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Mr. Budgen: I am sure that the hon. Gentleman will understand that for the average dairy farmer, for example, the quota may be worth as much as £200,000. They would very much like to know whether--I am sure that the hon. Gentleman is about to say something very carefully--on taking office a Labour Government would immediately give notice that quotas were to be phased out, say, within two years without compensation. [Interruption.] I do not have any milk quota.

Mr. Morley: I shall certainly not be drawn on such issues, but in the past the Government have cut quotas without compensation. The levels of various forms of support are enormous. Income from oilseed production is 64 per cent. subsidy. About 40 per cent. of arable farmers' net incomes comes in subsidy. Despite that, about 20, 000 farmers are expected to leave farming by the beginning of the next century. Therefore, the CAP is not altogether successful at keeping people on the land.

There is an argument for support for small farmers and for keeping people in farming and it will have to be considered in the future. Some Conservative Members have argued for limits to the amount of subsidy paid to farmers. That is an interesting idea, but it has disadvantages for individuals. However, the argument is worth considering.

Dame Elaine Kellett-Bowman: With respect, in the European context it is dangerous to refer to small farms because what is a small farm in Britain is a large farm on the continent. One must be careful to define what one means by such terms.

Mr. Morley: I am grateful to the hon. Lady. I am aware of the average size of United Kingdom farms compared with European farms. I shall say a word about European farmers later.

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There have been problems with headage payments, which have led to overstocking and distortions within the livestock sector. It is also hard to justify the fact that some agricultural sectors are heavily subsidised while others are not. That again distorts the market and means that there is no free market in agricultural products. It is hard to justify subsidies for the dairy, beef and sheep sectors while the pig and poultry sectors receive no subsidy. Such subsidies also influence the debate on the transport of live animals for slaughter. It is a scandal that continental veal producers are often linked to dairy producers. The unnatural liquid diet on which veal calves are force fed comes from generously subsidised milk powder from surplus milk production. Such distortions and abuse should be stopped. I hope that the Minister will argue for such changes within the CAP regime.

Producers such as Welsh sheep farmers who have been so unfairly critical of the NFU in recent months should remember that up to 75 per cent. of the net income of those in the less-favoured areas comes from subsidy.

Some people have called for disruptive action in response to the demonstrations about live exports. They should stop and think about what that would do to their image, and about the support that they receive from taxpayers--some of whom are demonstrating against live exports. They should heed the wiser counsel of organisations such as the NFU, which know the most effective ways of lobbying and putting the farmers' case.

The same applies to the dairy sector, which the CAP supports to the tune of about £230 per year per cow. As has been pointed out, those who have received milk quotas have received a substantial free capital asset. I am not saying that farmers should not have the right to demonstrate and to put their point of view--or, indeed, that fishermen should not have the same right, although I have every sympathy with the Minister.

The unsubsidised pig sector has had a difficult couple of years. It currently faces the cost of phasing out stalls and tethers. The sector should be congratulated on the positive way in which it has approached animal welfare, but it would not be unreasonable to give it some support at this difficult time. Grant aid is being offered to Northern Ireland producers; why cannot that aid be extended to the rest of the United Kingdom?

Why should we not consider 100 per cent. first-year tax allowances for the cost of replacing stalls and tethers? Why should we not consider enabling capital allowances for buildings with a short lifespan to be written off over their useful lives? Why should we not consider allowing losses to be carried for three years for income-tax purposes, in line with the arrangements for corporation tax? I hope that the Minister will raise those points with the Chancellor, and that they will be dealt with in the Finance Bill.

I must comment briefly on the export of live animals for slaughter in the context of CAP reform. CAP regimes distort the livestock sector, as the hon. Member for Ludlow (Mr. Gill) pointed out. I must take issue with the hon. Members for Hexham and for Ryedale (Mr. Greenway): the export of live animals for slaughter exports jobs from the rural economy, quite apart from the attendant welfare problems.

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Of course problems are involved in, for instance, calf production. If we are to restrict the export of calves in veal crates, we must consider supporting the production of rose veal in this country, and providing marketing aids. We must consider the production of lightweight beef, and selective breeding. The Labour party has discussed those issues with the Meat and Livestock Commission, and with the industry.

There is less of a problem with sheep exports. Currently 80 per cent. of the sheep trade is carcase trade, and I am sure that the remaining 20 per cent. could be absorbed by further carcase exports. In its recent report "UK Live Animal Exports: the Implications of a Significant Reduction in the Trade for the UK Meat and Livestock Industry", the Meat and Livestock Commission considers the issue of live exports in some depth, and from the producer's point of view. The MLC examined the effect on lamb prices of reducing the number of exports, and found that prices at market had generally been rising as a result of reduced lamb slaughtering following this year's reduced lamb crop. There have been some improvements in the French market price, possibly as a result of fewer live sheep imports, and a 3 per cent. fall in the value of sterling. The MLC said that there were

"real opportunities for the expansion of the export market for lamb and there is scope for extending the home market. These will be major challenges for the industry and will require the maximum amount of support from MLC and Government."

Mr. Stevenson: Is my hon. Friend aware that the ability to develop a home market in meat is compromised by the lack of licensed abattoirs? According to the MAFF report there are about 1,400 licensed red-meat abattoirs, approximately 800 of which are on temporary derogations and could close at the end of the year unless they are brought up to structural standards. The Government seem oblivious to the problem

Mr. Morley: My hon. Friend makes an excellent point. The closure of abattoirs is certainly linked to the problem to which he refers. Although, overall, there is spare capacity in abattoirs in this country, the major problem is where they are. A regional policy should certainly be considered. We can and should be adding value and concentrating on the first-class meat export business trade, not on a second-class live animal for slaughter trade.

There seems to be a case for arguing that there should be a European fund to provide capital grants for moving towards high-welfare production systems. That would include the pig and poultry sectors. I recently visited the Agricultural Development and Advisory Service experimental farm at Gleadthorpe, looked at various systems of egg production and talked to United Kingdom egg producers. It is only fair that I put on record the tremendous work that the poultry sector is doing in developing a more welfare-friendly system. It is, of course, concerned that, in Europe, little progress seems to be being made in comparison to this country in the development of welfare-friendly production schemes.

One way to deal with that problem would be to argue for the establishment of a European fund, to which any producer in any member state could bid for capital assistance. I am quite confident that, given their excellent record, British producers would make the majority of applications to that fund. Again, the Minister may care to consider that in any reform of the common agricultural

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policy. A number of budget headings could be diverted to fund such a scheme--scrapping the tobacco regime would certainly be one of them. I am sure that better options for rural employment can be provided than the tobacco scheme.

We in the Labour party believe that much of the support schemes, quota arrangements and intervention buying is expensive and wasteful and is damaging the development of a strong agricultural market. We want to phase those schemes out in an orderly and structured way--not overnight, as the hon. Member for Gloucestershire, West (Mr. Marland) said. It has to be done sensibly and, of course, by negotiation in the European Community.

We also want to ensure that production matches demand. We have already heard examples of the proposed reforms for the sugar regime. It would be quite unacceptable if our quota was cut even though the UK is not self- sufficient in sugar production.

The idea of decoupling support from production and intervention is supported and accepted by most of the main farming organisations such as the National Farmers Union, the Country Landowners Association and other countryside organisations. Indeed, as far as I can remember, every hon. Member who has spoken in the debate supports such reform of the CAP. Questions lie in the form, application and speed of that reform. If we can achieve that decoupling, there is great potential for redirecting the savings towards a more constructive use in the countryside.

We want progressively to increase support for environmental land management schemes, as we progressively reduce support for production. It is quite unacceptable that the agri-environmental package in the CAP accounts for a paltry 1 per cent. of the total UK CAP budget. We need to move towards a more integrated land management policy. We need to support research and development, as my hon. Friend the Member for Edinburgh, East rightly pointed out, especially on non-food crops.

We need to identify socio-economic factors, such as upland and isolated communities. Farming in the rest of Europe, such as that under the cork forests, in eastern Europe, especially in Poland and Czechoslovakia, on the Spanish steppes, which are threatened through ploughing and open irrigation, and in the Greek olive groves are part of a very rich bio- diversity. If we are to have a CAP structure, I for one would much rather that it supported that range of European bio-diversity and the many communities that farm with such methods than the move towards large-scale farming that we seen over recent years.

We need to have basic environmental protection, which should be an obligation on all land users. Important areas should be protected by statute, but where there is a need for management such agreement should be available on a voluntary option basis. There must be co-ordination between European schemes and GATT. Set-aside should have a clearer environmental role, including a forestry role. I have said before that I very much welcome the progress that the Minister has made in negotiating that. We need to ensure that environmental conditions apply to all support payments in all agricultural sectors. The treaty of Rome should, indeed, be amended at the 1996 intergovernmental conference to reflect that.

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Diversification should be encouraged within a rural and land use policy framework, and we need to encourage a sustainable and prosperous rural economy, recognising the important role of agriculture as a principal land user.

There are several ways of achieving those objectives, but repatriation is not really one of them. That would simply distort any agricultural market within the European Union and lead to unfair competition. If the individual elements of CAP contributions were given to member states what control would there be, for example, of France's support for its pig industry and Holland's support for its dairy sector? It would be impossible for there to be any kind of fair agricultural market on that basis.

We could have repatriation only within a strict framework of environmental support agreed through the European Union, so that support for the agricultural sector was based on land management objectives and not used as a production subsidy.

There is widespread recognition of the failures and distortions of the CAP, and our amendment reflects the mood of the House and of the country. I was sorry to hear the arguments of the hon. Member for Wolverhampton, South- West (Mr. Budgen) about why he feels that he must vote for the Government. At least he was honest when he said that this was not the time to attack the Government. According to him, the time to attack them is when they are arrogant and popular--so presumably, according to his argument, when they are arrogant and unpopular it is not the time to attack them.

The hon. Gentleman seems to offer us one of the first cases on record of a rat jumping back on to a sinking ship instead of deserting it. How will he be able to hold his head up again when he talks about the European Union, after voting for a motion that "congratulates the Government on its robust negotiating stance on the CAP since 1979",

and on

"its leading role in achieving reform of the CAP",

although we know that prices have increased, fraud continues, farmers are still leaving the land and consumers are still paying far too much?

The hon. Gentleman intends to vote for that Government motion and not for our amendment, although our amendment stands not only for what we have argued for but for what he has publicly argued for. He is entitled to his own opinion, but he is not entitled to argue one thing and vote for another, which is not what some of his hon. Friends have said they will do. I do not think that we shall take what he says about Europe very seriously any more.

It is time for a constructive debate on Europe, such as we are trying to have on CAP reform. It is not good enough constantly to attack Europe in a negative and damaging way, as the hon. Gentleman does. The hon. Member for Wycombe (Mr. Whitney) was right to say that the hon. Member for Wolverhampton, South-West should publicly say that we should leave the EU. He should campaign for that instead of constantly sniping and fuelling the civil war in his party, because all that is affecting public perceptions of the EU and of the positive aspects that we in this country should support.

There is a case for criticism and for arguing for reform, and we have been making that case tonight, but there is also a case for recognising the benefits of the EU for the agricultural and food sectors and for the rest of the

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economy, and we should think about that when people embark on xenophobic, irrational and ill-considered attacks. As the hon. Member for Wolverhampton, South-West intends to support the Government tonight, I hope that in future we shall hear less of those attacks and more of his defence of the European Union and of the Government's position.

9.33 pm

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): This has been an interesting debate, and I am grateful for the contributions of my hon. Friends the Members for Hexham (Mr. Atkinson), for Norfolk, North (Sir R. Howell), for Ryedale (Mr. Greenway), for Wolverhampton, South-West (Mr. Budgen), for Gloucestershire, West (Mr. Marland), for Northampton, North (Mr. Marlow), for Harborough (Mr. Garnier), for Ludlow (Mr. Gill), for Plymouth, Sutton (Mr. Streeter) and for Wycombe (Mr. Whitney), who in their own ways all touched on the many dimensions and aspects of the common agricultural policy as seen by Conservative Members. I shall deal with the remarks of the hon. Members for Edinburgh, East (Dr. Strang) and for Glanford and Scunthorpe (Mr. Morley) in due course, but we also heard some comments from the hon. Members for Stoke-on-Trent, South (Mr. Stevenson), for North Cornwall (Mr. Tyler), for Cardiff, Central (Mr. Jones), for Ynys Mo n (Mr. Jones), for Angus, East (Mr. Welsh) and for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I shall have more to say about those hon. Members in a moment.

The problem for some Conservative Members is that there is perhaps a temptation to give some credibility to the amendment tabled in the name of the Leader of the Opposition. Anybody with the type of analytical skills displayed in this debate who reads the thin diet which stands for an Opposition policy on agriculture will see that the Government are truly addressing the issues of reform and modification of the common agricultural policy in the interests of the food industry, consumers and farmers, while the Opposition are out on a fishing trip for some kind of short-term political gain. We have credible policies, as outlined in the excellent speech by my right hon. Friend the Minister of Agriculture, Fisheries and Food. My hon. Friends the Members for Ludlow, for Northampton, North and for Wolverhampton, South-West have their own way of looking at the debate. My hon. Friend the Member for Ludlow says that the common agriculture policy cannot be reformed, and says that he talks as a craftsman and a farmer. I would say to my hon. Friend that I earned my living in the horticulture industry before coming to the House. I also have first-hand experience of what it is like to operate in a sector that effectively has no direct intervention. I know what it is like to live on my wits to serve the needs of customers. But I also know what it is like to operate within a European market where having, for example, common standards in terms of grading means that I can operate Europewide and worldwide in agri-food products. The reality of the debate is that we cannot instantaneously change the common policy.

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My hon. Friend the Member for Ludlow has a unique view of the matter, and he knows that, at the end of the debate, we will not be able to trigger the type of reform that he seeks. The ideas which we have put forward provide a solid and sensible way of dealing with some of the problems of the common policy, and I hope at least that he will see favour in the line that we are taking. He is right that we must make the common policy more responsive to the needs of the marketplace. He also mentioned the pig meat regime. We voted solidly against that proposal--the regime has now ended--as it was not something with which we could agree.

My hon. Friend also talked on the subject of abattoirs, the problems of which are affecting a number of my hon. Friends. At a time when the consumption of red meat is under pressure, when matters of hygiene and quality are of uppermost concern and when meat is being dominated by the supermarkets which seek the highest standards, some of the enormous investment that has been made to ensure the highest possible standards must be supported by those in the meat trade to safeguard an important industry for our farmers. I am sorry that the hon. Member for Northampton, North is not in his place. [Interruption.] He has shifted places. I see that he has put his hand up at the back of the class, and I recognise him. Unfortunately, I cannot sustain the same benevolence to him as I did to my hon. Friend the Member for Ludlow for his arguments on the subject of repatriation. His argument would cause significant problems of distortion, and that view is shared by Members on both sides of the House. Nobody seriously supports repatriation because of the potential for distortion and unfairness which could creep in. In discussions on the common policy, one often hears people seeking reassurance that things will be fair and that the rules will be implemented. Repatriation is a short route against that. I do not understand my hon. Friend for Northampton, North who, on the one hand, was advocating a free market approach, but, on the other, started to talk about standard quantities of milk and some form of intervention system. That did not seem entirely consistent with the freeing up of the market that he wanted.

Many hon. Members have tried to put the matter into perspective. Let us consider the costs of the common policy. If we convert into 1993-94 prices the amount of money that we spent on agricultural support in the financial year 1958-59, the figure is £2.8 billion. We spent £2.7 billion in 1994-95. That is not an excuse not to reform. As my right hon. Friend the Minister said, one of the great drivers of change will be the expansion of the Community and the pressure that enlargement will put on the budget. However, I ask my hon. Friend to keep the amounts in perspective.

Mr. Marlow: My hon. Friend has made various points--

Mr. John Greenway: He is not your hon. Friend.

Mr. Marlow: Of course he is my hon. Friend. He is all right. My hon. Friend said that there had been no great change in agricultural support. May I remind him that we contribute net to the Community budget a further £3 billion, some of which could be spent on agricultural support. My hon. Friend said that what I suggested would be unfair to the British farmer. Is it fair that the British

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farmer can produce only 80-odd per cent. of the milk required in the United Kingdom, that we cannot produce as much lamb as we possibly could because of quotas and that we have to take more of our land out of production than any other Community country?

Mr. Jack: The Government understand those frustrations. We seek in the long term to remove the barriers to letting the excellence and efficiency of our farming operation have its particular way. As my hon. Friend the Member for Wycombe adduced in his remarks, had we been a member of the Community at the beginning, we could have designed a system that did not have the restrictions to which my hon. Friend refers. Now is the time to back the Government, who take reform seriously in a properly presented way.

The hon. Member for Wolverhampton, South-West, in his own forensic style, intervened in the debate on several occasions. He was right when he talked about the need to make the CAP more market-driven. On that point, we agree with him. I was delighted with his comments because he reflected well on what my right hon. Friend the Minister said about our desire to reform.

The hon. Member for Wolverhampton, South-West asked some specific questions about the implementation of the milk quotas. Spain has now fully implemented milk quotas. There will be a report from the Commission by 31 March on Italy's efforts to implement the quotas. If it has not done so, it will face further penalty. My right hon. Friend will have an opportunity to raise those matters in the Agriculture Council.

My hon. Friend the Member for Ryedale set an example for the House in his speech. He did what the hon. Member for Edinburgh, East singularly failed to do. He worked out a plan of campaign. Opposition Members shake their heads as if they had not heard his sage words. Let me remind the House what my hon. Friend said. The hon. Member for Ynys Mo n could perhaps associate himself with it. My hon. Friend said that change needed to be well thought through. He was right. He said that if we were to change from one thing to another we should not tip the baby out with the bathwater. He was right. He said that change should be gradual. He was also right about that.

This morning the hon. Member for Edinburgh, East told the Financial Times what a mess the CAP was. Then, as he sought instantaneous change, he also told us that we needed gradual reform. He is possibly one of the most inconsistent people. My hon. Friend the Member for Ryedale is entirely consistent. My hon. Friend went on to talk about the need to move the CAP closer to the market. On that point again, he was right. He said that the CAP should be non-discriminatory. Absolutely. If there is to be fairness, all the talk of repatriation must be set aside. Otherwise, we shall fall on to a discriminatory track.

My hon. Friend mentioned environmental benefit. Given that in the financial year 1996-97, when our full agri-environment package is up and running, we will spend about £100 million, I agree with him. One of the areas for reform that must be explored is that to which the hon. Member for Glanford and Scunthorpe alluded in his speech. At least he had some ideas that we can debate. I searched for them in the speech of the hon. Member for Edinburgh, East, but could not find any. Environmental cost compliance is an important area for the future of the CAP. Those prepared to debate

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reform sensibly yearn to see the common policy develop more environmental credentials. That will be an important theme as we develop the debate on reform.

My hon. Friend the Member for Ryedale said that we should have regard for the food and drink industry. I could not agree with him more. One of the great missing elements on the Opposition Benches is a regard for the purpose of the agricultural industry, which is about producing the raw materials for our competitive food industry. If it is to remain competitive, Conservative Members' idea of dispensing with the unnecessary burdens and costs of the social chapter will allow our food industry to triumph in Europe, rather than fail as it would under Labour policies.

Lady Olga Maitland (Sutton and Cheam): Does my hon. Friend agree that it is extremely important that we should do everything that we possibly can to export excellent produce from this country? Furthermore, does he agree that the Food From Britain campaign has had tremendous success? Will he tell the House how much he has invested in that programme?

Mr. Jack: We are putting some £6 million into Food From Britain, which is an excellent organisation. For example, I am about to announce an export seminar to encourage tremendous development in horticulture. My hon. Friend is entirely right.

My hon. Friend the Member for Ryedale went on to discuss matters connected with retaining the security of food supply, which is also important to the food industry. His plan was a blueprint that should be listened to by hon. Members across the House-- [Interruption.] --despite the carping voices opposite.

My hon. Friend the Member for Gloucestershire, West drew attention, in his unique style, to some of the problems of Milk Marque and invited me to comment on those. The Office of Fair Trading and the European Commission can be used if questions of abuse of competitive position arise. That was made clear during the passage of the Agriculture Bill and subsequently. Milk Marque will have noted carefully what my hon. Friend said, as will others in the milk industry, because commentary at this stage is particularly valuable. My hon. Friend the Member for Sutton recognised an important point when he said that some form of agricultural support is inevitable. In a perceptive speech to the Oxford Farming conference, my right hon. Friend the Minister reminded the industry that any change would inevitably be gradual and that the rest of the world, with the possible exception of New Zealand, would not easily give up its present support because it knows that it is an important negotiating tool when it comes to further rounds of the general agreement on tariffs and trade. My hon. Friend also pointed his finger at enlargement, which I shall discuss in a moment.

My hon. Friend the Member for Harborough paid tribute to our pioneering work on the inheritance tax changes in the context of the Agricultural Tenancies Bill. It is notable that such a pioneering measure, which is designed to bring new blood into the farming industry, should be so vehemently opposed by the Opposition.

Mr. Foulkes: Will the Minister give way?

Mr. Jack: No, I do not think that I will--not to the hon. Gentleman. I want to talk to my hon. Friend the Member

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for Hexham, who asked what Labour was all about in this debate. We are still searching for the answer. He developed the theme of world competition, and agriculture is a world competitive activity. We have a great deal of good techniques that are much demanded outside the shores of this country, and we support the industry's export activities.

Mr. Foulkes rose --

Madam Deputy Speaker: Order. It is clear that the Minister is not giving way, so the hon. Gentleman must resume his seat.

Mr. Jack: My hon. Friend the Member for Hexham also discussed animal welfare, to which I shall return in a moment.

My hon. Friend the Member for Wycombe provided us with a useful background, giving us the context in which to regard the subject, which is the wider debate on Europe. I think that he is right to try to do so, to place in perspective the important agricultural matters that we are considering.

My hon. Friend the Member for Norfolk, North took us through some important parts of the discussion on the subject of-- [Interruption.]

Madam Deputy Speaker: Order. I remind the House again about sedentary interruptions and what I would call running commentaries.

Mr. Jack: My hon. Friend the Member for Norfolk, North takes a considerable interest in the costs and expenditure of the common agricultural policy. However, the latest figure that we have--we have deposited a report in the Library to that effect--is that the cost of agriculture per person in this country is £4 per week. That is the most authoritative and definitive figure that we can have. My hon. Friend was right, however, to caution the House not to place too much weight on some of the figures about relative savings that could result if there were no common agricultural policy, because it is extremely difficult to predict what the shape of world prices would be compared with European prices if there were no common agricultural policy. He did the House a service with his arguments in that respect.

Mr. Welsh rose --

Mr. Jack: I want to comment on the speeches of several hon. Members and, in fairness, I shall comment on the arguments of the hon. Member for Angus, East in due course.

It is quite nice to see the hon. Member for North Cornwall in the Chamber this evening. Your absence was noted, you are quite right, in the debate on the Agricultural Tenancies Bill, and your absence from the-- [Hon. Members:-- "Order."] Your absence from the animal welfare--

Mr. Morley: The hon. Gentleman's absence.

Mr. Jack: The hon. Gentleman's absence. I appreciate that. The absence of the hon. Member for North Cornwall from the Agriculture Tenancies Bill debate and from the animal welfare debate and parliamentary questions was duly noticed. [Hon. Members:-- "Hear, hear."] Having suffered 31 minutes of him in the debate on hill livestock

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compensatory allowance, only for him to be ruled out of order by the Chairman, I think that he probably did us a service by not being there to give us his opinions.

The hon. Member for North Cornwall agreed with us about repatriation, and I was grateful for that support. He also spoke on the subject of a common rural policy. His is an over-bureaucratic approach to that. Ours is the suggestion of having a rural White Paper. My right hon. Friend the Minister of Agriculture, Fisheries and Food, my noble Friend Earl Howe and I have chaired a series of seminars throughout the country to listen carefully to all those who have an opinion about the development of the rural economy in this land.

The Conservative Government are consulting as widely as possible. We have received about 300 submissions already about that matter. There is overwhelming interest in the way that we are developing a rural approach to policy.

The hon. Member for North Cornwall chastised me on the subject of hill livestock compensatory allowance and the hon. Members for Carrick, Cumnock and Doon Valley and for Angus, East discussed that. I draw their attention to the fact that we do have to take into account the total position of the subsidy incomes that will be paid in terms of hill farmers.

Mr. Tyler: Will the Minister give way?

Mr. Jack: Would the hon. Gentleman allow me to answer the arguments that he made in his speech before he comes back? In 1994, the total subsidy going to hill farmers was about £550 million. That increased to £600 million. In its third report the Agriculture Select Committee said that it did not see anything sinister in a switch in the source of funding from the United Kingdom Government to the European Community. It noted that we could rightfully take those matters into account. I discussed the hon. Gentleman's other argument in my remarks about non-farming incomes.

Mr. Tyler: Does the Minister now deny the facts that he has laid before the House this evening--that hill farmers had reductions in their income last year and will have a further drop in the current year? If the compensatory allowances are to mean anything, surely he will compensate for those reductions?

Mr. Jack: I am adverting to the fact that there is an increase in moneys going into the hills, not necessarily from the hill livestock compensatory allowance, which my right hon. Friend the Minister of Agriculture, Fisheries and Food held constant against last year. I have told the hon. Gentleman that there are other subsidy increases. He also seeks to ignore the support that we are able to give as a Government through objective 5b status--about £620 million--to help strengthen those difficult parts of the country. We understand the problems of the hills. We will continue to consider those problems carefully and we are trying to strengthen the economy in those areas.

The hon. Member for North Cornwall, in common with other hon. Members, spoke about pigs. The Ministry has held a seminar with leading members of the pig industry to try to find a way forward. The hon. Member for North Cornwall spoke about Northern Ireland. I should say that, under objective 1 status, Northern Ireland has the ability to use some of its moneys for a limited scheme of help

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with investment in sow stalls and tethers, but only for the smaller pig herd. The important point to remember is that 60 per cent. of our pig herd is already in loose accommodation. Those who have made that change may be rather worried about the possibility of funding those who have not already done so.

I was somewhat surprised by the speech of the hon. Member for Edinburgh, East. He took us on a statistical magical trip around the CAP, but all Conservative Members were left desperately searching for some indication of Labour party policy on agriculture. None of us was able to find one iota of Opposition policy.

The hon. Gentleman was continually probed about that by my hon. Friends, but he failed to come up with any suggestion of Opposition policy. Having listened to his remarks, that is not surprising. He has, after all, singularly opposed the sensible changes that we have made. When it came to developing the future of agriculture with the Agricultural Tenancies Bill, the hon. Gentleman led the charge against it. He does not acknowledge the thinking on how to review the CAP, but my right hon. Friend has appointed a group to do that. Where is the Labour party's policy?

The hon. Gentleman has failed to acknowledge the lead that we have given to the reform of the CAP. He fails to understand the dynamics of the enlargement of the CAP. My right hon. Friend was right when he pointed out that it is external pressures on the CAP which are the main driver to change. The hon. Gentleman fails to give any weight to the efforts that the Government made to ensure that the MacSharry proposals have led to a 30 per cent. reduction in cereal support prices; a 15 per cent. reduction in beef support prices and a greater move towards the market driving the CAP. Those are Conservative achievements, but the hon. Gentleman offered us not one iota of similar Opposition policy. In every way he has tried to frustrate sensible debate on change to the CAP.

The hon. Member for Glanford and Scunthorpe had the nerve to start talking about animal welfare. My hon. Friend the Parliamentary Under-Secretary of State has already put before the House a six-point plan on ways in which we are trying to safeguard the meat trade in this country; safeguard a European solution on animal welfare as well as safeguard the veal industry by developing rose beef in this country.

I should point out what the hon. Gentleman said recently about bovine spongiform encephalopathy in the export of animals. His comments were reviewed in Farming News , which said that he made irresponsible remarks and that his contribution represented "good political point scoring perhaps, but the tempting conclusion has to be that politicians would do better to concern themselves with Britain's agricultural economy than the minuscule threat to the welfare of European consumers."

Because of his remarks, the hon. Gentleman put the meat trade at risk. He has also done a great disservice to the Government's efforts to deal sensibly with issues connected with the welfare of animals. Mr. Morley rose --

Mr. Jack: No, I will not give way, because every hon. Member should appreciate that it is the Conservative party that takes reform seriously. We have seen from tonight's debate that the Labour party is not the farmer's friend. The Opposition have little understanding of rural life and no clear agenda for the future shape of the CAP, as their

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amendment shows. It is Conservative Members who have the ideas about renegotiating the CAP and who live in the real world of food and farming. We are taking forward new thinking and new ideas about the rural economy. We are moving forward in the fight against fraud in the context of the common agricultural policy, and we are seriously considering the question of enlargement as the key to the much-needed reforms that we advocate. I urge all hon. Members to support us in the Lobby tonight.

Question put, That the amendment be made:--

The House divided: Ayes 278, Noes 305.

Division No. 106] [10.00 pm


Column 244

Abbott, Ms Diane

Adams, Mrs Irene

Ainger, Nick

Ainsworth, Robert (Cov'try NE)

Allen, Graham

Alton, David

Anderson, Donald (Swansea E)

Anderson, Ms Janet (Ros'dale)

Armstrong, Hilary

Ashdown, Rt Hon Paddy

Ashton, Joe

Austin-Walker, John

Banks, Tony (Newham NW)

Barron, Kevin

Battle, John

Bayley, Hugh

Beckett, Rt Hon Margaret

Beith, Rt Hon A J

Bell, Stuart

Benn, Rt Hon Tony

Benton, Joe

Bermingham, Gerald

Berry, Roger

Betts, Clive

Blair, Rt Hon Tony

Blunkett, David

Boateng, Paul

Bradley, Keith

Bray, Dr Jeremy

Brown, Gordon (Dunfermline E)

Brown, N (N'c'tle upon Tyne E)

Bruce, Malcolm (Gordon)

Burden, Richard

Byers, Stephen

Caborn, Richard

Callaghan, Jim

Campbell, Mrs Anne (C'bridge)

Campbell, Menzies (Fife NE)

Campbell, Ronnie (Blyth V)

Campbell-Savours, D N

Cann, Jamie

Carlile, Alexander (Montgomery)

Chidgey, David

Chisholm, Malcolm

Church, Judith

Clapham, Michael

Clark, Dr David (South Shields)

Clarke, Eric (Midlothian)

Clarke, Tom (Monklands W)

Clelland, David

Clwyd, Mrs Ann

Coffey, Ann

Cohen, Harry

Connarty, Michael

Corbett, Robin

Corbyn, Jeremy

Corston, Jean

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