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House of Commons

Tuesday 29 November 2005

The House met at half-past Two o'clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

EU Budgetary Reform

1. Mr. Desmond Swayne (New Forest, West) (Con): What discussions he has had with his EU counterparts about the prospects of reforming the EU budget. [32388]

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Jack Straw): Many.

Mr. Swayne: I am tempted to ask "Why?" The Secretary of State has told us that reform of the budget is predicated on reform of the common agricultural policy. What proposals for the reform of the CAP have the Government put on the table during their presidency? Has the Agriculture Council even met during the British presidency?

Mr. Straw: I am very happy for the hon. Gentleman to ask me why; that is the purpose of the House. The reason we have had many discussions on the European Union budget is that there is an awful lot to discuss, and even more to explain to some of our European counterparts about how, to take an example at random, the United Kingdom has historically been paid significantly more than France over many years, notwithstanding the abatement that was secured in 1984—

Mr. Eric Forth (Bromley and Chislehurst) (Con): By Mrs. Thatcher.

Mr. Straw: The hon. Gentleman—

Mr. Forth: Right honourable.

Mr. Straw: The right hon. Member for fancy ties reminds us that the abatement was secured by Mrs. Thatcher. That is true, although in the debate that took place thereafter, in which I took part, that deal was treated with some scepticism—

Mr. Forth: Not by me.

Mr. Straw: No, by me. And I was right, because, as we predicted at the time, the deal failed to ensure any long-
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term reform of the common agricultural policy or of the EU's budget. Twenty years on, it has been left to the Labour Government of my right hon. Friend the Prime Minister to secure that reform.

Interim agricultural reforms have been secured, above all, through the efforts of the United Kingdom, although perhaps the hon. Member for New Forest, West (Mr. Swayne) has not noticed. Thanks to my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs we have for the first time achieved significant—36 per cent.—cuts in sugar subsidies, which is a major achievement for the British presidency.

Ms Diane Abbott (Hackney, North and Stoke Newington) (Lab): The cuts in sugar subsidies represent an important step forward in agricultural reform, but will my right hon. Friend ensure that the new arrangements do not disadvantage our traditional allies in the Caribbean? Will he also ensure that sufficient money is put aside for the right transitional arrangements for them?

Mr. Straw: I share my hon. Friend's great concern about the inadvertent but none the less powerful impact of the changes in sugar subsidies, which could affect many of the Cotonou countries—the African, Caribbean and Pacific countries. I discussed this issue with a delegation from the ACP countries at the United Nations General Assembly in September, and my right hon. Friend the Prime Minister discussed it with Commonwealth ACP countries at the Commonwealth Heads of Government meeting. We have been pushing the European Union for cushioning support, with a two-year phase-in. So far, there has been a proposal, which has still to be agreed, for €40 million for 2006. We are pushing the European Union to increase that and to ensure that there is sufficient provision in the 2007–13 budgets, which have yet to be agreed, for the ACP countries.

Mr. Forth: Ugly rumours are circulating that the Prime Minister is prepared to give away Lady Thatcher's rebate in return for some vague promise or undertaking on CAP reform. Will the Secretary of State give the House an absolute assurance now that there is no question of our rebate being given away without the absolute certainty now of substantive CAP reform?

Mr. Straw: I thought that Ugly Rumours was a band with which the Prime Minister was associated. I am happy to say that I have never heard any of its tracks—

Mr. Forth: Let's keep it that way.

Mr. Straw: Indeed.

My right hon. Friend the Prime Minister said on 20 June, as on many other occasions, that the rebate was an anomaly, but an anomaly that was justified by a much bigger anomaly, namely the distorted spending of the common agricultural policy. Yes, we are ready to discuss the removal of that anomaly, but only in the context of significant reform of the common agricultural policy.
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Mr. Doug Henderson (Newcastle upon Tyne, North) (Lab): Workers at the Nestlé chocolate factory in my constituency very much welcome the proposed changes to the sugar regime. They would have welcomed them even more had they gone a bit further. On the general question of the contributions, does my right hon. Friend agree that the question of who pays how much should be resolved among the richer countries of the European Union, and that the interests of the accession countries should be protected?

Mr. Straw: On the sugar subsidy, we would always like these things to go further, but I am grateful to my hon. Friend for his generosity. This was a significant deal, and it was achieved only as a result of the work of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs.

I agree with my hon. Friend's second point. Let me make it clear, however, that whatever deal is agreed, the United Kingdom will pay a fair contribution towards the cost of enlargement. That is our duty and responsibility, which all parties have agreed. All parties in the House have supported enlargement. All the E15 wealthier member states must make fair contributions towards the cost of enlargement. That is a separate issue—although it is bound to mean that our contributions will rise— from whether or not we get rid of the rebate in return for reform of the CAP.

Mr. Graham Brady (Altrincham and Sale, West) (Con): President Chirac is reported as saying that a deal on the EU budget is being impeded by the power struggle between the Chancellor and the Prime Minister. The former Minister for Europe, the right hon. Member for Rotherham (Mr. MacShane), warns Ministers in The Daily Telegraph today that he will not accept a one-sided deal that only moves on the rebate. Would not it help the Foreign Secretary to present a clear, united position if he were now to come clean, publish the Government's budget proposal and give absolute guarantees, first, that the whole rebate will be kept until there is fundamental CAP reform—delivered and not just promised—and, secondly, that no budget will be agreed that costs the British taxpayer more, not less? Does he agree that the worst of all worlds would be for Britain to give way on our rebate with no guarantee of real CAP reform?

Mr. Straw: Our—[Interruption.] There is a lot of chitchat among Conservative Members as they try to work out their policy. Our position on the rebate has been made clear, and I spelt it out again today. I intend to publish proposals to our EU colleagues—which, of course, will also be made available to the House—at the beginning of next week, for what has been delicately described as a conclave of European Foreign Ministers, which will take place tomorrow week.

Mr. Denis MacShane (Rotherham) (Lab): Will the Foreign Secretary confirm that the majority of countries with which he must deal on this matter, and particularly the agri-protectionist countries, are governed by parties of the centre right, sister parties of the Conservative party? Is not it a real worry for Britain's future standing in Europe that the incoming leader of the Conservative party has said that he wants to break all political links
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with conservative parties in Europe? Is not it a fact that it is betraying British interests to uphold its anti-Europe—

Mr. Speaker: Order. That question is totally out of order.

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