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to reflect the estimated indirect resource impact of the first stage of the international financial reporting standards on derivatives and impairments of £215,000,000, with no overall impact on DEL;
to revise sub-head provisions to reflect resource and capital revisions in allocations between top level budget holders to match required defence outputs, with no overall impact on DEL;
additional fiscal capital DEL provision of £50,000,000;
to increase non-operating appropriations-in-aid to reflect a QinetiQ receipt of £200,000,000 and a receipt for the Defence Aviation Repairs Agency of £60,000,000, with a corresponding and offsetting increase in capital expenditure (no overall impact on capital DEL);
to reallocate Royal Hospital Chelsea (RHC) costs of £9,232,000 from other current voted expenditure to non-voted expenditure;
to reallocate DEL grants-in-aid from DEL to non-budget grants-in-aid (non-voted) to reflect classification changes for the Council of Reserve Forces and Cadets Association of £55,522,000; £8,631,000 for the Marine Society and Sea Cadets; and a re-classification of cost of capital for public corporations from voted other current costs to grants of £21,396,000 with no impact on resource DEL;
to increase grants-in-aid funding for the royal naval museum of £75,000; Royal Hospital Chelsea of £1,000,000; the RAF museum of £400,000; and the national army museum of £395,000 by reducing resource DEL current costs and increasing non-budget grants-in-aid with no overall impact on resource;
to increase grants-in-aid funding for the armed forces memorial of £80,000 by reducing resource DEL current costs and increasing non-budget grants-in-aid (outside DEL); and
to reflect the reclassification of non-departmental public bodies (NDPBs) museums from voted to non-voted DEL of £14,903,000.
The changes to resource DEL and capital DEL will lead to an increased net cash requirement of £3,389,122,000.
Environment, Food and Rural Affairs
Agriculture and Fisheries Council
The Secretary of State for Environment, Food and Rural Affairs (Hilary Benn): I and Huw Irranca-Davies represented the United Kingdom at November’s Agriculture and Fisheries Council in Brussels. Richard Lochhead, Conor Murphy and Elin Jones also attended.
All of the ‘A’ points were adopted.
On fisheries the Council reached agreement by unanimity on a new regulation to establish elements for a medium-term multi-annual framework to allow for the recovery and management of cod stocks. Following an initial table round and bilateral discussions with the most interested member states, the presidency was able to reach agreement with the Commission and so table a final compromise. The final compromise represents a balance between those offering appropriate protection for the stocks, and the opportunity to encourage sustainable fishing. The main elements are:
Targets expressed in terms of fishing mortality, rather than the previous approach of increased spawning stock biomass, over which fleets have no control. In all sea areas the target is 0.4;
Mortality reductions in the first year of 25 per cent. They will then be set at 10 per cent. annually for the North sea and, depending on biomass levels, either 25 per cent., 15 per cent. or 10 per cent. elsewhere until the target mortality rate is reached;
For quota setting, constraints on the movements of TACs of 20 per cent. for the North sea and 15 per cent. elsewhere. The North sea constraint will not apply to quota increases in 2009;
The allocation kW day effort “pots” to member states and allows them to administer their own effort to reward sustainable fishing; adjusted on an annual basis. This extends these arrangements based on collaboration with the fishing industry, and pioneered in the UK (both Scotland and England) as possibilities to all member states. The effort levels will be based on the average deployed either during 2004-06 or 2005-07, as member states wish;
The geographical scope is extended further to the west of Scotland to include the vast majority of cod catches;
The Celtic sea remains outside the scope of the plan.
Member states then re-enforced their priorities for the final round of negotiations scheduled to finalise the EU-Norway fisheries agreement. The Commission noted the difficulty of resolving member states’ conflicting views on which stocks should be used to pay for the balance of access to Arctic cod, Norway’s strong desire for progress on discard reductions and the willingness of Norway to accept a modest TAC increase. The UK noted that decisions on cod TAC needed to be taken with Norway and should be part of a wider package, including in cod recovery. We also supported the wider principle on discards issue, but noted the need for more technical work.
The Council held an initial exchange of views on the Commission’s very recent proposal to reform the regulation that governs member states’ responsibilities to enforce fisheries regulations. This is a recognised area of weakness in the common fisheries policy framework, and in which nearly all fishing member states have a weak record. The Commission noted that improvement should not wait for the general CFP reform in 2012. The new proposal would encourage a culture of compliance by all in the sector; those who break the rules should not benefit; a penalty points system would lead to licence withdrawal of licence where necessary. It would introduce a new common approach to control and inspection to all stages of the chain; including import, transport and at market; using modern technologies and risk analyses. Control and enforcement are member states’ exclusive competence and this would reaffirm their complementary roles with the Commission. It offered more flexibility for quota reductions or financial penalties where necessary.
Nearly all fishing member states spoke briefly to acknowledge the general need for improvement, the need to avoid over-bureaucratic requirements and to
support compliance by industry. France was the most dubious about the ease of progress.
With regard to aquaculture, member states discussed the future of the aquaculture sector based on a Commission non-paper and a presidency questionnaire. The Commission expressed concerns that the EU industry’s output seemed to be stagnating while that of third countries were continuing to expand and explained that they planned to publish a communication next spring on the matter.
There was general support for simplification of the legislation and of the administrative procedures but disagreement on whether the environmental legislation needed amending to reflect the needs of the aquaculture sector. While there was some support for the EFF giving more attention to the aquaculture sector there was also a clear rejection from UK, the Netherlands, Sweden and Germany for any extra funds to be made available. Most landlocked member states asked for a differentiation to be made in the EFF rules between inland and marine aquaculture. Many member states called for a community promotion campaign and there were also general calls for a community action plan to deal with the problem of cormorant predation. The UK and Slovenia mentioned the importance of reducing the input of wild fish protein. There was a clear rejection of the French suggestion that the Community had a role to play in questions concerning zoning.
Finally on fisheries, the Council noted reports from the Commission on recent measures to simplify CFP regulations, and on Poland’s significant recent progress to comply with the regulation on quota reduction and stricter enforcement.
On agriculture items, the Council reached majority agreement on the CAP Health Check—the scheduled review and adjustment of the mechanisms of the EU’s common agricultural policy, which was intended to improve, reinforce and build on the 2003 CAP reforms. However the UK did not support the final deal.
The UK set out its ambitions for the Health Check in April. We made it clear then that we wanted to cut further the trade distorting nature of the CAP, reduce regulatory burdens, give farmers greater control over their business decisions, and redirect more CAP spending away from direct farm payments towards delivery of targeted public benefits. Progress has been made in these areas, often in the face of opposition from other member states, but we are also disappointed that some new distortions have been introduced.
The Health Check took a number of positive steps in reforming the CAP, which the UK welcomes. These include:
Further decoupling of approximately £3 billion of direct farm payments—reducing the market distortions faced by UK farmers and making farmers across the EU more responsive to market signals in important sectors such as arable crops - although this decoupling could be significantly reduced if member states fully utilise payments under national envelopes under article 68.
The phase-out of the remaining processing aid schemes for dried fodder, starch, flax and hemp;
Further reductions in the intervention system, including the abolition of intervention for pigmeat, butter for manufacture and butter for direct consumption;
Agreement on the process for phasing out milk quotas by 2015, including a 1 per cent. per year increase in quotas over the next five years—although other aspects of the final deal
involve differential increases for some member states, while two scheduled reviews of the dairy market could create uncertainty for the dairy industry;
Reducing red tape for farmers through some simplification of direct farm payments and the requirements of cross-compliance;
An increased focus on environmental benefits across Europe, by increasing the rate of compulsory modulation to 10 per cent. by 2012, and therefore increasing the share of CAP funding that goes towards environment and rural development schemes. This will reduce the gap in modulation between the UK and the rest of the EU, leading to a more level playing field for UK farmers.
The ending of compulsory set-aside, leaving farmers free to take their own production decisions based on market circumstances.
Flexibility in the new cross-compliance requirements to allow member states to pursue options for capturing the environmental benefits of set-aside that is appropriate to local environments.
The UK is concerned about some aspects of the Health Check, in particular the market distortions created by the increased flexibility in the use of “national envelopes” which allow member states to support specific sectors using payments coupled to production, and to fund risk management measures.
We are also disappointed that the Health Check was unable to go further in achieving full decoupling across the EU (although that will be achieved in England), phasing out all the remaining market support mechanisms such as intervention, and focusing even more CAP spending on delivering public benefits, including environmental benefits.
On balance, the UK could not support the final Health Check deal because it allows unused funding from single payment scheme budgets to be used to fund measures within national envelopes, rather than being returned to member states, thus increasing the potential for distortions, and because it creates short-term competitive distortions and uncertainty in the dairy sector from a range of measures, in particular differential changes to milk quotas, changes to rules on the butterfat content in milk (which is used as a reference for deciding dairy quotas) and two reviews of the quota phase-out process.
Overall, the UK takes the view that the agreement reached on the Health Check is a step in the right direction of further reform, but is also a missed opportunity to speed up the process of change. We will continue to press for further steps for the benefit of farmers, consumers, taxpayers and the environment in the forthcoming EU Budget review, in which we want to see a more fundamental reassessment of the CAP.
The Council also agreed the presidency compromise on the school fruit scheme, but it failed to secure a majority either way on the approval of Round-Up Ready II GM soya for use as food and feed. The Commission will now act on its own initiative to approve this use.
Finally, the Netherlands and UK raised concerns about the European Parliament’s proposed amendments to the pesticides package. These could have an adverse affect on the availability of pesticides and so agricultural activity, with no impact on public health. It was important that the Council held to its agreed position. A number of member states intervened in support, whilst the Commission said it supported the Council’s common position, and not the Parliament’s approach.
Foreign and Commonwealth Office
Winter Supplementary Estimates
The Secretary of State for Foreign and Commonwealth Affairs (David Miliband): Subject to parliamentary approval of any necessary supplementary estimate, the Foreign and Commonwealth Office departmental expenditure limit (DEL) will be increased by £149,848,000 from £1,930,709,000 to £2,080,557,000. The administration budget will be decreased by £34,000 from £430,569,000 to £430,535,000. Within the DEL change, the impact on resources and capital are as set out in the following table:
| £’000s | |||||
| Change | New DEL | ||||
| Voted | Non-voted | Voted | Non-voted | Total | |
| (1)The total of 'Administration budget' and 'Near cash in Resource DEL' figures may well be greater than total Resource DEL, due to definitions overlapping. (2)Capital DEL includes items treated as resource in Estimates and accounts but which are treated as Capital DEL in budgets. (3)Depreciation, which forms part of Resource DEL, is excluded from the total DEL since Capital DEL includes capital spending and to include depreciation of those assets would lead to double counting. | |||||
The change in the resource element of the DEL arises from:
1. £11,000 transfer of Administration Budget from Cabinet Office in respect of legal work undertaken by the Office of the Parliamentary Counsel.
2. £45,000 transfer of Administration Budget to the Office of Government Commerce for sustainable procurement.
1. Transfer of £5,000,000 other current expenditure from the Home Office for work on migration.
2. Transfer of £4,000,000 other current expenditure from DFID is respect of the Returns and Reintegration Fund.
3. Transfer of £2,800,000 other current expenditure to MOD for counter-narcotics work in Afghanistan.
4. Transfer of £400,000 other current to the Security and Intelligence Agencies for expansion and capability.
5. Transfer of £40,000 other current expenditure to the Cabinet Office for the Government Secure Zone.
6. Transfer from the British Council of £40,000 other current expenditure to the Cabinet Office for the Government Secure Zone.
1. Claim on the reserve of £100,000,000 in respect of African Peacekeeping activities.
2. Claim on the reserve of £31,300,000 in respect of Global Peacekeeping activities.
3. Transfer of £16,000,000 from MOD in respect of the Stabilisation Aid Fund.
4. Transfer of £2,400,000 to MOD in respect of Global Peacekeeping activities.
5. Transfer of £738,000 to DFID in respect of management of Stabilisation Aid Fund projects in Afghanistan.
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