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Mr. Yeo: I am sorry that I gave way to the right hon. Gentleman. However, once again, we see the tendency of Labour Ministers and Back Benchers to fight again over matters that were concluded years ago. Conservative Members are anxious to do what they can to ensure that dairy farmers' prospects are improved in 2000, and put right some of the damage done in the past few months.

Mr. Paterson: Does my hon. Friend agree that it is tragic that the Minister does not understand that dairy

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processing in Europe is twice as efficient as it is here because companies such as MD, Parmalat and Arla are successful dairy co-operatives that have gone on to processing? Smashing up Milk Marque has set back the prospects of British co-operatives going into processing by about five years.

Mr. Yeo: My hon. Friend is quite right. Impeding the process of vertical integration in that industry is not in the interests of farmers, processors or, indeed, consumers.

It is common ground that fundamental and far-reaching reform of the CAP is necessary to prepare for EU enlargement. Even if it were not, World Trade Organisation negotiations will, no doubt, force further reforms.

Farming has to move closer to the marketplace, even though it cannot go all the way as long as the United States continues to bail out its farmers with huge amounts of taxpayers' dollars. Europe cannot sensibly operate on a completely free-market basis while the world's richest country declines to do so. It is also common ground that support in future will not be confined to production- related payments. In that respect, we endorse the principle of the rural development regulation.

CAP reform will also provide an opportunity to examine whether some decisions currently taken at EU level would be better taken by the Governments of individual member states. The sole purpose of any change must be to make the policy work better in the interests of consumers, taxpayers, farmers and the environment.

Changes are needed, not only in the practical policies of the CAP, but in the culture and philosophy within which those policies are implemented. Too often, whether it takes place in Brussels, Whitehall or even some regional office, the interpretation of the rules is hostile to farmers and others working in the countryside.

If British farmers deserve anything, it is a chance to show what they can do to compete on more equal terms with others, at home and abroad, both inside and outside the EU. Nobody denies the need for regulation, but farmers and other small businesses in rural areas should be able to expect the regulations to be applied in a common sense manner.

The Government's motion and our amendment to it are not limited to the CAP. The Minister spoke at some length about the action plan for farming--a plan which, it is claimed on its front page,

After the Downing street summit of 30 March, the Government claimed that their package of measures was worth £200 million, but today is Parliament's first chance to examine that package; alas, the claims have been exposed as false. Far from representing £200 million of extra cash, the element of agri-monetary compensation shows a cut of £110 million compared with last year's figure.

Mr. Nick Brown: That is absurd. As I explained to the hon. Member for Somerton and Frome (Mr. Heath), the arrangements for agri-money are degressive. The fact that the Government do not take up the full sum does not mean that a cut has been made.

Mr. Yeo: In April the Minister gave me a written answer on the subject. He made it clear that in 1999,

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£264 million was available; and that in 2000, £154 million will be available. By my reckoning, those figures reveal a cut of £110 million.

Let me set out the record of the Conservative Government on agri-monetary compensation, because there have already in the debate been some astonishingly ignorant and misleading exchanges on that subject. Agri-monetary compensation in its current form was first available only four months before the 1997 general election, when farm incomes were four times higher than they are now and the pound was valued at 20 per cent. less than it is now. Yet the Minister's answer to the intervention of the hon. Member for Monmouth (Mr. Edwards) appeared to imply that the Conservative Government were at fault in not claiming agri-monetary compensation in those circumstances. Can farmers take that to mean that Labour will continue to seek sources of extra support for Britain's farmers even if farmers' incomes quadruple, to their pre-election levels, or if the euro rises to a value equivalent to that of the deutschmark in early 1997?

Mr. Brown: Will the hon. Gentleman remind the House whether the last Conservative Government supported or opposed the introduction of the agri- monetary regime? Did they commit themselves to making payments under that regime, or did they say that they would not make such payments.

Mr. Yeo: The last Conservative Government made their agriculture policy in the light of the needs at the time of farmers, consumers, taxpayers and the environment. I have absolutely no doubt that, had the Conservatives remained in office, farm incomes would not have collapsed as they have done; if they had, I am sure that we would have sought all available help for farmers under the agri-monetary scheme.

The agri-monetary element of the scheme accounts for more than one third of the package's total value; that element has declined. Let me give an example of one of the smaller elements. When, on 17 April, the Minister finally answered my written question about the details of the package--four days after a junior Minister had wrongly assured the House that the information that we sought on behalf of farmers had already been published--the answer revealed that, of the £200 million of cash help trumpeted by the Government, £4.5 million came in the form of a commitment not to raise meat hygiene inspection charges by more than the rate of inflation.

Even by the disgraceful standards of new Labour, which has debased the currency of political debate and enabled Ministers to assure the public that taxes are going down when they are actually rising, that is a pretty remarkable distortion of the facts. If a promise not to imposes increases in the burdens on agriculture by an amount greater than the rate of inflation constitutes cash help, who knows what further horrors the Government have in store?

Mr. Brown: That is a semantic point and this is not the first time that we have heard it; similar points were raised in response to the September package on the question of specified risk material costs, which the Government carried rather than passing them to the industry, and on the question of the cattle charges. The fact is that costs have to be covered, either by the

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industry or by the taxpayer. If the taxpayer is to cover the costs, that will cost money--new money that was not previously budgeted; money that I have to argue for alongside competing bids for public expenditure. Therefore, the money is new money because it is money spent to an agricultural purpose that was not going to be spent previously.

Mr. Yeo: The right hon. Gentleman appears to expect to be thanked if he walks down the street and does not rob the bank. From his remarks, we can take it that the Government were planning to raise those charges by a rate greater than inflation; but, having managed to take control of the management of those operations, the Minister was able to say that charges would increase only by the rate of inflation. Such Orwellian manipulation of language is a disgrace to the Government and gives rise to false hope in farmers' hearts.

As the Minister says, our charges have been laid previously. Last September, a package was announced and the Minister claimed that it was worth £500 million. Yet, only a few weeks later, critics were suggesting that it was worth not £500 million but £1 million. In its report, "The current crisis in the livestock industry", published in December, the Agriculture Committee stated:

The Minister's comments this afternoon demonstrate that he learned nothing from that experience. In the same report, the Committee stated:

False hope is exactly what the Minister gave rise to again in March this year.

Mr. Brown: The hon. Gentleman must not distort the Agriculture Committee's comments. It made those points in respect of the way in which the announcement was reported, but was careful not to do so in respect of the announcement itself. That announcement was made in September, when the House was not sitting, in response to what the Government believed, and I continue to believe, were urgent pressures. We set out specifically, category by category, each expenditure head. The Committee had sight of the statement made at that time, as did the hon. Gentleman. I defy anyone to describe the September statement as misleading: it was explicitly stated that £150 million of the package was new money, the rest being composed of two elements, agri-monetary payments previously announced--

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