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The French are a little bit more rational about this sort of thing—or self-interested, depending on your point of view. The French Minister Michel Barnier is on record as opposing any reform to the CAP. Using food security as an excuse for more protectionism, he has gone as far as suggesting—I think I saw this in the Financial Times—that the CAP should be taken out of the Doha round of the WTO talks. He is on record as saying that the CAP is a good model and that the CAP should return to its food production subsidies. Do the Government agree with Mr Barnier or do they think that the N in his name should be replaced with an M and agree that it is absolutely barking mad to spend 45 per cent of the EU budget on the 5 per cent of the population that produces 3 per cent of the EU output? I should like some idea of whether the Government think it is still a very good idea to spend this sort of money.

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The noble Lord, Lord Taylor, asked where the Government are on all this. I have news for him—the debate is going on without us. A report in the Times on 26 April noted that Germany is backing French proposals to maintain direct agricultural subsidies after 2013, which is when Britain and some other more market-minded EU member states want total reform of the CAP. The German Minister of Agriculture, Herr Seehofer, said:

He did not see how this could be done,

Absolutely no surprise, then, that Germany has joined France in opposing the concessions on farm subsidies that Mr Peter Mandelson, our very own Trade Commissioner, is proposing to make at the Doha round. That is now being opposed by the French and German Governments. I do not know whether the British Government are in a strong position to argue that one through and get their way.

The French press agency, AFP, tells us that Berlin and Paris are ready to join forces in opposing British attempts to reform the CAP. This is welcomed by a spokesman for the European Commission, who said:

Note that they did not say that it is always good for Britain. For those self-deluding British politicians who for years have been telling us that Europe is going our way, this must be something of a wake-up call. This is state intervention and state protectionism all rolled into one—these so-called reforms of the CAP which are being opposed by France and Germany, which have always called the shots. But this is the CAP, invented as a conduit for pouring money into French agriculture. It is entirely predictable that the Franco-German motor is exploiting a perceived food shortage to continue to advance an agenda which has existed for decades and which shows no signs of running out of energy or of money, even if it is our money.

These are the CAP chickens coming home to roost at last. Successive Governments have handed over our agricultural, farming and food policies to the European Union. We are now at the mercy of the Commission, the European Parliament—if this treaty goes through—and the Council of Ministers.

I speak now not as a swivel-eyed Europhobe but as an advocate for the Government’s position, as I understand it from today’s Financial Times, which says that the Chancellor, Alistair Darling, wants to scrap EU external tariffs, which inflate prices for commodities such as beef and dairy products, and end all direct payments to farmers. The FT quotes him as saying:

Mr Darling is right in saying that, but it does not end there. He goes on to say that the CAP costs consumers in Europe billions of pounds a year in higher food bills while hurting farmers in the developing world. The German Agriculture Minister has dismissed that as “complete rubbish”. Do the Government agree with Mr Darling, the Chancellor, or with the German

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Agriculture Minister that the reforms of the CAP that Mr Darling is proposing are complete rubbish?

The amendment is sensible. It is crazy that the Government can support the idea of giving the European Parliament, which is currently mired in sleaze—brilliantly exposed by the Liberal Democrat MEP Chris Davies, and I am still waiting for a tribute from the Liberal Democrat Front Benches to his energy and bravery in exposing that corruption—any role at all in a co-decision on the CAP. It has historically been against reform, as the noble Lord, Lord Taylor, said, and has blocked it, so to allow this to go through would be completely crazy.

This is a classic argument for getting out of the mess of the EU. We are never going to get anywhere on agricultural reform while we remain bound to the ruinous, discredited policies of the CAP.

Lord Teverson: I warmly welcome the thanks of the noble Lord, Lord Willoughby de Broke, to Chris Davies, who is indeed doing important work on the way that expenses work in the European Parliament, much as many of my honourable friends are doing in the House of Commons. The expenses regime in the European Parliament, as in the House of Commons, needs to be changed and made transparent; I agree with the noble Lord on that. I was with Chris Davies MEP at the end of last week and congratulated him on his good work.

We agree on all sides of the Committee that there needs to be continued reform of the common agricultural policy. As the noble Lord has said, the Government themselves have a fairly radical agenda in that area. It would be useful, though, if we got some of the historical facts and the context right at the same time. First, the common agricultural policy is, wrongly, a huge proportion of the total EU budget. It has gone down—currently it is around 40 per cent—but it is important to remember that the EU budget is something like 1 per cent of the total EU GDP, which makes agricultural support throughout Europe from all nation states something like 0.5 per cent of GDP. That is probably significantly less than in some areas of industry where the single market, competition policy and state subsidy have not worked well enough.

I agree with a number of the criticisms that the Conservative Front Bench made of the single market and its inability to complete the process that started some time ago. That needs to continue. We have to accept that if we are in a single market for agricultural produce, the last thing that I would want for farmers in my area, the south-west, is greater inequality in subsidy between agricultural regimes. Within a single market it is quite clear that states such as France and new states in eastern Europe would subsidise agriculture far more than any UK Government ever would. That would be to the direct detriment of British farmers.

8.45 pm

There is another area, which we have to put in some context. All of us would probably agree that the reforms of the CAP have not gone far enough, but

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let us not mistake the fact that the changes that happened through Agenda 2000—and all the other changes that took place when the current policy came in, in the early 2000s—were major changes. The European Union has moved substantially away from production subsidies, to other areas in terms of environmental cross-compliance and rural policy. All of us, particularly on these Benches, would agree that that process has not gone far enough, but to say that there has been no reform of the common agricultural policy would be absolutely wrong. What we do not have now, in terms of the food security issue, are grain mountains and butter mountains. With the change of the Common Market organisation on wine, a number of those areas are changing as well. Do they go far enough? No, they absolutely do not. I think we would all agree with that. While there is a single market, and some payment to farmers, I would be interested to know if other political parties are advocating a total free market in agriculture, with no subsidies whatever. If that is the case, they should make that very clear in their manifestos at the next general election, whenever that is.

I am particularly struck by the Conservative Front Bench view on the involvement of Parliament in the common agricultural policy. From the standpoint of the noble Lord, Lord Willoughby de Broke, the European Parliament is probably an institution beyond redemption because of corruption, so he would have a valid argument. I cannot understand why any party that fundamentally agrees with democratic accountability would not agree that something as central to the European Union—outside the areas that are always exclusive for policy, such as defence and foreign policy—should not be part of the European Parliament’s serious responsibility. That denies democratic accountability; it denies the fact that there is no taxation, or expenditure of tax by budgets and institutional budgets, without democratic accountability. I cannot see how you get away from that.

Lord Willoughby de Broke: The noble Lord may have made a small mistake; he may have confused me with a Member on the Conservative Benches. Of course, I am not. I am UKIP. The noble Lord, Lord Lamont, has asked me to make that clear, which I do with great pleasure. Secondly, I do not see why the European Parliament should have a role at all in democratic accountability. It is not its money. It is our money that is being disposed of, so cavalierly, by the Commission and, under these proposals in the treaty, by the European Parliament. The European Parliament has nothing to do with it at all.

Lord Teverson: I agree absolutely with the noble Lord about that: taxpayers’ money is exactly that. It is taxpayers’ money, whether it is that of the Exchequer within the United Kingdom, or at the discretion of the Scottish Parliament or that of the European Parliament and European institutions. Clearly, the money comes from us as individuals, whether as businesses or other legal entities. I think that we agree on that. It is true at UK Parliament level and at European Parliament level.

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I believe strongly that there needs to be democratic accountability at European level. The European Parliament is a great institution. It is not a perfect institution by a long way, as the noble Lord said. During my time as an MEP, I remember that the noble Lord, Lord Tomlinson, was one of the most effective MEPs, especially with regard to the Committee on Budgetary Control, calling to account the expenditure that we are discussing. It is absolutely wrong that some 40 per cent of the European budget is not fully accountable to the European Parliament. That will change under the treaty of Lisbon.

There is a real issue about the agriculture committee, which is chaired by a Conservative Member of the European Parliament, Neil Parish, and any criticism of that committee must reflect on him. If you do not give a committee of a Parliament any real power, you should not expect it to attract the most competent MEPs. It will not exercise authority because it does not have great authority. The same is true of the committee on fisheries, of which I was a member. Perhaps I was not the right person to undertake that task. We need democratic accountability. It is not just about committees driving decisions. All committee decisions on legislation, and certainly on budgetary matters, are examined in different areas but all come before the Parliament. I do not believe that the European Parliament holds the agriculture interest groups in particularly special regard. This change in the way in which Europe works will result in greater democratic accountability and greater accountability of the agriculture budget.

As I said on Second Reading, if any European Union institution acts behind closed doors and in a non-transparent way, which is to be changed under this treaty, it is the Council of Ministers, where even in legislative session deals can be done that are not made public. That will change and this whole area of agriculture and fisheries will become far more transparent and accountable. Better decisions will be made. It may take time but I am sure that these bodies will become far more democratically accountable than they are at present.

Lord Tomlinson: It is a great pleasure to follow the noble Lord, Lord Teverson, to whom I am grateful for his generous personal remarks. He explained the policy areas in the CAP extremely well. I merely emphasise one of his challenges. The Opposition criticise this area, but are they in favour of a complete free market in agriculture or do they see any role for subsidies? If they are in favour of subsidies, should they all be done at the national level or is there room for a European Union subsidy, albeit of a different nature to what we have today? The one thing that is absolutely clear—

Lord Willoughby de Broke: May I—

Lord Tomlinson: No. I listened with great patience to the noble Lord and I shall not give way at the moment. I have hardly said a thing and I am not giving way. This is far too frequently being turned into a dialogue involving only whichever UKIP

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Member happens to be walking around, leaping up and thinking that he has inquisitorial rights in the Committee. I am not prepared to concede to them.

The point that I was trying to make is that nobody in this House defends the CAP as it stands. It is clearly not a sensible mechanism with which to organise European agriculture. It was a sensible mechanism in the days when the treaty of Rome was written, when the greatest geopolitical problem that Europe had was the security of its food supplies. As we moved towards self-sufficiency commodity by commodity and failed to change the CAP, it became a less and less relevant way of organising European agriculture.

However, whether we should support the CAP today is not the question in the amendments. The most important question being raised in the amendments is whether there should be a role for the European Parliament. One of the important things that the treaty of Lisbon does is abolish the distinction between compulsory and non-compulsory expenditure. As soon as that happens, for the first time ever a real power is being given to the European Parliament, which has been able to indulge in every sort of unaccountable nonsense discussion because it had no power whatever over non-compulsory expenditure. In the debate so far, we have failed to realise that the people who have had the exclusive priority of determining agricultural policy—the Council of Ministers—have made a mess of it and have largely to be held to account by a European Parliament that will have equal say over the distribution of agricultural expenditure.

The CAP is not supported by anyone. It needs to be reformed. I believe that the engagement of the European Parliament through the abolition of the distinction between compulsory and non-compulsory expenditure will be the greatest impetus for change that we have before us. In those circumstances, for noble Lords to describe the European Parliament as the last bastion resisting reform—or, as one noble Lord said, as totally against reform—is a caricature of the reality. Once the distinction between compulsory and non-compulsory expenditure is abolished, the European Parliament will see agriculture in contraposition to all the priorities that it espouses—environmental policy, social policy, regional policy and so on—and on which it has been pressing for greater expenditure. It will realise that, with a capped budget, the only way in which it can gain more expenditure on social policy, on common foreign and security policy and on regional policy is by making sure that it exercises its responsibility for adequate controls on agricultural expenditure. That policy will be the driving motor for the necessary change in that area.

Lord Williamson of Horton: I, too, would not wish to see the words “European Parliament and” excluded from the Bill as proposed in Amendment No. 40. I take the view that the European Parliament’s intervention in agricultural matters as a result of changes in the budget system that give it some real power that it did not have before is likely to be positive for changes in the agricultural policy of the Union. I do not take the view that the European Parliament is a wholly conservative body that wishes to retain exactly what we have now. The facility to

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move money between one part of the budget and another will be an important element of the way in which the European Parliament looks at agriculture.

We are out of date in looking at the Parliament as a body that will retain the agricultural policy exactly as it is now. I attended more than 100 meetings of the Agriculture Council and eight marathons normally lasting two or three days and nights and I am still here, but not much change was made in the common agricultural policy in consequence. I would have expected to have a bigger change as a result of parliamentary input. We are out of date and we should welcome parliamentary input.

Finally, it is important while criticising the agricultural policy, as many of us do, to be realistic about one or two of the changes that have been made. There is quite an important change in the agricultural policy, in that it was a market intervention mechanism practically across the board, which pushed up prices to consumers. That happened over many years. That element has practically vanished. If you look at the accounts now, you will see that the amount of money devoted to intervention in the market is extremely low and that there is little intervention in the market.

The gainers are the consumers, who are not penalised as they were in the past by elements of the common agricultural policy. I attach a lot of importance to that; I think that it is just as important as the argument about taxpayers’ money. They are both important points. There is still a heavy amount of taxpayers’ money being put into agriculture—in my view, too much—but the intervention in the market has been sharply reduced compared to the situation before the changes were made. We should recognise that, because it is an important element for our consumers and for others in the European Union.

9 pm

Lord Stoddart of Swindon: The noble Lord, Lord Teverson, challenged the Conservative Party—and others, presumably—to say whether it wants a free market in agricultural products. I think that New Zealand went for a free market in agricultural products and made a great success of it. It may very well be that that is another policy that the Conservative Party will put forward before an election before the Labour Party gets hold of it. As I shall show in a moment when I quote further from today’s report in the Financial Times, the Government seem to be moving in a direction that many of us over many years have urged them to do, although so far they have not gone our way.

The CAP has undoubtedly been a disaster overall. I remember when we were fighting those battles long ago about whether we should join the Common Market that the people who were most in favour of our joining were the farmers. They were in the vanguard. The NFU was a government supporter and helped the Government to persuade farmers, who were much more important then in our economy than they are now, that they should go in. By heaven, a lot of them now regret that decision, because since we joined the common agricultural policy about 500,000 farmers have left the farms and our agricultural

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production is not what it was. It has been a disaster in other ways as well. The Treasury tells us that the CAP costs every family in this country £18 a week more in food costs than they would need to spend if we were not in the CAP.

Lord Hannay of Chiswick: I am grateful to the noble Lord for giving way. I have slightly lost my place in the groupings list; I am a little unclear which amendment he is speaking to. Could he perhaps say? I am not aware that the treaty of Lisbon establishes the common agricultural policy.

Lord Stoddart of Swindon: The one good thing about the Lisbon treaty is that it gives us an opportunity to talk about important things that perhaps we do not tackle too often in our debates. The amendments refer to agriculture and the role that the European Parliament might have in the future, so we are perfectly entitled to discuss it.

We have had many good speeches and the European Parliament has been ably defended by two former Members of that body, but I wonder whether it is worth defending. I refer to the article in the FT today. I have been itching to find something with which to support the Government and this article gives me the opportunity. I will quote three paragraphs. The headline is, “Chancellor fires blast at EU’s farm policy”. The article says:

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