Examination of Witnesses (Questions 880
WEDNESDAY 23 JANUARY 2008
Lord Rooker and Ms Sonia Phippard
Q880 Viscount Brookeborough:
One could say that it is all very well for Defra, settled in London,
and that most of England is an entirely different type of countryside
to those areas on the periphery, the devolved areasbeing
Scotland, Northern Ireland and Wales. To what extent do you think
that the environment should continue to be appreciated, as a result
of some grazing or some farming in those areas? If that is so,
can a future Pillar II in lieu of Pillar I sustain it? Or are
you sayingwhich is undoubtedly truethat animals
produced on the Isle of Skye, the Hebrides or the hills, cannot
be produced in England?
Lord Rooker: First of all, if you take the situation
regarding, let us say, Northern Ireland, they have a land border
with another Member State; obviously, the consequence is vastly
different schemes. I think that the thrust will be towards eliminating
the subsidies for which they are paid for no particular purpose.
Q881 Viscount Brookeborough:
But there is a purpose where sometimes the environment requires
some of this marginal land to be grazed, rather than simply left.
Lord Rooker: In that case it ought to be part
of a scheme to do it and based, for England's purposesit
is slightly different in Northern Ireland, Scotland and Waleson
some kind of scheme, some kind of arrangement with an end output,
so that you have something you can measure; as opposed to now:
simply saying, "I've got an area of land that is farmed,
in good agricultural condition, and I demand my money". That
is not quite the long-term vision that we have. In Pillar II and
also through the RDAs, we have lots of arrangements for environmental
works and stewardship of the environment. I freely admit that,
in the hills, there is very little you can do. The sheep do a
really good job for us to make sure the landscape is maintained,
as man-made. The city-dwellers like it. They will be the first
to complain if we allow it to be covered in bracken. Therefore,
there is an environmental benefit to farming the hills, and by
and large done with sheep. However, that is something you can
measure and I think that is a much better purpose. I think that
farmers are much more comfortable in having the money flow when
there is an output, because the output is there. It may not be
the output in terms of tonnes of sheep meat to market, but we
measure it in a different way and it is much more acceptable to
the public as well.
Q882 Lord Plumb:
May I ask a supplementary? If the Lisbon Treaty goes through,
qualified majority voting will include agriculture, which it has
not done in the past. A lot of these countries, structurally,
are beginning to think in terms of development and therefore using
the Pillar I fund for structural development. In fact, it should
not be available for Pillar II use. Will there not be a difference
of opinion here at the end of the day, when you get around the
table before May and other countries say, "We must continue
this fund for a considerable amount of time, in order to make
our structural improvements effective"?
Lord Rooker: I might be wrong, and I will take
advice from Sonia, but I do not think that the May issue is relevant.
It is long-term, abolishing reliance on Pillar I to Pillar II.
That is part of the budget post-2013; that is not relevant to
the health check, which we will be looking at from May to the
end of this year. It is a much longer period for discussion with
the 15 Member States plus the new entrants to the EU. It varies,
particularly with some of the new Members; the structure of their
farming is completely different. However, if they all joined on
the basis that there is a load of money out of Pillar I, then
they will be sadly disabused because there will be a different
arrangement. It is best that they share the lessons we have learnt,
in a way, from running the CAP the way we have done, which has
been anticompetitive and not beneficial. However, this is a long-term
discussion, after the health check and then into the Budget, which
will be post-2013. We are therefore talking about 2015-2020 for
that kind of arrangement, and I suspect there will be a phasing-in
and a phasing-out. It is not something that we are under pressure
for to deal with this year. It is useful to let the landscape
be painted, though, so that people know where the UK is coming
from. We are not alone in this. At the end of the day, we will
have to face the World Trade Organization and other matters, keeping
our farmers and food producers competitive and able to compete
on a global scale. At the present time, we are not able to do
Q883 Lord Palmer:
You virtually answered my question in your opening remarks and
in replying to Lord Brookeborough but, in your opinion, what proportion
of Pillar I spending should be transferred to Pillar II and what
proportion should disappear altogether? I think I understood you
to say that basically 100% should go almost at once.
Lord Rooker: No, I have not implied that at
all. I do not carry around all the figures for the UK in my head
but, in terms of England, as I have said, it is just over £1½
billion. I am not proposing that overnight we withdraw £1½
billion from what is, in effect, support to farmers in England.
No, this requires long-term change. I do not have a figure and
the reason, as you will appreciate, is that there is an objective
to reduce the proportion of the EU Budget spent on the CAP. It
is around 45% or something of that order. It is a phenomenal amount
of money. There will be a view amongst Member States, I suspect,
that we have seen Pillar I go, and " ... Right, we'll have
that money" and that gets moved to Pillar II and maybe other
schemes. There will be some countries, and treasuries in some
countries, that will say, "Hang on a minute. Perhaps we don't
need to raise taxes as much. We'll have that money and take it
off the budget". There will be all kinds of negotiating arrangements.
At the present time, I understand that Pillar IIif you
take all the various schemesis about 20% of the CAP funding.
The single farm, direct, inefficient payments form 80%. What we
want to do is get rid of those. I am not in a position to say
how much of that we would like to see go over the Pillar II and
how much we would like to see wiped off the budget altogether;
but there will be discussions about this, because there will be
an attempt to reduce the overall size of agriculture in the EU
Budget. That is not a very precise answer, I am afraid, but it
is the one I can give you with some safety for my own skin!
We did invite the Treasury to come along and talk to us but, they
did not seem to be particularly keen to do so.
Lord Rooker: I had a chat earlier about that.
For all practical purposes, I am the Government and I speak for
the Government. I have a standard phrase here, and you read it
in a letter that you have had from the Economic Secretary, that
"No decisions have been taken on how the Government intends
to approach the Budget review or the Commission's process".
I cannot go any further than that.
Q885 Viscount Brookeborough:
You seem to be quite optimistic, Minister, that maybe there would
be a reduction in the total budget, but what we have seen in other
sectorsbe it the wine sectoris that actually the
deal in the end was that there would be no reduction in the budget;
it would merely be used in different ways, be it a different Pillar.
Lord Rooker: Yes.
Q886 Viscount Brookeborough:
Do you have good grounds, from discussions with other countries,
for feeling that we will succeed?
Lord Rooker: No, we just have our vision and
our attempt. The opportunity does not come along very often to
have a look at the fundamentals of the EU Budget. The last one
was dealt with and this will be dealt with at, let us say, a much
higher political level than my humble position. You are quite
right: it will probably be the result of trade-offs on other issues
when the time comes.
Chairman: Let us move on to rural development.
Q887 Baroness Jones of Whitchurch:
You have emphasised several times now the importance that you
see in Pillar II in the future, and you have talked in particular
about the increasing environmental responsibilities that you see
being carried out under Pillar II. In fact, we were talking before
you arrived about what Pillar II really meant and what rural development
really meant, and of course it is much broader than just the environmental
aspects. There is the economic aspect, the cultural aspects, and
others as well. Do you think that we are in danger of overloading
Pillar II with a whole lot of new responsibilities, way beyond
what it was originally intended for, and really way beyond agriculture
in the way that we had originally envisaged it?
Lord Rooker: In some ways, the way Pillar II
operatesthe concept and the operation, as I understand
itis flexible enough and broad enough for us to deal with
virtually all the objectives that we would want to deal with.
We look at it through, on the one hand, the stewardship schemes
that are funded through Natural England and the rules there relating
to the work that is done by farmers in respect of the environment;
but also money is channelled through Pillar II, through the Regional
Development Agencies, through various organisations that would
not be related to the environment but related to rural life in
general. There is a host of schemes out there. In fact, they are
so complicated that people set up businesses to explain the schemes
to people. In some ways, I do not see that as a criticism; it
shows that we think Pillar II is broad enough and flexible enough
certainly to be able to cope with the Rural Development Programmes
that we would wish to operate. Indeed, we have a very substantial
Pillar II Rural Development Programme over the next five to seven
years, running into nearly £4 billion, reaching all kinds
of activities. We do not see a threat of it being overloaded.
I do not deny that, if Pillar I goesand we are obviously
talking about a decade aheadand Pillar II changes substantially,
then certain Member States, and we would be no different, would
start to look at delivery mechanisms. As we are now, do we have
the machinery of government right for delivering these programmes?
Obviously, if we have a different system we will have a look at
it; but, at the present time, it is flexible enough and broad
enough to achieve our objectives. However, I am not saying that
would be the case if, for example, half of Pillar I was saved
for the taxpayer and the other half went over the Pillar II. That
would be a substantial amount of moneyI am just thinking
aloud on thatand you would start to look at how you deliver
such programmes. Would the present arrangements be sufficient,
and also what would the programmes be? At the present time, however,
we do not have a problem with it.
Q888 Baroness Jones of Whitchurch:
Could a lot more of that be done by individual Member States?
Why do it at a European level anyway?
Lord Rooker: That is part of the other issue.
Looking at the budget, I keep seeing this word "subsidiarity"
and occasionally I ask, "What have we got back? What do we
do now that was done for us by the EU some years ago?". Examples
are given, but there is a lot more that we ought to be able to
do that does not distort competition, and actually makes it fit
for purpose in the individual states. We see that here. Given
the fact that it is a devolved issue in the UK, we have enough
experience of dealing with different programmes in Wales, Scotland
and Northern Ireland, and we can build on that. It can be dealt
with at a local level, therefore. I absolutely agree with that.
There is no reason at all why Brussels should be dictating the
details of Rural Development Programmesas long as you have
a programme, and the big picture is bought into, that we want
the European Union to be concerned about the economy, if you like,
and quality of life in rural areas.
Several decades ago, when I had a professional interest in rural
development, my conclusion was that, if you were serious about
rural development in a broad sense, the last thing you should
do was to put money into it through farmers or agriculture. Surely
the problem with Pillar II is that it does not give you that broader
flexibility to put money and support into the rural economy beyond
the farming/agricultural route?
Lord Rooker: That may be true, but the experience
we have through the RDAs anyway, outside of Pillar II work, is
in creating and sustaining rural business and innovation, to make
sure that all our towns and villages do not look like chocolate
box lids, where people commute in and out and there is no vibrancy
of life. That is exactly the opposite of what we are trying to
do, but we are not necessarily using Pillar II for that. However,
if in the EU context rural development became bigger then, as
I have said, we would look at how we would deliver that; but we
are not relying exclusively on Pillar II for the work that goes
on there. You are absolutely right. I have forgotten what the
figure is now, but it is confined to 1 or 2% of people involved
directly in agriculturewho live in the rural areas. I think
it is 25% of people who live in rural areas, although the definition
can be argued about. So there are lots of other issues that have
to be dealt with. The social infrastructure in those areas has
to be maintained and enhanced. That is important, and it does
not necessarily come through Pillar II.
Q890 Viscount Ullswater:
You have almost answered the question I was going to ask, which
was basically, if you are going to get rid of Pillar I, why not
just have a Rural Development Programme and scrap CAP altogether?
Perhaps I can phrase it in a slightly different way, however.
If this is the trendand in your Vision I think that
is the direction in which you are lookingwhat sort of percentage
of Pillar II, however it is funded, would go back into agriculture
under the sort of scheme Lord Brookeborough was mentioning, namely
access to marketplace for cows from the Orkneys, grazing the uplands,
or the public benefit of keeping the landscape and the environment?
What sort of percentage of that do you think would go back into
agriculture, back into the farming side of things?
Lord Rooker: I cannot give a percentage, but
I do not envisage reductions in that area. Obviously, the public
good that the public will pay for in terms of the landscape, looking
after the water, the soil, and the visual amenity, if you likethere
is a case for doing more on that. That can really only be delivered
through the farmers in that sense, when you are looking at that
aspect of it. I do not envisage less, therefore; but I am not
in a position to put a percentage on it. We have something of
the order of half the farmers in England signed up to stewardship
schemes now. We are getting a lot of benefit from it and it has
been a good experience for them to be in those schemes. In fact,
for the High Level schememainly because of financial restrictionswe
had a queue that we could not accommodate, because of the budget
problems that arose last year. Do not get me wrong: I am not seeking
to come here and say that we want to chop off this source of funding.
There is a public good argument. There will always be peopleI
suspect those who control the overall budgetswho might
start to question, "What is the public good of looking after
this?" and I think it is the job of everybody else who is
involved in this to put a price on protecting the landscape. However,
the effects of climate change and mitigation are upfront for everyone
to see. All this is very much tied in with that: making sure that
we grow the right crops, look after the soil, protect the waterwhere
water will be a serious problem long-term. I cannot put a percentage
on it, but I do not see any less than that. However, I am not
in a position to play with any figures, because I have no information
in that respect.
Q891 Lord Brooke of Alverthorpe:
Perhaps I may refer to A Vision for the Common Agricultural
Policy, the 2005 document. Following this through, understandably
you cannot put figures on it, but in Chapter 3 you did in fact
pose a whole series of questions. The first range of them was
on the topic we have just been covering. You go on to say, "Indeed,
the rural economy could benefit significantly from shifts away
from general agricultural support towards more targeted rural
development". We are now nearly three years on since that
was first written. I am wondering, therefore, if you are in a
position to put a little bit more flesh on the bones there. While
you cannot give figures, can you give some views on the targeted
topics you would want to go for, beyond the ones you have just
mentionedbecause they were essentially of farming?
Lord Rooker: Actually, I do not think I can
help. I do not think that I have come with a list on that, unless
I have misread my notes. The fact is that we have only just announced
the new programme. I think there was a delay in the Rural Development
Programme because of the problems in Europe about getting the
budget agreed. The 3.9 billion programme was only announcedthat
is for England, by the way, which would double the size of the
previous programmeand I think this is probably the first
year that we are involved in that. I am not in a position to give
a report back on that. Obviously, there will have to be a report
back because it is a large programme. This was announced just
before David Milliband would have left the Department, if I remember
rightly. I cannot give you a list now, unfortunately, because
we are in the first year of that programme, which, as I say, is
twice the size of what we have done previously.
Q892 Lord Brooke of Alverthorpe:
I am coming new to the subject and I have been reading
Lord Rooker: I am brand-new to the subject,
by the way!
Lord Brooke of Alverthorpe: I mean in
Europe. I am just wondering when, on the Chapter 3 questions,
the Government will have reached the stage where it will start
to answer some of the questions.
Chairman: Let us move quickly on!
Q893 Lord Plumb:
I am not brand-new to the subject! I was quite impressed by your
comment about the stewardship scheme and the fact that farmers
have responded very well. I think it is encouraging that there
was a queue of farmers wanting to come in, who found it difficult
to get in. However, last year on the Entry Level scheme there
was a decision to stop the management tools, and a lot of people
who applied to get into the Entry Level scheme this year have
been denied the opportunity to follow it through. The Entry Level
scheme, of course, is seen to be the second pillar, if you like,
of the stewardship scheme as a whole. I think that a lot are beginning
to find the benefits of thatand I do speak from a bit of
experience of itand are disappointed that they cannot get
into the scheme because the management tools have gone. Why?
Lord Rooker: I do not know. I will have to find
out and write on that. It is one that I cannot give a direct answer
to. I just plead guilty. Even though I am farming Minister, it
is not part of my day job, in terms of Natural England. This was
a policy that was not decided by the UK Government in the first
Q894 Lord Plumb:
I do know that.
Lord Rooker: It was something we had next to
no control over, really.
Q895 Lord Plumb:
As I understand it, it was a decision taken in Brussels.
Lord Rooker: In Brussels by the Commission,
Q896 Lord Plumb:
I have asked the question there and I have not had an answer.
I just wonder where this was blocked. It seems strange to me,
because it was such a good scheme.
Lord Rooker: I do not know the background to
the Commission decision, but I will certainly make it my business
to find out and report back to the Committee with an answer.
I have to say that if Lord Plumb cannot get it out of the Commission
Lord Rooker: I was going to say that, but I
decided against it!
Lord Plumb: That is not for the record!
Q898 Baroness Sharp of Guildford:
If we are looking at the current budget envelope, in a sense the
division between the monies in Pillar I and Pillar II are importantas
we can see from what you have already been sayingbecause
to some extent the current spending under Pillar II does help
to effect the transition from Pillar I to Pillar II here. How
do you respond to the accusations that have been made that the
UK Government is partly responsible for insufficient funding being
available under Pillar II, because it pushed cuts through in the
last budget deal under the UK presidency, which meant that in
effect there was not really enough funding there under Pillar
Lord Rooker: First of all, in reality we ended
up, as far as our own programme was concerned, with double the
size of the programme in England. We had the presidency at the
time and it was a question of trying to get compromises in order
to get the decisions through. I do not accept that we therefore
have to take any blame for that; on the other hand, we do take
responsibility for being in the chair at the time. We had 25 Member
States and we had to try to find a workable solution. That was
our responsibility. However, the reality is that David Milliband
announced a programme that was double the previous programme in
respect of England. I do not think it is a question of blame and
responsibility. We had responsibility because we had the presidency
and our job was basically to bring the 25 to the table and get
as good a deal, where people were as content as possible. That
means give and take, at the end of the day.
Q899 Baroness Sharp of Guildford:
Making trade-offs and that sort of thing.
Lord Rooker: It does.