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CAP Reform

5. Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): What discussions he had on EU common agricultural policy reform during the G8 summit. [12882]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): I chaired the summit in place of my right hon. Friend the Prime Minister while he returned to London following the terrorist atrocities of 7 July. At the summit, the CAP as such was not discussed. However, my right hon. Friend the Prime Minister called for reform in all G8 countries, and pressed colleagues to agree on a date by which to end export subsidies.

Mr. Bailey: Does the Foreign Secretary not agree that the benefits of the deals made at the G8 conference on aid to Africa and development would be lost if the EU CAP export subsidies continued to undermine the economies of those self-same African countries? Will he pledge—notwithstanding the demonstrations that have taken place in Brussels over the last couple of days—to press for an end to the CAP regime and export subsidies to developing countries?

Mr. Straw: My hon. Friend is right about the damaging effects of those export subsidies, which, in the case of wheat, powdered milk and sugar respectively, are estimated to lead to prices approximately 34 per cent., 50 per cent. and 24 per cent. below EU costs of production. They have a destabilising effect on natural producers outside the European Union. We are pledged to seek 2010 as the end date for the subsidies. Whether we succeed will depend on whether we secure the full support of our EU colleagues, and then on whether success is achieved at the World Trade Organisation round in Hong Kong in December.

Mr. Stephen Dorrell (Charnwood) (Con): Does the Foreign Secretary agree that it is simply self-indulgent of European Union leaders to go to the G8 summit and sign up to the aspiration to make poverty history, while at the same time defending the present structure of the common agricultural policy? Will the Government focus their advocacy of CAP reform on structural reform of the policy to open European markets to agricultural products from elsewhere in the world? Do the Government accept that the implication of that is reduced EU expenditure, which should lead to a reduction in the overall level of the EU budget?

Mr. Straw: I agree with the right hon. Gentleman's last point. Fundamental reform of the CAP must constitute a straightforward reduction in total financial support for it. However, I do not consider EU member states with a different view to be capricious. Their view is connected with their politics, and the strength of their
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agricultural lobbies and their electorates. What we must do inside the EU is secure an agreement that is ultimately acceptable to all.

To those who think that the answer is to renationalise agricultural support, I say that that is not the answer, because it could lead to a degree of national competition that would in turn result in increased subsidies for European farming.

Kelvin Hopkins (Luton, North) (Lab): I am sure my right hon. Friend agrees that "reform" can mean as much or as little as we want it to mean, whereas "abolition" is very clear. Will he include abolition as at least one option for debate during the EU presidency, and examine its full implications?

Mr. Straw: I have thought about that, because I am an open-minded sort of guy. I have thought about it a lot, because at first blush the criticisms of the CAP are so intense that it would seem to follow naturally that its abolition was the answer. I am afraid, however, that we cannot escape the fact that if we abolish the CAP—including any common policy preventing national state aid from going to the agriculture industry—we could end up worse off, with a bidding up of agricultural subsidies in each of the existing EU member states. We need the continuation of a common regime which will bring down the totality of agriculture spending, while shifting the balance of that spending away from direct support for production to rural development—which is what we have tried to do in this country.

Mr. Graham Brady (Altrincham and Sale, West) (Con): When the Minister for Europe gave me the Government's priorities for the UK presidency on 6 June, CAP reform was not even mentioned. Two weeks later the Prime Minister was describing the CAP as irrational, and on 23 June he told the European Parliament that a new budget could not be agreed unless it set out

We strongly welcome the Government's new commitment to negotiating a radical reform of the treaties, but does the Foreign Secretary agree that the time has come for the Government to spell out the detail of the reform that they are seeking? To that end, will he now agree to our request for a Green Paper setting out the Government's proposals?

Mr. Straw: I do not think that the hon. Gentleman was paying attention to what my right hon. Friend the Minister for Europe said—[Interruption.] That is very clear, because reform of the common agricultural policy is in the White Paper and is also embraced by the policy priority of future financing. One cannot reform the future financing of the European Union without reforming the CAP, which is 40 per cent. of the total spent. As to how that reform is to be achieved, we do not need a Green Paper or a White Paper to spell out the key elements—a reduction in the total amount of spend and a shift in the balance of that spend. What we need is to secure the agreement of our EU colleagues, which is what we are now seeking to do.
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Mr. Brady: The Foreign Secretary has obviously not read the written answer of 6 June, which did not mention CAP reform at all. He is also being a little vague in his answer. Perhaps it is his inability to give a straight answer on CAP reform that led the French Foreign Minister to tell the International Herald Tribune today that the idea of reforming the EU budget before 2014 is "not serious". Will the Foreign Secretary now prove how serious he is about CAP reform by publishing detailed proposals to reform it? Specifically, if it is irrational for 40 per cent. of the EU budget to be spent on agricultural subsidy, what percentage would be acceptable? Given that Ministers now say that they do not expect any change overnight, will he also set out the timetable? There is a rare agreement across the House that we have a real opportunity to reform the EU for the better. If the Foreign Secretary refuses to answer those simple questions, the British people will be forced to conclude that the Government are wasting that golden opportunity.

Mr. Straw: I think it would be a good idea for Front-Bench Opposition spokesmen to listen to the answers before they deliver the supplementaries that they write outside the House. I say again that we have been very clear about what we are seeking and about the timetable. We are seeking a mid-term review of the forthcoming financial perspective between 2007 and 2013. What we propose can be seen in the conclusions to the last European Council in June—that it should be set some time during 2008–09. So far as the—

Mr. Brady: What percentage?

Mr. Straw: The hon. Gentleman is muttering at me.

Mr. Speaker: Order. That is something that the hon. Member for Altrincham and Sale, West (Mr. Brady) should not do. I gave him some licence when he spoke for too long in his second supplementary and I am not going to allow him to interrupt the Secretary of State again.

Mr. Straw: So far as the detail is concerned, what we have to do now is not publish a Green Paper—our trajectory is now very clear—but gain the agreement of our EU colleagues.

Mr. Speaker: Sir Menzies Campbell? Chris Bryant, then.

Chris Bryant (Rhondda) (Lab): A sad replacement, Mr. Speaker. [Laughter.] I have clearly united the House.

As one who was born three days before the common agricultural policy came into existence, may I say to the Foreign Secretary that one does not have to be an old Eurosceptic like my hon. Friend the Member for Luton, North (Kelvin Hopkins) to believe that the CAP is in urgent need of reform? I hear what the Foreign Secretary said about being opposed to the repatriation of the CAP, as it might lead to an increase in agricultural subsidy, which would be unfortunate. However, if a co-financing system were on the table, which meant that more money would be paid by the French Government
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for French subsidies and that subsidies across the whole of Europe were reduced in quantity, would the Government be able to support it?

Mr. Straw: We learn something every day and I believe that my hon. Friend was born on 11 January 1962, as the CAP came into force on 14 January 1962—so there we are. On his particular point, I agree with my hon. Friend that co-financing within a common regime may provide a way forward.

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