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Mr. Cash: Will my hon. Friend do everything possible to ensure that other member states do not get more quota unless we get more for our farmers? Will he ensure that the Italians cough up the fines that are due and that they obey the quota rules? Can he give the House an assurance, as I suspect he was about to, on modulation of compensation and ensure that farmers do not bear unreasonable income loss, but get proper compensation if the CAP dairy regime is reformed?
Mr. Baldry: It would be unacceptable for another member state to get more quota if the UK did not get more. As the House knows, we are deficient in quota. We have continuously made it clear that we do not believe that other member states should receive further quota.
Mr. Ieuan Wyn Jones (Ynys Mon): Will the Minister give way?
Mr. Baldry: Let me deal with one intervention before I tackle another.
Spain, Greece and Italy are in deep financial difficulties with the Commission in respect of making payments, because they have failed to cough up last year's super-levy. The Commission is, at last, getting tough with member states that do not comply with the rules, and not before time. We must ensure that, when we are not
self-sufficient in milk quota, other member states play by the rules, and that the Commission insists that they abide by the rules.
Mr. Baldry:
I should like to make some progress before I take another intervention.
The debate on the hard choices has already started. Our views on reform of the dairy regime were published in our response to the Select Committee report. We tabled the response at the Council of Agriculture Ministers as a contribution to the discussion in Europe. We proposed progressive reductions in support prices over five years, to bring them into line with world prices. At that point, quotas would become meaningless and could be abolished. During the transition period, cross-border transfer of quotas should be introduced, with a time-limited income payment scheme to dairy farmers designed to help them to adjust to the removal of support prices and quotas.
It is clear from our discussions in the Council of Ministers that several member states and the Commission share our analysis of the pressures on the quota system. As the Select Committee states in its report, at some stage, the European dairy industry must come to terms with trading at world prices. As a way of preparing the ground, we have called on the Commission to propose cuts in support prices as part of this year's price fixing, along the lines advocated by the Select Committee.
Regrettably, negotiations on the future shape of the CAP regime will not be as clear between now and March 2000 as hon. Members would like. The message that should go from the House to the Commission and to Europe is that we all owe it to the dairy industry to take early decisions. We are determined to put pressure on the European Commission and the Council of Ministers to ensure that early decisions are taken, so that dairy farmers can plan sensibly for the future.
Quotas are not the only concern of dairy farmers; there is also the selective cull. Many farmers stand to lose a number of their cows in coming months. We fully understand that, and that is why we have made it clear that we shall be as flexible as possible in the operation of the cull. In our package of measures to compensate for animals slaughtered in the selective cull, we have sought to be fair. We recognise the difficulties of balancing production against quota towards the end of the quota year, and have secured an extension of the quota leasing deadline for this year for producers affected. Some 15,000 dairy farmers have registered their interest in using that facility, although I suspect that few will have cows taken before 1 April.
Farm visits under the selective cull are well under way. Slaughtering has started. In Great Britain, the first visits to natal herds--the herds where bovine spongiform encephalopathy cases were born--started in the last week of January. By the end of last week, 517 natal herds had been visited and 1,300 animals were subject to provisional slaughter notices. Slaughtering is expected to start this week, with the slaughter rate building up over the next few weeks.
In Northern Ireland, farm visits started a week earlier and all but one of its 124 natal herds have been visited. The first slaughter, of 206 animals, occurred on 28 February. We hope to be able to complete the selective cull in Northern Ireland in the near future.
The quota regime affects not only farms but dairy processing. The UK dairy processing industry is likewise held back by quotas. As we never tire of reminding colleagues in the Agriculture Council, the UK is seriously in deficit in milk, but we are one of the EU countries best suited to milk production. The quota system deters investment, inward or home grown, in dairy processing. In an ever more global marketplace, world markets are growing. Multinational companies will site their processing facilities where raw materials are readily available at world prices.
The constraints of our commitments under the general agreement on tariffs and trade Uruguay round, to reduce subsidised exports, mean that large-scale investment in dairy processing in the European Union, let alone the UK, is unlikely as long as quotas and high support prices remain. The GATT constraints are already starting to bite. Reform of the dairy regime is as crucial for our dairy processing industry as for farmers.
Another important issue in recent years, as the Select Committee made clear, has been the deregulation of the milk market. That, too, has impinged as much on the processing industry as on dairy farmers, and the Committee was right to devote as much time to the subject as it did. As we stated in our reply to the report, the Government welcome the Committee's endorsement of deregulation. To some extent, the industry is still adapting to its new freedom after the abolition the milk marketing boards. By industry, I mean both processors and farmers. Some farms chose to stay with Milk Marque, some have joined forces to form milk groups and some chose to deal directly with the dairy companies.
After sharp price increases, as buyers competed for supplies for the first time, milk prices returned to their previous levels. While other factors, notably the strength of the pound, have been at play, I think that that is evidence that the deregulated market is bedding down. Although dairy farmers remain as shackled as are farmers by the quota system, the abolition of the milk marketing scheme has removed one obstacle that hampered the development of an efficient, innovative dairy processing industry.
Mr. Davidson:
Will the Minister give way?
Mr. Baldry:
The hon. Gentleman wandered into the debate at about 12.20 pm, the only Labour Back Bencher to grace us with his presence. Perhaps he cannot tell the time. Ten minutes' attendance by one Labour Back Bencher is not much.
Mr. Davidson:
On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to make an outrageous slur without seeking to ascertain why I was elsewhere? I have a shipyard on the verge of closing today--
Mr. Deputy Speaker (Sir Geoffrey Lofthouse):
Order. I have got the hon. Member's message. The Minister is responsible for his own speech.
Mr. Baldry:
The agriculture industry will regret that a false point of order has prevented me from responding to some of the points made in the debate. Again, that sums up the Labour party's attitude towards agriculture.
Deregulation has led inevitably to some restructuring and a loss of employment, but employment in the dairy processing industry has declined in recent years, and the best protection for jobs is an efficient and successful industry. We shall ensure that the competition authorities continue to determine competition policy.
The past 12 months have been difficult for dairy farmers, and that is why it was such welcome news that my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food was able to announce last month that the residuary milk marketing board would shortly be making a cash repayment of some £15 million to dairy farmers, as a further step in winding up the old board's affairs. Dairy farmers are shortly to benefit from a share of that £15 million. It has also been a difficult year for the milk processing industry, but we must look forward--
Mr. Deputy Speaker:
Order. We now come to the debate on the development of democracy in central and eastern Europe.
Sir Geoffrey Pattie (Chertsey and Walton):
Seven years ago this month, my right hon. Friend the Member for Mole Valley (Mr. Baker) invited me to take over Conservative central office's responsibility for assisting centre-right parties in central and eastern Europe. In the first two years from 1990, we had to work extremely hard to try to scrounge air tickets to visit the region and to encourage people from the region to come to the United Kingdom.
I pay tribute to members of the team who worked with me then, and to those who have taken over and carried the heat and burden of the day since. In those early days, I was assisted by Edward Llewellyn, Angus Cargill and Julian Lewis, under the direction of John Guthrie. In more recent times, the international office has been under the leadership of Richard Normington with my executive assistant, Sally Tipping, the international desk officer, Catherine Fall and Ingrid Ainley, who has run the department so well. I pay tribute to the person in my staff who has worked brilliantly with the Westminster Foundation for Democracy in the past few years, Jadranka Porter, who has been ably assisted by Abbey Rosemont.
I thank all the agents in the party's organisation and the voluntary workers who have attended weekend conferences in this country and have visited central and eastern Europe to give their advice and support. At times, it has been hard work and, occasionally, it has been slightly hairy. I know that all concerned have found it to be a stimulating and uplifting experience.
The Westminster Foundation for Democracy was founded five years ago this month, and I pay tribute to my hon. Friend the Member for West Dorset (Sir J. Spicer), who has been the chairman since its inception and has led the organisation superbly. It was essential that we had a foundation in this country, as we were lagging behind our continental friends--particularly Germany--and we still do in terms of the scale of finance. But with no foundation on the Foreign Office vote, we had no means of funding the promotion of the cause of democracy on an all-party basis. We work on an all-party basis, and we are primarily interested in the development of democratic values. However, we like jam on both sides of our bread, and if we can have a centre-right Government in the country concerned, central office is particularly pleased.
I made my first visit to the region in April 1990, when I went to Prague in what was then still Czechoslovakia. In those days, even the lexicon had to be changed, as the word "party" meant the Communist party. One needed an "alliance" or a "front" or something of that nature. I made a mistake once when I was waiting with a group of Czech friends for a group of party activists from the UK to arrive at the hotel. I glanced at my watch and said, "Our agents will be here in 20 minutes," and I wondered why everyone had gone as white as a sheet.
In those days, parties tended to be driven by personalities. I remember returning to a hotel in Sofia with a colleague and seeing a heated argument on a street corner. I said to my colleague, "I am sure that that is another political party being formed." Sure enough, there were no fewer than 57 political parties at the Bulgarian election that year. Not only were there 57 parties, but
there were two electoral systems existing side by side--half the Parliament was elected by single transferable vote, and half by first past the post. The electorate were, let us say, less than completely sophisticated in such techniques.
At that time, anyone who was not a communist was virtually bound to be elected, and the people were united in one sense--they all had no previous experience of any form of government. When the history of the past five or six years is written, people will regard this as one of the most startling developments of the century. People with no previous experience were asked to manage the transition from a demand, centralised economy to a market economy. That is extremely difficult to achieve, and many failed to make a success of it.
In early 1991, there were centre-right Governments in Poland, Hungary, Lithuania, Czechoslovakia and Bulgaria. In Poland, I recall that there was no threshold in the proportional representation system, which meant that there were at least 20 parties in the Parliament. That caused chaos. In many ways, that was part of the thrill and excitement of democracy in those early, heady days.
In 1991, we had three contrasting experiences. The Czech Republic and Slovakia separated and, to their enormous credit, did so peacefully. We should contrast that with what happened in former Yugoslavia. Following the implosion of Yugoslavia, we were able to develop contacts with centre-right parties in Slovenia. Since then, we have attempted to create cautious relationships with other parties in other parts of former Yugoslavia.
The Soviet Union collapsed in the same year, and we had hardly finished digesting the arrival of democracy in the rest of central and eastern Europe before that happened. We then had the opportunity to visit countries such as Ukraine, Belarus and, particularly, the Baltic states. I remember going to the Parliament in Vilnius, where I zig-zagged through the anti-tank barriers outside the Parliament and went up the stairs past sandbags for a meeting with the Soviet military command. As a former Defence Minister, I never thought that I would see any of these countries at first hand, let alone find myself in a room talking to Soviet military commanders. It was a startling experience.
In early 1992, the Albanian elections were held. Albania had been crushed by 50 years of the most appalling dictatorship. At the time of the elections, I stood with Mr. Berisha in a football stadium where a crowd of 15,000 had gathered. It was noticeable that the country had intermittent food supplies, and many in the crowd that day had no knowledge of whether they would get food later that week. Certainly, the hotel had no hot water or heating of any sort. Yet the people were sustained and buoyed by the knowledge that they were at least going to be free. I will return to the tragic events in Albania later.
Six weeks after the Albanian election at the beginning of 1992, I was in my constituency and participating in the British general election. People complained to me about matters such as the frequency of the bus service or the fact that a bus stop had been moved. Before my eyes flashed the faces of people whom I had seen in Albania, but there was no point in upbraiding my constituents and saying, "You should have been in Tirana six weeks ago,"
because they would have been astonished had I done so. Nevertheless, my experience in Albania gave me a useful sense of perspective of what is important.
In the second wave of elections in central and eastern Europe, many of the former communists--almost all of whom had renamed themselves socialists--were returned to power. They knew that all they had to do was bide their time, because the electorates in almost all those countries had unreasonable expectations. I am not saying that some of those expectations had not been encouraged by fledgling politicians--it would not be the first time that that has happened--but many people in the region genuinely believed that they only had to exist to achieve the living standards they had seen on German television. Of course, life proved to be much harder than that, which led to considerable disillusionment. Only in the Czech Republic have the Government of Vaclav Klaus been able to hold on to power, and even Mr. Klaus lost his overall majority.
Many of the good people from central and eastern Europe whom we brought over for weekend gatherings in the United Kingdom were former Prime Ministers--we were in danger of having a former Prime Ministers' club--but at least they were learning the lessons of the democratic process. Those lessons were that they had to be properly organised, have policies that appealed to the electorate, and be united. So often, we found that, in certain countries, there were seven, eight or more parties that we in this country would recognise as centre-right, and all were vying for the same section of the vote. We are now witnessing what might be called the third wave. Centre-right parties, having lost elections and been forced out of office, went back to the grass roots, reorganised and proposed new policies. They have now won power in Lithuania, Bulgaria and Romania and have good prospects in Poland.
I want to speak briefly about events in Albania. Those events are tragic, especially in the light of what that country has already suffered. It is right that we should ask whether the European Union, through its various member states, has done enough for Albania since 1992; or whether it has been preoccupied with the intergovernmental conference and single currency, while on its doorstep a country has been suffering. It is no coincidence that the centre of much of the so-called rebel activity in the south of Albania is Vlore, because that is the well-recognised centre of mafia operations in that area and the mafia have been infuriated by the president's efforts to close down their operations.
The problems in Albania were set out extremely well in yesterday's Wall Street Journal leader, from which I shall quote. The leader talks about the Albanian Socialist party--another former communist party that has sought to dress itself in the socialist label--and states:
12.30 pm
"The ASP's plan is so good it could be a model for disgruntled Communists everywhere: You pull out of the election if opinion polls predict you are going to lose, complain that the country has become a one-party state, wait for a cause celebre, and then encourage criminal gangs and former Communist secret police and military leaders to take up arms against the government. The cause celebre in this case was the pyramid scheme wave that got out of control before the government quashed it."
The conclusion of the leader is:
"If opposition groups don't immediately start working with Mr. Berisha to hold free elections in the coming months, and instead press for military gains, it will become clear that what they are aiming for is not democracy but a military coup. If that happens, will we still hear news reports that it is a popular uprising?"
12 Mar 1997 : Column 317
Not only is Albania suffering a tragedy, but events there are being misreported on a spectacular scale.
I conclude by saying that the opportunity that has been given to me to serve in this way and to work with so many of the new democrats of central and eastern Europe has resulted in a profoundly stimulating and memorable experience, for which I extremely grateful.
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