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House of Commons

Thursday 22 January 1998

The House met at half-past Two o'clock


[Madam Speaker in the Chair]

Oral Answers to Questions


The Minister was asked--

Common Agricultural Policy

1. Mr. Paterson: What percentage reduction in the EU agriculture budget he will be seeking in discussions in the Council of Ministers on CAP reform. [22301]

The Minister of Agriculture, Fisheries and Food (Dr. John Cunningham): I shall be seeking CAP reforms that deliver lower prices to consumers in the short term and savings to taxpayers in due course.

Mr. Paterson: Ten days ago I addressed 4,000 angry, upset farmers in Oswestry. Numerous farmers from the crowd said that they wanted not subsidies or regulation, but to sell their quality product in fair and free conditions. If CAP reform is a priority of the Government, why did the Prime Minister not mention it in his speech of welcome to the President of the Commission on 8 January?

Dr. Cunningham: The briefing material associated with the meeting with the Commission on that date certainly reiterated the Government's commitment to CAP reform, as has my right hon. Friend the Foreign Secretary both in his speeches in Europe and in a recent interview published in Le Monde. I reiterated the Government's commitment in my first address to the Agriculture Council in Brussels on Tuesday.

Mr. Godman: Does my right hon. Friend agree that what is badly and urgently needed is the comprehensive reform of both the common agricultural policy and the common fisheries policy, and that without such reform there can be no enlargement of the Union?

Dr. Cunningham: I agree that we need to look for both those reforms. It is pleasing and encouraging that CAP reform is now very much on the agenda and I expect to see detailed proposals from Commissioner Fischler some time in March. We are scheduled to have reform of the common fisheries policy by 2002.

Sir Michael Spicer: The Minister did not answer the original question at all, but if one assumes that implicit in what he said was the idea of lower subsidies, does he

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agree with the National Farmers Union that with that should go a closer comparison between world prices and the prices charged for our agricultural products?

Dr. Cunningham: Yes. I am pleased to say that I agree with that important point. The whole thrust of reform of the CAP should be to dismantle production controls, which inhibit many of our farmers, to move towards world market prices and to decouple from production the transitional support for that change.

Mr. Andrew George: What approach does the Minister take in the debate about modulation in the reform of the common agricultural policy? That will be crucial for the future, especially for small farms, and it is essential that he retain an open mind on the subject.

Dr. Cunningham: I have made my position on modulation abundantly clear. I am opposed to it or to any proposal managed and controlled from Brussels that would be detrimental to efficient farming interests in this country.

Farm Incomes

3. Mr. Yeo: When he last met the president of the National Farmers Union to discuss the recent fall in farm incomes. [22303]

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker): My right hon. Friend last met the president of the NFU to discuss incomes in December last. Along with many right hon. and hon. Members, I also had discussions with farmers on Tuesday.

Mr. Yeo: Is the Minister aware that farmers in South Suffolk are experiencing a drop in their incomes partly as a result of Government policy, including the high level of sterling that has been caused by five interest rate increases during the past nine months? What discussions has he had with the Treasury about using the underspend on agricultural schemes that we will receive as part of our European Union budget rebate to help farmers cope with the effects of declining incomes?

Mr. Rooker: Other industries are also affected by the increase in the price of sterling. Agriculture is not alone, although in special recognition of that problem my right hon. Friend announced in the House on 22 December substantial extra help to the farming industry.

Dr. Ladyman: At the farm income lobby on Tuesday, one of the points made to me was that our pig farmers are forbidden from feeding meat and bone meal to pigs, yet meat raised in that way is freely available on our supermarket shelves. What plans does the Minister have to restrict imports of meat produced in that way?

Mr. Rooker: We have no plans to restrict such imports. We are subject to the restrictions of the ban imposed on meat, bone meal and other products because of the mismanagement of the bovine spongiform encephalopathy crisis by the previous Government. The

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consequences of that are being felt by farmers and the whole of the food production industry today and that will remain the case for some time to come.

Mr. Paice: The Minister knows that on Tuesday the president of the National Farmers Union and others presented a petition with 650,000 signatures from people who want to keep Britain farming. He knows full well that it is not merely a question of sterling and that in fact the Government have taken £129 million away from farmers and given back only £85 million. Why will he not now answer the question my hon. Friend the Member for South Suffolk (Mr. Yeo) asked? Will he undertake to the House that any underspend in the sheep premium, in set-aside, or in any other European programme will be used as part of our refund to access more money to help Britain's farmers?

Mr. Rooker: First, let us get the record right. The figures that the hon. Member quoted are correct, but they are for two different years. The increases he mentioned are for the next financial year and the assistance to farmers will be paid in this financial year. We do not make a move on those finances without the agreement of our colleagues in the Treasury. On the so-called underspends, what he suggests has never happened in the past and I do not see it happening in the future.

Mr. Blizzard: The main problem facing farmers is the large variation in the exchange rate of our currency and its effect on the green pound. Does my hon. Friend agree that if Conservative Members were really concerned about the countryside and were really the farmer's friend, they would take a far more positive attitude to the single European currency--which is favoured by the NFU--instead of their ridiculous policy of not going anywhere near it for 10 years and leaving farmers to suffer from sharp variations in exchange rates?

Mr. Rooker: The answer to that excellent question is yes.

Sir Peter Tapsell: Does the Minister recognise that, as sterling is likely to remain strong against the European currencies until the single European currency has been seen to fail and is abandoned, we are not dealing with a short-term problem? For the foreseeable future--for some years to come--British agriculture will be unfairly and exceptionally adversely affected by the present green pound arrangements. Are the Government seriously considering some way to help farmers over that period? If the green pound is left as it is at present, it will destroy British agriculture in the next three years.

Mr. Rooker: I bow to the hon. Gentleman's superior knowledge of the banking system. His confidence that the European monetary system will fail will not be shared by many people. He may be able to look into the future with such certainty, but we cannot. The issue will be with us for some time, as he said. Not only the farming and agriculture industry, but the whole of British industry, will be affected.

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Beef Industry

5. Mr. Edwards: If he will make a statement about the problems facing beef farmers. [22305]

8. Mr. Hanson: If he will make a statement on his Department's current support for the British beef industry. [22309]

Dr. John Cunningham: I am well aware of the problems of the British beef industry and I set out proposals to the House on 22 December for a special aid package, worth £85 million, for livestock producers. I have no current plans to make further aid available.

Mr. Edwards: I am grateful to my right hon. Friend for the measures that he has already announced. Does he agree that the farmers from Monmouthshire who came to the House on Tuesday made a strong case for clear and honest labelling of meat and meat products in British supermarkets, stringent controls on the import of substandard beef and a review of the tendering process so that public bodies can be encouraged to buy British beef?

Dr. Cunningham: Yes. All those measures are under consideration.

Mr. Hanson: What progress has been made on lifting the ban in Europe, given the welcome news about the potential for allowing Northern Ireland to export beef? I re-emphasise the point made by my hon. Friend the Member for Monmouth (Mr. Edwards), that many purchases are made by public bodies such as hospitals and schools and, indeed, Government Departments. What steps can my right hon. Friend take to encourage them to purchase British beef?

Dr. Cunningham: It was excellent news when the Commission in Brussels gave an emphatic yes to the export certified herds scheme last week. Yesterday, the Standing Veterinary Committee acted swiftly to follow that up by setting up a working party that I understand will meet again in Brussels next week. I hope that it will reach a positive decision.

Public bodies are bound by rules and guidelines that require them to get the best possible value for money when purchasing food. I have already had informal discussions with my right hon. Friend the Secretary of State for Defence about purchases by the Ministry of Defence.

Mr. Hayes: Will the Minister acknowledge that his decision to charge a flat-rate licence fee to fund the Food Standards Agency is attracting widespread criticism, including from Chris Haskins, the head of the Government task force? He also criticised Ministers for a tendency to overreact; the ban for being unscientific; and the whole regulatory framework, saying that people misjudged the matter if they thought that increased regulation would increase food safety.

Dr. Cunningham: I am not sure what the hon. Gentleman's question was, but I have read some of the reports. The hon. Gentleman's first point was completely misplaced, because we have made no decision to have a

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flat-rate licence fee for retail outlets or anyone else. We simply gave an illustrative example when we published the White Paper.

Regarding the comments of my good friend Christopher Haskins, I can understand that, since he was appointed by the Government to ensure that we have better regulation, he should be concerned about the abysmal regulations that we inherited from the previous Administration.

Mr. Kirkwood: Does the Minister agree that one of the most urgent and difficult cost increases that beef producers face immediately is the cost of disposal of fallen stock? Will he consider a small transitional fund so that the industry can get itself sorted out in the immediate aftermath of the withdrawal of the subsidy scheme and so that we can guarantee that high-risk and fallen stock material does not illegally find its way back into the human food chain? Can it possibly be in anyone's interest for the Minister to knacker the knackers' yards?

Dr. Cunningham: Temporary provision--transitional support--was made for the rendering industry. No further provision is available for it. The object of the support for the rendering industry, which was decided by the previous Administration, was to avoid problems in the meat chain in the immediate aftermath of the BSE crisis. We have no proposals for any temporary fund for the industry. The conditions of last year that gave rise to the problems no longer exist.

If people were to dispose of fallen stock in the way the hon. Gentleman suggests, they would be committing a very serious offence.

Mr. McGrady: The Minister is aware of the enormous, disproportionate impact of the BSE crisis on beef farming in Northern Ireland. In those circumstances, why has there been undue delay in the release of the agricultural monetary compensation fund? Will he look into the matter and take action to release that fund so that farming incomes may be properly upwardly adjusted?

Dr. Cunningham: I am somewhat surprised by that question. Farmers in Northern Ireland, just like those elsewhere in the United Kingdom, will qualify for their share of the £85 million package that I announced on 22 December.

Mrs. Spelman: A group of beef farmers from my constituency who attended the rally on Tuesday were bitterly disappointed and surprised to find that, when the audience was asked whether a Labour Member of Parliament was present in Westminster Hall, no one put up their hand. Is that indicative of the Government's position on the beef industry?

Dr. Cunningham: That of course depends on who the farmers invited--does it not?

Mr. Jack: Even the right hon. Gentleman could have gone.

Dr. Cunningham: The right hon. Gentleman is a little behind the news. I spent Monday and Tuesday in the

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Agriculture Council in Brussels. I chaired my first Agriculture Council meeting on Tuesday and returned to London at 8 pm on Tuesday.

Mr. Sheerman: Is my right hon. Friend aware that I was at the meeting at which, supposedly, no Labour Member was present? May I inform him that the beef farmers and other farmers who came to see me that day wanted most to talk about the way in which the previous Government, for 18 years, failed to come through with policies that helped small and medium farming enterprises? The policy that this Government will institute will create a healthy living for such farmers.

Dr. Cunningham: I am pleased to say that I agree with my hon. Friend's comments.

Mr. Jack: I can understand, after that exchange, why the hon. Member for Huddersfield (Mr. Sheerman) did not put his hand up in Westminster Hall.

The Minister will be aware that consumers and farmers have put much faith in his assurances that proper checks are being made on beef that is coming into the United Kingdom. Pursuant to the Minister of State's written answer on 20 January, how does the right hon. Gentleman know that all the checks are effective? The Minister of State told the hon. Member for North Tayside (Mr. Swinney) that his Ministry was unable to say how many checks are carried out. Will the right hon. Gentleman undertake to answer from the Dispatch Box the question that I tabled yesterday, in which I requested a complete breakdown of just what has been found as a result of the surveillance exercise?

Dr. Cunningham: I shall answer all the right hon. Gentleman's questions in due course. We have the right to inspect each consignment of imports from third countries if we think it necessary. On EU imports, the right hon. Gentleman should know--whether he does is another matter--that, due to requirements and obligations under the single market, we can make only sample checks. That is done, and we check all the paperwork available to us.

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