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Mr. Andrew Turner (Isle of Wight) (Con): As always, my right hon. Friend makes a terrific case. However, is not it the case that, whatever our success in winning the argument, root-and-branch reform is needed to ensure that the people at the rudder and those in the engine room—the Commission—begin to follow the instructions of the skipper, that is, the politicians?

Mr. Hague: We will run into trouble if we connect the skipper with the rudder by a root and a branch, but I take my hon. Friend's valid point.

Chris Bryant (Rhondda) (Lab): The right hon. Gentleman is discussing common agricultural policy reform and I do not believe that a single hon. Member would not like reform as urgently as possible. How much does he believe that British farmers should receive in CAP payments? Last year, they received £1.7 billion. The Duke of Westminster received £448,000, the Duke of Marlborough received £511,000, the Duke of Bedford received £366,000, the Earl of Plymouth received £459,000 and the Marquess of Cholmondeley received £306,000. Are all those payments appropriate?

Mr. Hague: No, of course they are not. Reform of the CAP would greatly reduce such payments. Huge payments are also made to large farms throughout the rest of Europe.

We agree on the need for reform of the CAP, which brings us naturally to the hot topic of this weekend's summit—the budget and the position of the EU rebate. An elector who participated in this year's general election only seven months ago would have had no doubt where the Government stood on the matter. Their mantra was that the rebate was "non-negotiable and fully justified." Any attempt to reduce Britain's rebate would be vetoed and blocked. It does British politics no credit when a cast-iron, comprehensive commitment, which was so freely given, is rapidly and deliberately abandoned. How Ministers expect any future assurances that they give on such matters to be believed is beyond imagining. Yet only five weeks passed after the general election before the Prime Minister devised a new and fascinating formulation. On 8 June, he said at the Dispatch Box:

For those of us who are connoisseurs of the Prime Minister's extraordinary ability to face several directions simultaneously that statement was a particular treasure.

When the study comes to be written of the Prime Minister's techniques, the statement should have a chapter devoted to it. First, there was the fascinating use
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of the word "period", which initially seemed to derive from his recent visit to the United States and his habit of starting to imitate any audience that he wants to please. However, he was using it in a more calculated way—to give emphasis to an otherwise meaningless statement. The phrase,

literally meant that the Government would not give away the entire rebate but might give away 10 per cent., 50 per cent. or even 90 per cent. The word "period" was used simply to fool everybody, like thumping the table hard while saying, "I don't know." It is testimony to the Prime Minister's skill in double-speak that he largely got away with that emphatic but meaningless statement.

The statement's meaning soon became clear. The rebate was indeed up for negotiation but only in return for genuine reform of the CAP. As reported on 13 June, the Prime Minister said that the British rebate could not be discussed unless that happened alongside a debate on all EU financing, including the

He said that there had to be fundamental changes

That was not the Prime Minister's policy when he ran for election only a few weeks previously. Nevertheless, it was not an unreasonable policy.

Offering to trade part of the rebate for sensible reform of the CAP, with a view to making the EU work more effectively and without additional expense to the British taxpayer, was not an unreasonable negotiating position. The Government were right to stress the urgency of the matter, with the Prime Minister saying,

The Chancellor was applauded at the Labour party conference for saying:

The Government were in a strong negotiating position. Since the rebate is a legal entitlement, with any changes to it subject to our veto, it is clear that there would be no need to ask the British taxpayer to stump up billions of pounds of extra contribution to the EU, on top of the massive contribution that they already make, without getting something serious in return.

The moral and economic grounds for CAP reform are strong. There are many willing allies on the subject in Europe and serious reform would free resources to help the new and future entrants to the Union. All in all, the position, albeit different from that in the election campaign, had merit and strength. Then the Government came up against the response of President Chirac, whose statement on Bastille day was intransigent:

It was also bizarre. He said that

How about that for a perspective different from the Government's?
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At some stage after that highly unco-operative response, panic seems to have set in in Whitehall. The talk of firm leadership in June was drowned out by the noise of gears crashing into reverse in November. The Government's position moved from being described by the Deputy Prime Minister on 6 July as one whereby

to one of seeking only the vaguest commitment to future reform.

Moreover, no plan for CAP reform seems to have   been submitted by the Government. The EU Agriculture Commissioner wondered whether Britain's proposals were

and the French Agriculture Minister said two weeks ago:

The Slovak Prime Minister said in October:

Does not the Foreign Secretary consider that the deployment of powerful arguments for fundamental change and the readiness to sacrifice a rebate of immense financial value to this country required a more serious, informed and diplomatically effective attempt to create some real momentum for reform? How on earth could the Government talk in that way yet come up with no proposals so that even well disposed countries were left muttering in the dark?

Hugh Bayley (City of York) (Lab): Is the right hon. Gentleman genuinely suggesting that Latvia, Estonia, the Czech Republic and Poland, having escaped from the shadow of communism, should now pay a subsidy through the rebate to the UK Treasury as a price for joining the western family of free nations?

Mr. Hague: As the hon. Gentleman knows, the United Kingdom is one of the largest contributors to the EU. To talk of any other country in the EU subsiding us is therefore not the correct analysis. We already send enormous subsidies to the countries that are entering the EU. It is no good describing my position as unreasonable since it was the Foreign Secretary's position only a few weeks ago. It is right to consider trading part of the rebate in return for genuine reform of the CAP. That is the position from which the Government have now retreated. They have moved from talking about getting rid of the current CAP and showing "firm direction" and "firm leadership", according to the Prime Minister, to a policy of progressive capitulation that will cost British taxpayers at least £5.5 billion with nothing guaranteed in return. That is the equivalent in expenditure of 53,000 nurses or 39,000 teachers.

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