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Lord Grocott: My Lords, I say to the noble Lord, Lord Forsyth, that that is not a bad idea in a bicameral system. As someone with long experience of another place, I wonder whether he accepts the criticism that while he was a senior Minister and his government were in office, the other place was doing too much, or did something miraculously change on 1st May 1997?

Noble Lords: Yes.

Lord Grocott: My Lords, I accept that it changed, and I believe that it did so for the better. It is important that both Houses exercise their scrutiny responsibilities properly. However, when the system is working properly, there should be a complementary system between the two Houses. I see nothing at all untoward in this House having a particular expertise in a particular area and spending longer on that matter than the other House, and vice versa. I return to the idea that we are being less than precise with each other when we suggest that all of those difficulties happen to have occurred since 1st May 1997 and that nothing similar happened during the previous 18 years.

Lord Graham of Edmonton: My Lords, "subject to the progress of business" is a phrase that has been used down the years by Chief Whips of all parties on many occasions. It is not a trite phrase; it means what it says. The Government are entitled to try to get their business through by agreement.

I am struck by the fact that every word that has been said in this debate, with the exception of the Chief Whips, must be studied. However, I am heartened by the fact that the two Chief Whips who spoke, besides the noble Lord, Lord Grocott, recognised that, in a very difficult situation, the best has been made of what one might call a bad job. That is not to say that they agree with it, but in the end they have had to agree to the proposition of the Government Chief Whip. I am heartened that that is their relationship; that is a good thing.

The Government Chief Whip would be well advised to try to take a longer look at the business, if possible. Since we returned from the Whit break until now, days

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were set down for progress. The problem occurred because we collectively decided to take matters late into the night and forced business on to a Friday. I regret the fact that the Government Chief Whip has extended the Session. However, I very much hope that he will take note of the fact that although that is to the dislike of the House, we give him our support.

Lord Grocott: My Lords, as ever, I am grateful to my noble friend for the friendly way in which he spelt that out. I shall give one more statistic; it is the last one that I will give to the House. There is no mystery about the job; it is simply a question of trying to fit the demands into the time available. I ask the House to reflect on this statistic if on nothing else: the slowest Bill in the previous Session on the Floor of the House—the National Health Service Reform and Health Care Professions Bill—took 21 minutes per group of amendments. In this Session, the Licensing Bill took 21 minutes per group, the Community Care (Delayed Discharges Etc) Bill took 21 minutes, the Courts Bill took 23 minutes, the Sexual Offences Bill took 24 minutes, the Communications Bill took 24 minutes and the Regional Assemblies (Preparations) Bill took 30 minutes. The simple fact—I do nothing other than report it to the House—is that Bills are taking longer in Committee in the Chamber than they did in the previous Session. I simply put those figures to the House. If anyone wishes to suggest anything different about those statistics, I shall be grateful for any suggestions. Clearly—any government must acknowledge this—Bills that take an average of 30 minutes per group of amendments on the Floor of the House will inevitably slow down the programme. I make no more bold a statement than that.

Baroness Gardner of Parkes: My Lords, the Chief Whip said that we have spent Friday after Friday on Private Members' Bills. That is really a terrible waste of time—I speak as one who has moved a Private Member's Bill. We are able to air issues very well in this House, but there is no hope whatever of those issues getting a fair hearing when they reach the other place because they go at the end of the queue. Can the Government look at the procedures between the two Houses? If a Private Member's Bill goes through the Commons, we give it a very fair hearing in this House.

Lord Grocott: My Lords, I do not disagree at all with the thrust of that suggestion. The system is not the most efficient. However, those who speak for governments are necessarily diffident about giving advice on the way in which the Private Member's procedure should be considered. I agree that there is frequently wasteful time between the two Houses.

Lord Donoughue: My Lords, I support my noble friend and congratulate him on the skill with which he has explained the difficult situation in which the Government find themselves: their programme is somewhat gridlocked and there have been many complaints about the intrusions on noble Lords' time.

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Does the prospect of a long, complex and controversial Bill to ban hunting help the Government and my noble friend in this situation or is it unhelpful?

Lord Grocott: My Lords, I discovered in this job that, the longer one goes on, the less one is concerned about content and the more one is concerned about getting the machine going on the rails. I know my noble friend's views on this matter and I know the answer that he wants me to give. But I simply say to him that these Bills are in the Government's legislative programme. So far as it is within my power, I shall ensure that the House has reasonable time to consider them all.

Lord King of Bridgwater: My Lords, does the Chief Whip accept that it is one thing for a government to invite their own supporters not to go to a party conference but it is quite another for them to prevent the supporters of another party attending their party conference? Does he also recognise that there is a distinction? If a party conference takes place in Brighton or Bournemouth, it is possible for people to attend and also to take some part in the business of this House during that week. The next party conference of the Conservative Party will be in Blackpool, which will make it virtually impossible for Members to combine attendance at both. Therefore, will he confirm that, if that is the direction he is following, every effort will be made to ensure that there is no controversial business and that the least controversial business is taken during that week?

Lord Grocott: My Lords, I can certainly say to the noble Lord, Lord King, that, whatever business is or is not taken, as ever we shall try to secure agreement through the usual channels. I do not know whether it helps or hinders my colleagues to say this, but we make every effort to reach agreement and I can make absolutely no promises about what the business will be during that period. However, I am sure that the noble Lord, Lord Cope, will make his views known very clearly.

The Earl of Northesk: My Lords, I acknowledge the immense difficulty of the task, but can the noble Lord give the House an assurance that, in so far as is possible, the usual channels will attempt to ensure that our putative 10 o'clock cut-off time is breached as infrequently as possible?

Lord Grocott: My Lords, I say a wholehearted "yes" to that. I am a passionate supporter of the intention of the House normally to secure the conclusion of business by 10 o'clock. I freely admit that on a number of occasions during this Session—although not as many as in the same period during the previous Session—that 10 o'clock rule has been severely breached.

However, I have to say to the House—again, there are no tricks or smoking mirrors in this—that if, in some respects, marginal changes could be made to the conduct of business here, then it would be possible to

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meet many more demands. For example, if—I should not say "if" because it is history now—the Sexual Offences Bill had been considered in Grand Committee rather than on the Floor of the House, I should have been coming to the House now to say, "Can we rise for the summer Recess a little earlier than anticipated?" Whenever I say anything such as that, I am told, "Oh, you are threatening the House". I hope that noble Lords will believe me when I say that I am not threatening the House; I am simply presenting the dilemma that I have to work daily to resolve.

I simply urge the House to give some consideration to the fact that there are many demands on the precious prime time spent on the Floor of the Chamber. This is half our Parliament. Perhaps we should consider carefully whether major debates on Select Committee reports and other issues of that kind are better held on the Floor of the House and whether it would be possible to move more Bills into Grand Committee. However, I am getting into deep waters and shall keep quiet.

The Lord President of the Council (Lord Williams of Mostyn): My Lords, I have the impression that we have now discussed these issues sufficiently.

CAP Reform

3.54 p.m.

Lord Whitty: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Secretary of State for Environment, Food and Rural Affairs. The Statement is as follows:

    "With permission, Mr Deputy Speaker, I wish to make a Statement on the outcome of the final negotiations on the reform of the common agricultural policy, which concluded in Luxembourg at 6.35 this morning, UK time.

    "We approached the negotiations with two clear objectives: first, to get the best settlement we could for UK farmers, consumers, taxpayers and the environment; and, secondly, to get an agreement which could lay the foundations for a successful outcome at the WTO negotiations in Mexico later this year.

    "In pursuit of these objectives, we set negotiating goals: to simplify the CAP, reducing the burden on farmers; to provide for a substantial shift of support from production to a wider range of rural and environmental activities; and to give the EU a strong negotiating stance in the WTO negotiations that reach a key point in Cancun in September. I am happy to say that the agreement today delivers what we wanted—real change.

    "The key points are: breaking the link between farm subsidies and production in order to reconnect farmers to their markets, reduce damaging environmental impacts and reduce bureaucracy—this is at the heart of our approach to sustainable food and farming; cross-compliance to make

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    subsidies dependent on meeting standards in key areas, such as environment and animal health and welfare; support prices for butter and rice are reduced, bringing them closer to world prices to the benefit of consumers; and there is a new financial discipline, which will trigger action to reduce subsidies if CAP expenditure looks to be in danger of exceeding the agreed ceilings.

    "Today's settlement includes elements that were not even in the January package and therefore, in some respects, it goes beyond the initial proposals. The first is national envelopes, which will allow us to develop targeted schemes to promote sustainable and environmentally friendly farming. Secondly, we have secured a further switch of resources to the second pillar and an earlier start date for modulation. The second pillar package that we have secured is more than a third larger than was available in the January proposal. For the first time, modulation applies on an EU-wide basis, switching support from production subsidies to targeted support for environmental and rural development objectives across the European Union. Thirdly, we have succeeded in protecting UK farmers from the immediate threat of an unfair settlement as part of the financial discipline process. I will be placing a detailed summary of the agreement in the Library of the House, and I wish Members happy reading.

    "The most radical and most important element in the package is the new single farm payment, which we can use to replace the plethora of existing direct payment schemes, such as arable aid, suckler cow premium, beef special premium, slaughter premium, extensification premium and sheep annual payment premium, to name but a few. This will greatly simplify the bureaucracy associated with all those schemes. But, more importantly, because that payment is no longer linked to production, farmers will be free to produce for the market rather than the subsidy.

    "Farming, consumer and environmental interests have all strongly supported a move of this kind. We will, of course, consult on the detail of how to proceed, especially with use of the national envelopes and the important new provisions for cross-compliance.

    "Decoupling is also particularly important in the WTO context. This deal enables the EU not only to meet but to better the domestic support targets that have been proposed in the WTO negotiations. These reforms will reduce the distortions in world markets that the CAP has caused and will accordingly contribute to a successful conclusion of the Doha development round. I hope our trading partners will recognise the scale and importance of this change and respond positively to it.

    "Reaching this agreement has taken an immense and united effort, and I want especially to thank our dedicated team of officials, my many Cabinet colleagues who have actively engaged in support of our discussions, and of course our colleagues in the devolved administrations, who have been closely

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    involved throughout. It shows what we can achieve by working constructively with colleagues in the Agriculture Council. In particular, I want to pay tribute to Franz Fischler, who showed considerable courage and tenacity in piloting through this agreement.

    "It is hard to over-state the importance of this morning's agreement in transferring the core elements of the CAP and laying down a new direction for its future evolution. Giorgios Drys, who has done an excellent job piloting the council through these negotiations, said that we needed to get agreement for a new CAP—and we have".

My Lords, that concludes the Statement.

4 p.m.

Baroness Byford: My Lords, I am grateful to the Minister for repeating the Statement made this afternoon. I should like to record our gratitude to Mrs Beckett for so quickly returning to the House after the agreement was reached.

The agreement, while welcome, falls short of some of the original proposals. Three weeks of wrangling have ended up in a fudged compromise. I ask that government time be allocated to enable the House a full debate on the details and the implications of the agreement, once the details are fully known. As the Statement has shown, it really is a skeleton at this stage; I do not accuse the Minister of that—it is a fact. We must wait to see the further details which will arrive in the Library later.

We welcome the move on decoupling, which should reduce market distortion—although I understand that up to one-fifth of the modulation money may return to the European pool to be used as the Commission decides. I ask the Minister whether objections were raised to this. This would surely favour smaller, continental farmers and disadvantage UK farmers. That cannot be right; we must look closely at what is proposed.

As regards the environment, the receipts from the EU-wide modulation may be insufficient to put in place the recommendations made in the Currie report. Does the Minister accept that this is a possibility? If so, how will the Currie recommendations be achieved?

I am concerned that the implementation of the whole package has been delayed until 2005 and that some countries have the option to delay it further, until 2007. I trust that the Government fought strongly against this, but we on the Conservative Benches find it unacceptable. Does not the Minister accept that the compromise which gives other countries options to maintain links, at least in part, with production, could lead to market distortion? Might it not also disadvantage UK agriculture and—more importantly—developing countries?

Does the Minister accept that it is likely that the UK will lead the reformers? Will he ensure that we will not be losers as well, should the Government not ensure a fair deal for UK farmers?

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We welcome in the Statement the aim to simplify CAP and reduce the burden—especially that of regulation—on farmers. We also look to see where the EU will give a strong stance in the WTO negotiations. I believe that that has been half achieved, although if we had managed a full swing of all countries at the same time, we would have had a stronger stance in Cancun in September.

The Statement defines clearly that,

    "there is a new financial discipline which will trigger action to reduce subsidies if CAP expenditure looks to be in danger of exceeding the agreed ceilings".

I ask the Minister what is anticipated, and how that will be achieved.

The Statement also deals with the question of national envelopes. Is the Minister content that the national envelope scheme envisaged will in fact allow fair competition between existing EU countries and those who will shortly join us?

As regards farming, consumer and environmental interests, the Minister said,

    "We will, of course, consult on the detail of how to proceed, especially with the use of national envelopes and the important new provisions for cross compliance".

Could the Minister give us some steer as to the timetable envisaged?

Further on in the Statement, the Minister declares that,

    "I hope our trading partners will recognise the scale and importance of this change and respond to it positively".

We do too, because it is hugely important that at the WTO talks, we get the EU's move recognised and taken into consideration.

In placing the detailed summary of the agreement in the House of Lords, will the Minister remember our desire to fully debate it in parliamentary time. Instead of debating the Hunting Bill, 17th July might be an appropriate time to do so.

4.5 p.m.

Baroness Miller of Chilthorne Domer: My Lords, we on the Liberal Democrat Benches welcome the news of success on CAP reform. I congratulate Mrs Beckett and her team, and the noble Lord, Lord Whitty, too—not only for the outcome, but for their tenacity and hard work. I also record our gratitude to Franz Fischler, because he in particular should take great credit for having stuck with what must at times have seemed a thankless task.

We have as good an outcome as could be expected at this stage. We especially welcome decoupling. Future success depends heavily on how we choose to implement this at national level. An early debate in the House would be helpful, but I would also welcome comment from the Minister today as to the time-scale and extent of the consultation.

I especially welcome the greater-than-expected success in switching resources to the second pillar. Rural communities in Britain will be extremely thankful for that. One area that concerns me and which we should get right, given that we have

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discretion for them, involves young entrants to farming and young farmers who will inherit their families' farms. We must make sure that whatever system we devise is truly encouraging to them. It is no good to look to the future for a vibrant farming sector if no one really wants to go into it.

We should look also to the processing and marketing chapters. I particularly welcome what I understand to be a much-enhanced food quality and national assurance scheme effort and that producer groups will be able to make progress in promoting their products.

I would like the opportunity to debate all that detail in the House—especially in the light of the contribution of the noble Lord, Lord Haskins, to our countryside debate the other day. While I am sure that he will be able to streamline rural delivery, it cast a slight chill into my heart to hear that he is still looking at too great a scale of farm, and that his vision of our future is not based on the small, family farms that are so crucial, not least to our management of landscape. All noble Lords will remember, as I do, the importance of that link between farming landscape and tourism, and the contribution of tourism to our national economy.

I welcome this progress; it gives us a brighter future to work towards. I feel much more optimistic now that we can go to the Cancun round of the WTO with our heads held higher because Europe has kept faith with the rest of the developing world. It is now clearly incumbent upon the United States to review their farm subsidy system, which is out of line with the rest of us, and to do something about it.

4.9 p.m.

Lord Whitty: My Lords, I thank the noble Baronesses for what is on balance a substantial welcome for what has been achieved in Luxembourg—not just overnight, but over months of bilateral, multinational negotiation.

I was slightly taken aback by the noble Baroness, Lady Byford, calling this "a fudged compromise" at the beginning of her remarks which ended up by being extremely welcoming and welcome.

A fudged compromise is the last thing this is. It is a clear, strategic shift after 50 years of CAP away from wasteful and often environmentally damaging production subsidies towards a system that sustains our countryside and allows farmers to produce for the market and not for the subsidy. This is a dramatic and historic change and one which should not be underestimated.

There are a few compromises at the edges. We needed to make them in order to reach the deal. That was always going to be the case. But in many respects, we have a better deal not only than anyone expected but than appeared to be the case in terms of Commissioner Fischler's proposals in January. Much of that is down to the good working between ourselves, the Commission and the agriculture Ministers of those countries which supported reform.

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It is also important to note that throughout the process we have received the support of the major farming unions within the United Kingdom. That was a great strength to us and, if I may say so without disparaging continental counterparts, a great example to some of them.

The noble Baroness, Lady Miller, asked a number of questions. She asked about the modulation and the 80 per cent. Clearly, there is some skewing towards the protection of smaller farms. That was always going to be inevitable and it is much less than appeared to be the case at one point. And we get at least 80 per cent of that money back, which is considerably more than looked guaranteed. We can get more than that, but we are guaranteed to get 80 per cent back as compared with the current situation. Under the existing second pillar, under which we got back only 3.5 per cent of the money spent, the United Kingdom will get back a minimum of 11 per cent. That is an extremely substantial improvement for us.

The noble Baroness also asked about the date of 2005 as distinct to 2004. When we set out on the negotiations it was intended that we start in 2004 but, as they have taken somewhat longer than originally hoped, it is sensible to allow enough time. We do not yet have the legal regulations laid and we need to set up the new administrative systems for the operation. The sensible date seems to be 2005, and the United Kingdom ultimately supported that.

We were not happy about some countries having the opt-out to 2007, but that, too, was part of the final compromise. Far from that being to the disadvantage of UK farmers, it will mean that UK farmers are into the new system ahead of those countries which foolishly choose to delay the implementation of the new system for another two years. We will be operating in a more market-oriented and environmentally effective system before what I believe will be a minority of countries which used to take advantage of that delay. In so far as there are market distortions, their effect will benefit UK farmers who will be operating more as commercial farmers as against the minority of continental country farmers who operate differently.

In terms of the WTO effects, we believe that this puts the European Union in a strong position in relation to our trading partners and, far from the EU delaying the opening up of trade to developing countries, a successful outcome to the Doha round is a major and significant shift of the EU position which should make those talks a success. Part of that success, as the noble Baroness, Lady Miller, indicated, will be that the United States moves in the same direction. The United States, as distinct from Europe, has been moving in the wrong direction over the past few years in relation to domestic farm subsidy. It now needs dramatically to reverse that position to make its contribution to a positive outcome and Cancun.

Financial discipline relates to digressivity and the fact that we now have ceilings on the total expenditure. The arrangements from 2007 will be introduced and once expenditure gets within 300 million of that ceiling there will be a cap on particular forms of

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expenditure. Therefore, we cannot have a repeat of the situation we occasionally experienced with the CAP, where expenditure gets out of hand.

The national envelope is beneficial to us and we can use that flexibility and subsidiarity to the advantage of the UK countryside for our particular purposes. It provides the flexibility we are seeking and does not disadvantage the UK, as some are suggesting. There will be consultation on that and on many other aspects of the agreement, beginning almost immediately and intensively once we have tabled the regulations from the Commission. We have some time to get this right and I am sure that the farming organisations, rural interests, the environmental organisations and others will wish to be involved in those discussions.

As the noble Baroness, Lady Miller, said, one of the most important aspects of this is the increased importance of the second pillar. It is significantly larger than appeared likely at the beginning of this year. It will enable us to expend what have previously been production subsidies in a way which benefits the whole countryside and its environment.

The noble Baroness was right in saying that part of the agreement needs to be directed at making farming attractive as a commercial and profitable enterprise. Some of the provisions under the second pillar will help government to do that, but the UK Government are already committed under the post-Curry strategy, to support the industry in developing assurance schemes, processing and marketing, the development of producer groups and so forth. This move at EU level will help sustain that position, too.

Both noble Baronesses referred to the question of debating the matter in this House. I could not possibly comment on the specific suggestion that the noble Baroness made in relation to a certain date in July. Clearly, the usual channels will need to consider that. We have had a recent important debate on CAP in this House and we will have to consider whether we should do so again and at what point that would be appropriate.

I thank the noble Baronesses for their comments and underline the unity of purpose across not only government and the farming organisations, but also environmental bodies and industry at large because of its interest in the wider trade round. The United Kingdom has acted as a collective entity on this occasion and the comments in this House reflect that.

4.18 p.m.

Lord Harrison: My Lords, I want to take my cap off to this CAP reform and in so doing to thank two individuals in particular. First, I thank EU Commissioner Franz Fischler, who to my certain knowledge has attempted to resolve the issue for some six, seven or eight years. Secondly, I thank our own Secretary of State, Margaret Beckett, and her team who have tirelessly worked to ensure this success in the face of criticism from the press and "Farming Today" and others who despaired of her achieving this wonderful outcome. It will be a good outcome for

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farmers, for the environment and for developing countries because it enables us to hold our head high in the WTO round.

Will my noble friend accept that one other huge benefit accrues from this agreement? It is that for those of us who want to support the Government in their pro-European stance, which was announced by the Prime Minister and so proselytised, the biggest blot on the landscape for too many years has been a failure to reform the CAP. That is now being done and it is a tremendous plus for Britain and Europe.

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