Rural Affairs Committee, 16 Nov 1999

Meeting date: Tuesday, November 16, 1999

Official Report 176KB pdf

---

Agricultural Business Improvement Scheme

Those of us who attend the committee regularly will know that this rate of progress is quite dizzy, given that we usually allow one and a half hours for the first item alone.

The subject of item 4—the agricultural business improvement scheme that runs in the Highlands and Islands—has arisen largely since our previous meeting. I welcome Jamie Stone and Jamie McGrigor, who are both Highland members of the Parliament; they have come to the meeting today specifically for the discussion on this item.

The issue has been raised with the committee by Mr Hamish McBean, who wrote to me to explain the problems that surrounded the agricultural business improvement scheme. We have also received submissions on the matter from the National Farmers Union and the Scottish Landowners Federation. I am sure that those of us with an interest in the matter will have had a huge postbag from individuals who have been affected by the scheme and felt it necessary to write to MSPs on the subject.

I propose not to go over the submissions that we have received in detail, given that we have read most of them. I invite members who have opinions on the matter to express them at this point.

I am happy to start the debate, if I may. Those of us who were present at the briefing at 1 o'clock could not fail to come to the conclusion, if we had not done so already, that the scheme had got into a mess, to put it mildly. However, there is more to it than that. Livelihoods have been affected and the trust of applicants to the scheme has been shaken, not least their trust in Lord Sewel's statements, made in February and March this year, that adequate funding would be available to meet any costs incurred under the ABIS scheme. That has patently not been the case.

We cannot simply let the matter go at that. We have all been given to understand that considerable expense had been incurred by many farmers, who are ill-equipped to meet that expense—never mind be encouraged to do so by the Scottish Office agriculture, environment and fisheries department and then the Scottish Office rural affairs department. Those farmers have been told that the expense was completely needless, as there is nothing left in the pot and their applications will almost certainly be refused. In fact, we were told that there had been no communication between SERAD and the applicant. That is an unsatisfactory state of affairs, and we must consider it more deeply.

I agree with Alex Fergusson. This has been a shambles. The Government said earlier this year, in effect, that anyone who submitted a valid application would receive assistance—the more, the merrier. Given the current farming crisis, the scheme is an excellent idea and would make a great difference to the Highlands and Islands. Now that people's expectations have been built up and, in many cases, their bank accounts have been emptied as they have spent money on getting planning permission and hiring consultants and so on, they are left in the lurch—or, worse, they do not know where they stand.

There are a lot of questions to be answered. The Government's precise exposure to claims is not clear—there is certainly disagreement about the upper limit. I know that we do not want to be continually diverted by whatever is this week's crisis, but it seems that this matter is significant enough to a large enough number of people for us to consider it in more depth—I suspect at our next meeting.

At the meeting just before this one, I learned that there was some argument about the amount of money to which people could be eligible under the scheme. We are told that there are applications for funds of more than £22 million, but that that figure might be a lot less once all the applications have been processed. Should we ask for a quick audit of applications so that we know the magnitude of the problem? We could invite the minister to our next meeting to answer questions on this.

This is a bad business. It is of paramount importance to the northern Highlands. Rhoda Grant's suggestion is sensible but, as became apparent from our discussions with the NFU, we are somewhat boxed in by past, present and future European funding. The way forward may be to make a plea for some form of financial lifeline from—let us face it—a surplus-rich Treasury. Perhaps we could push this case with our Westminster colleagues. Such a plea would have cross-party support. Rhoda Grant and others will agree that in the Highlands there is cross-party recognition of the severity of the problem.

The old saying was that the Highlands were on Scotland's conscience. Given the gravity of this problem, we can say that the Highlands are on the UK's conscience. Members heard the letters on this that I read out in Parliament the week before last, and late last night I got a call from a farmer in John O'Groats who had put up money but did not know when he would get it back.

We should remember that this was a relaunch of ABIS. The ABIS scheme had been operating perfectly well for some time, and had met all applications. As the take-up was not sufficiently large, the scheme was made much more attractive, which is why many people went into it. One cannot offer carrots and then plunge people into despair by not producing them. What has happened to the money that must have existed to pay for the scheme?

I am also alarmed by the countryside premium scheme. I am led to believe that the same thing is happening with that scheme—money has been transferred from it to the organic aid scheme. I would like to know whether that is the case. If these schemes are going to be made available, but the funds are suddenly going to be withdrawn, the hill-farming industry—which is in a desperate state—will be left in even greater financial difficulties. It is not good enough to let people spend money on planning only to take away the funds. That is a bad state of affairs, which demands serious explanation.

I am sorry for being late. I was at the Health and Community Care Committee.

That is okay. You are forgiven.

I apologise if I say something that has already been said.

Many farmers in the Highlands did not quite meet the deadlines. I met two on Friday, whose building warrants were processed late. There are more applications than the total that we have now. Many farmers have spent money on architects' fees and planning, for example, but because they have had to wait for council building warrants, they are still waiting to submit applications.

I support what Jamie McGrigor said. The Scottish National Farmers Union has told me that £6 million of the full £23 million of funding has been spent on farmers. In the Parliament last week, Ross Finnie said that £17 million of the full £23 million budget had been spent. I would like to know why we started with £23 million but have ended up with £1.2 million.

Most important issues have been raised. There is a sense of betrayal in the agricultural sector. If the Government is to be trusted by farmers, it should fulfil its pledges. This is a serious issue that this committee should examine, perhaps by inviting the minister to discuss the matter.

It concerns me to hear the word betrayal used in this context. I understand the concerns, but if we want to have a constructive and effective relationship with the ministry, the last thing that we should do is use language of that kind. There is clearly a problem, and Rhoda's suggestion that we seek an explanation for what has gone on is a good one. I think that that would command general support.

According to the Scottish National Farmers Union, the Executive has held meetings with applicants and potential applicants in the Highlands over the past few weeks, and members of this committee will be aware of the announcement that was made today. Although the urgency and importance of this issue are not to be underestimated, a sense of proportion would well become us as a committee.

I echo Alasdair Morgan's point that, although we must identify and deal with these problems as they arise, we must not, as the Rural Affairs Committee, become a committee for discussing the latest agricultural crisis. We understand the difficulties that the agricultural industry faces and we should deal with those, but if we become too inclined to adopt a fire-fighting role, the longer-term constructive plans that we agreed at the outset will be more difficult to fulfil.

We are perhaps reaching a consensus. However, we should ask the minister or his representative to attend the next meeting. In advance of that, we should get an audit of the figures, as was suggested. A lot of figures have been bandied about, and there seems to be some scepticism over the likely commitment of the Government. If we had some of those figures in advance, our meeting with the minister would be better informed.

I have listened to other members' comments. I am surprised that Mr Macdonald is suggesting that the language that we are using is rather aggressive. I do not think that the word betrayal is aggressive at all. Many of the farmers and the people who are on the list, when speaking to their bankers and accountants weekly, use far stronger language than we have heard here. We were speaking to some of them earlier, and this debate is on-going between many of us who represent rural constituencies and the farming community. We realise and accept the difficulties that those people are encountering.

This is nothing new; it has gone on for several years. If this were the only difficulty that the farming community was suffering, I would use less aggressive language. However, I am not prepared to do that when I see what is happening in the farming communities. The Rural Affairs Committee has a duty to make the strongest possible case to the Scottish Parliament and to remind the Executive of Lord Sewel's commitment that

"sufficient resources will remain applied to the ABIS to ensure that all outstanding commitments can be met, as well as accommodating any up-surge in applications which may emerge as a consequence of the improvements to the scheme".

We should remind our Scottish Parliament colleagues of that clear and unambiguous statement so that we can address the situation and give some comfort to the people in rural Scotland who are trying to exist in very difficult circumstances.

It is important to avail ourselves of the facts before we make recommendations. The notes for news editors that came out with the press release indicate that, although currency fluctuation and the weakness of the euro formed part of the problem, another part was the transfer of £2.7 million to other agriculture and fisheries measures in the Highlands and Islands programme. We need to know what has happened. I am sure that Lord Sewel did not make that statement without any consideration. We need to know why money was transferred to other measures and what those measures were.

I want to return to Lewis's point. We cannot underestimate the importance of the ABIS to many farmers. Farmers have faced various problems over the past few years and people should not think that there is a new problem every week. No one wants to run the Scottish Parliament by crisis management.

I have to tell Lewis that there are men whose families have been in farming for 200 years who are about to walk away from their farms. The whole structure of farming is in serious crisis and farmers are at their lowest ebb. Generations of farming depend on this scheme. I am sorry if I am being dramatic, but I am passionate about this issue. People have told me what they told John Farquhar Munro: they are facing a desperate state of affairs.

The problems in farming that Mary indicated are being faced by farmers throughout Scotland, not just by those who are eligible for the ABIS. The committee has agreed to investigate the problems of the agriculture industry in general in Scotland.

I thank Dr Murray for that statement. However, I represent the very north of the country, from Cape Wrath to John o' Groats. The farmers have had so many difficulties recently that those communities will start to go under if we do not give them something. It is as bad as that.

I am not sure that this is just an agricultural problem. This scheme has run into enormous administrative difficulties. Although the effect has been felt on agriculture, some of my questions centre on why the scheme has got into this extremely difficult state. Perhaps we should enter into the debate with a view to helping the Scottish Executive not to get into this state, if that helps Mr Macdonald. The situation is absolutely hopeless.

If there are no further comments, we need to decide how we are going to proceed on the matter. Some members have suggested that it would be appropriate to ask the Minister for Rural Affairs to come to the next committee meeting to answer questions and to provide detailed information on the ABIS and the problems that face us. Do members think that that would be an appropriate course of action?

Members indicated agreement.

Yes, it would. I also think that it would be worth including in the invitation some points about the administration of the scheme as well as the point about the consequences for farming.

Given the wide range of problems that face the scheme, would it be appropriate for us to ask other officials to come to the committee to give evidence?

That would be up to the minister and whether he felt that he needed anyone to advise him.

It would be helpful if we could get some financial information in advance, such as the breakdown of the fund, the value in euros, how it has been disbursed so far and how the Executive has arrived at some of the projections for future disbursements. As you know, convener, some people have questioned the alleged commitment on the part of the Scottish Executive, whereas others are saying that it is not as bad as all that. We need some explanation of the figures that have been put out.

The real commitment was made before the Scottish Executive came into being. Lord Sewel and the Scottish Office made it. It may be very hard to delve further into that commitment by questioning the current minister. Perhaps we should be asking someone from the previous administration to come as well.

That is an issue that I would like the committee to clarify.

I do not think that that is an appropriate approach.

I did not think that you would.

That is a red herring. We are talking about the department that preceded the current department, which is headed by Ross Finnie. Ross Finnie receives the same advice from the same officials as Lord Sewel did. Ross Finnie is the minister who is accountable to us for the conduct of that department.

Lord Sewel is safe in retirement.

I do not think that there is a bring back Lord Sewel campaign.

Given those remarks, is the position regarding the administration that predates the Scottish Executive fully understood?

I think that the situation merits a more accelerated programme. We should not wait for our next meeting, which is two weeks away. The situation is serious enough to call an emergency debate. There are many people involved in agriculture who are waiting to hear what we are going to do. They have stock out on the hills or in the fields and they do not know what is going to happen next. We must accelerate the debate.

As Lewis Macdonald said, Lord Sewel made his statement before the Scottish Executive came into being. We should ask the Scottish Executive to speak with colleagues at Westminster to encourage funding and support from that source. I hear that there is a flush of money down there and they do not know what to do with it. Let us have some of it up here.

It is important that we have information when we question the minister. Perhaps we should have a meeting next week. If we are going to ask them to do an audit on the applications so that we are properly informed, we cannot demand it in such a short time scale. We want to sort out the problem and to help people. We do not just want to make political comments.

We should ask for an audit and ask the minister to come and see us in a fortnight. A fortnight would give them adequate time to prepare an audit of the applications. In the meantime, the minister could examine other avenues of funding and perhaps—I understand that there is European funding—contact the Government to find out whether it can put in more money. That is an issue that we are uncertain about and we must sort it out. We need to do the groundwork between this meeting and the next.

I have reservations about asking the minister and senior civil servants to cut into their diaries at a week's notice. There could be a problem.

As I mentioned earlier, if the minister could be persuaded to answer questions about the ABIS, he might dispel the worries that people have about the countryside premium scheme. I gather that there are priorities for the scheme. Two people rang me last night to tell me that there are now extra priorities for the scheme. A lot of people are waiting to get on to that scheme. If we tackle the problem now, it may not arise again.

I am concerned that we will fail to deal urgently with an urgent issue if we slip into discussing the wider issue of agricultural schemes. The committee's view is clear. We should agree and press on.

What is the date of the next meeting?

The next meeting falls on 30 November, which is a holiday. There was a provisional decision, made some months ago, to conduct that meeting on 3 December.

That is what I understood.

Should we aim for an earlier date or meet on the scheduled date? Certain difficulties would arise in trying to arrange a meeting at shorter notice. I have grave reservations about trying to do so. Would it be appropriate to schedule the investigation for 3 December?

Members indicated agreement.

Would it be appropriate, in advance of that meeting, to ask that a full audit of the ABIS figures be made available, ideally for distribution with the papers for that meeting?

Members indicated agreement.

Would it be appropriate for us to invite the minister and such senior civil servants as he feels necessary to come on that day to address the issues raised?

Members indicated agreement.

Would anyone like to add anything about the ABIS?

I go along with the suggestion that we should get the best financial and other information that we can. We will discuss it at the meeting on 3 December. My fear is that by the time our discussions are dealt with by the Scottish Executive and the Scottish Parliament, we will be into the middle of December. Parliament will close and will not open again until early January. Nothing will happen in all that time.

I understand the priority that you attach to this issue, John. I am very sympathetic to your view. However, I am concerned about being able to set up an appropriate and adequate investigation within the time scale, before the next meeting. We should note John Munro's position and the fact that we take his concerns very seriously.

It might be useful to invite the industry to put forward a couple of case studies. Reading about the direct experiences of a few farmers who have encountered difficulties with the scheme would help the committee.

Would it be appropriate for us to approach the NFU and the SLF for such information?

Highland MSPs have got lots of case studies. I would be happy to give mine to the committee if it would be helpful.

We have contacted the Scottish Crofters Union in such circumstances in the past. Would it be appropriate to do so this time?

Members indicated agreement.

I hope that we will include two case studies from each organisation with the papers distributed in advance of the meeting.

Do we have any information on the deadlines applied to this fund, given that it is from Europe? I understand that the deadline is 31 December 1999.

That is the date that I got from the previous meeting.

That being the case, do we have time for all these deliberations and responses?

The powers of the committee are such that we cannot force a decision before a specific date. However, I hope that the conduct of this investigation will have a serious effect on concentrating the minds of those who have that power so that action may be taken in a timely manner.

As long as the Executive realises the seriousness of the situation.

Would it be appropriate for us to get the papers that we have discussed circulated as early as possible, in advance of the normal date?

Can I suggest that, in your letter to the minister, you emphasise the urgency of the matter? Would it help, John Farquhar, if we underline the fact that we see this matter as very urgent? We are allowing for time to carry out an audit, because that will inform our questioning, but a paragraph about the urgency would be appropriate.

Yes: emphasising the seriousness of the situation. I am sure that the committee would agree with that sentiment.

Members indicated agreement.

I think that that is unanimous, John.

Rhoda has already made this point, but I will make it again: it is important to check what action can be taken by the Scottish or UK Government, and what would be prevented by Europe. We have already covered this to an extent when we were addressing the lamb crisis, only to rebuffed at the final hurdle by Brussels. We could obtain advice on what would be allowed by the European Union in terms of compensation or top-up money.

Who do we approach for definitive advice on that?

Are there any more comments on this matter? If that is all we have to say at this stage, I will move on to the next item, but I hope that everyone is confident that we wish to proceed with a sense of urgency. I thank everyone who came along for this part of the meeting.