European Union (Amendment) Bill

My Lords, I thank all noble Lords who have taken part in this debate. I am certainly not going to take sides as to whether this debate should have taken place today or should take place tomorrow. I shall say only that those who insist, as the amendment does, that there should be some kind of extra report to Parliament might like to bear in mind that we are having a full debate today and a full debate tomorrow in one of the Houses of Parliament. We welcome—I hope that I am not giving too much away—the report on the future of the common agricultural policy by a sub-committee of the European Union Committee, about which we have heard so much in this debate and which is chaired by my noble friend Lord Sewel. As the Government have already indicated, we share the key planks of the committee’s conclusions on the direction of future policy, because frankly it resonates very closely with the Government’s own vision for the CAP, which was published in 2005. I do not intend to go on at length about our vision for the CAP, because that is something best covered tomorrow, but the noble Lord, Lord Taylor, who moved the amendment, is entitled to an answer to some of the points he made during this debate. I hope that noble Lords will bear with me. The vision for EU agriculture envisages an industry that is fundamentally sustainable and integral to the European economy. It has to be internationally competitive, without reliance on subsidy or protection. It should be rewarded by the markets for its outputs—not least, for safe and good quality food—and by the taxpayer only for producing benefits for society that the market itself cannot deliver. It needs, obviously, to be both environmentally sensitive, maintaining and enhancing the landscape and wildlife while tackling pollution, and socially responsive to the needs of rural communities—we heard about those from the noble Lord, Lord Selsdon—while producing high levels of animal health and welfare. Yet it must not, lastly, distort international trade and the world economy. We are looking, then, at a farming industry which, by 2020, is: profitable in the marketplace, while it continues to produce the majority of the food we consume; making a positive net environmental contribution, particularly regarding climate change, yet wider than that; and managing the landscape and the natural assets underlying it. Further reform of the CAP is a key element in achieving both what we want in this country and our European vision for agriculture. Despite recent improvements, it is our view that the policy still distorts global markets, weighs farmers down with regulation and acts as a disincentive for them to improve their competitiveness. As a result, we call for an end to market support and direct payment elements of the common agricultural policy by 2015-2020 because they damage developing countries—the noble Lord, Lord Pearson, just asked me a question about that. Those elements are also expensive and wasteful, delivering poor value for money, and restrict the ability of EU farmers to respond to market signals and become truly competitive. We believe that farmers can do just that, certainly in this country. That would represent a further evolution of the common agricultural policy that we now have. Price support would gradually diminish, as would other direct support to farmers, while agricultural markets would progressively open up. There would also be a central role—rather than some peripheral one—for rural development measures, including those targeted on protection and enhancement of the rural environment. The reform is, of course, being pursued and the health check was referred to. That promises worthwhile adjustments to certain CAP mechanisms but will not, in itself, reduce overall CAP spending. The health check, however, has the potential to deliver beneficial changes which signal the ongoing nature of reform in that direction of market liberalisation and, at the same time, in the delivery of public benefits. A review is scheduled of the major CAP reforms of 2003, about which I will have something slightly more controversial, perhaps, to say in a moment or two. The legislative proposals published by the European Commission on 20 May, since our Committee debates, launches six months of negotiations with the intention of concluding the deal by the end of this calendar year. Our ambitions for this health check—a process, remember, which is starting and not yet finished—are first, to remove the production-linked farm payments that remained after those important 2003 reforms and to avoid the reintroduction of new distortions; secondly, to further shift the balance away from farm subsidies toward measures that protect and enhance our environment; thirdly, to simplify the bureaucracy associated with the CAP, including particularly the single payment scheme; fourthly, to simplify the system of cross-compliance and, lastly, setting a clear timetable for phasing out price support and market controls. We also want to phase out the milk quota system, which provides a smooth transition for dairy farmers and gives them the certainty that they need to plan their business and we want to put measures in place to capture the key environmental benefits provided by set aside. Many noble Lords will have read the comments of the agricultural commissioner, Mariann Fischer Boel who was clear that the health check proposals, "““will move us further along the road of competitive and sustainable farming that can respond to demand and be part of the solution to the broader challenges that the world faces””." The Government will launch a full 12-week public consultation on the health check within the next couple of weeks. The health check proposals will be subject to the usual domestic parliamentary scrutiny procedures. An Explanatory Memorandum and impact assessment are being prepared. I am advised that they will be laid before both Houses within two weeks. Perhaps I may remind noble Lords—if they need reminding, because it has been advertised enough—about tomorrow’s debate, which needs more speakers. In the longer-term, the EU budget will look at all EU spending post-2013 and is likely to result in a high-level Commission White Paper in 2009 before the Commission change-over, which will inform the negotiations for the next financial perspective which should begin in 2010-11. Due to its size the CAP will rightly be perhaps the key focus for the budget review. Perhaps I may gently chide the noble Lord, Lord Taylor. He is such a charming speaker and so popular in the House that one can occasionally excuse him for indulging in a bit of party politics. The fact that he mentioned the word ““consensus”” on a number of occasions does not mean that he was not making what I thought were some rather unwarranted attacks on the Government and their reform agenda. He asked whether the Government are serious about CAP reform and about our forcing the pace of change. I gently remind him that when his party was in power the CAP was rampant; precious little reform took place. The enthusiasm that there appeared to be from the then Government for CAP reform was rather like their lack of enthusiasm for the national minimum wage. Politically, one can understand precisely why that was the position, but it was not in the national interest. If the Conservatives are now absolutely on board for CAP reform and they mean it, they should welcome, as I hope that they do, the very major reform that this Government largely negotiated in 2003, which is the basis of any further reform that may occur. Those 2003 reforms moved this issue on, which is an achievement of this Government.