Groundwater Maintenance Charge
We now come to members' business. I ask members who are not participating to leave the chamber as quickly and as quietly as possible.
Today's debate is on motion S1M-1171, in the name of Alex Fergusson, on the waiver of the groundwater maintenance charge. The debate will be concluded without any question being put after approximately 30 minutes.
Motion debated,
That the Parliament notes that the annual groundwater maintenance charge has been waived for sheep farmers in England and Wales and believes that the Scottish Environment Protection Agency should waive its charge in order to eliminate the competitive disadvantage which is currently borne by Scotland's farmers.
In registering my interest, I thank the Parliamentary Bureau for picking this vexed question for debate today. Hoping that his head is not getting too big this afternoon, I too welcome the new Deputy Minister for Sport and Culture to his role. I wish him every success therein.
During the two summers that have passed since the first election to this Parliament, I have held a series of tented surgeries at some of the agricultural shows in the south-west of Scotland, where I live. This year, there was virtually only one subject that people wished to draw to my attention: the annual Scottish Environment Protection Agency levy known as the groundwater maintenance charge. When I say that fury was the principal emotion displayed by many constituents who came to see me about the issue, that is to understate the case.
What—nothing about the euro or low commodity prices?
I am not sure what I have done to deserve the opprobrium of the minister, but doubtless all will be revealed in due course.
As he embraces his new portfolio, the minister will witness that fury for himself and see that it has, if anything, grown stronger. That fury is understandable when the current plight of agriculture is considered alongside the fact that the Scottish Parliament was expected to make a difference. However much the Parliament might like to make that difference, the Executive has delivered a slap in the face to Scottish farmers which leaves in the mouth a bitter taste of arrogance and hypocrisy.
When the charge was initially introduced it was accepted, if grudgingly, as another piece of red tape dressed up as a way of reassuring the general public of the high standards of agricultural production that prevail in this country. Set at £123 per annum, even with the current economic fragility of Scottish agriculture, that amount of money was not likely to break the bank. Furthermore, the charge was initiated in response to an EU directive to protect groundwater. However, I would argue strongly that because it is an EU directive, and therefore an obligation, there should be an appropriate allocation of public spending to cover the cost.
Neither the reason for the charge nor the amount of it was greatly questioned by those affected. All that changed following the aid package announced after the Downing Street farming summit on 31 March 2000, when the levy in England and Wales was waived for the following four years. Scottish producers waited expectantly for a similar announcement from the Scottish Executive, because it is a devolved issue. When no such announcement was forthcoming, questions were asked in the Parliament, all of which received a similar answer, that the Scottish Executive has no plans to waive the groundwater maintenance charge and that it is SEPA's policy to move towards full recovery of the costs of the regulation, in line with the polluter pays principle.
In this case that is blatant nonsense. The original charge of £150 per producer covered the cost of establishing SEPA's database. SEPA carries out only a minimal number of inspections each year, and however much the Executive may talk of a review of authorisations, as it doubtless will, any such review is not due for another four years. I would love to hear the minister's justification for charging for inspections that may take place some four years hence.
So all that has happened is that Scottish sheep producers are being charged for purely notional costs. That they have to pay them when the charges have been dropped in England and Wales flies in the face of the Minister for Rural Development's support for initiatives aimed at minimising farmers' costs. Far worse, it flies in the face of the pronouncements that we have had from the Executive that it is fighting to give our farmers a level playing field in Europe so that they can compete on equal terms. Never again can ministers say that; they have gone out of their way to create an uneven playing field in the United Kingdom.
As I said earlier, neither the amount of the charge nor the reason for it is questioned. The blatant unfairness is being questioned—to such an extent that most farmers I know are refusing to pay what it is now, by definition, an iniquitous charge. It would cost the Scottish Executive only £300,000 a year to waive the charge—that is 25 per cent less than the cost of moving the Parliament to Glasgow for three weeks. That is a minute amount to pay for justice, a pittance to pay for equality.
Congratulations to Alex Fergusson on securing the debate and congratulations to the Deputy Minister for Sport and Culture on his new post.
I have a lot of sympathy for Alex Fergusson's motion. We are not talking about a lot of money, but the charge has the effect of kicking farmers when they are down. Farmers do not have troubles to seek just now. They face poor prices at the markets; the cost of fuel, which is crippling the industry financially, is another disadvantage they have compared to farmers in other countries and the recent poor harvests with terrible weather meant high drying costs.
To put the £123 into perspective, we have to remember that the average income of farmers is only £4,600. It is projected that that will fall by another 22 per cent to £3,600. They do not have a huge income in the first place from which to pay the charges. I therefore have a lot of sympathy with the motion.
The standard reply that we have all had from the former Minister for Transport and the Environment is about consultation. I cannot reconcile that with the fact that farmers are saying that they oppose the charge, and the fact that the National Farmers Union of Scotland has written to all MSPs to say that it is campaigning against the charge. I would like to hear the minister's comments on the nature of the consultation. Who was consulted, and what were their views? Did some farmers contact the Executive to say that they were in favour of the charge? If Mr Wilson is listening, I would like to know where Mr Finnie, the Minister for Rural Development, stands on all this. Can Mr Wilson confirm whether Mr Finnie has been in touch with the environment department about the charge? If so, what were his views? That is important, because we are always hearing about joined-up government from this Executive.
I tend to think that SEPA has been denied cash from the Government. Some figures that I received from SEPA today show that its grant from the Government last year was £18.6 million, but that the figure for 2000-01 fell to £17.3 million. It seems that the Executive is denying SEPA the cash, and that SEPA is then turning to the farmers to fill the gap. That is unacceptable—which brings me to the spending review.
The Executive has just been given an extra £5 billion over three years. It could surely have found a couple of hundred thousand pounds from the spending review to pass to SEPA to cover the cost of the groundwater charge, which does not sound like a lot of money to me. I appeal to the minister to revisit the issue, to consider the various options and to go back and speak to the industry. We could delay the charge for a couple of years and hope that there is an upturn in the industry. We could consider offsetting the charge by removing other regulations and charges. We should also consider the farmers' income. I ask the minister for a positive response. Please do not simply reiterate the standard reply that we have all heard from the environment minister.
If the debate had occurred when it was originally scheduled to occur—last week—I would have been replying to it. I am therefore in the peculiar position of having seen the minister's brief, and even a draft of his speech. It is an excellent speech—and I am sure that it will be delivered very well indeed.
On balance, I think that the position of the Executive is dead right, because the package of support that was made available to farmers in Scotland was a whole lot better than the package that was made available in England. If the Opposition parties were to try to pick the package apart in order to make good the groundwater charges, farmers would be worse off over the piece.
However, when I saw the papers for this debate, I fired off one question back to the officials. I said that I fully understood the need for a charge, because of the costs involved in the initial survey of the area where the sheep-dip, or whatever, was going to be discharged on the land. I knew that that survey was important, it required safeguards and it incurred costs. However, what I did not understand was the need for an annual repeat charge of £123 for simply shuffling paper around. I put that question into the system but I never got a reply. I hope that my friend, the new minister, has a reply because I would like to know the answer.
I would like to congratulate Alex Fergusson on securing the debate. I would also like to welcome the two new ministers—Allan Wilson and Tavish Scott. It is a pleasure to follow my constituent, John Home Robertson—but I will not agree with his sentiments.
In the Scottish Borders, these fees have been described to me as a great irritation, but not for all farmers. Of the 1,200 sheep farmers in the Scottish Borders, some 250 actually pay this charge. I agree with John Home Robertson in that no one can find a justification for the annual charge. No one quite knows what it is for, and it is taking between £30,000 and £40,000 out of the Borders agricultural economy—money that we can ill afford to lose in the sheep sector, let alone the arable sector. Some arable farmers are paying the fee, too.
The four-year scheme in England is not permanent and I do not understand why it could not have been replicated in Scotland. It is important to harmonise the two schemes, particularly in the Scottish Borders, which abuts England. I have constituents who own land on both sides of the border; they pay in Scotland, but not in England.
Is John Home Robertson one of those constituents?
I cannot answer that question. Mrs Ewing must ask the member about that.
The total sum of money involved is £300,000 to £350,000, which is peanuts in a budget of some £15 billion. It is time that the Executive got rid of the irritation, because it is causing friction where friction need not exist. It is a small sum of money that affects a few farmers. The Executive could get rid of the charge. The fact that the package that Scottish farmers got was better than that which farmers received in England and Wales is no reason why Scottish farmers should have to pay the charge.
The issue is a particular concern in the Scottish Borders because we abut England. Many of my farming constituents meet their English counterparts at local marts and it is a subject of continual discussion, as Alex Fergusson discovered in his summer tour of the shows and agricultural events in the south-west. I had a similar experience in the south-east of Scotland, where the issue was raised with equal force. I am sure that other members will have found the same in their areas of Scotland.
I support the motion and I hope that the Executive will come to the chamber—perhaps not today—and announce the end of such fees.
I must declare an interest in the subject as a farmer and a dipper of sheep. I am also one of the farmers in receipt of the iniquitous bill, which I am holding up in evidence.
As has already been outlined, 2,128 farmers in Scotland are being asked to pay a bill of £123 each, while their colleagues in England, Wales and—significantly—Northern Ireland, are not. That adds extra cost for Scottish farmers, which is bad enough, but the fact is that many of the farmers being asked to pay the charge already face higher costs due to climatic disadvantages. They also face higher costs because 85 per cent of Scotland is classified as a less favoured area; almost 100 per cent of those facing the bill will be farming such land, which suffers from "permanent natural handicaps"—to use the former Scottish Office definition of less favoured areas. Not only is the charge being imposed in Scotland and not in England, but it is being imposed on those farming in the toughest farming conditions in Britain.
We hear much from the Executive about tough choices. However, this choice is tough only on the most disadvantaged part of our rural economy. None the less, the Executive has made that choice and is implementing it through SEPA.
When the introduction of the charge was first mooted in 1996 or 1997, the proposed level of charging for the whole of the UK was about £700 per farmer. At that point there was an outcry and what we have today is a watered-down charging system—2,128 asked to pay in Scotland; none asked to pay in England, Wales and Northern Ireland. SEPA tells me that, of the 2,128 farmers affected in Scotland, 1,702 have paid up. Those who do not pay will, in due course, be subject to debt recovery process and ultimately will have their licences withdrawn.
However, it is more than money that is at stake. As Alex Fergusson has said, there is a point of principle of which I would ask the minister to take note. In England and Wales, the Department of the Environment, Transport and the Regions is paying for the issuing of licences to about 12,000 farmers, who receive them free of charge. In Northern Ireland and the Republic of Ireland, charges are not being levied on farmers.
In fact, as far as I can find out, the charge is not being levied anywhere else in Europe. This is another manifestation of the Executive's desire to penalise and disadvantage rural areas and communities. Take note, minister. It is a conscious decision knowingly entered into by the Scottish Executive, and no other spin can be put upon it. I cannot accept that the Executive is serious about its declared aim to minimise farmers' regulatory costs if it continues to impose the charge, especially when it is being imposed only in Scotland. It is yet another attack on rural areas and the rural way of life, and must be recognised as such.
I ask the Executive to change its mind on the tax—that is what it is; another stealth tax, this time levied on sheep farmers—I ask the Executive to repay the charges that have already been paid, and give us parity with our competitors in England, Wales, Ireland and Europe. I ask the Executive in future not to impose such charges, and in the interest of making life easier for it and for farmers, I ask it to introduce a charging policy that is consistent with the rest of the UK. As far as I am aware, in agriculture at any rate, this is the only charge that is levied by Government on farmers that is different in different parts of the UK. I urge members to support the motion.
I will be brief, because I want to listen to Allan Wilson. I congratulate him on his new position and I congratulate Alex Fergusson on bringing this issue before Parliament—it is important. I will not rehearse the arguments that have been propounded, nor will I rehearse the figures, because they are known. I suspect that we all received letters from our local branches of the National Farmers Union of Scotland and from individual farmers. If I have one criticism for Alex Fergusson, it is that groundwater charges was not the only matter that was raised with me when I did a tour of the north of Scotland during the summer. There are many other issues—as Richard Lochhead mentioned—such as fuel, that affect our farmers. None the less, it is an issue.
When Sarah Boyack responded to me—we all got the standard letter—at least it was done within six weeks, which beats some of the other ministers in the Executive. Having read the representations and replies, I wish to make some brief points. Sarah Boyack's letter says that the Scottish Executive must take a separate decision. What is it that makes the Scottish Executive feel that the polluter pays issue is more important in Scotland than it is in England and Wales? If there is to be a separate decision, will the Executive take it and will it follow the example that has been set elsewhere? If so, will the Executive put pressure on SEPA to reconsider its decision? The decision seems to be that there will be no relief, which has been promised in England and Wales, and that the annual fee will not be waived.
There is also a claim in the letter from Sarah Boyack that a special approach has been made available for smaller farmers and crofters—they could share costs by working collectively. That is an interesting idea—almost as interesting as hearing Brian Monteith quoting Trotsky. I did not think that the Executive would start talking about rural collectivism. I wonder how the concept of asking small farmers and crofters to work together will be implemented, given the communication problems that we have in our rural areas.
I hope that there will be a constructive response from the new Deputy Minister for Sport and Culture, because this issue, although it is not a major issue in terms of funding, is seen by our rural communities as another wound to an already severely injured industry. I hope that the Executive will take a constructive approach to Alex Fergusson's motion and to those of us who support it.
I congratulate Alex Fergusson on his motion and on his carefully constructed and thoughtful speech, to which I will return in a minute. Members can imagine, given the area that I represent, that I know about the problem. Lamb and sheep prices are somewhat better this year, but the situation is pretty touch-and-go for many crofters in Caithness, Sutherland and Easter Ross. What seems like a small sum in a great city such as Edinburgh can make all the difference to them.
I, too, hope that the minister will be as constructive as he can be, but I realise that these are early days. It has been said almost parrot fashion today, but I say from my heart that I give hearty congratulations to Allan Wilson and Tavish Scott.
A European Union directive is involved, but, as Euan Robson said rightly, the sum that is needed is small—less than the cost of moving Parliament to Glasgow. The objective can be achieved easily out of the £15 billion budget.
John Scott mentioned the Executive's desire to penalise rural areas. I say to him that we do things rather differently from London in this Parliament. Alex Fergusson exemplified that fact nicely with the charming and rather tempting manner in which he argued his case.
Settle down.
I do not dish out praise often, Mr Fergusson.
I do not think that anyone who is in touch with the farming industry can accuse the Executive of not taking rural areas seriously. I know that Tory members have genuine, albeit grudging, respect for Ross Finnie and the good work that was done by Mr John Home Robertson during his tenure. I am sure that Rhona Brankin will bring a new fragrance to the farmyard, which will invigorate us all.
Mr Ross Finnie and the rest of the Executive have shown no hesitation in rolling up their sleeves and weighing into farming issues. We all know that Mr Finnie and his team have had the bottle to go off to Europe and take the Eurocrats on at their own game. He is a fine bonnie fechter, and everyone in the farming world knows it. From big farmers to wee crofters, I have heard time and again that he is a good man. Good luck to him.
I thank all members for their good wishes. I will take matters head on. It will come as no surprise to members, and certainly not to Mr Fergusson or his colleagues, that the Executive opposes Mr Fergusson's motion. [Interruption.] My phone is causing that buzzing. That was Tony.
I was surprised by the tone of the debate, although I would like to thank the National Farmers Union of Scotland for giving me a parliamentary briefing on why I should support the motion. The Executive recognises the importance of the issues that were raised by members. Sheep farming is vital to rural communities—I will take the issues that were raised head on.
I say to Richard Lochhead and Euan Robson that the motion is not being opposed on the ground of affordability. The point is not the cost of dropping the charge, which—at about £350,000—members have said is minimal. At issue is the principle that regulated sectors should meet the cost of regulating pollution. Dropping the charge would set a bad precedent for the transfer of such costs to the taxpayer.
We are aware that farming faces difficulties. With respect to Mr Fergusson, it is not simply the charges, but various factors that have contributed to that: the impact of BSE; continuing export difficulties; and the weakness of the euro. The Executive has moved to address those problems with a range of measures. To answer a point that was made by Richard Lochhead, there was extensive consultation with the farming industry about the groundwater regulations and the charging scheme. Following that, great efforts, which were welcomed by the NFUS at the time, were made to minimise the burden of the regime.
In response to the points that were raised by Jamie Stone and John Home Robertson, we have made significant additional funding available to farmers. The main package of £39 million that was announced in March focused on Scottish priorities. It was a good deal for Scotland and it gave Scottish farmers a 20 per cent share of the total UK package.
Hill farming was recognised as a priority, with £20 million going to support those in less favoured areas, which John Scott mentioned. Ross Finnie recently announced a further £5 million for LFAs over the next three years, and sheep farmers also share in the £12 million that is earmarked for agrimonetary compensation for livestock farmers over the three years to 2001. I advise Richard Lochhead that we have consulted Ross Finnie about those matters.
I thank the minister for giving way.
The Scottish Parliament information centre's briefing on groundwater charges states:
"SEPA anticipated receiving some 10,000 applications for Authorisation to discharge listed chemicals . . . To date SEPA has received 2,600 applications."
That is clearly a major shortfall.
I have two questions for the minister. Did SEPA budget for 10,000 applications and, if so, who will make up the financial shortfall? Does not that highlight the fact that the minister will have to go back to the drawing board in any event?
That is a matter for SEPA. I will address those points if the Presiding Officer gives me time, but farmers turned to alternatives to dipping sheep in the short term, following the ban on organophosphates.
The package that was announced in March recognised the impact that certain environmental regulations might have on farmers. The Executive relaxed the timetable for the introduction of the regulation on integrated pollution prevention and control for existing pig and poultry installations. We also announced a new 40 per cent grant scheme to aid the capital expenditure that might be needed to prevent nitrate pollution in nitrate vulnerable zones.
The question for members is whether we should have included in the groundwater regulations a measure that was adopted in England and Wales; that is, whether we should have asked SEPA to drop its annual charges for four years. It is important to put the charge in perspective because we are not talking about a lot of money. The vast majority of farmers pay no more than £123 and many pay much less.
The regulations address real environmental problems.
The charge is level across the board—every farmer pays £123.
The charge of £123 is a minimum charge for 5,000 litres. Many crofters have combined with their fellows to reduce that charge—many pay only about £10 as a consequence of sharing resources.
There are real environmental concerns and problems. Sheep dipping plays a vital role in controlling sheep diseases but, as highly toxic chemicals are involved, it poses risks to health and the environment. Spillages of only a few litres into a river can devastate aquatic life for tens of kilometres downstream.
Those who dispose of dangerous chemicals on to land must obtain authorisation to do so from SEPA. That process ensures that disposal sites meet environmental and public health criteria.
The unique position of Scotland was mentioned. To simplify the authorisation process, applications involve self-assessment that is based on a flow chart. That approach is unique to Scotland and it has removed the need for farmers to commission specialist hydrogeological surveys. Small farmers and crofters—a group that is unique to Scotland—can share authorisation for a single disposal site. I understand that that approach works well in Shetland and the Western Isles.
The charging scheme is not unique. It is the Executive's policy that SHEEPA should—[Laughter.] SHEEPA? I meant to say that the Executive's policy is that SEPA should recover the costs of regulating polluting activity from those who are regulated. That policy applies to all sectors and to depart from it would shift that burden on to the taxpayer.
I am grateful to the minister for giving way.
We all understand and, for my part, I agree with the need for charges to be made and for people to meet the costs of regulating. My point, and that of Euan Robson, was that in some cases there are no costs; there are only repeat charges—annual charges—simply for shuffling paper. I tried to get replies to questions on those charges from officials and I recognise that the minister cannot do so now, but perhaps he could reply to members on that point.
I was going to address that point. I pay tribute, as other members have done, to John Home Robertson's record of work for the Executive during his period in office.
Farmers are not being singled out—other sectors must also pay the cost of environmental regulation and of the treatment and disposal of their waste. The application fee, which has been referred to, covers registration and assessment by SEPA of the suitability of the proposed disposal site.
Contrary to Mr Fergusson's claims, only 350 of more than 2,000 authorisations have required site visits so far. The annual maintenance charge—which is at issue today—covers the on-going costs to SEPA of site monitoring, groundwater sampling and analysis and administration.
The charge is intended to recover staff costs—there are six full-time equivalent specialist staff, plus technical assistants. There are scientific investigations, including groundwater monitoring, at more than 300 sites and maintenance of public registers and records.
Will the minister give way?
If the member does not mind, I will continue.
Those costs were estimated at £315,000 per year, but the scheme is not now expected to recover the full amount this year, which means that there will be a shortfall of costs from the charges that have been levied. SEPA plans to inspect about a quarter of the sites each year over the next four years in order to assess their compliance with authorisation conditions.
The charge also covers the cost to SEPA of surveillance monitoring of groundwater for pollution by dangerous substances—that is expensive. I should tell Richard Lochhead that, as an example, the cost of one analysis of one sample of groundwater for one sheep dip chemical is about £50, excluding the cost of transport and collection. In addition, SEPA maintains public registers of several thousand authorisations and groundwater examinations. That work carries significant and continuing costs.
The groundwater regulations regime is a necessary requirement of European law. It enables SEPA to protect groundwater from pollution by dangerous chemicals, and has been implemented in a way that is sympathetic to the practicalities of farming and with as light a touch as possible. Considerable efforts have been made to set the charges at a low and reasonable level. The vast majority of farmers will pay no more than £123 per year and many will pay less.
Farmers are not being singled out. The Executive's policy is that the costs of regulation of polluting activity should be borne by those who are being regulated.
Will the minister give way?
No—I am concluding.
We believe that this approach is to the long-term benefit of the industries that are involved, the taxpayer and the Scottish environment.
Meeting closed at 17:47.