6.28 pm

Sheila Gilmore (Edinburgh East) (Lab): It is very important to realise that investment in infrastructure works in boosting the economy. I want to give an example from Scotland that is about investment in housing, and I will start, but not necessarily finish, by praising something that the current Scottish Government did. At the beginning of the UK Government’s term of office, they took a decision to bring forward capital spending in order to boost the economy. They put some of that spending into housing, particularly affordable housing. As a result, for a brief period, they were able to increase the proportion of spending on affordable housing.

John Healey (Wentworth and Dearne) (Lab): In the spirit of generosity to other parties, will my hon. Friend also commend the coalition Government for introducing the borrowing guarantees and earmarking £10 billion for housing, classifying it categorically as infrastructure for the first time? To make her point, I should say that every £1 million of public money that goes into house building generates 11 jobs.

Sheila Gilmore: My right hon. Friend makes an important point. The spending in Scotland enabled the Scottish Government to announce that unemployment was not rising as fast as in the rest of the UK, and they took great pleasure in that. Sadly, the situation has not been maintained, and we are hearing less of how wonderful the Scottish Government are at dealing with unemployment; at present, the opposite is happening. I would argue that one of the reasons is that the investment in infrastructure, particularly in housing, has not been sustained. The figures are stark. In Scotland, there were 7,915 new affordable housing starts in 2009-10; in 2010-11, the figure fell slightly to 6,460; and in 2011-12, it fell to 3,405—a halving in less than two years.

There is a consequence for the construction industry, its employees and unemployment in Scotland. The Scottish Government showed that such investment worked, but they have not been able to sustain it. They would probably argue that that is solely because of what has been happening at the UK level—investment in housing and in capital has been falling. They would be right to some extent, although I would add that they are not particularly interested in showing that the situation can be overcome. I suggest two ways in which they could overcome it.

First, the Scottish Government could use the tax-raising powers given in 1999 as part of devolution. They have not chosen to use those, although I think people in Scotland would be prepared for them to be used if they thought that the money could be invested as it was previously. They have also put a stranglehold on local government by having a five-year council tax freeze,

12 Feb 2013 : Column 816

which has meant that local government cannot make the choice to say to its local population, “We desperately need more housing. We will put up council tax so that we can borrow”—that is perfectly possible—“and build that much-needed housing.”

So there are ways in which the Scottish Government could continue with policies that for a brief period showed that investment in infrastructure boosts the economy and employment. I urge them to go back to doing that, rather than allowing things to deteriorate so that they can always blame London; that, I am afraid, is what they tend to do.

Some of the discussion is fascinating. If someone had fallen asleep in 1997 and woken up watching this debate, they would have wondered which party was talking. Government Members want to argue, “The last Government didn’t do anything on infrastructure and when they did, it was all this horrible PFI.” I seem to recall that PFI was not a Labour Government invention, but was enthusiastically put forward by the preceding Conservative Government. I am interested to know when that conversion happened. We can get that sort of investment better, but my city is a lot better for some of the public-private partnerships that we put in place—the schools that were built and the investment that was taking place.

A lot of things seem to happen in Scotland first these days, which are then followed, not always for the better, here. In 2007 a Scottish Government of a nationalist persuasion took over, and in my city a Lib Dem-Scottish National party council took over. They both decided that they did not like public-private partnerships and so would instead come up with some magic way of creating these investments. As a result, not one new school was started in the five years of that Lib Dem-SNP administration—not one. Several were finished, and councillors were very pleased to go and open them and have their name put on the opening plaque, but those schools had been planned and funded through PPPs. We seem to have undergone a miraculous conversion at some point—I am not quite sure when—but we have not come up with anything that really works in its place.

I call in support of this argument none other than the Mayor of London, who is quoted in tonight’s edition of The Evening Standard as calling for a £1.3 billion investment in housing in London. Perhaps the Government would like to listen to a mayor of their own political persuasion.

6.36 pm

Catherine McKinnell (Newcastle upon Tyne North) (Lab): This has been a good and thoughtful debate with Members on both sides of the House illustrating how important infrastructure projects are to their constituencies, to the wider region and to UK plc as a whole.

I want to highlight some of the more memorable moments in the debate. My hon. Friend the Member for Swansea West (Geraint Davies) summed up the Minister’s opening speech as a dismal display of dither and delay; I hope that I have paraphrased him correctly. The hon. Member for St Albans (Mrs Main) gave the Government’s position away by speaking up for dither and delay and cautioning against a mad dash for growth. One could not accuse the Government of that—it is more like a mad dash for the dip.

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My hon. Friend the Member for Corby (Andy Sawford) spoke my mind when he expressed deep concern about the Government’s very backward-looking approach on this issue. He also made a passionate plea for more infrastructure investment in his area. My right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) spoke passionately about High Speed 1—a major achievement by Labour in government—and set out his concerns about the lack of housing investment by this Government.

The hon. Member for Rochester and Strood (Mark Reckless) limited his comments to rail infrastructure. He claimed that that was because the Government’s infrastructure activities are too broad and varied, but I would argue that it is the only area they are taking any action on at all.

My hon. Friend the Member for Croydon North (Steve Reed) raised the crucial issue of youth unemployment, which the Government, with their complacent approach, seem to overlook too often. My hon. Friend the Member for Sefton Central (Bill Esterson) recalled the cancellation of Building Schools for the Future—the decision made so rashly by the Government on taking office that has impacted not only on children but, as we now know, on economic growth.

My hon. Friend the Member for Bishop Auckland (Helen Goodman) talked about the lack of investment in the north-east region, with 0.05% of Government investment being the north-east’s share to date and the Government’s decisions being driven by a political rather than an economic rationale. My right hon. Friend the Member for Tottenham (Mr Lammy) set out the desperate need for investment in London. He was seconded by my hon. Friend the Member for Edinburgh East (Sheila Gilmore), who cited the Mayor of London’s having called for much the same thing.

The majority of Members on whom I have commented are Labour Members. That is because we called this debate to raise the fundamental role that infrastructure projects could and should be playing in getting our country and our economy on the road to recovery and growth. This is an economy that has been flatlining as a result of the Government’s failing plan, that did not grow at all in the whole of 2012 and that has now shrunk in four of the past five quarters.

Andy Sawford: This country’s growth rate since the 2010 comprehensive spending review is 0.4%. On infrastructure, does my hon. Friend agree that the huge contrast between us and America, Germany and other countries that are maintaining their stimulus is highlighted by the fact that they are now above their pre-crisis peak? They are now growing by 3% or 4%, compared with the abysmal record of this Government.

Catherine McKinnell: Indeed. My hon. Friend makes that point very well. Infrastructure investment fell off the cliff when this Government came to power and we are seeing the economic consequences of that today. Many Members have referred to the Chancellor’s 2010 spending review. It took place in the fourth quarter of 2010 and the UK’s economy has grown by just 0.4% since then. During that time, the USA economy has grown by 4.2%, Germany’s by 3.6% and France’s by

12 Feb 2013 : Column 818

1.5%. Our economy, however, has been stagnating for the past two years, and borrowing is now rising, not falling, as a result.

Geraint Davies: Will my hon. Friend give way?

Catherine McKinnell: I do not have much time left, but I will give way.

Geraint Davies: Does my hon. Friend agree that the United States strategy for the top 2% to pay more towards reflating the economy and getting 1% extra growth is a good idea and that we should not be hitting the poor to pay for debts?

Catherine McKinnell: This Government’s choices on spending and tax have resulted in millionaires being given a tax cut while the poorest bear the brunt. We are seeing the results of that, not just in the suffering that we see at our constituency surgeries, but in the lack of economic growth. That is why it is so disappointing—indeed, unforgiveable—that the coalition Government have been asleep at the wheel on the issue of infrastructure investment.

Andrew Bridgen (North West Leicestershire) (Con): Will the hon. Lady give way?

Catherine McKinnell: I will give way one last time and then I must make some progress.

Andrew Bridgen: I thank the hon. Lady for giving way. Does she not recall that a pledge was slipped into and hidden away in the Labour manifesto to cut capital spending—that is, infrastructure spending—by 50% had her party formed the next Government?

Catherine McKinnell: That shows, once again, the Government’s utter complacency and head-in-the-sand approach to this whole issue. The hon. Gentleman knows that his Government have spent £12.8 billion less on capital investment than Labour planned, so I will not take lectures on that from any Government Member.

Time and again over the past two years we have heard the Prime Minister and Chancellor expound the value of infrastructure investment in delivering growth in the economy and, crucially, creating new jobs. All the evidence shows, however, that their record is one of inaction, complacency, delay and failure to deliver, which, combined with private sector uncertainty, is having a highly damaging effect on Britain’s construction industry for one.

The much-vaunted national infrastructure plan, published back in 2011, identified 40 priority projects that the Government stated were

“of national significance and critical for growth”.

However, despite the Government’s proclaimed focus on those so-called priority areas—and, indeed, a Cabinet Committee that is supposed to be overseeing progress—we are yet to see spades in the ground for too many of those projects.

Last year’s autumn statement announced a £5.5 billion infrastructure package, but this is to be paid for by cuts to departmental spending and underspend, including capital underspends, and one third of the projects included

12 Feb 2013 : Column 819

in the package had been previously announced by the Government. Indeed, describing the 2011 infrastructure plan as

“hot air, a complete fiction”,

the director general of the British Chambers of Commerce urged the Government to develop

“bold leadership and some creative ideas”

and to “get a grip” on this issue in order to stimulate economic growth.

The CBI’s assessment of the Government’s performance does not get any better, with its annual infrastructure survey last year finding that 73% of its members do not think that transport infrastructure will improve over the next five years and that two thirds believe that the UK’s energy and water infrastructure is unlikely to get any better. This has been damningly described by the CBI director general John Cridland as

“a wake-up call that businesses in Britain are looking for action and we haven’t seen any yet.”

Even the Deputy Prime Minister finally appeared to wake up to the importance of this issue—although a little late in the day—when he acknowledged last month that the coalition cut capital spending too deeply when it came into government. We were all desperately disappointed that the latest apology did not come via YouTube—the “I’m Sorry” infrastructure remix. We were offered this particular mea culpa via The House magazine, which he told:

“I think we’ve all realised that you actually need, in order to foster a recovery, to try and mobilise as much public and private capital into infrastructure as possible.”

Yes, that is what the Opposition have been saying all along.

In their first three years, this Tory-led Government have spent £12.8 billion less in capital investment than would have been spent under the plans inherited from Labour. That is a fall of 8%. According to the Government’s Office for Budget Responsibility, the coalition will spend £7.3 billion less on capital investment over the course of this Parliament than was planned by Labour.

This debate is not just about investment. Ensuring that infrastructure projects get off the ground and deliver jobs and growth requires the political will and determination to drive things through—something that is sadly and damagingly lacking under this Government. The economic situation in which we find ourselves requires urgent action from Government, such as that proposed in Labour’s five-point plan for jobs and growth, which would bring forward long-term infrastructure projects, as we did in the aftermath of the global financial crisis. That plan includes the construction of thousands of affordable homes.

We need a comprehensive long-term plan to rebuild Britain’s infrastructure for the 21st century—a long-term framework that gives investors the confidence that they need to invest consistently and that will deliver real results for the UK economy. That is why my right hon. Friends the Leader of the Opposition and the shadow Chancellor have asked Sir John Armitt, the chair of the Olympic Delivery Authority, to conduct a review into how long-term infrastructure decision making, planning, delivery and finance can all be improved.

12 Feb 2013 : Column 820

As this issue is of such national significance, a cross-party consensus is required to deliver what we need. We have seen what can be achieved when we reach a consensus and plan for the long term across Parliaments and across political divides. The Olympics showcased Britain as the great country and the one nation that it is, but that was Labour’s legacy. What will be this Government’s legacy? If they are not careful, it will be dither, delay, stifled economic growth and stagnation. It is time to get a grip. The Opposition motion calls on the Government to do just that, and I commend it to the House.

6.46 pm

The Economic Secretary to the Treasury (Sajid Javid): I am grateful for the opportunity to conclude this debate.

I have listened with great interest to the 11 Back-Bench contributions in the Chamber this afternoon. This is clearly an issue about which many Members feel strongly. It is also an issue that Members on both sides of the House seem to agree on in many ways. Both sides want to see a UK with world-class infrastructure and both sides recognise the importance of improved infrastructure for the nation’s economic future.

However, only one party ruined the UK economy after 13 years in government, hugely damaging the UK’s ability to invest in the very infrastructure that we all care about. It was the party that tabled the motion. That same party left the UK with the largest budget deficit in the G20. [Interruption.] Labour Members say that we should look forward. It is no surprise that they want the country to look forward, because they do not want us to remember their legacy, but the country must remember. They left a budget deficit higher than 11% of GDP. They borrowed £159 billion in their last year in government—£5,000 in each and every second of that final year.

Had the previous Government not messed up the regulation of the financial sector, they would not have had to carry out the biggest banking bail-out the world has ever seen, with £65 billion being put into RBS and Lloyds alone. Imagine how much new infrastructure that money could have been invested in. As if that was not bad enough, let us not forget the decision to sell off the nation’s gold reserves at record low prices. Had they not done that, the country would have been £10 billion richer. One thing that we did not hear from a single Labour Member this afternoon was an apology for the damage that they did to this country.

Despite that toxic legacy, this Government have restored economic confidence. We have slashed the record budget deficit by a quarter. We have restored economic credibility and opened Britain up for business again. That credibility has led to record low interest rates, with the Government’s 10-year funding costs having halved since 2010. Each of those steps has been crucial to creating an economic environment in which the Government can invest in infrastructure, and one in which investors feel their funds are secure.

Sheila Gilmore: Will the Minister explain to the House and the country why the OBR predictions at the time of the so-called emergency Budget and the comprehensive spending review have not happened, why growth has not happened, and why the deficit has not been reduced at the rate the Government originally promised?

12 Feb 2013 : Column 821

Sajid Javid: I direct the hon. Lady to read the OBR report, which mentions a number of reasons, not least the eurozone crisis. She might like to read that report for herself.

I should respond to the points hon. Members have raised in the debate. Many accusations were made by Opposition Members. They said that, had they won the election, they would have miraculously invested more. The reality is that, had they won the election, they would have continued borrowing recklessly, which would have led to much higher interest rates. They would probably have led this country into the hands of the International Monetary Fund once again, which seems to be their speciality.

Let us look at Labour’s March 2010 Budget. It shows that the previous Government planned to cut capital spending by 6% compared with our latest plans. In fact, in nominal terms, they planned to cut capital spending by 22% between 2010 and 2014. My hon. Friend the Member for North West Leicestershire (Andrew Bridgen) made a good point, which the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) dismissed. Let me read to her the words of the right hon. Member for South Shields (David Miliband). In July 2010, he said the previous Government would have halved the share of national income going into capital spending. That is the truth, and Labour Members want to deny it.

Meanwhile, this Government have overseen an increase in total investment in infrastructure from £29 billion a year, which was the level between 2005 and 2010, to £33 billion a year between 2010 and 2012. In the autumn statement, the Chancellor unveiled a further £5.5 billion of investment, including £1.5 billion for the strategic road network.

Hon. Members are aware that the vast majority of spending needs to come from the private sector. That is why we have taken measures to target and support investment—measures such as the UK guarantee scheme, which will provide up to £40 billion of support to critical infrastructure.

John Healey: In an answer last month on the guarantee scheme, the Financial Secretary told me:

“No project has been guaranteed under the UK Guarantee Scheme at this stage.”—[Official Report, 18 January 2013; Vol. 556, c. 981W.]

However, in the autumn statement, the Chancellor said:

“I can today confirm a £1 billion loan and a guarantee to extend the Northern line to Battersea power station and support a new development on a similar scale to the Olympic park.”—[Official Report, 5 December 2012; Vol. 554, c. 876.]

Does that not show the uncertainty and confusion at the heart of the Government’s infrastructure failures? Who is right: the Financial Secretary or the Chancellor?

Sajid Javid: The right hon. Gentleman rightly made a point earlier about the action the Government have taken to implement the guarantee scheme. Of the £40 billion of guarantees available, about £10 billion have pre-qualified but are not yet issued, and there has been an offer of a £1 billion guarantee for the Northern line extension project to Battersea. That is substantial progress since Royal Assent to the Infrastructure (Financial Assistance) Act 2012 in October 2012.

The Government are working tirelessly to encourage further investment, not just from overseas, but from

12 Feb 2013 : Column 822

pension funds. However, the debate should not focus solely on the amount of money we secure for projects. We should also focus on how to ensure the best possible return on those investments—a point made well by my hon. Friend the Member for St Albans (Mrs Main). That is why the Government are running a cost review to reduce infrastructure costs by a target 15%, and why we have reviewed and reformed PF1 and launched PF2. The Government are investing wisely, collaboratively and efficiently.

Some Labour Members would have us believe that our investment is resulting in no action. I found it strange to hear the criticism that our investment has resulted in no spades in the ground. As the Financial Secretary told us earlier, a number of projects are already up and running. For example, major flood risk infrastructure projects have been completed in Nottingham, Truro and Keswick, and four new major road projects and 16 local transport schemes are under construction.

This is a Government with a long-term strategy for infrastructure. Our national infrastructure plan—the first time a Government have set out such a plan—identifies 550 projects with a value of more than £310 billion. It has seen us publish an investment pipeline that gives certainty to investors, which is absolutely key; prioritise projects through the creation of a top 40 list; and utilise a dedicated Cabinet Committee to ensure infrastructure delivery. The Opposition motion alludes to Sir John Armitt’s review into long-term infrastructure. Given the important and valuable role he played in the Olympics, I am sure it will be an interesting read and I will look at his recommendations. I am also sure that his advice will be considered, balanced and politically neutral. I would be very surprised if it were influenced by the shadow Chancellor in any way.

We have recently appointed our own Olympic expert to the role of Commercial Secretary. Lord Deighton is overseeing a review of Whitehall’s ability to deliver infrastructure, to increase commercial expertise across Government. We are enhancing the mandate of Infrastructure UK, increasing its capability to make sure that projects are delivered. Those steps show that this is a Government committed to investing in infrastructure projects and a Government committed to delivering infrastructure projects.

Let me turn briefly to two points raised by my hon. Friends the Members for Halesowen and Rowley Regis (James Morris) and for Rochester and Strood (Mark Reckless). They talked about the importance of rail investment and alluded to making greater investment in regional aviation. They made powerful cases and that is something the Government will look at. My hon. Friend the Member for Rochester and Strood asked whether I would be happy to meet him to discuss the matter further—I would be very pleased to do so.

In conclusion, I thank all hon. Members for their contributions this afternoon. I am sure we all want to see improved infrastructure in our constituencies and in the UK as a whole. While the Opposition have no answers for the challenges our country faces, this Government are getting on with the job. I therefore urge Members to reject the Opposition’s motion and to back the Government’s amendment.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

12 Feb 2013 : Column 823

The House divided:

Ayes 225, Noes 297.

Division No. 159]


6.57 pm


Abbott, Ms Diane

Ainsworth, rh Mr Bob

Alexander, rh Mr Douglas

Alexander, Heidi

Ali, Rushanara

Allen, Mr Graham

Anderson, Mr David

Ashworth, Jonathan

Bain, Mr William

Balls, rh Ed

Banks, Gordon

Barron, rh Mr Kevin

Bayley, Hugh

Beckett, rh Margaret

Begg, Dame Anne

Benn, rh Hilary

Benton, Mr Joe

Berger, Luciana

Betts, Mr Clive

Blears, rh Hazel

Blomfield, Paul

Blunkett, rh Mr David

Bradshaw, rh Mr Ben

Brennan, Kevin

Brown, rh Mr Gordon

Brown, Lyn

Brown, rh Mr Nicholas

Brown, Mr Russell

Bryant, Chris

Buck, Ms Karen

Burden, Richard

Byrne, rh Mr Liam

Campbell, Mr Alan

Caton, Martin

Champion, Sarah

Chapman, Jenny

Clark, Katy

Clarke, rh Mr Tom

Clwyd, rh Ann

Coffey, Ann

Connarty, Michael

Cooper, Rosie

Cooper, rh Yvette

Crausby, Mr David

Creasy, Stella

Cruddas, Jon

Cryer, John

Cunningham, Alex

Cunningham, Mr Jim

Cunningham, Sir Tony

Curran, Margaret

Danczuk, Simon

David, Wayne

Davidson, Mr Ian

Davies, Geraint

De Piero, Gloria

Dobson, rh Frank

Donohoe, Mr Brian H.

Doran, Mr Frank

Doughty, Stephen

Dowd, Jim

Doyle, Gemma

Dromey, Jack

Durkan, Mark

Eagle, Ms Angela

Eagle, Maria

Edwards, Jonathan

Efford, Clive

Elliott, Julie

Ellman, Mrs Louise

Engel, Natascha

Esterson, Bill

Evans, Chris

Farrelly, Paul

Fitzpatrick, Jim

Flello, Robert

Flint, rh Caroline

Flynn, Paul

Fovargue, Yvonne

Francis, Dr Hywel

Gapes, Mike

Gardiner, Barry

Gilmore, Sheila

Glass, Pat

Glindon, Mrs Mary

Goggins, rh Paul

Goodman, Helen

Greatrex, Tom

Green, Kate

Greenwood, Lilian

Griffith, Nia

Gwynne, Andrew

Hain, rh Mr Peter

Hamilton, Mr David

Hamilton, Fabian

Hanson, rh Mr David

Harman, rh Ms Harriet

Harris, Mr Tom

Havard, Mr Dai

Healey, rh John

Hendrick, Mark

Hermon, Lady

Hillier, Meg

Hilling, Julie

Hodge, rh Margaret

Hodgson, Mrs Sharon

Hood, Mr Jim

Hopkins, Kelvin

Howarth, rh Mr George

Hunt, Tristram

Jackson, Glenda

James, Mrs Siân C.

Jamieson, Cathy

Jarvis, Dan

Johnson, rh Alan

Johnson, Diana

Jones, Graham

Jones, Helen

Jones, Mr Kevan

Jones, Susan Elan

Kaufman, rh Sir Gerald

Keeley, Barbara

Kendall, Liz

Lammy, rh Mr David

Lavery, Ian

Lazarowicz, Mark

Leslie, Chris

Lewis, Mr Ivan

Llwyd, rh Mr Elfyn

Love, Mr Andrew

Lucas, Caroline

Lucas, Ian

MacNeil, Mr Angus Brendan

Mactaggart, Fiona

Mahmood, Mr Khalid

Mahmood, Shabana

Malhotra, Seema

Marsden, Mr Gordon

McCabe, Steve

McCann, Mr Michael

McCarthy, Kerry

McClymont, Gregg

McDonagh, Siobhain

McDonald, Andy

McDonnell, John

McFadden, rh Mr Pat

McGovern, Alison

McGuire, rh Mrs Anne

McKechin, Ann

McKenzie, Mr Iain

McKinnell, Catherine

Mearns, Ian

Miliband, rh Edward

Miller, Andrew

Mitchell, Austin

Moon, Mrs Madeleine

Morden, Jessica

Morrice, Graeme


Morris, Grahame M.


Mudie, Mr George

Munn, Meg

Murphy, rh Paul

Murray, Ian

Nandy, Lisa

Nash, Pamela

O'Donnell, Fiona

Onwurah, Chi

Osborne, Sandra

Owen, Albert

Pearce, Teresa

Phillipson, Bridget

Pound, Stephen

Powell, Lucy

Qureshi, Yasmin

Raynsford, rh Mr Nick

Reed, Steve

Reeves, Rachel

Reynolds, Emma

Reynolds, Jonathan

Riordan, Mrs Linda

Robertson, Angus

Robertson, John

Robinson, Mr Geoffrey

Rotheram, Steve

Roy, Lindsay

Sarwar, Anas

Sawford, Andy

Seabeck, Alison

Sharma, Mr Virendra

Sheerman, Mr Barry

Sheridan, Jim

Shuker, Gavin

Skinner, Mr Dennis

Slaughter, Mr Andy

Smith, rh Mr Andrew

Smith, Angela

Smith, Nick

Smith, Owen

Spellar, rh Mr John

Stuart, Ms Gisela

Sutcliffe, Mr Gerry

Tami, Mark

Thomas, Mr Gareth

Timms, rh Stephen

Trickett, Jon

Turner, Karl

Twigg, Derek

Twigg, Stephen

Umunna, Mr Chuka

Vaz, rh Keith

Vaz, Valerie

Watson, Mr Tom

Watts, Mr Dave

Weir, Mr Mike

Whiteford, Dr Eilidh

Williams, Hywel

Williamson, Chris

Wilson, Phil

Winnick, Mr David

Winterton, rh Ms Rosie

Wishart, Pete

Woodcock, John

Woodward, rh Mr Shaun

Wright, David

Wright, Mr Iain

Tellers for the Ayes:

Tom Blenkinsop


Nic Dakin


Adams, Nigel

Afriyie, Adam

Aldous, Peter

Amess, Mr David

Andrew, Stuart

Bacon, Mr Richard

Baker, Norman

Baker, Steve

Baldwin, Harriett

Barclay, Stephen

Barker, rh Gregory

Baron, Mr John

Barwell, Gavin

Bebb, Guto

Beith, rh Sir Alan

Bellingham, Mr Henry

Beresford, Sir Paul

Berry, Jake

Bingham, Andrew

Binley, Mr Brian

Birtwistle, Gordon

Blackwood, Nicola

Blunt, Mr Crispin

Boles, Nick

Bottomley, Sir Peter

Bradley, Karen

Bray, Angie

Bridgen, Andrew

Brokenshire, James

Brooke, Annette

Browne, Mr Jeremy

Bruce, Fiona

Bruce, rh Sir Malcolm

Buckland, Mr Robert

Burley, Mr Aidan

Burns, rh Mr Simon

Burrowes, Mr David

Burstow, rh Paul

Cable, rh Vince

Cairns, Alun

Campbell, rh Sir Menzies

Carmichael, rh Mr Alistair

Carmichael, Neil

Carswell, Mr Douglas

Cash, Mr William

Chishti, Rehman

Chope, Mr Christopher

Clappison, Mr James

Clark, rh Greg

Clarke, rh Mr Kenneth

Collins, Damian

Colvile, Oliver

Cox, Mr Geoffrey

Crabb, Stephen

Crockart, Mike

Crouch, Tracey

Davies, David T. C.


Davies, Glyn

Davies, Philip

Davis, rh Mr David

Dinenage, Caroline

Djanogly, Mr Jonathan

Dodds, rh Mr Nigel

Donaldson, rh Mr Jeffrey M.

Dorrell, rh Mr Stephen

Dorries, Nadine

Doyle-Price, Jackie

Drax, Richard

Duddridge, James

Duncan Smith, rh Mr Iain

Dunne, Mr Philip

Ellis, Michael

Ellwood, Mr Tobias

Elphicke, Charlie

Eustice, George

Evans, Jonathan

Evennett, Mr David

Fabricant, Michael

Farron, Tim

Field, Mark

Foster, rh Mr Don

Fox, rh Dr Liam

Francois, rh Mr Mark

Freeman, George

Gale, Sir Roger

Garnier, Sir Edward

Garnier, Mark

Gauke, Mr David

George, Andrew

Gibb, Mr Nick

Gilbert, Stephen

Gillan, rh Mrs Cheryl

Glen, John

Goldsmith, Zac

Goodwill, Mr Robert

Gove, rh Michael

Grant, Mrs Helen

Gray, Mr James

Grayling, rh Chris

Green, rh Damian

Grieve, rh Mr Dominic

Griffiths, Andrew

Gummer, Ben

Gyimah, Mr Sam

Halfon, Robert

Hames, Duncan

Hammond, rh Mr Philip

Hammond, Stephen

Hancock, Matthew

Harper, Mr Mark

Harrington, Richard

Harris, Rebecca

Hart, Simon

Harvey, Sir Nick

Hayes, Mr John

Heald, Oliver

Heath, Mr David

Heaton-Harris, Chris

Hemming, John

Henderson, Gordon

Hendry, Charles

Herbert, rh Nick

Hinds, Damian

Hoban, Mr Mark

Hollobone, Mr Philip

Hopkins, Kris

Horwood, Martin

Howarth, Sir Gerald

Howell, John

Hughes, rh Simon

Huppert, Dr Julian

Hurd, Mr Nick

Javid, Sajid

Jenkin, Mr Bernard

Johnson, Gareth

Johnson, Joseph

Jones, rh Mr David

Jones, Mr Marcus

Kawczynski, Daniel

Kelly, Chris

Kirby, Simon

Knight, rh Mr Greg

Kwarteng, Kwasi

Laing, Mrs Eleanor

Lamb, Norman

Lancaster, Mark

Lansley, rh Mr Andrew

Latham, Pauline

Laws, rh Mr David

Leadsom, Andrea

Lee, Jessica

Lee, Dr Phillip

Leech, Mr John

Lefroy, Jeremy

Leigh, Mr Edward

Leslie, Charlotte

Letwin, rh Mr Oliver

Lewis, Brandon

Lewis, Dr Julian

Liddell-Grainger, Mr Ian

Lilley, rh Mr Peter

Lloyd, Stephen

Lopresti, Jack

Lord, Jonathan

Loughton, Tim

Luff, Peter

Lumley, Karen

Macleod, Mary

Main, Mrs Anne

May, rh Mrs Theresa

Maynard, Paul

McCartney, Jason

McCartney, Karl

McCrea, Dr William

McIntosh, Miss Anne

McLoughlin, rh Mr Patrick

McVey, Esther

Menzies, Mark

Metcalfe, Stephen

Miller, rh Maria

Mills, Nigel

Mitchell, rh Mr Andrew

Moore, rh Michael

Morgan, Nicky

Morris, Anne Marie

Morris, David

Morris, James

Mowat, David

Mulholland, Greg

Mundell, rh David

Munt, Tessa

Murray, Sheryll

Neill, Robert

Newmark, Mr Brooks

Newton, Sarah

Nokes, Caroline

Norman, Jesse

Nuttall, Mr David

O'Brien, Mr Stephen

Offord, Dr Matthew

Ollerenshaw, Eric

Ottaway, Richard

Paice, rh Sir James

Paisley, Ian

Parish, Neil

Patel, Priti

Pawsey, Mark

Penrose, John

Percy, Andrew

Perry, Claire

Pickles, rh Mr Eric

Pincher, Christopher

Poulter, Dr Daniel

Prisk, Mr Mark

Pugh, John

Raab, Mr Dominic

Randall, rh Mr John

Reckless, Mark

Redwood, rh Mr John

Rees-Mogg, Jacob

Rifkind, rh Sir Malcolm

Robertson, rh Hugh

Robertson, Mr Laurence

Rogerson, Dan

Rudd, Amber

Ruffley, Mr David

Russell, Sir Bob

Rutley, David

Sanders, Mr Adrian

Sandys, Laura

Scott, Mr Lee

Selous, Andrew

Shannon, Jim

Shapps, rh Grant

Sharma, Alok

Shelbrooke, Alec

Simpson, David

Simpson, Mr Keith

Skidmore, Chris

Smith, Miss Chloe

Smith, Henry

Smith, Sir Robert

Soames, rh Nicholas

Soubry, Anna

Spelman, rh Mrs Caroline

Spencer, Mr Mark

Stanley, rh Sir John

Stephenson, Andrew

Stevenson, John

Stewart, Bob

Stewart, Iain

Stewart, Rory

Streeter, Mr Gary

Stride, Mel

Stuart, Mr Graham

Sturdy, Julian

Swales, Ian

Swayne, rh Mr Desmond

Swinson, Jo

Swire, rh Mr Hugo

Syms, Mr Robert

Tapsell, rh Sir Peter

Teather, Sarah

Thurso, John

Timpson, Mr Edward

Tomlinson, Justin

Tredinnick, David

Truss, Elizabeth

Turner, Mr Andrew

Tyrie, Mr Andrew

Uppal, Paul

Vaizey, Mr Edward

Vara, Mr Shailesh

Vickers, Martin

Walker, Mr Charles

Wallace, Mr Ben

Walter, Mr Robert

Ward, Mr David

Watkinson, Dame Angela

Weatherley, Mike

Webb, Steve

Wharton, James

Wheeler, Heather

White, Chris

Whittaker, Craig

Whittingdale, Mr John

Wiggin, Bill

Williams, Mr Mark

Williams, Roger

Williams, Stephen

Williamson, Gavin

Wilson, Mr Rob

Wollaston, Dr Sarah

Wright, Jeremy

Wright, Simon

Young, rh Sir George

Zahawi, Nadhim

Tellers for the Noes:

Greg Hands


Mark Hunter

Question accordingly negatived.

12 Feb 2013 : Column 824

12 Feb 2013 : Column 825

12 Feb 2013 : Column 826

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).


That this House notes that the previous administration’s final Budget planned to cut capital investment by 6 per cent more than this Government’s latest plans, in the period 2010 to 2014; further notes that this Government has increased capital plans by £20 billion

12 Feb 2013 : Column 827

at the Spending Review and at the last two Autumn Statements, by taking tough but necessary decisions to cut current spending, with a result that public investment as a share of GDP will be higher on average over this Parliament than it was under the previous administration; further notes that this Government announced £5.5 billion of extra infrastructure investment in the last Autumn Statement, including £1.5 billion for roads, £1 billion for new schools, £900 million for science and £1.8 billion for housing and local infrastructure; further notes that it has supported the largest investment in the railways since Victorian times under the High Level Output Specification; further notes that no national infrastructure plan existed under the previous administration whereas this Government has set out for the first time a multi-year long-term strategy for the UK’s infrastructure, with over 50 per cent of the Government’s top 40 projects and programmes due to be in construction, procurement or completed by the end of 2014-15; and believes that sweeping away red tape and developing new finance initiatives such as the UK Guarantees Scheme will also support up to £40 billion of extra important projects.

Business without Debate

delegated legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Social Security (Payments on Account of Benefit) Regulations 2013, which were laid before this House on 10 December 2012, be approved.—(Mr Swayne.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Universal Credit (Transitional Provisions) Regulations 2013, which were laid before this House on 10 December 2012, be approved.—(Mr Swayne.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 13 February (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Social Security

That the draft Universal Credit Regulations 2013, which were laid before this House on 10 December 2012, be approved.—(Mr Swayne.)

Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Space Policy

That this House takes note of European Union Document No. 16374/12, a Commission Communication on establishing appropriate relations between the European Union and the European Space Agency; and supports the Government’s aim to work with the European Commission and ESA to begin a period of discussion about the future relationship between the ESA and the EU in which it will seek to ensure that any Commission proposal for evolution of the relationship supports the growth of the UK space sector, avoids duplication of expertise and functions between the ESA and the EU, protects the UK’s ability to participate in certain space programmes on a voluntary basis, and fully analyses

12 Feb 2013 : Column 828

the implications for the EU budget and EU competence, so that a fully informed decision can be taken next year.

—(Mr Swayne.)

Question agreed to.

delegated legislation


That the motion in the name of Mr Andrew Lansley relating to the Electoral Commission shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice has been given that the instrument be approved.—(Mr Swayne.)



That Annette Brooke be discharged from the Committee on Privileges and Sir Nick Harvey be added.—(Mr Randall.)



That Annette Brooke be discharged from the Committee on Standards and Sir Nick Harvey be added.—(Mr Randall.)


Main Road Recreation Ground (Kinnerton)

7.14 pm

Mark Tami (Alyn and Deeside) (Lab): Over 400 residents of Kinnerton have signed this petition in favour of the non-development of a valuable green space. The campaign to protect the field has gone on for more than 20 years, and the issue needs to be resolved in the long term.

The Petitioners

believe that there is a real risk that unless the land is awarded Field in Trust status, designated as a village green or alternatively Flintshire County Council agree to a long-term lease of the land to the Community Council for recreational use beyond 2015, that the community will lose a valuable and much used recreational area in the heart of the village.

The Petitioners therefore request that the House of Commons urge the Government to secure protected status for Main Road Recreation Ground.

And the Petitioners remain, etc.

Following is the full text of the petition.

[The Petition of residents of Higher Kinnerton, Flintshire,

Declares that earlier this year the Community Council nominated Main Road Recreation Ground to be protected under the Queen Elizabeth II Fields in Trust Challenge—a UK wide programme to celebrate the Diamond Jubilee and London Olympic Games by permanently protecting outdoor recreational spaces for future generations. However Flintshire County Council refused the nomination claiming the site has ‘long-term residential development potential’ which appears to contradict with Flintshire County Council’s own Unitary Development Plan which describes the field as ‘an important green space within the heart of Higher Kinnerton providing a green break within the built fabric of the village’.

Further that Flintshire County Council have now rejected an application to register Main Road Recreation Ground as a new village green—a move which had been supported

12 Feb 2013 : Column 829 by organisations including Campaign for the Protection of Rural Wales (CPRW) and national charity Play Wales; further that Alyn and Deeside MP Mark Tami and AM Carl Sargeant had also written to Flintshire County Council’s chief executive Colin Everett supporting the application for village green status and the move to retain this area of land for recreational use.

Further that the Petitioners believe that there is a real risk that unless the land is awarded Field in Trust status, designated as a village green or alternatively Flintshire County Council agree to a long-term lease of the land to the Community Council for recreational use beyond 2015, that the community will lose a valuable and much used recreational area in the heart of the village.

The Petitioners therefore request that the House of Commons urge the Government to secure protected status for Main Road Recreation Ground.

And the Petitioners remain, etc.]


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Common Agricultural Policy Reform

Motion made, and Question proposed, That this House do now adjourn.—(Mr Swayne.)

7.15 pm

Roger Williams (Brecon and Radnorshire) (LD): I draw hon. Members’ attention to my entry in the Register of Members’ Financial Interests, particularly as regards agriculture and farming.

I would like to thank you, Mr Deputy Speaker, for allowing time for today’s debate on common agricultural policy reform. It is important that the House is able to discuss issues that will affect farmers across England and Wales—and Scotland, Northern Ireland and, indeed, the whole of Europe—for the seven years after 2014.

Last week’s deal to reduce the overall EU budget by €58 billion will have a considerable impact on the direct payments to farmers and on the rural development budget that makes up the common agricultural policy, now said to be worth €373 billion over seven years. The funding for the CAP will be in the region of 13% less than the 2007 to 2013 deal. Relative reductions will be made to direct payments, falling from €283 billion to €277 billion, with rural development reduced from €91 billion to €85 billion. While I am pleased that the deal has been agreed on the €908 billion budget, it is important that these cuts are applied equally across the EU.

I and farming representatives such as the National Farmers Union believe that these reforms are an excellent opportunity to simplify, reduce and eliminate competitive distortions within the common market, to continue the process towards market orientation and to encourage farmers to become more competitive. I must emphasise once again that these reductions should be equal across the single market or else distortions will disadvantage UK farmers. It is pleasing to hear that the capping proposal to limit direct payments to larger farms will be used on a voluntary member state basis.

A number of issues need to be addressed. Under the current agreement, England and Wales—and, indeed, Scotland and Northern Ireland—receive less direct payment support than our main competitors in western Europe. This gap between us and France, Ireland, Germany, Denmark and the Netherlands needs to be narrowed, or at most kept at current levels, especially if the situation is made more difficult by Department for Environment, Food and Rural Affairs proposals to remove up to 20% of the direct payment that farmers now receive, especially at a time when other member states are looking to improve farmers’ direct payments through reverse transfers.

Glyn Davies (Montgomeryshire) (Con): I need to draw attention to my own entry in the Register of Members’ Financial Interests; I think my interests are similar to those of my hon. Friend. Does he agree that the issue is not so much about a reduction in the level of support as about securing a level playing field, particularly in respect of the greening policy? On a number of issues, British farmers might well be seriously disadvantaged as compared with their European competitors unless we get that level playing field. That must underpin what we do.

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Roger Williams: I agree. I am not arguing for an increase in the CAP budget; what I am arguing for is equality across the whole of Europe. At present, for instance, dairy farmers in the Netherlands receive twice as much support as those who farm in England.

DEFRA’s attempts to cut payments unilaterally, were they to be realised, would hit our farmers far harder than the proposed EU budget cut. In that context, I want to raise a few regional concerns that have arisen following discussions with the Farmers Union of Wales.

Although many of the draft CAP regulations and recently proposed amendments acknowledge regional administrations, others do not. Is the Minister confident that the final regulations will properly acknowledge devolved Administrations such as those in Wales, Scotland and Northern Ireland?

The impact of greening measures on the regions was also raised with me by the FUW. Greening accounts for 30% of direct payments. Analysis by the Agriculture and Horticulture Development Board suggests that Wales, Scotland and northern England would be worst hit by the European Commission’s crop rotation greening proposals. That impact is likely to be due to the particular climatic and topographical challenges faced by farmers in those areas, which, as the Minister will know, are limited in terms of what arable crops can be grown in them, and are therefore at an instant disadvantage in relation to other regions. There is a fear that the greening measures will be perceived as too prescriptive and therefore unhelpful.

I should like the Government to make allowances for farmers in higher latitudinal areas, for example, to take into account the challenge of farming in a tougher environment. I should also like them to support amendments tabled by my Liberal Democrat colleague George Lyon MEP and agreed to by the EU’s Committee on Agriculture and Rural Development, which will allow farms to be exempt from greening requirements if they undertake actions that reduce agriculture’s impact on the global environment.

It will be difficult to ensure that the greening measures that generate 30% of direct payments will have an equal impact in countries whose climates and agricultural systems vary as much as Finland and Malta. I fear that DEFRA wants to impose one form of greening on English farmers, namely the ELS-light approach in pillar one. It is one thing to say that a farmer who participates in the entry level stewardship scheme should be exempt from greening, and another to say that the only way in which he can receive his greening payment is to participate in the scheme. We see DEFRA’s approach as an interesting addition to the Commission’s proposals, but only as an accompaniment, not as a replacement. Forcing farmers in England to take part in ELS management measures when, say, Scottish, Irish or French farmers have access to choice and the various “green by definition” derogations sounds very much like domestic gold-plating to me.

I hope that the Government do not consider it necessary to use the new flexibility in the proposals to allow for voluntary modulation of funds in the region of 15% that can be made by member states between the two pillars. While it does represent a liberalisation of the voluntary modulation principle introduced for the UK and Portugal under the previous CAP regime, does the increased

12 Feb 2013 : Column 832

possible modulation not represent a threat that could undermine UK farmers’ ability to compete within a common market?

Tim Farron (Westmorland and Lonsdale) (LD): Does my hon. Friend agree that, given the likely shrinkage in the overall size of the EU budget, a decision by the UK Government to reduce the amount of modulation would be one way of ensuring that livestock and dairy farmers in particular see no reduction in their single farm payments?

Roger Williams: I agree. UK farmers certainly need a level of direct payment to remain financially viable and to play their part in the activities in which the people of this country would like to see them play a part.

Jim Shannon (Strangford) (DUP): I congratulate the hon. Gentleman on raising a matter that is worthy of a three-hour debate. Northern Ireland farmers have experienced a 52% reduction in their real incomes at a time when the supermarkets are not paying them the money that they need to recoup some of their losses. Does he agree that, while it is good that there has been a seven-year continuation of the CAP moneys until 2020, those moneys should have been set at a level that would help the farmer rather than penalising him?

Roger Williams: I agree. The direct payment protects the farmer from various things, including volatile commodity prices and poor and problematic weather conditions, which have a huge effect on profitability. Without the direct payment, many farmers would not be able to continue in business.

I, along with organisations such as the Country Land and Business Association, fear that modulation of this kind could undermine the ability of UK farmers to compete. I note the findings of the Environment, Food and Rural Affairs Committee “Greening the CAP” report. It stated:

“The competitiveness of UK farmers will be reduced if they are exposed to higher modulation rates than their European counterparts. We therefore recommend that Defra does not set modulation rates higher than other Member States that receive similar single farm payment rates.”

In terms of rural development, or pillar two, the UK receives the lowest per hectare allocation of funds because of the rebate the Government receive from Europe. A further reduction could turn farmers away from all the good they are doing in developing wildlife under the existing pillar two. The Government must make sure that as much positive management for wildlife as possible continues as we approach the 2020 deadline for improvements in biodiversity. Pillar two has delivered real improvements for the environment; the Royal Society for the Protection of Birds receives £5 million from the CAP, for instance.

For a number of agricultural sectors, direct payments make up the majority of farm income, yet under EU rules farmers cannot receive payments for undertaking environmental work. They can be paid compensation only for the losses and costs incurred as a result of that environmental work. I believe there should be a system that genuinely rewards farmers for undertaking environmental work, and I am sure the Minister agrees. A deal must be done under the Irish presidency, thereby

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allowing for a period of transition in which farmers can make informed business decisions before the policy takes effect.

The British and European public have great expectations for CAP reform. They expect farmers across Europe to provide quality food and increase food security, and to increase exports within the EU and further afield. They also require our farmers to be sustainable and to deliver public goods such as biodiversity, landscaping, water purity and granting greater access to farmland. These two goals can be achieved only if agriculture is profitable and successful. Farmers cannot, however, be expected to commit their lives to such a role within the sector without receiving sufficient support and investment. It is therefore essential to have a single farm payment that is set at a level that allows farmers to remain profitable and deal with the challenges they face.

Recently, the single farm payment accounted for 80% of the total profitability of English agriculture, and in this financial year it will probably account for even more. The profitability of English agriculture is therefore clearly closely linked to the income from the single farm payment.

The challenges facing farmers vary widely. Globally, prices for commodities remain volatile, and the dairy industry has seen some of the lowest prices for milk in recent times. High input costs such as for fuel, fertiliser, feed and chemicals are hitting farmers across all sectors, too. We also face increasingly inconsistent weather, which has resulted in the lowest wheat yields since the 1980s, while dairy farmers have had to keep cattle indoors and revert to winter feeding early, all at extra cost. These effects are felt globally as well as here in the UK; the United States has experienced its worst drought in 56 years, for instance, leading to poor yields and crop abandonment in some areas.

I also want to make the case for extra support for hill farmers. They find it difficult to compete with people farming more advantageous areas. The CAP does not give specific support for hill farming.

Mr Mark Williams (Ceredigion) (LD): I congratulate my hon. Friend on securing this debate. The point about hill farmers leads me back to one of his original questions about the voice of regional government and national Government in the final regulations. Is he satisfied that the voice of Wales—in particular Welsh hill farmers—is being acknowledged in those negotiations and discussions?

Roger Williams: My hon. Friend points to a significant problem and I am not convinced at the moment that the future of hill farmers in Wales, England and the other devolved nations is secure. Will the Minister say what negotiations are taking place on behalf of the hill farming community? I do not seek to maintain the absolute level for CAP expenditure and it is far more important that British farmers are treated fairly and equitably. We operate in a single market in Europe and whatever settlement is finally reached, the terms and conditions applied to our farmers—whether the transfer to pillar two or the greening rules—must not put us at a disadvantage with our major competitors.

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English farmers have already undergone substantial and radical reform through the full decoupling of direct support payments, the cutting of farm payments at national level, and the progressive move towards an area-based payments system. The combination of those policy decisions, all taken at national level by previous DEFRA Ministers, means that this year a dairy farmer in the Netherlands will receive a payment that is 91% higher than that received by an English dairy farmer. The reform should seek to narrow the gap in support levels compared with our competitors, and it certainly should not make it any worse.

I thank the Minister for listening and appreciate the size of the challenge faced by him and his ministerial team.

7.31 pm

The Minister of State, Department for Environment, Food and Rural Affairs (Mr David Heath): May I say how grateful I am to my hon. Friend the Member for Brecon and Radnorshire (Roger Williams) for securing this debate, because it is extremely timely? We are about to enter probably the most intensive period of debate in Europe on common agricultural policy. There were doubts about whether we would have agreement on the overall EU budget, but that is now in place and was agreed last week. The Agriculture Committee in the European Parliament voted on its amendments last month, and I am optimistic that we will secure an agreement on CAP reform during the Irish presidency. My hon. Friend raised that point and it is important not least because we do not want our agricultural businesses and farmers to have a prolonged period of uncertainty. They need to know exactly where we are.

My hon. Friend set out to some extent the broad parameters of last week’s deal in which the Prime Minister secured a reduction in the CAP of €55 billion—13% less than the current budget. We do not need to be apologetic that we have sought a reduction in the overall budget of the European Union, as that is consonant with what taxpayers and national Governments across the European Union are experiencing. We also do not need to be apologetic that it will have consequences for the size of the agriculture budget, as no sector can be entirely immune from the process. The key is to ensure that the available funds are used in the most effective way to support agriculture across the United Kingdom.

Although my hon. Friend was concerned, I see the additional flexibility of the 50% potential transfer from the pillar one budget to pillar two as a key part of that support. He mentioned the importance of high-level environmental schemes, and I want to ensure that those continue, because they have enormous value not only for the United Kingdom but for our wider environmental responsibilities. I also believe that our rural programmes are of enormous value and want to ensure that they are still intact. My hon. Friend’s concern is whether the transfer will effectively move money out of farming and into another pot. I understand that and perhaps we need to define better our terms for pillar two and pillar one.

For instance, the definition of greening measures is very important in determining whether they lie in pillar two or pillar one, and whether there is, in effect, a transfer of funding from pillar two to pillar one that compensates

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for money going in the other direction. I will go on to discuss greening in a moment, but if we had a process under which other member states were required to consider what they could do to introduce in their agricultural systems environmental support schemes such as those in this country, that would improve not only the comparative competitiveness of our industry, but the environment, and most people in this country would like to see that.

What are the Government’s priorities? Of course, we want to negotiate a good deal for farmers, for taxpayers and for consumers. What about in the long run? I do not resile from the view—this is the Government’s clear policy—that we want a common agricultural policy that continues to orientate itself to the market, that increases the international competitiveness of EU agriculture, let alone our own, and that increases the capacity to deliver environmental outcomes. Ultimately, we want an efficient and responsive agricultural sector in the EU and globally, and we want the future CAP to help to achieve that. That is why it is really important that the CAP continues on the path of reform and that we reduce, in the long run, our reliance on direct subsidy.

My hon. Friend asked about the extent to which we involve the priorities of the devolved Administrations in what we argue for, and I can tell him that we involve them fundamentally. It is really important that we hear what every part of the UK agriculture has to say about CAP reform, which is why we devote a great deal of time, both at official and ministerial level, to listening to the devolved Administrations and securing, as far as we can, a common UK position, on the basis of which we then negotiate.

Dr Eilidh Whiteford (Banff and Buchan) (SNP): I am reassured to hear the Minister say that he will continue to work closely with the Scottish Government on this issue. However, I wish to put on the record the fact that the Scottish Government’s top priority has been ensuring that a fair proportion of the allocation comes to Scottish farmers. The hon. Member for Brecon and Radnorshire (Roger Williams), who has led the debate so ably this afternoon, pointed out the disparities between the different beneficiaries of this policy; a level playing field just does not exist at the moment.

Mr Heath: However, there is of course a difference between the distribution per farm and the distribution per hectare. Scotland has a distorting factor, because there are very large holdings that are “lightly farmed”; these holdings sometimes fall within a definition that I know the Scottish Minister is keen to look at to see whether they are actively farmed at all. There are specific issues to address there.

I spent the past two days in Scotland talking to Scottish farmers and to Scottish Ministers, and I was there last week. As I say, we do listen carefully, for instance on the issue relating to the highlands, the definition of permanent pasture and how heather is treated. We have now secured a workable definition, which includes heather. That is important for Scotland and for Scottish agriculture, and it was secured by the negotiations in which we took part. I assure hon. Members from all parts of the United Kingdom that we take that matter seriously and we continue to listen.

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Let me give another example. In Scotland, coupled payments are still a key part of the distribution mechanism, whereas they are not in the rest of the UK. Therefore, the fact that we can provide some cover within the national ceiling from, in effect, an English contribution to enable Scotland to persist with its schemes is important.

Dr Whiteford rose

Mr Heath: I have given way once to the hon. Lady, and as the debate was secured by my hon. Friend the Member for Brecon and Radnorshire I really need to answer the points he raised.

Let us examine some of the other issues. The first is greening, on which we still have a lot to negotiate. The one thing that all member states were agreed on was that Commissioner Ciolos’s initial thoughts were not the answer. They were far too prescriptive and far too inappropriate in many areas. They displayed a lack of recognition that hugely different farming procedures are used, even in various parts of this country, let alone in the wider European family. What we want is a continued orientation of the CAP towards rewarding farmers for the public goods they deliver, which includes environmental benefits and protecting and enhancing wildlife, but not in a form that is over-bureaucratic and over-demanding in implementation, which may result in a tick-box mentality that does not help the environment and certainly does not help farming.

We believe that some of the proposals simply do not represent good value, whereas some of our existing agri-environmental schemes do. I hope everyone agrees that what we need is flexibility to allow local definition of environmental benefits and schemes that do not force people into inappropriate farming practices. I am hopeful that we will secure that degree of flexibility, but we should not take it for granted. The other thing we do not want is duplication, so that people are paid twice for doing precisely the same thing. There is a risk that the outcome of some of the European Parliament proposals will be farmers being paid once under pillar two and once under pillar one for doing exactly what they are doing now. I doubt our taxpayers would thank us for that. It is important that we reach a successful outcome.

My hon. Friend mentioned George Lyon, who is one of the beacons of common sense on the European Parliament Agriculture Committee. I have worked closely with him, and we certainly want to continue to do so in the future.

Our concerns in relation to intervention in the market have been well rehearsed. We have been clear over the years about our desire to reduce the reliance on trade-distorting measures and the importance of the CAP sticking to that path of reform. That is where we part company with the European Parliament Agriculture Committee, because many of the amendments voted through there would move us backwards, away from market orientation, and increase budget pressures for old-style market support. There is a place for recognition of the need to support some farmers, especially hill farmers and those in less-favoured areas. I stress that and argue in favour of doing that, but when it comes to providing subsidy for European farmers to start growing tobacco again and get taxpayers’ money to do so, I draw the line, because that is clearly not in the interest of taxpayers or of the EU.

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Roger Williams: The key issue is flexibility on modulation to allow some countries—people think the UK will be one of them—to move money from pillar one to pillar two, while other countries move money from pillar two to pillar one, thereby further disadvantaging UK farming.

Mr Heath: As I said, what we want is flexibility to find the right solutions for our farmers. At one point, my hon. Friend praised high-level agri-environmental schemes, and we want those to continue. We may need that flexibility to ensure that we can achieve that within our pillar two framework, but at the same time I want the level playing field with other countries that he seeks, so that they do some of the same things that we do, and do well, in their domestic agriculture. I am not convinced that they are doing that yet. The thrust of our argument is: yes, we want public money to support public good, but we do not want public money to support distortions of trade and agricultural production which result in a regression across the EU.

I am clear that to achieve that we need flexibility not only in definitions, but in being able to move cash

12 Feb 2013 : Column 838

between headings. We need to make sure that we have an appropriate period of transition—it would be disastrous for British agriculture were we to move too fast and in too rigid a way to a solution that is not appropriate for many of our farmers. We need to make sure that the implementation period is sufficiently long to allow an orderly transition, so that we do not repeat the chaos of 2005 with the Rural Payments Agency—I am determined that we will not do that again. Most of all, we need to listen to what our agriculture industry needs, relate that to what our taxpayer needs in value for money, and make sure that we have prosperous and sustainable agriculture right across the UK in the future. That is what we are trying to achieve from CAP reform, and I believe it is possible to do so, but I do not underestimate the difficulties in reaching a successful conclusion.

Question put and agreed to.

7.45 pm

House adjourned.