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Mr. Swayne: Shall I answer it?

Mr. Baldry: I should be interested to hear my hon. Friend's answer.

Mr. Swayne: Undoubtedly, I would continue to support the party and the manifesto, but I do not go so far

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as my hon. Friend. It is appropriate to pursue a policy of repatriation that falls short of withdrawal from the EU. They are not necessarily one and the same.

Mr. Baldry: I am grateful to my hon. Friend for that observation, but if he thinks about it he will realise that it is intellectually impossible to pursue a policy of repatriation without advocating withdrawal from the EU. I am pleased that he and his colleagues will support the manifesto, which, I suspect, will state that we should continue to be part of the EU and argue our case from within. Indeed, I had hoped that the Government had proposed the debate because they wanted to provide the House with a genuine opportunity to discuss agricultural matters.

Mr. Gill: If I understand my hon. Friend correctly, he is arguing that no matter how bad it gets--no matter how serious the position for British fishermen or farmers--we will hang on to the CAP, come hell or high water. That is totally bizarre. Such a policy would not have great appeal to the British electorate. By using such extreme terms, he is being somewhat disingenuous. He knows that the inevitable consequence of repatriation is not withdrawal from the EU.

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Member for Banbury has been helpful in allowing interventions, but time is getting on and a number of hon. Members wish to speak. Interventions will squeeze out opportunities for those hon. Members.

Mr. Baldry: I have not been speaking for long, Mr. Deputy Speaker, and I do not intend to do so. Some Labour Members spoke for as long as 40 minutes, and these are important issues. The House must judge whether my comments have been extreme; I thought that they were perfectly moderate.

In response to my hon. Friend the Member for Ludlow, we are members of the EU. That decision was taken by this House, and by the country in a referendum. Part of our membership of the EU is membership of the CAP. It behoves Ministers and Opposition Members to argue and campaign for the sort of CAP we wish to see. That, quite rightly, is what Ministers should do. We will criticise Ministers when we feel that they fall short of what we wish to achieve in the CAP.

However, I hope that my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will assure us when he winds up that it is not and will not be the policy of the Conservative party to withdraw from the CAP or, by implication, from the EU. That would send a destructive message to the people of this country and to our colleagues throughout Europe.

I was a Minister when we had a policy of non- co-operation with Europe over beef. That was brought about by considerable frustration at the fact that Heads of Government from other member states refused to give my right hon. Friend the Member for Huntingdon (Mr. Major) an honest and straightforward answer. Some would say that it was a matter for the Agriculture Minister; others that it was for the Health Minister; others that it was for Parliament. We were making little progress.

As a consequence of that frustration--and to ensure that the EU understood how deeply these matters were felt here--we had, for a while, a policy of non-

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co-operation with the EU as a whole. At the end of the day, it did not necessarily advance our case very much. It made the point, but thereafter it caused a number of colleagues within the EU who might otherwise have been sympathetic to us to feel that we were not approaching the EU in the way and by the rules that we would have expected from others. However, that is history. We are members of the EU, and it behoves us to collaborate.

Earlier today, we had Trade and Industry questions, at which great concern was raised, rightly, about the future of Dagenham and the potential loss of 2,000 jobs there. Also, we have had debates on Rover recently, when the House has been full. The National Farmers Union estimates that, this year, we are likely to lose 15,000 jobs in agriculture and industries allied to it. That is an enormous number to go from one industry in one year.

The Minister chided me when I said that the crisis in the dairy industry was probably the worst in recorded history. I do not think that there has been a time in the history of UK agriculture--certainly not since the depression of the 1930s--when the prospects for all sectors of agriculture have been as grim as they are at present.

Part of the reason for that is the strength of sterling, the weakness of the euro and the relationship of the two. In dairy prices, for every 1 per cent. rise in the value of the pound in relation to the euro, 0.6p comes off the price of a pint of milk. I think that, of the 9p decrease in the milk price in the past year, 5p can be attributed to the relationship between sterling and the euro.

Interestingly, today, the Secretary of State for Trade and Industry used a form of words that was rather different from that used recently by the Prime Minister and the Chancellor, and it may well herald a different approach by the Government. Until recently, the Government's approach to the sterling-euro relationship has been to say, "There is absolutely nothing we can do about it. One just has to accept it. Manufacturing industry and the dairy industry will have to accept it." Today, the Secretary of State changed that line by saying that sterling's strength in relation to the euro was unsustainable, and that, sooner or later, the international financial communities will see that sterling's value is unsustainable.

Although that may herald a change of tack by the Government, we have to recognise that not only United Kingdom manufacturing industry and my constituents who work at Cowley, but dairy farmers and others have been suffering from the strength of the pound--or the weakness of the euro, or the relationship between the two--and the difficulty of exporting. We should never forget that other sectors are suffering too.

We should also recognise that particularly the dairy industry has been facing other difficulties, not least the break-up of Milk Marque and the creation of three new organisations, which will find it increasingly difficult to compete. However, not all is lost. I simply draw the dairy industry's attention to the fact that, as one can see in supermarkets, there is a huge market yet to be won in products such as yoghurt and other value-added dairy products, the value of which is about £1 billion. Almost all those products are imported from firms such as Mullers in Germany and elsewhere. It is a huge market.

Mr. Paterson: May I correct my hon. Friend? Mullers has invested £65 million in Market Drayton, in my

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constituency, and makes 800 million pots of yoghurt from milk produced at farms in the surrounding 40 miles. It is a marvellous lesson in how we should be adding value to the basic dairy product of milk--which is the point that I think my hon. Friend is trying to make.

Mr. Baldry: It is indeed. I am very glad of my hon. Friend's correction, as I was relying for my information on the report by the Select Committee on Agriculture on milk pricing. As Mullers' investment shows, we shall be able to guarantee jobs and ensure that we maximise the liquid milk price by concentrating on value-added products. That would surely benefit UK farmers, and I hope that other similar firms will invest here.

The Government can do more than we have heard described today to help UK farmers. Although the Minister said some pleasant words about deregulation, just recently, an enormous number of environmental regulations have been imposed on the farming industry, including the groundwater regulations and the integrated pollution prevention and control regulations. Farmers have also been threatened with nitrate regulations, and a pesticides tax that would be £55 per tonne, which is simply not sustainable. The Government have temporarily withdrawn the pesticides tax proposal, but they have not said that they will permanently withdraw it. I simply hope that the Ministry and the Government will make every effort to ensure that farmers are not overburdened with regulations, and that regulations are introduced sympathetically. When farming is in difficulty, those burdens have a disproportionate cost.

Similarly, the Minister made much of diversification in the countryside. However, that possibility will be dependent largely on the way in which planners and the planning authorities approach it. Farming enterprises have a new difficulty when they seek to diversify farm barns or other buildings. They are now told by local planners that their proposals are not sustainable, because, as farm buildings tend to be in the countryside, some way from centres of population, people may have to drive to them. A farmer in my constituency wished to convert some buildings that were going to be used by a local physiotherapist to provide a service for a large number of people in the area, but planning permission was denied.

Mr. Geoffrey Clifton-Brown (Cotswold) rose--

Mr. Baldry: I am not going to give way. I have been waiting since 1.30 pm and I have been speaking for only 15 minutes.

The Government's policies on diversification will come to nought if they cannot encourage planners to be more sympathetic.

I am conscious that a number of my hon. Friends have also been waiting for a long time and wish to speak, so I shall come to my final point. Several farmers in my constituency are concerned about the IACS cheques. Debates on agriculture are always partly in code, and I apologise for that, but the Minister will understand what I am talking about. The issue is incredibly important for the cash flow of cereal farmers. They usually receive their IACS cheque at the end of November, but there are concerns that they will not receive it until March of the following year. That will disrupt their cash flow considerably. I hope that the Minister will assure that House that the situation will not change.

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While it is clearly good to make form-filling easier by taking advantage of computerisation and the internet, a large number of farmers do not have computers. It would be greatly resented if an increase in computerisation was simply code for cutting the number of regional offices and the opportunities for farmers to have face-to-face contact with MAFF officials to help them with form-filling. We have heard repeatedly that if farmers get their IACS form wrong, the financial penalties are draconian. There is no appeal or remedy, only a total financial loss. The network of MAFF regional offices has been greatly respected and appreciated over the years.

These are grim times for UK agriculture. The Government have not made the progress that they should have done. We are not alone in saying that. A House of Commons Library research paper on the Agenda 2000 reforms says that the result was a disappointment to the British Government and the dairy industry. There is no sign that the EU is willing to abolish dairy quotas. Even the existing commitments are worth little, since there is ample scope for change of mind before 2005.

The Minister is always courteous and always comes with soft words, but farmers are interested in what his actions mean. They want money in the bank and financial support for the farming community during the greatest crisis for agriculture in living memory. The farming industry is looking to the Government to give a positive lead and real assistance. If they cannot do that, the 15,000 jobs that may be lost in agriculture this year will be nothing compared with the likely job losses in years to come.


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