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10.22 pm

Mr. Michael Jopling (Westmorland and Lonsdale) : My right hon. Friend the Minister referred to the early negotiations in 1983 and 1984, when milk quotas were introduced. I think that I would not be exaggerating if I said that he and I have those negotiations written across our souls in indelible ink. We will never forget those difficult months.

My right hon. Friend referred to some of the inherent weaknesses of milk quotas. One of our anxieties was that quotas should be properly enforced in all countries. Now I read that in Italy, for example, there is a suggestion that massive amounts of levy have not been paid. I hope that my right hon. Friend will tell us that, if that is the case, no effort will be spared in extracting that money from Italy. I remind him of a provision which he and I got put in late in those negotiations--that in the event of a country not paying up, the levy would come from the farmers and not from the Government. That is important, and I hope that he will not forget it when dealing with Italy.

I agree strongly with most of what the hon. Member for South Shields (Dr. Clark) said, but he was a bit unfair not to acknowledge that, when quotas were introduced, we leaned over backwards to ensure that small farmers got back to their pre-quota milk production as quickly as possible. I think that we succeeded. That should be acknowledged.

We must accept the judgment of the European Court--the hon. Member for South Shields responsibly and honestly said that--but I think that it was grotesque in every way. It is well known that most of the people who took the 1977 scheme to be paid to get out of milk production did so as a permanent and not as a temporary step. Few of them could go back into milk production even if they wanted to. No doubt some of them will do, hoping to be able to make a quick buck out of the value of the milk quota, but I shall say more on that later.

I am sure that the Minister remembers, as I do, the difficult months after the introduction of the milk quota. What caused as much resentment as anything else was the fact that some people who had taken the scheme to go out of milk production then came back into it and were given generous quotas. That was widely regarded as unfair at the time, and it will be regarded as even more unfair now if some of those people return after years out of milk production. The European Court has gone off its head in making that judgment.

I welcome the Minister's comments. I want to underline them and suggest that they should be sticking points in the negotiations. This quota is unexpected, so it should be non-transferable ; people should not be able to profit by selling it. The hon. Member for South Shields (Dr. Clark) spoke about that crucial matter.

How will my right hon. Friend deal with a case in which somebody who has been given extra quota then wants to sell his farm? Will he be allowed to sell the quota with the farm, or does it die when he leaves the farm? That is an important matter. It must be a sticking point that people who are given this windfall should not be able to cash it.

I welcome enormously the Minister's statement that the United Kingdom Government are seeking to protect existing quota holders and not to take some of the extra windfall quota from people who, goodness knows, have had enough difficulties in the past few years with milk

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quotas. The Minister will be taking part in difficult negotiations : I understand that almost as well as any other hon. Member. I grieve that the Germans' lack of realism seems to continue unabated despite the death of Mr. Strauss in Bavaria. I hope that a little more realism will creep into the way in which Mr. Kiechle works his case in the Council of Agriculture Ministers, because it has been less than responsible for many years. I understand that the Germans want producers, under the windfall arrangement, to receive all the quota that they would have been granted had they been producing in the base year, and that they also want part-time farmers to benefit. I hope that my right hon. Friend will resist that proposal, because I see no purpose in supporting the Germans' suggestion.

I endorse heavily what my right hon. Friend said about his strong opposition to reducing the co-responsibility levy for small producers as part of the whole package. My right hon. Friend knows that one of his most important battles on behalf of British farmers in Brussels and Luxembourg will be to resist the continuous attempts by the Commission and other countries to slant the common agricultural policy in favour of small farmers. That is an attack on British agriculture because we have a hugely better and more efficient structure than almost any other country in the Community. The proposal to reduce the co-responsibility levy for small producers is just another way in which small farmers--the majority of farmers--in almost all other Community countries benefit at the expense of British agriculture. One should remember that the average size of herd in this country is about 60 cows, whereas in a country such as Portugal, I believe, about 97 per cent. of the milk is produced from herds of three or fewer cows. That fact illustrates the differences in structure. We must not allow the Community to take us in Britain to the cleaners.

I was pleased to hear my right hon. Friend's approach to this most difficult and unforeseen problem, and I wish him luck in the negotiations.

10.30 pm

Mr. Geraint Howells (Ceredigion and Pembroke, North) : I am sure that hon. Members of all parties will agree that since the overnight introduction four years ago of milk quotas, agriculture in Britain has never recovered confidence. It will take a long time to restore that confidence. I say that with respect to the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) and his hon. Friends because I am not in any way condemning him, but simply referring to the milk quotas that were forced on us by the EEC Commission.

It is a great pity that during those four years the industry has lost further confidence in nearly every sector. I have agreed with many of the suggestions made by the Minister in the past four years about what should be done to try to help agriculture, but I hope he will recognise that it is the wish of the majority of farmers in this country that he should stop dismantling many of our agricultural institutions, and that he should not take away the guaranteed price system that has operated so successfully for some of our products. I shall not refer to any of them tonight, but I should like the Minister to be aware of the views of many farmers. After reading what Mr. Derek Andrews, the permanent secretary to the Ministry of

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Agriculture, Fisheries and Food, has said, the fortunes of the farming community do not look very bright. It seems that agriculture will have a bad time in the next 12 months.

I turn now to milk quotas and the EEC ruling. I am sure that many dairy farmers throughout the country were as shocked as I was on hearing the EEC's ruling about the two Dutch farmers. However, that has happened and we must live with it. I agree entirely with the sentiments expressed by the Minister tonight. My hon. Friends support him wholeheartedly and hope that he will be successful in his deliberations in Brussels in the coming months.

I am sure that to their way of thinking the Dutch farmers will feel that they have been fortunate. I wonder whether there are any dairy farmers in Britain who would go to court about an extra milk quota. Could any farmers in Britain do the same as those two Dutch farmers? It would be sad if many dairy farmers in this country would do so. Although this matter has been covered by many hon. Members, I should like to ask some questions. I hold the same view as the Milk Marketing Board, which is in favour of making sure that milk production surrendered will not be surrendered to the non- marketing schemes.

The dairy industry in this country would like answers to three questions. First, many farmers have asked me--I pass this on to the Minister and hope that he can give me an assurance on it--whether the milk quotas will be operating in this country after 1992. Although the right hon. Gentleman said that the butter surplus in the EEC was diminishing, does he foresee a day in the near future when there will be a milk shortage in the EEC?

We have heard about quotas being bought and sold and the hon. Member for South Shields (Dr. Clark) talked about the transnational quota system that will operate after 1992. A few years ago many dairy farmers in Wales sold their quotas to farmers in England, but I was delighted to learn that the trade is now in reverse. Many farmers are worried about the value of the quotas. I agree entirely with the Minister, who has been saying for the last few years that we have to be careful that farmers' milk quotas do not become worthless after 1992.

The final and best question is the one put to me by dairy farmers. Can the Minister give an assurance that British dairy farmers will have the opportunity to compete on equal terms with their counterparts in the rest of the EEC? If he can give that assurance, many dairy farmers will look ahead with confidence. The ruling has my backing and that of my hon. Friends.

10.35 pm

Mr. Paul Marland (Gloucestershire, West) : There is no doubt that the introduction of milk quotas has substantially reduced the output of milk from our dairy farms. The turn round in farmer opinion after the quotas were introduced has been astonishing. There was an enormous amount of ill-feeling flying around when my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) and our mutual right hon. Friend the Minister of Agriculture, Fisheries and Food were doing their best to introduce the milk quotas. I was the Parliamentary Private Secretary to my right hon. Friend the Member for Westmorland and Lonsdale and I

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remember going to the three counties show and then on to Ross-on-Wye and Dyfed. We were mobbed by farmers. I always thought that farmers were friendly until we went to those places. It is to the great credit of my right hon. Friend the Member for Westmorland and Lonsdale that he stuck to his guns and carried on with a difficult job. Dairy farmers now owe him a debt of gratitude that they can never express. That was a difficult time for my right hon. Friend, but the one thing that dairy farmers do not now want to part with is their dairy quota.

It is good news that stocks are falling, because that means lower costs to the taxpayers, less flak for the farmers and less criticism that the dairy industry is not trying to solve its own problems. Like other hon. Members, I should like to turn to the Mu"lder factor, the Dutch farmer who took financial inducements to stop milk production through a beef conversion scheme before quotas were introduced in 1984. Admittedly, it was a temporary arrangement, but how was anybody to know that the Dutch farmer was later to return to dairy farming? Mr. Mu"lder, who pocketed the cash that was available, has now changed his mind and decided to return to dairy farming. May I ask my right hon. Friend the Minister whether it is possible to appeal against this European Court of Justice ruling?

[Interruption.] I notice that the Minister moves his head to show that it is not. At any rate, he has not fallen asleep.

My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) suggested that Commissioners might rewrite the rules. That is not an unrealistic suggestion. Perhaps we could have an explanation about that. It seems to be the height of injustice that farmers, who were involved in expansion plans when the quotas were introduced, were not offered the facility that is now being offered to Mr. Mu"lder. Many of my constituents who were engaged on Government expansion plans were knee-capped when the quotas were introduced. Many of them, although they were not made bankrupt, had to sell their farms and go into a different business. Why should they not be allowed such an opportunity? Perhaps we could go to the European Court about that as well. There is a great feeling of injustice because the Mu"lders have received what the farmers in the Forest of Dean see as rather special treatment.

It is incredible that the EEC will find another 500,000 tonnes of production to help Mr. Mu"lder, and anybody else in his position. It will be a great incentive to other farmers to find ways to ride in on the back of this court case to see whether they, too, can get some extra production or come back into dairy farming. It cannot be right that, having cashed in once to get out of milk, he should seek to cash in again to get back into milk. I was delighted to hear my right hon. Friend say that he will use his best influence to make sure that this is not resaleable, not leaseable and not inheritable. A quota is now worth money, and the Mu"lder case is seen by dairy farmers throughout the country as the height of injustice. All the good will of the farmers of the Forest of Dean and of dairy farmers throughout the country goes with my right hon. Friend in his negotiations to ensure that the quota is not resaleable and cannot be passed on. I wonder whether any more skeletons will fall from any more cupboards. Perhaps we should do our best to bring them all out, once and for all, and put an end to it, so that the farmers can know not only where they are now, but

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where they will be in the future. I wish my right hon. Friend the best of luck in these negotiations, for many of us admire his lucidity, tenacity and stamina in hanging on in all these negotiations. He is positively terrier-like in the way that he approaches the European negotiations.

10.42 pm

Mr. Eric Martlew (Carlisle) : First, I apologise for the fact that I may not be here for the winding-up speech.

I shall take a slightly different tack from that taken by the hon. Member for Gloucestershire, West (Mr. Marland). Milk quotas have not just created benefits. In my constituency, a brand-new factory that cost £2 million and employed 60 people had to close. It is a shame that we cannot debate New Zealand butter with the milk quotas, because they tie in. I accept the good reasons of my hon. Friend the Member for Newham, North (Mr. Spearing) for objecting to that, but the only logic that would cause me to change my mind and be in favour of the importation of New Zealand butter is the fact that there is now a shortage of milk for manufacturing processes. It makes no sense to stop imports of New Zealand butter in those circumstances. I am a Member sponsored by the Transport and General Workers Union, and many of its members have jobs in the milk processing industry. The quota system may have got rid of surpluses, which is a good thing, but we do not have a free market. It is surprising that Tory Members do not want it. We have a monopoly shortage. The Minister said that the butter mountain has started to melt. Not thousands of tonnes, nor hundreds of tonnes, nor even a single pat of butter goes in intervention. We have a shortage of milk. Companies with orders for evaporated milk, full-cream milk powder, yogurt and cheese- -all labour-intensive processes--cannot fulfil those orders because, although we have the manufacturing capacity, we do not have the raw materials. These are all genuine orders ; there is no subsidy. The Minister said that quotas brought a secure future for the milk-processing industry, but that is not correct because there is a lack of investment in the industry. There is surplus capacity, but not the promise of extra milk to meet those orders. I accept that there is a surplus in Europe. I asked the Minister about that before the recess and he admitted that that was so, but, when I asked whether there was a surplus in the United Kingdom, he did not answer the question. Italy and France are putting cheese into intervention, but, in Scotland, the creameries cannot meet export orders for cheddar cheese, which would greatly help our balance of payments, because of the milk quota system. In a perverse way, therefore, the ruling of the European Court will perpetuate that situation.

Mr. Nicholas Winterton (Macclesfield) : Was not the quota system designed to ensure that the United Kingdom opened up its market to liquid milk from Europe? As the hon. Gentleman said, there is a shortage of milk in this country. Manufacturing capacity is unused because of that shortage and the system is now achieving what Europe rather than the United Kingdom wanted--access to the English market for continental liquid milk.

Mr. Martlew : If the hon. Gentleman is asking whether we got a raw deal from the Commission's milk quota proposals, the answer is yes, just as we normally do.

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However, the dairy farmers who are left did not get a raw deal ; they are doing very well. If we consider agriculture in general, dairy farming is the one area that is doing well. One of the reasons for that is that the Milk Marketing Board, which is, in effect, a farmers' monopoly co-operative, pushes up the price of milk for manufacturers. That money then goes to the farmers. As a consequence, we shall be pushed out of the world market and some creameries will close. Those farmers now have guaranteed security. They have a product that is more valuable than milk and, in some cases, more valuable than the land that they farm.

Let me quote an example from an advertisement in Saturday's Yorkshire Post. The advertisement, which appears under an advertisement for cess pools-- that is perhaps significant--states : "Milk quota for sale. Both clean and part used with B.F. 3.56 to 4.05 per cent."

The figures refer to the butter fat content.

We cannot blame the farmer for selling the quota. He did not buy it ; he just happened to be there when the EEC and the Government gave him the commodity. Surely that cannot be right.

We must consider a system in which we can equalise the amount of milk that goes into manufacture in Europe. One of the reasons why there is a shortage of milk at present is the milk curve. It would be a bureaucratic nightmare, but we must examine the possibility of a monthly quota so that we can calculate the times of year when we require the milk. That cannot be done by giving financial incentives to the farmers. We must consider a system whereby, in the spring, there would be no surpluses to go into intervention, but, when in periods of shortage, we would have the milk to ensure that our creameries kept going.

I hope that the Minister will examine that option and consider ways of getting rid of that distasteful speculation and bartering of milk quotas represented by a certificate that the farmers never earned and do not deserve. The only person who pays is the consumer.

10.50 pm

Mr. Teddy Taylor (Southend, East) : I have two brief questions for the Minister, who is clearly dealing with great skill with an issue that has arisen from a judicial decision. First, what is the net cost of that which has been proposed? The papers that are before us are mystifying. The Commission refers to a "net deficit" of about £18 million. The Ministry tells us that the cost will be about £30 million. The third estimate comes from my hon. Friend the Parliamentary Secretary, who, being a sensible and humble man, has taken a middle view and opted for £24 million. Why is there such a great difference between the estimates, and where will the money come from?

In a recent debate we were told that there are legally binding terms and restraints on agricultural spending. I ask the Minister to tell us where the £30 million, or £24 million, will come from. Will it mean some compensating factor for other spending on agriculture? Further to the net addition to Community spending on agriculture, will there be any additional spending by member states, including the United Kingdom? The Court of Auditors' report says that the transfer of financial responsibility for butter dumping to member states was unlawful, and the Council of Ministers declined even to discuss the proposal. We know, however, that butter dumping is extremely expensive. It was revealed in a

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parliamentary answer last week that the most recent price of selling butter is 2.75p per pound, which seems extremely low. When the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), the Liberal party's spokesman, was speaking of the possibility of a shortage of milk and butter because of the reduced quotas, he should have been aware also of the implications of the fire clearance sale. Will there be additional spending by member states because of any increase in the dumping of butter, which has reached extraordinary and substantial levels? My right hon. Friend the Minister will know that specific assurances were given by my right hon. Friend the Prime Minister and by all the members of the European Council in February, when they agreed to a massive increase in Community spending. I hope that we shall be told who will pay for the deficit. Secondly, will there be a compensating effect on the Community's spending on agriculture? Thirdly, why are the Commission's figures so wildly different from the Government's estimates?

10.53 pm

Mr. William Cash (Stafford) : I, too, have experienced the milk quota issue at first hand. The quota was announced on the day that I was selected as the Conservative party candidate for the Stafford by-election. That is another event that I am unlikely to forget. I endorse the comments of my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) as a member of the Select Committee on European Legislation, which recommended that the issue before us should be debated at an early date. There is the important matter of principle that these matters are ultimately subject to majority voting, and there is potential for a blocking minority that will be constituted by the Mediterranean countries. We do not know what the outcome will be, and at the same time it is clear that the proposals that we are discussing are inspired largely by the interests of the German Minister and the electorate which he serves. I have the greatest possible respect for my right hon. Friend the Minister, for he is a man of great skill and determination, but how are we to retrieve a situation that will have a significant adverse effect on the British farmer, on the assumption that majority voting will have the result that we expect? We must stand up for our rights.

There was a unique event on Monday, when the proposal to take note of a European document was opposed by the Government. If we are out-voted on this issue, we should not take that lying down in the Council of Ministers or as a Parliament. We should ensure, as a Government and as a Parliament, that we make our protest and that we act accordingly, if necessary by a vote in the House.

10.54 pm

Mr. Nicholas Bennett (Pembroke) : I support my right hon. Friend the Minister in this matter. I believe that he is working very hard for constituents like mine who over the past few years have had a 19 per cent. cut in their milk quota and who now have some stability. They welcome the

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fact that the Minister is determined to fight to preserve that position and to ensure that farming is on a fair financial footing over the next few years.

In Pembrokeshire we have watched with some concern the implications of the Mu"lder case, especially for family farms which tend to be small and medium -sized units. I hope that the Minister will bear in mind the parliamentary answer that he gave me recently. In one he said that it was not envisaged that there would be any further cuts in quota after this year, taking account of those that have already been announced. In another he said that surpluses had, to a large extent, been eliminated in the dairy sector. Given that that is the case, we must ensure that there are no cuts in quota as a result of the Mu"lder judgment.

Farmers who now believe that they have a stable position should not find suddenly that further unexpected cuts are made in 1989 and 1990. It is up to the Commission to find some other way if it is necessary to recompense farmers who went out of production in 1978 rather than take it out on the farmers who are still in production and who have been led to believe that the position has been fixed for the foreseeable future.

I welcome a letter sent by Mr. O. J. Williams, the prospective Conservative candidate for the European Parliament constituency of Mid and West Wales, to the Minister in September in which he stated that in 1984 only 65 per cent. of hardship cases were met. Not every farmer who suffered hardship received benefit. It is important that we should remember that when we are dealing with the Mu"lder case. We should therefore take a fair, but restrictive, attitude towards the applications from farmers who went out of production as long ago as 1978.

10.56 pm

Mr. Ron Davies (Caerphilly) : I commend the hon. Member for Pembroke (Mr. Bennett). That is not something that I normally do, but at least he was the only individual on the Government Back Benches to commit himself and his support to this evening's proposal. I congratulate him on that.

I was surprised by the attitude adopted by the Minister when he opened the debate. I was also surprised by the comments of the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) who followed him this evening, but who preceded him in office. They both spent some considerable time hand- wringing and bemoaning the evils of the quota system and the common agricultural policy. I have to remind them that it was the Conservative Government who took us into the European Community, who accepted the common agricultural policy and who for the past nine years have been the stewards of British interests in the European Community. If there are any deficiencies in the quality of the agreements--

Mr. Cash : Will the hon. Gentleman give way?

Mr. Davies : If the hon. Gentleman will allow me to finish this sentence and make this point, I will give way, as I think that he has a valid intervention to make. However, at least he should have the courtesy to allow me to finish the point that I am making. If there are any defects in the agreements coming from Europe at the moment, we know who is responsible for them. The British Minister of Agriculture, Fisheries and Food represents British interests in Brussels.

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Mr. Cash : Will the hon. Gentleman go on the record and agree that, as a result of the referendum, the Labour Government ensured that we stayed in Europe and, furthermore, renegotiated on terms that have turned out to be less than satisfactory?

Mr. Davies : That is irrelevent to this evening's debate. My point is that for the past nine years all the agreements made in Brussels have been made with the agreement of successive British Ministers. There are two of them here tonight who have bemoaned and criticised the quota system--the present Minister attempted to suggest that there would be some benefit from quotas--but they have been responsible for the implementation of the quota system in Britain. We should not forget that.

We have had a very wide-ranging debate, and I was surprised at just how wide-ranging it was. Indeed, the contribution from the hon. Member for Gloucestershire, West (Mr. Marland) was quite entertaining, as is normally the case. I hope that we did not keep him from his dinner for too long.

The Mu"lder case and the judgment that resulted from it receives our support for two very good reasons. First, the outgoers scheme, as it was introduced in 1978, was known to be a temporary scheme. The Minister was suggesting to the Under-Secretary that a Labour Government were in office at the time. That is true. I hope that I am showing the degree of consistency that my party has always shown on these matters in endorsing the action taken by that Government in 1978. It was a temporary scheme, and it would be quite wrong for individuals who voluntarily involved themselves in those outgoers schemes now to be penalised. Therefore, we support the principle that was developed in the Mu"lder case. Secondly, the principle of the violation of legitimate expectations was the basis on which the judgment was made.

We supported the Minister's initiatives on set-aside. It is important that the principles developed in this case are seen to be supported by all parties in the House. Otherwise, initiatives such as the one that he is now taking under set-aside could be in jeopardy if farmers felt that their legitimate interests would be prejudiced in two, three, four or five years' time--God forbid that quotas on cereals would be introduced--and they would be reluctant to enter into set-aside agreements. For those reasons, we support the principles of the judgment in the Mu"lder case.

Mr. James Paice (Cambridgeshire, South-East) : Does the hon. Gentleman accept that there is a fundamental difference between a temporary scheme, whereby the scheme itself is not supposed to last for ever, and the temporary exodus of individual farmers? In the case that we are discussing tonight, the farmers themselves decided to go out of milk production. There is a great difference between whether the scheme was temporary and whether the farmers' cessation of milk production was temporary.

Mr. Davies : I understand the distinction that the hon. Gentleman is trying to make, but, as I understand it, the temporary scheme was clearly intended to take farmers out of milk production for a limited period. That was the nature of the scheme and the basis on which entrants into the scheme signed various agreements.

I support the principles involved, but I have some doubts about the implementation of the scheme. I understand that in September, when the Commission was considering the matter, it estimated that 1 million tonnes

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of quota would be required to meet applications under the scheme. The scheme now before us provides for only half that figure : only 500,000 tonnes of additional quota will be made available. Will the Minister square that circle and tell us how he proposes to deal with it? If there are more applicants than quota, will he come back and suggest that more quota be found? Will he enforce some percentage agreement, take applications on the basis of first come, first served, or will he reduce the amounts available? Those are serious questions and I hope the Minister will tell us how he proposes to deal with them when he replies to the debate. They are particularly important for Britain because the British dairy industry was as prepared as that of any other country in Europe voluntarily to involve itself in the 1978 scheme.

I draw the attention of the House to the appendix that accompanies the motion. It refers to the number of applicants for cessation in the various countries of the European Community. In the United Kingdom there were 5,694 beneficiaries of the milk non-marketing premium and 2,510 beneficiaries in the dairy herd conversion scheme. In total, more than 8,000 British farmers participated in the schemes. The Under-Secretary agrees. I am grateful for that because I have here a comment which he made in the explanatory memorandum on the European Community legislation. He said :

"The United Kingdom accounted for a high percentage of the production surrendered under Regulation 1078/77 and will wish to see this reflected in the allocation of any additional quota." British farmers provided 10 per cent. of production relinquished under those schemes, with 8,000 of them participating. A court judgment now makes quotas available to two Dutch individuals who took court action. When the Minister replies, I want him to say how the proposals will affect the 8,000 British farmers who took advantage of the 1978 scheme. He should have the answer readily available. I refer the Minister to the detailed translation available in the Vote Office, which sets out the criteria for eligibility for entry into the scheme. One has been included quite deliberately to exclude not only British farmers but a large number of European farmers. It states that they had to have

"applied in vain to the Member State's competent authority for a reference quantity between 31.3.1984 and 31.7.1988."

The Ministry has records of all the applications lodged with it for quota between 31 March 1984 and 31 July 1988. The Minister is shaking his head, either because he does not have the records or because he is not prepared to agree to the provision. If the latter, it is a pity that he did not say so during his speech. If the former--that he does not have details of those who applied--it means that 8,000 British farmers eligible, in theory, for admission to the scheme cannot apply because the Ministry does not have records of their applications.

Mr. MacGregor : It is the latter case. I opposed that provision in the Commission's proposals. I am glad to say that it does not now appear that it will be included.

Hon. Members : Hear, hear.

Mr. Davies : I share the delight of Conservative Members. However, it is somewhat remiss of the Minister not to say that what appear in the document as the conditions that will apply do not meet with his agreement, and that the House is being asked to take note not of this

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document but of an amended document. We do not know what those amendments will be. I like to think that the right hon. Gentleman treats the House with a degree of integrity. He should be prepared to say how the document will be amended and how the criteria will apply.

As the Minister has volunteered that snippet of information, I shall press him further. Will he give an assurance that the criteria will not have to be met?

Mr. MacGregor : The hon. Gentleman knows that there is qualified majority voting. It is not open to one Minister to give an absolute assurance on how negotiations will end. I said that I opposed the proposal, and I have support for that. I do not think that it will be in the final scheme.

Mr. Davies : I am grateful to the Minister for that concession. I shall test him once more-- [Interruption.] We do not often have time to debate these matters. If Conservative Members want to take me on, I shall be happy to take them on during the remaining 22 minutes. I have legitimate points to make and these matters must be properly debated in the House. We have already had one important admission from the Minister, and I want one more.

If there is to be a similar provision--that to meet the eligibility criteria applicants will have had to have lodged their applications with the Ministry between 31 March 1984 and 31 July 1988--in the light of the Minister's reservations, will he assure us that there are adequate records of any British farmers who made applications verifying that they lodged applications during the relevant period? That appears to me to be a simple and straightforward question. If the Minister will give the undertaking that that information is available in his Department, I shall be happy with that.

A number of questions were asked by the hon. Member for Southend, East (Mr. Taylor), the answers to which we would be interested to hear. We, too, have a number of questions. How is the quota to be apportioned ; and what percentage of the additional quota does the Minister believe will be available to the United Kingdom? How many applications have so far been made? How many applications are held by his Department? If the criteria discussed earlier are to be enforced, how many applications have been made? How many of those applicants would meet the necessary criteria? How many British dairy farmers, who took advantage of the two outgoers schemes in 1978, would be eligible for this scheme if it were accepted as it presently stands? Those are specific questions which we are entitled to have answered.

The Minister was very candid when he said that the Commission had been forced into taking this initiative--if we can call it that--which was reactive and for which we expressedd our support. Of course, that was the minimum that was compatible with the judgment. We do not criticise the Government for the way in which they have presented this or for their behaviour so far. However, for all of us, it is a sorry reminder of the inadequacies of the common agricultural policy, and it should remain a spur both to the Government and to Opposition to achieve a radical reform of that policy. That is the real lesson to be learnt from this debate.

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11.12 pm

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson) : I am surprised that the hon. Member for Caerphilly (Mr. Davies) said that everything should have been cut and dried before we came into the Chamber ; if it had been, all the speeches in the debate would have been worthless and useless, and there would have been no point in having the debate. The hon. Member for Newham, South (Mr. Spearing), who asked for the debate to be split into two halves, would also have been wasting his time. The hon. Member has gone, but he will be here again. The Scrutiny Committee asked for the debate so that the Minister could get the flavour of opinion in the House on this important issue. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) began with an intervention saying that we could perhaps change the rules altogether ; that has been taken up and, of course, has been brought to my right hon. Friend's attention.

The hon. Member for South Shields (Dr. Clark) covered many of the matters which were subsequently reinforced. Initially, he asked what the attitude was of other member states. He named Germany, Denmark and the Mediterranean countries. He wisely chose three divergent opinions. The Germans want a less restrictive scheme than we do. They want to allow in, perhaps, all the people who were excluded all those years ago, and they want to allow in part-time farmers. The Danes support my right hon. Friend in wanting a more restrictive scheme. I am not sure whether the Danes support the Germans in the introduction of part-time farmers, but we certainly do not.

The southern and Mediterranean countries are asking, as the hon. Member for Caerphilly has done, for a renegotiation, a payback : "Let us do a deal. What will we get out of it?" Perhaps we could have expected such attitudes.

The hon. Member for South Shields said that, when and if quotas are reallocated, they should be non-negotiable. My right hon. Friend has already said that if those quotas are reallocated, he will try to ensure that they are not transferrable and non-negotiable. It is a special scheme with special quotas and I hope that we can draw up special rules.

The hon. Members for South Shields and for Ceredigion and Pembroke (Mr. Howells) also asked whether quotas will go on for ever and whether there will be Euro-trading in them. The hon. Member for Ceredigion and Pembroke also asked whether there will be a milk shortage after 1992 ; whether there will be transnational quotas and whether British dairy farmers will be able to compete on equal terms. I can only answer yes to the last question. The Minister and previous Ministers have done their best and have succeeded in ensuring that our farmers can compete on equal terms. I would need to look into the crystal ball to be able to give the hon. Gentleman any reasonable answers to the rest of his questions. Perhaps he can have a word with Merlin when he pops home.

I should like to reinforce what my hon. Friend the Member for Gloucestershire, West (Mr. Marland) said about my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling). The work that my right hon. Friend did during the introduction of quotas is now being recognised. I have been to farmers' meetings where they have said straight out that they did not realise that it would

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all turn out as well as it has--I am sure that at the time my right hon. Friend knew that it would. It is because of my right hon. Friend's hard work that we now have such a sensible system. My right hon. Friend will be reassured to know that my right hon. Friend the Minister is following in his footsteps by hounding the Italians at every stage. The only way in which we can guarantee that British farmers are not disadvantaged is to ensure that all the member states of the EC stick to the rules that are imposed by a qualified majority or a unanimous vote. My right hon. Friend the Member for Westmorland and Lonsdale said that the court judgment was grotesque, and since then many people have supported that statement. I have already said that this is a special quota dealing with a special category. The hon. Member for Caerphilly said that the terms of the quota should have been chiselled on stone in black and white to prevent alterations. I am sure that he will accept that all the terms will be the subject of negotiation in Brussels during the long hours of deliberations.

Mr. Cash : Does my hon. Friend agree that it would be highly desirable if the European Court of Justice decisions could be attributable to the judgments made by individual judges? Then we would know who made the majority decisions in that court.

Mr. Thompson : It might help my hon. Friend, but it would not help me. It would not alter the case. I shall not be led down that path tonight- -perhaps one afternoon in the Smoking Room.

The hon. Member for Carlisle (Mr. Martlew) left the Chamber after advocating what I would have called, to provoke him had he been present, a free market in milk. However, as he is absent, I shall not bother.

The hon. Member for Southport (Mr. Fearn) mentioned costs. He will have read the financial implications given in the explanatory memorandum :

"The Commission estimates the cost of increasing the Community reserve, measured in disposal terms, at 90 MECU (£59.9m). In addition the 0.5 per cent. reduction in co-responisbility levy will reduce receipts by 20 MECU (£13.3m) giving a total cost of 110 MECU (.73.2m). Against this is set the savings of 74 MECU (£49.3m) from the reduction in the intervention support price for butter leaving an overall deficit for the proposals of 36 MECU (£24m)."

However, my right hon. Friend and others in the Council are striving to neutralise the effects of that half a million tonnes of butter as much as possible.

Mr. Teddy Taylor : How?

Mr. Thompson : How unusual. I turn, expecting my hon. Friend to be extending his hand. I move on.

The kind contribution of my hon. Friend the Member for Pembroke (Mr. Bennett) was most welcome. He spoke clearly for the dairy farmers in his constituency.

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As to the remarks of the hon. Member for Caerphilly (Mr. Davies), we agree that in Britain, 8,000 farmers took up the various outgoers' schemes. In Europe alone, 6 million tonnes of butter were removed, and in Great Britain we took out 20 per cent. of our production. How many farmers will want to return under the scheme is not known, but those in Great Britain who satisfy the conditions when they finally emerge amended and not unamended--and I cannot give the hon. Gentleman the satisfaction, which word I do not use in any derogatory sense, of saying that they will not be unamended--will be able to join the scheme, as will all European members.

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