Examination of Witnesses (Questions 40
- 59)
WEDNESDAY 14 NOVEMBER 2001
RT HON
MARGARET BECKETT,
MP, AND MR
BRIAN BENDER,
CB
40. Your ability to move forward any UK-developed
agenda for change will be determined by what happens at the EU
level. What discussions have you had with your fellow European
Ministers about what they see as change? I am also interested
in your own personal philosophy and your description of what this
word "change" means. Your Permanent Secretary used the
word "sustainable" and embodied in that are many different
approaches to the production of agricultural products, but change
can mean an awful lot. It can mean incremental change on the basis
of what we have got. It can mean a radical alteration, for example
a plan to eliminate all £3 billion of public funding into
the sector of agriculture. Where on the scale of increment to
"big bang" do you sit and what do you sense from your
discussions with other European Ministers their feel for change
is?
(Margaret Beckett) I am trying I deal with all of
those aspects. Some of what you are asking me will emerge, I hope,
in our later observations and publications. Broadly speaking,
I stand more on the radical than on the incremental end, and in
terms of discussions and what happens at the EU level and so on,
there are a variety of different discussions taking place. I have
had a number of bilateral conversations with fellow ministers.
Renate Künast and I addressed a conference very shortly after
my appointment to this post which I believe was sponsored by the
RSPB and NFU together, which was an interesting outcome. There
is, as the Committee will know, a group of Ministers all of whom
are keen to see substantial reform of the CAP which does meet,
and in fact it would have been meeting this weekend but it was
going to meet in Denmark and the Danes have decided to have a
General Election instead. There is an on-going programme of discussions.
There is also an on-going programme of discussions obviously with
the Commission. As to where people stand, it comes and goes a
little, to be perfectly honest. The German Minister is certainly
showing increasing interest and determination to promote reform.
The French, as you may know, have like the UK, taken advantage
of the modulation to the existing CAP that the recent reform allows,
to begin to divert funding and take a different approach to some
agriculture issues. Indeed, I understand the Portuguese have signalled
that they wish to do the same, although at this moment I cannot
call to mind to what degree we have concrete information about
their proposals. I think things are shifting and indeed it was
the EU negotiating position in Doha that we have to contemplate
radical change. While it is common ground and we have been talking
about CAP reform for as long as I can remember, I do think the
climate for such reform is more favourable than it has ever been,
although that is by no means to say it will be achieved.
41. You described your own position on the spectrum
as towards the radical end. Earlier you indicated to the Committee
the independence of the inquiries, one of which is looking into
the future of farming. Will your own department therefore be making
its own submission to this independent inquiry and, if it is,
is it going to be published and if it is not, why not?
(Margaret Beckett) No, we will not be making a formal
submission on behalf of the Government because the whole point
of having an independent inquiry is that others look at the range
of ideas and philosophy and theories that have been tossed around
for some time, discuss it between themselves and come forward
with their thoughts. It is strongly my view (and I think it is
shared) that for the Government to give formal evidence as to
its own approach would run the risk of compromising the independence
of the Commission and we are extremely anxious that this Commission
is seen as independent and that it is truly independent of the
Government's input.
42. One of the things that you said in your
speech to the Labour Party Conference was "there is no long-term
future for an industry which cannot develop in line with market
forces." That was an acknowledgement of the importance of
the market place, and yet in the last three weeks the DTI have
published their Code of Practice which is supposed to govern the
relationships between agriculture as the principal customer and
the supermarkets as the primary production centre. This did not
get a glowing response from the agriculture industry. It is interesting
on one little point that the Code specifically excluded plants
and flowers. That is an important part of horticulture. What input
did your Department have? I ask that in the context of the Ministerial
Sub-Committee on Rural Renewal because one of its terms of reference
is to look after matters relating to farming and food and to monitor
the wider Government approach. I would have thought if you were
going to see this market flavour developed into something which
was meaningful and helpful to agriculture at this difficult time,
you would have made a major input. Can you tell us first of all
what you did input into it?
(Margaret Beckett) I did not only use that phrase
and description at the Labour Party Conference, I also said it
to a substantial European conference held in Belfast which was
hosted by our NFU but for farming organisations across Europe,
so I said it to farmers first. Secondly, on the issue of market
forces and the Code of Practice, of course I take your point about
the issues as being issues for my Department but this is a competition
issue. The Code of Practice followed, as you would be well aware,
the Office of Fair Trading's observations and report and competition
issues are very much an issue for the DTI and they are handled
in a conspicuously independent way for that very reason.
(Mr Bender) Can I just add a separate point on the
operation of the supply chain which is that the Chairman of the
Meat and Livestock Commission, Mr Peter Barr, is himself leading
some work across the industry to try and look at a more effective,
efficient supply chain and one that is consumer-led rather than
the reverse. And informal discussions we have had with him not
only informs us but informs the Don Curry Policy Commission. Getting
a more efficient supply chain operating that meets consumers'
needs is very much a focus of the Department's aim and work.
43. The issue of reform of CAP is often encapsulated
in discussions about the price of food. Some people say food is
too expensive but if you talk to farmers they have a different
view, they will say, "We do not get enough of what is paid
for food, we do not get an adequate return." If sustainability
is to be affordable by farmers and good environmental practice
is to be followed, they need to have profitable, well-run businesses.
Again, Secretary of State, where do you lie on the spectrum? Do
you want profitable farmers who can be sustainable in their practices
or do you want the public to have cheaper food, or do you think
it is possible to have both?
(Margaret Beckett) I think it would be entirely wrong
not to see whether it is possible for us to have both. I certainly
want to see farming have profitable, well-run businesses and perhaps
diversified businesses too, although that will not always perhaps
be the case. But it has always seemed to me, going back over a
period of some many years, that one of the many problems with
the CAP was that it was a policy which was designed to keep prices
up, and that seems to me to be in itself undesirable interference
with the market. How and what shape of structure eventually emerges
is another matter. It does seem to me there are areas, and I believe
I am right in saying that for example in the arable sector we
are now closer to world prices than we have been for quite a long
time, so I think we have to try to get that balance right between
what provides a decent living for the farming community who, I
completely accept, have really struggled and had tremendous difficulty
in recent years and also how we get a fair price and the most
efficient price for consumers.
Paddy Tipping
44. One of the things that has surprised many
people is the importance of visitors to the countryside. Foot
and mouth disease came in and tourism stopped and there were real
problems. The radical approach to the countryside would be to
say to farmers and landowners that what we want you to do is produce
a backdrop for people to visit the countryside. So in a sense
they would provide the landscape and the environment into which
people visit. Clearly that is a radical approach. It has real
consequences for farming practices. What is your thinking about
that?
(Margaret Beckett) I think that is absolutely right
and I think it came as a shock to many people to realise just
how great a component of the rural economy and of rural prosperity
were a range of other activities and organisations rather than
just the farming interest, which is of course at the core of the
countryside, and not least, as you say, in terms of their responsibility
for landscape and issues of that kind. I know that a number of
the schemes that the Countryside Agency is beginning to implement
do look—and they have had various experiments and pilot
projects and so on—at the role of the countryside in that
respect. I think that provided a lot of importance and stimulus.
I think the other thing that I would say is that certainly as
big a surprise to me, not having focussed on these issues in quite
this way before, was the degree to which the involvement of the
tourist industry is very much an issue of domestic tourism too.
I think a lot of us when we talk about tourism, we tend to think
about the international market. To use the usual shorthand, how
do you get the American visitors back. I recall, in fact, the
Chairman saying this to me when we were discussing the difficulties
that were being experienced in Yorkshire that actually the tourists
in his part of the world come from Bradford and Leeds and this
was an element we needed to stimulate. Yes, a lot of people have
learnt some important lessons, what we need to do is to gather
that experience and put it to good use.
45. Following a point that Mr Jack was making
earlier on, you acknowledge that farming has had a very difficult
past five years. If we pursue a radical approach, if we fundamentally
change farming support systems, does that imply there is going
to be a fairly prolonged period of severe change? One can see,
for example, how niche markets, organic or welfare friendly markets
could grow and survive. One could see how big arable farmers could
become more efficient. What is the real future for the traditional
family farmer? Surely they face a very difficult prospect?
(Margaret Beckett) I take your point. I suspect that
if we are—and this is taking something of a step forward—successful
in getting agreement to substantial change to the CAP, I would
guess that will be on a transitional basis. It is a matter of
discussion and argument I suppose whether it is better to have
a kind of big bang change or incremental step by step because
the incremental approach means that it will take longer. On the
other hand, I think many might find it preferable and easier to
adjust. I believe there is a real and prosperous future for the
traditional family farm. I am very mindful of the fact that there
are sometimes slightly different issues, depending on whether
farms are in ownership or are tenanted and that also creates a
different number of concerns. Yes, I do believe that perhaps in
some cases on a more diversified basis, although I know very many
in the farming community have already taken such steps, certainly
perhaps in a slightly different context we will see the continued
development of farming but I would be astonished and dismayed
if we were to see the disappearance of what one might call the
traditional family farm.
(Mr Bender) Can I add, if the Committee will forgive
me, just two quick points on that, two areas where my Department
has thought it right to provide assistance. One is on the provision
of business advice and skills to help skill the farmer to continue
to survive in the environment. How we rationalise that, how we
join it up, how we continue it is one of the issues we will be
reflecting on in the future. The other is various schemes the
Committee will know either for marketing support or indeed encouragement
of assurance schemes and again that should be a benefit to the
traditional farm.
Chairman
46. Secretary of State, it is part of the conventional
wisdom now, I suppose, that the aim must be to move from support
for production to what one might call, broadly speaking, public
good assistance for agriculture, of which one of the most frequently
mentioned must obviously be environmental schemes, and countryside
stewardship is I suppose a flagship project in that area. Do you
think that the volume of those schemes would ever be such that
they make up for a cessation of production aid or will there inevitably
be a requirement on the farmer to look for income from other sources
to bridge the difference between the two?
(Margaret Beckett) If you like, that is a 60,000 dollar
question. Certainly it has to be the case that it is not easy
to judge to what extent this different range of programmes—and
I share your view that the countryside stewardship scheme is an
excellent scheme but obviously it is very much in the beginning—can
take the place, if you like, of production subsidies. I think
it is more a matter, not just of saying "oh, well that will
completely replace" as of breaking the link between headage,
for example, in livestock and the support that is given. These
are issues which are important in farming terms where artificial
behaviour patterns do seem to have been created. I think that
is common ground, I do not think that is disputed, both in terms
of the future of farming itself and also in environmental terms,
breaking such a link we believe would be highly desirable. Obviously
how you can get the right level of support and for what means
is absolutely a key component of thinking about how you develop
the issue of public good and not just of food production, livestock
production or whatever.
47. These programmes and the related ones have
got to keep quite a large degree of flexibility, have they not?
(Margaret Beckett) Absolutely.
48. I refer to the Organic Conversion Scheme,
for example. There is now a surplus, I understand, of organic
milk.
(Margaret Beckett) Yes.
49. The Northern successor to Milk Marque is
now meeting the market for organic milk, it is then pooling its
organic milk into the wider pool and equalising the price. There
is a real danger that people might find organic milk in their
conventional milk, as it were, to turn the logic on its head.
Does that lead you to believe that in your Organic Conversion
Scheme, for example, you should be turning off the tap for conversion
in the dairy sector? There is always a risk, is there not, in
these schemes that unless one retains the flexibility to react
very quickly to the market conditions, you simply reproduce in
a new sector the abuse that existed in an old sector?
(Margaret Beckett) I entirely share that view. I strongly
believe that what we need is the maximum degree of flexibility.
Indeed one of the concerns we have about the ERDP and about the
implication of modulation is that there is a degree of complexity
and inflexibility which is actually rather hindering attempts
to develop better and wider schemes. I entirely agree that one
of the reasons for wishing to retain flexibility is because of
the danger of replicating in new sectors, or newish sectors such
as organic farming, some of the features which everybody so much
deplored in the way that CAP worked conventionally. Indeed, not
only have I said to farming audiences that farming has to find
its place in the market place but I have also said to Green audiences
that I am not the slightest bit interested in providing funding
to build up surpluses in organic food which the market does not
require, any more than we wanted to build up surpluses in more
conventional foods that the market did not require. Neither of
these, I have to say, were entirely welcome messages to the audiences
to which they were addressed.
50. Further applications for conversion in the
dairy sector, are they not being entertained?
(Margaret Beckett) Pass. I will look at that. As a
matter of general principle. Of course, you will appreciate that
in terms of organic production this is very much the exception.
One of the things that does concern us and one of the things that
we are seeking to encourage—and I hope one of the things
that may come out of the Policy Commission is encouragement is
that we seek to satisfy more of the market that there is in the
UK for organic produce from within the UK.
Phil Sawford: On the point of a reduction in
subsidies, there are those that argue that over the past 50 years
subsidies have been part of the problem rather than part of the
solution. They have distorted markets and propped up inefficient
sectors of the industry. If we are to phase that out and keep
cheap food, I think you said we want both, that will obviously
have a major effect on agriculture. I wonder what thinking, what
models you have looked at? The point on diversification, there
is a finite number of trout farms and bed and breakfasts and farmers
markets.
Mr Jack: Caravan parks.
Phil Sawford
51. Even caravan parks. Farmers in my constituency
are looking for a direction, they want to look forward, they want
to look to the future. They seem to be looking into a vacuum.
We talk about sustainability in the long term of agriculture but
they want some clear framework, some clear idea of where we are
going. Are we simply intent as a Government on paying for their
husbandry of the countryside? Where do they go in difficult times?
Where do they look for their future or do we have to face up to
it that many farmers will go, that there will be a significant
reduction in the number of small family farms in the longer term?
I think we want more clarity on that direction.
(Margaret Beckett) I accept that and I understand
that concern. Of course this is again precisely why the setting
up of the Policy Commission was in our manifesto to get a wider
group of people, a wider range of people, not just those in Government
or in the relevant departments to think about and to address these
issues. I ought perhaps to say that although clearly none of us
wants to see high priced food if it can be avoided, of course
I do recognise that there are those who argue that one of the
problems that we have is that we do not pay enough for our food.
There is a distinction I make there between seeing what is the
right price and having a system, as the CAP does, that actually
kept prices artificially high in all circumstances. You asked
what sort of models. I think it would be dangerous to try and
say "oh, we want to do what X did" because we have to
look at our own circumstances but at the farming conference in
Belfast, to which I referred, there was a very interesting presentation
from a New Zealand farmer about what New Zealand had done when
forced by the change in their relationship with the United Kingdom
as we entered the European Community, not least among other influences.
You know, what they had done and how they had sought to address
the market situation in which they had found themselves, what
they had actually done, which of course was to phase out all subsidies,
and how they had sought to satisfy markets. Now let me say at
once I am not suggesting for a second that we should simply say
"oh, well, we will do what New Zealand did" because
they are in extremely different circumstances from ourselves.
I think that an encouragement, if you like, that we can take from
what was done in New Zealand is that they were able radically
to transform their approach to agriculture and to do so successfully.
It seems to me it is important for us to take encouragement from
the fact that within our own very, very different circumstances,
we should be trying to look, as they were forced to do, at what
our market situation is, what potential solutions there are for
us and how we could move towards those solutions. I will freely
tell the Committee that I think it would be madness as well as
arrogant for me to say that after the comparatively short time
I have been in the Department I know the answer to all these questions,
but at least I hope I know what some of the questions are. As
to the other issues, no I accept it is not just a matter of diversifying
into particular kinds of small enterprise and I accept too the
fact that there may be not enough of a market for all who may
be concerned. This is one of the reasons though why we are extremely
keen—and I know it is not always welcome to people in the
farming community—to see good quality business advice provided
to the farming community about the way forward for them and that
advice being sought by people in the farming community. I know
that there are many in farming who believe that there are grounds
to look at perhaps more co-operative ways of working, for example,
than has been the case sometimes in the past and that will help
to create a new future, particularly for the smaller farm which
one does not wish to see disappear but which may find its future
through different ways of working than in the past. Also I think
we need to encourage and stimulate innovation and innovative thinking.
For example, it potentially satisfies all the interests in my
Department if we find that there is a good market for energy crops.
There are a range of potential answers emerging from the mist
of these questions.
Mr Drew
52. If I could just make a comment on your last
point about farmers working co-operatively. Some of us have spent
quite a long time trying to persuade them of such. I think it
would be very useful if the Department might take the lead and
at least look at the idea of a national conference to establish
good practice which might begin to help the dissemination. It
is a struggle on the ground, I can tell you now. That is just
a comment, you might like to take that up rather than refer to
it.
(Margaret Beckett) If I could perhaps say, Mr Drew,
the Government does not intend, as I said, to give formal evidence
to the Policy Commission but there is nothing to stop Members
of Parliament or Members of this Committee doing so.
53. Thank you. I look forward to that. If I
can move on briefly, you have mentioned it many times before,
what we mean by the sustainable development agenda that the Department
is signed up to. Could you give me some tangible examples—perhaps
the Permanent Secretary might like to engage in this—of
what the Department has done so far and what it would like to
do in this area?
(Margaret Beckett) If I could pick up on your second
point, and perhaps ask Brian, as you say, to deal to a degree
with your first point. In terms of what we have done so far, the
one thing I will say briefly is that as the Committee may be aware,
and certainly I think will expect, we are working on our own sustainable
development strategy for the Department which we hope to publish
in due course. What I would like to focus on, because I think
maybe it might be more illuminating than a sort of list of "well
we have tried to do this" or that is what we would like to
do in the context of the World Summit on Sustainable Development
in Johannesburg next year. One of the things that is the source
of considerable anxiety to the South African Government, and of
concern to many who are engaged in preparations for that Conference,
is that there is a danger of it being seen—and this goes
back to the point that I think David Lepper made to me earlier—as
an environmental conference. Actually it is not an environmental
conference—and it was one of the reasons why I was very
pleased that we were able to settle some of the climate change
technicalities in Marrakech—it is meant to be, we wish it
to be, a conference that looks at the overall package of issues
that we mean by sustainable development, that is the economic
and the social issues as well as the environmental. People are
focussing on the list of potential things that the Summit could
try to do which have emerged from the regional discussions that
have been held already, saying that we want to reduce that list
but many people are saying that as that list is reduced to a smaller
number of things on which the Summit should focus that they wish
it particularly to focus on the economic and social, not least
because particularly in Africa, and in the context of the conference
held in Africa, there is such a clear link between the poverty
that exists and environmental degradation. It is a vicious circle.
So what people are beginning to say we should look for to emerge
from the Summit are concrete projects and proposals in terms of
providing, say, clean water, sustainable energy in continents
like Africa which can begin to transform both the economic and
social prospect and also in that context and by those means the
environment. I think these are part of the "what we would
like to do" issues and, of course, it is also very strongly
my view that while there is a general public recognition of problems
vis a" vis the environment and not least of climate
change, a general concern and goodwill towards these issues—much
of what has been discussed so far, even though we hope it will
in the long term be beneficial—is just way over people's
heads and always will be. If, however, we can begin to focus more
as we move forward on things like developing the practical projects
to provide clean water, energy and so on, then not only is that
a good thing in itself, and particularly a good thing in the developing
countries, but it actually shows people what we are doing as a
world to start to tackle the problems of the environment rather
than just discussing it at a rather high minded and philosophical
level.
54. Current examples?
(Mr Bender) I have been given a couple of minutes
to think. Can I inform the Committee of two management changes
and two policy things we are doing. On the management changes,
we set up two divisions in the Department which did not exist
before the election bringing together different parts. One is
a division in the Food, Farming and Fisheries part of the Department
that leads on sustainable agriculture, and that brings together
some thinking from what you might call both sides of the fence.
In the Land Use and Rural Affairs Directorate-General we have
a division called the Farm Management Improvement Division which
again brings together some of the business skilling issues, some
of the land management issues, some of the environmental issues
that were done on different sides of the fence before the election.
On policy outcomes, policy issues, perhaps two points to mention.
One is the Department launched in August outlines for an emissions
trading scheme. Secondly, work was taking place in the two separate
departments before the election and now is taking place within
DEFRA for, I hope, publication in the spring of a soil strategy.
55. Can you just again, very briefly, map out
besides chairing the Green Ministers Group, which obviously Michael
Meacher does, in what other ways are you taking forward the sustainable
development mantle within the Government itself?
(Margaret Beckett) I think those are the key means
at present. We are in discussion, as I said we are developing
our own sustainable development strategy, so too are DTLR. We
are keeping the discussion going between ourselves about these
issues so that they progress in parallel.
(Mr Bender) Two specific further examples. One is
early this year, I think it was, the then DETR published a White
Paper on Sustainable Development. DEFRA will be publishing the
next one, the follow up one, I hope early in 2002. Secondly, we
will want to carry forward, through various collective machinery,
including the Green Ministers but including also, I suspect, the
Cabinet Committee on Public Expenditure, sustainable development
as an underpinning theme of the forthcoming spending review.
(Margaret Beckett) Indeed, I should have said that,
actually. I have got to the stage that I take it for granted and
I think everybody else does too. It has been agreed to be an underpinning
or if you like an overarching theme of the whole approach to the
next spending review.
Patrick Hall
56. Secretary of State, commentary on the new
Department has sometimes said that because it is ambitious in
looking at the environment and environmental protection and sustainable
development, therefore the Department should take on planning,
transport and everything. Of course that cannot be.
(Margaret Beckett) No.
57. Therefore those issues have to cut across,
do they not? I am not quite sure from the answer that has just
been given by Mr Bender and yourself that the mechanism is well
and truly there to ensure that the leadership that is necessary
to ensure that those matters are constantly on the agenda and
addressed by all departments is going to be possible, not because
of lack of will but because of a lack of the mechanism to do it
from DEFRA, led by DEFRA to actually sustain that effort across
all departments.
(Margaret Beckett) If I may say so, I do not think
that is right because, as you have just been saying, the issue
of sustainable development is underpinning everything that is
going to be done in the spending review. That will make a difference.
We have the strengthened Green Ministers Committee. We have already
referred to the concordat on some of these specific issues with
DTLR and, as I indicated earlier, there are bits of the different
departments which have already been working together and will
continue to do so. We have made a small announcement on the issue
that we are setting up a group with the Office of Government Procurement
to try to encourage the right approach across Government. I think
from memory it is a task force or a cross cutting committee or
something but basically drawing in the Office of Government Procurement
and that I think is a very important indicator of the degree to
which this approach is accepted across Government, and not least
within the Treasury, because as you will appreciate for the Treasury
to agree not only that sustainable development is a key theme
that runs throughout everything that is going to be part of the
considerations of the spending review but also to agree that the
Office of Government Procurement should be taking into account
not only as it must, quite rightly, value for money but also sustainable
development is potentially an important step forward.
58. Yes, that is a very radical change indeed.
(Margaret Beckett) Indeed.
59. If it was really to be achieved, that would
be fantastic, it would change entirely the short-term outlook
on budgets and programmes to a totally different way of judging
what is cost effective.
(Margaret Beckett) That is right. Yes, properly cost
effective.
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