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European Union (Amendment) Bill

We will have to wait and see how different it is, but the straws in the wind show, we suggest, a much greater move to readiness for reform among members of the European Parliament. We will have to wait until after the next elections, as I said, to see what the European Parliament looks like; my noble friend Lord Tomlinson argued so and the noble Lord, Lord Teverson, agreed with him. Yet the fact will remain that that Parliament, with its limited budget, will not be able to do the things that it wants if it continues to agree to spend too high a percentage of its expenditure on agriculture. We think that the pressures will be there on the European Parliament once it has some responsibility. So far, it has had none at all and its Members can say whatever they like; it does not matter. However, they will have some responsibility now and we very much hope and expect that they will act responsibly. There are some exemptions where there will not be co-decision. On the agriculture side, these include the fixing of market support measures such as intervention prices and import levies, while for fisheries these include limitations in the form of total allowable catches. Those are all responses to acute economic circumstances and inevitably require rapid reactions, which could not be guaranteed under the co-decision process. If the fisheries measure agreed annually in December were to be delayed then implementation in the January immediately following would be severely compromised and the measures unenforceable, threatening the long-term sustainability of the stocks. That exemption is therefore simply an example of the EU adopting a sensible and practical approach to the annual fisheries negotiations and other similar measures. I turn to Amendment No. 41A, which would require a statement from the Secretary of State on the Government’s objectives for the CAP and the CFP. We very much welcome the European Union Committee’s report, The Future of the Common Agricultural Policy, published in March this year. I have to declare something of an interest, as I was a member of its Sub-Committee D up until last November, but clearly not one when it formed its views and put them in writing. If I describe it, then, as a masterful analysis of the CAP’s strengths and weaknesses, I am not boasting. As the Government have already indicated in their response, we share the key planks of the committee’s conclusions on the direction of future policy, not least because they resonate so closely with the Government’s own A Vision for the Common Agricultural Policy published, as noble Lords will remember, in late 2005. That envisaged a future for EU agriculture as a fundamentally sustainable industry, integral to the European economy. It ought to be internationally competitive without reliance on subsidy or protection; it should be rewarded by the market for its outputs—not least for good, safe food—and by the taxpayer only for producing societal benefits that the market cannot deliver. It should of course be environmentally sensitive. It should be socially responsible to the needs of rural communities. It should produce high levels of animal health and welfare and the non-distortion of international trade and the world economy. Our vision—our domestic view for farming—is of an industry that by 2020 is, first, profitable in the marketplace and continuing to produce the majority of the food we consume; secondly, making a positive net environmental contribution, particularly in respect of climate change, but wider than that; and, thirdly, managing the landscape and the natural assets that underlie it. Here the Committee will be at one. Further CAP reform is a key element of achieving both our domestic and our European visions for agriculture. Despite recent improvements, the CAP remains expensive, wasteful and inefficient at providing ongoing support to farmers. It distorts global markets, weighs farmers down with regulation and acts as a disincentive for farmers to improve their competitiveness. We call for an end to the market support and direct payment elements of the CAP by 2015-2020, because they damage developing countries, as has been said, are expensive and wasteful—costing approximately €50 billion per year—deliver poor value for money, and stymie the ability of EU farmers to respond to market signals and become truly competitive. That would represent a radical further evolution of the CAP: price support would gradually diminish as would other direct support to farmers; agricultural markets would progressively open up; and there would be a central rather than a peripheral role for rural development measures. CAP reform is currently being pursued on two key tracks. The health check, which has been referred to, promises worthwhile adjustments to current CAP mechanisms and should be concluded before the end of the year. It will not in itself reduce overall CAP spending, but the health check has the potential to deliver some beneficial change that clearly signals the ongoing nature of CAP reform in the direction of market liberalisation and the delivery of public benefits. In the longer-term, the EU budget review, which follows on from the health check, will consider all EU spending post 2013—the end of the financial perspective—and is likely to result in a high-level Commission White Paper in late 2008 or early 2009, before the Commission change-over, which will inform the negotiations for the next financial perspective, which ought to begin in 2010-11. Due to its size, the CAP will rightly be a key focus for the budget review, as will the UK and other countries’ abatement. We want the CAP health check negotiations this year to play an important part in the reform process by reducing regulatory burdens and giving farmers greater control over their business decisions; cutting further the trade and market-distorting nature of the CAP; and directing public spending more towards delivery of targeted public benefits, particularly environmental ones. The Commission is due to publish its legislative proposals for the health check on 20 May. The noble Lord asked me about what would happen next. The proposals are due on that day. The Government will run a full consultation and the legislative proposals will be subject to the usual domestic scrutiny procedures.