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Baroness Anelay of St Johns: My Lords, will the Minister give way?

Lord Donoughue: Always.

Baroness Anelay of St Johns: My Lords, I might try to keep the Minister to that promise in further debates in the House. Will the Minister comment on why it is that the cattle traceability scheme has been changed in the way it is being costed by this Government? In our budgetary arrangements we did not pass on the start-up costs to farmers. As I understand it, that is now being done by this Government which means that £10 million of costs will be passed to farmers which we would not have done.

Lord Donoughue: My Lords, the final decision has not been announced. However, we have to spend more money than was provided by the previous regime on many important aspects of farming, including hill farmers. That has to come from somewhere.

Baroness Anelay of St Johns: My Lords, as the Minister has given me the opportunity to intervene, I wish to ask him a question about hill farmers, to which he referred. I appreciate that the Secretary of State announced on 22nd December that he would make extra payments to hill farmers. However, will the Minister confirm that that is because he had already taken away £60 million which we would have allowed them?

Lord Donoughue: No, my Lords, that is not the case. The provision for hill farmers was exactly as provided by the previous government. The previous government provided an extra sum of £60 million for the previous year and budgeted for that not to recur in the current year. Had the Opposition won the election, would they have found more money and from where? Would that have been taken from the money for schools, hospitals, the disabled, or from higher taxation? We should be told that. Those are my general comments, but I now wish to deal with the many specific points that were raised although I shall not be able to deal with all of them.

Lord Mackie of Benshie: My Lords, before the Minister deals with those points, I did not hear him say that he would operate the CAP as it is operated on the Continent. We have already given figures as regards differences in farmers' incomes under the CAP.

Lord Donoughue: My Lords, I shall deal with the CAP. First, I wish to say a little more about beef and BSE, which I touched on at the beginning of my remarks. This was mentioned by many speakers and, most pungently, I thought, by the noble Lord, Lord Marlesford. I cannot comment on his long, historical analysis of BSE although much of what he said seemed to me to be close to the mark. I assume the Phillips inquiry will tell us more about that. I repeat that the first

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priority of this Government is protection of the consumer and the maintenance of public confidence in food. Action will be taken on a precautionary basis to ensure that consumers continue to be given the highest protection against risks from BSE. That is why we have acted decisively to introduce controls on imported meat.

It is disappointing that Community-wide controls on the use of specified risk materials are not yet in place, but in the meantime unilateral measures to ensure that food and feed products are free from risk materials will remain in place. Lifting the ban is also a high priority for this Government. We believe that we are making steady, if limited, progress. But the two priorities of health and lifting the ban together explain our action in banning beef on the bone on which a good deal of indignation has been expressed. On health grounds it would have been irresponsible for any government to act differently and to ignore the clear advice of its Chief Medical Officer on an important public health issue. I may have to remind the previous government--as they may have forgotten--that they went beyond the advice of the SEAC in 1994. However, even more immediately convincing were the implications for the beef ban. It was made clear to us that without action to demonstrate publicly that our beef is completely safe--if we had not taken the action that we did, that would not have been the case--there would be no prospect of getting the beef ban lifted. That difficult and controversial decision was taken in the interests of our farmers.

We are also urgently pursuing other measures to get the ban lifted. I note what the noble Lord, Lord Clifford, said about farmers in the south west. I also appreciate the helpful comments made on Northern Ireland by the noble Lord, Lord Alderdice. On 14th January the Commission agreed a draft proposal for the export certified herd scheme which will be presented to the Standing Veterinary Committee. The scheme would operate in Northern Ireland until the British computerised tracing system is fully functional. We have already begun work on that and expect it to be operational in the late spring. We have also now received a positive opinion from the Scientific Steering Committee on the principle of the date based export scheme, supported by an offspring cull. We are maintaining our pressure on the Commission to conclude consideration of both proposals as soon as possible.

On the agri-monetary side and compensation, I recognise the impact of currency movements on farmers which affect competitiveness and the green rate compensation payments. Certainly much of the predicted 30 per cent. fall in total incomes from farming is a direct result of the strength of the pound. Consequently we have repeated demands--made by the noble Earl, Lord Ferrers, the noble Lord, Lord Mackie, and the NFU--to collect the £980 million which is sitting in Brussels. One NFU leader has said that it is a matter of making a simple telephone call. However, as I think the noble Lord, Lord Hooson, implied, the United Kingdom Exchequer and taxpayer bear 71 per cent. of those European Union funds. That is the result

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of the Fontainebleau agreement negotiated by the former Prime Minister, the noble Baroness, Lady Thatcher. I wonder whether noble Lords opposite repudiate the Fontainebleau agreement. If not, where would they find the extra £600 million plus that would have to be produced by the Exchequer to sustain the claim of the £980 million? There is not a level playing field. Noble Lords ask for a level playing field but, because of the Fontainebleau agreement, there is not a level playing field, and no other European country experiences that. Against the background of a tight situation--

Lord Stanley of Alderley: My Lords, is it not true that the figure is only 23 per cent. and that 50 per cent. is provided by every other European country? It is only the addition from 50 per cent. to 71 per cent. that the Fontainebleau agreement takes account of.

Lord Donoughue: My Lords, I do not believe that that is the case but I shall write to the noble Lord, Lord Stanley, setting out the exact mathematics. Against that background of a tight situation on public spending, the one-off package of £85 million for the livestock sector which the Minister announced on 22nd December represents a fair balance between the conflicting requirements we face and will provide a considerable shot in the arm for the sectors involved. Of course that has to be agreed with the Commission, and consultations are proceeding to establish the detail of how the money is to be paid to farmers. I should report that the Commission has raised some points which we are now considering. Any change in the package which might be required by the Commission will not affect the overall total amount of aid paid to the United Kingdom farmers.

CAP reform remains, as it was in the distributed speech of the Prime Minister, top of the shopping list, and nothing has changed. It is inevitable in the face of increasing competition on world markets, and an essential precursor to successful enlargement of the European Union. I found the comments of the noble Lord, Lord Middleton, particularly interesting. He is correct. My right honourable friend's Oxford speech set out our position.

Several noble Lords referred to modulation. Our declared policy in Brussels is to resist modulation on a Europe-wide basis since the British agricultural sector is bound to lose from that. We believe that change is inevitable along the lines of Agenda 2000, but it may not be as rapid as some assume or fear. Most farmers have little to fear from a move away from production support towards a more competitive world market, providing--I stress this--they are also receiving extra environmental payments.

The change will have effects. I agree with the noble Lords, Lord Stanley and Lord Mackie of Benshie, on the need to ease and manage that change. The list of suggestions by the noble Lord, Lord Stanley, on early retirement, local co-operatives, and so on, were helpful and constructive. My right honourable friend has already announced that he is exploring the possible contribution of the European early retirement schemes.

A further list of points was raised with me. In the time available I shall answer as many as I can and write to noble Lords on the other matters. The noble Earls,

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Lord Clanwilliam, and Lord Peel, and the noble Lord, Lord Rotherwick, referred to the abolition of the advisory panels. They were not replaced by the advisory group with only one farmer. They are being replaced by local groups with much wider rural representation including, but not only, farmers. We are establishing local groups which report to the Minister. They report to Ministers on their regional visits. The Ministers in the department have already made more than 50 regional visits. That approach reflects our view that the ministry must reflect, and consult with, the whole rural community. That we propose to do.

I wish to take this opportunity to pay a tribute to the great contribution by the noble Lord, Lord Shuttleworth, to British rural life.

The noble Lord, Lord Kimball, and my noble friend Lady Young, raised the issue of the regional development agencies. I agree that we must ensure that the rural countryside has representation. The noble Lord mentioned, modestly, one representative on each. I would hope that that was at least the case.

On the question raised about guidelines, it is a complex issue. I have a long answer, but the House might appreciate it if I write to the noble Lord. The European Commission has not issued formal guidelines on what constitute separate businesses, but we have clear criteria. I shall write to the noble Lord.

The noble Earl, Lord Clanwilliam, referred to organic farming and pesticides. I do not have time to go into the issue in detail. However, I assure him that the new Administration in general, and myself in particular, have great sympathy with his priorities.

On the importance of horticulture, as always I appreciated the contribution of the noble Baroness, Lady Trumpington. I normally nearly slip into calling her my noble friend. It is a sector which receives little assistance and makes few complaints. As the noble Baroness suggested fruits have suffered. I can only say that I shall do what I can within the constraints on public expenditure. That public expenditure also affects loan schemes within the European Union rules.

Several noble Lords referred to unpasteurised milk. I should point out that it is already banned in Scotland as unsafe. Here we are examining its safety but we have not yet reached a decision.

The noble Lord, Lord Palmer, referred to renewable energy sources. I can assure the noble Lord that my right honourable friend is already actively engaged on the issue. The noble Lords, Lord Astor of Hever and Lord Clifford of Chudleigh, and the noble Earl, Lord Courtown, raised the issue of forestry and woodlands stewardship. I agree that these are important issues. They do not all come under MAFF. I hope that the noble Lords will accept it if I write to them.

Finally, the daunting general question ran through several thoughtful contributions on how we balance our two wishes, among many--the wish to preserve small family farms as a crucial part of the living countryside, especially in Northern Ireland, Wales, the north and the south west, together with the efficient and world competitive farming that we also want. The noble Lords, Lord De Ramsey, and Lord Rathcavan, and the noble

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Earls, Lord Peel and Lord Courtown, referred to this issue. It is a dilemma and a dichotomy built into the Agenda 2000 reforms to which I have given great thought but which I cannot resolve today. I did not detect an easy solution offered in the debate. Noble Lords are quite right. In the end Europe has to resolve the dilemma. We want family farms in a rural society; and we want to push forward towards world competitive prices and an efficient agriculture. It is one of the great challenges to Europe and to us to resolve the matter in a way that is reasonably acceptable to both sides.

In conclusion, I thank all noble Lords for their contributions which added greatly to my vertical learning curve. I shall write to those noble Lords to whom I failed to deliver an answer today.

7.39 p.m.

Earl Ferrers: My Lords, I thank all noble Lords who have taken part in the debate, in particular the Minister for the courteous and charming way in which he replied. I felt sorry for the noble Lord during the debate. It was rather like standing up in front of the firing squad. He had only two people behind him, but that did not worry him. Everyone else seemed to be on the other side of the House. If I may say so, the noble Lord acquitted himself with calm and dignity. He is a thinking person. I hope that he will take note of what has been said and will not just say, "Thank goodness that debate is over. We can now turn to other subjects."

What has been said is important. The countryside--agriculture--is concerned. Perhaps I may again impress this upon the Minister. Agriculture is concerned to know that the Government understand and care. I think that in the person of the noble Lord, Lord Donoughue, we have an example of someone who cares; and the Government care. I hope that the noble Lord will be able to pass that message through to the rest of the Government.

I was glad also to hear the intervention of the right reverend Prelate the Bishop of Bath and Wells. It is good when a right reverend Prelate takes part in such a debate to explain the concerns that he finds in the area in which he lives. I was glad, too, to hear the intervention of the noble Baroness, Lady Young of Old Scone. Her speech was, as the noble Lord, Lord Donoughue, said, a unique and cheerful experience for him. It was also a pleasant experience for us because it was a very elegant speech, but she scared the daylights out of me when she said that the decision to ban beef on the bone was taken in order to reassure Europe and had nothing to do with the basis of risk. My daylights were scared even further when that was confirmed by the Minister. I do not wish to labour those points further. I believe that the Government have the flavour of the concerns which are felt.

I am grateful to all noble Lords for having taken part. I should particularly like to mention the noble Lord, Lord Alderdice, whose loquacity and ability to speak without a note on any subject without hesitation, and to make common sense as well, is an art which I greatly admire. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.

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