21 January 2000

Scots hit out at bank rate policy

BANK of England policies to control inflation, based on booming industries or areas of the country, are making things even more difficult for farmers.

During a visit to Edinburgh on Wednesday, Scottish NFU president Jim Walker told Eddie George, governor of the Bank of England, and his monetary policy committee that their policies had to take account of industries other than the finance and service sectors.

Raising interest rates, with the concomitant increase in the strength of sterling, undermined UK agriculture, Mr Walker pointed out. And he urged the bank to seek a more innovative approach to monetary policy rather than the single, blunt instrument of interest rate movements.

Mr Walker made the same point to Chancellor of the Exchequer Gordon Brown when they met privately last week.

Before that meeting, Mr Walker said he was determined to leave Mr Brown in no doubt that, while Scotlands farmers wanted to reduce their dependence on public support and secure more of their income from the market, short-term help was essential.

All the farming unions have recently highlighted the EU currency-linked compensation to which UK farmers are entitled. The money, however, is not automatic – the government must apply for it in Brussels.