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Lord Mackay of Ardbrecknish: My Lords, I am afraid that I do not recall the incident and I congratulate the noble Lord if he does. My brief tells me that I should now say that the reputation of Treasury officials is not borne out by my personal experience (if true). I believe that it is true. I am always impressed by the officials that I meet at the Treasury in my capacity as their spokesman in your Lordships' House. They have a very difficult job, as some of your Lordships on both sides of the House who have served at the Treasury know--and that is to prevent spending departments, pressure groups and everybody else taking more and more of the taxpayers' money. I am afraid that it is not often the most popular job in government.

Lord Eatwell: My Lords, is the Minister aware that one of the most well-known sources of error in Treasury calculations is its failure to take into account the secondary effects of policies? Calculations are often hundreds of millions of pounds out. That has happened when the Treasury has failed to take into account the secondary effects of employment policies on tax and revenue. As any second-year undergraduate can make a reasonable stab at such calculations, why does the Treasury fail to take into account the secondary effects of policies and as a result gives erroneous advice which costs the taxpayer very large sums of money?

Lord Mackay of Ardbrecknish: My Lords, I was interested to hear the noble Lord refer to second-year undergraduates. I sometimes wonder if the reason that the Treasury sometimes makes mistakes, as we all do, is that there are too many Cambridge graduates in the Treasury--

Noble Lords: Oh!

Lord Mackay of Ardbrecknish: That may not be a universally popular view, but the fact is that the Treasury and other departments of government try to forecast and to foresee the behavioural and other consequences of policy and to judge what those policies may cost and what benefits they may bring. However, as the noble Lord well knows, economics is not an exact science--nor is prediction.

Lord Boyd-Carpenter: My Lords, is my noble friend aware that anyone who tries to change the outlook of the Treasury is guilty of crazy optimism?

Lord Mackay of Ardbrecknish: My Lords, the Treasury has a major responsibility for looking after the taxpayers' money, which is not always easy. It also has to do it against the background of a very changing world. One of the interesting matters to emerge from the report on the leaked document is that it draws attention to the considerable changes in world trade over the next 20 years as a result of the emergence of major players in the Far East. I should have thought that that was certainly something that all of us should take into account.

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Lord Bruce of Donington: My Lords, may I draw to the attention of the noble Lord the necessity for him to point out to the Treasury that at present the taxpayer is paying £2.5 billion net to the European Union without any ascertainable return?

Lord Mackay of Ardbrecknish: My Lords, I wondered how the noble Lord, Lord Bruce of Donington, would introduce the European Union into this debate. There are other ways of doing it, but he has rather surprised me. I should have thought that our membership of the European Union was not something that could be decided on the simple question of the taxpayers' balance sheet. The other aspect is the importance of the European Union to us as a trading partner and the clout that it gives us around the world when it comes to trading matters, for example the World Trade Organisation and the like.

Lord Clark of Kempston: My Lords, does my noble friend agree that whatever criticism can be made of the Treasury, over a long period its policy has resulted in this country having an economy which is the envy of the rest of Europe?

Lord Mackay of Ardbrecknish: My Lords, my noble friend is quite right. Thanks to sensible government policy led by the Treasury, the United Kingdom is almost unique in Europe. It has a fast-growing economy, with unemployment falling and employment rising, which must be the envy of a few of the other major players in the European Union.

Set-aside Land: EU Rules

3.12 p.m.

Baroness Darcy (de Knayth) asked Her Majesty's Government:

    Whether European Union rules prohibit the holding of charitable events on set-aside land where the landowner receives no payment for its use.

Lord Lucas: My Lords, European Union rules currently prohibit any lucrative use of set-aside land incompatible with the growing of an arable crop. The European Commission has ruled that this prohibition applies even when the proceeds go to charity rather than to the farmer. The Government consider this a totally unnecessary interference in rural life which contributes nothing to the control of agricultural production in the EU.

Baroness Darcy (de Knayth): My Lords, I thank the Minister for his encouragingly robust and sympathetic reply. In the short-term can the Minister suggest a solution to the problem faced by the Bicester and Finmere Horse Show, which over the past 35 years has raised many thousands of pounds mainly for the paraplegic sports movement? Owing to this absurd ruling, to date it has found no definite site for its show which is due to be held on 11th August.

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Lord Lucas: My Lords, if the noble Baroness writes to me I shall see what the Ministry can do to help.

Lord Taylor of Blackburn: My Lords, the Minister says that the Government disagree with the decision of the EU. If they disagree, what will they do about it?

Lord Lucas: My Lords, we have continued to press our case with the Commission very strongly. One of the difficulties is that all bureaucracies make daft decisions like this but in this country Parliament, the press and Ministers for the most part put the matter back on the straight and narrow. In the European Union the Council of Ministers is too part-time to have time to deal with it. With good reason, the European Union pays little attention to the British press. All I can say about the European Parliament is that I hope it can be encouraged to take up this aspect of European Union policy. It would be a useful thing to do.

Lord Pearson of Rannoch: My Lords, bearing in mind that the countries which benefit under the common agricultural policy possess between them a large majority of the qualified majority votes which are necessary to change it, can my noble friend look forward to the happy day when the common agricultural policy itself may be set aside?

Lord Lucas: My Lords, generally I look ahead only in terms of tens of years rather than the time-scale to which my noble friend has referred.

Lord Carter: My Lords, is it not ridiculous that a farmer can grow a non-food crop and graze cattle on set-aside land with the intention of making a profit but he cannot allow that land to be used to raise funds for charity? Does the Minister agree that this example of ridiculous regulation is a suitable candidate for a policy of non-co-operation?

Lord Lucas: My Lords, yes. It is a truly daft policy. To add to the noble Lord's list, one is allowed to grow opium poppies on the land.

Baroness Masham of Ilton: My Lords, can the Minister say what happens if charities use set aside? Who will penalise them? Is not Britain a special case because it has more charities than most other European Union members?

Lord Lucas: My Lords, I am not aware of any plan to introduce a horde of Belgian inspectors, all disguised as Hercule Poirot, to go round the hedges and byways of England to see whether or not the rules are being transgressed. Nonetheless, if the European Union caught out the United Kingdom on this matter it could reduce the amount of money that it receives from the European Union, and that could be extremely expensive for us.

Lord Dixon-Smith: My Lords,--

Lord Stoddart of Swindon: My Lords--

Noble Lords: Order!

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The Lord Privy Seal (Viscount Cranborne): My Lords, we are running out of time. The longer we dispute who should take part the less time there will be for both noble Lords to contribute. Perhaps the noble Lord, Lord Stoddart, can put his question fairly quickly and then my noble friend will be able to contribute.

Lord Stoddart of Swindon: My Lords, does the noble Lord agree that this is yet another instance of Europe interfering in the nooks and crannies of British life? Does he also agree that all he has to do to deal with the matter is to ensure that no prosecutions are brought before the British courts? It is before the British courts that such prosecutions will have to be brought. Will that not solve the problem?

Lord Lucas: My Lords, I am not aware that any prosecutions or investigations are proposed. As to the first comment of the noble Lord, I entirely agree with him.

Lord Dixon-Smith: My Lords, does my noble friend agree that it is illogical that the landowner who makes land available out of the goodness of his heart without remuneration suffers if the European Union catches up with what is going on? He loses the set-aside payment. That does not apply exclusively to charitable organisations. Other social organisations, such as motorcycle clubs, or even pony clubs, wishing to use the land, equally fall within the ban. Does my noble friend agree that this kind of illogicality does nothing to enhance the good standing of public administration in general?

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