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Department for Environment, Food and Rural Affairs

By definition, if one has some degree of protection, that is not quite free trade. We have absolutely no free trade in agriculture at the moment. I am not suggesting that we should have free trade in agriculture or that we should take away all subsidies and all controls. It is a fundamental industry, and there are all sorts of strategic reasons, as well as social reasons, for wanting to sustain it. We had the Doha round, following which there was very little change, and the UK presidency last year, when again there was an attempt to get some sort of change after President Chirac attacked Britain over our rebate, following his failure to win his referendum. He wanted to lash out at somebody, so he lashed out at us. I suggested in the Chamber—I think that I was the first—that the Prime Minister ought to say, ““Okay, quid pro quo: you get rid of the CAP and we’ll forget about our rebate.”” We would not need a rebate if there was no CAP. Of course, that did not happen. At the end of the day, the Prime Minister agreed to a settlement with almost no change in the CAP and a substantial increase in our net contribution to the European budget for the future. It was such a poor settlement that even The Economist was moved to say that no settlement would have been better than that settlement. The argument was that we should help eastern Europe. I am happy to help poorer nations, and if we have to have fiscal transfers from the richer nations to the poorer nations, that is fine, but they should be open and above board so that we know what we are doing. What we have through the CAP is, sometimes, fiscal transfers from rich countries to richer countries, such as Denmark. That is not right. If we are going to give assistance to the poorer nations of the EU, we should do so on a simple basis so that contributions and receipts are proportionate to the relative prosperity of different nations. That would be a fair system, and I have suggested it many times in debates. Indeed, about a year ago, I noticed in the small print of one European document that was debated in the Chamber that that proposal was specifically rejected. I do not know whether it was just my suggestion that had been rejected, whether the message had been picked up, or whether other people, too, were articulating what, to me, was a sensible proposal. The cost of the CAP to the UK is enormous. As a result of the settlement last year, our net contribution will go up from £4.7 billion in 2007 to between £6 billion and £7 billion in 2013. We can still subsidise our own agriculture, and we will be much better off in Exchequer contributions. Without the rebate, we would pay £12 billion this year, increasing to £20 billion by 2013, so the rebate still makes a difference. At the same time, however, we are making a substantial net contribution simply because of the cost of the CAP. Food prices are important, too. I speak as a representative of a purely urban constituency—I have no rural interests at all—but my constituents have a strong interest in the CAP, because they pay vast sums of money in higher food prices every year. It is estimated that the CAP costs £15 billion a year extra in food prices to consumers in Britain—£250 per person, or £1,000 for a family of four. For some families in my constituency that is a lot of money. It might not mean so much to more affluent people, but to some people in my constituency it means a great deal. If we want to change the net fiscal transfers, let us do so on a much fairer basis. The Select Committee report says the Government should"““direct the debate towards scrapping the existing CAP and replacing it with a ‘Rural Policy for the European Union’.””" Fine; we have made progress, if the Select Committee is urging the Government to proceed in that direction. I absolutely agree. The rural policy has not been specifically defined, but the repatriation of agricultural policy could give us a very good rural policy and save us vast sums of money in the process. It would be fairer, too, to the developing world, which produces food much more cheaply than we can. We could import food from developing countries, rather than having to choose more expensively produced food from the EU. We have a problem, because the UK is constantly talking about reform, but other countries in the EU are constantly resisting it. Perhaps that is partly because they benefit a great deal from the CAP—it is a disbenefit for us—but they appreciate, too, the fact that it is part of the glue that holds the European Union in its current tight arrangement. I would like to see—I have said so many times, and many Members agree—a much looser arrangement in the EU of independent member states co-operating on a voluntary basis for mutual benefit, instead of something governed by bureaucracy from the centre, and by a budget over which we have very little control. May I read a final quotation from the report to show the problem? On page 8, the report cites continental politicians who have commented on Britain, and says that a"““German farm leader accused the UK government of ‘poisoning the political atmosphere’ in 2005 with its constant attacks on the CAP.””" If that is the tone, even raising the issue is ““Don’t mention the war”” stuff. Unfortunately, the softly-softly approach advocated by the hon. Member for Brecon and Radnorshire (Mr. Williams) will not work. We are the country most likely to launch reform, so we must drive it through. We must set a date by which we expect the CAP to be abandoned and replaced by a more sensible approach to agricultural policy in Europe—and, indeed, in the rest of the world. No other country will take the lead; we have to take it, and we are best placed to do so, because we suffer discrimination and disbenefit as a result of the CAP. It is therefore our job to do it.