Common Agricultural Policy

The best answer I can give the hon. Gentleman is to point to what the Commissioner said at the NFU conference a few weeks ago, which I have already mentioned. He said that people in Britain are the ““champions””—that was his word—of environmental conservation, stewardship and so on, and he did not want to penalise us. Therefore, we are using our own experience as the benchmark. We will be pressing the fact that standards need to be raised, rather than reaching down to the lowest common denominator, as I have suggested. My phrase ““equivalence”” is not about whatever is down at that level; it is about what is at a higher level and trying to raise concern for the environment and so on across the whole of the EU, including in those member states where lip service is barely paid to the matter. I shall make a final point on greening. I should have mentioned this earlier as it was raised by several hon. Members. I have said publicly in writing in many places that any British—sorry, I meant English farmer in this context, although there will be similarities in the rest of the UK. Any English farmer who is either in a stewardship scheme or who is considering renewing or entering one need not be concerned about any changes that may come. I have said clearly that if—we hope that this will not happen—the outcome of the negotiations are to someone's detriment, we will allow them to opt out at that stage with no penalty. I cannot be clearer than that; that is absolutely the case. A number of Members referred to capping. Capping is, first of all, anti-competitive and does not stimulate businesses to grow. It will give the wrong message to the industry, which we want to be competitive. Secondly, in its proposed form, we think that the capping is quite bureaucratic. Bringing labour costs into it will complicate the process, which is completely opposite to the direction in which we wish to go. Thirdly, as the hon. Member for Ogmore said, there will be a great deal of business for lawyers in trying to find ways around it. When the hon. Gentleman referred to the Co-op, he also inadvertently put his finger on the fourth point to consider—corporate structures. Many of our largest farms operate under a corporate structure, which means that the issue of whether we break them down then comes into play. That leads me to the closely linked issue of active farmers. The Commission's proposals for active farmers are twofold. First, farmers should be actively farming—doing the job—and I will come back to that. The second aspect, which has caused the most concern, is the idea that the classification should be based on a proportion of farmers' total income that subsidy comprises. That again falls foul of the corporate structure argument, because farmers may have businesses in a number of different corporate structures. Secondly, it prompts the scenario—the nightmare, almost—of having the Rural Payments Agency's computer talk to Inland Revenue's computer to establish whether someone's non-farm income is at a specific level. Again, that is a non-runner in terms of implementation. However, we have great sympathy with those who believe that the money should go to the people who farm the land. That touches on the question asked by the hon. Member for Ogmore. If they are tenants, the money should go to them. Under whatever form of tenancy, management or contract farming arrangement, the money should go to the business that controls the land. That is the way in which the system should operate. That brings me back to the point made by the hon. Member for Banff and Buchan about the issue of slipper farmers in Scotland. Again, we understand that problem entirely, and we will do our best to find a way through it. It will not be easy, but it is important to ensure that people are doing something on their land before they receive any money. Whether the solution to the problem is that proposed by the Scottish National Farmers Union, namely, a minimum stocking rate—the problem tends to be associated with that sort of land—or another mechanism, I assure hon. Members that we will try to find a way forward. A few Members spoke about the young farmers' proposals, but, again, this is another example where one size does not fit all. The Commission's proposal is simply that if young farmers—I say ““young””, but new entrant young farmers can be up to 40 years old—have some entitlements, they will be able to get a 50% premium on them for a certain number of years. That would represent a small increase in their income, but it would bear no relevance to the size of the business and, as the hon. Member for Banff and Buchan pointed out, it would ignore the fact that they probably would not have any entitlements anyway, because of how the system operates. Virtually every Minister at Council agrees that we should help young farmers; there is no debate about that. However, it should be left to individual member states to decide the best way forward, which is how we address the issue of access to capital. No one mentioned this afternoon the Commission's proposals for small farmers. The only reason why I want to mention them is that the Commission is proposing that small farmers could opt for a small farmers scheme, in which they fill in a form and get the money with no questions—I will not go quite so far, but that is the impression as to the proposal. The key thing about the Commission's proposal is that small farmers will be exempt from the greening requirement, which we oppose. We are quite happy with the idea of a simplified scheme for small farmers, as that makes sense, but to exempt them—and we are talking about a massive swathe of farmers across Europe— from the fundamental greening obligations facing other farmers would be wrong. There was a lot of discussion about pillar two. The Government's position, which has not changed since we took office, is that we would like to see a bigger share of CAP funds put into pillar two, and that any reduction in the funding should primarily be at the expense of pillar one. We believe that, because through pillar two it is possible to make targeted payments for public goods, whether they are existing ones or new ones that we can develop under the ecological assessment that DEFRA published last year. For example, we could start to fund farmers in the hills for what they do for water or carbon retention. That is how one could target payments through pillar two. The hon. Member for Ogmore asked me about agri-environment taking a bigger share of pillar two, but given that it takes more than 80% now, I am not sure that it should take an even bigger share, because—I come back to answer the question asked by my hon. Friend the Member for Thirsk and Malton—of competitiveness. We believe that pillar two is the best way of enhancing competitiveness, and we have already started to do that. In the past few months we have launched three different schemes in the existing rural development programme for England to fund, grant-aid and help farmers and other rural businesses to invest for the future. That investment may be in plant. For example, there will be £20 million, which I announced—I hope I have announced that; I think I have just announced it; I just have, if I had not.