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Kelvin Hopkins (Luton, North) (Lab): We have had a long and interesting debate, in which a certain amount of change has taken place. The tectonic plates may not have moved, but certainly the sands are shifting, which I very much welcome. We are now talking about things that I used to raise a year or two ago, such as doing away with the common agricultural policy.

For once I find myself substantially in agreement with my hon. Friend the Member for Rhondda (Chris Bryant). He emphasised that the EU budget is a mess and has been for a long time. It needs to be rationalised and made fairer. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) spoke of his concern that structural funding might be taken away from Wales as a result of the entry of poorer new member states. He ought to be saying to the Government that every pound taken away should be replaced by the British Treasury. In his position, I would be arguing that strongly. Many Labour Members represent areas that receive such funding and, if it is taken away, it should be replaced by the Treasury.

Mr. Breed: I am grateful to the hon. Gentleman for saying that. Does he agree that the way that money is spent is better organised and controlled in the region where it is to be spent, rather than being directed from central Government, particularly the Treasury?

Kelvin Hopkins: I agree. Perhaps democratic local government could have more of a say. In general, it is better for decisions to be made closer to where people live and where the funding is to be spent. Funding coming from the British Government rather than the EU would be better spent, and there is a parallel in the aid budget for the rest of the world. The Department for International Development does a much better job than the EU. If more funding went through DFID and less through the EU, the people who benefit would benefit more.

I take issue with the hon. Member for Meirionnydd Nant Conwy on another point. He spoke about handbagging, as though we had started the argument that has caused the impasse in the budget. To go back to the politics of it, if he remembers, following the victory of the French people in their referendum—I put it that way because that is the way I see it—it was the French President who immediately wanted to deflect attention from what he saw as his failure by attacking the British rebate. He raised the issue.

Shortly afterwards, I suggested in my modest way in a debate in the Chamber that if the French President wanted to open the question of our rebate, we should open the question of the CAP. If there were no CAP, there would be no need for a rebate. I do not suppose that the Prime Minister listens very much to what I say, but he took up the same theme not four or five days later, and I am very pleased about that. He put together a reasonable argument, but the handbag was first raised by the President of France, not by Britain.
 
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We must appreciate that the problems arise entirely from the CAP. It is time to consider a way of abandoning the CAP and to state our intent to get rid of it over a period, in a sensible and negotiated way, not in a big bang.

David Taylor (North-West Leicestershire) (Lab/Co-op): Is my hon. Friend aware of a document that has been produced by the Treasury and the Department for Environment, Food and Rural Affairs jointly that envisages just that as an option by 2020? Does he share that ambition and does he agree that it ought to be achieved earlier than that—perhaps by 2013?

Kelvin Hopkins: My hon. Friend took the words out of my mouth. I was about to suggest a five-year phasing-in period. We heard a sensible suggestion from the right hon. and learned Member for North-East Fife (Sir Menzies Campbell), who spoke about co-financing, whereby some subsidy comes from national Governments and some from the common agricultural policy. If that was phased in, it would reduce the level of the CAP by 20 per cent. a year over a five-year period and replace it as national Governments choose with national funding. We could adopt a phased, sensible approach and we might even persuade countries not to take actions that were unacceptable and that had damaging effects on the outside world.

Much of the argument today has been made by hon. Members who would normally be the free traders—people who believe in economic liberalism. I do not share their view that the CAP is an instrument of economic liberalism and free trade and helps the third world. Even socialists have argued that. I do not believe that to be the case. If agricultural policy were repatriated, perhaps in a phased way, we could persuade individual countries, and certainly our own country, to reduce the level of overall subsidies to agriculture.

At the same time, I do not think it politically feasible to suggest that others should abandon subsidising their own agriculture, which is fundamental to the culture and economy in some countries. One cannot say to the French, "Get rid of all subsidies and go for free trade in agriculture", because the effect would be politically devastating. We cannot expect the French to do that, because we would not withdraw selected subsidies from our own agriculture. I keep mentioning Welsh hill farmers—I hope this goes down well with Welsh Members—who are part of our culture. Small-scale livestock farming is beneficial to the countryside, and if a degree of subsidy is appropriate, let us proceed with that policy.

Sometimes countries want to maintain a degree of agriculture for strategic reasons. The Czech Republic used to be able feed itself, but since it has joined the European Union, it cannot do so, which is upsetting.

Mr. Breed: Does the hon. Gentleman believe that food security for every European country is an important aspect of agricultural policy?

Kelvin Hopkins: Some food security is necessary, but trade in agriculture will always occur, because we must import those things that we cannot produce.
 
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Agriculture should be decided democratically within each member state. Some member states would have larger sectors than us, but we would maintain our own distinctive style. For example, I would like to see us abandon the large-scale production of sugar beet. It would be beneficial if we started to produce biofuels, which provide CO ₂ -neutral green energy. We could use the open spaces in East Anglia in which sugar beet is currently grown to produce biofuels, and my approach would involve national production.

Mr. Richard Bacon (South Norfolk) (Con): Is the hon. Gentleman aware that sugar beet can be used as a biofuel?

Kelvin Hopkins: If we were to use it as a biofuel rather than dumping it on Malawi, I would be very pleased. Selling cheap subsidised sugar to the Malawians is not the way to proceed, when they can produce sugar themselves.

I want briefly to discuss the effects of the CAP by considering EU agricultural spending per head in member states with comparable living standards to our own: in Ireland, agricultural spending—these are rough figures and might be out by a few euros here or there—amounted to €460 per head of population in 2004; in Denmark, the figure was €275; in France, €160; and in Britain, €65. Ireland, which has a similar standard of living to our own, has seven times the subsidy per head for agriculture; Denmark, which is a richer country than Britain, has four times as much subsidy; and France, a big country which is comparable to Britain, has two and a half times as much subsidy. The position on subsidies is nonsense.

I agree with those hon. Members who have argued that we should provide more for the newer member states and if any redistribution takes place, it should be towards them and not the richer western European nations. If we compare the subsidy per head in Spain and Poland, which have similar populations but different living standards—Spain is considerably richer than Poland—Spain spends €150 per head and Poland spends €15 per head, which means that spending differs by a factor of 10.

Hon. Members have discussed structural funding and I have examined the structural funding tables for 2004. The Spanish get 10 times more in structural funds than the Poles. I know that such funding is phased over a period. We keep saying that we want to be generous to those countries, but we are not being generous, and the fault lies with the CAP.

Britain is being guilt-tripped about our rebate, which is justified on the basis that we are the least favoured by the CAP among the western European nations. The problem is not our rebate but the CAP. If we were to get rid of the CAP tomorrow, reduce contributions accordingly and repatriate spending, we could examine what we need to do and allow the situation to settle down. In that case, the budget would be more understandable, which would allow us to adjust it to make sure that poor nations receive according to their living standards and that we give according to our wealth.

We should not accept any accusations of guilt from the big beneficiaries of the CAP and we should not back off. I am glad that my right hon. Friend the Foreign
 
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Secretary is negotiating for us, because I have great confidence in him. I am pleased that he is batting for Britain on this very sticky wicket. I am not sure that members of the Commission understand cricketing metaphors—if they played cricket, we might get a bit further. My right hon. Friend is doing the best job in difficult circumstances. I hope that he will emphasise that the main issue is not our rebate but the CAP. If we want to help the poorer nations more, we can, but first we have to deal with the CAP.

We must move towards an EU budget—I have said this many times before in these debates—that is fair and equitable according to the living standards in the different member states, which means that the rich give most and the poor receive most. That is completely screwed up by one simple fact—the existence and operation of the CAP. I urge my Front-Bench colleagues to consider how to move away from the CAP and towards a more sensible approach to agriculture.

Many people argue that, if we got rid of the CAP, member states would subsidise their agriculture even more and we would have a worse problem. I do not think that that would happen, because a Government's own taxpayers would have to bear the cost of the subsidies and they would be under pressure not to spend too much and to reduce those subsidies. At the moment, they are spending other people's money—largely British money, in fact. It is always easier to spend other people's money than one's own. In Britain, we would stop subsidising Tate & Lyle to the tune of nearly €200 million a year—a ridiculous amount. We would also stop subsidising some of the very wealthy farmers—the landed gentry who in the past were represented by Conservative Members. Indeed, royalty, including the Duchy of Cornwall, gets these subsidies. If we did that, other countries might do the same, especially if we appealed to them to play their part in helping the world's poor to find their way forward.

I would go further. I am not automatically a free trader. If a poor country wanted to restrict imports of subsidised agricultural products from countries such as France, we should let them do so in order to protect their own farmers. Simple free trade and forcing them to open their markets to our goods will not help them in any way. There are two sorts of protectionism—by the rich to help themselves and by the poor to ensure that they have a chance in this difficult and competitive world.

6.13 pm

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