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provided for under the ESA scheme, the public will have greater access to the beautiful regions of the Cotswolds and the upper Thames tributaries, which are well worth a visit.

I should like to move to the question of how we should deal with the common agricultural policy budget. We should be grateful to the Americans. A system that encouraged ever more subsidy and the dumping of exports on the third world at prices way below those of its indigenous products was crazy. That did the poorest countries no good at all, because their own farmers could not possibly compete, so they went out of business or--even worse-- started producing drugs, tobacco or other undesirable crops.

I welcome the fact that we will reduce the subsidising of exports dumped on the poorer countries, but it is incumbent on all politicians to find a solution to the problem of starvation in the third world. World population must surely be the key to the solution. There are five billion people on this earth. That number is set to double in the next 30 or 40 years, and it will double again to 20 billion by the end of the 21st century. Neither my right hon. Friend nor I will live to see that, but my children's children certainly will. It is a sobering thought that in 100 years' time there will be four times as many people on earth--an horrific prospect for this country, too.

That is one reason why we must sort out the CAP. But there is a much more pertinent reason for doing so--to benefit our taxpayers, our farmers, and above all our consumers. We spend roughly £3 billion on our agriculture every year. The Minister's excellently produced booklet tells us that fact. Given our population of 56 million, that works out at about £60 per person per year. That is certainly a large figure, but it is not huge in the context of the Government's other expenditure. I would not claim that the public are getting value for money, but they are getting something for their money--cheaper food than they would get if we had a free market. They are also getting the sort of countryside that they want. Increasingly, the countryside will be run on environmentally friendly lines, and the public expect to have to pay for that.

There has been some discussion of repatriating our agriculture policy. As long as we are members of the Common Market, that simply is not possible. If we repatriated our agriculture policy, the French and perhaps others would continue to subsidise their farmers. That is exactly the problem for our pig farmers at the moment. The French are subsidising theirs, but we are not subsidising ours--with the result that they have to sell pigs at between 10p and 20p a kilo below the cost of production. Under repatriation, how would we control that sort of problem ?

We need an agreement between the 12, the 16, the 20 or whatever the EC becomes. Perhaps we can repatriate some financial policy, but we need carefully to consider the regulatory side. Regulation must be done EC wide, so that we prevent increasing numbers of subsidies. An interesting letter appeared in The Daily Telegraph the other day, under the title "Stalking farm subsidies" :

"We want to bring down support prices to the point where supply and demand are brought into balance. This would enable supply controls such as production quotas to be dismantled. Where compensation for price cuts is provided in the form of direct aids, this should be progressively reduced."

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My right hon. Friend may recognise those words--they appeared in her letter of 5 February. I agree with every word of it.

It would be wrong to follow the example of New Zealand in this matter as long as we remain in the EC. An excellent article in The Daily Telegraph of 17 March described how New Zealand has completely deregulated its agriculture. Despite predictions of doom and gloom that many of New Zealand's 60,000 farmers would go out of business, in the event only 1,500 went out of business. Perhaps many years from now we will be able to deregulate our agriculture, but it will never be possible to do so completely while we are a member of the European Union.

I should like to correct a wrong fact adduced earlier in the debate. Four countries are about to enter the EC. One of them, Sweden, has to a large extent deregulated its agriculture already. It will be a large net contributor to the EC--it will contribute about £1 billion, despite having a population of only seven or eight million. That compares with our contribution of £2 billion and our population of 56 million. Let us hope that these large net contributors join soon and bring some of their glasnost to the common agricultural policy so that we can progressively move towards deregulation and the repatriation of some budgetary mechanisms while retaining the regulatory mechanisms.

Let us ensure that GATT really works, and that we do not end up having to set aside more and more land just to accommodate the Americans, who would then increase their production and take our markets.

9.4 pm

Mr. George Stevenson (Stoke-on-Trent, South) : I should like to begin by expressing agreement with the comment of the Minister of Agriculture, Fisheries and Food that this debate must be viewed in context. Its context is the reform of the common agricultural policy. The right hon. Lady was right to say that the farmers are to be commended. We should, indeed, commend the workers and all those who live in increasingly difficult circumstances in rural communities, which cannot, of course, be divorced from agriculture.

In the short time that is available, I shall concentrate on the issue of costs and what has happened since the introduction of the reforms. Clearly there is among hon. Members, including myself, a feeling that the reforms that have been introduced since 1992 have taken on all the attributes of a mirage. A person is in the desert and is desperate. He thinks that he has found something to meet his needs, but then it disappears. The CAP reforms of 1992 have taken on those attributes.

One means of establishing the truth of this assertion is to consider costs. The Minister told us that the reforms would keep costs within agricultural guidelines. Nothing of the sort has happened. In the time available I cannot go into great detail, but I can say that since 1992 expenditure on CAP guarantees has increased by no less than £4.2 billion--not bad going. According to the European Commission, the guidelines will not be breached next year--the figure is about 37 billion ecu, which I reckon is about £33 billion--provided that no account is taken of the cost of devaluation and of the monetary changes, which is about £1.16 billion ; that we transfer £900 million of olive oil support to 1996 and take no account of it ; and that we start to spend the monetary reserve even before the budget is

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agreed. I should remind the House that the monetary reserve was created outside the guidelines to meet fluctuations in exchange rates. Thus, unless the Minister, when she is battling for us, can change the situation, we shall have to spend money outside the guidelines to keep us within. That is absolutely crazy.

Those costs will not disappear, so they will have to be met. I estimate that between 1992 and next year we shall have increased agricultural expenditure by approximately £6 billion. These are not my figures or the Labour party's ; they were produced by the Commission.

Are right hon. and hon. Members satisfied that simply noting such a horrendous situation--which is what the motion we are debating asks us to do--is good enough ? Opposition Members think not. We believe that it is necessary to take a far stronger line in respect of these things. It is for that reason that we think it important to point out exactly what has happened since 1992.

What does the situation demonstrate ? It demonstrates that CAP expenditure is as much out of control today as it has ever been. In fact, it is accelerating. The increase that I have mentioned amounts to about 30 per cent. The consumer and the taxpayer are being clobbered. We are pouring increasing resources into the black hole that is called the CAP. The 1993- 94 budget is bogus, as is accepted by the Commission, and I have demonstrated as briefly as possible that the 1995 budget is a cruel illusion.

The CAP has a voracious appetite. We hear a great deal of Euro-sceptic jargon--"We're battling for Britain", and so on--but none of this would have happened, and there would have been none of these horrendous increases, if the Government had not agreed. That point can fairly be put to the Minister. Why, over this period, have Ministers, on behalf of the Government, gone to Brussels saying "We're fighting our corner. We're going to control costs" ? Next year the Government, if they agree to this arrangement--and I hope that they will not--will have presided over an increase of about £6 billion.

I have one or two questions to which I hope the Minister will reply in his winding-up speech. Where will the Minister find the £1.2 billion that, according to the Commission, represents the cost of the monetary alignments of black Wednesday ? Will the Minister agree that the £900 million of olive oil payments that, according to the Commission, should be deferred until October 1995 should be transferred into the 1996 budget ? If so, what justification can the Minister give us this evening to agree to defer nearly £1 billion of expenditure simply to remain within the guidelines ?

Will the Government agree to spend the money in reserve ? It was never intended to bolster up a crisis within the CAP but only to meet changes in the exchange rate. It was never intended for that purpose and it is outside the guidelines.

In the last few minutes of my speech I shall make one or two observations on specific issues. On cereals, the Commission stated that cereal stocks were 43 million tonnes at the beginning of 1994. It estimates that, even with the reforms in place, by 1998 we shall have 175 million tonnes of production and, if everything goes right this year, we may end up with 33 million tonnes of cereals in store. I remember the halcyon days before the reforms when we had only 18 million tonnes of cereal in store. What progress have we made when the reforms bite into the regimes yet we end up with twice the amount of cereals in store ?

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On milk, the Secretary of State is quite right not to agree to quota cuts in the present circumstances, but logically, if we do not press for a quota cut, we shall remain in structural surplus because the quota is 12 per cent. more than consumption. In addition, the disadvantages to the United Kingdom because we are not

self-sufficient will continue. That is not good enough ; we need something more positive from the Minister. Although she is right in the circumstances, we cannot tolerate continued structural surpluses because of the quotas while the United Kingdom continues to be disadvantaged.

On beef, clearly there have to be some changes because of the 1992 reference year. The regional quotas that qualify for the special premium are now out of control--something like 30 per cent. more than was anticipated. However, there is great danger in agreeing to a reduction in the density from three to 2.5 livestock units per hectare. That will hit the United Kingdom harder than elsewhere. The Select Committee report stated that the CAP price proposals "constitute an issue of considerable political importance". The Select Committee is right. The issues that are of considerable political importance demand that tonight we do something more than simply note the United Kingdom's horrendous and critical position. I hope that the Minister is right. I hope that she can get across her view that the 1992 reforms were the first step. In the light of the agricultural crisis in our rural communities, what is the next step ?

9.13 pm

Mr. Walter Sweeney (Vale of Glamorgan) : I take issue with the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis), who criticised my right hon. Friend the Secretary of State for Wales for not being present this evening. That was rather cheap, considering the efforts made by my right hon. Friend, of which the hon. Gentleman must have been aware, to secure equal treatment for cereal farmers in England and Wales. Despite his efforts, he was unsuccessful, but at least we have a scheme that takes account of the high yield produced by cereal farmers in constituencies such as mine in the Vale of Glamorgan. I certainly welcome half a loaf as better than none.

Mr. Ainger : But does not the hon. Gentleman accept that his farmers in the Vale of Glamorgan, and mine in Pembrokeshire, are discriminated against--if they were getting the same yields as their English counterparts, they would receive significantly more, whether they are in less-favoured areas or non-LFA areas ? Does he accept that the Minister of State may well have done his best, but that it was not good enough ?

Mr. Sweeney : I have already accepted that my hon. Friend was unsuccessful, but the point that I am making is that he has tried on behalf of farmers in Wales. The hon. Gentleman will be aware that the background to the discrimination between Welsh and English farmers is based on the fact that, by and large, because of the nature of the terrain, yields in Wales can be expected to be substantially lower than those in England. Clearly, in parts of Wales, as the hon. Gentleman knows, the yield is comparable in every way with parts of England. That is why I feel that the solution, although less than ideal, is certainly better than the original proposal.

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A remarkable feature about the debate has been the range of views expressed by hon. Members on both sides of the House, which seem to have favoured radical reform of the CAP, and the considerable support for repatriation of agricultural policies. I congratulate my right hon. Friend the Minister and her predecessor on their efforts to reform and improve the CAP. I am sure that all hon. Members know full well the difficulties that the Government face in securing improvements. I wish my right hon. Friend well. If I may use an agricultural metaphor, I hope that she will take the bull by the horns and urge substantial reform.

Personally, I would like to see the CAP in its present form abolished. On the need for reform, a few statistics will make my point for me. The average family of four in the UK pays more than £18 per week extra for its food as a result of the CAP in its present form. No other industry enjoys that level of subsidy. In 1992, consumers in the European Union paid an extra 40 per cent. for agricultural products. In 1992, the average value of subsidy to European Union farmers was equivalent to 47 per cent. of their income. With the prospect of four new members joining the European Union, the level of subsidy may become even worse. The average value of subsidies to Finnish farmers is 68 per cent. ; to Norwegian farmers it is 77 per cent.

I found myself agreeing with the hon. Member for Lancashire, West (Mr. Pickthall) when he pointed out that our constituents might not know very much about the detail, but they know instinctively that they are paying too much for their food as a result of the existing CAP. Naturally, I disagreed with him when he went on to say that he favoured the abolition of set-aside because he felt that it was encouraging hunting. As a hunting supporter, I disagree, although I agree with his underlying sentiment that set-aside has been a failure. Although I start from the Conservative premise that subsidy is a bad thing and should be eradicated, I realise that suddenly to abolish subsidies would harm British farmers and farm workers. Instead of advocating the abolition of subsidies, I therefore suggest that, on an interim basis, farmers should be paid direct payments linked solely to farm income. That would be less market-distorting than subsidies tied to price intervention or production levels. A system of direct payments would be better in a number of ways. First, the true level of support would be visible through taxes rather than food prices. Secondly, it would be more efficient. Only 40 per cent. of the existing CAP budget goes to farmers, while 60 per cent.--£27.6 billion a year--is spent on administration, the cost of exporting intervention surpluses, storage costs and fraud : in Italy alone, fraud cost £64 million last year.

The link between direct payments and area under-cultivation should be dropped. As I have said, set-aside has not worked ; leaving 15 per cent. of arable land to one side reduced last year's cereal harvest by only 1.4 per cent.

Agricultural subsidies in Europe are designed to keep inefficient producers working : the same applies to steel and other problem industries. Politicians in each member state should consult their constituents, and decide how much subsidy is appropriate. The legitimate desire to protect the countryside might be served better by the establishment of national parks than by subsidies for inefficient farmers.

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According to a recent report from the Centre for Economic Policy Research, agriculture is a major area to which the principle of subsidiarity should be extended. The European Union should have no role in the payment of incomes, as conditions and practices vary throughout the Union. That point was made very well by the Opposition earlier. Conditions in England may be very different from those in Greece, for example.

The role of the European Union should be confined to the creation of a statutory framework for national income support, to limit market distortions. National Governments would specify income thresholds below which subsidies should be claimed ; the European Union would impose a cap limiting the maximum subsidy available. Within the new framework, each national Government would be free to decide how large their nationally financed direct income support should be. No longer would British citizens have to subsidise French farmers indirectly by paying a much higher net contribution to the European Union budget. The ultimate objective should be the abolition of agricultural subsidies throughout the European Union. Meanwhile, the new framework would be a great step forward for the EU--a step away from the common agricultural policy and towards cheaper food, lower subsidies and more competitive markets.

9.22 pm

Mr. Nick Ainger (Pembroke) : As I have already been fortunate enough to make a couple of interventions about some of the issues with which I wished to deal, my speech will be brief.

Today's debate has confirmed that hon. Members on both sides of the House agree on one thing : the common agricultural policy as a whole is a failure. Moreover, as is suggested by the figures cited by my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson), the reforms have not produced the result that the Minister claimed they would produce a year or so ago.

There is an additional measure of the success or failure of the CAP. Not only is the budget growing and growing ; those who were supposed ultimately to benefit from the system--consumer and producers--are not doing so. Farmers--especially those in less-favoured areas who should be receiving reasonable hill livestock compensatory allowances and the like--are feeling the pinch.

The Minister tells us regularly, in various press releases, that hill farmers have received significant increases--up to 30 per cent. year on year, which was the figure between 1991-92 and 1992-93. Sadly, however, the base year to which the Minister refers--1991-92--was the worst year for nearly a decade in terms of farmers' net incomes. Using that as a base year was totally and, in my view, deliberately misleading, and did not warrant the cuts that were made last year and this year.

Our rural areas have a serious problem. Because of the CAP's failure, we are not encouraging young people into farming ; the age profile in the industry is rising every year. The latest figures, based on the past 15 years, show that, on average, 26 people leave farming every day. That is catastrophic for rural regions, which many hon. Members represent.

There seems to be a consensus--if one can use that term these days--among hon. Members on both sides of the House that we must move away from a CAP that deals only with price and product support towards a CAP that

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involves the environment and people rather than products. If we do that, we shall be moving in the right direction. It is nice to see Conservative Members moving in that direction because I fought the 1992 general election on the basis of such a policy. The Conservative party is at last starting to listen to what not only the Labour party, but people who represent rural communities' interests have been saying for some years.

Sadly, as my hon. Friend the Member for Carmarthen (Mr. Williams) said, people in rural communities depend not only on CAP subsidies, but on family credit. Many small hill farmers, dairy farmers and sheep farmers, particularly those in Wales, but also those in Cumbria and south-west England, depend on state handouts to support their families. That is further proof of the failure of the CAP. We have to get to grips with fraud, although that is not such a problem in this country. I am willing to accept that, in the main, the British farmer is honest and tries to earn an honest crust, but there is massive scandal and fraud throughout Europe, which is not being properly tackled.

Hon. Members on both sides of the House have mentioned the need to return to national aids, yet, sadly, the one national aid over which we had some control--the hill livestock compensatory allowance--has been cut again and again. I accept Conservative Members' comments that the HLCA is not necessarily a good national aid because it is a headage payment, but at least it was there in principle and the Government had a great deal of control over it. They should have considered applying the HLCA not on a headage basis, but on the basis of environmentally sensitive farming, lower inputs and lower outputs.

I shall finish because my hon. Friend the Member for Glanford and Scunthorpe (Mr. Morley) has just given me a dirty look. We in Wales expect the Secretary of State for Wales to be involved in debates such as today's. It is rare that we have a full day's debate on agriculture. I should have thought that the Secretary of State or the Minister of State could have attended part of the debate. Every time I intervened to ask about a Welsh issue I was told by the Minister of Agriculture, Fisheries and Food that it was not her concern, but a matter for the Secretary of State for Wales. When we debate agriculture in the whole of the United Kingdom, the Secretary of State for Wales should be present for some of the time.

9.28 pm

Mr. Elliot Morley (Glanford and Scunthorpe) : I welcome the opportunity to debate agriculture and to examine the effectiveness of CAP reform and how it operates in the United Kingdom. The Labour party has always expressed doubt about the CAP reforms and whether they would work. My hon. Friend the Member for Edinburgh, East (Dr. Strang) made that clear in moving the amendment, and demonstrated the weaknesses of the scheme.

The set-aside scheme, which is at the heart of the reforms, wastes resources. We are also not convinced that it will meet its objectives. Agra Europe wrote on 29 October last year :

"The problem for the Community is . . . that the new support system and current agricultural technology is encouraging farmers to minimise the impact of set-aside on cereals and, in particular, to maximise their output of high yielding wheats."

The report also contains some good news, however. It went on to say that, because of the new technology, United

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Kingdom farmers would be far more competitive in a world market than some of them seem to believe. Recent figures appear to bear that out.

The 1993 provisional figures for wheat, for example, show that, although the area for wheat production is down--from 2,067 million hectares last year to 1,759 million this year--the yield increased from 6.82 tonnes per hectare in 1992 to 7.31 tonnes in 1993. I know that yields can be influenced by the weather, but the yield in 1993 was the highest since 1989, and it was higher than average yields between 1982 and 1984, which were 6.81 tonnes.

European agriculture is still a heavily subsidised sector. Measurements of producer subsidy equivalents, produced by the Organisation for Economic Co- operation and Development, show that European Community farmers obtain 47 per cent. of their income from agricultural support, compared with 28 per cent. for farmers in the United States.

When considering the United States, it is also worth considering the implications of the general agreement on tariffs and trade. Not much has been said about GATT, apart from the fact that there is a linkage between it and the CAP reforms. However, some serious issues have yet to be resolved in relation to the GATT agreement. The first is the question of opening EC markets to food imports, amounting to 5 per cent. of domestic consumption. I am not clear whether that figure is for the Community or whether it is an aggregate figure. It could mean that the United Kingdom, which has traditionally imported a high percentage of its food, could be taking more than its fair share of that 5 per cent. penetration. The second problem is that of food additives and drugs in animals, which is very serious. In many cases, drugs are used abroad, but their sale is banned in the European Community. Hormones in beef are one example, and bovine somatrophin--BST--which is being legalised in the United States, is banned in this country at least until the end of the year. We must deal with those problems within GATT. Many third countries with poor animal welfare standards and almost non-existent enforcement procedures will export meat products to this country. We need to ensure that our producers, who have invested in high welfare standards, are protected from what I regard as unfair competition. Ways of doing so might include clearer labelling, which will allow consumers to ensure that they are choosing foods that have been produced to the highest standards. Another way is to put minimum standards into place through the GATT agreements and negotiations. Animal welfare standards are a cost to the industry, but it is a cost that many within it are prepared to accept. Such high standards can be a marketing aid, and I was pleased that the Parliamentary Secretary endorsed that view in Agriculture questions today, when he recognised that it can be an advantage to market food that is produced in this country to the highest standards.

What is the sense in exporting low-value live sheep to the continent, where farmers simply add value to the carcasses ? Apart from exporting live animals, that is exporting British jobs, and it does not help the food deficit in this country.

I was appalled to hear the hon. Member for Hexham (Mr. Atkinson) say that he hoped that the Minister would resist improvements in animal transportation times, because it would affect his farmers and the live export of sheep. The French must be laughing all the way to the bank

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at the attitude of the hon. Member for Hexham. We should ensure that we are adding value, rather than simply exporting live animals, which is not good economically or in animal welfare terms. Sheep exports increased from 81,000 in 1985 to between 2 million and 3 million in 1993, and that concerns me. We should be proud of the quality of British lamb, as well as that of our beef and pork, which are also mainly a carcass trade. We should vigorously market British lamb as chilled carcasses--marketing on the hook, rather than on the hoof.

It is a pity that Food From Britain has to operate with one hand tied behind its back, due to the way in which the Government have frozen its budget and restricted its activities. If we are to tackle the deficit in food imports, we must have a stronger marketing system.

The problem is that the CAP is still hugely expensive and wasteful. The original scheme proposed some modulation of support, as has been mentioned by the hon. Members who spoke on behalf of small farmers. It is fair to ask whether a limit should be imposed on the people who receive their highest income from agricultural support.

In response to a written question, we learned that the highest individual payment to a farmer was £1.25 million-- [Interruption.] Indeed, that was the Co-op. The Co-op manages farms ; that is a growing part of its business. So it is not fair to suggest that one individual farmer received that money. Nevertheless, the written answer also informed us that other people were receiving payments of more than £1 million, and that many farmers were in receipt of payments running into hundreds of thousands of pounds. We should give some consideration to people who are in a less fortunate position in terms of agricultural support.

The detail of the CAP figures shows that there are still a number of substantial increases, although expenditure is supposed to be decreasing. Cereal compensatory payments are increasing by 40 per cent., although admittedly as part of the agreed reforms. Potato starch compensation is also being increased by 40 per cent. That does not apply to the United Kingdom, but it still adds to the overall costs.

Olive oil production aid is up by 44.7 per cent. Again, that is not a United Kingdom matter. The beef annual premium is increasing by 25 per cent. and the suckler cow premium by 36 per cent. That represents unfair competition with the unsubsidised pig and poultry sectors which, as we have heard, are going through a difficult period. The total EC agricultural support budget for the current year will increase by 23 billion ecu. We want the overall budget to decrease, not to increase in that way. A CAP budget currently running at about £30 billion is obviously open to fraud, as has been described by my hon. Friend the Member for Workington (Mr. Campbell-Savours). There are more interesting issues buried in the papers that the Government must examine, and must press firmly in the Council of Ministers. Tobacco is certainly one such issue. Some hon. Members have already said what nonsense the tobacco subsidy is. According to the figures, tobacco prices have been frozen for this year and will not be reviewed until 1996. I see no reason why the review should be put off for so long. Alternatives must be sought

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for people who depend on tobacco crops, but at present tobacco is the most heavily subsidised crop per hectare in the European Community.

Protein plants, too, are subsidised, in the form of dried fodder payments, which have been identified as costly and inefficient. Fibre plant subsidies, which include silkworm subsidy, constitute another costly scheme identified by the Court of Auditors as open to fraud. Linseed, a big United Kingdom crop, still receives a £438 per hectare subsidy, which represents an extremely small reduction.

I am concerned about the proposals to raise the minimum alcoholic strength of wine--although I imagine that some hon. Members will not be too worried about that. The strength is being raised not for the benefit of the consumer, but to reduce current wine surpluses. Many hon. Members have said that what we need in the CAP is a major shift to decouple subsidy from production. Farmers and the industry as a whole already recognise that. The Labour party wants existing CAP funds to be better used, for the benefit of farmers, farm workers and the wider rural economy.

There are alternatives. My hon. Friend the Member for Workington and others have mentioned repatriation and subsidiarity--interesting concepts, which need to be examined. However, when we discuss repatriation, we must always bear in mind the need for equality in subsidies between the different agricultural sectors. The market would be distorted without the equality that can come about only through a common policy.

The Labour party welcomes the shift towards environmental support payments. We welcome the increase in environmentally sensitive areas recently announced--something that we have long advocated and for which we have long campaigned. However, the total of all the various schemes for environmental support is only about £100 million, which pales into insignificance when compared with more than £2 billion of subsidy in the arable aid programme and set-aside.

The Government's commitment to the environmental programmes is also in doubt. They have recently cut the farm conservation scheme, and research and development programmes.

In addition, there have been changes to the Agricultural Development Advisory Service, which means that it is no longer regarded as supporting farmers but is evolving into a private consultancy whose services many farmers can no longer afford. The Government have an important role to play in providing such support. The Government's green credibility has also been damaged by their failure to honour their promise on hedgerow protection. Indeed, the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) and his pal the hon. Member for Hexham were involved in hedge-killing activities. Labour Members will not forget their role in destroying a Bill to protect hedgerows, and will remind their constituents of it when the time comes.

There are alternative methods of support through green premium payments, which the Labour party has been advocating. We could promote alternatives, such as the restoration of traditional wetlands, which is advocated in a recent excellent report by the Royal Society for the Protection of Birds. Wetlands can also help to control floods and provide sea defences by the creation of radical habitat creation schemes of salt marsh and reed-beds.

A connected issue, which I hope the Minister will take into account in future negotiations, is that, if we are to use

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long-term set-aside for environmental reasons--especially for wet pasture and flood defence--there is a need for grazing on that long-term set-aside. At the moment, such grazing is prohibited under the set-aside regulations. There is a need to negotiate a way of licensing grazing as part of conservation and long-term set-aside management. I hope that the Minister will take that into account. Diversification can be encouraged through access agreements, and rural planning policies can encourage the use of farm buildings. We also need to encourage more organic farming, which involves an integrated approach. There is a little support for conversion, but in fact organic farming is second only to environmentally sensitive areas in providing an alternative to farmers.

We want to encourage alternative crops--non-food crops, such as linseed for oil, wheat and sugar beet for ethanol, rape for bio-diesel and biomass schemes. There is still a long way to go, but there are niche markets where a biodegradable fuel would be useful, such as in waterways and sensitive areas.

Lord Carter recently gave an excellent paper in which he identified other markets for bio-oils, such as lubricants, technical oils and chemical feedstock. All these, of course, need support for research and development, and marketing, in partnership with industry. That is something of which the Labour party is not afraid, and we pledge to undertake such research. The money is available. There is a total of £30 billion of CAP funding, which we believe needs a change of direction and application. Only the Labour party can achieve that, because the Government have isolated themselves. They are currently involved in a row and, through their new- found attraction to the block vote, are supporting measures that will make it more difficult to reform the CAP--they are supporting a smaller vote in countries which will, of course, be only too pleased to try to delay it. Tonight, I had to attend a meeting of Steel Action, a group comprising steelworkers from all over the country. They are asking why the Government are not taking up a real issue in Europe and fighting against unfair steel subsidies, for example, instead of being involved in the nonsense of qualified majority voting. The truth is that someone has recently grabbed the Prime Minister's arm and explained to him that such voting will never lead to reform of the CAP, so we now have a further nonsense of a two-tier approach to qualified majority voting--23 for everything else but 27 for agriculture where it suits the Government.

That approach makes the Government a laughing stock, and alienates support in Europe. It puts at risk the membership of countries that will be net contributors to the CAP and which should be natural allies of this country- -or, should I say, of the Labour party, in this instance. There will never be changes unless we work towards co-operation rather than alienation, unless we work for a common position rather than one that cannot stand up to examination but brings the Government into disrepute.

9.44 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack) : Before I address this excellent-quality debate,I should say that we have just heard a speech from the hon. Member for Glanford and Scunthorpe (Mr. Morley) which convinced us that the

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Labour party is bereft of any sensible and positive ideas for agriculture and food in this country. I shall develop that theme in my remarks.

This has been an interesting debate ; I genuinely congratulate all hon. Members who took part in it. We had some remarkably thoughtful contributions. In particular, I congratulate my hon. Friend the Member for Lincoln (Mr. Carlisle) on an excellent speech on environmental matters. Clearly, he has carefully thought through his position about the development of the new challenges for agriculture and the environment, and I look forward to him contributing to the work that will be undertaken to assess the environmental impact of set-aside.

My hon. Friend the Member for Wantage (Mr. Jackson) made an extremely well- thought-out and thought-provoking speech, taking into account the expansion of the Community, the challenges it will face and some of the real long- term challenges as it comes to terms with large-scale expenditure on agriculture. That was the theme of many other speeches.

My hon. Friends the Members for Hastings and Rye (Mrs. Lait) and for Faversham (Sir R. Moate) raised issues connected with horticulture and the food industry. They did so with compassion, conviction and knowledge, and I shall deal with some of their detailed points in a moment.

My hon. Friend the Member for Hexham (Mr. Atkinson) dealt with his constituency knowledge about the problems of hill farmers and animal welfare--key issues in a debate on agriculture.

My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton- Brown) took us to a central issue that underpins much of our consideration of the common agricultural policy--the context in which we see the CAP in terms of the general agreement on tariffs and trade. If the United Kingdom had not worked tirelessly behind the scenes, we would not have reached a GATT agreement ; we would be living in a world facing protectionism. Sadly, that is something that has been lost by Labour Members.

Finally, my hon. Friend the Member for Vale of Glamorgan (Mr. Sweeney) talked about the cost of the common agricultural policy. I shall speak in more detail about the speeches by Opposition Members, especially the hon. Members for Edinburgh, East (Dr. Strang) and for North Cornwall(Mr. Tyler). I was taken by the comments of the hon. Member for Lancashire, West (Mr. Pickthall) who talked about a subject that I know well--horticulture. I was grateful for his contribution.

The hon. Member for Carmarthen (Mr. Williams) talked about the change in the common agricultural policy ; the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) took us through his view of the environment ; and the hon. Member for Londonderry, East (Mr. Ross) gave us perhaps a cautionary tale about what change in agriculture means in terms of the effect on employment.

The hon. Member for Londonderry, East perhaps omitted a very important point, which has been missing from the debate--the fact that agriculture is the start of the food chain. Agriculture is the process which provides food manufacturers, food producers, and ultimately the consumer, with the food we eat. As the number involved in primary production has declined, we may see more people entering other parts of the food chain.

The hon. Member for Pembroke (Mr. Ainger) surprised me, because he did not mention his marvellous early potatoes. I thought that he might at least take the

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opportunity of a little light advertising, but he failed to do so. However, he joined in the wider debate on the reform of the common agricultural policy.

This debate is of considerable importance, because it touches the lives of those who form 2 per cent. of our work force. As I said, it is important because it is the starting point for our food chain. It is also important because the issues that we have discussed touch on the whole question of the well-being of our rural communities. In a year in which we will see an increase in farm incomes, and other matters which I shall refer to in a moment, we can see a strengthening of the rural economy. The work that we have done--for example, in campaigning for funding under things such as objective 5b status--is a clear sign of the coherence of our policies in terms of the rural economy. The debate has demonstrated that it is in the Conservative party that some of the best thinking is going on about the future of the common agricultural policy in terms of its impact on our rural communities.

I must say that I trembled slightly in preparing for this debate, because I had understood that the Opposition were to make an announcement on the CAP. I stood by the Press Association printout expecting to see a long list of quite devastating new thinking ; to my absolute relief, I got a copy of the Labour party press release on the CAP.

I have here a £5 note. I am not offering it to anybody this evening, but I was offering it earlier to anybody who could find a vestige of an agricultural policy from the Opposition. This is safe money, because nobody has managed to find that missing policy. I searched the Opposition's manifesto for a reference to agriculture, but I could not find one. I searched today's document for some new policy. It says that the hon. Member for Edinburgh, East condemns 14 years of Tory Euro-waste. All I can say is that this document is a waste of the paper it is printed on.

It is the Conservative party which can take the credit for being the driving force behind the reform of the CAP. It is this party which is conscious of cost and which has tried hard, within the overall budgetary limits which my right hon. Friend mentioned, to drive down EC expenditure on the CAP. It is this party which has been taking the lead on integration of, for example, environmental policies with the reform of the CAP. It is this party which understands about free trade and its importance to agriculture. That is why we have been pioneering in terms of the GATT. This party understands that the success of our food and agriculture industry is determined by consumers buying the excellence of its output, as good wholesome food. I looked to see if the Labour party had any ideas on the subject, and I saw what it said when its former leader was in office. The Labour party said that dismantling the CAP would provide money which-- believe or not--could be spent on the cohesion fund, which transfers money to poorer European Union nations.

This evening, we have heard nothing to rebut that position. I can only assume that that largesse from Walworth road

Mr. Morley : Who said that ?

Mr. Jack : It was the former leader of the hon. Gentleman's party. He may not be in touch with what his party's former leader used to say.

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The Opposition have also said quite clearly in other documents that the savings which they see coming from changes in the CAP should go towards financing other Community projects. We have heard nothing this evening to rebut that, and I can only assume that that is their objective.

I was interested that the hon. Member for Edinburgh, East entertained us with some of his notions about social policy and his view of agriculture. One thing which the Labour party would like to sign up to is the social chapter. I have noticed recent reports in the press which have suggested that the hon. Gentleman's party might want to introduce some social benefits for part-time workers. Perhaps he has not costed that, but if his proposals were applied to part-time workers in agriculture, he would simply add about £11 million to the cost of UK agriculture. That is how much the Labour party cares about the cost base of our agricultural production. The hon. Gentleman told us that, in some way, the Government had left agriculture in a disastrous position.

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