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The Paymaster General (Dawn Primarolo): If the hon. Gentleman put his arguments more succinctly, rather than taking twice as long to say half as much, my attention would probably be sharper.

Mr. Bercow: I do not know why the Paymaster General is so churlish. When I think that I need communications advice from the hon. Lady, for whom I have a high regard, I will be happy to consult her. However, I do not think that that is necessary. There are good arguments to be made, and there are several examples that elucidate them. I have a little way to go, and many key points to emphasise. I am sorry that she is so frosty about it. I am not usually as disobliging to her as she is insisting on being to me.

I should like to draw attention to the failure of the CAP and the inadequacy of its reform. If that pains the hon. Lady, I can only say to her that she has taken the offer. She is in the Government and she has to defend the position. If she is not happy about it and finds it uncongenial, she knows the options that are open to her.

On Second Reading, the Economic Secretary said:

"we achieved the most radical reform of the common agricultural policy since its inception".—[Official Report, 3 July 2001; Vol. 371, c. 228.]

In that respect, she was echoing what the Chief Secretary had said earlier in the debate—[Interruption.]

The Paymaster General would expect me to have done a little research into these matters. I have also had the chance to see what relevant commentators said at the time in response to the Government's achievement. It is not a question of what the Paymaster General or the Economic Secretary think, but of what other observers think. What did the Select Committee on Agriculture conclude? I can quote it with exemplary succinctness for the benefit of the Paymaster General and others. In five words, it said:

"This is a bad deal."

The Opposition have been much more generous and nothing like so ferocious in our criticism. We thought that there was an argument to be made by the Government. However, in the view of the Agriculture Committee, it was a bad deal. In case the Paymaster General thinks that I am inventing that, she can of course refer to the relevant report, of 29 June 1999, at paragraph 6. I feel sure that when, at some point, she leaves the Chamber—I am not encouraging her to do so—it will be because she is going to hotfoot it to the Library to obtain a copy of the report and refer to paragraph 6. [Interruption.] My hon. Friend the Member for Mid-Worcestershire (Mr. Luff)—the Whip who must be obeyed—reminds me that he was the distinguished Chairman of the Agriculture Select Committee at the time of the report, so he can confirm that what I said is true.

Let us hear what the House of Lords Select Committee on the European Union said about Agenda 2000. The task was to

"facilitate enlargement of the Union; to develop a policy consistent with international trading agreements; better to protect the environment; and to promote rural development."

The Committee's judgment was that those objectives were not achieved.

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What did the National Farmers Union chairman, Ben Gill, have to say on the matter? In the foreword to the 1999 NFU publication "Farming Economy", he said that the reforms of the CAP made under the present Government had left UK agriculture in an "inherently unstable state".

The Countryside Alliance has said:

"the recent Agenda 2000 round of CAP reform was a failure. Agenda 2000 failed to address the new pressures of EU expansion, and the Select Committee on Agriculture foresees another round of CAP talks within two years."

English Nature said that the outcome was

"very disappointing for the environment".

The Food and Drink Federation was

"extremely frustrated and concerned by the conclusions of the weakened package of reforms adopted in Berlin".

The Tenant Farmers Association concluded:

"the agreed package stems more from matters of financial and political expediency rather than a desire to place agriculture in Europe on a firm long term platform".

Given the importance of reform of the CAP, which I think is agreed on both sides of the House, the fact that independent commentators are less than exultant—I put it no more harshly than that—about the outcome of the hon. Ladies' negotiating ploys should at least give the Economic Secretary and her exuberant colleague, the Paymaster General, pause for thought.

Having dealt briefly, but with relish, with the Economic Secretary's claims about reform of the common agricultural policy, I now move on, with due enthusiasm, to stealth taxes. I do not want the Paymaster General to feel left out; I shall come to her, and she will not be disappointed. I do not want her to feel that she is excluded from my remarks today, because she will feature in choice fashion. However, I hope that she will exercise the patience for which she is renowned on both sides of the House, because first I want, properly and politely, to address my remarks to the Economic Secretary.

Before I go any further I shall say something to the Economic Secretary that I probably should have said at the outset; I have certainly said it to her outside the House. I have always regarded her as possessing a rare combination of intellectual ferocity and personal charm, so I feel flattered to be opposing her across the Dispatch Box. [Interruption.] The Paymaster General, in what I take to be a slightly more jocular fashion than that in which her earlier observations were made, says, "That's the end of a good career."

On Second Reading, on 3 July, considerable attention was paid to article 9, page 14, of the Council decision on the system of the European Communities' own resources. The Economic Secretary will be well aware that that article states:

"The Commission shall undertake, before 1 January 2006, a general review of the own resources system, accompanied, if necessary, by appropriate proposals, in the light of all relevant factors, including the effects of enlargement on the financing of the budget, the possibility of modifying the structure of the own resources by creating new autonomous"—

I emphasise that word—

"own resources and the correction of budgetary imbalances granted to the United Kingdom as well as the granting to Austria, Germany, the Netherlands and Sweden of the reduction pursuant to Article 5(1)".

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On that occasion my right hon. Friend the Member for Wokingham (Mr. Redwood)—sadly, he is not in his place now, although he performed earlier—argued forcefully that the article was Brussels parlance for enabling the European Union to impose its own taxes directly on the British people.

In the course of Second Reading my right hon. Friend challenged the Chief Secretary to the Treasury to strike from the document those references to the creation of autonomous resources and to seek to amend the Bill accordingly. If the Chief Secretary had been prepared to do so, or if he had even replied to my right hon. Friend's request to him to intervene, we might have had some reassurance.

As the Economic Secretary will confirm, the Chief Secretary is no more reticent than I am. He is a regular contributor in the House, and I have always thought that among Ministers he is the veritable Dr. Pangloss of new Labour. He always thinks that the best is in evidence, and that all is for the best in this best of all possible worlds. Yet when he was challenged by my right hon. Friend to respond to that question, he chose not to do so.

The Economic Secretary, who is a rather braver soul, was prepared to do so, and on Second Reading she quoted a passage from the European Communities (Finance) Act 1995, which was in fact article 10 of the Council decision of 31 October 1994 on the system of the European Communities' own resources. She used the quotation to support her alleged refutation of what my right hon. Friend the Member for Wokingham had said.

The article states:

"the Commission shall submit, by the end of 1999, a report on the operation of the system, including a re-examination of the correction of budgetary imbalances granted to the United Kingdom, established by this Decision."

The Economic Secretary then said:

"That position"—

that is, the position in the Council decision of 31 October 1994—

"did not lead to a new EU tax then, and it will not do so now."—[Official Report, 3 July 2001; Vol. 371, c. 231.]

I do not think that the argument is quite as compelling as she seems to think. She said that article 9 of the Council decision on the system of EC own resources of 29 September 2000 was broadly similar to that of October 1994, so there was no problem.

We need to play the game—an important game—of spot the difference. The notable difference between the two articles is that that of 29 September 2000, as distinct from the one put forward six years before, refers to the creation of new autonomous resources. There is clearly a difference here. We might ask whether the word "autonomous" refers to member states' ability to raise own resources through their own autonomous powers or to the power of the European Union to raise money itself through its own direct and autonomous budgetary powers over and above, and separate from, the autonomous budgetary powers of sovereign states. "Which is it?" I might ask. I am sure that the answer is on the Economic Secretary's lips even as I pose the question.

I hope that the hon. Lady will help to explain that point, because if she does not, she will be aware that we have been undertaking a little of our own private detective

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work to discover what we can. In that respect I am deeply indebted to one of the brightest minds helping the Opposition in this House—James Cartlidge, who has done superb work on this subject.

At my request, James Cartlidge took it upon himself to contact the European Commission to try to get clarification on the subject, which the Minister had not offered. He spoke by telephone to a Mr. Jean-Pierre Bache, who has responsibility for the

"Outlook for financing and budget forecasts of own resources in the Own Resources evaluation and financial programming section in Directorate B of the Budget Directorate General of the European Commission."

If the Minister would find it helpful for me to supply phone numbers and website references, I should be happy to do so at a later date. I am always a helpful soul; if I can be obliging, I am more than willing.

Mr. Bache was unhappy with the use of the word "autonomous", although that is the English translation given, because he felt that it did not adequately explain the intended meaning. He felt that the phrase "visible and accountable" would have been more appropriate. The reason, as Mr. Bache explained, is that the Commission's intention is to bring EU budgetary affairs closer to the people. Indeed, one might argue that what "autonomous" means in this case is just that—bring the EU budget closer to the people by reaching directly into their pockets. In other words, autonomous EU budgetary authority inevitably leads to Brussels levying its own taxes directly on the British people.

If the Economic Secretary does not share that analysis, she at least owes it to the House to explain what is the purport of the very particular remarks contained in the document announcing the Council decision. As Mr. Bache further explained—it is his explanation and not necessarily ours—that is not the same as the EU taking on its own tax-raising powers. Rather he argued that the new autonomous own resources measures would manifest themselves—I like this and I hope that my hon. Friends do—in more indirect forms while nevertheless achieving greater direct revenue-raising powers for Brussels.

The example that Mr. Bache used was one in which the EU might choose to specify certain percentages of excise duty or VAT as new own resources to be paid into the Brussels budget. The Economic Secretary might argue that we have nothing to fear from article 9 because similar such articles negotiated by Conservative Governments have not led to EU taxes, but we all know that this article will result in the EU having the opportunity to propose new ways in which autonomous resources can be raised.

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