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Lord Bach: My Lords, the job of the presidency and the Commission in this case—the presidency's purpose is to assist the Commission to reach an agreement—is to keep a sensible balance between the needs for human health and those of the environment, which perhaps have not been taken seriously enough in the chemicals field up to this point; and to make sure that the chemicals industry in Europe, which employs hundreds of thousands of people, is able to continue to do the work that means that people can lead better lives.

The Countess of Mar: My Lords, while I would be the first to acknowledge that chemicals have saved a lot of lives in the world in recent years, they have also damaged a lot of lives. Will the shenanigans that went on in the European Parliament last week—when the views of the chemical companies clearly dominated those of human health and the environment—not carry through to the final decision on REACH?

Lord Bach: My Lords, I do not often disagree with the noble Countess, but on this occasion I do. I was in
 
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Strasbourg for two and a half days last week, and can promise her I saw no shenanigans whatever. What happened over those two and a half days was that when the voting came, the decision of the European Parliament was in line with what the Commission wants and what member states want. If anything, the differences were—as I said to the noble Baroness—in the direction of more environmental concerns as far as authorisation was involved. There has certainly been no giveaway to the chemicals industry or anything else. At the moment we are on track for a balanced agreement that everyone should be proud of.

Lord Hylton: My Lords, has there been any progress in replacing methyl bromide in horticulture, and in preventing the routine use of antibiotics in animal feeding stuffs?

Lord Bach: My Lords, I am afraid I cannot tell the noble Lord the answer to that question, but of course I will write to him with it.

Lord Turnberg: My Lords, if the welcome proposals in REACH are pursued fully, will they not result in an enormous increase in the amount of animal testing? This would be problematic.

Lord Bach: My Lords, it is certainly an issue. One of our key objectives in the UK for REACH is to ensure that animal testing is kept to a minimum. Although REACH will, as my noble friend says, mean an increase in the number of substances that would need to undergo tests, any animal testing will be kept to a necessary minimum through maximum use of non-animal test methods which are being developed at the moment, and through data sharing from the important part of REACH that we introduced—one substance, one registration. Data sharing means that animal testing will not have to be duplicated.

Lord Pearson of Rannoch: My Lords, what estimation of the cost of the REACH directive is there, both in its human form and animal application?

Lord Bach: My Lords, I cannot give the noble Lord any costs. If REACH is effective, is passed and becomes the norm, there will be a huge improvement in the way we—the EU—approach the chemicals industry. This is a problem that has concerned both industrialists and environmentalists for many years. If we continue as we do, the costs will be very high.

Baroness Miller of Chilthorne Domer: My Lords, if we are going to discuss the question of cost, is not the cost to the National Health Service here and to the health services in every other country enormous, in terms of rising cases of all sorts of things associated with hazardous chemicals?

Lord Bach: My Lords, of course there are risks with hazardous chemicals that affect the cost of the National Health Service. The whole point of REACH is to make sure that we get the right balance.

 
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Common Agricultural Policy

2.58 pm

The Earl of Dundee asked Her Majesty's Government:

When they expect their current proposals for further reform of the system of agricultural subsidies and food import tariffs to be implemented.

Lord Bach: My Lords, the European Commission's proposals for reform of the CAP sugar regime are being negotiated this week. The commission has also made a conditional offer on reducing agricultural subsidies and import tariffs as part of the World Trade Organisation negotiations. Under the EU future financing negotiations, the Government have proposed a debate on the whole EU budget, including the common agricultural policy, leading to a review in the next few years. Implementation dates will of course depend on the outcomes of each of these negotiations.

The Earl of Dundee: My Lords, I thank the Minister for his reply. Does he accept that the European Union's current failure to deal properly with high agricultural tariffs presents a major threat to wider trade prospects with developing countries? In the latter context, what balance will now be struck in a reform of sugar prices in Europe, to which the Minister referred, and in cotton prices in the United States?

Lord Bach: My Lords, on the noble Earl's first point, I agree that dealing with the distortions that the CAP system has set up puts at risk the wider world considerations. But I remind the noble Earl that a great deal has been done to address some of the worst aspects of the common agricultural policy. The reforms of 2003 and 2004, introducing the single payment scheme for farmers and breaking the link between the bulk of subsidy and production, is a great improvement for Europe and particularly for farmers in the UK. It is likely to make them much more competitive than they have been in the past.

I am afraid that I am not in a position to answer his second question about the link between sugar and cotton in the United States. All that I can say is that the sugar regime is one of the most outrageous examples of the subsidy system and has gone on for much too long.

Lord Barnett: My Lords, I ask my noble friend to ignore the advice recently given by the noble Lord, Lord Lawson of Blaby, and indicate—as I hope we have indicated—that we would be willing to phase out our rebate, provided that there was a complete phasing out of all the food subsidies.

Lord Bach: My Lords, I can only repeat what my noble friend Lady Royall said from the Front Bench a few minutes ago. We agree that the abatement is an anomaly, but it arises because of another anomaly caused by the imbalances on the expenditure side of the current budget. The Prime Minister has made it clear that if there were a serious effort to correct those
 
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imbalances the abatement would be on the table. I cannot do better than to quote my right honourable friend the Foreign Secretary who said, on 1 November:

"The current abatement is an anomaly, but it is an anomaly on an anomaly, and the most profound anomaly is the structure and funding of the common agricultural policy".—[Official Report, Commons, 1/11/05; col. 708.]

Lord Livsey of Talgarth: My Lords, does the Minister agree that, in the light of the reforms which he referred to that took place in 2003, with single farm payments coming in only this year, the fact that the sugar regime is about to be radically reformed and that we can go to the WTO in Hong Kong in early December sure that the reforms that we have already made will make an impression, it is time for the agricultural industry to settle down and absorb those reforms before further reforms take place?

Lord Bach: My Lords, the reality is that the reforms that are proposed will not come into force for some time. We have asked for a review during the middle of the next financial perspective. If the noble Lord is saying that agriculture is going through a time of tremendous change and difficulty, I of course agree with him. I very much admire the way in which individual farmers and the National Farmers Union are reacting to what are, in some cases, difficult changes.

Lord Williamson of Horton: My Lords, while I strongly support the need to move forward on agricultural reform, does the Minister agree that the enormous changes in the use of the EU budget away from intervention measures towards direct payments to farmers, linked to environmental and similar objectives, are well under way, and that the Government are to be congratulated on that? The Government should not hide their light under a bushel; they should let it shine out on the noble Lord, Lord Pearson of Rannoch, and elsewhere. Would the Minister confirm that that is the situation, and that, because of the changes, the great majority of the budget goes on direct payments, while a very small percentage of it goes on market intervention, export subsidies and so on?

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