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Mrs. Teresa Gorman (Billericay): Is my hon. Friend aware that farmers in New Zealand had tremendous problems with form filling, and were being driven mad by bureaucracy? The New Zealand Government-- incidentally, a Labour Administration--have dumped the subsidy system and returned to a free market. The New Zealand farmers are now doing wonderfully well without bureaucracy on their backs.
Mr. Gill: My hon. Friend makes an extremely good point. The New Zealand Government stopped subsidies. They also stopped many welfare payments. Why did they do so? They took that action because the money ran out. Having weaned the farmers and others off subsidies, the
New Zealand Government find that they have a much more vibrant economy than that of the United Kingdom or anywhere else in western Europe. They have a strong currency, low inflation and low unemployment. As I understand it, there is scarcely a farmer in New Zealand who wants to revert to the previous heavily subsidised system.
There are four reasons why the CAP is making things so difficult. As time is limited, I shall be brief in describing the harm that it is doing. It has had a disastrous effect on the pastoral economies of the third world. It negates the law of supply and demand. It is harmful to innovation in agriculture. It is almost immune to the real needs of the marketplace. It is socialist. It imposes quotas, specifies qualities and fixes prices. The end result was surpluses. We have tweaked the CAP again, with the result that there is more political interference and more of the planned economy, which is in great danger of creating shortages in the cereal market because of the introduction of set-aside.
I understand why the hon. Member for North Cornwall can support the CAP. Doubtless the spokesman for the Opposition, the hon. Member for Glanford and Scunthorpe (Mr. Morley), will jump to his feet to support it. They should support it, because it is a socialist concept. I cannot understand, however, why a Conservative Government can be such a willing accomplice to Soviet-style central planning. It is simply naive to believe that the system is capable of reform. It is fundamentally flawed. It is impossible to police and control. It is hugely expensive. The public pay twice: once as taxpayers, and a second time as consumers.
All that is in complete contrast to the old British system, the deficiency payments scheme, which had the advantage of redistributing money. Money was taken from the taxpayer. It subsidised the production of food, which reached the marketplace at a cheaper price, to the ultimate benefit of those on low incomes. It was a good system.
Mr. Elliot Morley (Glanford and Scunthorpe):
I congratulate the hon. Member for Northampton, North (Mr. Marlow) on securing the debate today, as these are important issues--there is no denying that. There are severe problems with the CAP that need to be dealt with. It needs to be reformed. That is the position of the Labour party. I have to say, however, that it is going it a bit to describe the right hon. Member for Suffolk, Coastal (Mr. Gummer), when he came back in 1992, as some kind of red commissar presiding over a centrally planned economy within the CAP and the European Union. That is somewhat stretching the point.
Although I listened to the hon. Gentleman's argument carefully--indeed, the argument for repatriation is a position that has been taken by a number of
commentators, and there are a number of options for reform--the concept of repatriation and a free market are a contradiction in terms. One cannot have repatriation of European funds to member states and allow them to subsidise different sectors of agriculture in different countries, and then hope to have a free market on a level playing field. That just could not be done. I hope that the hon. Gentleman will accept that.
I have a constituency interest in the pig and poultry sector. Although there is a little truth in what the hon. Gentleman said about the poultrymeat sector, in the pig sector there has been a major move to extensive field systems, and that is a welcome change in terms of pork production. So he can eat pork with a clear conscience in terms of the way in which it is produced in this country.
I was also surprised with the storyline in "The Archers", which has been touched on. The story was that, although Brian Aldridge lost his £9,500, he was receiving an integrated administration and control system cheque for nearly £110,000, and that caused particular offence to another character, a business man whose business had gone bust in the recession.
As he pointed out, the whole idea of the changes in 1992 was to give compensation to the area payments for reduced prices, yet cereal prices have gone up. It is true that is partly as a result of the fallout in the devaluation of the pound--there is no denying that--but there is no doubt whatever that, in the arable sector at the moment, it is a win-win situation for farmers. Indeed, the monthly IACS cheques are just like monthly lottery wins in some sectors.
Mr. Marlow:
Is the hon. Gentleman saying that it is the policy of the Labour party that large farmers should not get compensation for land that is taken out of production?
Mr. Morley:
It is certainly the policy of the Labour party that we should move away from production subsidies. I want us to be absolutely clear about that. Although we recognise that there is a need for agriculture support in certain sectors, we believe that there are better ways of doing that. I will touch on those in a moment.
When approaching the issue, it does not help to take a negative isolationist view within the European Union. I notice that, in Farming News, Sir David Naish said:
Although there is a perfectly respectable case for arguing the different ways of approaching reform of the CAP, it does not help to be in the Government's situation, split between the different wings--the Euro-sceptics and the Europhobes. That has paralysed their approach to the way in which it should be done.
To be fair, the hon. Members for Northampton, North and for Ludlow (Mr. Gill) have won their arguments with the Conservative party in many ways. The Government are the prisoner of the right. They have moved towards the positions of other Conservative Members in the campaign that they have been running. It is the first time that a Government have gone cap in hand to a group of rebels rather than withdrawing the Whip.
The Labour party recognises the problems of the CAP, and they are also recognised in Europe. In a recent report, Mr. Fischler stated that there was a need for simplification of the CAP. He went on to say that it has
I make it clear that we in the Labour party are committed to radical reform of the CAP. We are not afraid to argue for that, both in this country and within the European Union. But the difference between the Labour party and the Government is that we have allies in the European Union, and we can find consensus in terms of getting that agreement.
We want to uncouple agricultural support from production. We want an end to quotas. We believe that set-aside is a negative use of public funds, except when it is used for conservation purposes--long-term set-aside. We want to move towards world pricing for agricultural products.
We also recognise that there is a need for support, but, as part of the change within the CAP budget, we want to see the available funds redirected towards environmental support, and--perhaps as important--support for the wider rural economy, in creating jobs and supporting businesses. We want to recognise the problems of upland farms and their needs. Although we want to press for radical change, we believe that we can encourage and support the approach towards a better rural environment with the funds available.
If one contrasts that positive approach with that of the Government and their priorities on CAP reform, one will see that, according to their Budget statement, within the areas where they have some influence of reform, they want to cut the EC surplus food scheme altogether; restrict eligibility for the R3 carcases category--a stunning 3 per cent. reduction in the number of carcases available-- withdraw from the school milk scheme; end the EC processing and marketing grants scheme; end the fisheries grants; and cut back on research and development, at a time when there is a great deal of consumer concern about food, and there is a pressing need for R and D in all areas of agriculture.
That is a glimpse of the Government's priorities for reform--snatch the milk from our nation's schoolchildren, mug our pensioners and poor for the cheap butter and mince, and invite redundancies from our major team of scientists who are doing vital work on research on the risk to consumers from bovine spongiform encephalopathy. At a time when everyone in the agriculture sector agrees on the need for increased marketing and added value, particularly in developing a high-value meat export trade and moving away from live exports, funds through European Union schemes are to be axed.
"Internal sniping by politicians is jeopardising Britain's chances to win allies before next year's EU inter-governmental conference".
He continued:
"And that made it extremely difficult for the NFU to make its case for UK agriculture within Europe".
"become quite complicated over time, and increasing complexity has made policy management increasingly difficult. In addition it has led to a negative image of the CAP in public opinion (complicated, opaque, bureaucratic, not understandable, open to abuse and fraud)".
He is absolutely right, and I am pleased to see that it is recognised at the highest levels of European policy-making. I very much want to see something stem from that.
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