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Mr. Paterson: Does my hon. Friend agree that the Minister's speech descended into the disgracefully

11 May 2000 : Column 1038

churlish statement that no constructive ideas came from Conservative Members? Will my hon. Friend comment on the fact that I sent the Minister a letter on 15 December last year--I send him numerous letters--and sent a reminder on 18 February but his colleague, the Minister of State, replied on 26 April? The letter that I sent was from the managing director of Fullwood, the third largest manufacturer of milking equipment in the world, who deserved an early and reasoned reply to some sensible and practical suggestions on how to improve the supply industry to the dairy industry.

Mr. Yeo: My hon. Friend has obviously been treated with disgraceful discourtesy by the Minister, and, more important, so has the senior industry figure whose suggestion he relayed. When he winds up the debate, my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will point out that several of the proposals about which the Government have boasted today and on recent occasions were contained in the policy document published by the Opposition in April 1999. Far from our not making constructive suggestions, some of those that we have made have happily been picked up. I hope that, by the end of the debate, more of them will be adopted by the Government.

The debate is urgently needed. A year ago the Heads of Government of European Union member states produced an utterly feeble package of CAP reforms. As a result of their failure, the process of European Union enlargement may now be impeded. Meanwhile, the crisis that is destroying Britain's farmers and damaging the British countryside worsens steadily month by month. Farm incomes have fallen by three quarters since the Labour Government came to power and thousands of jobs have been lost.

A year ago, the Agenda 2000 talks offered a chance of fundamental CAP reform--a chance that, regrettably, was thrown away. In its seventh report entitled "Outcome of the CAP Reform Negotiations", the Select Committee on Agriculture said that

Judging by what the Minister said today, not a great deal is likely to change. The Select Committee added:

The consequences of that bad deal will be felt by existing EU members and more widely. Prospects for the six applicant countries--Hungary, Poland, the Czech Republic, Estonia, Slovenia and Cyprus--are threatened by European Union Ministers' failure to grasp the nettle. Admitting those countries would add substantially to the current cost of the CAP budget. Who will bear that burden? It is simply not acceptable that it should fall entirely on existing contributors to the EU budget.

Quite apart from the question of enlargement, CAP reform is needed for other reasons. The CAP is failing consumers, taxpayers and farmers. Despite the horrendous cost of its huge spending which, according to the documents that we are considering, is now about £25 billion a year, the income of British farmers is at its lowest in real terms since before the war.

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Taxpayers, too, have grounds for complaint. Despite constant promises, the cost of the CAP never seems to fall. Too much money is wasted, and there is the scandal of subsidies for tobacco farmers, costing taxpayers hundreds of millions of pounds a year. Any policy that pays people to produce a product which is considered so dangerous to human health that it cannot be advertised legally and whose quality is so low that much of the output has to be dumped in the developing world, ought to be condemned as immoral, incompetent and ridiculous. However, such a policy has been part of the CAP for many years.

Consumers, too, have been let down by the CAP. Food sold in EU countries is artificially expensive. Indeed, the total cost to a typical British family of four of higher food prices and taxpayers' expenditure on the CAP is estimated to be £12 to £15 a week. That does not include an extra £1 a week, which is the cost of expenditure on national agricultural policies.

The environment suffers because of the CAP. Even after last year's reforms, English Nature, the Government's statutory adviser on nature conservation, concluded:

Mr. Nick Brown: That quote is fair. However, along with other environmental groups, English Nature revised its views following our December announcement on how we intend to make use of the second pillar of the agricultural policy, which is an important component of our debate.

Mr. Yeo: I welcome the rural development regulation, and shall deal with it in a moment. However, it remains true that many practices that the CAP continues to encourage damage the environment.

My hon. Friend the Member for North Shropshire (Mr. Paterson) referred to the dairy sector, an examination of which illustrates just how bad a deal the Government got for Britain last year. At the Heads of Government summit in Berlin last March, the Prime Minister accepted a proposal to freeze mainland Britain's milk quota for six years, but agreed to allow Ireland, a country which is self-sufficient in dairy produce four times over, an immediate increase in its quota.

It is all very well for the Minister to say that he wants quotas to be phased out--indeed, there is nothing between the Government and the Opposition on that--but, given that that process will take many years, it is disgraceful that the Government agreed to a proposal that will give our nearest neighbour a chance to go on undercutting our farmers. That decision dealt a severe, disastrous blow to hard-pressed dairy farmers, who have been denied a chance to supply the demands of the home market, despite having some of the best dairy-producing land in the EU.

As the Minister acknowledged, dairy farmers are still struggling with a farmgate price for milk that leaves many of them trading at a loss. Those are precisely the circumstances in which any responsible Government would have resisted the Berlin proposal. While still on the subject of dairy farming, I reiterate Conservative Members' regret that the Government insisted last

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summer on breaking up Milk Marque, the largest dairy producers' co-operative in the country. That policy weakened the position of the primary producer and was followed for no reason but dogma.

Mr. Brown: Let us be clear about this. I have no direct ministerial responsibility for the matter, which is the responsibility of the Secretary of State for Trade and Industry. Is the hon. Gentleman saying that the Opposition believe that the Secretary of State for Trade and Industry should set aside the views of the competition authorities?

Mr. Yeo: The Minister should have insisted that the recommendation was made in the light of up-to-date information. The report on which the Secretary of State for Trade and Industry based his wrong decision was founded on hopelessly outdated information about the state of the market and Milk Marque's share in it. If the Minister had been doing his job, he would have made sure that proper representations were made to the Department of Trade and Industry, drawing attention to shortcomings in the report by the Monopolies and Mergers Commission.

Mr. Öpik: Does the hon. Gentleman agree that Milk Marque was a friend of small producers, who continue to be concerned about who will defend their interests in the supply market?

Mr. Yeo: I entirely agree, which brings me to my final point on the matter. The Minister suggested that dairy farmers were not concerned about such issues, so I would welcome the opportunity to introduce him to some small dairy farmers who are profoundly concerned about them. To be fair to the Minister, he has tried to get around the country and meet farmers. Having done so and listened to many of them, it is astonishing that he should now claim that dairy farmers are not anxious about the matter.

Mr. Nick Brown: I have not said that dairy farmers are not concerned. They tend to be not as abusive to me as members of the Conservative Front Bench.

Mr. Yeo: It is not abusive to point out that small dairy farmers have been directly disadvantaged by the decision of the Minister and his Cabinet colleagues. The Minister may not welcome that, although I am glad that he has backtracked on comments that he made about half an hour ago. Nevertheless, many small dairy farmers will read our exchanges with dismay.

Dr. Gavin Strang (Edinburgh, East and Musselburgh): The hon. Gentleman said that Milk Marque was a friend of small producers. However, if it was, it was not nearly as good a friend to those people as the Milk Marketing Board. Does he not remember that a Labour Government negotiated arrangements to ensure that the board continued and that a Conservative Government abolished it in the face of Labour opposition?

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