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Column 478putting an additional £20 burden on British families? When will the Minister join my hon. Friend the shadow Minister of Agriculture, Fisheries and Food in calling for a root and branch reform of the CAP? When will he cut out all this Mr. Nice Guy and go to Brussels and tell them that we are not going to have it any more; enough is enough, and this kind of profligate public expenditure is unacceptable to ordinary British taxpayers?
Mr. Waldegrave: I am pleased to hear a member of the Labour party saying that profligate public expenditure is out of order. His neighbours on the Front Bench below the Gangway looked a little nervous at that point. The previous Labour Government supported a CAP that was generating huge surpluses, which have now been largely disposed of. They short-changed the British farmer with the monetary compensation amounts to a really acute degree. For example, our milk quota is less than it should be because they short-changed our dairy farmers in the late 1970s and our production fell. That is why we were not able to negotiate a better quota.
Mr. John Greenway: Is my right hon. Friend aware that his proposals for the CAP review group, which is now established, have been warmly welcomed by farmers in north Yorkshire? They recognise that there needs to be further reform of the CAP, but will my right hon. Friend take note that they will not support any further changes in CAP reform that discriminate against British farmers and that there are in any event enough sectors-- such as sugar beet quota, which is due for reform--where they are already disadvantaged with regard to other European farmers?
Mr. Waldegrave: As my hon. Friend the Minister of State has said, we will fight for fair treatment of sugar producers. We are not producing the surpluses that cause the problem, and we should therefore not be penalised when the matter is dealt with. Following the farrago of nonsense from the hon. Member for Thurrock (Mr. Mackinlay), I forgot to point out that it is absurd not to recognise that, throughout the 1980s and 1990s, the British Government have taken the lead in working for reform of the common agricultural policy. We shall continue to do that.
Will the Minister now admit that we were right to warn his predecessor, the right hon. Member for Suffolk, Coastal (Mr. Gummer), that the 1992 MacSharry reforms were hopelessly inadequate? Surely the Minister appreciates that the current proposals for reform of the sugar and wine regimes--both in huge structural surplus--fall far short of what is required. Moreover, is it not clear from the latest European Commission price proposals that the Commission is simply not prepared to redress the huge cost of the beef and dairy sectors? When will the Government take a decisive stand on the common agricultural policy?
Mr. Waldegrave: It is a bit ironic to be teased by the hon. Gentleman on that subject. I know very well that the milk quotas started during a period of Conservative Government; they were imposed on us then. My point, however--a real point--was that the short-changing of the dairy industry under the last Labour Government had
Column 479damaged production in this country, which meant that our base-year figure was much lower than it would otherwise have been.
If the hon. Gentleman had read the newspapers recently, he would know that I have made the point about this year's price review in almost the same terms as him, although on the basis--I hope--of slightly more knowledge. The review does not go far enough, although there is a useful cut in the intervention price for butter. We need further steady cuts in underlying price support; otherwise, in due course, we shall face very serious problems with the common agricultural policy, which will have to be dealt with on an emergency basis. That would be a much less good way of handling the matter.
Sir Teddy Taylor: The Government were congratulated from all sides when they secured agricultural spending limits at the Edinburgh summit. Will the Minister tell us what we are to do now that the EC has published a budget for 1995 that exceeds the legal spending limits by £l,000 million?
Mr. Waldegrave: My hon. Friend will be pleased to know that agricultural spending is running well below the guideline. That shows that the MacSharry reforms--although I have many criticisms of them--have probably been more successful in limiting over-production than people predicted at the time, and surpluses have diminished as a result. This year we shall be well within the FEOGA guideline.
Mrs. Browning: In line with the policy announced in 1993, we are maintaining Government funding for Food From Britain. In the current financial year, this represents 54 per cent. of the organisation's financial resources.
Mr. Simpson: Would the Minister care to think again about the adequacy of that answer, given the current almost unsustainable and unbelievable levels of food imports into the United Kingdom? I should be grateful if she would explain why we import apples over a distance of 6,000 miles from South Africa, green beans over a distance of 4, 000 miles from Kenya and parsnips over a distance of 11,000 miles from Australia. That cannot be other than damaging to the global environment and our domestic economy. Given that set-aside is now the second largest crop in the United Kingdom, when will the Minister come up with a policy that will reverse the problem of empty land-- [Interruption.]
Food From Britain targets its resources on exports and speciality foods. Many of the horticultural products that the hon. Gentleman mentioned are produced in this
Column 480country, ensuring that we can not only export them but produce them for the home market, thus promoting import substitution.
I am glad that the hon. Gentleman mentioned parsnips. I learned only last night that it is difficult to obtain them in France. I have spoken to Food From Britain, which is already exploring the market opportunities.
Mr. Cook: Does Minister realise that more than half the food retail market is in the hands of only 2 per cent. of retail stores, and that that results in a high percentage-- [Hon. Members:-- "Hear, hear."] The Prime Minister's entry is appropriate because I was about to say that that results in a high percentage of rejects--about 20 to 50 per cent., depending on the commodity. In the case of the latest commodity to enter, it will be 100 per cent. shortly. That underlines the need for perfect produce. What percentage of the Food From Britain programme is dedicated to helping the producer, who must bear the cost of that, and produce a better standard for the market?
The Prime Minister (Mr. John Major): This morning, I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
Mr. Watson: Yesterday, the Prime Minister announced detailed plans for a legislative assembly in Northern Ireland. Does he understand that, by doing so, he has conceded that power can and should be devolved to each of the constituent countries of the United Kingdom, precisely because each of those countries is distinct and different? When can we expect framework documents that meet the clearly expressed demands for a Welsh Assembly and a Scottish Parliament from the people of those countries?
The Prime Minister: With your permission, Madam Speaker, I shall tell the hon. Gentleman what those differences are. In Northern Ireland, the Assembly will not be tax raising. The Assembly proposed for Scotland would be. In Northern Ireland, there has been a sectarian divide of remarkable proportions for years. That does not exist elsewhere. In Northern Ireland, neither of the parties can form part of the UK Government and lead that Government. That does not apply in any other part of the UK. In Northern Ireland, because of its history, there has been an Assembly in the past. That does not apply elsewhere. In Northern Ireland, a part of the population may wish to form part of a
Column 481foreign country. That does not apply anywhere else. Those are some of the differences. I can stretch that list to the corner of the Chamber and back again.
Mr. Hawkins: Does my right hon. Friend agree that, where councils can be described as mean-minded cocktails of political correctness, inefficiency, bureaucracy and waste, that is a matter for condemnation? Does he further agree that councils like Labour Blackpool and socialist Lancashire have been accurately so described by Mr. Leo McKinstry, a recent close adviser to Labour Front-Bench spokesmen?
Mr. Blair: Does the Prime Minister agree with the director of the Gas Consumers Council that, although the City may view the £1 billion profit of British Gas as reasonable, consumers will take a different view?
The Prime Minister: I think that consumers wish to see the lowest possible gas price. Consumers will also be pleased with the fact that the gas price has fallen by something over 20 per cent. since privatisation. They will welcome the fact that the Gas Consumers Council represents gas consumers' interests and deals with complaints. I much prefer profits to losses, provided that there is a good service for customers, and that the price, which the regulator seeks to determine, is right. Profits yield taxes for meeting our public services. In the past, these same public utilities have drained public resources through subsidy.
Mr. Blair: Just on prices, gas prices fell in the three years before privatisation. They have risen in real terms since 1979. They rose last year in real terms, and they will rise again next year. [Interruption.] They rose last year in real terms, and they will rise again. [Interruption.]
Mr. Blair: Is that not the contrast between pay excesses at the top and pay cuts and redundancies for the rest, between vast monopoly profits and a tide of consumer complaints? Let me tell the Prime Minister and the Conservative party-- [Interruption.] Yes, pay excess at the top and salary cuts for the rest. I tell them, until-- [Interruption.] I see the yobbos are out in force today. We will continue to speak for the British people on this issue. Until those companies are properly regulated in the public interest, they will continue to be seen, rightly, as the unacceptable face of privatisation.
The Prime Minister: The right hon. Gentleman rather dashed around the dates in order to make the case that he put before the House. As he knows, at the time of privatisation we put in a regulator to ensure that customers get the best deal possible. Since privatisation, prices have fallen by over 20 per cent. for domestic consumers, even
Column 482after allowing for inflation. That is the reality. It is also the reality that, for many years while they were in the public sector, the nationalised industries cost the British taxpayer £50 million a week in subsidies. Now they are yielding money for the Exchequer to deal with public services and other matters. The right hon. Gentleman knows that that is the case. He knows that a more efficient service is being provided, and he has offered no alternative whatsoever.
Democrat-controlled councils, including Somerset, to set aside some of their pet projects and to put children's education first?
The Prime Minister: I have no objection to raise at the absence of the right hon. Member for Yeovil (Mr. Ashdown) and I am sure that my hon. Friend's message for the right hon. Gentleman was taken on board by his right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and will be faithfully relayed to him.
Mr. Beith: May I have instead a message for all those people whose incomes are just above the level at which they would qualify for free prescriptions and whose chronic illnesses are not on the list which would qualify them for free prescriptions? Those people now have to pay 26 times more for prescriptions than they did in 1979. Is that a fair rate of inflation for such a vulnerable group of people?
The Prime Minister: I can give the right hon. Gentleman a message in addition, rather than instead. As he knows, over 80 per cent. of prescriptions are dispensed free. Pensioners, pregnant women, children and those on low incomes all have their prescriptions free. A total of 333 million free prescriptions are dispensed every year. I believe that it is fair that those who can afford to pay should do so.
Even after the increase that has been made, the prescription charge will be well below the average cost of medicines to the national health service. The resources raised from that charge, paid for by people such as the right hon. Member for Berwick-upon-Tweed, myself and many others, are enough to pay for 75,000 hip replacements, 33, 000 heart valve replacements or 235,000 cataract operations. That is the reality. The money does not go to the Exchequer: it is made available to help increase the resources for the health service to meet the needs of people.
Mr. Barry Porter: In the document published yesterday, the Prime Minister said that he cherished the Union, and he went on to say in his statement that he was a Unionist. Will he take every opportunity to reinforce, underline and emphasise that commitment?
The Prime Minister: I believe that the efforts that the Government have been making to try to ensure that the strife and difficulties that have taken place in part of the United Kingdom for so long are brought to an end is a clear and compelling reason for my hon. Friend to accept what I said yesterday.
Mr. Hain: Did the Prime Minister sanction the Minister for Health telling the BBC's "PM" programme last night that the prescription charge increase would help to finance the nurses' pay award? Does he accept that there is public disgust at the way that the news of the increase--a savage tax on the sick--was sneaked out while the House was uniting on Ireland? Does it not prove that the Tories are the party of high tax and low cunning?
The Prime Minister: When the hon. Gentleman stretches his arguments to such a length, I am tempted to remind him that it was a Labour Government who first introduced prescription charges and a Labour Government who reintroduced prescription charges after they had been abolished and that only one half of the people who get free prescriptions today enjoyed them under a Labour Government. Perhaps the next time that the hon. Gentleman talks about prescription charges, he will make those points clear as well.
Q4. Sir Teddy Taylor: To ask the Prime Minister if he will raise at the next meeting of the European Council the level of contributions by member states to the administrative costs of the proposed European central bank.
The Prime Minister: Although the administrative costs of the proposed European central bank will be of concern to the Government if the bank is established, the relevant provisions of the Maastricht treaty are not yet in force and are unlikely to be so for some years to come.
Sir Teddy Taylor: As the European Monetary Institute, which is the embryo central bank, on 6 February levied a capital charge on national banks of £500 million, including £75 million paid by the Bank of England, is the Prime Minister aware that some consider, rightly or wrongly, that the process of monetary union from which we are only partially exempt will forge ahead?
As many people consider that we are now near the irreversible end on Europe, would the Prime Minister, whose integrity I genuinely greatly respect, consider whether it might be appropriate to ask the people of Britain if this is the way that they want to proceed? Would not such a referendum now help to resolve the damaging splits on both sides of the House and give the Prime Minister real authority at the 1996 intergovernmental conference?
Column 484not partial, exemption from monetary union. The opt-out which I secured at Maastricht, approved by this House, provides that we will not enter a single currency at any time unless we take a specific decision to do so. That is not a partial but a complete exemption. As to the money made available to the EMI, to which my hon. Friend referred, that which has been provided by the Bank of England will be returned when the EMI is, in due course, liquidated. It is not a non- returnable payment.
On my hon. Friend's third point, a single currency of course raises serious political, economic and other issues. I have never ruled out a referendum and, again on this occasion, I do not rule out a referendum, but I believe that whether or not it is appropriate is something that we would need to consider at the time.
Mr. Campbell: Is the Prime Minister aware that Richard Budge, who now owns the vast majority of the British coal industry, last week told miners that they would have to take a three-year pay freeze at the same time as awarding himself £50,000? How does that go with the Prime Minister's classless society?
The Prime Minister: I was not aware of what Mr. Budge said to the miners, but I will make myself aware. I hope that what the hon. Gentleman has just said will prove to be more accurate than what he said across the Floor of the House about Trafalgar House and Northern Electric a few days ago.
Mr. Trimble: In his statement yesterday, the Prime Minister placed great emphasis on the right of the people of Northern Ireland to decide their own future. In the context of his proposals, will he give an undertaking that, if at some future date the people of Northern Ireland express a wish to become a part of the United Kingdom on the same basis and with the same benefits and the same burdens as everyone else, he will give effect to that wish?
The Prime Minister: As I have said to the hon. Gentleman, we are asking the parties in Northern Ireland and the people in Northern Ireland to see whether they can reach a consensus on what they believe their future should be and how they would wish to deal with that future. That is the whole purpose of the framework document. If the hon. Gentleman and the political parties across Northern Ireland would come forward with that proposition, we would consider it in precisely the same way.
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