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Mr. Roger Williams (Brecon and Radnorshire): May I first draw the attention of hon. Members to my entry in the Register of Members' Interests in relation to agriculture?
The Liberal Democrats broadly welcome the move from support for European agriculture that is linked to production, but this has certainly not happened in the decisive way that the trade justice campaign would have wanted. It remains to be seen how the reforms will be viewed at the WTO negotiations later in the year. Indeed, the French ministry of agriculture was boasting on its website this morning that it had retained all its protection and all the ramifications of the CAP, in terms of support for production.
The reforms seem to amount to a virtual repatriation of agricultural policy, with all the dangers of trade distortion that that entails. There is also the danger of nations that are not as scrupulous as us in using state aid introducing such aid under the camouflage of the various options for decoupling and the implementation times. We will press the Government to design the scheme for this country in the best interests of the British farmer, and to allow for distinct solutions to be reached for the devolved nations.
We welcome a number of the announcements that have been made, in particular the commitment to retain at least 80 per cent. of the modulated money to be used in its country of origin. That is a great improvement on the first proposals, which limited us to less than 20 per cent., as a result of the Tories' reticence in claiming support for pillar 2 money in previous years. We also welcome the fact that the advisory service will no longer be compulsory, and that it will be a voluntary service that farmers can make use of, rather than being a requirement of the scheme.
We also welcome the ability of countries to decouple by 100 per cent. It was not clear from the right hon. Lady's speech whether it was her intention to introduce a scheme of that nature in this country. Perhaps she could let us know whether that is the case. We understand that the French expressed concern about the possibility of the abandonment and dereliction of land. In the peripheral areas of this country, too, there is concern that land could go out of agricultural production altogether. Will the Secretary of State tell us how the Government are going to tackle that issue? We
also welcome the support for new entrants and young farmers, but it has not been spelled out in detail. It would be much appreciated if the Secretary of State could help us on that.We are concerned about trade distortion, and I am not satisfied that the Secretary of State has given a clear indication of how the Government are going to ensure that farmers are supported in that regard. We have campaigned for a long time for a level playing field in terms of agricultural support, but this morning's announcement seems to leave us with a rather mountainous landscape, with hidden valleys, and peaks clouded in mist, because of the uncertainty over how other countries will implement the reforms, and the effect that that will have on British agriculture.
We are also worried about how the entitlements are going to work, especially for new entrants and for people who are taking up new tenancies. Will people who are giving up tenancies have ownership of the entitlements, or will those entitlements go back to the landlord? How will these provisions be applied when splitting land for sale?
Uncertainty is the greatest problem for any business, and that applies to farming, too. We are pleased that this announcement has been made. It takes us some way along the line, but I believe that it has still to be agreed by the Heads of Government meeting. If that is not the case, perhaps the Secretary of State could let us know. Farmers will want to make their business decisions shortly, and certainty is the key to their being able to do so.
Margaret Beckett: Like the hon. Member for Aylesbury (Mr. Lidington), the hon. Gentleman says that this will not be enough for the Trade Justice Movement. Let us show some common sense; it is not the job of organisations such as the Trade Justice Movement to be satisfied with whatever Governments achieve. Their job is always to be prodding us on. If they were not doing so, they would not be doing their job. I do not find it the slightest bit surprising that this will not be enough for such organisations, but it is an awful lot more than either they or anyone else—including me—thought we would get not so long ago. We must take these things with a pinch of salt.
I am mindful of the fact that every member state needs opportunities to provide prosperity for their work force and their farmers out of the package. I would simply and gently ask Opposition Members to cast their minds back—or just look through the press cuttings—to what some of my colleagues were saying some weeks or months ago and then reread what they are saying today. I say nothing more than that.
On trade distortion and abandonment, we recognise that there are dangers and we will discuss how those can best be overcome. But all these issues, such as the potential for the abandonment of land, were a real threat in the past. We believe that we now have a more constructive structure that will enable us to address them.
If the hon. Gentleman will forgive me, I shall not attempt to go into the whole issue of entitlement; it is a complex matter. The agreement contains a special section dealing with the issue of how entitlement arises and how it can be transferred where land is sold, rented
and so on. We are mindful that there was a good deal of justified concern about that. We believe that the package has addressed that concern, but it is a little complex.
Paddy Tipping (Sherwood): This is a significant achievement that has long been sought, and my right hon. Friend the Secretary of State has shown remarkable negotiating skills to belie those critics who said that the Fischler reforms would never happen. The important thing now is to work through the detail for British stakeholders. Will my right hon. Friend confirm that she intends to move forward quickly with environment schemes, particularly the entry scheme and with a review of the agri-environment schemes? If we can achieve that, and achieve a simpler way into those schemes, it will help us to argue against the critics in the Chamber who will complain that other countries' ability to continue production payments until 2007 is anti-competitive. A new environment scheme must be the way forward.
Margaret Beckett: I thank my hon. Friend for his remarks. A couple of things strike me from what he says. First, we intend to press forward with the pilots for our entry-level scheme and with the ongoing work on agri-environment projects. My hon. Friend will not have had time to discover that there are a variety of other smallish but useful ways in which the overall settlement will be of assistance to the environment. For example, although we would have liked very much to get rid of set-aside altogether, we have obtained in the continued system the freedom to use land margins and so on—something that organisations such as the Royal Society for the Protection of Birds have wanted for a long time. There are lots of minor improvements along those lines.
My hon. Friend is right to draw attention to the fact that, although we want improvements to the environment, we believe that they can go hand in hand with continued and strengthened prosperity for farmers. Critics looking at the ability to continue production subsidy payments overlook the fact that every single economic analysis, of which I am aware, of the impact of decoupling suggests that it would make farmers better off. For that reason, although this is not generally in the public domain, there is increasing pressure, interest and comment from farming organisations in other member states—including some of those who were not too enthusiastic about these proposals—who realise the potential attractiveness to them. It has been said on behalf of one member state that the farmers there had a soul above having a higher income. I will believe that when I see it.
Mrs. Angela Browning (Tiverton and Honiton): The key to removing subsidies in a so-called single market is the timetable for implementation. My hon. Friend the Member for Aylesbury (Mr. Lidington) raised with the Secretary of State the question of the differential time scales to be applied by different countries. The potential downside to that is that market share will be taken by those countries in those commodities that retain subsidies over a period in which they will see off the
competition. What analysis has the Secretary of State made of the impact of that process on the British market?
Margaret Beckett: With great respect to the hon. Lady, who has experience in the Department, her observations are misconceived. Only time will tell how people will use the freedoms that are now available to them, but there was very little demand for anything other than a general, broad common time scale for implementation of the package. Most member states were anticipating implementing at the same time and as early as they were free to do so. One feature of the way in which we strove to reach agreement—and one of the reasons why we got such a broad agreement—was people's willingness to allow freedom and room for manoeuvre to member states who had particular concerns, whether one thought that those concerns were necessarily as big a problem as they thought or not.
The hon. Lady spoke about market share. When I said that her comments were not right or germane, I meant that she was overlooking the fact that farmers will continue to receive a payment; it simply will not be geared to the level of production. That means that they will be able to produce for the market. One facet of the economic analysis of decoupling is that there is a strong suspicion that, in many cases, it will lead to a higher return precisely for that reason.
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