Examination of Witnesses (Questions 220-239)
LORD WHITTY
AND MR
DAVID HUNTER
11 FEBRUARY 2004
Q220 Mr Wiggin: Do it! Go on!
Lord Whitty: Tempted though I
am, I think the announcement should be made through one of the
normal parliamentary processes and not at this Committee.
Q221 Chairman: Would you like to tell
us which process is going to be employed to make this announcement?
Lord Whitty: I am not yet in a
position to say that.
Q222 Chairman: So we do not know quite
when and you cannot tell us by what means. It is disappointing
that in the discussion with stakeholders, perhaps one of the most
important, namely Parliament, has not been involved in any way,
shape or form via a debate in the House. One hundred and twelve
Parliamentary Questions have been asked about it. Why has your
Department not wanted to have an open discussion in Parliament
on this matter to help in an additional way to inform your thinking?
Lord Whitty: Well, I am not responsible
for the way in which the House of Commons, let alone the House
of Lords, runs its business, and at any time you could have had—
Q223 Chairman: Well, put simply, have
you or your Secretary of State ever asked the business managers
for such a debate and, if not, why not?
Lord Whitty: Well, because we
believe that the appropriate stakeholders are really those who
are involved in the industry, in the environment, in the countryside
generally, and that Parliament, if it were so minded, could have
asked for a debate. This Committee could have asked for my presence
or the Secretary of State's presence at a much earlier stage in
the proceedings.
Q224 Chairman: Well, I did and you have
not.
Lord Whitty: You have not asked
or I have certainly never refused to come before this Committee.
Q225 Chairman: No, I am talking about
a parliamentary debate. I asked the Leader of the House.
Lord Whitty: The Leader of the
House job is not mine. I am not responsible for the Leader of
the House.
Q226 Chairman: The Leader of the House
tells me that whenever sensible requests like that are put forward
by people who take a serious interest in the subject, that information
is communicated to the appropriate Secretary of State, so there
has been no doubt that a request has been made to have a debate
in the House of Commons ahead of an announcement so that the people
who represent constituencies with a strong agricultural and rural
interest might have had an opportunity to discuss it. I have not
heard anything yet to explain to me why your Department has not
seen fit to have such a debate.
Lord Whitty: Well, I suspect,
without wishing to malign the Leader of the House, he gives rather
similar answers to everybody if there is an interest in a parliamentary
debate and clearly there is limited parliamentary time. We have
felt that it is more sensible to discuss with those who are directly
involved than it is to provide government time for a debate within
either House, but of course it was still up to the House to decide
whether they wanted a debate in Opposition time or in the various
procedures which operate in either House, so I do not think you
can lay that at the door of the Department.
Chairman: Well, I think the Committee
will have drawn a clear message that the Government did not want
to have its own time for that debate.
Q227 Paddy Tipping: You have told us
you are to make an announcement soon through the normal parliamentary
process. You must be going to make the announcement tomorrow at
half past 12.
Lord Whitty: Well, people can
make guesses, but it is a matter of the parliamentary timetable
and I am not in a position to confirm or deny any particular arrangement.
Q228 Paddy Tipping: Why is there some
secrecy about this? Why is it difficult to say, "We want
to make an announcement. We want to make it before the NFU Conference,
so we are doing to do it this week, tomorrow or Friday"?
Lord Whitty: Well, we will either
make it tomorrow or we will make it very shortly.
Q229 Paddy Tipping: I do not see why
it should be a State secret.
Lord Whitty: Well, I am not sure
whether it is a State secret or it is not. I am not the person
who makes the announcements about parliamentary business.
Q230 Chairman: Well, could you help the
Committee, therefore, to understand the difficult further considerations
that clearly you are still having to make on this by just providing
us with a simple and easy-to-understand list of the issues which
were still remaining to be decided? What is the barrier to the
final decision being made? What further analysis, for example,
have you yet to do to decide how England is going to introduce
the Single Farm Payment?
Lord Whitty: We have completed
the analysis and it is the conclusions from that analysis and
how they are expressed which will be finalised, as I say, very
shortly, possibly even in the timetable that Mr Tipping suggests,
but I am, as I say, not responsible for the timing of parliamentary
business.
Q231 Chairman: So the honourable Member
for Morecambe and Lunesdale, who has a written Parliamentary Question
on the Order Paper, might be getting an answer tomorrow?
Lord Whitty: He might.
Q232 Chairman: Well, it is a she actually!
Let's focus for a second on the analysis that you have done. Northern
Ireland made it clear in their public statement that they have
analysed 30 different models of the payment scheme. How many have
you analysed?
Lord Whitty: Well, we took some
principal decisions, mainly that we were going to decouple and
decouple fully, although there was a question mark over the timetable.
Northern Ireland of course looked at various mixes of decoupling
and not decoupling which are allowable under the Regulations.
That is how they got to 30 separate options. We did not look at
anything which does not go for decoupling. Our focus was on the
form of decoupling and the form of Single Farm Payment with decoupling
of all the regimes which are covered by the June announcement.
Within that, I do not know if we can estimate, David, how many
versions we looked at of that, but it would not be as many as
Northern Ireland.
Q233 Chairman: Were these pieces of economic
analysis to work out the impact on farming in England of different
ways of making the Single Farm Payment?
Lord Whitty: In effect, yes.
Q234 Chairman: So perhaps you could give
us an indication of the various models that you looked at. Which
is the best buy? Which has the best effect on UK farming? Could
you describe its characteristics to us?
Lord Whitty: Well, we are looking
for a scheme, and this has been spelt out in various pronouncements,
whose objectives are to provide a system of support for farming
which has public acceptability, which delivers public goods, which
provides a basis on which farmers can operate and decide how they
meet market requirements rather than have their production determined
by particular and specific subsidies, and which delivers environmental
benefits, so we have a number of objectives and the combination
of those objectives has been measured against various different
forms.
Q235 Chairman: You mentioned just a second
ago that the decision should have public acceptability. What about
acceptability within the farming industry? Could you say a word
or two about how you are deciding what may be acceptable? What
are the criteria that you have employed to date to determine the
question of acceptability of your proposal to the farming industry?
Lord Whitty: Acceptability to
the farming industry is obviously a dimension, but it is the taxpayer
in general that is paying for this support and the taxpayer, therefore,
expects to see public good out of it both in terms of improved
efficiency and focus for farming and in terms of the public goods
like the environment and the landscape. Therefore, it is public
acceptability which is the key criterion. Now, within that clearly
different measures may be of different attractiveness to the various
sectors of farming and it is true that some sectors of farming
have favoured one form of paying the Single Farm Payment, and
probably the majority have favoured historic payment and others
have favoured something close to an area payment or some form
of hybrid, and we have had representations on all of them, so
there is not a uniform farming view as to which of the forms of
payment, once having decoupled, is most acceptable to farming.
What English farming has done, and I think it is right to recognise
the very big shift in opinion in English farming which has taken
place, is that they have all or virtually all favoured decoupling
which is a significant shift in attitude and one which I think
is very much in line with that of the Government.
Q236 Mr Wiggin: Over the border from
my constituency, in Wales, Carwyn Jones has said that he is going
for a historic model. Why is it that he has been able to make
that decision and what has he got wrong or why will we not have
that here?
Lord Whitty: I think the pattern
of farming is somewhat different in Wales than it is in England
as a whole. In particular, they have a much larger area of less
favoured areas of farming and smaller farms and, therefore, any
change in the basic situation is going to hit more farms and more
immediately than it would in England. I think in the long run
the historic system is not sustainable. I think that applies in
Wales and in Scotland as it does in England, and I suspect it
also applies in various areas of the Continent, and I hope some
of you have heard me quote before my Hungarian opposite number,
who says, "Instead of paying a farmer for having ten cows,
you are going to be paying for having had ten cows ten years ago".
That has limited public appeal or logic and I suspect that those
who go for the purely historic system will at some point in those
ten years or certainly by those ten years have to face up to the
fact that that system is no longer viable, whereas we would intend
to move, not overnight, but move to a system which is more acceptable.
Q237 Chairman: In your Oxford Farming
Conference speech you talked about the requirement for what you
described as a "sustainable framework" for the implementation
of the decision that we are discussing. Could you just elaborate
on what exactly you meant by that phrase?
Lord Whitty: Well, some of what
I just said of one which is defensible through the process, one
which does not cause excessive disruption, although it may cause
some disruption, but that we end up with a system which is more
robust than the past system of subsidy and the system which simply
perpetuated the past system of subsidy, but decoupling it from
actual output.
Q238 Paddy Tipping: We were joking earlier
on about phoning a friend to confer about a question. I do not
think Commissioner Fischler has quite been phoning you, but certainly
he has been firing off some letters about what he thought was
agreed last summer. Could you just explain what missives you have
received and what the kind of approach is of what the Commission
has sent to you?
Lord Whitty: We have had quite
a lot of phone calls and face-to-face discussions with Commissioner
Fischler because clearly there is a slight difficulty with the
Commission position in that whilst we have the broad Regulations
in black and white, we do not have the detailed Regulations and,
therefore, we need to check out, as do all other Member States,
quite whether what they propose or we propose fits in with what
the Commission are likely to lay down in the final Regulations.
This is not particularly helpful, but it is the reality. At the
same time the industry understand that they are going to have
to make an early decision so that they can make decisions on the
basis of it, and that is completely understandable and right.
So we have been in very close contact at both Commissioner to
Minister level and Secretary of State level and other levels within
the Commission. Now, the letter which Fischler sent or the round
robin to all countries and which was rather over-interpreted in
some of the farming press was effectively saying, "Well,
remember that the core proposition in June was to pay on the basis
of historic payments. That is, that remains the default position
and that any departure from that position, therefore, has to be
justified on an objective and reasonably equitable basis".
It was, as I say, rather over-interpreted that Fischler was telling
us that we could not go down to an area-based system or a hybrid-based
system or some other departure from what was clearly allowable
within the Regulations. Now, there may be details which constrain
us to the degree to which we can go down that both on the Single
Farm Payment itself and on other aspects of the package, but he
was clearly right that the historic thing is the core proposition,
but there is also the ability for any country to regionalise and
move away from that to an area payment or a hybrid system or a
less dynamic system which moved from one to the other.
Q239 Paddy Tipping: But the Commission
is not in a position to block any proposal that you put forward,
provided it starts with a historic base and then moves forward?
Lord Whitty: Well, it is not so
much starting with a historic base. We do have to indicate to
the Commission whether we are going for an area-based system or
simply a historic system and we have to do that by August 1, and
if you say, "In principle, we want an area-based system",
you can still have historic elements of it if you phase it in,
but you have to choose one or the other for the long-term position.
That is really what Fischler was saying, that, "If you go
for the area basis, make sure you are within the Regulations".
Clearly if were outwith the Regulations, then the Commission could
block this, but we do not intend to be outwith the Regulations,
either those that exist already or those that we are yet awaiting.
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