Examination of Witness (Questions 60-79)
RT HON
MARGARET BECKETT
MP
2 NOVEMBER 2005
Q60 Mr Williams: Secretary of State,
just to refine the CAP arguments a little, in the summer the Prime
Minister indicated he was willing to give up the UK rebate if
President Chirac agreed to a fundamental reform of the CAP and
yet the European Trade Commissioner, Peter Mandelson, has said
recently, "Let me be clear. It is absolutely and unequivocally
not the intention of the Commission to use the Doha Development
Agenda negotiations to precipitate a new phase of CAP reform",
and yet then he goes on and we are told in negotiations he was
prepared to give up 40% of the traditional farming subsidies in
this country in order to get the agreement to go forward for the
WTO meeting in Hong Kong. It is against that background that people
in the agricultural industry are very confused as to what really
is the intention of the Government.
Margaret Beckett: First, can I
say, without in any way trespassing on the Prime Minister's or
the Chancellor's territory, I think it would be perhaps a better
reflection of the Prime Minister's view to say rather that he
felt that it was not sensible for others to try and raise the
issue of the British rebate without considering the circumstances
which led the rebate to be awarded in the first place, namely
the existence of the Common Agricultural Policy. I think I am
right in saying that it was that way round rather than the other
way round. Secondly, you raise the issue of the Doha round, and
I am grateful to have the opportunity to put on record the fact
that Commissioner Mandelson, of course, is a commissioner, he
has his own role and his own responsibilities, but what he says
about not seeking to use the process of negotiation in the Doha
round to drive further CAP reform is not only his view and his
expressed view, it is also the expressed view, the shared view,
of the Agriculture Commissioner, and I am sorry if it has caused
anxiety, and among the farming community I can see that it might
if the context of it were not made clear, the context of those
observations is that there are those who have argued that it is
not possible for the Commission to make further negotiating offers
in the Doha round without that requiring a further reform of the
CAP. That is not the analysis of the Presidency or of the Commission.
Of course one of the reasons for raising that concern is that
questions have been raised about the Commission's mandate. In
a sense the Commission has mandates coming out of its ears actually,
but part of the Commission's mandate is the phraseology about
"not reopening the major settlement of the last CAP reform",
but that, of course, does include not only the 2003 negotiations
but the steps that have been taken since, and they include being
able to reach agreement on sugar, but they also, of course, have
the Doha mandate which, for example, talks about substantial increases
in market access; so they are negotiating their way within the
framework of these different mandates and of those who are watching,
inevitably very closely, the progress of those negotiations some
have asserted that they are doubtful as to whether the Commission
is still within their negotiating mandate. These are not doubts
that we share. We believe that including the offer that has just
recently been made, the Commission is within its negotiating mandate
and that nothing that they have opposed so far requires further
CAP reform.
Q61 Mr Williams: I understand that
it is the Government policy to keep the EU budget to within 1%
of GDP. Is it your opinion that EU could deliver the common agricultural
policy as it is within such a budget?
Margaret Beckett: Yes, I believe
that we could. There would be some differences, of course, but,
I repeat, the Common Agricultural Policy is changing. There are
those who believe that there are potential further changes that
could come in the fullness of time, but, as you will appreciate,
we have major changes underway now, and, although, from the point
of view of the negotiators, it is some time since that major settlement
was reached, as this Committee more than anyone else will appreciate,
we are very much in the throws of implementing now that process
of reform.
Q62 Mr Williams: On a day where a
number of MPs received representations from Trade Justice, what
role does Defra have in promoting the interests of third world
countries in these negotiations?
Margaret Beckett: Of course in
one sense we do not have a direct role, but I can assure you that
we have very much the interests of, for example, our ACP partners
at heart, and you may know that in the Luxembourg presidency we
had a full meeting of the Agriculture Council with representatives
of the ACP states, we also had such a meeting in our presidency
in September and we are, as a council, very mindful of their interests
and concerns and very anxious to ensure that any changes that
we negotiate, in particular in the sugar regime, are balanced
by assistance to them to deal with the impact that will inevitably
have on their economies.
Q63 Mr Williams: I understand that
the chief executive of the Rural Payments Agency (RPA) is a board
member of Defra responsible for delivery. Do you think those two
positions are compatible given the difficulty that the RPA are
going to have in paying the single farms payment?
Margaret Beckett: It is obviously
a matter of judgment, and I can understand people raising the
issue, but, frankly, I would have thought there are few people
better placed to understand the difficulties and appreciate the
necessity of good delivery than somebody who is at present the
head of the RPA.
Q64 Mr Williams: Can you tell us
why you think the Rural Payments Agency are unable to make payments
under the single farm payment scheme at the start of the payment
window in December?
Margaret Beckett: Yes, I can.
As I think many of the Committee will be aware, we already were
in the throes of making substantial changes to the RPA when the
CAP reform negotiations took place and were agreed, and what we
have had to do, and what is never easy to do in any IT project,
is to incorporate into a change programme which was already challenging
and difficult a new set of policies which had to be implemented;
and it has been very disappointing, in fact, that we have not
had as much success in putting together the relevant IT programmes
as we would have wished, but I can assure you that at the highest
level in my department this is under a process of continual scrutiny
and pressure.
Q65 Mr Williams: Will farmers receive
an interim payment in advance of the new February target?
Margaret Beckett: We have not
at present made a decision or plan for an interim payment. I think
the great anxiety is that that would be such a substantial further
complication that it would jeopardise or could jeopardise the
February payment date. I think, on balance, probably farmers would
rather have the greater certainty of a payment in February rather
than risk that for the sake of an interim payment, but obviously
that is something that we keep continually under review, and I
really mean that. I know ministers are always saying that, but
I mean it.
Q66 Mr Williams: But there is no
obstacle in terms of the EU or CAP bureaucracy to stop an interim
payment being made?
Margaret Beckett: If we felt that
we had to make an interim payment, then clearly that is an issue
we have to raise. I do not envisage there would be insuperable
obstacles, but, I repeat, the main concern is that what I think
everybody wants is to get the scheme going properly and the payments
being made.
Q67 Mr Williams: I understand the
Welsh Assembly are going to be in a better position to make the
payment on time than the RPA. Perhaps there are lessons that can
be learnt from the Welsh Assembly in this one?
Margaret Beckett: Indeed. It is
always good to know that our colleagues in the devolved administrations
are performing so well.
Q68 Chairman: Secretary of State,
just to be specific, I read a quote from the RPA which said it
was "in line to make the payments in February" which
is language which allows a certain amount of "wrigglery"
if something does not quite happen en route as planned. When do
you expect to hear from the RPA definitively whether they will
or they will not be able to pay in February?
Margaret Beckett: That is a very
good question, Chairman. I cannot answer it at this moment in
time.
Q69 Chairman: Could you let us know?
Margaret Beckett: You have made
me think I ought to know that actually.
Q70 Chairman: Yes. I am just a bit
worried with you being away from the shop in December.
Margaret Beckett: It is a good
point as to what is the absolute deadline.
Q71 Chairman: Yes. You will let us
know, will you?
Margaret Beckett: I will.
Q72 James Duddridge: Following on
from my other colleague I feel I ought to make a plug for Rochford
and Southend East, but it is a coastal area which has a tenuous
link to flooding, hopefully tenuous. In all seriousness, the Environment
Agency has identified just over two million houses that are either
at risk of flooding or in floodplains, and it is an issue that
is certainly heavy in my post bag. I would be interested in three
points: (1) the progress made on Making Space for Water, (2) what
is going to happen to properties that are uninsurable in the mind
of the ABI (Association of British Insurers), uninsurable on a
commercial basis, and (3) I am fascinated by the degree of public
engagement in the issues of flooding and there is a need to be
open and honest, rather like the avian flu, but at the same time
not to cause panic in areas that are likely to be affected in
terms of property prices?
Margaret Beckett: I do not think
I can give the Committee a complete update at the moment on where
we are in terms of the Making Space for Water work. If I may I
will offer to send the Committee a note about that, because I
know there is a huge amount going on, but, as I think you will
appreciate, I have latterly been engaged in other issues. As to
the issue of uninsurable properties, of course, as you know, we
were able to reach agreement with the Association of British Insurers
that if the Government were prepared, which indeed we are and
have been, to make more resources available for flood investment
that they would maintain, broadly speaking, insurance cover; otherwise
there was a very real risk of a substantial withdrawal of insurance
cover and that was overcome; but since then we have also been
in further talks with them because we are very mindful of the
fact that it is a matter of great concern to individuals. I remember
reading only the other day, which I cannot now find in my notes,
but we have been in talks with the Association of British Insurers
who have agreed that they would be prepared to involve themselves
in talking to people in areas of particular risk where there is
a risk of losing insurance to see whether there are steps that
can be taken that could sufficiently reassure their members for
insurance covers to be maintained, and we hope by such means to
be able to really whittle down to a very small number of areas
those where in fact insurance cover might be withdrawn. It is
a matter of engagement. Are there demountable defences that could
be erected? Are there practical steps that can be taken to diminish
the danger of flooding? If there are such steps, that is something
that the insurance companies and industry would take into account.
Q73 James Duddridge: Before you go
on to talk about the public engagement, perhaps I could probe
you on the point about uninsurable housing and joined up government.
What concerns me is that in the Thames Gateway there are proposals
to build more housing, and I know in my own constituency—again
I apologise, but being a new member of Parliament I know a lot
more about the constituency I represent rather than the whole
nation—there is an area that used to be a lake that was
then filled in and is now a golf course, it regularly floods and
is likely to have 600 houses built on it. At the same time, literally
a mile or two down the road, there are people worried about the
advice they are getting from the Environment Agency in relation
to the likelihood of flooding, and this was an area in 1953 where
people were killed due to flooding, so it is not simply about
property prices, it is about risk to life as well. Could you comment
on that, particularly in terms of joined up government? I was
interested in your earlier comments.
Margaret Beckett: There is no
question that the Office of the Deputy Prime Minister are very
well aware of these issues, of the overall implications of any
future development. I am also very conscious of the fact that
people should be taking into account environmental impacts, including
such things as flood risk, when development is being considered,
but, broadly speaking, I think what they would probably say is
that if development is being considered in an area where there
is already development—for example, I think the argument
would be that there is a difference between building on potentially
part of a floodplain where there is no development now so you
are creating a new risk, or whether it is an area where there
is already development, there is already a risk—there are
therefore already issues of precautions and protection and so
on within which new development could be protected or sheltered.
I think those are the differences that I would identify.
Q74 Mrs Moon: I was waiting, also
like James, to hear the comments in relation to public engagement
in issues of flooding. Like James, Secretary of State, I represent
an area of coastal constituency where people are very conscious
of issues of flooding in particular, as we have a couple of times
had inundation into properties on the seafront. I have particular
interest as my own property is 500 yards from the sea. Personally
I do not find that the public in my constituency lack information.
It is more that they are aware of the issues and risks of flood.
What they are not necessarily always aware of is the potential
in relation to climate change. I do think that there is a need
to have an informed debate on that issue and I wonder whether
this is something that Defra needs to take a lead on?
Margaret Beckett: As it happens,
we are in the quite near future planning to start an awareness
campaign about climate change issues, and I have little doubt
that the potential and the impact of flooding will be part of
that campaign because it is one of the things that people can
readily comprehend, and it flags up some of the difficulties.
As you say, I had not realised that a specific point was being
made about public awareness, but I think the Environment Agency
do a pretty good job in general. I certainly find when there are
flood warnings, and so on, that they turn up on the local news.
Obviously there is always more that can be done and we do try
to keep that information going, but I also would rather assume—I
do not know whether it is the up side or the down side in the
exchange we have just had about the involvement of the Association
of British Insurers—of course, if your insurer is saying
to you, "Have you considered the flood risk?", that
I would have thought concentrates the mind wonderfully.
Q75 Mrs Moon: There are two sides
to living on the coast. One is that obviously if your property
is near to the coast you want all the coastal protection issues
in place, but also we need to educate the public that there are
certain areas of the coast where we have to allow nature to take
its course. I am unclear whether that is something that comes
from yourself or from the ODPM?
Margaret Beckett: I think it is
us.
Q76 Mrs Moon: Then, I would urge
you, that is a debate that we need to be far more proactive in?
Margaret Beckett: I completely
agree. Indeed, it is one of the most difficult debates, I think.
Q77 Mrs Moon: Yes.
Margaret Beckett: Because, as
you quite rightly say, I think probably any sensible person can
see and recognise that trying to manage withdrawal is something
that is not always going to be practical, that there are some
areas that are simply just not possible reliably to protect for
long periods of time, but it is one thing to see that in the abstract
and it is quite another if you happen to live in such an area.
Chairman: I am aware, Secretary of State,
that our time of having you here is drawing to a close. We have
a couple more things we would like to probe you on very quickly.
Q78 David Lepper: I am not going
to plug any local event or association, Secretary of State, but
you know you are always welcome in Brighton Pavilion or the neighbouring
constituencies that form Brighton and Hove! Supermarkets: there
is increasing concern, I think you would acknowledge, about the
role of supermarkets and the power that they exert across the
food chain. The Office of Fair Trading audited compliance with
the supermarket code of practice I think just last year and there
is a suggestion that it was hampered in that by a lack of submissions,
partly because some suppliers were too nervous to complain about
their own situations. I know the OFT has just announced that it
would at least reconsider its decision not to refer the grocery
market to the Competition Commission for review, but I wonder
what your view is of the supermarket code of practice particularly
in relation to its effect on standards of production, employment
practices and so on?
Margaret Beckett: Obviously the
code of practice is an issue for the Office of Fair Trading and
very much in their hands. If the feeling were that it was leading
to concern about food quality, food safety and so on, I think
that would be a matter of quite general concern. It is certainly
the view of my department and something we have tried to encourage
and support, both practically and by way of advice and so on,
that a good path for the future for the British farming community
lies in higher added value production, and so certainly we do
not wish to see a decline standards and quality and very much
try to encourage a co-operative supply chain working in the development—I
am sure all the Committee are familiar with the little red tractor—of
things that encourage people to think about the provision and
the quality of their food. It might be of minor interest to the
Committee to know that during our European Union Presidency we
sent a hamper of food from Britain to the EU agriculture ministers
in order to make them acquainted with the high standard of British
produce and we had a lot of very complimentary remarks indeed
from my agriculture colleagues.
David Lepper: The Committee looks forward
to receiving the same.
Chairman: Does anybody else want to make
an offer while we are at it!
Q79 David Lepper: Could I focus on
what you have just said about the standards of food from this
country. I know that your department has recently added two million
pounds to the funding for Food from Britain, and you have also
been undertaking a review of regional food strategy. Whilst I
accept you may not have reached firm conclusions following that
review yet, have you any thoughts about what Defra could be doing
to give even more support to local food initiatives?
Margaret Beckett: I think there
are a couple of things. As you quite rightly say, we have given
more money to Food from Britain and we are continuing to step
up our work and to encourage and assist farmers to add value to
their produce. We are also encouraging people to raise awareness
of the possibility of registering particular quality foods. There
are a fair number of British foods that are specifically registered,
but not nearly as many as in some other Member States. It cannot
be guaranteed, of course, this is something that has to be looked
at, but I do think that there is merit in encouraging, from the
consumer side, people to think about local sourcing of food—and
when I say "people" I do not mean families and individuals,
I also mean local schools and hospitals and so on—and also
there is merit in encouraging people to not only aim for quality
but to make that a feature of what is their competitive niche
in the market place; and I am encouraged to see more and more
of that taking place, and I think quite successfully.
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