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7.5 p.m.

Lord Carter: My Lords, we have had a wide-ranging debate with many excellent speeches, but none more notable than the maiden speeches of the noble Lord, Lord Phillips of Ellesmere, and the noble Baroness, Lady Thomas of Walliswood. We all look forward greatly to hearing their further contributions to our debates when we shall all have the benefit of their considerable expertise.

My noble friend Lord Williams of Elvel covered adequately the environmental aspects of today's debate, and I shall therefore concentrate upon agricultural topics. My noble friend commented upon the vital importance of integrating agricultural policy fully into environmental policy. I should like to expand on that point a little to link today's topics of the environment and agriculture.

The majority of land in the UK and throughout the European Union is used for agriculture. It is vital that that land continues to be readily available for food production of one form or another. However, since the future of our wildlife, traditional landscapes, and natural resources depend also to a great extent upon the management of that agricultural land, it is essential that all farming activities are undertaken in an as environmentally friendly manner as possible.

It is inevitable that farmers will be subject to increasing public scrutiny on that issue. If they are to retain their standing and respect within the wider community, they must be prepared to deliver those environmental goods to the highest possible standard. They involve not merely the creation of beautiful and

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accessible countryside for society as a whole but they must also fulfil our national commitment to conserve and enhance the UK's biological diversity.

The full integration of agricultural and environmental policy offers a fundamentally new agenda for UK agriculture. It is an agenda that recognises that agriculture is central to a prosperous and environmentally sound rural economy; that largely involves the continuation of commercial farming activity in all areas, with some exceptions; and ensures that environmental criteria are pursued on an equal footing to production objectives.

The principle of integration is accepted increasingly; but practical implementation is yet to be achieved generally. That is despite numerous opportunities, the most significant of which, when the opportunity was largely missed, was the package of CAP reforms announced in 1992. Some proposals have been put forward. The Labour Party proposed green premia and grants for environmentally friendly farming. The CLA has produced its own scheme for environmental land management systems. There have also been proposals from the NFU and the CPRE. It will be interesting to know whether the Minister can give us any idea when the White Paper to be produced jointly by the DoE and MAFF is likely to be seen by us. I have seen some rumours in the press about September of next year. It would be useful if he could help us with that.

If the CAP is to become more environmentally driven, we must be sure that any measures taken in that respect do not add to the long list of existing possibilities for fraud. Much has been made of the recent report of the Court of Auditors which has been mentioned a number of times today. The figure of £6 billion for fraud on the Community budget, largely in agriculture, has been referred to. But that figure is not new. Your Lordships' European Communities Committee reported in the 1988-89 Session. I was a member of the committee which was ably chaired by the noble Baroness, Lady Robson of Kiddington. In that report we stated:

    "No authoritative assessment of the level of fraud in the Community has been made, and a firm estimate is difficult to achieve".
But the committee received evidence from witnesses who were prepared to estimate the scale of fraud. Those estimates indicate a loss of between £2 billion and £6 billion each year, which is the range of figures mentioned recently in the press.

As we know, some 80 per cent. of the expenditure of the EU budget is in the hands of the national treasuries. In an excellent publication entitled Farm Brief there is a quotation from an official of the Court of Auditors. He stated:

    "Which country has the best control of agricultural spending? None, they're all equally bad. The UK government is just as guilty of sloppy management of inspection and controls... Sure there are big companies involved. Defrauding the Commission is not the same as doing it to the bank—it's more or less a sport".

In addition to fraud in the European Union there is malfeasance on a grand scale. That is the wilful misconduct of public affairs. We have the recent

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example of certain member states which did not pay their fines for exceeding their milk quotas. The figure of £1 billion was mentioned, and I do not believe that it has been refuted. On the morning of the relevant meeting of European Union Finance Ministers, Mr. Kenneth Clarke, Chancellor of the Exchequer, appeared on the "Today" programme. With that particular brand of ebullient machismo which he has made his own, he described the tough stand that he would take on the issue. Of course, by lunchtime he had rolled over and given in. The fines were halved and Italy was given an extra milk quota so that it would not feel too hardly done by.

That contrasts with the Prime Minister's attitude, which he expressed to his own Back-Benchers only last week, with regard to additional payments to the European Union budget. It appears that the Government's policy is a combination of supine hand-wringing in Brussels and faintly ridiculous muscle flexing at home. I suggest that that posture is neither dignified nor consistent.

That is all compounded by today's news that the Treasury forecast of our contributions to the EU budget this year was too low by £732 million. The forecast of £1.7 billion looks like an out-turn of £2.4 billion. The effect of the CAP is not just the result of the budgetary contributions; there is also the trade flow effect. A recent report from the Centre for Research in Economic Development and International Trade at the University of Nottingham was extremely enlightening in that respect. It states:

    "One point emerging that there is no apparent correlation between a country's relative wealth and the distribution of transfers from the budget and trade effects. Although the highest per capita benefits accrued to Ireland, which in terms of GDP per capita is the third poorest country in the Union, this is followed by Denmark, which is the richest. Similarly, the Netherlands and France receive large per capita transfers from the CAP (the transfer to the former is larger for instance than that going to Greece), even if both countries have per capita incomes above the Union average. On the other hand, the UK, Portugal and Spain appear to be net contributors even though they are relatively poor countries within the Union. This supports the view... that the so-called 'UK problem' is more accurately described as a poor country, small agricultural sector, net importer problem".
That is some kind of comment on the past 15 years of the Government's control of our agricultural policy.

There are other aspects of the CAP and the European directives. Slaughterhouses will be prohibited from enjoying the traditional meat inspection service provided by local authorities since 1992 and must pay for the ruinously expensive veterinary inspections that are required by the EU. More than 200 small slaughterhouses have gone out of business since provisions came into force and they have put hundreds of people out of work.

Under EC hygiene rules, small cheesemakers are prohibited from collecting milk from neighbouring farms. A refrigerator tanker is required, irrespective of the distance and quantity. There are times when we enter the realms of high farce. Are your Lordships aware that there is an EU ban on the sending of live worms by post unless they are accompanied by a journey plan, provided with food and water and rested after 24 hours? The same provision, which causes only irritation and amusement

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to the worm trade, is, more importantly, stopping the small poultry breeders from distributing their stock, thus threatening dozens of small firms with bankruptcy and the loss of more jobs.

Turning to matters of more immediate parliamentary interest, next week we shall begin consideration of the Agricultural Tenancies Bill. I do not wish to foreshadow our Second Reading debate. However, I must tell the House that, if the Bill is not substantially amended, there is genuine anxiety on these Benches about the effect on the future security of tenure for farm tenants under the new farm business tenancies and the provision of openings for new entrants into farming. I also understand that the Bill as drafted does not give to existing tenants the security of tenure that we all thought the Government intended to ensure. We shall certainly be seeking to improve the Bill, and I respectfully suggest that this House is well equipped to do so.

The debates on the gracious Speech provide an opportunity to raise a number of matters which are of concern to the agricultural industry. The Government's proposals for the future of the State Veterinary Service are causing considerable alarm. Perhaps when the Minister responds he will comment on the views of the British Veterinary Association which has described the slimming down and quasi-privatisation of the SVS as at best a bureaucratic bungle and at worst an act of criminal folly. The association calls it a recipe for disaster and a purely bureaucratic response which will,

    "castrate if not crucify the SVS at this critical time".
It also claims—and correctly—that our SVS is the envy of Europe. Yet, as with so many areas, dogma appears poised to risk all the investment made in the UK since the war as regards the protection of animal health, public health and animal welfare. Those are strong words from a well-respected profession and I shall be interested to hear the Minister's response. I must repeat that many farmers are convinced that it is only a matter of time before we have a major outbreak of animal disease resulting from importation.

This week the House of Commons Select Committee on Agriculture reported on health controls and the importation of live animals. The report is valuable and makes a number of important recommendations affecting farm livestock and horses, and there is the headline matter of the ending of the quarantine for cats and dogs. It would be helpful if the Minister could give the Government's initial reaction to the report, in particular on those matters affecting farm livestock. It would be nice to think that the report covered the historic dinosaur mentioned by the noble Baroness, Lady Strange. I was a little confused; I was not entirely sure whether when she referred to the historic dinosaur she was referring to government policy or to her castle in Scotland. I know which interpretation I prefer.

The noble Earl, Lord Clanwilliam, my noble friend Lady Nicol and other speakers, dealt adequately with organic farming. Perhaps I may ask the Minister—and not for the first time —why our support for organic farming is at rates that are so much lower than in other member states of the EU. Is it a typically perverse Treasury policy? This policy, if it were adopted, could reduce surpluses, add to environmental protection and

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reduce the import bill. It is an example that we always seem to get in Government, irrespective of party, of the left hand not knowing what the right hand is doing.

The whole concept of the organic management agreement is similar to the ESA approach; it is an adaptation of the environmentally friendly farming approach. Obviously, it can be seen as a part of a matrix of conservation grade farming, environmentally friendly farming and, for those who want it, organic farming. It is a logical extension which increases the reduction of surpluses and environmental protection.

There are many other matters that I should like to cover, but time does not allow me to do so. There are two topics in particular upon which I should like to spend a little more time—one is the transport of live animals, and the other is the debacle in the milk market caused by the winding-up of the Milk Marketing Board which produced results that were exactly as we forecast when debating the agriculture legislation in the last Session. Does the Minister support the proposal from my honourable friend Mr. Gavin Strang (who is our spokesman on agriculture) that the Meat and Livestock Commission should undertake an urgent study to see whether we can replace the live exports of sheep with exports of sheepmeat?

When I recently asked the Minister during Question Time when the consumer would see the benefits of the deregulation of the milk market, he said that that would be in the long term. I have to say that the consumer of milk is beginning to feel that the Government's view of the long term has not only discounted the future but also the hereafter.

In conclusion, I believe that we need a coherent statement on the objectives of agricultural policy. As a suggestion, I should like to offer the Labour Party's objectives for such a policy: to provide food of a high quality to consumers and to provide it at reasonable prices; to support incomes and employment in rural areas; to protect and enhance the rural environment; the biodiversity and public access provisions and to ensure the highest possible standards of animal welfare; to ensure that support arrangements give the taxpayers and consumers value for money; and to reinforce our overseas development policies. It would be nice to think that the Government's proposals on agricultural policy in the coming Session will fulfil those objectives, but I fear that their record to date does not give us much hope.

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