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The main item of business on today's agenda relates to the petitions from the National Farmers Union of Scotland, which the committee last discussed a month ago. We have deliberately kept as much time free as possible during this meeting to deal with them. One or two other items have come on to the agenda over the past week, which we would like to bring forward at the end of the meeting. However, while trying to be fairly disciplined about the amount of time that we apply to the petitions, we do not wish to cut our discussion short, given that they are the main purpose of this meeting.
Given the time and the number of items on the agenda, I think that we should be able to deal with this petition fairly quickly. We can note its contents and the fact that the Prime Minister has indicated at a National Farmers Union conference that there are no plans to proceed with such a tax. I think that we should simply note the petition and move on to consider other matters.
Are there any further comments on PE24? If not, we will note the petition and move on.
This is primarily a reserved matter. Our briefing note indicates that it is a matter strictly for the Office of Fair Trading. The British Veterinary Association has offered to come to speak to us about why veterinary costs are high. It might be more appropriate to encourage the OFT to look into this matter as a potential non-competitive practice and to encourage the veterinary association to liaise with the OFT.
That is a valid point of view. Do other members have comments to make?
There is a presupposition that the prices are higher for reasons to do with competition law—such an assumption might be invalid. The prices might be higher for reasons that can be dealt with by the Scottish Parliament. The implication seems to be that there is an element of competition law involved. Therefore, the course of action that the NFU in Scotland should take is to complain, in the first instance, to the OFT. If the response from the OFT is dusty, the committee might want to examine the issue further.
Could the committee refer the case to the OFT?
Having researched this a little, I feel that the best course of action would be to write to the NFU in Scotland offering our support and suggesting that it approach the Office of Fair Trading.
Cannot the committee refer the case to the OFT?
The OFT will follow up matters that are referred to it by anybody—matters need not be referred by a parliamentary committee or an elected representative. A complaint will be just as valid if it is referred by the NFU in Scotland.
The petition has been referred to the committee and I feel strongly that we should take some action on it, even if that action is only to refer the petition to another body, rather than send it back to the NFU.
The committee should not act as a post box, as we would, in effect, if we passed on the petition without examining it. If the committee is going to refer petitions to other bodies, we should examine them to see whether there is a prima facie case—as in this instance—for the OFT to investigate. We have not done that and, given our timetable, we might not be in a position to do it. How high up our agenda should this be? The committee must decide, but unless we are prepared to take the time to examine the petition in that way, we should not refer it to the OFT.
I agree with Alasdair. If the NFU can refer the complaint to the OFT, it should do so. If, after that, the NFU feels that we should revisit the issue, the complaint can be taken back to the committee.
I am inclined to go along with that. Mike Rumbles pointed out that the petition was sent to the committee. I can appreciate the advantages of presenting a number of different issues at the same time to the Rural Affairs Committee, but it is clear that some of the issues are not directly relevant to the committee; it is appropriate that we say that when we feel that it is the case. In this case, the union would be well advised to approach the OFT directly, if the petition is—as it appears to be—based on concerns about competition policy. The union can come back to the committee if it is not satisfied with the response from that office.
That is the right way ahead. The NFU accepts that the manufacturers' pricing policy might have much to do with the problem, but it is also looking for a review of the licensing and supply of veterinary products. It would be fair to say to the NFU in Scotland that it should bring the issue back to the committee for wider review if OFT action does not alleviate their concerns or address all of them.
The course that we will take is to write to the NFU suggesting that it take the matter up with the OFT. We will invite the union to keep us informed of progress and to come back to the committee if there is something that we can do to contribute to the action that it wants to take.
I want to get my oar in, although road haulage tax is a reserved matter. There are elements of the issue in which the committee can help the road haulage industry that do not relate specifically to the tax.
Road haulage tax is a reserved matter and, as I pointed out, the Transport and the Environment Committee is the primary committee on this petition. To an extent, that gives us a freer hand to comment to that committee as we see fit.
The Enterprise and Lifelong Learning Committee is inquiring into petrol pricing. It is waiting for the OFT to make a report, after which it will look at the matter again. There is not much point in our taking up this issue when we already have reporters at that inquiry.
We are involved, as we have reporters attending those meetings to discuss the issue, but today we are asked to comment to the Transport and the Environment Committee. If our comments revolve around the areas that Mike Rumbles described, we should include them in what we say to the Transport and the Environment Committee.
This is an issue of the highest priority and it may be in order for this committee to give a commitment to build it into our broader investigations into employment patterns and agriculture. That would be one way of addressing the issues in the petition.
There is a slight problem with the comments having to be in by 3 March, because that precludes the results of the oil price investigation by the Enterprise and Lifelong Learning Committee or any investigation that we may wish to have into agriculture and rural employment patterns. I do not know whether we could advise the Transport and the Environment Committee to take the results of those inquiries into consideration.
What comments do committee members feel should be passed on to the Transport and the Environment Committee?
One of the bullet points in the petition states that we should
It is discussing petrol stations as well.
It is important that we discuss that point now; if we think that the issue is worth pursuing, it is worth noting to the other committee that we feel that way. I feel strongly that our rural petrol stations should be supported, because so many of them have been closed down over the past three years. It is up to us to take a view on this petition, and not just pass it on to another committee.
I hear what you are saying. The Enterprise and Lifelong Learning Committee has looked at this issue, which is part of its inquiry. I am not saying that it should not be examined; I am saying that there is no point in us duplicating the work that the Enterprise and Lifelong Learning Committee is doing, especially as we have an input into that work.
I am not suggesting that we duplicate anything. Rather than close the discussion now, this committee should take a view about the importance of rural petrol stations and pass it on as a recommendation to the Transport and the Environment Committee. Would not that be helpful?
Are you just talking about a form of words?
I suspect that this committee would be unanimous in recognising the importance of this matter and would hope that the Enterprise and Lifelong Learning Committee inquiry comes up with positive recommendations on the future of rural petrol stations and on the wider issues. In making our comments to the Transport and the Environment Committee, we should welcome the fact that the NFU has recognised the importance of the issue and has also accepted that the question of rural transport costs must be tackled in combination with the wider issues of transport policy. The petition recognises issues relating to urban transport, such as congestion. We should urge the Transport and the Environment Committee to pay close heed to the recommendations that come out of the inquiry.
I would be happy if Lewis Macdonald's points were taken on board.
There are already many initiatives that address the problems that Mike Rumbles has highlighted. Funds are dispersed to rural filling stations to ensure that they remain viable and the local authorities have reduced the rates on some of those properties.
It is obvious that, because of the distances involved in rural areas, the higher price of petrol and derv is significant.
The first group of points in the petition calls on the Parliament to review vehicle excise duties for heavy goods vehicles in comparison to other European Union states; to establish new rates comparable to the EU norm; to negotiate with other states to achieve harmonisation of fuel taxes; and to set taxes with reference to the effects of tax levels on the international competitiveness of EU businesses such as agriculture.
It would be useful if we were to make a general statement that recognised the significance of the matters raised.
It would also be useful to say that the committee supports the objectives of the measures.
We support the general objectives, but we might disagree over the details. Do we want to have harmonised fuel taxes across the EU? The logical conclusion would be the harmonising of all taxes across the EU. We would find ourselves in a minefield if we agreed to that measure.
That is right. Most of the matters in the first group are either reserved or subject to negotiation with other member states. The two points that follow that group are more within our province.
Would it be appropriate for us to express our support in principle for the idea of a level playing field in vehicle and fuel taxation?
Would that form of words meet with the agreement of the committee?
What are we being asked to do? Are we being asked to refer the matter to the Transport and the Environment Committee?
Yes.
I would like to put it more strongly. We should tell the Transport and the Environment Committee that we support the objectives of those elements of the NFU's petition. We should make a positive statement on what are good measures that the Rural Affairs Committee should be supporting.
I imagine that the NFU's purpose is to consult us on those matters that are within this committee's remit—issues that relate to the rural development regulations and public transport in rural communities. My view is that tax rates are not a matter for this committee. We all have views on tax, but it is the wider issues in the petition that are of a direct interest to us.
We have talked about a level playing field for taxation; one of the things that the Enterprise and Lifelong Learning Committee was examining was the situation in European countries that have permission to levy different tax rates. We seem to want the same tax rate, although we do not have the information that would tell us whether we could do something else.
I would not be the first to suggest that there should be different rates of tax in different areas of the United Kingdom. However, there may be a good case for leaving that option open.
Yes, it should be left open. If we say that we want a level playing field without having the research, we would be taking a line that we might want to change at some point.
We have to say that we support the general thrust of the petitions. However, PE65 asks us to
The point that the NFU is making is that the tax differential between the UK and Europe is outrageous. The vehicle excise duty on a 40-tonne vehicle is £5,750 in the UK, whereas in France it is £486. We are not talking about differential averages; this is a major issue. It would be remiss of the Rural Affairs Committee to make a sweeping statement saying that it is not in favour of the harmonisation of EU tax levels. That is not what the NFU is asking for.
That is exactly the point that Alasdair made.
Why not remove that point—the bone of contention—and support everything else?
There is an interesting debate to be had about road taxes—I am sure that every member has an opinion on the matter. However, it is not an agenda item for the Rural Affairs Committee—much as I would like to discuss all the good ideas that are floating around on the subject. The committee should be conveying to the Transport and the Environment Committee the fact that we recognise the significant impact of road and fuel taxation on agriculture and employment in rural areas. We should recommend that it pay close attention to the conclusions of the inquiry of the Enterprise and Lifelong Learning Committee into petrol pricing, which will be based on considerable research and evidence.
That is perhaps the point about urban transport environmental issues on which the Rural Affairs Committee should focus. We must recognise that transport policies designed to tackle urban problems can have a detrimental effect on rural areas. We should ask the Transport and the Environment Committee to consider the effects of any transport policies on rural areas, and not only on things such as congestion and pollution in urban areas.
I would like to deal in particular with the first four points that we have been discussing: two we could probably agree on without any problems; and two throw up issues that go significantly beyond the remit of this committee. I think that there will be little trouble with the first and the fourth points. In the first point, the NFU asks
I do not have a specific problem with it, but I wonder whether that would be the right approach for the committee. I was more taken with your initial suggestion that we give a general response to the four points together.
It depends how we interpret the word "review". We have to remember that excise duty is as it is because someone put up sound reasons for that. However, other people may want to reconsider those reasons.
I go along with Lewis's suggestion. With the best will in the world, even though we can acknowledge the problem and say that it should be taken into account, the Scottish Parliament cannot review vehicle excise duties—much as we might want to—as that is not within our remit.
It is patently obvious that transport costs impact disproportionately severely on rural communities, as the NFU's briefing note suggests. We would all agree with that. The first point that it raises is the one thing that we should acknowledge more than any other. I accept that we cannot review excise duties for heavy goods vehicles in the United Kingdom, as that is not within our remit. However, this is so important an issue for our road haulage industry, and one that impacts so much on all our rural communities, that it is important that the Rural Affairs Committee takes this opportunity to register and comment on the fact that differential rates of vehicle excise duties in the UK and in our neighbouring competitors in Europe are outrageously wrong. Although we recognise that we do not have the power to do anything about it, we should say what we feel. We should speak up.
Shall we take the line that this committee recognises the tremendous disadvantage that higher rates of vehicle excise duty and fuel taxation place on rural parts of Scotland?
Elaine has touched on the third point already. The NFU asks the Scottish Parliament to
That is outwith our remit—it concerns urban transport.
I think that we would agree that rural areas need different solutions from urban areas. I do not think that we should express a view on what the solutions for urban areas might be.
Should we also say that we recognise that the solutions to urban problems are causing problems in rural Scotland?
Any solutions to environmental problems should not be so broad as to take no account of the different circumstances of rural areas.
In tackling urban transport problems, we tend to focus on environmental concerns such as congestion, but those problems do not impact on rural communities in the same way. The point that is being made is that transport policy should be concerned not only with environmental issues, but with infrastructure and economic sustainability. This committee should support that view.
Does anybody have a form of words that would cover the point? Lewis, you got very close to the form of words that we need.
We need to say that we recognise the point that has been made by the union: that transport policy should not focus exclusively on the issues that concern urban areas, but should take into account the particular issues that concern rural areas across the whole range of transport policy.
Does that form of words meet with everyone's agreement?
Is the union not rather saying that, when it comes to tackling environmental problems in urban areas, the solutions should take account of the effect that they will have on rural areas? The suggestion is that they have not done so thus far.
What is being asked for, and what we can agree to, is that transport policies should be sensitive to rural areas.
Absolutely.
The final bullet point on the committee paper for this item takes us back to the issue that Mike Rumbles raised about rural petrol stations. Does the committee have a consensual view on that?
I do not think that we have any difficulty in supporting that point.
There is unanimous support for that point.
As it is worded on the paper?
Yes.
Despite the measures to protect rural petrol stations that John Munro mentioned, many have closed. We must therefore deal sensitively with the matter.
Do we accept the wording as it appears on the paper?
The next petition, PE68, concerns the climate change levy. Again, we will pass our comments to the Transport and the Environment Committee. The petition calls on the Scottish Parliament not to apply the proposed climate change levy to the Scottish agriculture sector.
Again, this is a reserved matter. The climate change levy was introduced by the UK Parliament. I cannot see why there is a separate argument for the Scottish agricultural sector. I see it as an issue that affects the entire agricultural sector. I know that the weather in parts of Scotland may be colder than that in parts of England, but there is not a tremendous difference. The main issues—questions such as whether agriculture will benefit from the national insurance rewards—are issues for the entire sector.
The Scottish NFU has made a representation to the Scottish Parliament. As such, it is the situation in Scotland that is being addressed. As Elaine Murray says, the effects of the levy would be exactly the same throughout the United Kingdom, but we must consider the petition as it has been presented to us.
Except that the Scottish Parliament will not be responsible for applying the proposed climate change levy.
That is right. The Scottish Parliament will respond to the climate change levy through the Transport and the Environment Committee rather than through the Rural Affairs Committee.
We are being asked to send our comments on the petition to the Transport and the Environment Committee. As the NFU has made this representation in the form of a petition, this is the ideal opportunity for us to pass our comments to the Transport and the Environment Committee.
This could have the same effect as the fuel price escalator. It may increase costs but not produce the expected results. I recognise that this matter is outwith our responsibility.
It is not clear what the final form of any climate change levy will be. There has been extensive consultation. People do not necessarily associate the agricultural sector with high use of energy, but there are parts of the sector that use high levels of energy. We need to flag up to other committees that are more involved in this issue that a problem could arise, depending on the form of the tax.
The point made by Mike Rumbles is worth noting. There are precedents for the climate change levy in other areas of taxation. It may be the case that we have not learned from the mistakes of the past and will fall into the same position as before. There may be longer-term problems, for example in relation to competition, which has been a difficulty in other areas.
The point that you and Mike Rumbles have made may be true. There is an intention to learn from experience and to consider carefully the form that the tax should take. As Alasdair Morgan said, consultation is taking place.
The petition calls on the Scottish Parliament not to apply the proposed climate change levy to the Scottish agricultural sector. The NFU has made a clear statement and seeks our support for it. Do we take the view that the climate change levy should not be applied to the Scottish agriculture sector, or do we take the view that, if it is to be applied to that sector, it should be done in a way that does not disadvantage the industry?
Any comment that we make should not apply only to the agriculture sector. Rural industries tend to be more fragile than urban industries. If we address agriculture alone, we will paste ourselves into a corner. We should suggest that the Transport and the Environment Committee also consider the problems of rural industries.
I understand that one of the principles of the climate change levy is that it should be revenue neutral for business as a whole. That is fair enough, but we should make representations that that principle should apply to rural business as a whole. There is a distinct possibility that a levy that is raised in rural Scotland will end up in urban Scotland. If the rebate is done through the national insurance system, high-density employee businesses will benefit more than low-density employee businesses, so rural businesses will tend to be at a disadvantage.
Do I get the impression that the committee is not opposed in principle to a climate change levy?
I do not think that we should be discussing whether we are for or against the proposed climate change levy.
The committee is obviously concerned that the climate change levy might disadvantage people who live and work in rural Scotland. I am trying to establish whether the committee would like to comment on that particular aspect of the levy, or whether we simply want to say that the levy itself is not a good thing.
I take Alasdair Morgan's point. It is not up to us to comment on the principle of the climate change levy, and, as other members have said, we are simply flagging up areas of concern about how the implementation of the proposed tax could have an adverse effect on rural industries. Alex Fergusson made a valid point about the density of employees and population and the propensity for revenue-neutral taxes to hit rural industries much harder. We should make those concerns known to the Transport and the Environment Committee.
One of the problems is that we have no evidence one way or the other that the levy will have such an effect.
Except for the precedent in other areas.
The point is that we have no evidence to show that the levy might result in money being transferred from rural to urban areas, where there are just as many capital-intensive, energy-intensive, low-employee industries. The problem with the tax is that it moves cash from energy-intensive industries to labour-intensive industries such as councils and the civil service. However, those industries also exist in rural areas. It might be an idea to say that, if evidence showed that some cash might be transferred out of the rural economy because of the levy, that would be a cause of great concern. However, we certainly do not have that evidence.
But we are flagging up our concerns that that might be the case.
Convener, can we take the same position with this petition that we took with the previous petition? We could alert the Transport and the Environment Committee to the agricultural community's concerns that there might be a differential, and say that, when the taxing policy comes to fruition, it should be sensitive to rural and urban needs.
Are members satisfied with that approach?
We will move on to item 1(e). We have grouped together three petitions—PE61, PE62 and PE67—that relate to the issue of agrimoney, specifically for the arable sector, the beef and sheep sectors and the dairy sector. As all members will have an opinion on agrimoney, would anyone like to kick off the discussion?
I should declare an interest here.
. I have to declare an interest as well.
I have already lodged a motion that supports the principles behind these petitions.
Feel free to speak to your motion.
Quite. I would like the committee to support these three petitions from the NFU. If all members agree, the committee convener could write to the Minister for Rural Affairs, Ross Finnie, asking him to pursue the matter with the UK Government.
I understand that the Scottish Executive supports obtaining agrimoney, and we might be able to add our weight to that support.
I asked a question on this on Thursday, and I was surprised by how non-negative Ross Finnie's answer was, in contrast to the usual answers that we get from ministers when we ask for anything. They are all programmed to say no, and I do not say that in a party-political sense.
Are there any other comments?
I agree with everyone so far. We should support this. I agree that the Executive is sympathetic, and we should give it every encouragement to pursue that compensation, which, as Alasdair said, is time limited, because there is not a lot of time left.
Is it the committee's view that I write to Ross Finnie expressing our support for petitions PE61, PE62 and PE67?
We are only commenting on petitions 61 and 62, because the European Committee is the lead committee, according to my briefing paper.
We can write to the minister if we like.
Alex, you could also sign the motion.
I will talk to you about that later, Mike.
Before we leave this item, I am not entirely sure why the dairy sector was selected for different treatment.
If you do not know, I suspect that we will not know.
If there is no further comment I will proceed as proposed.
I believe that there is already a commitment to increase the level of agri-environment funding by 50 per cent over a two or three-year period, but on top of that, there is room in the rural development regulations, which we looked at a few months ago, to increase that support. Indeed, in the papers that we received for this meeting, it was pointed out that consultation is under way on modulation as a means of increasing the support. We should pay attention to that consultation in coming to a conclusion.
The modulation proposals could be used for that purpose. They are also targeted on rural development funds.
That is right, but it is my understanding that the agri-environment scheme comes under the wider rural development regulations, and is one of the mechanisms for promoting rural development.
But my concern is that we have to be careful not to assume that agri-environment schemes will be the main beneficiaries of any scheme for modulation.
Indeed, it is one of the three beneficiaries, but clearly there would be an impact of modulation.
I am aware that we have not discussed modulation. It is important that we look at the outcome of the consultation, because you are right that it may or may not impact to a great extent on agri-environment payments. The petitioners are right that resources are inadequate. Without doubt, Scotland has received less funding than have other countries, including other countries in the UK. That must change. It would be sensible to incorporate the outcome of the consultation in any discussion of modulation.
Are there any other comments?
This may be more of a procedural point, but I note that the Transport and the Environment Committee has been asked to comment to us, but it has not considered the petition. How can its views be encompassed in our discussion of the petition if it has not made them known to us?
It has not yet appeared on that committee's agenda. We should suggest that it consider the matter.
Can we continue consideration pending that committee's discussion and pending the outcome of the consultation?
We have covered several urgent items today, but this item is worthy of a little extra time.
What is the time scale on the consultation proposals?
The consultation is just about finished.
We hope to be able to consider the responses to the consultation exercise.
That is rather a narrow question. We are considering welfare standards that were put in place by the UK alone. I wonder why the industry has not looked to Europe for compensation for that. It seems to be concentrating on BSE-related costs without considering the costs attached to the welfare standards. Is the industry missing something by doing that?
I understand from discussions with the minister and from the correspondence with Mr Fischler that there is not much chance of the animal welfare element falling within EU rules. I know that Ross Finnie is pursuing the other matter of the so-called BSE tax, which is the one that is likely to be compatible with EU rules. That is the thrust of the civil servants' work at the moment. Franz Fischler has made it quite clear that those are the rules that we ourselves imposed on our industry when the Westminster Government passed that legislation.
The committee has discussed the pig industry on a number of occasions, and that has led to this correspondence. The £5.26 payment is at the heart of the industry's case, and I am inclined to support its appeal. As Mike Rumbles says, there are two separate issues: one, the BSE tax and payment of £5.26 per pig and, two, the welfare standards.
Herr Fischler has made the situation clear in his letter. He says:
In essence, we are saying that we should deal with this in the same way that we addressed the agrimonetary compensation issue. I should write to Ross Finnie in support of this petition.
You should also ask when the department will be ready to submit its proposals to the EU.
We should ask for a general report about the situation. It is clear that events have moved on in recent weeks and that the pressure that has been applied has paid off. The Prime Minister is now involved. Discussions are taking place between Government and the industry. It is imperative that this committee keeps a close watch on what is happening, continues to support the pig industry and lets the industry know that it is doing that.
I have no difficulty with the principle that has been discussed, but we must be careful not to be too prescriptive about an aid scheme. We should say that the £5.26 BSE payment that is proposed in this petition is only one of the measures that should be sought—Richard Lochhead made that point earlier. We should not say to the minister that that is the only avenue that is worth pursuing. I am confident that he will be pursuing other avenues.
It is fair to say that there is support in principle from the minister on this issue. We will offer him our support, and ask for a progress report and a time frame for the implementation of measures.
The next petition, PE66, relates to the over-30-months scheme. It calls on the Scottish Parliament to support the removal of the limit on the payable weight of cattle that are destroyed in the over-30-months scheme. The scheme forms part of the package of measures to combat BSE. There is a limit of 560 kg on the payable weight of cattle that are slaughtered and the petitioners submit that the weight limit is discriminatory and prevents consigners of cattle receiving compensation to which they should be entitled.
I am not desperately inclined to support this petition. There is only a small pot, so there may be more deserving cases elsewhere in the agriculture sector, which require support more. There is a suggestion that it would be difficult to gain approval for this measure in either Brussels or Whitehall and that it might encourage people to fatten up stock prior to slaughter to get a better price.
The work that would be required to renegotiate the limit would divert resources from such matters as the negotiations for the pig industry. We have to set priorities. The pig industry is in a dangerous situation; we should divert efforts to that rather than start to negotiate about something else.
My party had difficulties with this petition.
We should remember that the over-30-months scheme will become redundant; we do not know when, but we hope that it will be sooner rather than later. As Rhoda Grant said, the pig industry is one important issue and agrimonetary compensation is another.
Our guidance is that the initiative that is suggested in the petition would cost £2.2 million. If we had £2.2 million to spend on one of the issues that we have discussed today, we would not spend it on this one.
I agree. We have to make a hard decision in this case.
I agree. We should concentrate on the pig industry, as Rhoda said. If no other matters had to be dealt with, I would say that we should do something about this petition, but we cannot agree to do something about all the petitions and this one is the least deserving of attention.
As we know, the projected cost of the suggested measure would be £2.2 million. I would like to divert £2.2 million to the pig industry, but we are unable to do that. It is important to emphasise that, in deciding to do no more with the petition, we are not denying the pig industry that money. I accept that other priorities need to be addressed, but I am sympathetic to this petition. In fact, I am sympathetic to all the petitions—I suppose that I should register that as an interest.
You are supposed to say that at the beginning.
I am not a working farmer any more, so I do not have to.
Is it the view of the committee that we not support the premise behind petition PE66?