. It has financial backing through the single regeneration budget scheme for coalfields, and deals with at-risk young people in the ex-mining villages of Carlton in Lindrick and Langold. I say "at-risk" because those villages, especially the Wimpy estate in Carlton in Lindrick, are notorious across the north of England for involvement in heroin and for the amount of drug dealing going on in the streets.
The youth workers are working with those at-risk young people, aged 11 to 15—particularly younger teenagers—who could make decisions to get into the drug culture and become drug addicts. Many times in villages, I have sat with parents whose children have become heroin addicts and part of the consequent crime and disorder problems.
The primary focus of the trust is to take young people to youth hostels, such as those at Edwinstowe, Matlock and Llangollen. My great fear is that its ability to do that will be impaired by the financial crisis of the YHA. Last weekend, the trust took a group of people to the 27WH Edwinstowe youth hostel. Young people must raise the finances, however minimal, to attend such weekends; they are not charity, or a handout, but an award for the enterprise of young people.
Young people must take on responsibilities in the youth hostel, and the structure and nature of the hostel enforces that notion. The ideas of governance and how one lives are, for many, sadly lacking in their domestic lives. Cooking is another skill. Such young people, when given a pound, would normally eat burgers and chips. However, in the controlled and guided environment of the youth hostel, they have no choice but to learn cooking skills and learn about healthy living and eating. Such concepts are not directly available to them anywhere else, but have the most powerful impact. That opens young people's eyes to a world beyond the deprived village, street or house in which they live. Such educational work—through youth groups or schools—is crucial.
The YHA has a recovery plan and has not sat on its hands waiting to be bailed out. It has had to increase its borrowing and has already borrowed —3.3 million. It has also enhanced its short-term marketing initiatives, particularly those aimed at spring 2002 in conjunction with the Government's campaign for the countryside. It has started the hostel review, identifying asset sales, to raise the £5 million that it has lost. It has highlighted that issue in national and local media. I am pleased to say that it has also intensified applications for public funds to assist hostel investment and outreach work.
To date, funds made available by the Government have had some, though limited, benefit. Business Links initially declared the organisation ineligible for the £15,000 available to small businesses for the loss that it has suffered because of foot and mouth. Some 93 hostels have lost more than 60 per cent. of their business for two consecutive months, and many are being closed as a result of the crisis. I am pleased that the Government have changed that policy so that the organisation is now eligible, but I trust that the funds have not dried up. Can the Minister confirm whether the £500,000 that could be available to the YHA is, in fact, still available?
The hypothetical rates liability is £1.02 million, but as a charitable organisation, the organisation receives 80 per cent. mandatory rate relief and, in some cases, a further 20 per cent. discretionary relief. Its annual rates bill is £117,000 so it can expect only £75,000 through the hardship relief scheme. Significant money went to farming-based charities but the YHA was, unfortunately, declared ineligible. The rural taskforce has recommended that the scheme should be extended to environmental and recreational charities, such as the YHA.
§ The Minister for Rural Affairs(Alun Michael)
I am grateful to my hon. Friend for giving way. I want to make it clear that the match funding scheme for charities, to which he referred, was intended to help individuals, under particular stress in communities, who were involved in farming-related and non-farming-related activities. Initially, there was concern that it was only farmers and their families who were helped, but the scheme was widened by organisations such as the Addington Fund, which made a tremendous 28WH contribution to helping people who were under immense pressure during the main period of the foot and mouth outbreak.
§ John Mann
I thank my right hon. Friend.
Let me stress the assistance that the Youth Hostel Association needs. It will continue to make applications to the community fund and the heritage lottery fund. However, it is crucial that the re-launching of the visiting the countryside campaign, including encouraging people to stay at youth hostels, is a major factor in Government action over the next year.
Matched funds, through the foot and mouth appeal, which has raised £239,000, could make a significant contribution to relieving the plight of the YHA. I ask the Minister to respond specifically to the question of match funding, based on the appeal to its members. The Government could ask regional development agencies to give priority to reinvestment in organisations, such as the Youth Hostel Association, that are involved with environmental and social tourism.
There should be some form of economic regeneration for constituencies like mine—which on any indicator is one of the more deprived, and which, according to my fact-finding, is one of the areas less well funded from the available pots of money. Assistance from the European regional development fund would also be of great help. I know that in Nottinghamshire there is significant money in that fund, which lies intact without a penny having been spent from it over the past two years.
I would like to see special attention given to those youth hostels in rural areas that contribute to over 50 per cent. of the bed stock, or in places where there is one village shop. One of the critical social factors—well beyond young people from my constituency visiting—is the fact that, for village pubs and shops, an influx of perhaps 60 or 70 people a night is a major contribution to their sustainability. That is particularly so where the youth hostel is the key provider of local beds, which is often the case, or where there is one village shop struggling to survive, so the custom from the YHA's clientele is vital for its survival.
I would also like some ingenuity from the Government in the ways in which public funds can be used for to help young people at risk, such as those in my constituency. The Government should invest in the future by providing more funding so that such young people can utilise the youth hostels, both in the next year and on a planned basis in the future.
§ Mr. Tom Levitt (High Peak)
I thank my hon. Friend for giving way while he is making such a powerful case about youth hostels, which I hope to add to later, if I catch your eye, Mr. Gale.
My hon. Friend will be aware that early-day motion 256 has already received over 80 sponsors, and I hope that he will urge every hon. Member to sign that EDM to show support for the youth hostel movement.
§ John Mann
I will, and I believe that more signatures are going in today to support that early-day motion.
My right hon. Friend the Minister and I have discussed this matter before on a number of occasions, and I think that we can picture the Black Sail youth hostel in the Lake 29WH district. I can tell those who have not been there that it is one of the best sites in this country. From the doorway, one can see on the right Red Pike and Pillar, which is part of the Wasdale horseshoe—unquestionably the greatest walking range in England, and one of the greatest walking ranges in Britain, and a ferocious sight from that aspect. To the left is Green gable and further to the left is Great gable—in Wainwright's words, the greatest of British mountains.
The Youth Hostel Association was formed to allow young people such as those in my constituency who have never seen such sights, who have been stuck in the cash-boot, burger-and-chips economy of deprivation, drugs and social risk, to experience the countryside and have their eyes opened to that greater world. For that reason, the YHA is a special case and urgently needs support and assistance from this Government, of all Governments, and from all parties, at its most crucial moment of need. I implore the Minister to help, because the organisation needs that assistance now. People at risk in communities throughout the country will be the losers if we do not tackle the problem in the very near future.
§ Mr. David Curry (Skipton and Ripon)
Although the first outbreaks of foot and mouth disease in my constituency did not occur until April—the election had been called before the first outbreak occurred—a large part of North Yorkshire was already frozen because of outbreaks elsewhere, in Wensleydale, and in Cumbria. Businesses have lost in every season this year. North Yorkshire is still not a free county, but I hope that in a week or so, certainly before Christmas, it will have that status, access will be largely, but not entirely, opened up and businesses can begin to look forward to next year without the catastrophe that overwhelmed them this year.
The business crisis has been widespread. Foot and mouth disease is thought of first as an agricultural and livestock problem, but the ripples go extensively through businesses. The hon. Member for Bassetlaw (John Mann) spoke eloquently about the youth hostel movement, which takes about £2 million a year. Just before the outbreak, I opened a refurbished youth hostel in my constituency, which promptly became non-functioning because of the lack of visitors. Tourism is often thought of as bed and breakfast, but many retired people who may have a spare room take visitors and do bed and breakfast; their life does not revolve around it. However, the people who run pubs and hotels are often wholly dependent upon free movement and on people being able to visit. There is no purpose in going to areas such as Grassington, for example, other than to gain access to the countryside of Wharfedale and Malhamdale. If people cannot gain access to the countryside, they do not go; businesses have had only 10, 12 or 15 per cent. of their visitors the previous year. It will be interesting to know whether the Christmas bookings are better, because people expect the countryside to be freer.
There are outdoor education and trekking centres in my constituency. Some people had just set up a business, and bought ponies and hired staff, and their business simply failed. I mentioned pubs and the hotels; the country shows at Pateley Bridge, Kilnsey and Malham 30WH were a complete wipeout, and the Masham sheep fair, perhaps most poignantly of all, this year had a competition for fake sheep. There were pens on Masham marketplace and people competed to make sheep out of wire, wool and so on—they were very imaginative—as they could not show the real thing. My neighbour had a high-quality entry, which she kept in her garage. I communed with it for some weeks when the wool was being stuck to the exhibit.
Many businesses have turned to making plaques for a living, which are awarded to for fell racing, or at country show events. Business is down catastrophically, even miles away from the infected areas; the National Trust and some public and semi-public bodies have suffered too. In towns such as Settle, where the epidemic started, there have been ramifications for almost every business that one can mention. Hotels and pubs in Horton in Ribblesdale—the epicentre of the epidemic—and in Malham and Grassington have all been affected. Businesses usually hope to make some fat over the summer and have a good autumn half-term holiday, which is the last real attempt to make money before the winter weather sets in. However, they have not been able to put by any stores, so the crisis will come this winter.
The crisis in businesses in my constituency, especially in tourism, is associated not only with the outbreak of foot and mouth disease. During the fuel crisis, travellers searched desperately to find a pump open in the Yorkshire dales. The serious problems caused by flooding also had an impact on tourism, and the persistently high level of the pound has made it much cheaper for many people to go abroad for their holidays than to spend them in the United Kingdom.
Those factors were present before the outbreak of foot and mouth disease. The Government's business rate relief and various funds provided some help. Regional development agencies have channelled funds, although there have been common complaints throughout the UK about the sheer bureaucracy of the processes that must be gone through before the money can be accessed. For many businesses whose desperate need was survival, the requirement to propose a business plan for future development was three or four steps beyond the crisis.
§ Mr. Burnett
I am grateful to the right hon. Gentleman, who accurately and compellingly describes the parlous conditions faced by many country businesses as winter approaches. Does he agree that it would be extremely unwise and unfair for the Inland Revenue and Customs and Excise to demand payment of deferred corporation tax, income tax and value added tax?
§ Mr. Curry
The hon. Gentleman has uncannily anticipated the point that I was about to make. However, repetition is no sin in politics, so I will not hesitate to make that point in a moment.
Charitable giving has been important. Craven had a target to raise £1 million to help affected businesses. The Minister also referred to various other charitable funds. There is a hardy resilience among my constituents, but it is astonishing that Government agencies are calling in the debts just as the crisis begins to bite in winter.
§ Alun Michael
The hon. Gentleman's intervention gives me an opportunity to nail a lie. There is no change 31WH in the approach of Inland Revenue departments to those who are affected by foot and mouth disease. We have given an undertaking to continue to be sympathetic when we consider each request for help and support. The joint helpline is still open seven days a week to provide that assistance. There have been a couple of reports that debts would suddenly be called in. I am satisfied from my own inquiries that those are rural myths. Treasury colleagues assure me that they intend to be as helpful as possible to businesses that are going through the difficulties to which the right hon. Gentleman rightly referred.
§ Mr. Curry
We have dispatched urban myths that were invented by a previous Secretary of State, we have had the rural myths, and we can now concentrate on the difficult business realities. The Minister's remarks are useful, and I will invite businesses in my constituency to let me know immediately if they receive a demand from the Inland Revenue or other agencies. I am sure that the Minister would want me to contact him instantly with that evidence, so that he can tell whoever has issued a demand to stop. Lord Montgomery says in his autobiography that his mother would sometimes say to the nanny, "Go and find what Bernard is doing and tell him to stop it." That may not be a bad motto for the agencies.
§ Alun Michael
It would be unrealistic to suggest that the Inland Revenue should not talk to people about how, as business gets back to normal, they may deal with payments over time. I do not want to suggest that the Revenue should not talk to anyone, and Ministers have made it clear that, while the current situation remains, they will be sympathetic and pursue the line that I described.
§ Mr. Curry
The Minister will know that businesses do not expect gifts from Government. Businesses know that the money must be repaid, so the importance is in the tone and nature of approach and making it clear at the beginning that this is not a demand for payment, but an exploration of how the two sides can co-operate on a problem that everyone recognises. That is the key. There is a case for extending the business rate relief, simply because winter is such a difficult period, and the Minister will no doubt examine that as he collects his thoughts. We also need a full response to the Haskins report, which was generally sensible and solid. He is a bit the Lord High Everything Else of the Government, but on this occasion he has done a reasonable task. The Government made an immediate response, but more detail is required.
Above all, businesses need not money but some certainty. Hon. Members should imagine that they are a business. They have just suffered a catastrophic year and are being told by everyone that they should modernise, advertise their services and improve their facilities to attract new visitors. They must invest to do that; they cannot just sit and wait for it to happen. They also know that if there is one more outbreak of foot and mouth disease£we should not forget that the Government expect a tail to the epidemic—a whole chunk of countryside could be frozen again and such investment would be useless.
32WH Businesses cannot choose not to make the investment, because they cannot just sit there and do nothing. Equally, if we do have an outbreak, there must be a response. It would be enormously helpful if the Government outlined the approach that they would take to isolate any outbreak and ensure that the repercussions would not plunge scores, or perhaps hundreds, of businesses into the same situation as earlier this year. That is particularly important, as the Government will shortly pass the Animal Health Bill, which will give them the legal means to compensate for animals slaughtered following vaccination as part of the programme for controlling foot and mouth. I do not prescribe a solution, but the Government must understand the great apprehension across the countryside that we are not yet done with foot and mouth and that it could come back and kill any recovery.
I will make one point to the Minister with which he will be painfully familiar. I mentioned country shows and the importance of attracting tourists. If the 21-day rule restricting movement persists, it will have an immediate and deleterious impact on the ability of traditional country shows to go ahead. Animals must be brought to and taken away from such shows and play an important part in them. If that 21-day rule is applied rigidly, it will be the death knell of many traditional country shows. They attract all sorts of people: those who make umbrellas, products from rocks and wheat, shoes and riding kit. Animals, although key, are not the only element, and an enormous number of businesses gain much of their lifeblood from attendance.
§ Mr. Burnett
I am grateful to the right hon. Gentleman for giving way, and I do not want to tax his patience, but I must say that I agree wholeheartedly. I was speaking at the Okehampton livestock show dinner last Saturday evening, and that point was made to me. Does he agree that it would be wise for the Government to exempt livestock shows from the proposed cooling-off period?
§ Mr. Curry
It is inevitable that in the period in which we are relaxing from foot and mouth disease, a licensing arrangement for movement will continue to be in place. I do not expect the Government to lift all restrictions, but it would be sensible to examine the particular conditions of animals to decide whether they could be moved relatively short distances to local shows and back again without falling foul of the measure.
The hon. Gentleman will also know that we are hoping to get an announcement that auction marts will start again quite shortly. They also have an important role to play in the countryside, not least because they are the most important rural instrument for combating social exclusion among members of the agricultural community stuck on the top of a hill—one of the few occasions that they actually get down and meet fellow human beings is at the auction mart.
The epidemic has shown how interdependent agriculture and tourism are, but how exposed the countryside is to those two industries, and how inadequate the wider economic base in the countryside often is. We agree that we need better quality and more diverse facilities and Haskins has spelt that out pretty starkly. I applaud the efforts to bring regeneration into 33WH some of the market towns, which we all agree are important. I will assume that the hon. Member for Torridge and West Devon (Mr. Burnett) agrees with Haskins before he intervenes again to tell me that he agrees. So many market towns have centres characterised by charity shops and financial services organisations because much of the traditional fabric of retailing has gone.
The regional development agencies are now talking about how to develop business. In the rural areas, it is important that food clusters—businesses dependent on agriculture, but spreading out to processing, going up market, trying to get higher quality food and dealing with the local supermarket, which is often regarded psychologically as a difficult thing to do—be given broad encouragement.
Let me make yet another plea about telecommunications equipment in the countryside. If somebody has a small business at the top of the dale it is prohibitively expensive to get in there the sort of wires and communications that would enable them to deal competitively with people who have access to higher technological products such as ISDN. Hundreds of thousands of pounds is needed to install such equipment. If we really want to wire up the countryside, to ensure that people can promote high value added businesses from the countryside, that question must addressed urgently.
I am grateful to the hon. Member for Bassetlaw for the opportunity to participate in this debate. I know that the Minister understands the problems because a short while ago I led a delegation from North Yorkshire spelling them out to him, but as I said before, repetition is always a virtue in politics provided it is not taken to extremes, and that is why I intend to stop now.
§ Mr. Martin Salter (Reading, West)
I congratulate my hon. Friend the Member for Bassetlaw (John Mann) on securing this debate. He described himself as a mere candidate for Parliament when foot and mouth first broke out. If he makes one or two more powerful speeches like that on behalf of the Youth Hostels Association and other affected country businesses, he will never be called a mere MP. So, more power to his vocal cords, if nothing else. This debate is timely, particularly as the Government have called for a full debate on the future of the rural economy. I shall be interested in the Minister's response.
It is worth us bearing in mind the devastating impact of foot and mouth on the country as a whole—and I speak as an urban MP who very much enjoys country sports, fishing, walking, rambling and the rest. I note the words on 18 April of the former Minister of Agriculture, Fisheries and Food, my right hon. Friend the Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown):Foot and mouth disease has been an enormous blow to the farming community. Nationwide it has had a profound, disturbing and painful impact which is fully recognised at the heart of Government. It represents the biggest peacetime challenge of recent times requiring a major logistical and scientific response. There are no easy options, only stark choices.Those were wise words in the light of what has occurred since.
34WH The impact on the countryside, and particularly the agricultural community, was quite devastating. The first signs of the outbreak occurred in Essex in February. The origins were traced to a farm at Heddon-on-the-Wall, Northumberland, which is considered to be the most likely source. From there it spread to seven farms in Tyne and Wear. One sent a sheep to Hexham market, from where the disease spread to other parts of the country. The initial rapid spread was almost impossible to detect and for something like three weeks no one was really aware of the virulent disease. However, foot and mouth disease affected only a small proportion—less than 2.5 per cent—of the UK total of 55 million cattle, sheep and pigs that make up the national herd. More than 1,600 vets—with other professionals and 2,000 military personnel—were working at public expense to deal with the outbreak.
The Government strategy was clearly based on the best scientific advice. Many veterinary and other experts worked to contain the outbreak. The Government sought stringent disinfection and precautionary measures to contain the disease within affected areas. They sought to restrict movement countrywide by identifying areas with a heightened risk. They embarked on a policy to cull all animals on infected farms, within 24 hours of the disease being notified, to prevent the further release of the virus into the air. Unfortunately, they were not always successful in meeting that target. To remove the risk of developing and spreading the disease, they attempted to cull all animals in neighbouring farms within 48 hours of the first report.
For all the criticism of the Government's actions, the strategy worked. Britain is now free of foot and mouth disease, though there may be a sting in the tail. The farming community has been keen to berate Ministers and Parliament in general, but eradicating the disease should be a cause for celebration and, in respect of compensation paid to farmers, a cause for gratitude. I hope that we shall hear the farming community express some gratitude later.
The impacts of foot and mouth on agriculture have been overemphasised. Not only the farming community has been affected by this devastating disease. The Minister will be only too aware of correspondence with me about Mr. Harrison, a man in my constituency who ran Trail Breaks—a small organisation that staged cycle cross events in the countryside, but was unable to operate because of restrictions on access.
I recently met the Berkshire branch of the Country Landowners Association. The right hon. Member for Skipton and Ripon (Mr. Curry) spoke about other industries that we might not readily associate with foot and mouth disease—industries that make plaques for the walls of tourist attractions, for example. The Country Landowners Association told me that some of its members—people who produce rambling books or guides—experienced a huge downturn in their orders. Bed and breakfasts in the countryside and country clothing stores are other examples.
My own sport of angling is also relevant. Fishing tackle shops are often located in urban centres. Because they were not in designated areas, they were ineligible to claim relief and support. Gun shops, country sport suppliers and youth hostels could also be mentioned. I was proud to add my signature to early-day motion 256 and I certainly associate myself with all the 35WH comments made by my hon. Friends about the work of the YHA and the need for the Government to consider it a special case. We must ensure that that worthwhile organisation continues.
Having given the Government a fair wind on how they sought to tackle the outbreak, I have to say that the tight drawing of boundaries within which businesses could apply for support was a mistake. The vast majority of people who go fishing in the countryside will visit tackle shops in places like Reading, Swindon and elsewhere. It is a shame that such shops were ineligible for support. However, I dissociate myself from today's announcements by the UK rural business campaign, which is seeking to take class action for compensation against the Government.
The Government cannot be seen as a financial comfort blanket for every business affected by foot and mouth or any other external force. The queue for Government compensation is long. It starts with Railtrack shareholders, for whom I have little sympathy. It includes passengers whose lives were ruined by Railtrack's incompetence, for whom I have immense sympathy. It also includes Equitable Life policyholders, and airline industry employees, who have suffered terribly from the downturn following the appalling events of 11 September. Many people have their hands out for Government support, but the UK rural business campaign will get precious little support in this House. One has to question— [Interruption.]
Mr. RogerGale (in the Chair)
Order. This is a Chamber, not a Committee Room. Hon. Members must not deal with post in here.
§ Mr. Salter
I thought that I had done something wrong.
One has to question the intelligence of employing a firm of lobbyists—Lehmann Communications—to organise a briefing for Members at 11 am on a Monday. I would not pay good money for that. The campaign's press release about the class action includes one comment from the Conservative shadow Secretary of State for Environment, Food and Rural Affairs, who is seeking to make political points. The UK rural business campaign represents a class action all right—an upper class action. It should not unduly trouble the Minister.
It is worth considering expenditure on support systems. The DEFRA figures show that compensation—the Government are ambivalent about the word "compensation", but use it in their announcements—for farmers totals £1.2 billion. However, about £54 million is available via the business recovery fund. That represents an imbalance between support offered to farmers and to other businesses, whether in rural or urban environments, that have been equally badly hit.
Having successfully achieved foot-and-mouth-free status in the UK, the Government must urgently attend to businesses that are falling through the cracks in the system. No system devised in a hurry will be perfect, but rural businesses, the tourist trade, and the YHA should not go out of business because of our failure to address their concerns, which are as legitimate and important as those of farmers.
§ Annabelle Ewing (Perth)
I congratulate the hon. Member for Bassetlaw (John Mann) on securing the debate. Fortunately, the foot and mouth outbreak did not reach as far as my constituency in Scotland. None the less, the outbreak had a devastating impact on access. Tourism is vital to my constituency and its economy because one of its attractions is the beautiful mountainous countryside. Hotels experienced a dramatic drop in business, which impacted on all sectors of the economy. There was no meaningful support for business in Scotland because a large proportion of the budget was allocated to survival workshops, which did not find favour with business men and women throughout my constituency. Farmers in Perthshire suffered because of the restrictions on exports and movements of livestock. Progress has finally been made on export movements, despite the fact that Scotland has been foot and mouth free for some time. However, farmers in areas such as the borders cannot get export licences because of administrative delays and bungling.
One may ask why a Scottish Member is speaking in a debate on agriculture, which has been devolved to the Scottish Parliament. For some reason, representation of Scottish agriculture has been ceded to Westminster. The president of the Scottish National Farmers Union, Jim Walker, gave evidence to the Rural Development Committee of the Scottish Parliament on 18 September. To summarise, he expressed extreme concern about the inability of the UK Government and the Department for Environment, Food and Rural Affairs to lobby effectively on Scotland's behalf with respect to foot and mouth and agriculture in general. A concordat between the Scottish Executive and the UK Government gives jurisdiction over Scottish agriculture to the UK Secretary of State. Has the Minister's Department received any representations from Scottish Executive Ministers about amending the concordat to ensure effective representation for Scottish agriculture in Brussels?
§ Mr. Tom Levitt (High Peak)
I congratulate my hon. Friend the Member for Bassetlaw (John Mann) on securing this important debate. As I mentioned in an intervention, I am the author of early-day motion 256 in support of the YHA in its present straits. Like my hon. Friend, I am a lifelong member of the YHA and, as the Member of Parliament for High Peak, I have seven youth hostels in my constituency, which may be a record. I wish to describe my own experiences with the YHA, in order to stress the importance of the movement.
As a young boy, I went with my youth club to Malham and Linton—which I believe is in the constituency of the right hon. Member for Skipton and Ripon (Mr. Curry)—in the Yorkshire dales. Those were the first youth hostels that I visited. Later, I went to the Isle of Man, Wales and the Lake district. As a teenager, I found independence by taking my first solo holidays in the Cotswolds and on the Isle of Arran, courtesy of the YHA. I discovered a love of inter-tidal ecology at the YHA field centre at Borth. Years later, I went back to the facility as a teacher. For four years, as a student, I spent all my summers and Easter vacations working for the YHA on the Isle of Wight and in London as a 37WH warden. During that time, perhaps more than at any other stage of my life, I met people from different walks of life, countries and backgrounds who became friends for life. It was a wonderful kaleidoscope, not just of young people, as indicated by the YHA's name, but of people of every age group.
The YHA is a truly phenomenal organisation, which spreads around the world and has a great tradition. As my hon. Friend the Member for Bassetlaw said, the YHA was formed 70 years ago at about the same time as the Ramblers Association, the Workers Educational Association and the co-operative movement. Many of the same people were involved in those campaigns and issues. The YHA is a major player in providing not only holidays but important learning experiences, covering social skills and development right through to biology and geography at degree level through its field courses. The organisation has moved with the times, contrary to the image that it might have. Some hostels now offer family rooms and wine with meals and do not insist on lights out by 11 o'clock. They are broadening their base and attractions and doing wonderful things for vulnerable people.
The past year has been a complete catastrophe for the youth hostels movement. The way in which the hostels were hit was disastrous in many cases. In my constituency, field centres were closed, staff were laid off, casual staff who would normally work for the summer were not employed, as the 22 million visitors a year to the Peak district reduced considerably, especially in the most rural areas and among those who might otherwise have used youth hostels.
The movement has a modernisation programme to bring its buildings up to scratch for the 21st century. That includes new facilities and making the hostels accessible to a wider range of people. All those investment programmes are in jeopardy. The only way that the YHA can obtain capital is by selling its capital assets—the youth hostels. In order to raise funds, the association would have to eat away at its own foundations.
As the YHA is a major player and the major not-for-profit player in the rural economy, and because it does not have the cash assets that, for example, a hotel chain may have stored away and deals with introducing young people to unique experiences that they would not otherwise have, I hope that the Minister will take away from this debate the message of early-day motion 256. I hope that he will do whatever can be done to help the Youth Hostels Association at its moment of need.
§ 12.1 pm
§ Brian Cotter (Weston-super-Mare)
I thank the hon. Member for Bassetlaw (John Mann) for securing this debate. He does so as the foot and mouth crisis has dropped from the media's attention following 11 September and other events. Nevertheless, long after the worse cases have disappeared, the disease will continue to affect tourism and related industries. Last Thursday, the Secretary of State for Environment, Food and Rural Affairs gave an interview to the Financial Times in which she warned against farmers believing that the devastating crisis was totally over. The rural communities face not only continuing economic fallout in the immediate aftermath of the disease but the possibility that a further outbreak may occur.
38WH The debate has been primarily about economic aspects other than farming, so I shall leave farming to one side because time is short. The British Tourist Authority estimates that the combined effects of foot and mouth and the events of 11 September could result in the loss of £2.5 billion-worth of inbound tourism this year. Thousands of rural tea shops, pubs, museums and guest houses have seen their profits slashed as visitors have chosen to stay away from the countryside. I am glad to say that in my constituency, which is a seaside resort, we have benefited. Now that people have seen the joys of Weston-super-Mare, they will be returning in their droves in future.
Farming and tourism are not the only sectors that have been affected—so have many other businesses such as marquee hirers and camping equipment suppliers.The important point made by the right hon. Member for Skipton and Ripon (Mr. Curry) that the effects are going to be felt through the winter, spring and even into the summer. Indeed, one of the main recommendations of the rural taskforce report, which was published on 18 October, was tohelp ensure the survival of rural businesses through the coming winter months, when incomes and reserves are likely to be at their lowest ebb".Yet any farmer or rural business owner hoping for the Chancellor to throw them a much-needed lifeline during last Tuesday's pre-Budget report would have been gravely disappointed. Was the announcement that foot and mouth disease had resulted in a £2.5 billion bill supposed to make struggling farms and businesses feel a bit better? Were they supposed to feel grateful for and satisfied with the little that they had been given?
The truth is that many support schemes introduced by the Government have not fully met businesses' needs. Many businesses have been unable to claim support under the hardship rate relief scheme, for example, as they do not fall within designated rural areas. That important issue has affected parts of my constituency and others, and includes businesses located in small rural market towns, which have seen their trade drop as a result of outbreaks nearby.
§ Alun Michael
It is worth making the point that businesses outside the designated areas where the Government have given additional support to the local authorities can apply for business rate relief. We have sought to mitigate the impact, particularly on rural local authorities, which bore an especially heavy burden as a result of trying to help businesses in their areas.
§ Brian Cotter
I thank the Minister for that intervention. Hopefully, it will help to highlight the fact that there is some support for businesses outside the 37 designated areas, although we might say not enough.
§ Alun Michael
The hon. Gentleman misses the point. The help is for the local authorities, which can provide help for businesses. We have sought to mitigate what would otherwise have been a very unfair burden on rural local authorities, because the heaviest demands fall on them.
§ Brian Cotter
My comment related to other factors. For example, Lord Haskins's report called for a £40 million support scheme, yet the Government came 39WH up with £24 million. When we go into the scheme in depth—I am taking time away from what I was going to say—we find points that need to be raised.
The small loans guarantee scheme was held up as a major part of the recovery package and has been extended, but the scheme needs to be properly used. As at 18 October, a little while back, only 18 new loans had been taken up, which is of great concern. The business recovery fund, which was administered by regional development agencies and local business links to provide grants to suffering businesses, allowed an element of flexibility. Delivery at local level meant that local needs and circumstances could be taken into consideration, and small businesses had the opportunity to talk them through with advisers. However, that has caused its own problems, with discrepancies across the regions in the way in which the process has been delivered through the RDAs.
The criticism most frequently aimed at that form of relief is that the application process is far too cumbersome and takes far too long to process. As of 3 October, the south-west RDA had approved 775 applications, but 3,001 were still being processed. A further criticism is that the scheme does not cater for the short-term cashflow needs of small firms. EU state aid rules come into play.
The rural taskforce report reflects that view:Whilst some have argued that assistance should be targeted primarily on helping businesses to change and adapt, many small businesses have made the straightforward plea that their priority is cash to survive through the winter. Tourism businesses are likely to recover provided visitors return in spring: the risk is that many may not survive until then.Will the Minister, as a priority, respond formally to that report, to which there has not been such a response? Will he make changes to the business recovery fund to speed things up? Will he assure us that any funds given to RDAs can be retained? The hon. Member for Bassetlaw and others referred to the Youth Hostels Association. I am sure that, as a former chair of the YHA, the Minister will have great sympathy.
§ 12.9 pm
§ Mr. Keith Simpson (Mid-Norfolk)
I, too, congratulate the hon. Member for Bassetlaw (John Mann) on obtaining the debate. How shrewd he was in applying for a debate on the financial impact of the foot and mouth crisis in the countryside and then sneaking in a speech largely about youth hostels. I do not mean that in any way as a criticism. He enhanced the prospects of his debate being secured, and I congratulate him on that. I first used a youth hostel many years ago, during the premiership of Harold Wilson, whom some Government supporters might not remember was a Labour Prime Minister—unless he has been airbrushed out of history.
Like a number of hon. Members, I want to broaden the discussion. In the past 10 months, some of us in this Chamber have attended numerous debates and statements on foot and mouth. I initiated such a debate in this Chamber on 27 March, and on 21 November my hon. Friend the Member for Ribble Valley (Mr. Evans) secured a debate on farming in the north-west. Several 40WH Members have talked about the need to strike a balance in today's debate between farming, rural businesses and the wider countryside, and it is true that this is not an either/or situation. In all the debates that I have attended, most hon. Members have recognised that the countryside must be viewed as a coherent whole. Certainly in my constituency, the countryside is entirely interdependent. Farming—we should refer to it as the food industry—small businesses, shops, garages, pubs, restaurants, country sports, and the holiday homes to which many hon. Members have referred all form part of the wider aspect of tourism. Moreover, there is the future of the environment—a subject on which we have not had time to touch.
Some hon. Members seem to believe that even farming is largely marginal. They turn to statistics that show that, according to every conceivable criterion, farming has declined in the past 20 or 30 years. However, on looking at the facts a little more closely, one comes up with some interesting propositions. For every person employed directly in farming in Norfolk in 1967, four were employed indirectly. Today, for every person directly employed, 14 are indirectly employed. The distinction between farming as it was narrowly defined and its broader aspects is therefore very strong. Any downturn in farming has a major impact on the countryside. Although this is perhaps not the time for such a debate, we should recall a point that was dramatically made by my right hon. Friend the Member for Skipton and Ripon (Mr. Curry): if we remove the farming community and the animals from the countryside, it will change dramatically in many areas.
It is worth flagging up the fact, as several hon. Members have, that farming is experiencing one of the worst recessions of the past 70 years. There are many reasons for that, in addition to the impact of foot and mouth. In 2000, farming income fell by 27 per cent. Such a fall had a knock-on effect for many of the small businesses in the wider farming community to which hon. Members have referred.
Last week, the Chancellor of the Exchequer said that the total cost of the foot and mouth epidemic has risen to £2.7 billion. The overwhelming majority of such costs relate to compensation paid directly to affected farmers, to cleaning up and to eradicating foot and mouth. A much smaller sum has been given over to rural businesses. By any means, £2.7 billion is a large amount of money, but I should point out one problem to the Minister. Although some have been compensated directly, many others in the farming community and in rural businesses who were indirectly affected, but who none the less suffered a major loss of income, have been unable to get any recompense. Indeed, many farmers and small rural businesses have said that it would have been better if their areas had been directly affected by foot and mouth, and if they had been closed down, because that way they would have received compensation. The indirect impact is enormous.
My right hon. Friend the Member for Skipton and Ripon made the wise point that, ironically, the crisis will occur during the winter. Many rural businesses that build up a cash reserve in the spring, summer and autumn are now in serious trouble, as the hon. Member for Weston-super-Mare (Brian Cotter), who represents a seaside resort, knows. When the Minister considers 41WH ways in which he can help the countryside, I urge him to tell the Treasury that the crisis has not gone because foot and mouth appears to be under control.
I welcome the Minister's statement on the Inland Revenue's action on VAT, which should make certain that small businesses in the countryside are given as big a breather as possible in which to recover. We are not discussing a free holiday that will go on for ever, but given the crisis, an early attempt by the Treasury to collect money owed would result in many businesses going bankrupt before they had had a chance to recover in the spring.
A report by Dun and Bradstreet in June 2001 showed that the number of UK businesses being liquidated or going bankrupt between April and June rose by 15 per cent. on the previous quarter. According to the Countryside Agency, the tourist industry could lose between £1 billion and £2.3 billion in 2001. That sum of money almost equals the total amount that the Treasury has paid out on foot and mouth. We are discussing a massive hidden cost to both the countryside and the tourist industry.
§ Mr. Salter
I agree with the thrust of the hon. Gentleman's argument, but will he clarify whether, as Opposition spokesman on these matters, he supports the class action being waged by the UK rural business campaign and its demand for £5.1 billion in compensation from the Government?
§ Mr. Simpson
That organisation has every right to seek legal compensation. Along with many in the countryside community and consumers, I do not follow the supposedly clear-cut audit trail of how the Government dealt with the crisis. Many Members, including my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) and myself, who were in the crisis areas and saw MAFF's reaction to swine fever know that there was no stately process in which a crisis was dealt with by following established procedures. There was crisis management on the scale of the retreat from Dunkirk rather than a well-organised drill parade. Several organisations will seek compensation, and the law will decide the matter.
Does the Minister agree that to revitalise the countryside—we must look to the future—the Government must do three major things? First, they must restore the public's confidence that the food that they eat is healthy. Secondly, they must restore the public's confidence in both the viability of the farming community and in the assertion that our food industry will not be exported. Thirdly, the public's confidence in the Government must be restored. Even when one takes account of the problems of MAFF and DEFRA—I know that many officials and vets worked hard—there was chaos and confusion. We do not yet have any form of analysis on the outbreak of foot and mouth or what went wrong in dealing with it. As many hon. Members have said, internal, non-public inquiries are frankly insufficient.
Foot and mouth disease must be eradicated and policies and procedures must be put in place to deal with any further outbreaks. If we do not learn that lesson, we will back here having the same debate in two years' time.
Finally, we must ensure that bureaucratic barriers to rural businesses are removed. Many small businesses have to go through a paper chase—an obstacle course— 42WH to get help of one kind or another. If the Government can simplify that, they will go a long way to meeting the needs of the countryside as it recovers from foot and mouth.
§ The Minister for Rural Affairs (Alun Michael)
If, as he suggests, the hon. Member for Mid-Norfolk (Mr. Simpson) desires to increase confidence in the Government, he and his colleagues could help by supporting the steps that we are taking to deal with the enormous problems arising from foot and mouth disease, as well as the disease itself, and by being as positive as many of the organisations that represent farmers and the tourism industry, with which we are working closely.
I congratulate my hon. Friend the Member for Bassetlaw (John Mann) on securing the debate. He is one of the increasing number of Labour Members of Parliament who represent rural constituencies. His speech was well informed and passionate, and it was matched by many excellent contributions. The debate may have been too short, given people's obvious interest in the topic.
In the brief time available to me, I want to concentrate on the issues that my hon. Friend raised, especially those relating to tourism and the YHA. In focusing on the financial impact of foot and mouth disease, we must emphasise that that discussion takes place against the background of its impact on individuals, families and communities. The pre-Budget report given by my right hon. Friend the Chancellor shows that the national economic impact was much less than we had feared. Although that does not diminish the severe local impact in many areas—notably parts of Cumbria, Devon and North Yorkshire—the debate should be placed in that context.
To some extent, people are helping themselves. On Saturday, I was privileged to take part in a conference called by the Bishop of Hereford, in which many people, especially farmers, talked about—
§ Alun Michael
I will not, if the hon. Gentleman will forgive me. He has intervened several times, and many hon. Members made considered comments to which I want to respond.
The bishop's conference was positive, because it was about people saying what they were doing to rebuild their businesses and to succeed in the long-term future. I have also been handed a copy of a report from a conference called "Winning Ways" organised by the National Farmers Union and the Country Landowners Association in the west midlands, which makes a positive contribution to facing up to the challenges that lie ahead.
The crisis is one partly of farming and partly of tourism, and I do not want to play down either. Hon. Members have rightly stressed the balance between the two. However, in financial terms, net of compensation, tourism suffered even worse than farming. One of the few benefits of the crisis is that it has driven home the interdependence of rural economies and communities. Visitors come to see the landscape, much of which is 43WH maintained by farmers. If they stay away, the village shop and the village pub risk closure. As my hon. Friend the Member for Bassetlaw said, youth hostellers contribute to the viability of both those institutions.
In recent months, the interdependence between tourism and agriculture has been reflected more than previously in the remarks of farmers, who say that they understand it much more now than they did before. The activities of the rural taskforce, which I have chaired since June, has been conducted in an atmosphere of working together in the long-term interests of rural communities. We will respond to the points made by the rural taskforce and in the Haskins report, including the issue of rate relief, which was raised during the debate.
Let us be clear about what the Government have done to help. We sought to control the disease as quickly and effectively as we could. It is too soon to claim complete success, but there have been no cases since 30 September, which is encouraging. Crucially, we have sought to get visitors back to the countryside. I think that the YHA itself has said that getting people back, and getting business back to normal, is needed more than anything else. Ever since I took up my role in June, that has been my top priority. I have been to places such as the Lake district with representatives of rural tourism, including from the YHA, to try to get that message across.
The clear views of Lord Haskins and the rural taskforce are that, although businesses need help through the winter, trade is likely to pick up, and businesses to recover, come the spring. If there is time, I will return to general issues of business support but I first want to spend a few minutes on the points about the YHA that formed such an important part of my hon. Friend's introduction.
I was pleased to hear him place such importance on the contribution that a youth hostel can make to the local economy, and to hear him balance that with the contribution made to those who stay there, especially those who are deprived in various ways or come from inner-urban communities. I do not have a pecuniary or personal interest to declare, but I have used hostels with my family and as a youth leader, and I endorse my hon. Friend's comments. I sought to bring a youth hostel to my Cardiff constituency as part of the exercise in joining up town and country. As a result, I was for some years an honorary vice-president of the YHA. I resigned in order to avoid a conflict of interest when I took up my present post.
Since September, I have received about 200 letters from hon. Members explaining their concern about the future of the Youth Hostels Association. I have no doubt that the problems are serious. It was the national organisation worst affected by footpath closures 44WH because so many of its hostels are in places where people mainly go to walk. Some hostels such as Black Sail, which a group of Members visited a few years ago, can only be reached on foot.
The YHA's estimated loss of £5 million on an annual turnover of £30 million is a measure of the impact on it. That is a serious blow, especially in view of its continuing need to invest in upgrading hostels to meet modern expectations. Like me, my hon. Friend the Under-Secretary of State for Culture, Media and Sport has had close contact with the YHA since early in the outbreak. We have been able to offer it limited help and advised it on how to access existing funds.?
We have visited hostels to publicise footpath opening. We have also changed the rules of the business recovery fund, as my hon. Friend the Member for Bassetlaw said, so that individual hostels can apply to regional development authorities for help, a point that I drew to the attention of RDAs when we made the announcement. There have been discussions between RDAs and the YHA and a number of applications are in process. Some have already succeeded.
We are involving the YHA closely in our plans to encourage visitors back to the countryside as part of our effort to work with the tourism industry as a whole. This is not simply the Ministry making announcements, but an exercise in working together. My right hon. Friend the Secretary of State will reopen one of the YHA's flagship hostels after renovation: Hartington Hall, a beautiful 17th-century building in the White Peak. My hon. Friend the Under-Secretary of State for Culture, Media and Sport and I plan to visit more hostels and will at least contribute through our bed night fees, if nothing else.
Set against a loss of £5 million, that is, of course, modest. The YHA is still at real risk of having to sell hostels to make ends meet. We are carefully examining the rural taskforce's recommendations that we should find further ways of helping. The matter is not straightforward, as earlier discussions about compensation made clear. Many industries would like compensation for loss of income. Compensation has been paid only for the loss of animals that were culled in the attempt to eradicate FMD. I cannot make promises, but I hope that the YHA will not take precipitate action. None of us wants the association to sell hostels and we shall keep talking to it about how to work together to avoid the need for such a consequence.
Several points were made during the debate about help for businesses. For example, the right hon. Member for Skipton and Ripon (Mr. Curry) referred, during a thoughtful contribution, to the imagination with which many businesses and communities responded to—