Select Committee on European Union Thirty-Seventh Report


Department for Environment Food and Rural Affairs Response

    1.  The Government welcomes this Report. It is timely to have the support, thoughts and recommendations of the Committee on Defra's priority areas for the UK Presidency of the EU.

    2.  Since the report's publication, Defra Ministers and officials have begun chairing Councils and Working Groups in the capacity of the Presidency. Some of these concentrating on the work areas discussed in the Select Committee hearing.

    3.  Also, in September, Defra hosted a successful joint Environment and Agriculture Informal Council event in London attended by EU environment and agriculture Ministers (the first time such a joint event has been held) The theme of the meeting was the relationship between climate change and agriculture, focussing on the significant challenges and opportunities that climate change presents to European agriculture.

    4.  It is hoped that the knowledge sharing and goodwill garnered from this event will help with the smooth running of Defra business in the EU during the UK Presidency.

    5.  The Government responds as follows to the Committee's recommendations.


Financial Perspective negotiations

  We agree that the emphasis should be on the rural development schemes, and we consider such spending should be focussed towards the new Member States. As stated in our earlier report, we strongly recommend that rural development funding under Pillar 2 of the Common Agricultural Policy should not suffer as a result of restrictions on the EU budget as a whole. Regarding Pillar 1, to re-open the Brussels ceiling now would create further instability in an already complex negotiation and we therefore do not believe that the agreement should be re-opened.

    6.  The Government acknowledges the importance of adequate funding for rural development, and, amongst other things, has argued for further transfers of resources from Pillar 1 to Pillar 2. A budget which allows for the continuation of the current levels of pillar 2 expenditure would be affordable, provided sufficient reductions were made elsewhere; and we have argued that any increases in rural development spending could be funded by reductions in agricultural subsidies. The Government notes that the Commission's proposed rural development budget of €88 billion already represents a substantial increase over current levels of expenditure in the EU 25.

    7.  The Government believes that consideration of the Brussels ceilings needs to be handled with care, in the context of decisions about the whole EU .budget. The Government does not believe that the EU should spend 40% of its budget on the CAP, and believes Europe cannot wait 10 years or more for change. The October 2002 agreement was part of a package that paved the way for enlargement and for the beneficial CAP reforms which have happened since. It was explicitly agreed "without prejudice to future decisions on the CAP and financing of the European Union after 2006" and set ceilings, not targets for expenditure. The Government does not believe a new Financial Perspective should be agreed that does not at least set out a process that leads to a more rational budget, and that this must allow such a budget to shape the second half of the Financial Perspective up to 2013, including expenditure on the CAP. The debate needs to proceed in an inclusive way and the Government is currently consulting other Member States on their views about the budget.

Sugar sector reform

  We support the Government's determination to bring the sugar reform into line with the general reform of the Common Agricultural Policy. Reform of this sector is long overdue, and will be inquiring into this subject in the autumn.

    8.  The Government has noted the Committee's views on sugar sector reform. Liberalising the outdated and protectionist EU sugar regime is an important element of our efforts to reform the Common Agricultural Policy and is a top priority for the UK Presidency. Reaching agreement at the November Council, as the Commission wants, is a challenging timetable, but we will do all we can to help meet it.


  We were pleased to hear that the Government recognise the critical importance of viewing fishing within the context of the wider marine environment. We urge the Government, during their Presidency, to ensure this approach is accepted by all Member States and informs the debate in the Agriculture and Fisheries Council.

    9.  There are a number of issues that will come before the Agriculture and Fisheries Council during the UK Presidency that deal with the conservation of fish stocks and the marine environment. These include a number of recovery and management plans for certain fish stocks and proposals for management measures for the sustainable exploitation of fishery resources in the Mediterranean Sea. The Committee will wish to note that on the 20 September the Council adopted a regulation to protect deep water coral reefs in the seas around the Azores, Madeira and the Canary Islands.

    10.  We also hope to be able to hold some discussions on progressing the Marine Thematic Strategy during our Presidency. However, this depends on the timing of the package issuing from the European Commission, and to some extent on its content, including whether there is an adequate impact assessment as a basis for debate. These are matters for the European Commission rather than the Presidency.

  We were pleased that the Government have pledged to ensure the handling of fisheries proposals is "better managed" in order to improve the scrutiny process in advance of the December Agriculture and Fisheries Council. We will work with Defra to ensure this is achieved.

    11.  We acknowledge that the speed with which proposals have hitherto had to be adopted as a consequence of the December Council process, has meant that they have not been given adequate consideration from a scrutiny perspective. Improvements in the scrutiny process have therefore been a particular priority for our Presidency. We have encouraged the Commission to develop its "front-loading" agenda by bringing forward discussions on a range of subjects which would otherwise have made the December agenda all the more congested. Minister Bradshaw will also chair a discussion at the October Council, which will consider changes to the fisheries calendar in order to provide for more time between the circulation of proposals and their ultimate agreement and application. In addition, at a practical level, we will continue to keep the Committee informed on progress on the various dossiers, in particular, by forwarding to you the key Commission documents as they are released.


  We were encouraged by this and urge the Government to do all they can during the Presidency to improve National Allocation Plans for the next stage of the EU ETS.

    12.  The need for clearer and more detailed guidance from the Commission on preparation of NAPs is a key priority for Phase II. This would ensure that the Commission and Member States are provided with the necessary information to undertake robust, transparent and consistent assessment of the NAPs, specifically, Member States progress towards Kyoto target. The Commission have committed to producing revised guidance in the final quarter of 2005, and the UK will continue to work with the Commission to ensure that views are taken into account, particularly on the content of the document. From a UK perspective, it is crucial that the timetable is met in order for revised guidance to be fully taken into account in the development of Phase II NAPs.

    13.  The Government launched a public consultation on 19 July on the development of the National Allocation Plan (NAP) for Phase II of the EU Emissions Trading Scheme (EU ETS). This consultation seeks views on whether the UK should extend the Scheme to include additional sources of carbon dioxide (CO2) emissions from existing sectors, and to include CO2 emissions from new sectors.

  The Committee supports the Government's goal of trying to deal with the environmental impact of aviation emissions as soon as possible. We reiterate our earlier recommendations that emissions from intra-EU flights be brought into the EU ETS at the earliest possible opportunity.

    14.  Aviation is making a growing contribution to climate change and we should ensure that industry takes its share of responsibility for tackling the problem. Emissions trading uses market forces to deliver real environmental benefits in the most cost effective manner.

    15.  The Government's March 2003 report, Aviation and the Environment: Using Economic Instruments set out our approach to developing policy and the Government's principal of sustainable development for aviation: that a proper balance should be struck and maintained between economic, environmental and social considerations; and within this framework that aviation should pay its external costs. As a result of this, the Future of Air Transport White Paper (December 2003) sets out the UK Government's intention to continue to press for the development and implementation of a well-designed, open international emissions trading regime for aviation through ICAO.

    16.  But it also sets out the Government's intention to press for the inclusion of intra-EU air services in the forthcoming EU emissions trading scheme, and to make this a priority of our Presidency of the EU in 2005. Our aim is for aviation to join the EU Emissions Trading Scheme from 2008, or as soon as possible thereafter. However, we recognise that this may not be a total solution and will continue to explore and discuss options for the use of other economic instruments. We plan to use our Presidency of the EU Council of Ministers to debate the options and agree a way forward.

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