Queen’s Speech

My Lords, I am sure that, like the noble Lord, Lord Berkeley, we all want to see in this country the best Olympics that have ever been held, but I do not wish to talk about that. Rather, I want to echo some of the remarks of my noble friend Lord Plumb by talking about the common agricultural policy—in particular, the health check that is due to be carried out in 2013. I am not a good mathematician, but I appreciate that that is after the next general election. The reason for my raising it now is that, in my view, unless the Government begin work now, they will fail sufficiently to influence the outcome of that work. In particular, we will also fail to have an appropriate impact on the decisions that will be taken if we set about the task in the wrong way. This is not least because of the extension of the co-decision procedures in the Lisbon treaty. Parliament needs to be told, and to be confident, that the Government’s approach and ideas are suited to European Union decision-making as it is currently configured. Before going further I declare an interest. I am a farmer and an owner of agricultural land in Cumbria. I am also chairman of Carr’s Milling Industries, a FTSE-listed, Cumbrian-based agricultural supply business. As many noble Lords have said and recognise, many of my neighbours have had a pretty rough time recently. Of course, we appreciate, and are grateful for, the rest of the country’s concern and good wishes. However, it is also important to point out that fine words and feasibility studies, in the words of the noble Lord, Lord McNally, do not butter any parsnips. What is needed in those bits of my home county that have been so afflicted is concrete help. In this country the common agricultural policy has become a kind of byword for much that is wrong with the European Union, although we must recognise that it has evolved for the better over recent years. Against such a background it is important that we distinguish between the policy’s aspirations, as set out in the treaties—which, it seems to me, have much to be said for them—and the mechanisms that have been adopted to put those policies into effect, some of which leave much to be desired. I cannot pass on without commenting, as I think my noble friend Lord Plumb did, on the English Rural Payments Agency, which quite simply is not fit for purpose as it currently functions. It was described by the chairman of the Public Accounts Committee in another place as a "master class in misadministration". This is a domestic responsibility where the wider public, the agricultural community and, indeed, the European Union are being short-changed by the way in which England is carrying out—or not carrying out—its obligations. We seem to have devised a system which is intellectually superior and sophisticated, but more or less unworkable in the real world. It would be much better to have a simpler and cruder system, which could be competently organised and hence fairly operated as intended. This, it seems, is a textbook example of the best being the enemy of the good. Equally worrying—I speak as someone involved in dairy farming and the supply of the dairy industry—is the workings of competition policy. It is difficult not to see abuse of dominant position by the oligopolic purchasers of milk from dairy farmers when the price they pay declines below the cost of production as wholesale prices rise. There are myriad instances of cheap promotional offers of milk and milk products by supermarkets, which are intended to promote the whole range of their wares. The cost of these promotions appears to be passed on exclusively to the milk supplier. This was neatly illustrated by one major supermarket buyer telling a supplier that the price of the milk products that they were buying would have to go down as the supermarket always, as a matter of policy, had a 40 per cent margin on its own selling price, whatever that might be. Its margin was not going to be sacrificed for the sake of the promotion; rather the supplier of the milk would receive less so that other categories of goods might be sold to the public. We now live in an era when there is increasing concern about food security, as has already been mentioned in this debate. If we are going to have domestic sources of supply, the supplier must be able to earn a living, as is quite properly recognised in the principles underpinning the common agricultural policy contained in the treaties. However, as the honourable Member for Westmorland and Lonsdale commented recently, a couple of years ago the average hill farmer was working for approximately £1.60 an hour. That being the case, it makes a mockery of the idea of a minimum wage elsewhere in the economy. For this, the farmers not only produce traditional agricultural products, but many of them look after the landscape and national parks, providing the basis of much of our tourist industry, not to say doing important environmental work. We as a nation seem to be in about as much of a muddle about our attitude to the agricultural sector as we are in our attitude to the European Union. I certainly recognise that some circles, some of whom sit behind me on these Benches, seem to think that I am, perhaps, excessively relaxed about the role of the European Union in contemporary political life. In fact I have very conventional views, but I cannot help concluding that the European Union exists, that the common agricultural policy exists and that agriculture exists, as do both its commercial and public good outputs. After all, in the real world we start from where we are and fantasising does not achieve constructive and concrete results. Politics and government are, at the end of the day, the art of the possible. It seems to me that, in the enlarged Europe of today, the political dynamic of agricultural policy has changed, as indeed has the character of the budget rebate that is so closely tied to it. We need to be absolutely clear that the rebate does not, in itself, matter at all; what matters is the net contribution to the European Union budget. The rebate matters only if it is necessary as a final balancing mechanism to achieve an equitable outcome. If our country’s net contribution is appropriate without the introduction of rebate mechanisms—that might well follow by repatriating some aspects of common agricultural policy expenditure—then there will be no need for the rebate. It also does not matter that the spending profile of the European Union budget is different from that of member state budgets. After all, nobody has ever suggested that the spending profile of local government should mirror that of member states, so why should the European Union’s? What matters is that the total levels of expenditure are appropriate and are not wasted and that expenditure is made in accordance with the principles of subsidiarity. I believe that the common agricultural policy poses a particular problem, especially in the mind of the so-called old Europe, because it was the political cornerstone of the treaty of Rome and has hence assumed an almost sacramental quality. We need to understand that and its implications, but we need at the same time—not least, in the bicentenary year of Charles Darwin—to recognise evolution. The world has moved on, and what was done in the 1950s, 1960s, and 1970s is not necessarily what is needed in the second decade of the 21st century. We must also be absolutely clear about the distinction between the policy aspirations and ambitions of the common agricultural policy and the policy mechanisms put in place to achieve them. The mechanisms, not the aspirations, should be the focus of CAP reform. Equally obviously, many participants in decision making about the future of the CAP now have absolutely no direct—or even indirect—involvement or emotional link with that particular chapter of western European history, 50 years ago. They are potentially enormously helpful allies to us. If we as a country can come forward with a set of bona fide ideas that will deliver a fair deal for agriculture, the countryside, the consumer and the taxpayer—not only for our country but across Europe as a whole—and if those are not designed, and/or perceived to be designed, from a parochial United Kingdom perspective, I can see no reason why those will not receive a favourable hearing from others. We must aim successfully to win over the hearts and minds of others among Governments, politicians, policymakers and those affected. I can see no reason why that cannot be done if we give ourselves enough time to do it. It is not that that will be easy, partly because of the domestic schizophrenia that seems to exist about the European Union, its budget, and agriculture, and partly because I never imagined that we did not gain the epithet "perfidious Albion" abroad for nothing. However, unless we go out and try to do that, we shall be selling our country short by not maximising the potential of what could be achieved.