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Mr. David Lidington (Aylesbury): May I begin by offering more than the routine thanks to the Secretary of State for the statement? Conservative Members greatly appreciate the fact that she has come straight from the Luxembourg negotiations to report directly to the House of Commons. She sets an example that, we hope, will inspire some of her Cabinet colleagues.
As the Secretary of State said, the agreement is detailed and complicated. We will want to study carefully its impact on different agriculture sectors and parts of this country. I hope that the right hon. Lady can do a couple of things that will assist not only the Opposition but all Members of Parliament in the process of analysis. First, I hope that she will allow us time for debate to put the many detailed questions that need to be asked about the agreement. Secondly, I hope that she will publish a detailed assessment of the likely impact of the proposed changes on various types of farm businesses. It is not good enough that we should have to rely on outside bodies such as the Royal Institution of Chartered Surveyors, however expert they are in their field. The Government owe it to Parliament to publish their detailed account of the likely impact.
Conservative Members welcome some aspects of the package. The most obvious is that decoupling—at least of a sort—will take place. I welcome the list of the
multiplicity of schemes that could be scrapped in the wake of the agreement. We shall look to the Government to make certain that scrapping the schemes, albeit welcome, is not immediately used as an opportunity in Brussels or Whitehall to deluge farmers with substitute brand new sets of regulations and red tape.The reality, however, is that the deal constitutes a botched compromise that falls far short of the radical changes that are needed. British farmers will have to bear more than their fair share of the costs of reform. The leader of the German farmers union said, in reaction to this morning's announcement, that the agreement was a
- "typical EU compromise which gives and takes a little from everyone and creates terrible difficulties for those who have to implement it".
Will the Secretary of State confirm that France and other countries can continue under the terms of the agreement to pay full production subsidies until 2007, and that even afterwards they will be free to link a considerable proportion of their farm support payments not to environmental or rural development schemes but directly to production subsidy? Will she also confirm that the modulation arrangements for transferring money from farm support to environmental or rural development projects discriminate blatantly against British agriculture? Will she further confirm that not only is the system weighted against larger farms—holdings in this country are on average significantly larger than those in the rest of the EU—but that up to one fifth of the money taken from farmers through modulation may be spent elsewhere in the EU on the schemes and under the framework of rules that the European Commission devises?
We hoped for a fair deal on the environment. Although it is true, as the right hon. Lady said, that today's agreement marks some advance on the previous position, I hope that she will take seriously the World Wide Fund for Nature's description of the deal as "an exercise in cosmetics." The head of agricultural policy at the Royal Society for the Protection of Birds told the BBC that the Government have
- "talked a good game on CAP reform. But internationally it appears to have lost out in securing major reforms."
Will the Secretary of State confirm that the arithmetic no longer adds up? The revenue that DEFRA stands to receive from the EU-wide modulation scheme will not be sufficient to cover the sums that had been provisionally budgeted for the entry level environmental scheme. The only way in which she can deliver the environmental improvements that the Government have pledged is through imposing a new, national modulation scheme on top of the Community scheme. That will carry the risk of further market distortion and harming the competitiveness of British farmers when compared with those elsewhere in Europe.
We hoped that the agreement would mean a fair deal for the developing world through the forthcoming international trade negotiations. It is trade justice week, yet the Secretary of State tells us of her delight in an agreement that will allow production subsidies in some form to continue indefinitely in the EU, despite all the pledges that the Government and other European Governments made at Doha and have subsequently repeated. Neither the Secretary of State nor the presidency conclusions mentioned the need for action to tackle export subsidies, which, as Ministers have admitted, cripple the ability of some of the poorest nations in the world to prosper through trade. I hope that the Secretary of State will be able to say whether the detail of the agreement includes some planned action on that.
The French agriculture ministry gave the game away in a statement this morning. It said, with some satisfaction:
- "This reform preserves—as was France's position all through the negotiations—the essential principles of the Common Agricultural Policy".
Again, the Government have failed to deliver on their promises. The gap between promise and delivery explains why so many people in this country are ceasing to believe anything that the Government tell them.
Margaret Beckett: The most evident gap was between reality and the rhetoric of the hon. Member for Aylesbury (Mr. Lidington). I hope that I have not lost track of all his questions.
Sir Robert Smith (West Aberdeenshire and Kincardine): It was a speech.
Margaret Beckett: All right, it was a speech. The hon. Member for Aylesbury should ask my right hon. Friend the Leader of the House for a debate, but I assure him that we shall do everything that we can to publish material that is as detailed as possible to assist hon. Members to assess the impact of the package. Consequently, he may find that he regrets some of his remarks.
I shall not bother to go into the list of quotes from people who said that the agreement does not go far enough. Many of us would have liked to go further, but pretending that the agreement is a bad result simply because we did not get everything that we wanted out of the negotiations shows the hon. Gentleman's total lack of experience in negotiating.
On the issue of unfair competition, it is correct that other member states will be able to keep production subsidies until 2007, should they choose to do so. It is
also correct that, beyond that, they will have the option to keep a restricted range of subsidies—I will not bother to go into the technicalities unless someone particularly wants me to. A certain number of premiums will be available, but they will obviously be much more restricted than hitherto. Member states will be able to keep coupled only a minority of the payments available.The point that the hon. Gentleman has totally missed is that we do not consider this to be an advantage. Indeed, when he said that we all thought that decoupling was a good thing and that we wished that we had had more of it, he seemed not to notice that he was shooting his own argument in the foot. If others wish to keep bureaucratic schemes that are, in many cases, very unpopular with their own farmers, it is no part of my plan to stand in their way. However, I believe that many farmers in Britain and across the rest of Europe—clearly, the German farmer whom the hon. Gentleman mentioned was not one of them—are fast coming round to the idea that they would like to have the advantage of total decoupling. We believe that it would give British farmers a competitive advantage, which is one of the reasons why we support it.
The hon. Gentleman also asked how the money would be worked out in terms of UK agriculture. As everyone knows from the January proposals, the initial package from the Commission contained quite a large gap between the funding that was raised in the United Kingdom for modulation and the money that could be spent here—not least, I am afraid, because of the appalling deal that was made by the previous Conservative Government when the basic agreement was reached on rural funding. We have made strides towards redressing that, however, and we hope to make further strides. At least we now have, potentially, some impartial criteria, rather than just an historic spend against which this can be judged. In consequence, we have massively improved the options available to UK farmers.
The hon. Gentleman asked whether there would be insufficient revenues to cover the scheme proposed by Sir Don Curry. That is not the case. The details are buried in annexe something or other—I think that it is annexe 7, but I would not swear to it. The text that I saw this morning was literally hot off the photocopier at about 4 am, and I have lost track of what the number is, but there is a special annexe dealing with that issue, which we believe covers us completely for transitional arrangements.
The hon. Gentleman then asked about the possibility of the UK voluntarily modulating on top of the EU scheme. Given that the EU proposal—although larger than the original—is not for the 10 per cent. modulation proposed in Sir Don Curry's recommendation, we shall clearly be looking to address that issue. We shall have to consult on how we do that, but my impression was that both sides of the House welcomed Sir Don's report. If this represents a change of heart on the part of the Conservative party, it is interesting to note it.
Finally, the hon. Gentleman asked whether this represented a fair deal for the developing world, because some form of subsidy would continue. Sadly, perhaps, nobody has ever said that we could get a better deal and better market access for the developing world only if all subsidies that had been put in place by the developed world were abolished. Personally, I could live very
happily with that happening, but no one has claimed that it was likely, or, indeed, part of the negotiating stance. It is not part of the package that has come of Geneva, which is intended to lay the basis for a sound foundation for the Doha discussions. I welcome the hon. Gentleman's ambition in that respect, but he is wrong to suggest that the package does not meet this requirement.As for other remarks that other member states have made on these issues, this outcome was one of the goals that the Agriculture Council set itself. The atmosphere inside the Council was extremely constructive, helpful and co-operative, with all member states willing to try to help solve the specific problems that had arisen in other member states. One of the criteria that we set ourselves when we embarked on this final stage was that, if at all possible, there should be no specific winners, and no losers. That is the case.
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