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That is one of the best condemnations of the CAP that I have heard for a long time—and hooray for that. It would appear from what the Chancellor is recommending to his European colleagues that he, too, believes in a free market in agriculture. We are moving together. The Chancellor of the Exchequer, who should know what he is talking about and in my view does, is talking sound sense that many of us agree with—including some on the Liberal Democrat Benches, who are very well disposed to the European Union. It seems that all sides are coming together to the view that the CAP is a ruinous policy—for Governments, for people and for the developing world. We are coming together in the hope that we can get rid of this absurd policy and find a market solution to the agricultural problems that we have, and to the food shortages and price increases that we will face in future, which cannot be found as long as we have the CAP.

Lord Pearson of Rannoch: I also support these amendments, because it does not seem possible that the European Parliament will do anything to improve the common agricultural policy. It is too firmly engaged on the European gravy train to upset its direction and jeopardise the comforts that it enjoys from it.

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Noble Lords may have noticed a quotation in the Times on 21 April, from an unnamed British diplomat who is supposed to be close to these matters in Brussels. He said:

Economically, as other noble Lords have said, the CAP is madness. The Government have said that it costs the average British family about £1,000 a year in higher food costs. We should not forget that those higher food costs come through the increased price of milk, sugar and bread, and hit the poorest hardest.

However, it is beyond our shores that the CAP must be held to account. If we are to believe the Trade Justice Movement, CAFOD and Oxfam, the common agricultural policy has been killing untold numbers of people in the developing world, mostly children, by dumping its unwanted produce on those impoverished people, because they cannot sell their products in their local markets. I have a question for the Minister: have Her Majesty's Government made any estimate of the extent of this suffering? What is the number of people who have been affected in this way in recent years? I accept that US grain subsidies and grain exports compound the problem, but we are responsible for the common agricultural policy, because we are part of the European Union and, therefore, we support that policy.

Then of course biofuels come on top of all this. They are perhaps not strictly part of the common agricultural policy, but the EU, in its absurd quest for environmental change and altering our carbon footprint in the useless pursuit of affecting global warming, is clearly proposing to use land that would be better used for growing food. I say “useless”, because we now know that the planet is cooling down, and will be for at least the next 12 years—maybe the next 50 years. I pray in aid the Hadley curve. Anyway, we are not talking about that now.

A noble Lord: Oh!

Lord Pearson of Rannoch: Well, we have just had the coldest winter in the northern hemisphere since records began. We are told by the global warming enthusiasts that it is just an aberration and that it proves their point and their theory, but of course it does not. Time will tell, but simply to laugh off the idea that global warming may have ceased or be on the retreat is perhaps a little arrogant of noble Lords, from whom I would have expected better.

I have another question for the Minister. Can he tell us of another industry that is paid for doing nothing, apart from many of the non-productive employees in our state sector? What other industry is paid this sort of money to do nothing, through set-aside and the single farm premium payment, while doing such colossal environmental damage? I would be grateful if the government Front Bench could come up with an answer.

I come to the noble Lord, Lord Teverson, who admits that we need continued reform of the CAP. As my noble friend Lord Willoughby de Broke points out, Europhiles and British Governments have been

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saying that for years, but nothing has happened. Does the noble Lord, Lord Tomlinson, wish to say something from a sedentary position? No, he does not.

Lord Tomlinson: The noble Lord is holding us spellbound.

Lord Pearson of Rannoch: I am very glad that the noble Lord is spellbound, but I very much hope that his Government will, on his behalf, be able to answer the questions that he does not face. I ask the noble Lord, Lord Bach, to answer the same question in relation to the common agricultural policy that I asked on the common fisheries policy, which he did not answer. Why can this wicked policy not be changed? What is happening in Brussels with the common fisheries policy and this policy? Which countries are holding up that change? Such discussions may well be secret in the enclaves and procedures of Brussels, but it would be helpful to the British people if they knew why this policy could not be changed.

The noble Lord, Lord Tomlinson, said that the European Parliament would be immensely helpful in this regard—I maintain that it will not—and that the Council of Ministers had made a mess of this over the years. But, surely, if change were to come, it would have to be proposed by the Commission in secret. It would have to be negotiated in COREPER and then passed by the Council. The noble Lord, Lord Tomlinson, shakes his head but I have to ask him whether that procedure occurred with proposed reform of either the common fisheries policy or the common agricultural policy. I suggest that it has not.

The position of the UK Independence Party is that if we left the European Union, which we should do, we would run our own agriculture to suit ourselves and stop being part of this evil on the face of the planet. I simply ask: how dare the European Union propose to lead the way on environmental policy for the good of the planet when it has been responsible for this for so many years—and why can it not be abolished?

9.15 pm

Lord Bach: I am grateful to the noble Lord for moving his amendment and speaking to the other two.

Amendments Nos. 40 and 41 refer to the extension of codecision to certain aspects of agriculture and fisheries policy-making. The ordinary legislative procedure—qualified majority voting and codecision—will now be the default decision-making procedure for agriculture and fisheries matters, as it has been for the environment for some time. Agriculture and fisheries policy is already subject, as the Committee will be aware, to qualified majority voting. However, the Lisbon treaty introduces codecision to this area involving the European Parliament.

We have to decide where we stand on that. We believe that the European Parliament fulfils a vital role in the European Union. Its Members are directly elected, perform a very important role of scrutiny and

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hold the Commission to account. Even those who are sceptical about the role of the Parliament should be grateful for that because they are even more sceptical about the role of the Commission. MEPs are increasingly effective, both at raising issues of key concern—for example, climate change in recent times—and at scrutinising and improving legislation.

Strengthening the European Parliament’s role increases transparency and democratic accountability. Our EU Select Committee report noted in paragraph 10.36 in relation to moving to co-decision on agriculture and fisheries that:

Experience in areas already subject to codecision—I have mentioned environmental policy already—has shown that proposals can be improved by the involvement of MEPs. The additional scrutiny and debate in the European Parliament will offer new opportunities for us and other member states to secure, frankly, better regulation.

If I may walk down memory lane for a brief moment, in a previous role as a Defra Minister I saw for myself the valuable input that can be given on legislation by the European Parliament. There are people in Committee tonight who will well remember REACH, which implements a new EU regime for regulating the risks to human health and the environment from hazardous chemicals. That was greatly improved through the interplay between the Council and the Parliament.

Thanks in part to co-decision, the final REACH proposal was more in line with the principles of better regulation and provided higher protection against the most harmful chemicals. The procedure also provided greater opportunity for scrutiny and a wider debate than would have taken place between industry and the interest groups involved. We as a country have a lot of experience of dealing with the European Parliament and will certainly draw on that—and, indeed, on what we consider our good reputation—when it comes to engaging it on agriculture and fisheries.

Of course, it is too early to say what the precise effects of these changes will be on reform of the CAP, animal health and welfare or fisheries policy in the EU. The reason for that is that, to be successful, the reform must take into account the political make-up of the European Parliament as well as the Governments of the member states that sit in the Council. However, the current signs in relation to the common agricultural policy health check are promising. The draft opinion of the Parliament’s rapporteur on the health check includes many issues with which the UK would agree, including some dismantling of market-supporting regimes.

I note that the weight of evidence given to the EU Select Committee was favourable. Professor Simon Hix of the LSE, a leading expert on European Parliament voting patterns, suggested that surveys of MEPs had shown that in fact an overwhelming majority in the European Parliament was in favour of reforming the CAP. Professor Helen Wallace agreed

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that transparency of decisions would be increased by codecision. She believed that, in the past, Ministers of Agriculture,

We think that that is an important and well made point. Indeed, when my successor, my noble friend Lord Rooker, was interviewed about this by the Select Committee, he agreed that the process had been opaque.

Lord Pearson of Rannoch: The noble Lord touched on my question there. Which countries are blocking this reform?

Lord Bach: If the noble Lord will be patient, I assure him that I shall come to that.

I remind the Committee that the Lords EU Committee unanimously concluded:

those are important words—

That is why we argue that there should be support from all round the Committee for this extension of co-decision.

Lord Pearson of Rannoch: Some of us have been hearing this for many years—in my case, since the Maastricht debates of 1992. We have always been told that it will be jam tomorrow with the common fisheries and common agricultural policies. The noble Lord has just referred to the narrow interests which have been blocking progress towards reform. I ask him again: what are those narrow interests? May we or may we not expose the countries which, in the Council of Ministers, block this reform?

Lord Bach: I do not necessarily refer to Ministers in the Council of Ministers when I quote our European Union Committee, which talks about narrow interests. I think that the noble Lord knows as well as I do to whom they may be referring.

Lord Pearson of Rannoch: I should really like to know what interests in Brussels prevent reform of the common fisheries and common agricultural policies.

Lord Teverson: Perhaps I may help. One major thing that stands in the way of reform is the fact that, as the noble Lord, Lord Tomlinson, said, the European Parliament has no control over the agricultural budget. As soon as it does have control, it will say that there are far greater priorities in the European Union, and I am afraid that money talks. With regard to the discussion about who initiates legislation, as the other House knows, one of the main controls over government is expenditure and working and controlling budgets. That

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is the key way that this will work, and the Lisbon treaty makes a fundamental difference in that area. I apologise for interrupting.

Lord Bach: I am grateful to the noble Lord, but I think I understood what the committee meant. There are, however, some important exemptions where the European Parliament will not co-decide.

Lord Forsyth of Drumlean: I apologise for interrupting the Minister, but what is the answer to the noble Lord’s question?

Lord Bach: Clearly, among the interests that are being referred to are some agricultural ones around the membership of the European Union. That answer is not particularly inspiring, but I would claim it was rather obvious.

Lord Pearson of Rannoch: I am afraid that is an inadequate answer.

Lord Bach: Will the noble Lord let me continue? There is much business to be got through tonight. On the agriculture side—

Lord Lamont of Lerwick: I apologise for interrupting the Minister, but could he explain something for those of us having difficulties in following the subtle implications of the answer? If these agricultural interests are strongly represented at the Council of Ministers level—presumably, because Ministers feel political pressure from public opinion and constituencies—why would that be different at a parliamentary level?

Lord Bach: We will have to wait and see how different it is, but the straws in the wind show, we suggest, a much greater move to readiness for reform among members of the European Parliament. We will have to wait until after the next elections, as I said, to see what the European Parliament looks like; my noble friend Lord Tomlinson argued so and the noble Lord, Lord Teverson, agreed with him. Yet the fact will remain that that Parliament, with its limited budget, will not be able to do the things that it wants if it continues to agree to spend too high a percentage of its expenditure on agriculture. We think that the pressures will be there on the European Parliament once it has some responsibility. So far, it has had none at all and its Members can say whatever they like; it does not matter. However, they will have some responsibility now and we very much hope and expect that they will act responsibly.

There are some exemptions where there will not be co-decision. On the agriculture side, these include the fixing of market support measures such as intervention prices and import levies, while for fisheries these include limitations in the form of total allowable catches. Those are all responses to acute economic circumstances and inevitably require rapid reactions, which could not be guaranteed under the co-decision process. If the fisheries measure agreed annually in December were to be delayed, then implementation in the January immediately following would be severely compromised and the measures unenforceable, threatening the long-term

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sustainability of the stocks. That exemption is therefore simply an example of the EU adopting a sensible and practical approach to the annual fisheries negotiations and other similar measures.

I turn to Amendment No. 41A, which would require a statement from the Secretary of State on the Government’s objectives for the CAP and the CFP. We very much welcome the European Union Committee’s report, The Future of the Common Agricultural Policy, published in March this year. I have to declare something of an interest, as I was a member of its Sub-Committee D up until last November, but clearly not one when it formed its views and put them in writing. If I describe it, then, as a masterful analysis of the CAP’s strengths and weaknesses, I am not boasting.

As the Government have already indicated in their response, we share the key planks of the committee’s conclusions on the direction of future policy, not least because they resonate so closely with the Government’s own A Vision for the Common Agricultural Policy, published, as noble Lords will remember, in late 2005. That envisaged a future for EU agriculture as a fundamentally sustainable industry, integral to the European economy. It ought to be internationally competitive without reliance on subsidy or protection; it should be rewarded by the market for its outputs—not least for good, safe food—and by the taxpayer only for producing societal benefits that the market cannot deliver. It should of course be environmentally sensitive. It should be socially responsible to the needs of rural communities. It should produce high levels of animal health and welfare and the non-distortion of international trade and the world economy.

9.30 pm

Our vision—our domestic view for farming—is of an industry that by 2020 is, first, profitable in the marketplace and continuing to produce the majority of the food we consume; secondly, making a positive net environmental contribution, particularly in respect of climate change, but wider than that; and, thirdly, managing the landscape and the natural assets that underlie it.

Here the Committee will be at one. Further CAP reform is a key element of achieving both our domestic and our European visions for agriculture. Despite recent improvements, the CAP remains expensive, wasteful and inefficient at providing ongoing support to farmers. It distorts global markets, weighs farmers down with regulation and acts as a disincentive for farmers to improve their competitiveness.

We call for an end to the market support and direct payment elements of the CAP by 2015 to 2020, because they damage developing countries, as has been said, are expensive and wasteful—costing approximately €50 billion per year—deliver poor value for money, and stymie the ability of EU farmers to respond to market signals and become truly competitive. That would represent a radical further evolution of the CAP: price support would gradually diminish as would other direct support to farmers; agricultural markets would progressively open up; and there would be a central rather than a peripheral role for rural development measures.

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CAP reform is currently being pursued on two key tracks. The health check, which has been referred to, promises worthwhile adjustments to current CAP mechanisms and should be concluded before the end of the year. It will not in itself reduce overall CAP spending, but the health check has the potential to deliver some beneficial change that clearly signals the ongoing nature of CAP reform in the direction of market liberalisation and the delivery of public benefits.

In the longer term, the EU budget review, which follows on from the health check, will consider all EU spending post 2013—the end of the financial perspective—and is likely to result in a high-level Commission White Paper in late 2008 or early 2009, before the Commission change-over, which will inform the negotiations for the next financial perspective, which ought to begin in 2010-11. Due to its size, the CAP will rightly be a key focus for the budget review, as will the UK and other countries’ abatement.

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