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Mr. Cook: I would wholly repudiate the idea that NATO's action in Kosovo was in any way illegal. Let me say gently to my hon. Friend that, if she really wants to convey dismay and alarm to Moscow, and to be heard, she should not couple that sentiment to words that Moscow would dearly like to be said in this Chamber.

Mr. Crispin Blunt (Reigate): I agree with the Foreign Secretary that it is difficult to discern Russia's self-interest in its actions in Chechnya, but will he comment on Prime Minister Putin's view that it is difficult to identify a Government of any sort with whom to negotiate in Chechnya? The situation is perhaps analogous to Somalia. Will he also comment on the suggestion that the west should be enabling the international community to get at least the sick, the frail and the mentally ill out of Grozny before the Russian ultimatum expires? Does he agree that this is one of the consequences of excluding Russia from the political process when NATO decided to take its action over Kosovo?

Mr. Cook: Russia was not excluded in the political process that led to that decision; it played a full part in the contact group and at Rambouillet. Of course, we did not consult Russia about the decision taken in NATO, and I do not imagine that, on reflection, the hon. Gentleman will want to press that point.

On assisting the evacuation of Grozny, the fact is that there are very few humanitarian agencies operating in Chechnya and I do not think that we could mount such an operation by Saturday even if we took the view that it

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would be the right thing to do. Plainly, the correct course is for Russia to refrain from the threat that it has made, and we will continue to press for that right through to Saturday.

Mr. Malcolm Savidge (Aberdeen, North): As the Yeltsin regime increasingly bears less resemblance to a democratic Government than it does to the bloodthirsty tyrannies of Stalin and some of the tsars, will Her Majesty's Government take all practicable measures to avert humanitarian tragedy?

Mr. Cook: We will certainly put every possible effort into coping with the humanitarian consequences of Russia's actions and take every opportunity to ensure that it understands the international community's deep concern and the damage that it is doing to its own interests.

Mr. Julian Brazier (Canterbury): Is the Foreign Secretary aware that Russia is very close to political and economic disaster and that international organisations say that organised crime runs half its economy? However much many of us may worry about the wisdom of the particular Russian tactics, the sad fact is that, if the legitimate elected Government of Russia are seen to be defeated by the principal centre of organised crime within the Russian Federation, the consequences not only for Russia but for all of us are incalculable.

Mr. Cook: My difficulty with the hon. Gentleman's point is that I find it very hard to see how this exercise can end in something that can be claimed as a victory for Russia. I do not see the present strategy as rooting out the terrorists or establishing a peaceful, democratic and stable Chechnya as part of the Russian Federation. That is why those of us who wish Russia well would like to see a change in its strategy towards Chechnya.

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Rural Development

3.48 pm

The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown): With permission, Madam Speaker, I am this afternoon announcing a radical redirection of support for agriculture and a significant increase in expenditure on rural development measures under the European Union rural development regulation--the second pillar of the common agricultural policy.

My decisions follow the comprehensive consultation launched in January with farming, rural, environmental and other interests over how to implement in the United Kingdom the common agricultural policy reforms then under negotiation. The Government are committed to reforming agricultural supports so that they are less distortionary and more closely reflect the public benefits that agriculture provides. We want to offer farmers constructive help to enhance and diversify their businesses in response to changing market circumstances.

The new rural development regulation, promoted under the United Kingdom presidency, provides member states with a range of measures, jointly funded with the European Union, to advance environmentally beneficial farming practices, to modernise and restructure their farming industries and to support off-farm rural development. That is an important part of the Government's rural policy, and has been developed in collaboration with the Department of the Environment, Transport and the Regions, and the environment and countryside agencies.

Our plans for the seven-year period are ambitious. For England it will mean a total of £1.6 billion in expenditure, a 60 per cent. increase over seven years. We have given priority to involving our English regional partners, and the plan will include a separate section for each region, setting out locally identified priorities. The devolved Administrations will set out their own plans for Scotland, Wales and Northern Ireland.

Four sources of revenue will cover the increased expenditure. The first source is the funding that my Department already allocates to existing schemes that will become part of the rural development regulation. Similar budgets are held in Scotland, Wales and Northern Ireland.

The second source will be the European Union's allocation of funds for the rural development regulation. The EU's initial contribution to the United Kingdom amounts to some £100 million a year. That figure disappointingly reflects the low historic level of expenditure on rural development inherited from the previous Government. I achieved, through negotiation, a 30 per cent. increase, and intend to press for a further increase for the UK when the allocations of EU rural development funding are reviewed in 2002.

The third source of funding will be the redirection, or modulation, into the RDR of a small percentage of the £1.6 billion in direct production subsidies paid to UK farmers under the CAP commodity regimes. In 2001, 2.5 per cent. of payments will be modulated; that will rise to 3 per cent. in 2002, 3.5 per cent. in 2003 and 2004, and 4.5 per cent. in 2005 and 2006. Modulation will apply at a flat rate and to all direct subsidies to farmers under the CAP. All of that money will be redirected to expenditure through the rural development regulation.

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The fourth source of funding will be the full match funding by the Government of the modulated element. In other words, each £1 redirected, or modulated, to the rural development regulation will be matched by an additional £1 of new expenditure from the Government.

Together, those four sources will result in substantial extra funds for environmental benefits and farm diversification. Total expenditure on rural development will rise to £295 million for England in 2006-07, and over the whole seven-year period will be around £1.6 billion.

Expenditure plans for England have yet to be finalised and there is of course room for some flexibility. However, the House will want to know that I plan to allocate over the lifetime of the plan the following indicative amounts, starting with £1 billion for agri-environmental schemes. By 2006-07, spending on agri-environment will be double the current level. Of that £1 billion, I plan to allocate around £500 million for the countryside stewardship scheme, a scheme open across England that pays farmers to bring about environmental improvements. I plan to allocate around £140 million for organic farm conversion.

In addition, I plan to allocate £85 million for woodlands on farms, and a £22 million increase in the woodland grant scheme; more than £40 million to encourage better marketing and processing of agricultural products; around £30 million for the growing of energy crops; and more than £20 million in aid for training to improve the skills of farmers and farm workers relating to environmental land management and other aspects of diversification

I also plan to allocate around £150 million for a new rural enterprise scheme to promote rural development on and off the farm. The rural enterprise scheme will complement the new enterprise grants scheme, which was announced in July by my right hon. Friends the Deputy Prime Minister and the Secretary of State for Trade and Industry, although the rural enterprise scheme is not confined to assisted areas.

There will be a successor scheme to the hill livestock compensatory allowance to help hill farmers in less-favoured areas, and a consultation on the arrangements for the new scheme is under way. The normal annual review of hill farmer support will take place in the autumn and will include, among other factors, the impact of today's announcement.

The rural development regulation will include policy instruments to help farmers to enhance their farm businesses. The rural enterprise scheme, processing and marketing grants and aid for training will complement my Department's existing policies to promote farm diversification, and to encourage collaboration and innovation across the agri-food chain. All that will be of real help to new entrants, including young farmers, as they work to develop entrepreneurial farm businesses.

Further to this statement, I shall announce in a parliamentary answer the detail of changes to the administration of certain CAP commodity regimes resulting from Agenda 2000.

The rural development regulation represents the long-term future of public supports for farm businesses and the rural economy. It presents a significant opportunity for improvement of the rural environment and the countryside

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landscape. It demonstrates the Government's commitment to rural communities, and it will set the agenda for further reform of the CAP in years to come.

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