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cut. Given the pork barrel politics of the mid-west and the farmers there, I doubt that it will go along with the 75 per cent. cut. The post-war systems of support for agriculture in the United States, Canada and other countries, and in this country after the Agriculture Act 1947, and the CAP itself show that support for agriculture is a primary objective for all western Governments. Are we serious in wanting an overnight dismantling of those systems, with all that that will mean for agricultural communities? That life support system cannot be taken away from them all of a sudden. We are all in favour of the liberalisation of trade and of GATT, but the reality is not as simple as that. There are grave distortions of trade on world markets. For example, one sees few Japanese cars in France, and few British cars in Japan. Great barriers need to be taken down, and it will take a long time to achieve that. Our agriculture is in serious trouble. In the GATT round, a 30 per cent. cut has been proposed for European Community support, but Britain has been making cuts in support since 1984. Now, in 1990, we have the lowest farm incomes in real terms since 1945. That compares with the circumstances that made it necessary to introduce the Agriculture Act 1947 to support agriculture.

Farmers in my constituency are going bankrupt, and many young farmers are selling off their stock and letting their land. It is all very well to discuss matters of world trade and support systems in an academic manner, but farmers are suffering grievously and many of them will not survive the next 18 months. The matter must be treated seriously. If we are to readjust, we must bring into balance supply and demand in food, as that will even up the pricing system. We cannot let rip the market in agricultural products, because the market will not support our agriculture. European farmers demonstrated in Brussels and Japanese and American farmers demonstrated there, too, because their family farms will go under as a result of the GATT round.

World trade must be liberalised, but that cannot be achieved overnight and agriculture must continue to have support systems. I am thinking in particular of the family units not only in Wales but in Britain, the European Community and worldwide. There will be grave social unrest without a commitment to support systems. The planning of the CAP needs to be readjusted and its funding must be better directed to the family farming units that require support. There is undoubtedly wastage within the CAP, but that does not mean that we should abolish it. Without such better direction of funds, I fear for the future of our agriculture.

6.27 pm

Mr. John Butcher (Coventry, South-West) : I gave an undertaking that I would not detain the House for more than five minutes and I shall endeavour to discharge that undertaking.

This debate, coupled with the deliberations of the House on European monetary union and on the social and regional fund assistance, which have been linked to the debate by the Labour party, is of key importance. It is no exaggeration to say that the debate about European


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monetary union is probably the biggest economic question as well as the biggest constitutional question that the House has faced since 1945.

Thus far, the House has tried to conduct the debate in an open and candid fashion. I hope that Labour Members will not think me too provocative if I point out that, hitherto, Labour Members have been able to lie back and watch the debate raging on the Government Benches, because they are putting together their policy documents--documents that will eventually surface in a manifesto that they will put before the public. I implore Labour Members to be a little more forthcoming than they were until yesterday. Yesterday, if I am interpreting the remarks of one of their Front Benchers properly, they attempted to outbid the Government in their enthusiasm for progression towards European monetary union.

I listened carefully to the Treasury shadow spokesman, the hon. Member for Islington, South and Finsbury (Mr. Smith). He appeared to say that there was a quid pro quo for the Labour party's resolute commitment to European monetary union--that a future Labour Government would argue for a major increase in regional fund expenditure and assistance to the poorer regions. Presumably that includes the poorer regions of Britain.

That is an awful attempt to sell the parliamentary Labour party an utterly false prospectus. There are only three contributors to the fund--Germany, France and the United Kingdom. One of them, Germany, has plenty to do in funding a £150 billion programme--which is tantamount to a huge welfare programme--for its cousins and other relatives in the eastern provinces of the new federal republic. The key paymaster of that fund is in no position to consider either increases in or additional takes from countries such as the United Kingdom, let alone Greece, Spain, Portugal and others. If the Labour party is arguing that it will go for full-blown EMU-- which it appears to be doing--on the basis that it will get back resources from the Commission, it is misleading its supporters in the House. It is ironic that we are having this debate on regional aid. The hon. Member for Islington, South and Finsbury quite literally included it. If the Germans will not pay, and if the French just stand pat--which they usually do--the only people who can increase the payments of the fund are the British. What is the Labour party's argument? Presumably it is that Britain must increase its payments to Europe in order to achieve a bigger payment from the regional fund, in exchange for a loss of sovereignty on our currency and constitutionally--something that most members of the Labour party, both rank and file and in this House, would find unacceptable. What a way to run a debate on the biggest question facing this country since 1945.

I have made my views on the common agricultural policy clear. There is a dangerous threat to the GATT round. I am not a socialist, but I have argued in some two dozen Council of Ministers meetings in Europe for the interests of the third world and the poorer countries in their trading relationships with the EEC. I have argued for the Lome countries. If we do not achieve a clear position on a free-trading, open-looking Europe, with zero barriers, our arguments on aid programmes to help those poorer countries will be academic and meaningless. There will be a huge lacuna in the logic that we have deployed to get to that protectionist position in Europe.


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Hitherto, the real debate may have taken place on only one side of the Chamber. As of yesterday, the real debate appears to be beginning on the other side, the Opposition side. I hope that this House will be accorded the privilege of a free vote on these issues. It has been argued elsewhere that there should even be a referendum. I sincerely hope that the House will do its fellow EEC members the courtesy of candid information and an open and honest debate on this question. 6.34 pm

Dr. Norman A. Godman (Greenock and Port Glasgow) : I shall follow the fine example set by the hon. Member for Coventry, South-West (Mr. Butcher) and make only a brief intervention.

I part company with the hon. Gentleman in his criticism of the role of the parliamentary Labour party in the debate. The major defining characteristic of debates on critical matters such as this is the lack of interest displayed by so many hon. Members on both sides of the House. A few moments ago, when we debated the decision of the President of the European Court of Justice on the Merchant Shipping Act 1988--an important decision concerning the constitutional position of this Parliament--there were fewer than 18 hon. Members in the Chamber. That is characteristic of this place--an appalling and near-fatal lack of interest in what is taking place within the European Community of 12 nations.

I agree with much of what has been said about the disastrous common agricultural policy. It has damaged, and continues severely to damage, the very structure of the European Community. I hold a similar view on the common fisheries policy. That so-called common policy is falling into even further disrepute in our fishing communities. The plain fact is that the European Community fishing fleet is too big for the stocks upon which it depends. The fleet must be severely reduced, especially in the United Kingdom. According to the multi-annual guidance programme, our fleet must suffer a reduction of between 30 and 40 per cent. before the end of 1991. If that sort of reduction must be inflicted upon our fishing fleet and our fishermen, and on those who find their work in that indigenous industry, it must be done humanely. There must be a decommissioning scheme, both in this country and in the littoral states of the European Community, that will allow fishermen to avoid the terrible fate of being driven ashore and into bankruptcy.

We are talking not only of people being put out of work but of small coastal communities, located hundreds of miles from Brussels--indeed, hundreds of miles from London--that will wither away. The only beneficiaries will be the people looking for holiday homes in our picturesque fishing villages.

Mr. Gill : I respect the hon. Gentleman's views on the fishing industry. Is it not ironic that the position in the fishing industry that he is describing has come about despite many programmes of aid to assist with the building of new vessels, all with the aim of improving the marketing and production of the product? Is that not symptomatic of what will happen to all the industries affected by structural funds? Despite all the benefits that are supposed to flow from the introduction of structural funds, it all appears to end in tears.


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Dr. Godman : I agree with the hon. Gentleman. I blame both Conservative and Labour Administrations. While we have had to face up to those MAGP applications, our fishing fleets have grown in size. That is an insane policy, given the fragile nature of stocks, especially those in the North sea. Indeed, off the west coast of Scotland and in the Irish sea, the stocks are equally fragile. We cannot allow them to be overfished, or the small communities will be destroyed. That would be a scandal for the nation and for Parliament.

I hope that I can elicit a response from the Minister on two points. First, it might surprise some hon. Members to know that I am pleased about two elements in the huge document that we have. One, on pages 529 and 530, is the aid programme of 20 million ecus for Romanian orphanages. Will United Kingdom non-governmental organisations be involved in the monitoring of that aid? There has been a deal of press speculation about the somewhat shady characters who have become involved in aid for those young children in such desperate circumstances.

What monitoring will there be, and can we be certain that the aid will go to those young children who so desperately need such assistance? Will the United Nations International Children's Emergency Fund, which has considerable experience in assisting children caught up in equally tragic circumstances, be involved? Despite the powerlessness of this place in seeking to restrain or influence decisions taken at a strategic level in Brussels, those are important questions for the young children in the Romanian orphanages.

Secondly, I welcome the aid for financial and technical co-operation with Latin American developing countries which is detailed on pages 483 and 484. I have genuine hopes for the establishment of democracies in, for example, El Salvador, Guatemala and Nicaragua. In El Salvador, the United Nations mediators are playing an important role in bringing guerrillas, the army and the so-called Government to the negotiating table. More aid should be given to those countries, but what discussions have taken place with United Nations officials who are directly concerned with establishing parliamentary democracies in such countries, particularly the three that I have mentioned?

6.42 pm

Mr. Teddy Taylor (Southend, East) : This has been a useful and helpful debate but, as the hon. Member for Greenock and Port Glasgow (Dr. Godman) knows, the Opposition Benches are empty because nothing can be done about the massive expenditure of £40,000 million, or about the court decision now affecting his fishermen and others throughout the United Kingdom. Basically, we are utterly powerless. Only if the Minister were to accept the amendment could any good at all come of this debate.

We know that jobs in every constituency will be affected, factories will close and trade will be disrupted if the GATT talks break down. Those talks are breaking down because, sadly, the EC has become the protectionist wrecker of the GATT. Instead of offering some reduction in farm spending, we have offered a bogus formula, which I am sure that the Minister accepts is not a reduction in the farm subsidy at all. Half the alleged 30 per cent. cut in the £23,000 million farm subsidy has, it is claimed, already taken place and the other half will be replaced by other


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subsidies. The Minister must at least tell the GATT that the United Kingdom recognises that the EC has offered nothing, that that is scandalous and that we will work in any way that we can within the EC to see that there is some meaningful comparison.

Those who think that farm subsidies have not been increasing should look at a parliamentary answer given on 19 October which set out clearly the fact that since the Government came to power agricultural subsidies from the EC have increased by about 260 per cent. and, since we joined the EC, they have increased by about 1,000 per cent. Looking to the future, all the signs are that, in 1991, agricultural spending will go through the roof.

The reasons are obvious. The beef and lamb markets have collapsed, while production has increased. We all know that that is true. In addition, the exchange rate of the dollar has fallen and German unification has imposed extra costs, all of which will add to the FEOGA guarantee commitments. If that happens, the EC will do yet another accountancy fiddle, and then what will the Government do? As the Minister said, in 1987 there was the agreement on strict budgetary controls, but when it came to 1988 an accountancy fraud was perpetrated by means of a metric year. The Minister works hard for us in Europe and I think that he knows that the same thing will happen next year. All the signs are that we will break through the new higher barriers, and the only way that we will be able to cope is through another accountancy fraud.

We should accept that there is no way in which the EC will agree to reform of the CAP. Any thoughts of that should simply be thrown aside. There is not the slightest chance that all the silly talk about new reforms and controls will have any effect. They can simply be overcome by an accountancy fraud, or some other kind of fraud. The Minister knows that fraud exists because the figures given disregard special provisions made for the elimination of surpluses of 1,400 mecu.

What on earth can we do? The Government must start saying what they think about this. That would be a step forward. The next time the EC wants more cash, we shall simply have to say no. That will be the only point at which we shall have any power. Unless we say no, we are completely and utterly powerless.

I hope that the Government will not follow the shameful example of the hon. Member for Islington, South and Finsbury (Mr. Smith). This has been a good debate and I agree that most hon. Members have spoken sincerely, but the hon. Gentleman, when asked whether he was in favour of cutting agricultural subsidies, said no, he was just in favour of cutting a proportion and that, if other expenditure was increased, a proportion would be kept.

That is shameful, speaking as the hon. Gentleman does for a party which represents working people and for whom it has fought sincerely and fairly. The hon. Gentleman should be ashamed of himself. He should appreciate that people in London are homeless and people elsewhere are starving, while he and his colleagues are agreeing to spend £140 million each and every week on the dumping and destruction of food.

There is nothing that we can do about that dreadful spending, the fraud or the fact that we shall once again break through all the limits while the same old tactics are used, but I hope that hon. Members will realise that what


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we are doing today will have a nasty effect on jobs. I hope that the Government will start saying clearly that they believe that what is happening to the CAP is shameful, that it helps no one and that they disagree with the CAP proposals and the EC stance in the Uruguay round, which is simply a fraud and a farce, as are so many things to do with the EC.

6.48 pm

Mr. Christopher Gill (Ludlow) : The explanatory memorandum states on page 4 that the Community budget has significant financial and policy implications. That is certainly an understatement. The budget perpetuates the structural funds, the regional development fund, the social fund and not least, as my hon. Friend the Member for Southend, East (Mr. Taylor) pointed out, the 30 million ecu to be spent on the agricultural guidance and guarantee fund.

The structural fund has done great harm to both the agricultural and fisheries industries. We have only to look at the end result to know that is so. There is over-production, and mortal damage has been done to traditional family farming. An otherwise efficient industry has been weakened, and serious international antagonism has been created. That is apparent in the current GATT round, and many of us are aware of the damage that has been done to the Third world in the process.

Higher expenditure, lower incomes, and chaos in world markets are the consequence of the structural fund. Does my right hon. Friend accept that fraud is endemic and deep rooted in many budget policies? How many of these budget measures would the Government have taken on their own account? Are the Government satisfied that the functions performed under the budget are not already duplicated by British organisations such as development boards and agencies? How do many of the articles in the budget accord with our political principles of non-intervention and a free market economy?

Mr. Roger Knapman (Stroud) : If subsidiarity means anything at all, could not agricultural support be left to national farmers?

Mr. Gill : If subsidiarity is to be made meaningful, the British Government will have to do an enormous amount to make it a reality. I am sad to say that we are at fault in this country in taking to the centre rights and controls that really belong with lower authorities. My hon. Friend makes a good point when he suggests that agricultural support should be repatriated to the United Kingdom, so that we may exercise more control over how our farmers are supported, and have more say in the way in which our intrinsically efficient industry, which can compete not only in the European market but worldwide, should develop. It would be so much easier to make such considerations within our own shores.

The final question that I wish to put to my hon. Friend is whether he recognises in the budget that is before us yet another blueprint for socialism.

6.53 pm

Mr. Maude : This has been a valuable debate, and not one that has taken a party political approach, which is desirable and right. The House properly takes a serious interest in these matters, and I regret that our debate had to be truncated, with rather less than two hours available


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to us. The debate was originally meant to last half a day. If there had been fewer bogus points of order from Opposition Members at the beginning, more time would have been available for debate. The hon. Member for Greenock and Port Glasgow (Dr. Godman) asked whether there would be monitoring by British non-governmental organisations of support to Romanian orphanages. I cannot provide him with an answer, but I acknowledge his genuine and proper concern, and I shall ensure that he receives a satisfactory reply. The hon. Gentleman asked also about aid to Latin American countries and whether there had been discussions with UN officials concerned with the establishment of democracies. I understand that such discussions have taken place, but I cannot give the hon. Gentleman a definitive answer. I shall ensure that my colleagues in the Foreign and Commonwealth Office provide the hon. Gentleman with a reply as soon as possible.

Much of the debate focused on the common agricultural policy. As a Minister, one is always keen to try to draw together the sense of the House and to achieve a consensus. I do not think that it is an exaggeration to say that the common agricultural policy has not found many friends in the House today. Attitudes have ranged from the very hostile to the fairly hostile, with the possible exception of the hon. Member for Brecon and Radnor (Mr. Livsey), to whose contribution I shall refer later.

Clearly it is undesirable that spending on the CAP should increase further, but clearly it will be difficult to constrain an increase in spending. Equally clearly, we must continue trying to do so, as we have done consistently during our term of office. I am not as despondent as some of my hon. Friends about the prospects of achieving a resolution to the GATT negotiations. I believe that realism will prevail and that there will be a satisfactory outcome. It is of overwhelming importance that there should be. As my hon. Friend the Member for Thanet, South (Mr. Aitken) warned, the absence of an agreement would lead to a perhaps not so gradual erosion of the multilateral trading arrangements, which would bring impoverishment across the world. There is an enormously heavy burden on those conducting the negotiations to do so in a way that will allow agreement to be reached.

My hon. Friend the Member for Ludlow (Mr. Gill) asked whether I accept that there is fraud in the European Community. Yes, I do. Of course there is fraud in the way in which some of the European Community's money is spent. It is essential that proper action is taken to fight that. I mentioned the budget line of additional funds to fight fraud. The Commission has started to take the problem seriously, and I assure my hon. Friend that the British Government at least will be constantly at hand to ensure that the Commission retains an interest in the fight against fraud.

My hon. Friend asked also whether there is duplication of spending. I believe not, in this country. We do all that we can to avoid duplication. I know from a previous office that I held of my hon. Friend's close interest in subsidiarity, which I am glad that he maintains.

The hon. Member for Brecon and Radnor expressed passing concern about the disproportionate amount of agricultural spending. His solution is that, rather than control agricultural spending, more should be spent on everything else. That thought had an echo in the contribution of the hon. Member for Islington, South and


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Finsbury (Mr. Smith), whose remarks were rather illuminating. He spoke of economic and monetary union, and seemed to believe that it would be all right for Britain to lose the power to take decisions, provided there were huge transfers of resources.

I am not sure that the hon. Gentleman understands that, if there were to be such transfers, they would overwhelmingly be from the United Kingdom to elsewhere. If the hon. Gentleman had understood that--which I doubt--he might well take a different view about whether the proposals constitute a good bargain for the United Kingdom. I do not believe that they do ; I believe that they constitute a very bad bargain.

In general, the hon. Gentleman's speech demonstrated an extraordinarily undiscriminating approach to the European Community budget. He read out a list of the European Parliament's proposals to increase spending, all of which had nice cuddly titles. That is all that the hon. Gentleman knew about them : they sounded nice. If that is the Labour party's approach to public spending--if it sounds nice, commit yourself to it and look at the small print later--it is lucky that Labour's chances of being elected are very slight. Its attitude seems to be, "If it sounds nice, buy it ; if the European Parliament suggests it, buy it ; if the two coincide, we must have it."

Mr. Deputy Speaker (Sir Paul Dean) : Order. I must now put the Question on the amendment.

Mr. Aitken : I beg to ask leave to withdraw the amendment.

Mr. Deputy Speaker : Order. I am afraid that, as it is now 7 pm, the hon. Gentleman cannot withdraw the amendment. By resolution of the House, I must put the Question.

It being Seven o'clock, Mr. Deputy Speaker-- proceeded, pursuant to Order [30 November], to put the Question already proposed from the Chair.

The House divided : Ayes 20, Noes 188.

Division No. 17] [7 pm

AYES

Abbott, Ms Diane

Aitken, Jonathan

Body, Sir Richard

Canavan, Dennis

Carlisle, John, (Luton N)

Corbyn, Jeremy

Dalyell, Tam

Fry, Peter

Gill, Christopher

Godman, Dr Norman A.

Hughes, John (Coventry NE)

Kilfedder, James

Lewis, Terry

Mahon, Mrs Alice

Moate, Roger

Nellist, Dave

Skinner, Dennis

Spearing, Nigel

Taylor, Teddy (S'end E)

Wise, Mrs Audrey

Tellers for the Ayes :

Mr. Harry Barnes and

Mr. Bob Cryer.

NOES

Alexander, Richard

Alison, Rt Hon Michael

Allason, Rupert

Amess, David

Amos, Alan

Arbuthnot, James

Arnold, Jacques (Gravesham)

Ashby, David

Aspinwall, Jack

Baker, Nicholas (Dorset N)

Batiste, Spencer

Beaumont-Dark, Anthony

Beith, A. J.

Bellingham, Henry

Bellotti, David

Bennett, Nicholas (Pembroke)

Benyon, W.

Bevan, David Gilroy

Blackburn, Dr John G.

Boscawen, Hon Robert

Bottomley, Peter

Brazier, Julian

Brooke, Rt Hon Peter

Brown, Michael (Brigg & Cl't's)

Browne, John (Winchester)

Bruce, Ian (Dorset South)

Bruce, Malcolm (Gordon)

Buchanan-Smith, Rt Hon Alick

Buck, Sir Antony

Budgen, Nicholas

Burt, Alistair

Butcher, John


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