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Dr. Gavin Strang (Edinburgh, East and Musselburgh): Does my right hon. Friend agree that the livelihoods of our farmers and farm workers are vital to this country? The crucial economic significance of the agriculture industry lies in the fact that it produces the raw material for our food manufacturing and processing industry in which hundreds of millions of pounds have been invested and thousands of jobs are at stake. Will he continue to ensure in the negotiations that we make certain that no policies develop that put our producers at a disadvantage to producers in other parts of the European Union? The agriculture industry is as important to this country as it is to France and Germany. It is vital that we have policies in place that enable our producers to compete on equal terms. He acknowledged that we are almost certainly being constrained by milk quotas, but there are other commodities in respect of which we are relatively efficient and in which we should have the chance to maintain, if not increase, our jobs and production.
Mr. Brown: As I would have expected, my right hon. Friend touches on the two most important points in the negotiations. Yes, I have a responsibility to protect the
national interest, and that means the interests of producers as well as those of consumers. I have done that. He is right to press me to ensure that the United Kingdom is not uniquely disadvantaged in the outcome. The ceilings proposal would have uniquely disadvantaged the UK. That is why I am so pleased that I was able to fight it off in its entirety.
Mr. Charles Kennedy (Ross, Skye and Inverness, West): As the Minister rightly said, the interim outcome is part of a process that will include the Chancellor, the Prime Minister and, further down the route, the WTO. Does he agree that perhaps the most useful thing for hon. Members of all parties to do is to send signals to him, and through him to the Chancellor, about the matters that will be returned to? Specifically, we must ensure that the Finance Ministers do not reconsider some of them in a way that turns out to be disadvantageous to UK agriculture.
In that context, given that the Commission did not table the degressivity measures, for the reasons that he gave, and that Finance Ministers want to reconsider the matter, will he ensure that the British Chancellor's contribution is based on the original degressivity measures, which would have released extra funds in the context of Agenda 2000 for rural development, agri-environment and desperately underfunded schemes, such as countryside stewardship? They must not simply return to the issue as a means of reducing the growth of the further costs involved at this stage in the reform.
Will the right hon. Gentleman be more specific about the United Kingdom farmers who have already successfully pursued extensification? There will be some national leeway, or subsidiarity, to use another incomprehensible Euro-speak word. Will he ensure, for those UK farmers who do not fit the current Commission formula, that our Treasury uses the national leeway to increase considerably the uptake in the application of the all-important schemes that go to the long-term heart of CAP reform? That means wider rural development generally. In considering what lies ahead, will he be more specific about how Finance Ministers will pursue this matter in the context of the future of the UK rebate?
Mr. Brown:
It was always the case that overshadowing the negotiations were the financial framework, the discussions between Heads of Government and Finance Ministers about the different methods of funding and the pressure that the UK was coming under on the rebate. I had to secure for the UK a decent agricultural component in what the hon. Gentleman rightly described as a much larger package. I have no doubt that the Prime Minister and the Chancellor of the Exchequer will continue to defend the British rebate vigorously. They will be able to do so because it is justified. We are still net contributors to the arrangements, and I am afraid that nothing that happened at the Agriculture Council has changed that.
The hon. Gentleman asked about extensification. That was a particularly difficult part of the negotiations, as I am sure all who follow such matters realise. The countries with extensive production systems are, essentially, ourselves, France and Ireland. Other countries have an interest in intensive production systems. They felt that the 1992 reforms shifted the balance too far in favour of extensification. My responsibility was to ensure that we were not disproportionately disadvantaged in the
negotiations. Price cuts from the producer point of view affect everyone. We managed to safeguard the United Kingdom position. More than that, several elements in the package improve on the present position, including the increase in the regional ceiling.
I have some room for manoeuvre on the national envelope. It is much diminished from the original Commission proposal because it has been used in part for the introduction of the new slaughter premium. Where I have discretion on the national envelope, I intend to consult. The hon. Gentleman is right that many farmers will look to me to use it to protect extensification and extensive production systems. That is the thrust of the representations that the NFU has already made to me.
On rural development, I am very keen both on the agri-environment part of the package and on strengthening the second pillar of the CAP more generally; so I welcome the thrust of the hon. Gentleman's question. I have to say that the time to do that was in the Agriculture Council round of the negotiations, rather than the Finance Ministers or Heads of Government meetings. We have achieved something for the rural development measure, but not the extra contribution that degressivity could have made had it been negotiated in the Agriculture Council. I regret that, and it would be unreasonable for me to hold out prospects that we could return to it. Finance Ministers and Heads of Government will want to consider the budgetary constraints, rather than reopen the agricultural part of the package. I think that it is those two different components that have led to some confusion in this morning's press.
Mr. Dennis Skinner (Bolsover):
Is my right hon. Friend aware that, for the past 18 years, the Tories have been talking about reforming the CAP? I always took the view that, if anyone--especially a Labour Government--dared to reform it, they would play merry hell. Already this morning we have seen Tory spokesmen making it clear that even this marginal decision is not satisfactory to them. I rather suspect that that will be the attitude from here on in. [Interruption.] It is the farmers talking over there.
What concerns me, however, is that the newspaper reports have been suggesting that Britain's rebate will be affected as a result of the negotiations. I know that the Liberals made a reference to that, but, before the Tories start, may we have a categorical assurance that the rebate was never discussed in the negotiations this week and that the rebate in total is still on the table?
Mr. Deputy Speaker (Mr. Michael J. Martin):
Order. Before the Minister replies, I remind the House that today is a private Member's Bill day. May I have brief questions and, of course, brief answers?
Mr. Brown:
That is a fair point, Mr. Deputy Speaker, but these are complex issues and, although the questions seem general, they require detailed and specific responses.
I assure my hon. Friend that the British rebate was not under discussion at the Agriculture Council. No delegation ever raised it. The British Government intend to fight to protect the rebate.
My hon. Friend is right to point out one further matter. Those who advocate reform confuse reform with the immediate imposition of budget savings. The two things
are incompatible. In the short term, if we want reform, the budget will have to rise. The previous Government always fell at that hurdle. They put the short-term budgetary interests before the medium-term interests of reform. They always failed. This is the most significant reform of the CAP ever, and the United Kingdom Government have been in the vanguard pressing for it.
Mr. Douglas Hogg (Sleaford and North Hykeham):
I acknowledge the difficulties that the right hon. Gentleman met at the Council. None the less, does he accept that the outcome represents a substantial shortfall on our long-term objectives? Does he accept that one of the major problems lies in the compensation payments--the direct payments? Does he accept that they are properly to be regarded as transitional payments which will taper away into nothingness over a period?
Does the right hon. Gentleman accept that one of the fundamental problems is that there is not a majority within the Council for fundamental reform and that, if many of the Council members had to choose between forgoing an enlargement and forgoing fundamental reform, they would choose to forgo enlargement? Does he accept that, in the absence of an appetite for fundamental reform within the Council, we are likely to see reform only if Heads of Government give very clear and tight riding instructions and, if necessary, take policy responsibility for the process?
Mr. Brown:
The right hon. and learned Gentleman's point that Heads of Government have to take final responsibility is right. Both the Agriculture Council and the separate discussions about the structural funds will go as two separate components of Agenda 2000 to the Heads of Government for final discussion and decision.
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