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8.29 pm

Mr. George Stevenson (Stoke-on-Trent, South): The hon. Member for South Worcestershire (Sir M. Spicer) referred to the need to discuss the common agricultural policy. Today many hon. Members have concentrated on the BSE crisis but they have not referred to the common agricultural policy. The hon. Gentleman went on to comment about the waste, inefficiency and ineffectiveness of the CAP, and I agreed with many of his views. I shall concentrate my remarks on the common agricultural policy and, in that context, refer also to the BSE crisis.

The hon. Member for South Worcestershire lost me when he tried to blame the Labour party for the Government's failure to put down a motion upon which we can vote. I part company with him on that point because I fail to see how that is the Labour party's fault. I do not follow his logic. We parted company again when he implied that he wanted to remove the CAP altogether. The Labour party wants to see it reformed fundamentally.

I think that it is relevant to refer to the BSE crisis in the context of a debate about the common agricultural policy. I believe that the application of the common agricultural policy over the past 25 years has led to some serious problems. The CAP has adversely affected our agricultural environment: it has promoted risk-taking in the pursuit of maximum output and maximum profits. I do not suggest for one moment that farmers and producers have not had some good and some lean times over the years. However, I argue strongly that the common agricultural policy ethos is to produce as much as one can as quickly as possible in order to maximise profits. Inherent in that ethos is the real risk that shortcuts will be taken.

At the end of his speech, the hon. Member for Caernarfon (Mr. Wigley) referred to the consumer. People the length and breadth of this country and in many European Union countries believe that the common agricultural policy has put the interests of the producer before those of the consumer. The correct balance has not been achieved.

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In July 1992, the right hon. Member for Suffolk, Coastal (Mr. Gummer) in his then capacity as Secretary of State for Agriculture, Fisheries and Food came to the House and claimed that the reformed common agricultural policy was good for the taxpayer, the farmer and the consumer. I shall briefly examine the validity and the accuracy of that statement.

Is it good for the taxpayer? In 1992--the year that the then Secretary of State made the statement to the House--the guarantee section of the common agricultural policy cost European taxpayers £24 billion. The anticipated cost of the same section in 1997 is some 40 billion ecu--or £31 billion. Between 1992 and 1997, the cost of the guarantee section of the common agricultural policy will increase by £7 billion. So much for it being good for the taxpayer. I cannot detect any sign--other hon. Members may be able to--that the remorseless increase in the budget will be mitigated effectively.

Many hon. Members have urged us not to be party political in the debate. However, I must put on record the fact that those massive increases in common agricultural policy expenditure were agreed, step by step, by the same Government who said in 1992 that the deal which they had fought for and achieved in Europe was good for the taxpayer. That point must be underlined.

The remorseless increase in expenditure cannot continue: this year it has increased by 10.7 per cent. over last year. I can think of many education authorities that would love to have a 10.7 per cent. increase in funding. How can the country justify that expenditure? Brussels has put up its hand for an expenditure increase of almost 11 per cent. this year while, at the same time, the Government turn around and tell the people of this country--including the researchers--that there will be funding cuts. That approach is not consistent, it is wasteful and it will not allow us to meet our objectives.

In discussing issues of cost and what is good for the taxpayer--who is also the consumer--we should note that in 1992 the Commission anticipated that the total cost of the reforms would be some 2 billion ecu over and above the 1992 budget. According to my calculations, that is about £1.3 billion. Those costs now total £7 billion. I accept that some of the costs may be attributed to enlargement, but we cannot argue away the massive increases in the cost of the CAP to which the Government have systematically agreed year after year.

Is the common agricultural policy good for the farmer? In opening the debate--or by way of intervention--the Minister of Agriculture said that farmers are better off today than they have been for many years. My hon. Friend the Member for Edinburgh, East (Dr. Strang) responded by saying that the Minister's statement might have been credible if it had been made before 20 March, but that in the present circumstances it was an insult to producers.

Let us examine how the common agricultural policy has benefited the farmers. It is true that incomes have increased across the board. They vary between sectors; they always have. Is that increase due to some deliberate Government policy? Did Ministers sit down and consider ways in which farmers' incomes could increase within the common agricultural policy? The answer is no. Farmers' incomes have increased largely because of the devaluation that was forced upon the Government in Sept 1992. That was the most significant factor to affect farmers' incomes. If the Government wish to claim credit for the increase in

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farmers' incomes, they cannot shy away from the fact that destruction of their economic policy forced devaluation and increased farmers' incomes. The Government cannot have it both ways.

The other reason why farm incomes have gone up is that there has been an increase in world prices, especially in cereals.

Year on year, it is costing the CAP £1.3 billion to cover the cost of devaluation. It has faced that cost since 1992 and it continues now. Farmers know that incomes that have been increased as a result of a destruction of Government policy and because of devaluation, and that a policy that depends on contributions of that magnitude are no basis for the future that they dearly want to see secured. We should all agree with them. It is important that we recognise that.

World prices have increased to such an extent and the CAP is such a nonsense that--I am not sure whether this is widely known--the European Union is taxing cereal exports to meet world demand. How crazy can it get? We are putting taxes and levies on imports. Because of the CAP, when we have an opportunity to export, we put taxes on those exports because of the demands of the CAP. That is absolutely ludicrous.

It is not an exaggeration to say, therefore, that when we present that scenario to farmers--they know it better than any of us because they live with it every day--and we say, "This is the future", we insult their intelligence. They know that that basis is no way to determine the future of agriculture.

The third area is the consumer. I want to relate my comments on that to bovine spongiform encephalopathy. I run the risk of being accused of using hindsight and of apportioning blame. I want to avoid that if I can, but for the Government to suggest that their actions since the early 1980s have not contributed to the disastrous fall in consumer confidence defies logic and belief. Who deregulated the animal food processing industry?

Mr. Ian Bruce: Has the hon. Gentleman read the two papers that the hon. Member for Peckham (Ms Harman) waved at hon. Members because, if he has, he will know that that is a nonsense of a charge?

Mr. Stevenson: I did say that I stand to be criticised, but I hope that my comments--if the hon. Gentleman will listen to me a little longer before he makes his charges--will show that I have a real point to make here, without apportioning blame.

In relation to the Government, two important elements run all the way through the issues that arose in the 1980s. The first is--I repeat--that there was a deregulation of the industry, which resulted in concerns being expressed by scientists that those measures ran the risk of not effectively destroying the agents that could have contributed to the problem.

Mr. Alan W. Williams: The Southwood committee was set up by the Government in 1989 to consider the origins of BSE. It reported at length. I read that report at the time and it concluded that the 1980 deregulation and, in particular, the lowering of temperatures in the rendering process caused--

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Mr. Ian Bruce: It was not deregulation.

Mr. Williams: It was deregulation. It allowed industry to maximise its profits and to choose its own temperature. That lower temperature caused scrapie to turn into BSE.

Mr. Stevenson: I am grateful for that intervention, with which I concur. Again, so that I am not misunderstood--I have touched the sensitivities of some Conservative Members--I am not seeking to apportion blame, but to string together a series of events that took place in the 1980s that lead to serious concerns about what the Government did and did not do.

Mr. Gordon Prentice: Just to nail this point once and for all, is my hon. Friend aware that page 13 of the Library paper on BSE, published today, says:

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