Commons Sitting of 21 March 1995

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
DEATH OF A MEMBER
Madam Speaker: I regret to have to report to the House the death of Sir James Alexander Kilfedder, Member for North Down. I am sure that hon. Members in all parts of the House will join me in mourning the loss of a colleague and in extending our sympathy to the hon. Member's family and friends.
Oral Answers to Questions
  EDUCATION

    Reading Ability
    Mr. Corbyn: To ask the Secretary of State for Education what assessment she has made of the reading abilities of 10-year-old children in England and Wales. [13242]
    The Minister of State, Department for Education (Mr. Eric Forth): The chief inspector's annual report for 1993–94 states that seven to 11-year-olds are making satisfactory or better progress in reading in 90 per cent. of schools. We shall have a clear national picture of the reading standards of 11-year-olds as a result of the Government's introduction of tests for the first time this year.
    Mr. Corbyn: Is the Minister aware that, on 9 March, an editorial in The Times estimated that poor standards of reading among children coming into and leaving secondary school is costing the country £10 billion a year? Does he recognise that one of the biggest problems is the inability of primary schools to teach six and seven-year-olds good reading skills? Why have the Government abandoned the reading recovery programme and, therefore, cut money available for specialist help, which has proved to be very effective in giving seven-year-olds a well above average reading ability for the investment of a relatively small amount of money and little intensive teaching time?
    Mr. Forth: Whether the estimated £200 million to continue this scheme nationwide is a small amount of money I shall leave to the hon. Gentleman to argue with his Front-Bench spokesmen. Indeed, whether he is making a commitment on behalf of his Front-Bench team, I shall leave them to sort out for themselves. The reading recovery scheme is one of many which deal with pupils in that age group who have reading difficulties. It is interesting that, having looked at the scheme, a number of local education authorities have decided to pick it up and to continue it as one of their priorities. That must be the
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    right way to proceed rather than us dictating from the centre what local education authorities—or, indeed, schools—should do.
    Mr. Evennett: Will my hon. Friend confirm that the national curriculum and the testing of children are helping to raise standards and that the policies of his Department are doing much to improve the calibre of teachers, teaching and standards in the classroom?
    Mr. Forth: I am grateful to my hon. Friend because he has identified rightly the battery of measures that we now have in place in schools to assist them in ensuring that our young pupils learn to read and to master numbers effectively. The curriculum is the keystone of that, regular objective testing is an important part of it, the independent inspection of schools is a vital element and the publication of school results, now welcomed by the Leader of the Opposition, is another key element. Together, all those measures will produce a steady increase in standards over coming years.

    Early Years Learning
    Mr. Robert Ainsworth: To ask the Secretary of State for Education what proposals she has to increase the provision of early years learning. [13243]
    The Secretary of State for Education (Mrs. Gillian Shephard): We shall be providing new places with new money by the end of this Parliament.
    Mr. Ainsworth: Will the Secretary of State clarify exactly what she will be providing and when? Are we not entitled to such clarification, and to a little honesty? We have the Chief Secretary to the Treasury saying that we should introduce vouchers, we have the Prime Minister advocating increases in the number of nursery places and a place for everyone and we have the Secretary of State for Education herself writing to her colleagues saying that LEAs could cut nursery places to fund the underfunded teachers' salary increase. What is the situation?
    Mrs. Shephard: Perhaps I can reassure the hon. Gentleman by saying that my letter to colleagues about local government spending simply pointed out that, in a tough spending round, it is appropriate to question all areas of spending, especially non-statutory areas, when councils are complaining that they cannot meet their statutory obligations. One of the delights of education, as I am sure the hon. Gentleman will agree, is that it arouses very strong passions. Pre-school education is no exception. The Chief Secretary, the Chancellor of the Exchequer, the Prime Minister and I have all made it clear that no option for the delivery mechanism of nursery education has been ruled out and no option has been ruled in. Whatever mechanism is finally chosen, it will place parental choice and quality at its centre and an announcement will be made when we are ready.
    Mrs. Ann Winterton: Is my right hon. Friend aware of the number of primary schools in my constituency that have encouraged nursery provision on the school premises? Indeed, last Friday I attended the opening of the Black Firs playgroup in Congleton. Is she aware of how helpful such arrangements are both to the schools

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    and to the relationship between the playgroups and the reception classes? Do they not represent one way of assisting early learning among very young children?
    Mrs. Shephard: Yes, the whole sector is characterised by great diversity, with excellent classes in nursery schools, excellent reception classes in primary schools, and very good provision by playgroups and in the independent sector. It is getting all those threads to work together for the advantage of parental choice that is complex, and that takes the time.
    Mr. Steinberg: Despite the Secretary of State's response to my hon. Friend the Member for Coventry, North-East (Mr. Ainsworth), will she tell the House whether she is in favour of a voucher system for nursery education? Is she aware that today there is a lobby of Parliament by parents, teachers, governors and support staff, who want a fully funded education service on an equal basis that is fair to all children in every school, including nursery provision that is not based on right-wing claptrap?
    Mrs. Shephard: I expect that the hon. Gentleman has been playing an important part in the rally organised by the National Union of Teachers this afternoon. Like other hon. Members, I have followed with interest the press reports about Cabinet splits, Ministers under pressure and so on. Like all good fiction, they make a good read, and I look forward keenly to the next instalment. Vouchers are an option as a delivery mechanism; they have their attractions but also their disadvantages.
    Mr. Riddick: Does my right hon. Friend agree that, contrary to what the hon. Member for City of Durham (Mr. Steinberg) said, the most effective way to ensure choice and diversity in the provision of pre-school education would indeed be a voucher system, and that such a system would have much support among Conservative Members?
    Mrs. Shephard: Vouchers that put cash purchasing power into parents' hands would certainly ensure choice. As I have said, vouchers are an option, and they have both attractions and disadvantages.
    Mr. Beith: Has the Secretary of State not confirmed, only a few moments ago, the pessimistic interpretation that everyone in education places upon her letter to her colleagues—that she believes that, in what even she admits is a bad year for education funding, it would be right to abandon the development of nursery education and to cut the programmes that local authorities have put in place for it? What kind of advice is that to give to education authorities?
    Mrs. Shephard: I realise that financial realism is not a characteristic of councils run by Liberal Democrats, but, as I have said, it is appropriate to question all areas of spending, especially non-statutory areas, when councils are complaining that they cannot meet their statutory obligations.

    Grant-maintained Schools
    Mr. Pawsey: To ask the Secretary of State for Education what are the financial benefits that come from grant-maintained status. [13244]
    Mrs. Gillian Shephard: Grant-maintained schools control the whole of their budgets, not just the proportion that would have been delegated by a local education authority. That gives them greater flexibility to spend more money where it really counts—in the classroom.
    Mr. Pawsey: I thank my right hon. Friend for that extremely interesting response, which I am sure will be noted by all schools with tight budgets and tight settlements. They may see that reply as representing a way forward. Does my right hon. Friend agree that the principal attraction of grant-maintained status is not the added funding that such schools receive but the greater freedom that they enjoy, and the fact that we have cut the cords that secure such schools to local education authorities?
    Mrs. Shephard: I know that my hon. Friend is a great enthusiast for grant-maintained schools, as are all my right hon. and hon. Friends—as are many people on the Opposition Front Bench. Grant-maintained schools are indeed good and popular schools that continue to attract keen recruits. One of the strongest reasons for their success, as any head of a GM school will tell us, is their freedom from LEA control, as was made clear last autumn by The Times Educational Supplement survey covering more than 500 GM schools.
    Mr. Kilfoyle: Notwithstanding the platitudes of the loony right of the Conservative party, does the Secretary of State recognise that immense damage is being done to the education of the vast majority of our children by preferential funding? How can she justify the situation in South Glamorgan, where two grant-maintained schools have received £4 million of capital funding as opposed to the total of £3 million which is going to 200 LEA schools? Is that not blatant bribery of schools for ideological ends
    Mrs. Shephard: I am disappointed to tell the hon. Gentleman that I am not responsible for South Glamorgan, but I can make it clear again that grant-maintained schools will continue to receive extra resources to reflect their extra responsibilities. We shall make sure that they continue to receive also a fair share of locally available resources, despite the best endeavours of hostile local authorities controlled by the Labour party.
    Mr. Allason: Does my right hon. Friend accept that one good way for a school to become insulated from the profligacy of local education authority spending is to go grant-maintained? Is she aware that grant-maintained schools in Torbay have been protected from the disgraceful threats of cuts made by Devon county council?
    Mrs. Shephard: One of the greatest strengths of grant-maintained schools is their independence from LEA control, and they also have flexibility to manage their own budgets in a tough year.

    Ethnic Minorities
    Mr. Stevenson: To ask the Secretary of State for Education what assessment has been made of the effects on schools of changes in section 11 funding; and if she will make a statement. [13245]
    The Parliamentary Under-Secretary of State for Further and Higher Education (Mr. Tim Boswell): Most of the £30 million recently announced for new

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    section 11 projects starting in 1995–96 will benefit schools. Together with continued funding of existing projects, it will support specialist English language teaching for ethnic minority pupils, and so help raise standards generally.
    Mr. Stevenson: Is the Minister aware that his response will be greeted with dismay throughout the country? Does he realise that section 11 cuts are having disastrous effects on pupils whose first language is not English? Will the Minister urgently intervene to restore the damaging cuts before further irreparable harm is done to that vital service?
    Mr. Boswell: I agree with the hon. Gentleman that the funding programmes are of great importance both to children and to schools generally, and I pay tribute to the teachers involved in them. The hon. Gentleman may not have noticed the announcement, which amounted to a doubling of new section 11 funding. For example, in the hon. Gentleman's own local education authority of Staffordshire, £191,000 of additional money will be given to support the existing programmes. That pattern will be reflected throughout the country in all areas where there is a major need for that activity.
    Mr. Brazier: Does my hon. Friend accept that there are many Conservative Members who do not echo the calls from Opposition parties for more funding for a variety of ethnic programmes at a time when budgets are inevitably tight?
    Mr. Boswell: I agree that we must have priorities, and my right hon. and learned Friend the Chancellor of the Exchequer expressed that when drawing up his Budget decisions. The programmes have value, and they are not the only way in which we support areas of educational difficulty. They must be judged on their merits as part of a balanced programme.

    Selective Education
    Mr. Hinchliffe: To ask the Secretary of State for Education what is her policy on selective education. [13246]
    The Parliamentary Under-Secretary of State for Schools (Mr. Robin Squire): The Government believe that schools which select pupils by ability, or which specialise in particular subjects, have an important part to play in giving parents a choice of schooling for their children.
    Mr. Hinchliffe: Is the Minister aware that, as well as the serious budget cuts in various parts of the country, one of the anxieties of those lobbying Parliament today is the reappearance of selection, especially in Tory areas such as Wandsworth? The last thing that I want for my children and for my constituents' children is for them to be written off at the age of 11, as I was under the Tory education policies of the 1950s and 1960s. While selection may be the obvious next step in terms of the Government's policy, will they for once look at the lessons of the past and learn from the experiences of people like myself and thousands of others in the 1950s and 1960s?
    Mr. Squire: Unlike the hon. Gentleman and his party, the Government are not bound by dogma or ideology when it comes to selection in schools. Unlike the hon. Gentleman, we believe that it is up to local education
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    authorities, controlled schools and, where relevant, grant-maintained schools to make proposals for selective education if they believe that it meets the demands of parents in their area. If the Labour party showed our commitment to higher standards in schools, it would not attack good schools of proven worth.
    Mr. Haselhurst: Will my hon. Friend assure me that he will approach with caution suggestions for changes in admission arrangements where they might have an unbalancing effect on a cluster of grant-maintained schools in a given area?
    Mr. Squire: I can reassure my hon. Friend that any proposals on admission changes are considered most carefully by my right hon. Friend the Secretary of State. That consideration includes the impact that those changes would have on other schools in the area.
    Mr. Jamieson: Will the Minister explain to the House why, since 1970, successive Tory Secretaries of State have signed the orders to close most of the grammar schools?
    Mr. Squire: I can only say in answer to the hon. Gentleman that those proposals did not come to me. They came to my ministerial predecessors, who will have considered them on precisely the merits of the schools which I implied in answer to the hon. Member for Stoke-on-Trent, South (Mr. Stevenson) a moment ago. Labour Members seem unable to grasp the fact that there should be diversity and choice in our education system and that the Government are pledged to defend that choice and diversity.

    Surplus Places
    Mr. Thurnham: To ask the Secretary of State for Education what is the cost of surplus places in local authority schools; and if she will make a statement. [13247]
    Mrs. Gillian Shephard: We estimate that the direct costs of maintaining surplus places in local authority schools is some £225 million. Of course, not all those places are in practice removable.
    Mr. Thurnham: Does my right hon. Friend agree that rising pupil numbers may fill some of those spaces, but that that is no excuse for failing to improve teaching standards in unpopular schools or closing them altogether?
    Mrs. Shephard: Given that the Audit Commission has pointed out the savings to be made from sensible rationalisation, I hope that all authorities will look carefully at the position in their area. If they make savings, that will obviously enable them to take the measures that my hon. Friend has identified. Nothing could be more important than raising standards.
    Mrs. Anne Campbell: Does the Secretary of State not realise that the biggest disincentive to local authorities to remove surplus places has come from the Government giving schools the opportunity to opt out of local education authorities? Does she realise that removing surplus places takes at least two years and is certainly no answer to the funding crisis that our schools face now?
    Mrs. Shephard: The first point is that high priority is given in capital funding to LEA bids for cost-effective

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    rationalisation proposals. The second point relates to GM schools. We do not normally approve proposals for self-governing status drawn up in response to a threat of closure, but we reserve the right to approve GM status for such schools when we are not persuaded by the LEA's case and the school is viable, effective and popular.
    Mr. McLoughlin: Is my right hon. Friend aware that in Derbyshire there are more than 17,000 surplus places? Can she confirm that every LEA this year had an increase in the amount of money that it could spend? Therefore, if there is any cash reduction to schools, it is simply because the LEA has changed its priorities.
    Mrs. Shephard: Yes, this year's settlement provides for an increase for all authorities. It should be viewed in the context of generous settlements in the past few years and lower than expected inflation. It is certainly the case that if Derbyshire had been prepared to tackle the large number of surplus places in the past, it would not have had the problems that it claims to have now.

    Class Sizes
    Mr. Simon Hughes: To ask the Secretary of State for Education what assessment Her Majesty's Government have made of the links between class sizes and pupil attainment. [13248]
    Mrs. Gillian Shephard: The accumulated research evidence has not demonstrated any conclusive link between marginal changes in class size and pupil attainment. What matters most is the quality of teaching provided.
    Mr. Hughes: Does the Secretary of State accept that 1 million primary school pupils are now in classes of over 30; that the size of primary school classes has increased by 20 per cent. over the past two years; and that this year's settlement will result in further increases in class sizes next year? Will she therefore come clean over Government policy? Do they favour smaller classes, as set out in their 1983 and 1987 manifestos; are they neutral about smaller classes, as they showed by saying nothing about them in their last manifesto; or do they now argue that class size increases make no difference? If the Government think that class sizes make no difference, I presume that their education policy is like their taxation policy, on which they argue one thing but are so incompetent that they produce exactly the opposite result.
    Mrs. Shephard: I thank the hon. Gentleman for his contribution. I expect that he is overjoyed that Southwark will spend an extra £8 million on schools this year. He must be delighted by the Government's generosity in making that possible. [Interruption.]
    Madam Speaker: Order. I am sorry but I have asked hon. Members to be careful when entering the Chamber when a Minister is responding to an hon. Member.
    Mrs. Shephard: It is worth while for the hon. Gentleman to note that, while class sizes have edged up recently, standards have improved steadily at all levels at the same time. Moreover, Ofsted reports have made no suggestion that class sizes are too large, and there is clear professional advice that teaching quality and leadership, to which we are committed, are the key factors.
    Sir Malcolm Thornton: Will my right hon. Friend add to those qualities classroom organisation and preparation?
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    Will she reiterate the point that the evidence on class sizes is ambiguous and that, as in the recent past, examples in the former ILEA showed clearly that the linkage between resources and attainment was far from conclusive?
    Mrs. Shephard: My hon. Friend is absolutely right: there is no conclusive linkage between resources and attainment. He is also right that teacher competence is the most important factor, which is why I am extremely pleased that we have been able to devote £250,000 to school effectiveness, in-service training, and grants for education, support and training programmes to achieve that competence.
    Mr. Blunkett: Does the Secretary of State believe the head of the private girls' high school in Sheffield who said on local radio recently that the three major reasons why her school was so successful were that she could choose her own pupils, she did not have to follow the national curriculum, and her class sizes were half those of neighbouring state schools? Who does the Secretary of State believe this afternoon: those who are lobbying as parents, governors and teachers, including the heads of private schools, who say that class sizes are crucial; or those around her who believe that the cuts in education imposed in the coming year will have no effect on standards and opportunities?
    Mrs. Shephard: The vast majority of pupils are taught in classes of 30 and below. The average size of classes in the primary sector is under 27 and, in the secondary sector, just over 21. One of the reasons why people choose the independent sector for their children is that, like Conservative Members, they value choice and diversity. So, too, do many of the hon. Gentleman's colleagues, including the hon. Members for Brent, South (Mr. Boateng) and for Kingston upon Hull, North (Mr. McNamara). Perhaps he should ask them for their reasons. I am sure that they would be happy to explain.

    Grant-maintained Schools, Hendon
    Mr. John Marshall: To ask the Secretary of State for Education what is the number of applicants to Hendon grant-maintained schools for September 1995. [13249]
    Mr. Robin Squire: The Department does not collect data on applications for places at individual schools, including Hendon grant-maintained school; but I would expect that, like GM schools generally, the three in Hendon are increasingly popular with parents.
    Mr. Marshall: Is my hon. Friend aware that Hendon school was the first grant-maintained school in London and that, since then, it has been transformed from being under-subscribed to being heavily over-subscribed? Is he aware that when my right hon. Friend the Member for Norfolk, South (Mr. MacGregor) visited the school, a teacher came up to him and said that she was a member of the Labour party but that the best thing that had happened to the school was its becoming grant-maintained? Does he believe that that school would be good enough for the right hon. Member for Sedgefield (Mr. Blair)?
    Mr. Squire: My hon. Friend makes his point unmistakably. I am delighted to join him in congratulating the school in being a pathfinder and to tell him that not

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    only are 1,034 other schools now grant-maintained, but, in under two weeks, they will be joined by another batch of schools which will be free from LEA control.
    As my hon. Friend says, a growing number of schools that are becoming grant-maintained continues to contain governors who are strong supporters of other political parties. I assume that they, having seen the evidence of their eyes, will go out and convert the Opposition parties so that they also become aware of the advantages of grant-maintained status.

    Exam Courses
    Mr. Harry Greenway: To ask the Secretary of State for Education what proportion of GCSE and A-level courses can currently be undertaken on a modular basis; and if she will make a statement. [13250]
    Mr. Boswell: This information is not collected by the Department. We understand from the Schools Curriculum and Assessment Authority that 8 per cent. of national curriculum GCSE and 5 per cent. of GCE A and AS approved courses are modular.
    Mr. Greenway: Does my hon. Friend agree that there are many roads to heaven, and that provided—
    Mr. Skinner: I go where angels fear to tread.
    Mr. Greenway: Do not forget it!
    Does my hon. Friend agree that, provided that standards are high, modular courses at GCSE and A-level are as valid as A-levels where standards are equal? Does he accept that some pupils perform better on a modular-based course than on a course leading to an examination on a one-day basis?
    Mr. Boswell: I can readily agree with my hon. Friend that there are many ways to heaven and, further, that many pupils may benefit—at least, teachers tell me so—from the adoption of modular courses. The essential matter is that there should be some safeguard against accidentally straying on to the primrose path; that is provided by the SCAA code of practice and guidelines, which bear equally on modular and non-modular A-level courses.
    Mr. Bryan Davies: Is the Minister aware that his former permanent secretary will make the case on television this evening that the present A-level structure is too narrowly conceived and offers limited opportunity to more than half our children? Why is it that, when the Confederation of British Industry, the National Commission on Education and the teacher unions and associations demand reform of the post-16 examination position—when there is that consensus in arguing for reform of the A-level system—the Government alone resist?
    Mr. Boswell: The Government are determined to maintain standards and excellence. Sir Geoffrey Holland was a most distinguished public servant. He is a highly distinguished vice-chancellor, with whom I have always enjoyed excellent personal relations and whose opinions I shall consider with the greatest attention and interest.

    Schools, Barnet
    Mr. Booth: To ask the Secretary of State for Education how many school places are provided in the borough of Barnet; and how many children are attending schools there. [13251]
    Mr. Robin Squire: The number of pupils attending maintained secondary schools in Barnet is 18,790 and information provided by Barnet LEA and the Funding Agency for Schools shows that for 1994, there was a total of 20,268 places.
    Similarly, there are 22,048 pupils attending maintained primary schools with places for 22,212. The latter figure excludes GM primary schools, for which such information is not collected centrally, but where I understand that 854 places were being provided when the schools became GM.
    Mr. Booth: Will my hon. Friend publicly recognise and congratulate the outstanding, second-to-none performance of the pupils of Finchley and Barnet, supported as it is by partnership between admirable parents and, until last year at any rate, a Tory council?
    Mr. Squire: I willingly join my hon. Friend in congratulating the schools in Barnet, whose results compare favourably with other LEAs. Barnet is in the top five LEAs in respect of the percentage of pupils achieving at least five GCSE grades A star to C, and in the top 25 LEAs in respect of GCSE A and AS-level achievements. By any standards, those are excellent results.

    Teachers (Hours Worked)
    Mr. Butler: To ask the Secretary of State for Education what is the average number of hours worked (a) per day and (b) per week by classroom teachers in (i) primary and (ii) secondary schools during term-time. [13252]
    Mr. Forth: The work load survey, based on teachers' own returns and carried out for the School Teachers Review Body, showed that the average total hours worked by full-time classroom teachers during a term time week in March 1994 was 48.8 hours for primary teachers and 48.9 hours for secondary teachers. Data are not available on a daily basis.
    Mr. Butler: Does my hon. Friend agree that those figures show, yet again, just how hard teachers work and fully justify the Government's decision to increase their salaries by just short of 40 per cent. in the past five years and to allow in full this year's pay recommendation? Does he share my regret that parents, teachers and governors have been forced to lobby Parliament today because local education authorities continue to spend on discretionary and politically correct measures rather than fund properly, with the money that they have available, the full teachers' pay settlement?
    Mr. Forth: I am glad to join my hon. Friend in praising good teaching by good teachers. I agree that to concentrate simply on the number of hours worked reveals only part of the picture: it is the effectiveness of those hours which matters. My hon. Friend is absolutely correct about LEA spending. It is interesting that a number of LEAs have been able to order their priorities in such a way that they have been able to meet the teachers' pay rise in full and to continue to provide well for their pupils and schools. If all authorities approached funding in that manner, we would not have to witness the artificial hysteria that has been generated in some quarters.
    Mr. Battle: Is not the truth that teachers have been totally demoralised as a direct result of 17 years of the

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    Government's education policy? Today's lobby of Parliament, which has brought together teachers, governors and concerned parents, should be listened to by the Government, because they are withdrawing capital funds from local authorities to repair schools and they are undermining those authorities' ability to pay the wage bill. Why are the Government shuffling off their responsibilities, as usual?
    Mr. Forth: I am slightly surprised by the hon. Gentleman's assertions for two principal reasons. First, it is certainly true that teachers' worth has been recognised in the pay increases that they have received under this Government, under whom they have done extremely well—and rightly so, I believe. Average teachers' pay, after 1 April 1995, will be £22,200 per annum. That amply rewards the contribution that they are able to make.
    As for the hon. Gentleman's second assertion that the pay awards cannot be met, he obviously did not listen to my earlier reply to my hon. Friend the Member for Milton Keynes, North-East (Mr. Butler), in which I pointed out that a number of authorities, including many controlled by the Labour party, have found it possible to fund the teachers' pay award in full. I welcome that.

    Grant-maintained Schools
    Mr. David Evans: To ask the Secretary of State for Education how many schools have applied for grant-maintained status. [13253]
    Mr. Robin Squire: To date, 1,157 schools have published proposals to acquire grant-maintained status. A further 15 schools are currently under a duty to publish such proposals following "yes" votes in parental ballots.
    Mr. Evans: I thank the Minister for that reply. Is he a member of the Transport and General Workers Union? Does he agree with me that if the 1 million members of the TGWU had gone to grant-maintained schools, preferably the Oratory, they might have been prepared to support Bambi, the leader of that lot on the Opposition Benches, in rewriting clause IV?
    Mr. Squire: My hon. Friend, in his typically understated way, has put his finger on it. Although I am not a member of the TGWU, what is good enough for its members and for those sponsored by it should be good enough for and on offer to all parents. That will happen as self-governing schools become the norm under the Government.
    Mrs. Mahon: Are not the Minister and the Government engaged in a huge bribery exercise? Surely that is why the Government have given more than £400,000 for the capital building programme to just one grant-maintained school in Calderdale, Holy Trinity, while the remaining LEA schools have just £125,000 to spend between them for 1995–96. How do the Minister and the Government justify such blatant discrimination against LEA schools?
    Mr. Squire: The hon. Lady is wrong. As my hon. Friend the Minister of State said a moment ago, capital programmes for LEA schools will increase by more than 6 per cent. next year.
    Mrs. Mahon: Not in Calderdale.
    Mr. Squire: The hon. Lady suggests that Calderdale is treated differently from the rest of the country; of course
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    it is not. Capital allocations for LEA or GM schools are treated on the same basis. If she visits the GM schools in her constituency or in Calderdale she will generally find that, far from being bribed to become grant maintained, schools are pleased to become GM and they would not dream of doing anything differently.
    Dame Elaine Kellett-Bowman: Did my hon. Friend see the news item in last Tuesday's Evening Standard, which proved conclusively that support for grant-maintained status is not confined to Conservatives? Eric Hammond, a well-known trade union leader, said quite categorically that it was not in the interests of the school in his area to be part of an expensive bureaucracy such as Lancashire county council.
    Mr. Squire: My hon. Friend, in her inimitable fashion, adds her voice and her own references to the examples that have already been given of prominent socialists who have seen the light and who are now embracing the advantages of grant-maintained status. We can only wait until all Labour Members take that view and, more particularly, encourage their local supporters to remove their tanks from the lawns of schools whose only crime is to seek to run themselves.

    Schools (Standards)
    Mr. Mike O'Brien: To ask the Secretary of State for Education what is her policy for improving standards in schools. [13254]
    Mr. Forth: The Government's education reforms, including the introduction of the national curriculum and testing, performance tables and independent inspection arrangements, are all driving up standards in schools. More pupils than ever before are achieving five or more GCSEs at good grades, and more are going on to further and higher education.
    Mr. O'Brien: Is the Minister aware that his statement will ring hollow in Warwickshire, where angry parents, teachers, councillors and Members of Parliament from all political parties believe that education standards will fall as a result of the Government's financial settlement? What do the Minister and his right hon. Friend the Secretary of State for Education have to say about declining education standards in Warwickshire, where school classes of more than 40 pupils are anticipated and 200 teachers may be sacked? What will be done to ensure that education standards in Warwickshire do not fall?
    Mr. Forth: I suggest that the hon. Gentleman and parents and governors in Warwickshire ask some pretty searching questions of their local authority. They might look to a neighbouring authority, such as Birmingham, which is able fully to fund the teachers' pay rise in spite of the fact that it faces the same stringency and demands as other local education authorities. I believe that the hon. Gentleman's local education authority has many questions to answer and I hope that he will start asking them.
    Mr. Dunn: Is the Minister aware that the Labour-Liberal Democrat-controlled Kent county council spends £12,000 per day on conferences? What contribution does that expenditure make to raising standards in Kent schools?
    Mr. Forth: I am grateful to my hon. Friend for mentioning the problem that people up and down the

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    country are facing. His example follows on very well from what I said to the hon. Member for Warwickshire, North (Mr. O'Brien). I suggest that my hon. Friends should advise any parents, teachers or governors who approach them to look very carefully at the books of their local authorities. They should examine their local authorities' priorities and what they are spending taxpayers' money on. If that money is being spent on useless conferences of the kind that my hon. Friend mentioned, I suggest that local education authorities should give much more positive answers than we have had so far.
    Mr. Blunkett: Will the Minister give priority to improving the teaching of history and geography in order to bring home to the Chancellor of the Exchequer the full impact of what 16 years of Tory government have done to this country's industrial base?
    Mr. Forth: It is perhaps regrettable that Members of Parliament are unable to take advantage of the excellent national curriculum that we have introduced in our schools. I am sure that had many hon. Members had the benefit of the national curriculum, they might have been better able to face the present policy challenges.
    Mr. Harris: Does my hon. Friend agree that a fair system of funding is important in improving standards in schools? Will he join me in condemning the contemptuous campaign run by Liberal Democrats in Cornwall, who claim that the Government allow Cornish schools £100 less per pupil than the rest of England? Does he agree that that claim is completely and utterly untrue?
    Mr. Forth: I was shocked to hear of the scurrilous misinformation being spread by Liberal Democrats in Cornwall. Unfortunately, I suspect that it is not unusual and the people of Cornwall should be getting pretty fed up with it by now, but I confirm absolutely that the assertions made by Liberal Democrats in Cornwall are utterly and totally baseless. I hope that the people of Cornwall will realise that and will ask some searching questions of the county council.

  PRIME MINISTER

    Engagements
    Mr. Keith Hill: To ask the Prime Minister if he will list his official engagements for Tuesday 21 March. [13272]
    The Prime Minister (Mr. John Major): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meeting later today.
    Mr. Hill: In his busy day, has the Prime Minister noticed that his plea for peace within the ranks has failed and that the Chancellor and Lord Tebbit are at each other's throats again over Europe? How does he feel now that it is apparent that all sides of his party share the same view as the rest of the country—that he has no authority and is not up to the job?
    The Prime Minister: If the hon. Gentleman is concerned about differing views in Europe, I suggest that he has a look around the Benches beside him. If he seriously thinks that the deputy Leader of the Opposition, the right hon. Member for Kingston upon Hull, East (Mr. Prescott), agrees with the Leader of the Opposition, or
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    that the Leader of the Opposition agrees with the hon. Member for Bolsover (Mr. Skinner), he is living in a fantasy world.
    Mr. Duncan: Does my right hon. Friend agree that most calls for more funding are really calls for higher taxation and that most calls for greater economic well-being are really calls for higher inflation? Will my right hon. Friend, therefore, undertake to continue his policy of keeping a firm grip both on inflation and public expenditure and not to do what the Opposition always seem tempted to do—cheaply to buy people's votes with their own money?
    The Prime Minister: My hon. Friend is entirely right about the necessity of holding down public expenditure, and equally right to point out that it is simply economically illiterate to object to taxation levels and at the same time to call for higher expenditure, as the Opposition so frequently do.
    Mr. Blair: Does the Prime Minister agree with his Education Secretary, who said this morning—[Interruption.]
    Madam Speaker: Order.
    Mr. Blair rose—[Interruption.]
    Madam Speaker: Order; otherwise I shall have to name a Member on the Conservative Back Benches.
    Mr. Blair rose—[Interruption.]
    Madam Speaker: It is Jacques Arnold.
    Mr. Blair: I apologise to my hon. Friend's dog.
    Does the Prime Minister agree with his Education Secretary who this morning admitted that in funding the teachers' pay award some schools and authorities would face "considerable problems"?
    The Prime Minister: Of course we recognised from the outset that this year's settlement is tough in education. We have never made any secret of that fact. We have made it clear that local authorities must choose their priorities. We believe that teachers in the classroom are a priority and should be a first priority among education authorities.
    Mr. Blair: But what does the Prime Minister say to schools and authorities that, as the Secretary of State for Education admits, do not have the reserves and balances to fund the award? If it is proven to the Prime Minister's satisfaction that such schools and authorities exist—for example, in Tory Buckinghamshire—will he take action and intervene?
    The Prime Minister: I shall tell the right hon. Gentleman exactly what I would say to such authorities. If any local authority is thinking of cutting the number of teachers in the classroom, I would ask it what savings it had made in non-teaching aspects of education. I would ask if it has two administrators for every three teachers, as happens across the country. I would ask what administrative savings it had made. If the answer is none, I would ask, "Why have you made no savings, and why are you singling out teachers in the classroom?"
    Mr. Blair: Is not the Prime Minister aware that five out of the six authorities with the lowest administration

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    costs are Labour—and that all are facing cuts? The right hon. Gentleman talks about non-statutory funding. His Secretary of State for Education said what that means—nursery education, youth work and school transport. Is that an option? Why does not the Prime Minister listen to the voices of parents, governors and teachers, who speak for Britain when they say that if we fail to provide properly for our schools, we are not just letting down our children but betraying our country's future?
    The Prime Minister: We have provided more adequately for education and for choice in education than the right hon. Gentleman would ever contemplate. If he wants to know what the priorities are, I suggest that he addresses authorities—most of which are run by Labour—about the 1 million surplus school places, which cost £250 million a year, about making use of the estimated £700 million in unspent balances held by schools and about cutting bureaucracy at county hall, where they have failed to take account of the responsibilities of schools and where for every three teachers there are two support staff. Those are the questions that the right hon. Gentleman should address to education authorities. If he thinks that there are no savings to be made, I suggest that he refers to the Audit Commission report, which made it clear that better management of pay bills would save £500 million—5 per cent. of the whole pay bill.
    Mr. Heald: Does my right hon. Friend agree that regional assemblies for England would be confusing, expensive and divisive? Does he accept that people in Hertfordshire do not want to be governed from Norwich? When he exposed that policy, the Labour party fell into confusion and chaos. Will he say today that we are not going to do it?
    The Prime Minister: There certainly seems to be some confusion on the Opposition Benches about regional assemblies. Almost every statement about them that can be made has been made. As Labour examines its policy, it realises that it is the total nonsense that I pointed out some time ago.
    Mr. Prescott indicated dissent.
    The Prime Minister: The right hon. Gentleman shakes his head; clearly he does not understand that his party's policy is nonsense. When Labour examines its policies for Scottish and Welsh assemblies in further depth, it will find precisely the same.
    Mr. McKelvey: To ask the Prime Minister if he will list his official engagements for Tuesday 21 March. [13273]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. McKelvey: Has the Prime Minister no sense of shame at having dithered over obscene fat cat salaries, alienating low-paid workers in the health service, including nurses and midwives? Is not the right hon. Gentleman setting the scene for a summer of discontent throughout the NHS?
    The Prime Minister: The hon. Gentleman knows very well that we have funded the health service better than any previous Government. That is clearly shown by the
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    number of people treated in the national health service, the wider range of services and the better treatment that is available.
    Mr. Patrick Thompson: To ask the Prime Minister if he will list his official engagements for Tuesday 21 March. [13274]
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Thompson: Bearing in mind the fact that this is national science, engineering and technology week, has my right hon. Friend had time today to read the encouraging report from engineering employers, which states that economic recovery is developing in a way that will increase national prosperity in the longer term? Is not that a tribute to Government economic policies, and is not this the right time for young people to go for a career in engineering?
    The Prime Minister: I agree about that, and about the need to encourage more young people into engineering and more people into learning skills of that sort. That is why we established the non-vocational qualifications some time ago. In engineering and manufacturing generally exports are growing and employment is increasing; that has not happened in manufacturing generally for many years.
    Mr. Alton: To ask the Prime Minister if he will list his official engagements for Tuesday 21 March. [13275]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Alton: I welcome the Government's decision to provide £1 million for the clearing of anti-personnel mines in Cambodia. Is the Prime Minister aware, however, that there are 100 million anti-personnel mines strewn around the world, and that there have been 1 million casualties and fatalities, especially among children? Does he agree that the time is ripe for an international moratorium that would bring within its scope the area-denial mines that are still shipped out of this country? Will he not agree with the terms of the early-day motion, now supported by more than 100 hon. Members of all parties, urging the Government to give a moral lead?
    The Prime Minister: I am grateful to the hon. Gentleman for giving me notice of the fact that he wished to raise a detailed question about land mines. We have neither produced nor exported anti-personnel mines for some years, and we have contributed generously to the demining programme. In July we announced an indefinite moratorium on exports from the United Kingdom of mines without a self-destruct mechanism. We shall be hoping to use the review in September of the UN weaponry convention to strengthen the protocol on the use of land mines and to ensure that its provisions gain universal support.
    Mr. Allason: Will my right hon. Friend support a measure to make it a statutory requirement that all local

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    authorities declare in their published budgets what is and what is not a statutory requirement and a statutory area of expenditure?
    The Prime Minister: My hon. Friend suggests an ingenious method of ensuring that local authorities' priorities are met. I shall invite my right hon. Friend the Secretary of State for the Environment to examine it.
    Mrs. Bridget Prentice: To ask the Prime Minister if he will list his official engagements for Tuesday 21 March. [13276]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mrs. Prentice: Can the Prime Minister tell us whether it is the Chancellor of the Exchequer or the Home Secretary who is right about the feelgood factor?
    The Prime Minister: The people who have most felt the feelgood factor thus far are the 600,000 people who are no longer on the unemployment register, as a result of the fall in unemployment. In terms of economic management, we are seeking to make sure that we come out of the recession of two years ago in a way that avoids laying the seeds of future difficulties, which were sown on many other occasions since the second world war. Hence we have had to take long-term, difficult decisions; as a result we now have the best prospects of rising living standards, year after year, that we have had for many years. That will produce a very good feelgood factor.
    Mr. Rathbone: Does my right hon. Friend accept that many Conservative Members share the qualms about land mines expressed by the hon. Member for Liverpool, Mossley Hill (Mr. Alton), but that none of us will accept the fact that Liberal Democrat county councillors are not funding education as they can—particularly in East Sussex, where they resisted and voted against a Conservative amendment to the budget that would have provided the necessary funds for education in the county?
    The Prime Minister: I was not aware of the example to which my hon. Friend has drawn my attention, but the rather cavalier use of taxpayers' money by Liberal Democrat authorities is no new phenomenon.
    Mr. Sutcliffe: To ask the Prime Minister if he will list his official engagements for Tuesday 21 March. [13277]
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Sutcliffe: Is it not true, from what we have seen and heard, that there is no policy area apart from Northern Ireland about which the people of this country believe anything that you, Prime Minister, have to say? In education, the parents and teachers are against you. In health, the midwives have been moved to militancy. Is not the best thing that could happen to this Government who cannot agree among themselves that you should resign and that we should have an immediate election?
    Madam Speaker: Order. The hon. Gentleman is not addressing the House and the Prime Minister correctly. Would he like to try again? He has another minute.
    Mr. Sutcliffe: I apologise, Madam Speaker, if I have not spoken in the language of the House, but I am expressing what I think the majority of British people feel.
    The Prime Minister: Had the hon. Gentleman been in the House longer, he would have heard remarks like that put to me before the last general election.
    Mr. Butcher: Will my right hon. Friend publish all the evidence, some of it garnered in response to hostile questions from Opposition Members, which shows beyond any doubt whatever that a reduction in the top rate of income tax has increased the proportion of tax paid as a total from the top 10 per cent., and that any proposal to increase the top rate of income tax will produce a shortfall in revenue which can then be obtained only from middle-income earners?
    The Prime Minister: My hon. Friend sets out a matter that has been well understood for many years. I will certainly invite my right hon. and learned Friend the Chancellor to lay that information out in the House of Commons Library. It might be very instructive for the right hon. Member for Kingston upon Hull, East (Mr. Prescott), who is giggling on the Front Bench because he does not understand it.
    Madam Speaker: Time is up. We now have a statement from Mr. Secretary Gummer. [Interruption.] Order. Will hon. Members who are leaving please do so quickly, as we have a statement on local government reorganisation to deal with?

Local Government Reorganisation
3.31 pm
The Secretary of State for the Environment (Mr. John Gummer): With permission, Madam Speaker, I should like to make a statement about the review of local government in England.
In my statement on 2 March, I set out my aims for the local government review. I announced my decisions for 20 counties, and I also announced that I intended to invite the Local Government Commission to carry out further reviews of a small number of individual districts.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) asked me to consider adding a small number of other districts to the list; he particularly pressed me to consider Norwich and The Wrekin. I have now decided to add those two districts to the list of those that I shall consider for fresh reviews.
At the time of my statement on 2 March, I was not in a position to announce the name of the new chairman of the commission. I am now pleased to say that Sir David Cooksey, currently chairman of the Audit Commission, has agreed to become chairman of the Local Government Commission for England. Sir David's appointment will be for one year initially, by which time we expect the programme of shire district structural reviews to have been completed. Sir David will take up his post in early July.
My statement on 2 March left just 12 counties on which I had not yet announced my decisions. I am pleased to be able to do so today.
I have decided to accept the commission's recommendations for the counties of Derbyshire and Staffordshire. The former county boroughs of Derby and Stoke-on-Trent will become unitary authorities; the rest of the county will, in each case, remain two tier.
Similarly, I accept the recommendation for Wiltshire, that Thamesdown—that is, Swindon—should become a unitary authority, and that the two-tier system should be retained for the rest of the county.
For East Sussex, the commission recommended a new unitary authority, to incorporate the existing boroughs of Brighton and Hove. I know that that recommendation has aroused strong local feelings—for and against. On balance, however, I agree that the combined authority is the right solution for the area. The rest of the county will retain the status quo.
I also propose to accept the commission's recommendations for Devon. The former county boroughs of Plymouth and Torbay will become unitary authorities. Elsewhere in the county, the two-tier system will be retained, except that, as I announced on 2 March, I am considering including Exeter—which is, of course, another former county borough—on the list of districts to be referred to the commission for fresh reviews.
Similarly, I accept the commission's recommendation that Nottingham should become a unitary authority and that the rest of Nottinghamshire should remain two tier, subject to possible further reviews of the districts of Broxtowe, Gedling and Rushcliffe.
For Essex, I propose to accept the recommendation that Southend should become a unitary authority.
Sir Teddy Taylor: Hear, hear.
Mr. Gummer: The independent view of Southend is pretty well known to the House.
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The commission also recommended that the boundary of Southend should be extended to include Southend airport. [Interruption.] It has a large number of European services. That needs further exploration and I may want to ask the commission in due course to look at the matter again.
With regard to elsewhere in Essex, I have already announced that Thurrock and Basildon will be subject to further reviews. With that in mind, I do not intend to act on the commission's recommendation for a major boundary change involving Basildon, Brentwood and Rochford. The rest of Essex will remain two tier.
In Hereford and Worcester, I agree with the commission that the historic county of Herefordshire should be restored on its former boundaries as a single unitary authority, and that Worcestershire should be restored as a county in its own right, retaining the two-tier system throughout the county. The district of Malvern Hills, which was created at the time of the 1974 reorganisation, will be split as recommended by the commission.
For Leicestershire, I am minded to agree that the city of Leicester should be given unitary status. I am also minded to agree that the historic county of Rutland should regain its independence as a unitary authority. That is one case where the arguments based on local identity seem to me to be particularly strong.
I recognise, however, that there are likely to be particular problems with the effective and convenient delivery of local services in that area—particularly with regard to Rutland, whose population is just 33,000. Before I introduce the order to implement these decisions, therefore, I shall want to be satisfied that good practical arrangements can be made for local services. I expect that, at least for some services, some form of joint working with neighbouring authorities may be needed. I shall also want to be satisfied that that can be paid for on the same basis, and within the same financial constraints, as for other reorganised authorities, and without imposing unacceptably high costs on the people of Rutland.
I now come to three counties where I have decided to depart from the recommendations made by the commission.
For Hampshire, the commission recommended that Portsmouth, Southampton and the New Forest should become unitary authorities. I agree with the recommendations for Portsmouth and Southampton. In the case of the New Forest, however, I have concluded that the case for unitary status is not sufficiently made out in a district that has more in common with the many districts recommended to remain in a two-tier structure. I have decided therefore that in the New Forest, as in the rest of Hampshire, the two-tier structure should be retained.
Similar considerations have affected my decision for the neighbouring county of Dorset. I agree with the commission that the boroughs of Bournemouth and Poole should be given unitary status. But elsewhere in Dorset I note that the existing authorities are not enthusiastic about the commission's proposals. On balance, I have concluded that the rest of Dorset will be better served by the two-tier system.
Finally, for Berkshire the commission has recommended the replacement of the county council by a structure of five unitary authorities. I agree that the county council should be abolished. But I disagree with the commission's recommendation that the districts of Bracknell

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Forest and Windsor and Maidenhead should be combined. I am satisfied that each of the existing districts in the county is capable of operating as a unitary authority, and I propose to modify the commission's recommendations accordingly. The county area of Berkshire will be retained together with the Lord Lieutenancy, but it will no longer have a county council.
Although my decision for Berkshire follows a different pattern from other counties, I am satisfied that the difference is justified. I note that it has the support of all the district councils concerned, and that until recently the county council also favoured a unitary structure for the county. I have said before that different structures may be appropriate in different areas to meet different local circumstances; Berkshire is a case in point.
I have given a full explanation of the background and reasons for the decisions today, in a written answer to my hon. Friend the Member for Eastbourne (Mr. Waterson). There are copies in the Library and the Vote Office.
My officials will now start work on drafting the orders that are needed to put the decisions into effect. The local authorities and their associations will of course be consulted. I hope that the first orders will be ready to bring to the House soon after the local elections on 4 May; in the meantime, we shall also be consulting on draft guidance to be given to the Local Government Commission for the fresh district-based reviews.
In my previous statement, I announced that a small number of districts would be referred to the commission for further review, and that I was considering whether to refer a limited number of others. Given the need to minimise uncertainty—and for there to be a clear end to the review process—I should perhaps repeat that, apart possibly from the two districts that I mentioned at the beginning of my statement, I am unlikely to want to add to the list.
The decisions that I have announced today reinforce the pattern that has emerged from the review. In broad terms, it constitutes abolition of the unloved "artificial" counties created in 1974, which have never commanded the loyalty of local people; creation of unitary local government in many large non-metropolitan towns and cities that will be well placed to benefit from the extra coherence and effectiveness that unitary local government can bring; and, elsewhere, the two-tier system retained, but with improved co-operation between the tiers.
I remind the House that I made it clear in my earlier statement that I would hold the counties to their promises of better co-ordination, greater subsidiarity and keenness to listen to the attitudes of local people in both parish and district councils in achieving the kind of government whose retention they sought.
I hope the House will agree that, with those changes, local government will be in better shape to meet the challenges that undoubtedly lie ahead.
Mr. Frank Dobson: I welcome the statement, as far as it goes. It has the singular merit of being in line with the principles that the Secretary of State set out in his statement of 2 March, which we welcomed. What it boils down to is a recreation of county boroughs that should never have lost their county borough status in the first place. I especially welcome the decision to give county borough status to Derby, and to retain two-tier local government in the rest of Derbyshire. I hope
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that that means that the Government and their supporters will now abandon their continuing mean-minded attacks on the county.
The Government's proposition rights the glaring anomalies that arose from the review. I refer in particular to the recommendation of independence for Rutland, which contains 33,000 people, but not for places containing 180,000. Apparently, even the Secretary of State now has some doubts about the Rutland decision; but we shall see what happens about that.
I welcome the Secretary of State's acceptance of the inclusion of The Wrekin and Norwich in the list of districts to be, as it were, reconsidered for reconsideration, but I was serious in regard to the other councils that I mentioned when we last discussed the matter. Since then, other districts have submitted themselves for consideration. I realise that the Secretary of State must draw the line somewhere, but I hope that he will not automatically rule out the districts that neither he nor I mentioned on the previous occasion. I do not think that we should proceed on the basis that the Department of the Environment is the fount of all wisdom in this regard. The right hon. Gentleman should acknowledge that it should be open to other districts to put themselves forward for independence if they can make a rational case.
I expect that the new Local Government Commission will make what may be described as a more structured, consistent and sensible approach to the task that it has been given than its predecessor did, that the criteria that it applies will be applied to each district and that there will be proper and consistent consideration of people's views. Also, if polling is to be done, I hope that it makes propositions clear, so that people know on what they are voting.
County boroughs and the districts that have been named will have the opportunity to demonstrate to the commission that they are entitled to independence, that their independence will be workable and popular and that they will be able to provide decent services for local people. That is to be welcomed because a council that can draw on civic pride and a sense of place is more likely to be able to provide decent services.
I welcome the appointment of Sir David Cooksey to chair the commission and I look forward to him conducting an orderly, sensible and consistent review. I welcome the undertaking from the Secretary of State that we shall be consulted about the remaining membership of the commission and the guidelines.
Although it may seem churlish, I must confess that I am, from time to time, a churl. I therefore remind the House that this whole review started with a statement from the right hon. Member for Henley (Mr. Heseltine), the then Secretary of State for the Environment, who said:
"most local authorities want unitary status and we believe that such status will provide a better structure for the future in most areas."—[Official Report, 20 January 1992; Vol. 202, c. 37.]
As a result of that, we have had a protracted, ill-considered, expensive and acrimonious review of local government across England, during which large numbers of staff in counties and districts have been deployed to present arguments for or against change, and in some areas, for two or three years, vast amounts of resources have been used and money has been paid out in court action. The review has simply distracted attention and

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diverted resources from the councils' proper job of providing local services. It has been very unsettling for the staff.
In the new circumstances, I hope that the Secretary of State will acknowledge that what is proposed in some areas prolongs uncertainty. In other areas, the staff will have to go through the process of change. I hope that the right hon. Gentleman will recognise that they are entitled to some protection and help over compensation, transfer, detriment and the implementation of compulsory competitive tendering. I am glad that in his previous statement he accepted my suggestion that he should meet the unions. I know that that meeting has now been arranged. I hope that he will find it possible to accept some improvement because the changes are not the fault of the staff—they have been forced on them by the Government.
I hope that the new commission will get on with its job and carry out the task in a proper and sensible way, and that this time it will do a decent, consistent job. All this could have been done two to two and a half years ago, and the county boroughs could have been recreated two years ago if the Government had recognised common sense from the start.
All these changes are being proposed to councils that were set up and had their boundaries established by a previous Tory Government. They are changes to things that the Tories got wrong in the past and I hope to God that they will not get things wrong again.
Mr. Gummer: I thank the hon. Gentleman for the part of his comments that supported what we are doing. I am sorry for his lapse into churlishness, and I shall return to that. I was also surprised that he should start by suggesting that there were those who were mean minded about Derbyshire. The county of Derbyshire could have done with a little more meanness itself and then it would not have been one of the most disliked local authorities in the history of mankind. The fact of the matter is that Derbyshire, both under Mr. Bookbinder and with Mr. Bookbinder still in the wings, did not and does not set an example of county government that most of us would like to follow. That is why I have some sympathy with those of my hon. Friends who wish that we could have gone further with unitary authorities in Derbyshire.
As for the other matters that the hon. Member for Holborn and St. Pancras raised, I too am concerned for the staff. That is one of the reasons why I want to restrict the number of councils being considered. The period is significantly shorter than the period originally announced, because I shortened it myself from the six to seven years that looked likely at first. None the less, staff will still be uncertain during that shorter period, and I should like to reach solutions as quickly as possible.
However, the staff are the servants of the local authorities, and if in the end we want to achieve the best local authorities that we can, there are bound to be difficulties occasionally. We must accept the fact that in private business most people have to cope with change all the time, so I am not quite so enthusiastic about suggesting that every local authority member of staff should have the kind of protection that is not available to everybody else who has to deal with difficulties such as making a profit, selling goods, providing services and being directly at the behest of customers and the public.
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I was also a little concerned by the hon. Gentleman's attack on the fact that the process had led to so many court actions. He should ask the Labour members of the former Cleveland county council what they were doing when they spent all that money on such court actions. They lost every one, as almost everyone could have told them in the first place that they would. Nevertheless they were prepared, as Labour councils always are, to spend other people's money in the defence of their particular—I was about to say "dogma", but I shall not.
The same is true of Lancashire; I shall watch carefully to see whether that county council carries through its considerable promises to the districts and parishes of Lancashire as to how it will operate in future.
Finally, the hon. Gentleman said that we were changing structures set up by a previous Conservative Government. I remind him that the original changes were made 20 years ago. If he really thinks that local authorities stay in the same place and are absolutely perfect after 20 years, he has a curious view of the pace of change, and little grasp of the fact that we no longer have local authorities that think that they should run everything. We now have enabling local authorities, with a different view of how they should operate.
Several hon. Members rose—
Madam Speaker: Order. I seek to call as many Back Benchers as possible, but I shall not be able to call many unless questions and answers are brisk. This is a day not for votes of thanks, but for one question, and one only, to the Minister and for a brisk reply.
Mr. Paul Channon: Is my right hon. Friend aware that, as so frequently in the affairs of Southend, all respectable Conservative opinion will be thrilled and delighted by the decision that he has announced, which will restore to Southend the unitary status that it had for more than 50 years, with which it governed its affairs with remarkable success? Is he further aware that the only people who, for some mysterious reason, will oppose the decision are the Liberal and Labour members of the town council? For the sake of clarity, will my right hon. Friend confirm that the elections will take place in 1996 and the new authority will start in 1997?
Mr. Gummer: There will be elections next year and the new council thereafter. I thank my right hon. Friend for what he said. I would have expected nothing else from the Liberals and the Labour party in Southend—especially the Liberals, who find it difficult to maintain the same view for two days running.
Mr. David Rendel: What does the Secretary of State mean by consultation? Although I welcome the appointment of Sir David Cooksey, I remember that during his previous announcement the right hon. Gentleman said that he would consult the Opposition before making the appointment, whereas in fact he simply told me whom he had asked to do the job, without any consultation whatever. What does he mean by consultation in the case of Berkshire, which he has announced will be given six unitary authorities—a solution proposed by nobody, and on which no consultation whatever has taken place? What does he mean by consultation when he announces that Rutland, which will be a small unitary authority, gets through on a

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60 per cent. popular vote while New Forest, which also achieved a 60 per cent. popular vote, has been refused the same status although it would be much larger?
Mr. Gummer: The hon. Gentleman sat in my office for 10 minutes and was asked to give his opinion on what should happen in Berkshire. At every moment, he refused to give his opinion and the councillors who were present became more embarrassed and got redder because he would not give his opinion. The Liberal Democrat party gives an opinion only when it has decided that it will get one extra vote by going one way rather than the other. The hon. Member for Newbury (Mr. Rendel) is worse than most Liberals in that way, and I must say that consulting the hon. Gentleman is almost impossible.
I consulted the hon. Member for Holborn and St. Pancras about the person who was to be appointed, and I am perfectly happy to consult widely, as I have done in the past, about the members of the commission. I hope that that can also be done on the guidelines. The hon. Member for Newbury was given every chance to speak about his own county, and he could not manage it.
Sir Timothy Sainsbury: Is my right hon. Friend aware that one of the main reasons why many of my constituents expressed opposition to a merger of Hove with Brighton was their understandable fear at the thought of their well-run Conservative council being joined with a borough whose socialist council is notorious for its inefficiency and extravagance? My right hon. Friend mentioned the incorporation of Southend airport in the borough of my right hon. Friend the Member for Southend, West (Mr. Channon). Is he aware that the western boundary proposed for my local unitary authority is unsatisfactory both economically and geographically, and that it divides the port of Shoreham? Can he assure me that he will look at the earliest possible moment at that boundary, which ought to be extended to the River Adur?
Mr. Gummer: I am happy to assure my right hon. Friend that when we come to look at the boundaries, which will not be immediately, I shall make sure that that particular boundary is carefully looked at early on. One of the real objections that I have heard widely in Brighton and Hove is the fear that the present Brighton town council would become dominant in the new authority. That council is so forgetful of the interests of its ratepayers and is so rude to incoming conferences that it forces the conferences to choose other towns to go to. That is because of the inability of Brighton council to keep its extremist left-wing views to itself. The answer is for the citizens of Hove to continue to vote Conservative and to make sure that the new borough is run by sensible people.
Mr. Dennis Skinner: Now that we have had three Etonians in a row, could I ask the Minister whether he thinks he has come to the hard part now? The Government have gone back to the 1974 regime of Derby city and two-tier status for the rest of the county. Does he understand that one of the problems in local government—apart from the boundaries—is the fact that this Government have withdrawn £50 billion in grants over the past years? What local government really needs is the money to provide work, to do the jobs and to reduce the class sizes—to the same as those at Eton if
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necessary—and to get more teachers. The Government must stop the rate capping of local authorities and let local democracy thrive.
Mr. Gummer: Year in, year out the Government have provided more money to local authorities, and year in, year out Derbyshire has wasted large sums of money, both from this Government and from its own ratepayers. Derbyshire has an appalling record, and the fact that the hon. Gentleman should still be defending it shows just how appalling his judgment is.
Mr. Patrick McLoughlin: Will my right hon. Friend explain to me how it is that last week he called Derbyshire county council incompetent and the chairman of the Conservative party called it corrupt, but that today he has brought forward proposals that will re-establish a Labour majority in that area for many years to come? How does he expect me to support the proposal?
Mr. Gummer: I fear that I must say to my hon. Friend that I have to distinguish between the council and the councillors. The only answer in Derbyshire is to get rid of those who are at the moment mis-running the local authority and replace them with people who can run it. I understand my hon. Friend's frustration, but he must accept that—however bad the councillors may be—it would be quite wrong for me to make a judgment for all future generations. I have to judge on the basis of the councils.
Mr. Bruce Grocott: While I join my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) in welcoming some of the points that the Secretary of State has made today, may I press him on the timetable? He says that he is minded to add The Wrekin to the list. When does he expect to reach a decision on that? If he decides to add The Wrekin to the list, what will be the time scale within which the commission will work?
Mr. Gummer: I thank the hon. Gentleman for that. Between now and July, when the new commission will come into operation under the new chairmanship, I intend to hold discussions with the county councils, district councils, parish councils and other people who are involved to decide whether it seems sensible to offer The Wrekin as one of the names on the list to be considered. If I decided that it was, it would be for the incoming commission to make its timetable, but I hope that the matter would be considered as soon as possible after July.
Mr. David Martin: May I welcome my right hon. Friend's decision about Portsmouth? Will he and his Department do everything possible to persuade the Liberal Democrat-led Hampshire county council to co-operate from now on with the new arrangements? That would be in stark contrast to the expense and wasted time of the abortive attempt to keep the Liberal Democrats' county empire as intact as possible.
Mr. Gummer: I shall certainly seek to do that. The order will insist that the county council take on its shoulders the responsibility for proceeding as rapidly and conveniently as possible. I agree with my hon. Friend that,

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as in other parts of the country, no one whom I have known has been so assiduous in tending their own interests as Liberal Democrat-dominated county councils.
Mr. Joseph Ashton: Is the Minister aware that he has now left north Nottinghamshire in limbo-land? While he has announced unitary authorities for the four districts in the south, he has not made any announcement as yet about the four districts in the north. Is he aware that all eight district councils wanted unitary status and that the only fair solution is to grant it to all of them? Will he have a look at what he now proposes to do for the north?
Mr. Gummer: I have the problem that the commission retreated from its original views. I do not have the powers to denominate any of the extra authorities—certainly not the three plus the four. I have said that I shall consider whether the three authorities that I mentioned ought to be looked at again by the commission.
I have a problem with the decision on Nottingham city. I maintain my view that Nottingham city should become a unitary authority, although I find it particularly difficult as I read today in the Daily Mirror that Nottingham city council has banned the use of the words "ladies and gentlemen" in any of its properties. People will not be able to say, "My lords, ladies and gentlemen" at the beginning of a dinner in any property owned by Nottingham district council because that is thought to be in some way sexist.
Mr. Nigel Waterson: Is my right hon. Friend aware of the profound disappointment that his statement will cause in my constituency? Will he look again at Eastbourne's former county borough status and its profound local identity, which even the Local Government Commission managed to spot, and send it for further review under the newly constituted Banham-free commission?
Mr. Gummer: I understand the particular difficulties with Eastbourne. As my hon. Friend says, it was historically a county borough. It is not one of those areas that naturally fit the suggestions that I have made. I do not think that it appeared in my original list. There has not been pressure from outside, but I understand my hon. Friend's point. I shall, of course, look at it again.
Mr. Paddy Tipping: Does the Minister accept that the decision to give Nottingham unitary status, which I welcome, cannot move forward positively until decisions have been made on the surrounding unitaries—Gedling, Broxtowe and Rushcliffe? Clearly, that creates uncertainty. Can the Minister give me an idea of the timetable that he and the commission have in mind to resolve that problem?
Mr. Gummer: That does not need to hold things up. The elections could not take place in any case for a further year. In the course of that year, I am sure that we shall come to an understanding about the other authorities. I am sorry that the hon. Gentleman should have found unsatisfactory the comment that I made about Nottingham city council. The reason why I made it is, first, simply that it is true. I have checked with the city council that it is true. Secondly, it reminds us that unitary authorities
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have a responsibility to act in the interests of everyone and not to press the particular ideas of political correctness that are damaging and downright silly.
Dr. Michael Clark: Is my right hon. Friend aware that Southend airport, to which he referred, used to be RAF Rochford and is within the Rochford district council area? Does he know that it is a large piece of undeveloped land that separates urban Southend from semi-rural Rochford? Does he agree that, if the airport is included in a unitary Southend with its own planning authority, it is likely, should the airport fail, that that land will be built up, to the great detriment of both Southend and Rochford?
Mr. Gummer: That is precisely why I felt that it would not be proper to take the commission's recommendation on board, but that the matter should be considered further in the future.
Mr. Eric Martlew: I am sure that the Minister is aware that there will be great disappointment in my constituency of Carlisle, a fine historic city, that he has not designated it for unitary status today. Will he explain the reasons briefly? Does his statement mean that he has closed his mind to giving Carlisle unitary authority status?
Mr. Gummer: The district of Carlisle contains significant rural parts that were not in the original county borough of Carlisle. I have considered Carlisle carefully; it is unlikely that I would want to add it to the list as it fits none of the reasonable proposals and it would stand out rather surprisingly if did.
Mr. Eric Pickles: My right hon. Friend's announcement that he would not accept the Local Government Commission's recommendation on the boundaries between Brentwood and Basildon is welcome. He will be aware of correspondence between us about the funding of the proposed merger, but he will not be aware of a recent statement by Liberal Democrats in Brentwood that, somehow, they could make a profit from such a merger. Does he agree that local government reorganisation on that basis would be ludicrous and that the best thing would be to base it on a locality? Does he further agree that Brentwood council should now look for civic pride for the people whom it represents in Brentwood, not for empire building elsewhere?
Mr. Gummer: We shall certainly look at all the figures that have been put forward, but, on the surface, the argument put forward by the Liberal Democrats seems pretty specious. It is important that Brentwood and places like it should seek to increase the civic pride that arises from people's sense of place.
Mr. Mike Hall: Will the Secretary of State confirm that Halton borough council is now on his list for review and that, when Halton and Warrington are reviewed, there will be strict guidelines on what county councils can spend on the campaign because, during the previous review, Cheshire county council threw its cheque book away, which was a waste of ratepayers' money?
Mr. Gummer: I remain of the opinion that Halton should be considered for a possible review. I shall look at

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it in the way that I have said to others and decide before July whether it should be reviewed. A good case has been put forward, so it is worth looking into it carefully.
Mr. Patrick Thompson: On Norwich, given that my right hon. Friend appeared to restate the assurance that he gave the hon. Member for Holborn and St. Pancras (Mr. Dobson) earlier this month, will he consider carefully the following points when he refers the matter for further consideration? More than 70 per cent. of people in Norwich rejected unitary status in a MORI poll; any change would cost the taxpayer millions of pounds; and proper consultations must be undertaken with the county council and the other district councils in Norfolk, which have strong views on the matter. Will he bear all those concerns in mind?
Mr. Gummer: I did not immediately suggest that the commission should consider a range of local authorities, precisely because I want time to look into them, in the way that my hon. Friend suggests. It is clearly necessary to establish that, even where a town—in this case, a city—fits the general criteria that we sought to use, there is local support for the proposition of a unitary authority. It would be wrong to deny people the opportunity to give that local support, but it is necessary to try to gauge it in some way, and I shall certainly talk to all the authorities to which my hon. Friend referred.
Mr. Jamie Cann: Does the Minister accept that there are many similarities between Norwich and Ipswich, not only our ability to prop up the rest of the Premier league, along with Leicester—
Mr. McLoughlin: Not for long.
Mr. Cann: Does the Minister also accept that we are both towns of about 120,000 people in rural counties of 600,000 or 700,000 people, which had county borough status for hundreds of years and ruled their own lives for hundreds of years? Yet the Minister proposes, against the wishes of people in Norwich—as I understand it from the hon. Member for Norwich, North (Mr. Thompson)—to give unitary status back to Norwich, but to deny it to Ipswich. I am sure that he cannot possibly mean that, and I hope that he can assure me that he will review the matter.
Mr. Gummer: If I may dare say so to the hon. Gentleman, it is a pleasure to see him dealing with his own constituency rather than with matters that relate to other people's constituencies, as is usually his wont. I am his neighbour, and I say that because, over Bentwaters, he is busy dealing with a matter that is no business of his and is causing my constituents considerable trouble as a result.
Mr. Cann: Will the Minister give way?
Mr. Gummer: No, I will not give way. I am answering the question. The hon. Gentleman must have some courtesy. He has given me the opportunity to answer his question and he has also given me an opportunity that the rules of the House do not usually give me, because I am not able to have an Adjournment debate on a matter of that type.
The hon. Gentleman may wish to know that I have read the local newspaper carefully and I found that the Labour party is extremely reticent about whether it wants Ipswich to be a unitary authority. I have detected no widespread
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feeling that Ipswich should be a unitary authority. It is not the same as Norwich. As a matter of fact, it is a smaller town, and it has a declining population. There are reasons to believe, therefore, that perhaps the same condition does not apply. However, I shall consider the points that the hon. Gentleman brings me, should he wish to.
Mr. Simon Coombs: Is my right hon. Friend aware of the fact that the people of Swindon will be pleased and proud at the first opportunity ever to be wholly responsible for their affairs? However, will he and his hon. Friends continue to hold a watching brief on the relationship that will now begin to develop between the unitary authority in Swindon and the rest of Wiltshire, to ensure that there is a co-operative spirit between the two new sets of authorities?
Mr. Gummer: I shall do my best to ensure that that happens.
Mr. Terry Lewis: Will the Secretary of State sweep away the hideous title, Greater Manchester council, restore the ancient Lancashire boundaries and put the city of Salford, the borough of Wigan and the borough of Bolton—all three standard authorities—back into the title of Lancashire?
Mr. Gummer: There will be boundary reviews of the mets when there is a big demand but, in the meantime, no.
Mr. Alan Duncan: The county of Rutland is, as it were, at the starting gate. If it can show itself to be a runner and a safe bet, my right hon. Friend will fire the starting gun. Does he accept that nothing could be fairer than that, and does he accept the gratitude of those who live there for the way in which he has handled that matter? Will he further confirm that the city of Leicester will not be allowed to continue to expand its boundaries?
Mr. Gummer: That is not a matter of boundary review at the moment. I cannot control whatever may happen in future, but at present it is a matter of deciding which areas should have unitary authorities, and I very much hope that Rutland will rise to the challenge.
Mr. Andrew Miller: The Secretary of State referred three times, I think, in his statement to questions of history. Against that background, and given the fact that that opinion is supported by the Labour party, the Conservative party and the chamber of commerce, will he review his decision in respect of Chester and, if he is prepared to do that, the consequential effects elsewhere in Cheshire?
Mr. Gummer: I have looked at Cheshire generally and Chester specifically, and I do not think that Chester meets the requirements so that we could reasonably envisage it as a unitary authority. I think that the hon. Gentleman will recognise that, in terms of size and other matters, it would probably be better if it remained part of a two-tier system. I do not at the moment intend to review that opinion.
Sir Teddy Taylor: As the great majority of people in Southend-on-Sea, including my family, will be delighted that the Secretary of State has decided to restore local government independence to Southend-on-Sea, will he seek, after that excellent decision, to advise his Cabinet colleagues that there is huge merit in avoiding the centralisation of decision

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making, and that one cannot obtain more efficiency and better value other than by having decisions made locally and democratically?
Mr. Gummer: I entirely agree with my hon. Friend. The great advantage of subsidiarity is that one does at the lowest level that which is best done there. The other part of subsidiarity, however, means that one does at other levels where things can be done what can be done only there. I am happy to say that Britain takes that view. We do at Westminster what is best done here and we do at European Union level the things that otherwise we would not be able to do at all. That is why subsidiarity is such a sensible idea.
Sir Jim Spicer: My right hon. Friend has made it absolutely clear that he expects county councils to live up to the promises that they have given to him. His ministerial team will know that Dorset has been extremely forthcoming in saying that it would accept an external audit—tough auditing—of its functions and expenditure. Who will carry out that function? Will my right hon. Friend appoint someone with the authority to carry out that audit on a six-monthly basis to make certain that Dorset is making the right progress?
Mr. Gummer: The Audit Commission has that particular role. I shall certainly draw to its attention the point that my hon. Friend made. I should also mention to him another serious matter. The proposals that were made by county councils in regard to their intention to change their methods of operation will be codified and brought together. They promised to be more co-operative and to be more full of the spirit of subsidiarity, which my hon. Friend the Member for Southend, East (Sir. T. Taylor) rightly raised in the House. Those lists of promises will be passed on to every parish council and district council in each county area, so they will know precisely what has been promised. I hope that, perhaps after a year or so, we shall then be able to review whether those promises have been met.
Mr. Tim Rathbone: Does my right hon. Friend accept that, when he looks at the borders of the new unitary authority of Brighton and Hove, he should not expand them eastwards, as there is no desire among people in my constituency suddenly to find themselves within that unitary authority? When he reconsiders that boundary, in the light of his answer to my hon. Friend the Member for Eastbourne (Mr. Waterson), will he be able to give the reassurance that many people have requested, about funding of county council services once Brighton and Hove have been extracted from the county?
Mr. Gummer: I very much hope that we shall be able to see a sensible use of money in the remaining county once Brighton and Hove are removed from it. I also hope that Brighton and Hove will be able to run themselves effectively and efficiently, particularly if they make the political decisions that I suggested earlier. I believe that the people of Telscombe will be able to rest easy in their beds, because there is no intention to change the boundaries. I promised my right hon. Friend the Member for Hove (Sir. T. Sainsbury) that when the boundary commission considers boundaries—some boundaries need to be looked at—his question about the division of
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Shoreham harbour will be considered. That is all that I have promised and I certainly do not intend to look for any wholesale change.
Mr. Edward Garnier: Is my right hon. Friend aware that prima facie evidence exists to cast doubt upon the ability of Leicester city council to manage its affairs impartially in the interests not only of its own citizens but of those in the wider county of Leicestershire? Will my right hon. Friend do nothing to alter the present system of local government throughout the area currently run by Leicestershire county council until a full judicial inquiry has been held into the evidence to which I referred?
Mr. Gummer: One has to make such decisions irrespective of the activity or the action of a particular council in a particular town at any one time. Otherwise, one would have to say about a number of places that we are considering, that the efficiency of the council is such that one must question whether a particular group can be trusted. One must accept that it is necessary to try to look at matters impartially and not deal with the people who happen to be in charge at the time. If my hon. Friend feels that there are matters relating to Leicester city council that should be given a wider airing, he will have the time to present that evidence. I do not believe that the decisions that I have announced today will be formed in law for a little time, because we need to leave Rutland with the chance to discover how it will proceed.
Sir Patrick Cormack: Is my right hon. Friend aware that there will be satisfaction and relief in Staffordshire as a result of his decision? However, will he clarify the position regarding elections next year? I understand that there will obviously have to be an election for the new county authority, but must elections be repeated next year in the areas where boundaries remain the same and where elections will be held this year?
Mr. Gummer: My hon. Friend raises an important point. The elections will be conducted exactly as one would expect; they will not be repeated. The only difference will be in Stoke, where a shadow authority will be elected.
Mr. Anthony Steen: Under the new arrangements, South Hams in Devon will be wedged between the unitary authority of Plymouth in the west and that of Torbay in the east—both of which have well-known territorial ambitions for expansion. When my right hon. Friend meets the Conservative leaders of South Hams district council tomorrow, will he consider seriously referring back to the commission the issue of unitary authority status for South Hams? In the recent referendum, more people voted in favour of making South Hams a unitary authority than voted in favour of unitary authorities in any other part of the country where referendums were held. Will he consider that matter very seriously?
Mr. Gummer: Of course I take the matter seriously. I acknowledge what my hon. Friend said; he has been assiduous in pressing the case on behalf of both South Hams district council and, as usual, his constituents. It is one of the smallest authorities in the country.
Mr. Steen: One of the best.
Mr. Gummer: Indeed, it is a very well-run authority. However, if we were undertaking reorganisation entirely

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on the basis of well-run authorities, we would not even consider the case of Norwich, for example. That is a different issue altogether.
With regard to my hon. Friend's district, I shall listen very carefully to the views of council leaders. However, I think that it is fair to say that, given the enormous strength of Devon county council, if it were better run—I have high hopes that that will happen very soon—it could assist South Hams in resisting territorial pressure from its neighbours. I do not wish to see it become another Danzig corridor.
Mr. Robert Key: Despite the fact that my right hon. Friend's decision will come as a disappointment to Salisbury district council, will he take it from me that we shall do our best to work with the new unitary authority? However, does he agree that it is not helpful to imply or to state that the reorganisation will mean no change for the rest of the county outside Swindon? When a third of the population is removed from any county, those who are left in the old county must face completely new challenges and perform new tasks.
Mr. Gummer: My hon. Friend is entirely correct. I apologise if I gave the impression that there is not a great deal of work to be done in counties whose composition has changed.
The reorganisation presents an opportunity to run the show much more effectively, efficiently and co-operatively than has occurred until now. For example, county social services departments must work more closely with district council housing authorities. Their operations can be conducted jointly. In my hon. Friend's case, I have looked very carefully at the points that the county council made in fighting for its cause and I shall expect it to carry them through to the letter and in the spirit that it suggested to both my hon. Friend's district council and the parish councils.
Mr. Peter Luff: I believe that I speak also for my hon. Friend the Member for Worcestershire, South (Mr. Spicer), when I ask my right hon. Friend whether he is aware that the recreation of the historic counties of Herefordshire and Worcestershire will be very welcome in Worcestershire. However, we are disappointed that my right hon. Friend has not gone one step further and implemented the original recommendations of the Local Government Commission for two unitary authorities in Worcestershire.
Mr. Gummer: Unfortunately, that was not the commission's final recommendation and I have limited powers as to what I may or may not modify. I have some real sympathy for my hon. Friend's point, but he must accept that I am restricted by the terms decided upon by the House. I have done my best within those restrictions.
Mr. Ian Bruce: My right hon. Friend will know that there was a fierce argument in rural Dorset outside Bournemouth and Poole as to whether there should he one council or two. The county council said that it would be much more expensive to have two. My right hon. Friend has chosen the county's second option of establishing seven councils in that area. How much extra will my constituents have to pay for those councils, or will additional Government grants pay for them?
Mr. Gummer: My hon. Friend is discussing a county much of which is retaining the system that we have had
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up to now, although not the status quo, as my hon. Friend the Member for Salisbury (Mr. Key) would remark. The change provides the opportunity for the Liberal-dominated county council to begin to run the council properly, and that will mean a good deal of change from its present activities. The county council can perfectly easily make it a cheaper alternative if it is prepared to ensure that the county council services are run in conjunction and in co-operation with the district councils concerned. I very much hope that my hon. Friend will look carefully at the promises that were made. We shall certainly do so, and perhaps together we can get even the Liberals to realise that efficiency provides money that can be used more effectively or that can reduce council tax bills. The difficulty for the Liberals in my hon. Friend's part of the world is that they promised everything and have suddenly discovered that they have to pay for it.
Mrs. Jacqui Lait: Is my right hon. Friend aware that eastern and East Sussex have a low tax base and will find it difficult to sustain two tiers of government? Is he considering any change to the standard spending assessment for Hastings and Rother, or will the council tax go up?
Mr. Gummer: I see no reason why either of those things should happen if local authorities improve their services. It will be necessary for officers to recognise that it is not a process of defending their particular empires, but one of ensuring that they are able to operate much more effectively in conjunction with the district councils, to provide better services at a lower price. My hon. Friend mentions another county council that has not had a good reputation in recent years and I shall be looking carefully to see that it provides services at the lowest possible price, with decent services provided for the people and not for the empire-building propensities of some departments.
Mrs. Teresa Gorman: Is my right hon. Friend aware that the changes that were proposed in the original commission's document for Basildon, Brentwood and Rochford were extremely popular with people in my constituency? In view of his remarks today, will he assure them that Sir David Cooksey and possibly one of his ministerial colleagues will meet some of my constituents, so that they can explain the reasons for their decision, which were that my constituency is geographically contiguous with Rochford and Brentwood, but is separated from Basildon by a major roadway? They also face the possible prospect of being tied in with a new unitary authority, two councils in which are notorious for their high rates in the past.
Mr. Gummer: I can assure the hon. Lady that we shall of course make sure that every opportunity is given to her constituents and those in neighbouring authorities to put their points to Ministers and to the commission. As I hope she has been pleased to hear, I have already promised that those areas will be referred to the commission again. I hope that in the course of that, a solution will be found that will be beneficial to her constituents and those of her neighbours.
Mr. Gyles Brandreth: Is my right hon. Friend aware that while many in Chester and Cheshire will be relieved that the continuing uncertainty about the future of local government is coming an end, others in the unique city of Chester are dismayed that our district is not to be included in the review? Does he

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understand their disappointment at not being able to press their case, and does he agree that it is incumbent on all those who continue in two-tier systems to make those two-tier systems work more effectively, to deliver better-quality services more cost-effectively and efficiently?
Mr. Gummer: My hon. Friend has honourably put forward the fact that in Chester and some parts of Cheshire, there have been significant differences of opinion on how best to proceed, but he must also be right that the purpose must now be to complete the review as rapidly as possible and to ensure that the authorities that are set up and those that remain carry forward the main purpose, which is to provide the best possible services at the most cost-effective price.
Mr. Matthew Banks: My right hon. Friend read a list of fine historic former county boroughs, but omitted one of the finest—Southport, which as a result of a little local difficulty in 1974 was swallowed up by the metropolitan area of Merseyside. My right hon. Friend and his Ministers have been particularly helpful to me and to my constituents. In the light of his statement, I ask him to give me one further assurance this afternoon. When the Local Government Commission reviews the shire counties, will it take the opportunity to examine metropolitan areas where a strong desire has been expressed for change, so that my constituents can put their case to the commission and that once and for all, we can get out of Merseyside and back into Lancashire—where my constituency rightly belongs?
Hon. Members: Greater Bootle.
Mr. Gummer: My hon. Friend will have noted that there were cries of "Greater Bootle" from Opposition Members. Perhaps my hon. Friend will make sure that his constituents recognise that in him, they have the only real bulwark against such a concept. I cannot widen my promise as he wishes, but I repeat my earlier promise to him that when the review is complete, Southport will be the first authority to be examined by the commission, so that the clear indications that he and his constituents have given may be given due weight in establishing whether Southport ought to be differently governed in future.
Mr. Anthony Coombs: While I cautiously welcome confirmation of the status quo for Worcestershire, how does my right hon. Friend propose to ensure that the new Worcestershire county council, in working closely—one hopes—with district councils, slims down its operations consistent with its lessened responsibilities under the reorganisation?
Mr. Gummer: My hon. Friend knows that SSAs will be reworked according to the new characteristics. We shall monitor the activities of county councils and measure them against their own promises. We shall seek to ensure that we get the best value for money, and I shall endeavour to encourage the professional organisations to recognise that it is not a satisfactory way of maintaining particular old forms, not only to insist on empire growing, but not to empire prune. In my view, there is a great need among county councils to reassess the traditional structure, to ascertain whether there are ways of improving it now that county councils are obviously meant to be enabling authorities—rather than constantly seeing themselves as doing authorities. A distinction must be drawn between policing and providing services in many areas, which county councils often forget.

Point of Order
Mr. Raymond S. Robertson: On a point of order, Madam Speaker. I seek your guidance on the way in which the House deals with Scottish legislation. You may be aware that the Leader of the Opposition said on Sunday:
"All Bills that affect Scotland now, I mean a lot of people don't actually know this, go through a Scottish Grand Committee. There's a separate procedure altogether for it."
Am I right in thinking that the right hon. Gentleman is completely and utterly wrong and showed amazing ignorance of how the House deals with Scottish legislation?
Madam Speaker: Some Bills go to one Committee, others to another Committee. If the hon. Gentleman would like to come to see me, I shall explain the situation to him.

Heavy Goods Vehicles (Safety)
4.32 pm
Mrs. Gwyneth Dunwoody: I beg to move,
That leave be given to bring in a Bill to specify more stringent safety standards for heavy goods vehicles and to increase the penalties for failure to comply with those standards.
There are 400,000 lorries in this country, and the Department of Transport says that, over 10 years, 17 per cent. of those lorries have been involved in fatal crashes. In 1993, 681 out of 5,935 fatalities—more than 10 per cent—involved lorries. It is important to understand that there is a real problem throughout the United Kingdom.
I want to ensure the safety of heavy goods vehicles by asking for increased staffing in traffic area offices, in the Vehicle Inspectorate, and in the police traffic divisions responsible for much of the enforcement. I want to impose a maximum of 11 hours on each driver, with a statutory rest period of 30 minutes in every three hours worked. It is important to set up a register of HGV driver training schools, and to have a nationally approved course for lorry mechanics. I should like also to widen the procedures for appeal to the traffic commissioners, so that we may include the rights of bereaved families to appeal against the decisions of the traffic commissioner.
The reason for all this is very simple. In December 1993, near Mold, Jane Gregory was killed when a lorry crushed her car on the Queensferry bridge. The lorry plunged off the bridge into the river, where the 26-year-old lorry driver was drowned. An inquest was told that the driver had not taken his rest breaks; and over the previous 10 days, from Northern Ireland to France and back to the United Kingdom, he had gone without his weekly rest periods, and on two occasions had gone without the minimum daily rest period. For one period there were no records at all, and the accident investigator, PC Gareth Owen, said that the high visibility at the time meant that the lorry driver should have been able to avoid crashing into the car.
In July 1993, four nurses died in their car in a tragedy on the M50, when a lorry tried to jump a queue of traffic by switching lanes, and ran over their Ford Fiesta. A passenger in another car was also killed. The lorry driver was jailed for 15 months, but Hereford Crown court heard that he was running late on the day of the tragedy because he had overslept.
University lecturer Susan Williams was crushed to death when a lorry with defective brakes and steering and other dangerous parts careered out of control down a hill, toppled on to her car and crushed her to death. The company involved, H G Pheasey and Son of Bakewell, which operates three lorries, was found guilty in September, in the magistrates court, on several counts of failing to maintain the lorry and comply with the tachograph rules. Mr. Pheasey was fined £2,300, most of it payable in £20 instalments. Despite previous convictions for mechanical defects and for one of his vehicles being found unroadworthy, he was allowed by the traffic commissioner to stay in business.
I have not yet mentioned the appalling case of Sowerby Bridge where six people were killed by a lorry with defective brakes. So we do not even have to think about the need for changes of the kind that I suggest: we know that it exists.
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I must make it clear that I do not assume that all road haulage firms run vehicles that are substandard or dangerous; but there are certainly a large number of vehicles on the road which constitute a considerable danger to their drivers and to anyone who should have the misfortune to cross their path.
The Department of Transport, through the Transport Research Laboratory, did some work in 1988 and 1990 and decided that 7 per cent. of lorries had mechanical defects. It also stated that one in six of the lorry drivers involved in accidents was partly to blame, and that 2 per cent. of the accidents were due to insecure loads.
There have been repeated calls both from the traffic commissioners and from the industry—and often from police forces and various arms of the Department of Transport—for changes in the law. It is clear that greater punishment should be imposed, and that there should be far more frequent checks on substandard vehicles. It is even clearer that those who do this work must be fully trained and must have behind them suitable back-up services to ensure that they can find out what really is going on with heavy goods vehicles.
The reality, however, is that the Government, while paying lip service to such changes, are moving smartly in the opposite direction. Far from increasing fines, they are making it clear that they will not carry out the same checks in future. Ministers will deny that. They will say that although it is true that they are asking for a 20 per cent. cut across the Vehicle Inspectorate, including front-line services, that that will not in any way impair the ability of the Ministry to check adequately on road transport. I am afraid that no one will believe any such assertion.
Ministers will say that it is their intention to encourage the road haulage vehicle industry to produce higher quality. But they must know that, sadly, because of the competitiveness and the number of small firms that are running close to the uneconomic edge, there will be constant pressure on road haulage firms to seek to undercut one another. That will inevitably mean more pressure on drivers to drive for longer hours. There will be more cutting of corners and far less support for the responsible firms who seek in every way to run proper businesses in a responsible and intelligent manner.
There are a number of things for which the House should be asking. We should be asking the Ministry to liaise closely with the Home Office, to ensure that traffic divisions of the police forces, many of which are staffed by people who have specialised knowledge, are not run down throughout the United Kingdom. The Ministry should insist that police officers are available to carry out more spot checks, preferably six-monthly. It should insist above all that there should be no cuts in the front-line services of the Vehicle Inspectorate. The Ministry should be giving greater powers to traffic commissioners to insist on a rapid hearing of cases where fatalities or bad injuries have been involved, to take action against many of the firms concerned. I believe that the traffic commissioners are not only aware of the position, but have called increasingly for action to be taken and would welcome the support of the Ministry to ensure that that happens.
There are many simple changes for which the Ministry should be asking and which it should bring to the House to put on the statute book. In Japan, it is possible, because of a series of lights that are fixed to the front of any heavy goods vehicle, for anyone to tell the speed at which the

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vehicle is travelling. Three sets of automatic lights give the onlooker a clear indication of the running speed of the vehicle. One light is illuminated if the vehicle is running at 40 kph or less; two if the vehicle is running between 40 kph and 60 kph; and three if the vehicle is travelling at more than 60 kph, which is the legitimate rate for vehicles in Japan. The speed indication lamps are quite clear—
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business), and agreed to.
Bill ordered to be brought in by Mrs. Gwyneth Dunwoody, Mr. Paul Tyler, Mr. Norman Hogg, Ms Joan Walley, Mr. Peter Bottomley, Mrs. Helen Jackson, Mr. Matthew Taylor, Mr. Patrick McLoughlin, Mrs. Alice Mahon and Sir Donald Thompson.

Heavy Goods Vehicles (Safety)
  HEAVY GOODS VEHICLES (SAFETY)
  Mrs. Gwyneth Dunwoody accordingly presented a Bill to specify more stringent safety standards for heavy goods vehicles and to increase the penalties for failure to comply with those standards: And the same was read the First time; and ordered to be read a Second time upon Friday 14 July and to be printed. [Bill 84.]

Agricultural Prices
Mr. Deputy Speaker (Mr. Michael Morris): I have to announce that Madam Speaker has selected the amendment in the name of the official Opposition and that there is a 10-minute restriction on speeches between the hours of 7 pm and 9 pm.
4.44 pm
The Minister of Agriculture, Fisheries and Food (Mr. William Waldegrave): I beg to move,
That this House takes note of European Community Document No. 5097/95, relating to agricultural prices for 1995–96 and related measures; congratulates the Government on its robust negotiating stance on the Common Agricultural Policy since 1979, its leading role in achieving reform of the CAP, its continuing pressure for further radical reform and its determination to ensure that EU agricultural spending is effectively restrained; welcomes the Government's key role in the negotiations which secured an effective agreement on agriculture in the GATT Uruguay Round; endorses the Government's drive to spearhead urgent and continuing efforts to combat fraud and illegal state aids throughout the EU; notes that UK farm incomes rose by 6.9 per cent. over the last year and that Government spending on hill livestock compensatory amounts and agricultural research and development has been maintained; and supports the Government's intention to negotiate an outcome on the 1995–96 price proposals which takes account of the interests of the United Kingdom, producers, consumers and taxpayers alike.
The debate has come over the years to have two separate but equally valid functions. First, the House has before it the latest proposals for the annual price fixing in the European Community, so that it can advise the Minister of its views before he or she goes to Brussels to negotiate. Secondly, the occasion fulfils the need for an annual general debate on agriculture, and gives the Minister the chance to give an account of what has happened in the past 12 months or so in this important industry. Any such report and statement of policy must inevitably deal with European agricultural policy issues wider than just the price fixing, since so much of agricultural policy is determined by the common agricultural policy, and so many of the improvements that we want involve changes to the CAP.
It is logical, then, to start by restating what we would like for British agriculture, British consumers and the British food and drink industry, and by setting out what we have been doing to enable those objectives to be met, both domestically and in Brussels.
Briefly, we believe that British farmers could do an even better job for our consumers and for the food and drink industry, which uses their raw materials, if they could compete more freely in a world in which there were fewer subsidies, fewer constraints on production and trade and more freedom for enterprise and efficiency to be rewarded. That means that we need a radical change in attitudes to agricultural trade, not just in Europe but in the United States, Japan and in many other countries, too. We want freer trade, the dismantlement of state aids and subsidies for production, and the ending of quantitative controls over farmers—set-asides, quotas and the rest—not just here but around the world.
We know perfectly well that that cannot be achieved overnight, as the hon. Member for Edinburgh, East (Dr. Strang) rightly told the Financial Times today, and that unilateral gestures, even when they are available, do little good if they just disadvantage our people. We believe that clarity about where we are going and in what time scale

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is vital if damage and disruption are to be avoided to an industry that has been led in a different direction since Labour's Agriculture Act 1947.
We also believe that there must be a growing recognition of the importance of the environmental role of farmers, and proper incentives for them in this field. We should recognise that good stewardship of the land is a valid output of our farming industry, which no one else can deliver, and that, in some cases at least, they should be paid for it.
It is these objectives, domestic, European and worldwide, that have formed our policy since 1979. In 1979, we inherited a CAP with few constraints on expenditure or on its potential to create food surpluses. Since then, very important steps have been taken to begin to get the situation under control. The super-tanker has begun to respond, very slowly, to a change in course.
Mr. Tony Banks: Notwithstanding what the right hon. Gentleman has just said, is not it a fact that we are now spending more money on the CAP than we were in 1979? To what extent does he believe that the absurdities of the CAP are undermining the whole concept of the European Union?
Mr. Waldegrave: If the hon. Gentleman waits just a moment, I shall give him some figures that might give him some pause, but I agree that sorting out agricultural policy, which must be sorted out, will do more to restore sensible support for the European Community than almost anything else.
Here are some figures. It is pretty useless nowadays, I have to say, to challenge the Labour party on its record in government. It is such a long time ago that half the population was not born when the Labour party were in government. I have woken up the hon. Member for Edinburgh, East, and that may be a good thing, but it may not be entirely to his advantage.
There are some exceptions. Most of the people who brought this country to a halt in 1979 are safely grazing in lush pastures down the Corridor, in another place, mooing and lowing gently, weighed down with honours. However, the hon. Member for Edinburgh, East has not been allowed to escape. He was there throughout the period from 1974 to 1979 in the Ministry of Agriculture, Fisheries and Food. He has been kept in his crate and there he remains to this day.
I shall not bore the House with too many figures. I have just three sets. Between 1974 and 1979 expenditure from the CAP budget—this is the point in which the hon. Member for Newham, North-West (Mr. Banks) was interested—in real terms increased by 61 per cent. or, on average, by 10 per cent. a year. From 1979 to 1994, expenditure from the same budget has increased in real terms by 38 per cent., or 2.2 per cent. a year. But far more to the point, from 1988 to 1994, expenditure has hardly increased at all—by 1 per cent. or virtually nothing in average terms each year. That represents a huge shift in policy terms. The ship is starting to change its direction.
It may be tempting for the hon. Member for Edinburgh, East, hearing those figures, to defend his record by attempting one of those somersaults that have been a feature of Labour policy recently. Perhaps when he was arguing for all those subsidies all that time ago he was working for the farmers; he was the farmers' man. Unfortunately, that argument does not work. Total income
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from farming in real terms fell between 1974 and 1979 by 32 per cent.—an average drop of 7.5 per cent. per annum. Since 1979, total income from farming has gone up by 10 per cent. In fact, since 1988, it has gone up by 21 per cent.
Most remarkable of all—I know that the House does not care for figures, so I simply give this third set—is the statistics on food prices. Between 1974 and 1979, food prices went up by 4 per cent. in real terms. That is, they went up that much faster than general inflation. In contrast, between 1979 and 1994, food prices have fallen by 20 per cent. in real terms. To put it another way, since we have been in power, food has become one fifth cheaper relative to other goods.
Mr. Nigel Spearing: Has not the right hon. Gentleman missed out some of the most important facts in his biased view of history? Is it not true that between 1973–74 when we joined, and 1979, we were in the transitional period of the CAP, so food prices of course went up, as did expenditure? Did not the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) take people into the Common Market without telling them clearly that we would lose control of our own agriculture, our own agricultural prices and the use of our own soil?
Mr. Waldegrave: The hon. Gentleman unwittingly makes my point for me. The Labour party, of which he was a loyal and redoubtable supporter—
Mr. Elliot Morley: Distinguished.
Mr. Waldegrave: That is correct. The Labour party took the agricultural policy and did nothing whatever about it. Through those years there were no controls on overall budget or on the growth of stockpiles and food mountains. Now, we sometimes have to listen to lessons from Opposition Members about how they would change it all overnight. They did nothing about it whatever.
Mr. Nicholas Budgen: I hope that in reviewing agricultural prices my right hon. Friend will refer to the system of quotas and area payments, which is another way of considerably benefiting the farmer. My right hon. Friend will certainly know, but the House may not know, that the milk quota is now worth something approaching £2,000 for each cow in milk, that even sheep quota is valuable, and that area payments for arable farmers are now running at about £105 an acre. Those are all ways in which the distortions of the CAP indirectly benefit the farmer to the disadvantage of the taxpayer.
Mr. Waldegrave: I am in some difficulty because my hon. Friend is making somewhat eloquently a later section of my speech. He is entirely right. We must get rid of such distortions. The best of our farmers would far rather be allowed to compete in a world market without those constraints, even if it were in exchange for lower prices.
Several hon. Members rose—
Mr. Waldegrave: Many of my hon. Friends are rising, but I think that my hon. Friend the Member for Worcestershire, South (Mr. Spicer) was the first.
Mr. Michael Spicer: My right hon. Friend began his excellent speech with the assertion that we needed radical reform, which he defined in terms

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of abolishing state aid and protectionism. Is not that an argument not so much for reforming the CAP but for its abolition?
Mr. Waldegrave: No. I shall explain why in a moment. I should proceed because so many of these excellent points fit well with the structure of what I am about to say. However, I cannot resist my hon. Friends the Members for Ryedale (Mr. Greenway) and for Norfolk, North (Sir R. Howell).
Mr. John Greenway: My right hon. Friend was comparing the records of the previous Labour Government and this Government, but he omitted one crucial fact. To suggest that food prices rose by 4 per cent. in real terms between 1974 and 1979 obscures the huge rate of inflation during that period. Food prices in the shops rocketed then, as every housewife knows.
Mr. Waldegrave: That is true. There was no supply side policy; it was a policy of cartels and incompetence in the management of the economy in general which led to that situation.
Sir Ralph Howell: My right hon. Friend has given us some interesting figures going back to 1974. However, would not he be able to prove his point even better if he went back to 1960, when we were spending 1 per cent. of GDP supporting agriculture, since when it has fallen. Only one quarter of 1 per cent. was spent on total support for agriculture in 1988 and even now it is less than half of 1 per cent. from both the EC and in the United Kingdom?
Mr. Waldegrave: My hon. Friend makes a fair point. We should remember that the concept of agricultural support was not invented with the CAP. We have had agricultural support in Britain since the beginning of the second world war. It was formulated in the Agriculture Act 1947. It is worth reminding people that we should compare the costs of that deficiency payment system with the current system if we are comparing the overall cost of things. My hon. Friend makes a fair point.
Dr. Gavin Strang rose—
Mr. Waldegrave: I give way finally to the hon. Gentleman.
Dr. Strang: I have a genuine inquiry. I agree with the hon. Gentleman's latter point. However, I cannot understand the figures that he quoted earlier in relation to the costs of the CAP. I mention in passing, and I shall repeat it later, that CAP spending in Britain in real terms has increased by more than 180 per cent. since 1979. I do not want to make great deal of that now, but I cannot understand why he is talking about no increase or an increase of 1 per cent. when, as he knows, the effect of the MacSharry changes was hugely to increase much of the expenditure—all the expenditure on set aside and the arable payments. The right hon. Gentleman's figure is inexplicable, unless he is referring to agriculture as a proportion of the total European Union budget, which I do not think that he is. That is quite a different figure. Other sums are going up there as well.
Mr. Waldegrave: If I may make one digression, I am reminded of the famous story of an American professor
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who said to Professor Durac that he did not understand the connection between x and y in a particular equation that Durac had written on the board and Durac continued with his lecture, thinking that that was a statement of fact which required no answer. The point is that expenditure went down in 1994. The figures are correct. I suspect that the hon. Gentleman's figures go up to only 1992 or 1993. If he looks at the latest figures which are all published—
Dr. Strang rose—
Mr. Waldegrave: This is unprofitable. The figures are in the Library. I assure the hon. Gentleman that the figures that I have given are correct.
On the other hand, since 1979, and more particularly since 1988, the figures reflect the beginning of a huge shift in the cost and direction of the CAP in which no one, either here or in Europe, would deny for one moment that Britain has been the prime mover. As a result of our efforts, the monster has stopped moving. Now we must start a radical programme of slimming.
The change has not been caused only by the valiant battles of my predecessors as Ministers in the Agriculture Council. A turning point was the imposition of overall control on agricultural spending in 1988, an achievement led by Lady Thatcher. The agricultural guideline ensures that agriculture expenditure will fall progressively as a proportion of the European Union total. It cannot be breached except by unanimity, and we will not sanction such a breach.
Mr. Budgen: The proposal relating to the overall proportion sounded very good at the time, but considerable additional expenditure on other items—particularly the regional and social fund—was then envisaged: as long as the other expenditure rose nicely, it was inevitable that agriculture expenditure would decline as a proportion of the total.
Mr. Waldegrave: That is true—and expenditure that is declining as a proportion is not the end that I want to achieve. Let me use my analogy of the big ship changing direction: this ship is changing direction. Before, agriculture was driving the budget up; that is no longer the case. We have much more to do, however. I am not arguing with my hon. Friend about that.
Incidentally, the pledge that I have just given—that we will not allow the guideline to be breached—is not one that the Leader of the Opposition could give. That would imply that he was vetoing a European Community measure; that he was alone—and he keeps saying that he will not be isolated in the Community. That strikes me as a weakening of the negotiating position that is essential to this issue and many others.
The second watershed was the inclusion of agriculture in the general agreement on tariffs and trade for the first time in the Uruguay round. Britain was a leader in what was originally a minority group in calling for that. If it had not been achieved, we would not have secured the 1992 reforms of the common agricultural policy—which are now being phased in over three years, of which this is the last. Those reforms were driven by the need for European agriculture not to bring the GATT round to a halt.
I am far from saying that the mechanisms used in the 1992 reforms were wholly right; they were not. We wanted the price cuts to hold back over-production, but

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not the quotas or the bureaucracy. But—and it is a big but—those reforms started a process that has helped radically to reduce stockpiles, has reduced the consumer cost of the CAP by about £8 billion—with £1 billion of that gain coming to the United Kingdom—and has, via the so-called peace clause, prevented the EU from increasing support for commodities above the 1992 level in the future.
My party currently seems to be very self-denying in terms of claiming credit for its achievements. I do not believe that without our commitment to controlling public spending we would have got the guideline; nor do I believe that without our commitment to free trade we would necessarily have got agriculture into the Uruguay round, or secured the right outcome from the round itself. Those are our Government's achievements, and we should be proud of them.
As I said earlier, however, this is only the start. I am not asking the House to endorse the CAP today—far from it—but I ask hon. Members to recognise and support our objectives for reform and the success that we have achieved so far in a battle that will move into a crucial phase during the next few years, with a new GATT round in 1999 and the proposed entry of the central and eastern European countries.
Mr. Tony Marlow: I would like also to be able to congratulate the Government on what they have achieved, but it does seem rather difficult to do that at a time when our farmers must take more of their land out of production than farmers in any other European country, and our farmers must pour their milk down the drain while our milk manufacturing facilities are having to close.
Our farmers seem to have to put up with much more bureaucracy. The IACS form is an example. Under the integrated administration and control system, 24 separate documents could have to be filled in in Britain; nothing like that happens in Spain, Portugal, Greece or Italy. Why do our farmers get the wrong end of the stick every time, whereas all the other European farmers seem to get away with murder?
Mr. Waldegrave: The answer to that is that they do not. No one compels any British farmer to set aside any land, but if a British farmer wants to accept large subsidies for arable production, he must do so.
Quotas are a different matter. It is quite wrong for us to be controlling what is still over-production of milk in the European Community by means of quotas; we should be controlling it by means of lower prices. It should not be thought, however, that when that comes—as it must and will—it will be wholly welcome to dairy farmers. Dairy farming is the sector of British farming that is most profitable in terms of pennies per hectare.
I believe that the policy that I am presenting is supported by forward-looking farmers. Indeed, it is supported by the National Farmers Union, which knows what must be done in the long term. My hon. Friend must be a bit careful when seeking a cheer from British farmers: they are familiar with the other side of the coin.
Dame Elaine Kellett-Bowman: Does my right hon. Friend agree that the effect on our farmers would be devastating if we did not secure reform of the CAP before the entry of the central and eastern European
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countries, to which he referred? Given their huge areas, they will be appallingly difficult competitors if we do not get it right in time.
Mr. Waldegrave: As so often, my hon. Friend has made exactly the right point. Indeed, I was about to deal with it.
Mr. Edward Garnier: Will my right hon. Friend give way?
Mr. Waldegrave: I think that I had better proceed with my speech. Perhaps I shall cover the point that my hon. Friend was about to make.
Our next objective must be to use the time that we have before those central and eastern European countries are ready to join to ratchet down the cost further, to make the policy one that will be affordable after they have joined. That was the point made by my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman). It is not so much pressure from the financial guideline as currently drawn that will help us in that regard; our first calculations show that the entry of at least the so-called Visegrad Four countries could probably be financed within the guideline on present, post-MacSharry policies. However, there would none the less be a large increase in cost. Moreover, the extra money "affordable" within the guideline would be completely wasted because it could not be used, under the GATT, to do anything other than destroy or permanently store the increased production that an unreformed CAP would produce in the central European countries. It could not be used for subsidised exports, for example.
I believe that the House, and all sane people, would regard such an outcome as absurd and unacceptable. It would be far better to return the money to the taxpayers, and to set prices at a level that avoids over-production in the first place. We must sort out the problem before those countries join. That means steadily lower prices, which in turn will mean dismantling—over time, and with due warning—the superstructure of controls and quotas that MacSharry introduced to restrain production at a time when the Community would not accept the alternative of greater price cuts. I can agree with one phrase in the Liberal party's amendment, among a number with which I disagreed. There must be due warning, so that the industry has time to adjust.
Mr. D. N. Campbell-Savours: May I ask the Minister to depart from his speech for a moment, and take us for a canter around Europe? Could we consider what will be the reaction of other European countries such as Italy, France, Belgium, Germany and Spain to the radical proposals that the Minister is presenting?
Mr. Waldegrave: I cannot resist the hon. Gentleman, as is often the case. I believe that in the next stage, according to the laws of arithmetic, the result of the interaction of the GATT with the CAP and budgetary concerns will demonstrate to other countries that the change is now unavoidable. After all, the same thing happened when both the last two changes to the CAP were made: external pressure on the Agriculture Council led to change.
The other countries that will respond fall into two groups. The group that does not want the change argues that we should postpone all action until after the entry of

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the Visegrad Four—have transition periods, hope for the best, all that kind of thing. Another growing group that firmly includes Sweden, Holland and Denmark, alongside us—interestingly, there is increasing support in France—holds that European agriculture is efficient enough to live much nearer to the world markets, and that we will head for a cliff edge if we do not act in time. That would be far more destructive to farming, and far more damaging to those who work in the industry. Although I would be wrong to claim that there is a majority in favour of my proposals, there is a significantly influential minority, represented in the Commission and among serious academics who, after some time lag, influence policy in Europe. The battle is not lost, but the battle would not have a chance of being won if it were not for the external constraints driven by GATT and the entry of the other countries.
The next stage will deliver lower prices in return for restored freedoms. But I must urge the House to believe that the slogan "repatriate the CAP"—I return to a point to which several hon. Members have referred—will not help us to get the outcome that we need. We cannot accept British farmers having to face subsidies for production elsewhere in Europe or, indeed, America, which they do not get at home, with free trade dismantling any protection for their goods. That is why we need a continuing CAP, with more not less rigorous action to rule out illegal state aids; a CAP which matches the single market with a single, simpler, cheaper, regime of support, which is, incidentally, increasingly focused not on production aids but on environmental gains.
We do not want repatriation of agricultural subsidies any more than any other kind of subsidies. We want fewer subsidies. We want our industry, which is one of the most efficient in the world, to be able to compete fairly and win prosperity from its own efficiency in the single market which we, after all, fought so hard to create.
In the meantime, as we prepare for the next forward moves, we are in a period in which the consequences of the previous changes are still working through, which makes the Commission's proposals this year fairly uninteresting. They involve very little change over and above those which result automatically from the 1992 reform. They include some welcome small steps further in the right direction, but the Commission should have gone further to reduce support prices across the board. It has missed an opportunity to signal to farmers and growers the intention to continue along the path set by the 1992 reform, as continue it must.
The main proposals affecting British farmers concern milk, sugar and cereals. In the milk sector, the Commission has proposed a 2 per cent. cut in the intervention price for butter, but no cut in quotas. That is welcome so far as it goes. The United Kingdom is only 85 per cent. self-sufficient in milk, so our producers and dairy industry would suffer disproportionately from any quota cut. I have urged the Council to adopt a larger cut in the butter intervention price so as to relieve pressure for quota cuts in the future.
I am also pressing for provision for the milk quota to be leased across member state boundaries. I regret that that suggestion has not commanded widespread support, but I shall stick to it. I shall nevertheless continue to press for measures to relieve the particular difficulties which
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our shortage of milk quota poses. That will be especially important if the Commission's report on the implementation of milk quotas in Italy and Greece, which is expected shortly, recommends that the quota increases granted to those countries in 1993 and 1994 should be repeated for 1995 and subsequent years.
For cereals, the Commission is proposing to reduce by two months the period during which intervention is open, as well as to cut the monthly increments in the intervention price in response to reduced storage and interest costs. I welcome those measures to reduce the role of intervention and encourage farmers to rely more on market price signals.
The Commission's failure to propose cuts to sugar support prices, which are indefensibly high, is particularly disappointing. I nevertheless welcome the proposal to reduce the level of storage refunds in response to falling interest rates across the Community. We shall seek to get the best deal from this unsatisfactory proposal on quotas for our producers, who are not, after all, the cause of the surplus which the Commission rightly wants to cut.
No change has been proposed in the levels of beef support beyond those determined in the reform, nor in the level of the sheepmeat basic price. I shall be pressing for changes to both those complicated regimes to reduce unnecessary bureaucracy. Expenditure on the beef special premium is controlled by overall national quotas, known as regional ceilings. Yet there is also a 90-head limit on claims under the scheme.
Mr. Christopher Gill: Does my right hon. Friend agree that it would far more satisfactory from everybody's point of view and would certainly encourage a better quality of beef if all the support was given to the suckler herd instead of being spread across all beef production, which includes those dreadful beef—no, they are not beef animals—those dreadful Holstein animals?
Mr. Waldegrave: For a moment I thought that my hon. Friend was getting at the dairy industry and farmers. I know that he speaks with great knowledge. I am not sure that he would be universally supported by the agricultural industry, but he makes the serious point that if a great deal more Holstein-derived beef came on to the market for other reasons, we might see a fall in the beef premium for the specialist beef producers, which would be very unfair.
As I was saying, we do not need the 90-head limit. It imposes a considerable extra burden. We would much rather get rid of the individual quotas on sheep annual premium and suckler cow premium and replace them with regional ceilings, as apply in the beef special premium scheme to which my hon. Friend referred. Such a scheme, which would need to be signalled well in advance to give farmers time to adjust, would remove a significant bureaucratic burden from the industry.
In most other sectors, the Commission has proposed no change in the support prices. As I have said, I think that that is a lost opportunity. It has, however, proposed a cut in the basic pig meat price to bring it slightly closer to market reality, which is welcome.
Meanwhile, however, there is a different area of action to open up: the area of fraud and enforcement of the rules. We have been at the forefront of pushing the Community towards a much more rigorous approach to the control of

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fraud. That matters, of course, not only in relation to the CAP, but the CAP is particularly vulnerable and still accounts for over half of Community spending.
It was, of course, the British who saw to it that the role of the European Court of Auditors was strengthened and ensured that its reports and recommendations should be properly considered in Brussels. In our previous presidency, we pushed through the integrated administration and control system, which although neither my hon. Friend the Member for Northampton, North (Mr. Marlow) nor anybody else would claim is other than unpopular, is an essential part of ensuring that we can secure fair controls right across Europe. If we did not have such a detailed scheme, there would be nothing for us to press to enforce. I shall be able to give my hon. Friend some examples of where, because that system is in place, the rules are being enforced right across the Community. I do not know how we could do that without such an underpinning structure.
The 1992 reform helped to reduce one kind of fraud at least, by reducing the role of export refunds and intervention, which have shown themselves to be targets for fraudsters. I very much hope that the Council will soon adopt a new proposal—sometimes known as the "blacklist" proposal—which will further tighten controls in that area. We must vigorously sustain the fight against fraud. I particularly welcome Commission initiatives which introduce tough penalties for those who, it has been proved, have benefited from aid to which they are not entitled.
We have also been pressing the Commission to use to the full its powers to disallow—not to reimburse from the Community budget expenditure improperly incurred by member states. As a result, the Commission disallowed a total of 1.5 billion ecu, about £1.2 billion for 1991, which is the last year for which decisions have been taken. That represented about 5 per cent. of CAP expenditure.
Mrs. Cheryl Gillan: Does my right hon. Friend agree that technology is extremely important in combating CAP fraud? I congratulate him on the press conference, which he held in conjunction with the Department of Trade and Industry, at the British National Space centre on 17 January, where it was announced that the spot satellite was to be used for the first time on earth observation and remote sensing, which will help us to combat fraud throughout the European Union.
Mr. Waldegrave: My hon. Friend, who is extremely knowledgable about this subject, is entirely right. The results of some of the early remote sensing satellite pictures in some of the southern countries of Europe have been very interesting and much acreage has turned out not to exist. Such a system will turn out to be a very useful weapon in reconciling people's claims with reality.
Dame Elaine Kellett-Bowman: Some of the remote sensing has to be used with a little care. For example, if one is trying to deal with the output of olive oil, one must know that an irrigated olive tree produces between 10 and 100 times as much oil as a tree which is not irrigated. So one must be a little careful in trying to combat fraud in the production of olive oil.
Mr. Waldegrave: My hon. Friend is perfectly right. The use of remote sensing will be most powerful in
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measuring hectareage, which is mainly linked to cereal production, and in areas where a farmer is claiming subsidies per hectare.
That is a powerful tool that the Commission has for obliging member states to put in place effective controls against fraud. I shall give the House some examples. Greece has been disallowed about £45 million for having inadequate controls on cotton expenditure. Substantial penalties will be applied to Italy and Greece in respect of grain frauds that have been uncovered. Those actions by the Commission—which I wholeheartedly support—send a clear warning to member states that poor controls will be heavily penalised.
Our record in the United Kingdom is good, but we too must ensure that our own controls are effective. There has been some publicity recently about off-contract deliveries of milk designed to avoid attracting super-levy. Although the so-called "black milk" problem is considered to be relatively small, I have instructed the intervention board to ensure that its anti-fraud unit actively investigates any information that it receives. If regulatory offences have been committed those involved will be prosecuted, and will also face a much higher levy bill as a consequence.
Part of the disallowance that I mentioned relates to the past failure by Italy, Spain and Greece to implement milk quotas, and the United Kingdom's action in the European Court resulted in a 50 per cent. increase in the disallowance originally proposed by the Commission. People have criticised my right hon. and learned Friend the Chancellor of the Exchequer over the deal, but I believe that they are wrong.
Let me remind the House of the facts. We had taken European Court cases against the Commission's original decisions—decisions that would have led to a total disallowance of about £1.6 billion over five years. We thought that far too low. Despite our requests, not one other member state joined us in bringing the case.
There was, of course, no certainty about the outcome of the case; few litigants can ever expect that. Italy and Spain had counter-claimed, taking their own cases to the European Court and claiming that the disallowances imposed by the Commission were too severe. In any event the case would not have come to a conclusion for a considerable time.
In those circumstances the "out of court" settlement amounting to a total disallowance of £2.5 billion—about £1.2 billion more than the countries concerned received under the milk regime during the same period—was a good outcome. The deal also established the vital principle that the Commission could act only in accordance with the regulations adopted by the Council, and establishing that had been a major objective of the court proceeding.
Mr. Budgen: My right hon. Friend will agree that it was disgraceful that three of the countries in the European Union were found to have made no attempt whatever to impose the agreed milk quotas. Will he now tell us whether, after all the Chancellor of the Exchequer's generosity on behalf of the British taxpayer, those three countries have now set up a proper system for reducing milk production, as they agreed to do?
Mr. Waldegrave: My hon. Friend is unfair, for once, in that he says that the Chancellor of the Exchequer was

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generous in that business. As a lawyer who has practised for many years, he would have advised his client to accept such a deal, because it was a good one.
Mr. Budgen: What has happened now?
Mr. Waldegrave: On my hon. Friend's second point, the Commission must now come to the Council. It has not yet put the proposals before the Council, although I believe that they will be put before us at any moment. The Commission will have to convince the other members and myself that the proper arrangements are in place. I suspect that there will be a difference between the three countries, and that Spain will be better prepared than the others.
Mr. Budgen: How long will all that go on for?
Mr. Waldegrave: My hon. Friend must restrain himself. The proposals will be before the Council in time for the proper decisions to be made, and we shall consider them. I shall certainly bear in mind the need to convince my hon. Friend and other Members of the House that we have taken the right decision.
Mr. Campbell-Savours rose—
Mr. Marlow rose—
Mr. Waldegrave: I must press on. Other hon. Members will be able to make speeches in due course.
It is essential that we press the Commission to fulfil its responsibilities to ensure that each and every member state obeys Community rules. As a result of our efforts the Commission declared illegal state aids by the French and Irish Governments—"Stabiporc" pigs aid in France, and the market development fund aid to mushroom growers in Ireland—and required that they be repaid. I shall let the House know of one or two other anti-fraud cases now in hand.
In one case "high-quality" beef was exported, with high export refunds, from two member states to the United States. The consignment passed customs but was never delivered, because the United States food health authorities declared part of the consignment unhygienic. It was then purchased at a very low price by an associate of the exporters and sent with false health certificates to two other member states as offal, with minimal import duty. After passing through a fifth member state, it was then exported to Africa as high-quality beef, once more with high export refunds. The organisation of the fraud involved companies in four of the member states through which the consignment passed.
Secondly, consignments of butter, sugar and milk powder en route from the Czech Republic to Morocco and Algeria via Spain, with Czech transit documents, were cleared as having reached the Spanish quayside for export, using a fake Spanish customs stamp. In fact they had been sold in various places inside the Community, avoiding import duty of about 20 mecu.
Thirdly, in September 1994 the Commission identified serious irregularities in the compensation paid to hill farmers in Corsica. All payments to Corsica under the heading involved have been suspended while the Commission and the French authorities make further inquiries.
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Fourthly, a mission to Italy the same month revealed a fraud worth 2 mecu concerning fruit and vegetable processing enterprises and Community funds. Legal proceedings have been opened in Rome. I give those examples, which are merely the latest, to show that at long last the battle against fraud is beginning to make some real headway.
Mr. Gill: Will my right hon. Friend give way?
Mr. Waldegrave: I think that I had better press on, because I am almost at the end of my speech.
At the beginning of my speech I promised to report on the other main agriculture policy events of the year, but I fear that I must do so very briefly.
On farm incomes, as I said earlier, the news remains good. The latest 6.9 per cent. rise in total income from fanning came on top of substantial rises in the previous two years.
Deregulation of the milk industry last autumn has opened up an over-regulated market to real competition. The same is happening with agricultural tenancies, and the Agricultural Tenancies Bill is currently before the House, to the delight of all parties in the industry—almost the only carping voice comes from the Labour party. As for the Agricultural Wages Board for England and Wales, I concluded that we should heed the advice that we received from most people in the industry and keep it. In the latest public expenditure round—a very tough one—we protected research and made no further cut in hill livestock compensatory allowances.
We have secured a 3 per cent. cut in set-aside, while our long-running campaign to ensure that land put into forestry and agri-environmental schemes can count towards set-aside has at last reached the point where firm proposals are on the table. We have widened yet again the range of our domestic agri-environmental schemes, with six new environmentally sensitive areas, a new habitat scheme and a new countryside access scheme. Total expenditure on those schemes will rise to about £100 million by 1996–97. We have also begun the consultation with the Secretary of State for the Environment that will lead to a new White Paper on the rural economy later this year.
We have, of course, faced the difficult and emotive issue of live animal transport, which we have debated several times in the House recently and may debate again soon. Work to secure a proper outcome, with the abolition of veal crates and tougher rules on transportation, continues.
It is always rash to say to a farmer that things are going well. When my father was a junior Minister in the Department that I now represent, he had on his desk a cartoon of two farmers leaning on a gate with a sheet of water in front of them. One fanner was saying to the other, "If the floods recede as fast as this we're going to have a very nasty drought on our hands." I have learnt not to say to farmers that things are going well. None the less, they are.
There remain huge tasks ahead of us, above all in securing the change that we need in the CAP and in securing it in an orderly way that does not make life impossible for the industry. But I believe that the Government have every right to ask the House to reject the Opposition amendment, which, incidentally, for the second year running, forgets to mention the words

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"farmers" and "agriculture", and to endorse our agriculture policies with some pride—pride in what we have achieved, and confidence that our direction for the future is the right one.
5.27 pm
Dr. Gavin Strang: I beg to move, to leave out from "measures" to the end of the Question, and to add instead thereof:
"but believes that the CAP continues to fail consumers, taxpayers, the rural economy and the rural environment and that the Government is not doing enough to make fundamental changes to an unacceptable policy.".
In opening the debate, the Minister rightly said that it has two purposes. It addresses the common agricultural policy price proposals and it is the traditional annual debate that used to follow the old agricultural price review before we joined the European Community. That was essentially a stock-taking exercise and an opportunity for the Minister to defend the price review and the agreements that he had reached with farmers' unions for the year ahead. I intend to treat the debate in the same way.
Like the Minister, I believe that we must accept that Europe is crucial to agricultural policy. All the major strategic decisions are made in Europe, and of the spending on agriculture in this country, expenditure through the framework of the common agricultural policy is about four times the Government's domestic expenditure on agriculture.
The Minister said that the industry is doing relatively well, and I am happy to agree. In fact, that is an understatement because across the industry there has been a significant rise in farm incomes, which we warmly welcome. That rise occurred against the background of the depressed incomes of the 1980s, and I think that most people in the wider community still do not appreciate how badly agriculture did during the 1980s and how much investment was depressed.
The Minister would probably accept that there are still some sectors which, to put it mildly, we would like to see doing better—the pig sector, the fruit sector and the upland sheep farming sector, which are not doing well enough—but returns for cereals and milk, major commodities, and potatoes are very good.
It is important that we continue to understand that the increase in prosperity is not a consequence of the Government's policy—far from it. The major factor in the increased returns for British farmers is what we still rightly call black Wednesday. It all goes back to that debacle in the autumn of 1992 when the Government were humiliated and had to abandon their policy of trying to stay within the ERM. It is important to dwell on that point so that people fully understand what happened. It was fundamental to the long-term prospects for British agriculture, and it explains why many farmers, who may be doing well now, are still uneasy about the future.
The Minister reminded us today that the 1992 MacSharry reforms produced an agreement to cut the cereal price. Other price changes were agreed, but the crucial decision was to cut the intervention price for cereals. To compensate cereal growers for that, direct payments to farmers were to be introduced along with set-aside and farmers were to have an arable payment scheme, which included set-aside payments. In other
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words, if a farmer had 100 acres of grain, he would get paid so much per acre of grain and so much for the set-aside, the land left fallow.
What happened in the United Kingdom is very different from what was envisaged under MacSharry, and very different from what happened in Germany. In the UK, the increase in the sterling green rate and the devaluation of the pound meant that we did not have a reduction in cereal prices. By and large—I am happy to be corrected on this—it is fair to say that cereal prices in the past two or three years have not changed for UK farmers, although they have, in the main, been above the intervention price.
There has been a huge change in the incomes of growers as a result of the arable and set-aside payments. The effect of the devaluation of the pound was massively to bump up those payments, and that is the crucial factor. Farmers did not experience a price cut and they received much more enhanced compensation payments than had been envisaged at the time of MacSharry.
The arable area payment for England, which began in 1992–1993 at £140 per hectare, increased to £247 per hectare for 1994–95. The set-aside payment in 1992–1993 was £253 per hectare; in 1994–1995 it was £313. There has been a huge increase of money into the cereal sector.
Mr. Marlow: What is the hon. Gentleman's conclusion? Is he saying that farmers are far better off because of white Wednesday, or that farmers should not have the payments?
Dr. Strang: I shall come to that later. I am not saying that price cuts could be made in Europe without some attempt being made to alleviate their short-term effect. What happened in the United Kingdom was totally different from what was intended by the Council of Agricultural Ministers.
Mr. Budgen: I am trying to understand the general drift of the hon. Gentleman's remarks. He says that some sectors of agriculture are doing badly and require more investment. Is he offering more public support in the form of taxpayers' money to sectors of agriculture that are complaining? How is that consistent with reducing financial support for the agricultural sector?
Dr. Strang: I shall come to that. [Interruption.] The Member for Hertfordshire, North (Mr. Heald) will not be disappointed when I do.
The massive boost to British agriculture in the past few years is a direct consequence of black Wednesday. The Government cannot claim credit for the increase in farmers' returns because they and previous Conservative Governments have implemented policy changes that have tended to be inimical to British agriculture. I intend to dwell on some of those changes.
Before I do so, I wish to be fair and to describe two exceptions to those changes. The first is the decision to reprieve the agricultural wages boards. The decision to close them was inspired by Tory dogma, and it was opposed by the whole industry. We know from history, however, that that was not necessarily sufficient to ensure that the boards survived. The Minister decided to reprieve the boards, which were of great importance to the Labour party and it would be churlish not to thank the right hon. Gentleman for that decision.
The second exception is in relation to animal welfare. As I have explained, we do not think that the Government have gone far enough, although we had a constructive

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debate on the Adjournment on a Wednesday morning recently. I acknowledge that the right hon. Gentleman has adjusted the British Government's position on animal welfare, and has moved us towards a more pro-animal welfare position. There is still some way to go, but I welcome that fact.
Mr. Mark Robinson: Will the hon. Gentleman give way?
Dr. Strang: Not on the subject of animal welfare. My hon. Friend the Member for Glanford and Scunthorpe (Mr. Morley) will deal with that matter when he speaks. I will not give way on the agriculture wages boards either, as I merely mentioned the two subjects in passing.
I am grateful to the Minister for making available to us the Department's annual review, which is to be published on Thursday. The major event, as it rightly points out, was the decision to deregulate the milk industry after 60 years and to eliminate the milk marketing schemes. The Opposition do not believe that any of the evidence that has emerged since the abolition of the milk marketing boards justifies any alteration in our stance. We opposed the abolition of the boards, and said that—at the very minimum—the Government would have a responsibility to lay down an appropriate structure that would operate in the best interests of the industry.
The Government have abdicated their responsibility, although I know that that decision predates the term in office of the present Minister of Agriculture, Fisheries and Food. We are still concerned about the closure of manufacturing capacity, and we see no evidence that the abolition of the milk boards is resulting in an increase in the production of high-value milk products, as the proponents of the changes on the Conservative Back Benches suggested. On the contrary, we are still worried about the reduction in capacity, which is not in the long-term interests of milk producers, although they are benefiting from the sharp price increase that has resulted from deregulation.
Before I move on to the CAP, I want to say a few words about the damage that the Government have done to the long-term prospects of British agriculture by attacking what I would call the public services, expenditure on which has nothing to do with Brussels. It is wholly funded directly by the British Treasury. It is mainly very positive expenditure that brings great benefit not only to farming but to the British people. I refer, for example, to agricultural training.
Anyone who goes about the country and knows anything about agriculture must be aware of the number of people directly involved in agricultural training who have lost their jobs. Expenditure on the agricultural training board has been slashed. The new ATB Landbase is only a pale shadow of the previous board. In 1992–93 the Government spent £6.7 million on the agricultural training boards. In 1994–95 the ATB Landbase contract was for just £4 million.
The state veterinary service—I hope that the Minister will listen to this—has a tremendous history. It has been peopled by some of the most dedicated vets and civil servants in Britain. It is a tremendous asset to the country. It is in the front line. It is not less important but more important now because of the increased risk of animal
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diseases coming in from central Europe. The Minister nods his head. Let me remind him what the Government have done to the state veterinary service. The number of vets employed by the service has fallen from 580 in 1979 to 403 in 1994—a 30 per cent. cut. We are talking not about money but about real resources. We are talking about what the veterinary service is about—vets.
Instead of fewer state vets, we should have more. I hope that the Minister will abandon the dogma that has bedeviled the service and demoralised vets. We will pay a price for it if we do not reverse the cuts. The price will be a costly one if some major disease that is prevalent in eastern Europe comes into Britain. Such diseases could easily come to Britain through the European Union.
The Agricultural Development Advisory Service is a great service. Colleges in Scotland and the former national agricultural advisory service in England, which became ADAS, served the industry well. Anyone who has spoken to any employee of ADAS will be aware of the destruction and demoralisation of the service by Government dogma and successive cuts. ADAS is a Government service, not a private consultancy. There are plenty of private consultancies about. We are all for them if they can earn a living. ADAS is a Government service that is supposed to help our farmers and give them independent advice, which they do not get from fertiliser companies or compounders. It is supposed to give them advice on all the things that we should encourage farmers to do. It is now required, according to the latest figures, to recover 63 per cent. of its costs from consultancy. The service has been pushed so far down that we do not know what its future is. I hope that the Minister will try to minimise the damage. He will never reverse the cuts, but I hope that he will not go for complete privatisation of ADAS.
Mr. Waldegrave: My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) asked the hon. Gentleman about his demands for further expenditure, which he has failed to answer. We have demonstrated how many billions of pounds flow into British agriculture from consumers and taxpayers. The hon. Gentleman says that, on top of all that, we must add further taxpayers' money. Surely an industry with that amount of underpinning and support can pay for its own training.
Dr. Strang: The valuable state expenditure on services such as state vets, of which the Minister has complete control, is being squeezed, but the expenditure that we want to cut has increased since 1979 by 180 per cent. in real terms. That expenditure is under the CAP in the United Kingdom. We want to slash two thirds of it. I shall explain that to the right hon. Gentleman in a few minutes.
Mr. Budgen: The hon. Gentleman damages himself by getting so over-excited. Let us take the example of a dairy farmer—this may be embarrassing to my right hon. Friend the Minister. Since the introduction of milk quotas, dairy farmers have been given a quota under the common agricultural policy that is worth about £2,000 per cow and rising. Some dairy farmers have retired and simply leased the quota. They have found themselves in a comfortable way of life. Such people do not need further subsidy so that their cowmen can be trained at the expense of the taxpayer, do they?
Dr. Strang: I agree with the hon. Gentleman. I do not want to digress for too long, but I shall make two points

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about quotas. First, the United Kingdom share of the total European Union milk quota is too small—I shall not go on about the increases that were given to Italy and Spain, for which I have already criticised the Government and I do not accept the Minister's defence—not because we do not have enough quota to meet our needs but because we are a relatively efficient producer of milk.
Quotas were introduced because there was a surplus of milk as a result of the CAP market support arrangements. We want those arrangements not merely tinkered with but eliminated. Intervention buying of skimmed milk powder and butter still occurs on the continent. Surely the hon. Member for Wolverhampton, South-West (Mr. Budgen) understands that. We must have quotas because we have an overarching policy that drives up the price of milk and milk products, whether or not it can be justified by the market.
Mr. Budgen: Surely the hon. Gentleman realises that to most people outside the House the common agricultural policy is an utter nonsense and distortion. The hon. Gentleman looks at each point at which some slight reduction in state aid has taken place. He describes such reductions as a gross scandal and as taking the bread from an impoverished section of the community. We are meant to regard farmers in the same way as single mothers in a deprived area of Bristol or Wolverhampton. That is rubbish. The more that we examine the hon. Gentleman's proposals, the more it is obvious that he wants a great deal more money to be spent on agriculture.
Dr. Strang: I think I know what this is about. I shall not give way again. The hon. Gentleman is one of the Euro-sceptics. I have a document here entitled "Not a penny more". The hon. Gentleman's name is not on it, but two of his leading hon. Friends' names are on it. The document is clear. It makes a frontal attack on the CAP. It says:
"Under the Common Agricultural Policy only £40 out of every £100 reaches them. The rest of the agricultural subsidy is swallowed up by fraud, bureaucracy and huge food surpluses which are dumped on world markets at give-away prices."
I intend to make a proposal that will end that.
If the hon. Member for Wolverhampton, South-West is to be true to the position that he has taken and vote accordingly, he should vote for our amendment. That also applies to his hon. Friends. They do not agree with me on most things, partly because I am Labour and they are Tory; everyone in the House of Commons knows that. We now understand that all these interventions are an attempt to justify the Euro-sceptics' intention not to vote in the way in which they have argued for the past few months.
The most important cuts are the slashing of expenditure on research and development. I accept that all the cuts took place before the right hon. Gentleman became Minister of Agriculture, Fisheries and Food. The former Agriculture and Food Research Council has been replaced by the Biotechnology and Biological Sciences Research Council. The number of scientists was cut by 41 per cent. between 1979–80 and 1993–94. If we examine expenditure on research commissioned by the Ministry, we can see that Government-funded agricultural research and development has been slashed. We shall pay a long-term price for that. One of the reasons why we have had such a buoyant and successful agriculture industry over the past few decades is because of the investment that we have been prepared to make in that area.
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I am disappointed by the way in which the Minister sought to present the figures for expenditure on the CAP and, as a consequence, I shall say a little more about them. In 1978–79 CAP expenditure in the UK was £337 million, and the projected figure for 1995–96 is £2,873 million—an increase of 180 per cent. in real terms. I take the year 1995–96 because the price proposals that we are discussing relate to the coming agricultural year. o suggest that there is some great success story here is misleading.
I shall give one or two more statistics that I had not intended to give, because we must nail this matter. The Minister will correct me if I am wrong, but he said that the 1994 outturn of the total European Union agricultural budget is lower than the 1993 outturn. In reality, total expenditure under the CAP has been ratcheted up year in, year out. I shall quote one or two statistics that I have converted into sterling from ecus. They are rough figures and I am prepared to concede plus or minus 10 per cent. The total CAP expenditure in 1980 was just over £7,000 million; in 1985, it was just over £12,000 million; in 1990, it was just over £19,000 million; and in 1994, it was just over £30,000 million. That 1994 figure is projected; the actual outturn may be somewhat lower. Even if the 1994 figure were just £27,000 million, it is still a huge ball-park increase. The projected figure for 1995 is more than £30,000 million.
Mr. Waldegrave: There is nothing more sterile than bickering about statistics, but they are important, as the hon. Gentleman says. Between 1974 and 1979, expenditure from FEOGA increased by 61 per cent. in real terms. Between 1974 and 1979, expenditure from FEOGA increased by 38 per cent. in real terms.
Dr. Strang: My final quote is from a letter for which I am grateful to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson). The Minister's figures are flawed and I shall come back to them. The letter, dated 6 February, was from the Minister to my hon. Friend, and it said:
"You request confirmation of the rate of increase in CAP expenditure between 1991–92 and 1995–96. Expenditure at 1991 was 31.9 billion ecu"—
so let us say 32 billion ecu, to round it up—
"while the 1995 CAP budget has been set at 37.9 billion ecu"—
so we could say roughly 38 billion ecu, an increase of 6 billion ecu. [Interruption.] Those are huge figures. Do not hon. Members realise that the expenditure was a fraction of that a number of years ago? The right hon. Member for Bristol, West (Mr. Waldegrave) sought to argue in his letter that that was no longer a problem and that CAP expenditure was under control.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): Oh, no.
Dr. Strang: Oh, yes. That is the impression that he sought to give.
Mr. Waldegrave rose—
Dr. Strang: If the right hon. Gentleman is about to qualify that, I shall be delighted.
Mr. Waldegrave: I am not about to qualify it other than to say that that is not what I said at all. I pointed out—the oil tanker is shifting—that there was a 61 per cent. increase in real terms under Labour and a 38 per

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cent. increase over the whole period of this Government. What is significant is that between 1988 and 1994, it has increased by only 1 per cent., so the change is moving in the right direction.
Dr. Strang: The right hon. Gentleman is misleading the House—
Mr. Deputy Speaker: Order. The hon. Gentleman might like to rephrase that.
Dr. Strang: I accept that he is inadvertently misleading the House.
Mr. Deputy Speaker: Order. The use of the word "misleading" is not acceptable.
Dr. Strang: No problem; I withdraw it.
I do not dispute the increase in expenditure between 1974 and 1979. As my hon. Friend the Member for Newham, South (Mr. Spearing) pointed out, that was a period of transition. I do not say that it was satisfactory, but we were moving from not being in the CAP to being fully in it. I challenge the Minister's figures for the real-terms increase in CAP spending, but he may have tried to exclude some countries and compensate for the enlargement of the European Union. If so, he should say so.
Mr. Waldegrave indicated dissent.
Dr. Strang: Let me move on.
Mr. Gary Streeter: Will the hon. Gentleman help the House by saying exactly where his figures come from?
Dr. Strang: My figures have only two sources: first, Government documents—the Government publish figures not just on their own spending but on European Union spending—and most of the figures that I quoted are from that source, including the letter from the Minister of State; secondly, the last two figures that I gave are from a European Union document and I converted those from ecus to sterling.
Mr. Waldegrave: I have given the hon. Gentleman and the House figures derived from the Ministry in good faith, and I believe that they are right. If, as a result of the hon. Gentleman's amateur arithmetic, he turns out to have accused me wrongly—he backed down from accusing me of misleading the House only under pressure—will he apologise to me?
Dr. Strang: If the figures that the right hon. Gentleman gave are a fair representation of what has happened in relation to CAP expenditure, of course I shall apologise. I cannot understand this exchange because everyone sitting in this House of Commons knows that CAP expenditure has increased massively in the past few years. There is no dispute about that.
Dame Elaine Kellett-Bowman: It is slowing down.
Dr. Strang: It has slowed down for only one year. Even the hon. Lady must understand that the MacSharry proposals reduced the price effect of the CAP on the continent—less in the UK because of devaluation—but it did not alter the cost of the CAP to the taxpayer. On the
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contrary, MacSharry would always have increased the cost of the CAP to the taxpayer and everyone acknowledged that at the time.
I am happy to make it clear that the Labour party wants an end to state intervention buying of agricultural commodities. We want an end to subsidising agricultural exports, which is some two thirds of CAP expenditure. The Minister spoke a great deal about fraud. Anyone who knows anything about fraud knows that the vast bulk of it derives from surpluses and the huge quantities of agricultural produce in store. Above all, it derives from the huge payments that are made to traders when they move produce across international frontiers. Interestingly, the examples of fraud that the right hon. Gentleman gave all related to the payment of export refunds and some related to agricultural commodities that had been taken into intervention. I emphasise that we want an end to that system of market support. We do not want an end to supporting our agricultural industry, but intervention buying and export subsidies should go.
I want to deal with the relationship between those subsidies and fraud, because if we ended that relationship we would tackle fraud. I must ask the House to put up with a long, important quotation from the head of the division of the audit guarantee section of FEOGA. He is a senior official of the Court of Auditors and is involved in the audit of all the market support money in relation to the CAP. He gave evidence to the House of Lords Select Committee on the European Communities, which, like our own Select Committee on Agriculture, provides a lot of valuable information to everyone interested in agriculture. That senior official was interviewed about fraud and he said:
"Another example deals with agricultural expenditure. When considering export refunds (the export refund total amount this year would be about 8–10 billion ecu, which is substantial) the background of spending this money is the surplus of agricultural production in the European Community. To simplify, you could say that one wants to get rid of those surpluses; of course, not at any cost, but the Commission is pushing to get rid of the surpluses. Now we go in the same direction: the Commission wants to get rid of the surpluses; the Member States try to execute a policy to pay for the export refund; and the beneficiaries, the traders or manufacturers, play their role. It all gears into the same direction: spending the money. Of course, it does not mean that all traders would manipulate it. Not all transactions are fraud, but the problem is you create a kind of climate where, let us say, a little bit of a fiddle is more or less accepted. One should not be too critical of the traders because it could hamper trade; it could make it difficult to get rid of the surpluses. In such a climate you stimulate fraud, and that is a structural problem."
Let me repeat that final sentence:
"In such a climate you stimulate fraud, and that is a structural problem."
The Minister may appoint as many bureaucrats as he likes to tackle fraud and we may have all the satellite surveillance to which the hon. Member for Chesham and Amersham (Mrs. Gillan) referred, but one will never end that fraud when such huge subsidies are paid on large volumes of produce that are traded across international frontiers. That is why the Opposition believe that we should get rid of agricultural export subsidies and state intervention buying. The Opposition have enunciated that policy for some time.
The Government's motion takes the biscuit. After all the fraud and the record of wasteful expenditure, it calls on the House to congratulate

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"the Government on its robust negotiating stance on the Common Agricultural Policy since 1979, its leading role in achieving reform of the CAP, its continuing pressure for further radical reform"
and so on. That is an insult to the intelligence of the House. That is a criticism not of the right hon. Gentleman but of his predecessors. We all remember what his predecessor but one, now Secretary of State for the Environment, said when the Labour party attacked the MacSharry reforms as being hopelessly inadequate. In reply to my hon. Friend the Member for Workington (Mr. Campbell-Savours) he said:
"The hon. Gentleman has not grasped the fact that British Ministers have won their battles in the European Community and that the CAP reform is designed on what Britain wanted. There was no single major element of our negotiating list that we failed to secure in those negotiations."—[Official Report, 25 March 1993; Vol. 221, c. 1228.]
That is what the then Minister of Agriculture, Fisheries and Food said less than two years ago.
What about the current Minister's immediate predecessor, now Secretary of State for Education? As I said last year, she had a great reputation as the voice of the Norfolk barley barons in the Agriculture Council. She tinkered with and argued about little concessions on set-aside, but made not the slightest attempt to reform the CAP radically.
The right hon. Gentleman has been in office for only a few months. He has appointed a committee of intelligent men and women—no doubt they are enlightened people—to consider the CAP. We will need a lot more than that if we are to tackle the enormity of the wasteful expenditure inherent in the CAP.
The Opposition's amendment to the motion is quite clear, because it states:
"that the CAP continues to fail consumers … and that the Government is not doing enough"
to change it. I have spelt out the radical changes that we would like to be made to the CAP, so the choice is clear. I urge this honourable House to vote for our amendment.
6.4 pm
Mr. Peter Atkinson: The hon. Member for Edinburgh, East (Dr. Strang) is right that the terms of the Opposition amendment are clear. But what did he say in his speech, which lasted for about 40 minutes, about how the Opposition propose to reform the CAP? I made a few notes of his speech and although he argued that radical reform was necessary, his only attempt at reform was to launch a diatribe on fraud.
We all agree that fraud should be tackled, but the hon. Gentleman devoted the rest of his speech to an arcane argument about various figures and criticised the Government for abolishing the Agricultural Trading Board, the state veterinary service and so on. My hon. Friends and I had expected the hon. Gentleman to provide us with some details of what the Opposition propose to do to reform the CAP—some of my hon. Friends might even have agreed with him. Apart from his attack on fraud, however, we were not offered one Opposition reform.
Mr. Budgen: My hon. Friend is rather unfair. Surely it is plain that the hon. Member for Edinburgh, East (Dr. Strang) proposed to make the CAP even more expensive. He offered considerable aid from the taxpayer to large sections of the agricultural community, many of which are doing quite well.
Mr. Atkinson: I agree entirely.
In recent months, we have had several debates on agriculture. Farmers throughout the country will listen to today's debate and I am sure that they thought that they would, at last, learn about what the Opposition propose for British farming. I suspect that other hon. Members are as baffled as I am about the Opposition's intentions.
The Government deserve congratulations on what they have done to turn the titanic CAP around. [HON. MEMBERS: "It is early days."] I accept that, but the farming community can live with the Government's measured approach. We marched the farming sector up the hill in 1947 to make it farm in a particular way, so if, towards the end of the century, we are to march it down again, we must do it in a way that does not bankrupt farmers and ruin British agriculture. Farm incomes have improved and although not all sectors of farming are prosperous, farmers have been able to invest properly to restructure in order to face the full rigours of moving closer to the world market in future years.
The Government deserve credit, because my right hon. Friend has done a great deal to make the CAP more workable and has made it easier for farmers to adjust to the new regime.
It will be enormously complicated for British farming to move closer to world market prices. The proposed United States Farm Bill is important because we must be aware of what is happening in other parts of the world. GATT has become much more significant to Britain, in addition to the CAP, so we can no longer say that we are alone in Europe. We must bear in mind overseas pressures and the further developments in other countries.
Agra Europe magazine has considered the implications of the United States Farm Bill. If the Republican Senate is successful in removing set-aside from American farms, the amount of cereals produced in America will increase to such an extent that it could lead to 25 per cent. of British cereal farmers going out of business. British agriculture must be in a strong position to face such world competition.
One issue on which the hon. Member for Edinburgh, East did not dwell, on which I hoped that he would dwell more fully, was that of hill farms, which is important for me as I have a hill farming constituency. He did talk for a second about the problems that confront hill farmers, of which there are many, but he did not discuss the issue of animal welfare and animal exports; he said that he would leave it to the hon. Member for Glanford and Scunthorpe (Mr. Morley), who will sum up for the Opposition. That issue is of extreme importance to hill farmers and livestock farmers because any unilateral decision to do anything about the export of animals or the transport of animals will have a devastating effect on their income.
My hon. Friend the Member for Ludlow (Mr. Gill) asked what would happen if a great many dairy bulls came on to the market to be raised for meat. He called them horrible Holsteins, which I think is extremely unfair, but it gives an idea of the problems that could confront hill farmers who rear, as it were, proper beef, in all those markets if those dairy bulls were not exported and instead came on to the market to be fattened. That is of enormous significance to hill farmers, yet not a word did we hear about what the Labour party proposed to do about that.
Mr. Streeter: Does my hon. Friend agree that the hon. Member for Edinburgh, East (Dr. Strang) said three times during his speech that he would come to a certain issue later, and failed each time to get anywhere near that issue?
Dame Elaine Kellett-Bowman: Surely he always does that.
Mr. Atkinson: I agree with my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter), and that is why I was disappointed with the speech by the hon. Member for Edinburgh, East. He was very good. He whizzed around the Dispatch Box and shouted and became quite excited at one stage, but we did not hear that he proposed to do anything radical.
Mr. Gill: I am grateful that my hon. Friend listened to my intervention in the Minister's speech. Does he recognise that the fact that so many of those animals are undesirable for the beef industry, and much else that goes on in the agricultural industry, is as a result of the regime? It is not as a result of a farmer taking a proper commercial decision in terms of supplying a real market or of supplying a customer. So much of the decision-making by the farmer is influenced by the intervention regime and the common agricultural policy, rather than by the customer. We have to return to consideration of the customer.
Mr. Atkinson: I agree entirely with that. I believe that we cannot get to where my hon. Friend wants to go, which is where I think that most Conservative Members want to go, unless we do it in a slow and measured way. That is why I argue in support of the Government and the way in which they have tried to restructure the common agricultural policy; I hope and believe that that is the way to get to where the hon. Gentleman wants to go.
Repatriation was mentioned by one of my hon. Friends on the Conservative Back Benches. I believe that a repatriation of those decisions would be extremely damaging for British farming. Although it is superficially attractive, it would succeed in closing off an important market, especially an important export market for livestock, which is important to hill farmers such as those in my constituency.
Mr. Budgen: That depends, does it not, on the overall relationship that we are likely to achieve with Europe if we achieve, at the next intergovernmental conference, a significant loosening in our relations with the European Union. We hope that we will be able to loosen the common agricultural policy and at the same time retain our right to trade with the countries in the European Union. The hill farmers in my hon. Friend's constituency should be all right in a well-negotiated settlement of that type.
Mr. Atkinson: I am always rather worried about giving way to the hon. Gentleman because I know that he will lob something complex at me, as I suspect that he has done this time. Currently, as far as hill farmers or livestock farmers throughout the United Kingdom are concerned, the European Community is an important source of exports, one hopes of deadstock, but also of some livestock. Therefore I fear that to move to a policy of repatriation would erect more barriers to free trade because other European Union countries such as France and Spain would spend more money subsidising their agriculture than the United Kingdom would and therefore we would be at a competitive disadvantage.
Mr. Marlow: I am sorry. My hon. Friend is a very intelligent man, but he has been misled by our right hon. Friend the Minister.
Mr. Tyler: Misled!
Mr. Marlow: I apologise. I withdraw that remark. He has drawn the wrong conclusion.
Mr. Deputy Speaker: I should be grateful if the hon. Gentleman would withdraw it formally.
Mr. Marlow: I have certainly formally withdrawn it. I am afraid that my hon. Friend has drawn the wrong conclusions from what my right hon. Friend the Minister said. There is this great fear that, if we had a level playing field in Europe—if we traded in agricultural commodities, as in everything else in Europe, without let or hindrance—the other Europeans would subsidise what we would not subsidise. The fact is that at the moment we make a net contribution of £3 billion to the European Community each year. If we were not part of the common agricultural policy, we would be able to keep £2 billion of that cash in our own pockets. That would be more than enough to keep our farmers in the way to which they have become accustomed.
Mr. Budgen: On a point of order, Mr. Deputy Speaker. Is the word, "misleading" an unparliamentary word, because it does—
Mr. Deputy Speaker: Order. I understand the question. [Interruption.] Order, the question was quite clear. The answer, in the context in which it was given, is yes.
Mr. Atkinson: Thank you, Mr. Deputy Speaker. I am obviously becoming a target for a different debate. It brings me to my last argument, because I know that many other hon. Members wish to speak.
We must continue to push for reform of the common agricultural policy because, by the end of the century, we must allow our farming industry to become more ready to meet the world market that it has to meet.
Listening to my hon. Friends firing shots at me about Europe, I am reminded of what the hon. Member for Edinburgh, East said. He said, in an appeal to Members on the Conservative side of the House, that perhaps they should vote for the Labour amendment. When he said that, it revealed the intention behind the amendment because it is not about British farming; it is not about a Labour policy for British agriculture. It is trying to set a little snare—if that is not an unfashionable word, Mr. Deputy Speaker—to catch a few votes from the Conservative side of the House in order to make some cheap party political points in the debate that will follow tonight. I believe that such a serious debate about the future of British agriculture should be treated more seriously by members of the Opposition.
6.16 pm
Mr. George Stevenson: The hallmarks of the European Commission proposals that we are debating are complacency in action and chronic uncertainty. Having listened to the Secretary of State's speech, I am afraid that the Government appear to have taken the same attitude. However, while we have that

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complacency, inaction and uncertainty we have remorseless cost increases. I shall return to that subject later.
The 1995–96 price proposals from the Commission are best described as the "no change proposals". Nothing is proposed for the sugar regime; nothing is proposed about milk quotas; nothing is proposed about beef; nothing is proposed about sheep; nothing is proposed about wine. One could go on and on. Yet we are asked by the Government to give our support to the general thrust of the Commission's proposals.
We have here a classic European Commission ploy. It paints a rosy picture overall, but when one gets down to the detail and the fundamentals of the position confronting us, one obtains a different picture altogether.
Indeed, so complacent is the Commission—and, apparently, the Government—that it says in the documentation that accompanies the proposals that it has no intention of promoting further fundamental reform. I find that staggering. It is, at the very least, a cause of disappointment that the Secretary of State did not even mention tonight the fact that apparently the European Commission has no intention of making further fundamental reform. In other words, he was saying that the MacSharry reforms were successful—I do not really think that there is a Member of the House who would accept that—and that that is the basis on which agriculture in the European Community should proceed into the next century. That is not only nonsense, but very dangerous nonsense.
The Secretary of State spent some time discussing agricultural issues in his speech. He mentioned consumers and I will check Hansard to establish whether he mentioned taxpayers. However, I am absolutely sure that during his 45-minute speech—even taking into account interventions—he did not once mention rural areas. That is a significant omission to which I shall return later.
It is apparent to everyone—except presumably the Commission and Her Majesty's Government—that, if for no reason other than the future enlargement of the European Union, the CAP as it is presently structured simply cannot survive. That very important point must be underlined in the debate. I agreed with the Secretary of State when he said that the current CAP proposals represent a serious lost opportunity.
The issue of cost has so far occupied much time during the debate. The Commission's attitude towards CAP costs, speeches by Government Ministers, and documentation and letters that hon. Members have received from the Ministry reveal that the agricultural guidelines, of which much mention has been made, started out as a mechanism for exercising at least some control over the runaway costs of common agricultural expenditure. It was thought that, allied with other instruments, it would be an effective means of exercising some control.
The agricultural guidelines were viewed in that way for the first few years of their existence. Although I believe that they are far too generous, they were set in the main by member states who had a vested interest in ensuring that they were set at a high enough level so as not to prevent the remorseless increases in agricultural expenditure.
I suspect—and everything that Government spokesmen have said justifies my concern—that the agricultural guidelines have shifted from being a control mechanism
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to being viewed as a target. No matter what we do, if we stay within the agricultural guidelines we are okay. Thus, by some magical wave of the wand, agricultural expenditure is "controlled". That appears to be the European Commission's attitude and the Government have swallowed it whole. I intend to produce information to substantiate that claim.
According to that logic, massive cost increases are justified if they fall within the outrageously generous guidelines. People emanate smug satisfaction when they say, "Why do you criticise increases in CAP expenditure when we are within the guidelines?"—guidelines which are extremely generous and which I suspect are being treated as a target. The Government have adopted the Commission's view and I believe that we should challenge it.
Mr. Paul Marland: Will the hon. Gentleman reflect a little on his own experience in the European Court. He knows that our Minister is responsible for only a small amount of the annual expenditure on agriculture in this country and that any reductions in expenditure elsewhere must be arranged in co-operation with our European partners. Perhaps the hon. Gentleman could draw on his experience and, rather than criticising the current arrangements, tell us how the Minister could constructively arrange a better deal than the present one.
Mr. Stevenson: I am grateful for the hon. Gentleman's intervention, and I will return to that point later in my contribution. However, I must set the record straight: I have never been a member of the European Court; nor have I appeared before it. Unfortunately, the Government hold the record for the number of times that they have been dragged before the European Court over a variety of issues.
I am sure that the hon. Member for Gloucestershire, West (Mr. Marland) recognises that we must not be fooled by the siren voices which say: first, agricultural expenditure is under control when it clearly is not; and, secondly, because it is within the guidelines, it is all right. We must challenge those views and I am sure that the hon. Gentleman will join me in doing so.
Mr. Gill: Is the hon. Gentleman confident that his views will be supported by other Agriculture Ministers in the Community? In asking that question, I am mindful of the words of a former Chancellor of the Exchequer in this place who said that, when he raised the question of fraud in the Economic and Finance Council, everyone reached for their newspapers; they were not interested in reducing the amount of money that is lost through fraudulent practices.
Mr. Stevenson: I am not sure what support my views may enjoy among other members of the European Community. I have not yet tested my views to that extent; although I floated them during my term in the European Parliament. I am not even sure whether my views have widespread support on these shores. However, I am certain that the present British Government's attitude stands no chance of gaining the support necessary to secure fundamental reform of the common agricultural

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policy. While the attitude of smug satisfaction prevails, the consumer and the taxpayer will continue to be subjected to financial mugging.
Mr. Marland: Will the hon. Gentleman give way?
Mr. Stevenson: No, I would like to make a little progress. How are the Government responding to the situation? I would describe their response as nothing short of incredible. The Government motion refers to the Government's
"determination to ensure that EU agricultural spending is effectively restrained".
It goes on to say that the House should note that
"UK farm incomes rose by 6.9 per cent. over the last year".
The implication of the latter claim is that Government policy was responsible, through some mechanism, for that rise in UK farm incomes. If the Minister intends to say in his reply to the debate that farm incomes have increased as a result of Government policy rather than the disaster of black Wednesday and devaluation, I shall be interested to hear his reasons. The claim that the Government have "effectively restrained" expenditure beggars belief.
Many statistics have been cited in the debate so far and I do not wish to add to them. In a letter to me, to which my hon. Friend the Member for Edinburgh, East (Dr. Strang) has referred already, the Minister sells the pass. Between 1991–92—the year in which the MacSharry reforms were agreed—and 1995, agricultural expenditure increased by 6 billion ecu. That works out at about £4.5 billion. I do not understand how the Government can claim that they embarked on policies that "effectively restrained" agricultural expenditure in light of their own figures which show that the cost of the common agricultural policy increased by 25 per cent. over three or four years. According to the report published by MAFF, CAP costs will continue to increase. So not only do we face massive current increases, but, by the Government's own admission, we shall face even greater increases.
I should like for a moment to examine the Government's plans as set out in the MAFF report to which I referred. According to that report, United Kingdom expenditure on agriculture is due to increase by £466 million next year to a figure approaching £2.9 billion. The report states quite openly that most of the increased costs are due to devaluation. The term used was "currency alignment", but it comes down to devaluation. That devaluation has been responsible for increases in farmers' incomes over the past year or two.
If those costs result mainly from devaluation, I wonder what will happen to them as a result of the current turmoil in the European Union monetary markets. In recent months, there have been further devaluations and crises in the exchange rate mechanism. Those factors affect costs, therefore, when he replies to the debate, can the Minister give us some idea of what the additional costs will be as a result of devaluations over recent months?
Between 1990 and 1997, the Government expect United Kingdom expenditure on the CAP to increase by no less than £1.2 billion—so much for restraining expenditure. The motion is nonsense. The facts simply do not bear out the Government's claims. I know that that has not stopped hon. Members supporting the Government in the past, but I hope that on this occasion they do not fly
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in the face of the facts as presented and support the motion. We have heard much talk about fraud tonight. I believe that the Government motion is equally fraudulent.
There have been other changes in agriculture to which the Secretary of State referred. I join my hon. Friend the Member for Edinburgh, East in welcoming some of those changes, but let us not be blind to the other changes and retreats by the Government over recent years that have disadvantaged British agriculture.
The arable area payments and the direct income support are skewed in favour of small producers—in other words, they are against the interests of the larger more efficient producers in the United Kingdom. The sheep premium agreement, which imposed a limit of 500 in lowland and 1,000 in less-favoured areas, affected British flocks because of their relative size. The sugar quota regime continues to be a scandal. The milk quota regime is another example, whereby in 1984 the Government enacted to the letter a swingeing 9 per cent. cut in quota when countries such as Italy never implemented their quota. The beef premium, which imposed a 90-head limit, and the livestock unit restrictions were against the best interests of United Kingdom agriculture and, of course, the common fisheries policy has been mentioned already.
I now turn to the point to which the intervention by the hon. Member for Gloucestershire, West (Mr. Marland) referred.
Mr. Marland: I simply want to put the record straight. I did not mean that the hon. Gentleman had been a member of the European Court but a member of the European Parliament and I was hoping that his experience in that role would prove useful in this afternoon's debate.
Mr. Stevenson: I realise that the hon. Gentleman was trying to make a useful intervention, and I am grateful to him.
We need to recognise that the 1992 reforms are at best misnamed. They were forced on the European Community by budgetary crises and the GATT negotiations. Inevitably, the future will force on us further reforms, but they will be for different reasons. There is no doubt that unless firm action is taken, there will be budgetary problems. Not only will we have to consider the budgetary problems and the results of the GATT requirements, but there will also be enlargement issues, particularly involving eastern Europe.
Any future reform must take a number of issues fully into account. First, there are inherent contradictions in the common agricultural policy that recent changes simply have not addressed. How can we be engaged in a policy that tries to equate growing olives in Greece with producing milk in Staffordshire? It is clearly a contradiction, so much greater flexibility needs to be brought into the system.
Repatriation has been mentioned. I am not arguing for repatriation, but for much greater flexibility so that we can remove some of the contradictions that are inherent in the common agricultural policy. Mention has been made of subsidiarity. What is wrong with greater flexibility that brings with it greater subsidiarity?
The second consideration that is absolutely essential in any future renegotiation of the reform of the CAP is that agriculture is an important industry; it is extremely important for our rural areas and rural communities.

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However, it is only one factor; many other aspects of our rural areas and communities must be taken into account, not least, of course, the environment.
Three points need to be taken fully into account. First, flexibility is not just desirable, but essential because it is clear that if we continue down the present path, as outlined by the MacSharry reforms, United Kingdom agriculture efficiently operated will increasingly face problems.
Secondly, agriculture support needs to be decoupled from production and we should be removing the artificial restrictions imposed by quotas. Thirdly, agriculture policy should be seen as part of a wider rural policy. We should no longer accept that if agriculture is doing okay, then by some magical definition our rural communities are doing all right. We have enough evidence that that is simply not so.
According to the Government, farm incomes have increased by 6.9 per cent. over the past year, yet our rural communities continue to decline. Therefore, agriculture support must be seen as part of a wider rural policy framework.
It is now time to lay the foundations for that reform so that we can secure the future. The European Union will be enlarged and that enlargement will not bring not only opportunities but immense challenges, and potentially serious problems. Unless we are prepared to challenge the complacency of the Commission which sees fit to argue that no further fundamental reform of the CAP is required, that future will be compromised to the detriment of us all.
6.29 pm
Sir Ralph Howell: Attacking the common agricultural policy is a popular sport, but I do not intend to play it. I welcome the speech of my right hon. Friend the Minister, who said that the CAP is an integral part of the European Union and will remain so. It must remain. However, there is no doubt that changes are necessary. In the context of my constituency, it is obvious that we should not be penalised by having to reduce our sugar beet acreage when Britain is nowhere near self-sufficient in sugar. Neither should milk production be reduced when this country has a big shortfall. Both issues must be pursued with vigour. Some way must also be found of helping our pig industry, which is in serious trouble. It is wrong for Britain to be importing so much pigmeat.
I was concerned when my right hon. Friend the Minister described the CAP as a monster. Perhaps it needs controlling, but I will return to that point later. I was worried most by my right hon. Friend's reference to cutting prices. The European Union is fortunate in having ample food at reasonable prices. The cost of the CAP is often attacked. In the 1960s, as I said in my intervention, we spent 1 per cent. of our gross domestic product on support for agriculture. The figure subsequently fell, but it was always more than half of 1 per cent. until we joined the European Community. The figure is now less than half of 1 per cent. The people who imply that, if Britain left the CAP, agriculture would not have to be supported have got it wrong and they are being mischievous.
In 1960, the people of Britain spent 25 per cent. of their net disposable income on food. That figure has regularly decreased and today it is only 10 per cent. We spend less
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on food than any other EU member state and about the same as the Americans—but their GDP per head of the population is higher.
Mr. Budgen: When a country enjoys a long period of peace and steady, albeit irregular, growth it is bound to spend less on food and more on other consumer items. My hon. Friend merely points out the advantages of economic progress.
Sir Ralph Howell: My hon. Friend makes an interesting comment. This country has enjoyed 50 years of peace and prosperity, and the common agricultural policy probably did more to bring that about than NATO. The CAP was the first policy adopted by the six original members of the EEC. One purpose of being generous to the small farmers and to the peasant population of Europe was to stave off the threat of communism which was about to sweep across the whole of Europe at that time. By being generous to the small farmers, especially those who were working for firms such as Volkswagen and continued to live in the rural areas, communism was checked and did not get a hold in France, Germany and Italy. When the history of that period is written, the CAP will be held responsible for that success.
The fact that there have been no food queues in the EC when people east of the iron curtain were suffering from shortages of all basic foodstuffs is also a great success story, and it is about time that somebody said so.More misinformation is put around on this subject than any other, especially by the Eurosceptics or Euroseptics—I am not sure which it should be. The claim has been made that the CAP costs every British family £28 per week, but there is no substance in that or in the OECD report itself, which gave a figure of £20 per head. I challenged the Treasury, which does not seem to be very good at figures these days.
Mr. Budgen: My hon. Friend is attacking everybody. He must try to find some friends.
Sir Ralph Howell: The other day, a Treasury Minister said that the CAP was costing every family £28 a week. That was too much for me to tolerate, so I went to see him. By the time I arrived, he had reduced the figure to £20 a week—and by the time I had finished with him, he had cut it to £15. But even that is not the right figure. The true UK and EU subsidy amounts to less than £3 per family per week. Part of the rest is supposed to be accounted for by food prices rising more rapidly than they would otherwise, but there is no proof of that either.
Mr. Waldegrave: Someone said from a sedentary position that my hon. Friend the Member for Norfolk, North (Sir R. Howell) does not have any friends, but that is not true: I support my hon. Friend the Member for Norfolk, North in giving a strong health warning about such figures. They are all based on the idea that world prices would not change if agricultural support were abolished in Europe, which presumably that would not happen without its also being abolished also in America. World prices would be unpredictable, but they would almost certainly be much higher.
Sir Ralph Howell: I thank my right hon. Friend for those comments. There is no such thing as a world price of food or of wheat. Nobody can give one. The fictitious figure of £20 a week was calculated on the basis of wheat at £50 per tonne, which was available for a short period

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from Australia. The world cannot live on wheat at £50 per tonne. We would all starve if that policy were adopted. We should consider the issue in a more logical and sensible way. Thorough research should be undertaken to arrive at a cost figure for the CAP which stands up and is not merely guesswork. The people who are trying to damage Britain being in Europe are making great play of the cost of the CAP, and it is time that the Government put some effort into making the true facts known.
6.48 pm
Mr. Paul Tyler: As a number of hon. Members wish to speak, I shall not go over old ground but will try to break new ground. I accept the Minister's point that this debate is our annual opportunity to review agriculture and the future of the common agricultural policy. I agree with the hon. Member for Hexham (Mr. Atkinson) that there is a need to examine not only the European environment but the world context. I know that the Minister and others had some innocent fun at my expense when I spent some time with members of both Houses of Congress to discuss this very question. It is extremely important to open up discussions across the Atlantic. What happens to American agriculture is just as important to British farmers as ensuring that our continental competitors are not given an unfair advantage over us.
I agreed with hon. Members who have said that the so-called repatriation of agricultural policy would be a misguided step, not just for British agriculture but for the British countryside. I accept that in the past year there has been a modest overall increase of 4.4 per cent. in agricultural incomes. But some parts of the industry have not benefited to that extent, and it is important to recognise the difficulties that they have faced. For some of them it is a bit early to start celebrating just because they have progressed from near disaster to mere crisis. Even more unfortunately, some of the recovery happened because of black Wednesday: it had nothing to do with what the Government have done—the recovery has been despite what the Government have done.
The reform of the CAP has to take place at two levels. Strategically, we must try to persuade our colleagues around the table in the European Union that reform is inevitable, necessary and desirable, and we must maintain that pressure. That much is agreed throughout the House. That is the long-term goal. As the amendment tabled by my right hon. and hon. Friends states, however, in the shorter term there are things that we can do in this country and it is important to think about that aspect today as part of the review of what is happening in the industry.
In the short term, there can be no doubt that MAFF is making a right old pig's ear of its implementation of the CAP. Compared with those in other member states, our farmers are all too often uniquely burdened by bureaucracy and entangled in red tape. Even when they can find a way through the administrative jungle there is always some ministerial ineptitude waiting to trip them up—delayed payments, lost forms, and so on. In short, all too often Ministers have made good measures bad, and bad measures worse.
Mr. Streeter: How would the Liberal Democrat proposal for a countryside management contract help with
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red tape and bureaucracy? What the hon. Gentleman is really suggesting is that local authorities should have a say in what farmers can and cannot do. Will that not burden them even further?
Mr. Tyler: The hon. Gentleman must contain himself. He is always a bit premature and he is particularly so today. If he will be patient, I shall come to that point.
The three watchwords for any improvement must clearly be reform, simplification and targeting. We must certainly reform the unnecessary regulations which have been imposed—uniquely—in this country and which have put our farmers at a competitive disadvantage. Reforms must simplify the elements of EU legislation which have been taken in comparatively simple form from Brussels and have been expanded as they passed through the Whitehall mincing machine until they have become unintelligible and largely unmanageable. The Government must target resources at specific, good-value objectives, whereas up till now they have squandered cash and imposed inadequate controls.
Rural policy objectives of the right sort are widely supported inside and outside the House. The hon. Member for Plymouth, Sutton (Mr. Streeter), representing an urban constituency, is perhaps not aware of the support in all the agricultural organisations—the National Farmers Union, the Country Landowners Association and others—for reform measures of direct benefit to the environment and the rural economy. Across parties we should aim for a common rural policy. Clearly we must enable the farmer to have some real flexibility and choice—hence our idea of the countryside management contracts.
Parts of the industry have had a particularly difficult time in the past 12 or 24 months. The hon. Member for Hexham shares my concern about hill farmers. Over the past few years the hill livestock compensatory allowances have been reduced by one third, so hill farmers have been especially hard hit. The annual statement that the Minister put before us today states that the incomes of hill livestock farmers are expected to fall in 1994–95. They have already fallen in the past few years, and they will be falling again. That causes widespread concern in the House. Incidentally, the same statement makes it clear that the incomes of lowland livestock farmers in England and Wales are expected to drop in 1994–95. There will also be an impact from the livestock problems that were mentioned earlier.
All this comes at a time when the public are clamouring for more targeted investment in our uplands and hills, to maintain the landscape and to ensure that it is properly farmed. That is the sort of targeted investment that the public are anxious to preserve; yet these are the very payments that have been cut. Instead of maintaining a vibrant and living landscape, attractive to man and beast alike, many areas are being reduced to semi-dereliction.
When I challenged the Minister of State in Committee over the HLCA cuts in real terms, he said that I had not taken into account off-farm incomes. Perhaps he can explain today what he meant, but I hope that he has subsequently noted how his suggestion has been laughed out of court by the industry. There are not a great many openings for hill farmers to become ice cream salesmen, for instance. The hon. Member for Hexham will know that there are not many diversification opportunities in his constituency. It therefore seems absurd to build such a calculation into the equation for the first time.
Mr. Jack: I apologise for interrupting the hon. Gentleman, but I want to make it abundantly clear that, when speaking about non-farm income—not off-farm income—I in no way implied that when hill farmers' incomes are calculated and the HLCAs are determined that type of income is taken into account; it is misleading of the hon. Gentleman to suggest that such a formula is being followed, because it is not.
Mr. Tyler: I am grateful to the hon. Gentleman for making that clear, but his comments in Committee have been widely misunderstood, as he will have seen in the farming press. He said in Committee—I hope that he will be careful about what he says today—that whenever farm incomes go up, the HLCAs will fall, as happened in the past two years. But whenever hill farm incomes drop—I note that the hon. Member for Hexham is nodding—there is no compensating increase. So for the hill farmers it is, "Heads you win, tails we lose."
MAFF is all too eager to save a penny or two when such cuts can be made, and the Chancellor can get the princely sum of £30 million—very small in terms of the overall agricultural budget. This is a gesture by the Ministry to display its financial rectitude to its colleagues—a small fish thrown to the sharks. For many comparatively small and vulnerable farm businesses, however, it represents the difference between viability and bankruptcy.
The pig sector has been mentioned already, and I should like to spend a moment on the subject. It, too, has been subjected to the most bizarre treatment. When Ministers decided to ban sow stalls and tethers, they claimed that they had examined each area of the UK to see whether farmers needed grants to help them make the change. First they looked at Northern Ireland; yes, they decided, the change would clearly impose intolerable costs during the transition, so Northern Ireland's farmers needed help to get through it. Then they looked at Scotland, Wales and England; no, they decided, the change would not cause farmers here any problems—they could be left to fend for themselves. So Northern Ireland gets special treatment, while the rest of the United Kingdom is left to its own devices.
What is the justification for that? No one has said. I do not want to jeopardise improving relationships with and in Northern Ireland, but this clearly is not an essential part of bringing peace to the Province. I suspect that the Northern Ireland Office used its arm-wrestling techniques to extract money from Whitehall and Brussels, even though other areas of the United Kingdom would also qualify for the grants concerned. Once again, this is no aberration on the part of Brussels: it is a product of Whitehall's double standards.
As hon. Members have said, all too often in the past huge sums have gone to those in the industry who are well off, while targeted investment in the form of farm conservation grants, waste water projects and HLCAs, to maintain livestock farming, has been neglected and rural communities, the rural economy and the rural environment have suffered as a result.
In the past, the Ministry has spent a great deal of time centralising the slaughtering capacity of this country. The number of abattoirs has halved in England, Wales and Scotland in the past 15 years, during the lifetime of the Government. Significantly, in Northern Ireland there has not been anything like the same reduction because there
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the same notorious hygiene regulations have not been introduced. As a result of that centralisation, not only are there additional costs to the industry but many farms are now stranded great distances from the nearest abattoir, exacerbating the problems of long-distance transport of livestock.
I am amazed at the complacency with which the Government congratulate themselves in their motion today. I do not think that dairy farmers in particular would regard this as the right moment for such self-congratulation. The chaos over milk quota has nothing to do with tight-fistedness: it has resulted from a lethal cocktail of irrationality, ineptitude and pigheadedness—irrational in the way in which the quota was set up in this country, not taking account of the full needs of our market, and making it very difficult to ensure that it was a tradeable commodity; inept in the way in which the new arrangement has failed to process quota transactions on time; and pigheaded in the way in which the Ministry has refused to use a bit of discretion and common sense in the resolution of disputes.
On the tapes this afternoon it was suggested that some 15,000 British dairy farmers will face fines of some £75 million for excess production in the current year—an average of some £5,000 per head. I do not know whether that figure is correct, but I hope that by the end of this debate the Minister will be able to tell us what sort of figures are involved.
All those factors seem to be unique to the United Kingdom. Everywhere else in the EU, competitor countries use their quota in a way that seems to be better controlled and ensure that it is not a speculative commodity. It seems to be reasonably administered. But above all, in most other member states there seems to be a system for providing new entrants and developers—the subject of the worst ministerial injustices here—with additional quota.
As Members of Parliament, we receive far more complaints about the inadequacy, incompetence or misdirection of the Ministry or its minions in the executive agencies than we do about the framework of the CAP itself.
Mention was made earlier of the integrated area control system forms. Of course they have a function, but it is extraordinary that the Ministry itself can make mistakes with IACS. The example field data sheet included in the 1995 IACS explanatory booklet, which is intended to show farmers how to do the job, itself contains two basic errors. The south-west National Farmers Union has pointed that out, but I do not think that the Ministry has yet been able to make the necessary corrections.
Then there is the Intervention Board for Agricultural Produce. I bet that not one Member here who represents a rural constituency has not had problems with the intervention board. Again, I see Conservative Members nodding in agreement. The old example that we used to give of a barefaced lie was the promise, "Your cheque is in the post." The alternative now has to be the intervention board's assurance, "Your quota forms are being processed urgently." Dairy farmers all over the country are now finding that that simply is not true. I have a memorandum here from a firm of chartered surveyors and agricultural valuers, who tell me that they

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sent a batch of 19 transfers to the intervention board in time for the deadline of 12 noon on Saturday 31 December 1994. They report:
"Of the 19 various transfers that were sent to The Intervention Board in this particular batch, it seems that six have not yet been processed and all the parties involved, i.e. the lessors, lessees and ourselves, have been constantly badgering The Intervention Board to confirm the leases.
The Intervention Board contacted me on Friday of last week, March 17th, and admitted that they may have mislaid the forms and were wondering what they could do about it."
That is absurd and very expensive. Other cases have been reported in the agriculture media.
I do not have time to dwell on the Meat Hygiene Service, a new agency to be introduced on April Fool's Day, but I know that many hon. Members on both sides of the House are concerned that the introduction of the new regulations and this new service takes it out of local elected accountability. A risk-free business is being established with a turnover of some £40 million; the Government are inventing a new monopolistic quango. Is that deregulation, decentralisation, democratic accountability? Is that the clarity to which the Minister referred? What hogwash.
Ministers ask us to believe that they are a safe pair of hands, to be trusted with the long-term review of the CAP. Well, judging from the experience of the way in which they operate the CAP in this country, it is a case of "physician heal thyself". Ministers seem to think that British farmers really will put up with that standard of administration, when their competitors on the continent are obviously benefiting to a far greater extent. Is it any wonder that so many people are leaving the industry? The Minister's own figures show a 15 per cent. drop in full-time farmers in the past decade.
In a perceptive article in The Guardian on 25 February, Martin Kettle was absolutely right to identify the Conservative Government's Euro-wobble as a major obstacle both to the reform of agriculture policy and to animal welfare improvements in the single market. Insistence on dilution of the EU by enlargement—it will be interesting to hear what the Minister has to say this evening—rather than encouraging cohesion by generic growth, lessens the chance of progress in both directions. Mr. Kettle pointed out that
"the British veto sounds fine until your realise that it also means a Greek veto".
For as long as the most retrograde countries are allowed to block even the most cautious of reforms, the CAP will remain an expensive nightmare, the scale of fraud will continue, and animal welfare will be swept under the Council of Ministers' carpet. Further expansion eastwards, as the Minister hinted, where conditions are even more primitive, would simply make conditions worse. The more that Conservative politicians in this country pretend that these issues can be resolved unilaterally, the more our farming competitors on the continent will laugh all the way to the bank.
As though all those obsessions were not enough, let us consider the difficulty of the Minister and the Minister of State when they attend Council of Ministers meetings. How can they persuade their opposite numbers of British good intentions? Contrary to popular belief, Ministers in the 14 other member states are capable of reading what
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the Prime Minister and his colleagues think, not just about the need for European Union joint initiatives but about the personalities of those national leaders. People read what is said here in London.
The right hon. Member for Bristol, West (Mr. Waldegrave) is surely too astute to ignore the consequences of his own party colleagues' blinkers, and I am relieved to see that he has not joined in their recent xenophobia, but they done nothing to help him or his ministerial team to achieve Europe-wide progress on these fronts. By investing sacred calves with purely British significance, the Minister's party has increased the problems that he now faces, not diminished them.
Several hon. Members rose—
Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I remind the House that Madam Speaker has placed a limit of 10 minutes on speeches made between 7 pm and 9 pm. That will still apply even though the clocks have not been too helpful.
7.7 pm
Mr. John Greenway: Previous debates on the agricultural price proposals have usually been characterised by rows about price changes proposed by the European Commission, and the round-the-houses view of agriculture. With the exception of the something-for-everybody speech that we have just heard from the hon. Member for North Cornwall (Mr. Tyler), the debate tonight—I suspect that it will continue in this vein—seems radically to have changed. It now seems that the CAP is wasteful and that there are calls for abolition, for repatriation, for dismantling price support. What I find astonishing is that, through all the debates that we have had in my eight years in the House, we have been trying to argue that if only the United Kingdom farmer could compete on fair and equal terms, the United Kingdom farmer would do well. Now that he can and is doing well, everybody wants to abandon it, in a spirit of knocking Brussels, of Euro-scepticism. I regard myself as a Euro-sceptic on these Benches, but we have to have a balanced view on just what is happening within the European Community.
I have long wanted to say that what really makes me angry is the way in which an argument is developed in order to take an anti-Brussels line. When, recently, we had a row about Spanish access to the Irish box to fish, everyone said, "Pity the poor fishermen. Isn't it dreadful that Brussels is allowing this and we are powerless to stop it?" Now we have the argument about the transport of live animals and the export of livestock, so crucial to the well-being of farmers in my constituency and in that of my hon. Friend the Member for Hexham (Mr. Atkinson), as he mentioned. People say, "It's dreadful that Brussels is stopping us banning such exports."
I would ask hon. Members to have the same concern for farmers as for fishermen. If they did, they would recognise that we are right to say that we must continue to support livestock exports and to argue in Brussels and in other member states for the opportunity to improve welfare standards across Europe. That is the right and consistent approach.
I do not have time to deal in detail with all aspects of the CAP which concern us. But it is clear that change and reform are needed. I intended at a fringe meeting with the

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National Farmers Union at the Conservative party conference last autumn to call for a CAP policy review, but my right hon. Friend the Minister did exactly that in his speech that morning to the conference. A proper review of the CAP and our options is long overdue. I have 10 suggestions about how we should go about it.
First, the reform must be properly thought out. In the past, too many changes have been a quick fix. Milk quotas are a good case in point. They were introduced to cut the cost of supporting milk when the Community would not cut the price. Now we have sheep quotas, which are causing immense problems in my constituency where some long-established flocks have no quota because there was not enough to go round. Please, let us have no quick fixes. Let the policy be properly thought out so that we have a structure which will last us for another 40 or 50 years.
Mr. Budgen: Ah.
Mr. Greenway: My hon. Friend thinks that I have let the cat out of the bag by referring to another 40 or 50 years. I imagine that in that time we will remain committed members of the EC, but we will have shaped it in a way that suits Britain, not the rest of the EC alone, which often seems to many of us to have been the case in the past.
Mr. Marlow: Will my hon. Friend give way?
Mr. Greenway: No, I shall not give way because I have only 10 minutes.
Secondly, the change must be gradual and there must be a transitional period because things cannot be changed overnight. Farmers need to know where they stand. Growing crops and keeping livestock requires a one, two, three, four or five-year cycle. Politicians cannot change things overnight.
Thirdly, we must move closer to the market. That will bring three benefits. First, as I have said, it will help to end artificial restrictions on production; secondly, it will mean that the United Kingdom's greater efficiency will count for even more; and, thirdly, it will reflect our obligations to GATT and to the third world, which farmers themselves recognise are important.
Fourthly, the CAP must be non-discriminatory. Too often in the past, as I have already said, we have been discriminated against. I do not accept, as the hon. Member for Edinburgh, East (Dr. Strang) said earlier, that the only reason why our farmers are doing well is what happened on a Wednesday in September 1992. Another fundamental reason why our farmers are doing well is that my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), when he was Minister of Agriculture, Fisheries and Food, went repeatedly to Brussels and said no to MacSharry discriminating against United Kingdom farmers. That must remain our watchword. We must say no to the ridiculous idea of modulation and the belief that because a farm is large it does not need support. Large estates like those in my constituency and the people who work on them are just as important as the small farm structures on the continent.
Fifthly, price support must be more closely linked to environmental benefits. One could make a speech on that alone. Clearly, much more needs to be done on that. If there were time I would make further suggestions. I agree with the concept of trying to decouple support from
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production to having some kind of contract in terms of the environment in our constituencies. Farmers themselves recognise how important that is.
Sixthly, any reform must have regard to the needs of the food and drink industry. We have talked about agriculture and the CAP, but I have yet to hear anyone mention in any detail just how vital the food and drink industry is to Britain. In many respects we are market leaders. After the huge devaluation in 1992, the price of raw materials for many manufacturers rocketed overnight and they have had a great battle in coming to terms with it. Therefore, we need fairness for them as well.
Seventhly, reform must tackle all commodities. Too many, particularly Mediterranean crops, have not yet been tackled. I want Ministers to go to Brussels and be more determined about that. There is scope for much greater reform in those areas.
Eighthly, we must reduce the overall cost of support. If I have time, I might say a few more words about that because I do not think that the cost is anything like as bad as people think. As has been said, progress has been made. But reducing the overall cost of support is essential if the central and eastern European countries are to be brought into the Community. Without that, the cost of the CAP will explode and we shall have serious problems.
Ninthly, we must retain the security of food supply, not only for now but into the future. That means not prohibiting our opportunity to grow crops and keep livestock in years to come.
Tenthly, the CAP must be less bureaucratic and we must tackle fraud. Those two objectives may appear contradictory but they are not. Much of the fraud is a result of too much paperwork.
Two phrases highlight the current situation.
Mr. Deputy Speaker: Order.
7.17 pm
Mr. Jon Owen Jones: It is worth reminding ourselves of the history of the CAP and national subsidy in Britain which predated the CAP. They arose at the end of the second world war when starvation was a reality in many European countries and when rationing was a reality in Britain. However, what began as a good project, solving that problem, has grown enormously and now desperately requires to be cut.
The CAP accounts for more than half the entire EU budget. There have been arguments about the total amount, but about £30 billion—£91 million a day—is being spent on subsidising agriculture throughout the EU, and that simply to build grain mountains of 16 million tonnes, beef mountains of 250,000 tonnes, butter mountains of 250,000 tonnes, wine lakes and so on. We are paying farmers large sums of money not to farm. It is a surreal system which should have been invented by Salvador Dali. As much as £2.5 million a day is being spent on growing tobacco that no European wants to smoke. More money is being spent on growing tobacco that no one wants than is being used by the European Union to improve our transport network. CAP spending is equivalent to the total of the rest of the EU's budget.
Fundamental reform is clearly long overdue: no party in the House should argue about that. The Government's efforts to secure changes in the package did not benefit consumers at all, but added to the level of spending. Two

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achievements of the Government's negotiation on the MacSharry package were the securing of compensation for cereal growers irrespective of the size of their farms, and the securing of annual sheep premiums on larger flocks. I am sure that those two achievements were very worthy, but they did not help to reduce the total budget.
The CAP stops farmers being more productive. Its objective should be to ensure that the true market prices of commodities are reflected in the value that the farmer gets for his product, and that efficient farmers are suitably rewarded.
A number of hon. Members mentioned enlargement of the European Union. Enlargement will double the likely bill that British consumers will have to pay: huge sums will go to Hungarian, Czech and especially Polish farmers if the present system continues. But, even without enlargement, CAP policies are bound to be challenged by future GATT settlements. Export subsidies and border tariffs are not defensible now, and certainly will not be defensible in the medium or long term. As I have said, we need to change the CAP fundamentally, if not get rid of it altogether.
I do not agree that repatriating subsidy payments is any real solution. It will only mean the absence of a real single market in agricultural goods—and it will hardly constitute an attractive solution to countries such as Ireland, France, Portugal and Spain, which are net beneficiaries of the system. If subsidies must be paid, they must not be related to production: they must be decoupled from it. They must be paid to the individual farmer, rather than being dependent on the total level of production. The market must be allowed to determine the price of the commodity. Only in that way can overproduction be tackled without the imposition of a huge bureaucracy involving quotas, form-filling and a continuation of the inefficient and endemically fraudulent system that currently operates.
Let me say a little about the environmental impact of the CAP, and of direct subsidies to farmers based on acreage used for agriculture or on guaranteed prices for their products. The policies implemented in Britain and other European countries since the war have devastated what was a diversity of wildlife and habitat. During the past 50 years, half Britain's remaining broadleaf woodland has disappeared, as have 40 per cent. of our lowland heath, 90 per cent. of raised bogs and 60 per cent. of wet meadows. A third of our reptile and amphibian species are now in serious decline; and 50 per cent. of skylarks—a common species—have disappeared in the past 20 years.
As signatories of the biodiversity convention at Rio, we have an obligation not just to halt that trend but to reverse it. The CAP, as currently implemented, does not address the issue; temporary set-aside is no solution. The present system rewards farmers for being inefficient. It should be a laudable aim for farmers to produce the maximum amount of food on the minimum amount of land, but our system does precisely the reverse. Producing more food on less land would release land for other uses—in particular, marginal land that should never be brought into production. The release of that land would allow its use for recreation and the restoration of wildlife habitats.
Marginal land can be allowed to return to its natural state. If draining stops, marshland and wetland will return; if grazing stops, scrubland will return on pasture and open
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woodland—and, eventually, mature deciduous woodland—will reappear. The process of succession, perhaps aided by farmers, will restore many of our natural habitats. We shall be able to reintroduce species that are long lost, locally and perhaps nationally.
Our national policy advocates the retention and development of wildlife to third-world countries. Why do we not have such a policy in this country? It would not have to be expensive; indeed, without our current system of agricultural subsidies, it would be cheaper to remove marginal land from production and to develop national eco-systems that could well prove economically beneficial in the promotion of tourism. Moreover, we would not have the current daft system of subsidising farmers for doing nothing.
We should have a radical agenda. We might be the first European country to discuss that agenda, but I hope that others would follow our example. Why should we not reintroduce the beaver to parts of Britain? Why not reintroduce the wild boar? Why should those suggestions be considered unreasonable? If we want African countries to set aside land on which lions can roam, and Indians to set aside land on which tigers can roam, why should we not reintroduce some of the species that have been rendered extinct in this country? It would not require a great deal of Government intervention; it would simply require, initially, the withdrawal of Government subsidy from land that is not productive and not needed. Modern farming methods allow—
Mr. Deputy Speaker: Order.
7.27 pm
Mr. Nicholas Budgen: I hope that the hon. Member for Cardiff, Central (Mr. Jones) will forgive me if I do not follow his arguments. In the 10 minutes available to me, I shall not have time to argue with him as I should have liked to.
Let me begin by declaring an interest. I represent an urban and suburban constituency, but I am also a small farmer. During my years in the House I have rarely attended debates such as this and have usually abstained in the Lobbies, regarding the CAP as perhaps no more than the price that taxpayers and consumers must pay for being part of the free trade area which is what I wanted Europe and the common market—as I saw it—to be. Tonight, however, I intend to support the Government and my former party: I shall vote for the main motion, and vote against the amendment tabled by the official Opposition—a far less effective opposition than we are, I might add.
I shall do that for openly political reasons. [HON. MEMBERS: "You want to be reselected."] I do, and I also want to be re-elected. I believe that a Back Bencher should be as much nuisance as possible to his party when his party is doing well and is arrogant with success. On the whole, I was as rude as possible to Lord Lawson between 1986 and 1988 and I regard him as being the proximate cause of many of our present difficulties. Now that my former party is doing badly, it seems to be a very proper time to come to the aid of my former colleagues.
I intend to vote along the party line tonight for the reasons that I have given, but I make it absolutely plain that I still regard the CAP as being a very high price to pay for our membership of the free trade area. The CAP is certainly very expensive. I agree that no one can be

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absolutely certain of how expensive it is because we do not know what the effect of reducing all the subsidies and distortions would be on the world market place. It is certainly bad for the environment, as the hon. Member for Cardiff, Central pointed out. It certainly creates gross distortions, such as the quota system. I shall say a word or two, however, about fraud, which I contend is an inescapable part of these European programmes.
I commend to the House two documents from the Library—a document on the European Communities (Finance) Bill, which was published on 22 November, and a document on fraud in the European Community, published on 2 December. It seems clear that fraud in the CAP is running at about 10 per cent. of overall expenditure. The European Community is a half-formed federal structure, which makes it essential for us to understand the cost of further federalisation. It is not a fully formed federal structure such as in America. In the European Community, laws and regulations are made by the Commission with some input—arguably—from the Council of Ministers, but the enforcement is left to member states. The result, of course, is that the enforcement is, at the least, very uneven. Look, for instance, at the way in which the common fisheries policy is dealt with by Spain. Consider the system of transporting animals. Again, regulations are laid down by the Commission, but enforcement by member states is very uneven.
The common agricultural policy is, of course, especially bad. I invite the House to look at the very useful reproduction of what my right hon. and learned Friend the Chancellor said on 21 October about how the Italians and, to a lesser extent, the Spaniards and Greeks, had failed to implement a quota system for the production of milk. That failure goes back to 1989. The House kicked up a bit of a row about it before it considered the European Communities (Finance) Bill. Now, when we ask our right hon. Friend the Minister of Agriculture, Fisheries and Food what is happening in those three countries, we are told that they were let off most of the fine, they were given a great big rocket, they said that they would do something about it and they have done nothing.
Italy, particularly, has a different attitude towards the implementation of law; a rather more Italian attitude towards the rule of law; a rather more relaxed and sophisticated attitude towards fraud than we have in this country. Fraud and non-enforcement of European regulations are an absolutely inescapable part of any European programme. It would apply especially to a single currency. We would have to have a vastly enhanced regional and social fund.
I shall vote for my former party tonight and I hope that some of my hon. Friends will do so as well.
Mr. Gill: Not a chance.
Mr. Budgen: Well, I hope that they do so for openly political reasons. The Tory party needs to unite before the local elections—[Laughter.] I think that my party is in some difficulty—[Interruption.] The time to be unpleasant to one's party is when it is arrogant and successful. The time to come to its aid is when it is in difficulty. I hope that we may be able to unite in future in believing that what we want is a less federal structure in Europe. We do not want any of these fraudulent and wasteful European socialist mechanisms such as the common agricultural policy. We do not want a single
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currency and we do not want an enhanced regional and social fund. We want an enhancement of the role of the nation state and the resuscitation of my former party, the Tory party.
7.35 pm
Mr. Ieuan Wyn Jones: I hope that the hon. Member for Wolverhampton, South-West (Mr. Budgen) will forgive me for not pursuing his line of argument. I am sure that we all enjoyed his mental contortions in telling the House that he was prepared to throw away his principles on the basis of self-preservation. We thoroughly enjoyed the way in which he justified that to his own conscience. We shall see which Lobby he goes through eventually and whether it is with a smile or a frown on his face.
The price proposals in the common agricultural policy this year represent the final stages of the implementation of the MacSharry proposals. Although they do not greatly change prices or other matters, we must address a number of concerns. I shall do so from the point of view of farmers in Wales. I stress, however, that although the MacSharry proposals were highly criticised because they did not go far enough and because they preserved many of the old common agricultural systems, at least they recognised, in their final form, the importance of maintaining the structure of small family farms and of ensuring rural employment.
I accept, as some hon. Members have said, that it is important to consider agricultural policy in the wider context of rural policy, but it is also important to recognise that people live in rural areas and that if we are to maintain a viable rural economy farmers, who play such an important part in that economy, must be properly supported. I am not saying that they should be supported at whatever cost, but certainly we must maintain a measure of support for farmers who have to farm difficult terrain, in circumstances such as high rainfall and so on, to ensure the viability of our rural communities. That is why I felt that the MacSharry proposals, especially since MacSharry came from such a rural background, understood the effect of significant changes.
We need to look at some of the difficulties that have arisen, especially in the milk sector. Milk quota regulations have been very strictly enforced in the United Kingdom. Year after year—not every year, but for many years—the milk quota allocation has been cut, even though, as several hon. Members have said, the United Kingdom is not self-sufficient in milk and milk products. We know, however, that other countries, such as Italy, are still struggling to implement milk quota regulations. The fact that while we are facing cuts in milk quotas other member states have not yet implemented the quota regulations upsets a lot of farmers. I urge the Government to ensure that there are no further cuts in milk quota allocations in the countries of Britain, at least in the next few years, and perhaps even occasionally to make the case that we should be entitled to even more quota allocation than we have had in recent years.
There are arguments, of which I am sure the Minister is aware—in Wales, for example—that if there are to be more cuts in milk quotas, at least small milk producers should be protected from them. I ask the Government to give some thought to mechanisms to allow that to happen when the matter is discussed in the Agriculture Council.

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In Wales there is concern about Government pressure to replace individual sheep and suckler cow quotas with regional ceilings. In a country such as Wales, with a predominance of small and medium-sized family farms, such a policy would benefit larger producers at the expense of others. It is important to remember that when considering any change.
The theme has been echoed across the Chamber again tonight, and I too must tell the Minister that we were disappointed that the Government could do no more than maintain hill livestock compensatory allowance payments—indeed, they congratulated themselves on that achievement. I am a member of the Agriculture Select Committee, and when those allowances were introduced the Committee was told by the then Minister of Agriculture, Fisheries and Food that they were compensatory amounts, so that when incomes went up the payments would go down.
The converse must also be true: when incomes go down the compensatory amounts should go up, but the Government have not done that. I urge them not to congratulate themselves on maintaining payments at their current level but to accept the case for increasing them when incomes fall.
As we have already heard, the 1992 reforms must also be seen in the context of the conclusion of the GATT round. Although the impact of the GATT changes will not be significant in the next few years, they will bring about significant and profound changes thereafter. We must recognise that when the GATT agreement was reached it was a major achievement for the industry when it was decided that the compensation for price cuts and set-aside within the CAP reforms would not be subject to further reduction but would be counted as green box subsidies within GATT.
The question remains, however, whether the CAP must face further reforms before the budget is overwhelmed in the event of expansion of the membership of the European Union to the east. There is no doubt that further reform is essential, if only to ensure that support is channelled to those who need it. Far too much within the CAP directs support to farmers and large institutions that do not need it. Instead, the CAP should be used to maintain the fabric of our rural societies.
If any one feature gives the CAP a bad press it is the fact that a handful of farmers seem to get large subsidies while small farmers go to the wall from time to time. We must ensure that farmers who need support get it, even if there is reduced support for others. What farmers in Wales support is better deployment of budgetary resources both in direct support for farmers and in relation to distribution between farmers.
The debate has been interesting, partly because we have heard how much support there is for a decoupling system, moving away from direct aid for production and towards aid in the form of environmental payments. That idea has been greatly welcomed throughout the industry in Wales, and I believe that that is the direction in which the CAP reforms should move. Farmers are the custodians of the countryside, as is recognised on both sides of the House and outside it, and they should be adequately compensated for the work that they do.
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I strongly object to the principle of repatriating policy, because if that happened distortions would reappear. Other member states would support their industries at different rates and at different times, and the market would be distorted again. We should at least retain the integrity of one policy throughout the European Union, even if it has to be much reduced because of expansion to the east. That will be vital if we are to ensure that our farmers can compete effectively and continue to succeed in the markets that they have won over the past few years.
I shall briefly confirm another point that has been made tonight. If farmers are to face great changes as a result of further reform of the CAP, it is crucial that they be given the opportunity to adjust to those changes. I hope that the Government will take on board many of the constructive contributions that have been made tonight.
7.45 pm
Mr. Paul Marland: I start, as others have, by congratulating my right hon. Friend the Minister of Agriculture, Fisheries and Food and his predecessors on the progress that has been made towards reform of the common agricultural policy. Such changes are never easy, and it takes some time for the wheel to turn.
When milk quotas were introduced I went with my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling) to the Three Counties show. Farmers had hired an aeroplane that was flying overhead pulling a banner saying, "Jopling turns the milk sour". However, farmers have now turned the quotas to their advantage and made them into a great opportunity, so I am sure that now they could think of another slogan to tow behind their aeroplane. My right hon. Friend has been making life a little sweeter for us in this place recently, so how about, "Jopling makes life sweeter"? I am sure that if we tried to separate farmers from their milk quotas now, they would have something ferocious to say.
I believe that the success of the gradual change in policy can be measured by the enormous reduction in the storage of surplus stocks, even this year. Stored wheat has been reduced by 57 per cent., beef by 80 per cent. and butter by 61 per cent. The good news in that development is that the money is no longer going to the owners of intervention stores but to farmers, who in turn recycle it in the rural community, and that was discussed at length earlier.
Time is the great thing; farmers need time to adjust. How horrendous was the Opposition idea that intervention buying should be stopped overnight. Can we imagine the effect that that would have on farmers' incomes? I hope that all farmers will hear what the Opposition Front-Bench spokesman, the hon. Member for Edinburgh, East (Dr. Strang), said about that idea.
When the Labour party was in office, in four and a half short years it had reduced farmers' incomes by 32 per cent.—but that is nothing compared with what Labour's proposals would do this time. Not only do farmers need time to adjust and to take advantage of new opportunities, but the Government should seek to give them opportunities, which we have done through the introduction of the Agricultural Tenancies Bill, which is now before Parliament, grants for diversification and marketing schemes.

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How much better and more constructive that all is than what I can only presume was the politically correct waffle from the Opposition Benches—[Laughter.] I was obviously right; I have obviously scored a hit if what I say is met with such agreement on the other side of the House, especially by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes).
There is no doubt that agriculture must continue to move closer to the marketplace and become less reliant on subsidy. That is a sea change for farmers, and in many ways it is a nerve-racking process to have to go through, but it provides new opportunities.
Farmers undoubtedly operate at the very beginning of the food chain; indeed their work is an essential part of it. It is their business, in partnership with the food manufacturers, who add value, and the retailers, who sell food to consumers, to satisfy demand in this country. As others have said, food manufacture and retailing constitute one of the biggest businesses in the country.
I shall reflect on a couple of aspects of the debate, the first of which concerns milk and the setting up of Milk Marque. Again, there has been some anxiety among farmers and manufacturers about exactly how that would work out. Was Milk Marque set up to establish a free market in milk, or not? Most thought that it was, and saw it as an opportunity and—up to a point—that is how it has turned out, but it is not quite as clear as that.
Farmers relish supplying a commodity that is in short supply, and they should have every opportunity to exploit that to the full. However, the shortage of supply has given rise to a situation in which manufacturers' difficulties have been compounded by Milk Marque playing its cards close to its chest in the initial stages of bidding. How much milk does it have to sell? How much should such manufacturers bid for, in view of the uncertainty of supplies? How should manufacturers pitch their bids to farmers who are wanting to sell direct? They offered such farmers 1p per litre more because they could save on the bureaucratic costs of a running a brokerage, which Milk Marque is.
If the manufacturers underbought, there was no way in which they could pick up the extra supplies that they needed in a free spot market. That begs the question—how free is this market in milk? We are getting there, but there is some considerable way to go. It is not a genuine free market, because Milk Marque is not acting as a genuine broker. It is seeking to draw to itself extra responsibilities, rather than allowing the market to find its own level.
For example, Milk Marque is acting in that way with regard to transport, milk balancing and service levels. On transport, there is not a free market as manufacturers cannot collect direct from the producer. If people want to collect beer direct from a brewery they can, as it is a free market, but that does not happen with milk. Manufacturers have their own transport and want to use it, but Milk Marque will not let them.
Traceability is also very important to milk manufacturers, who want to know precisely what is in their milk and how it has been handled between the farmer and their depots. They cannot know that unless they use their own transport. With more pressure being applied on the quality of production, it is extremely important that milk manufacturers are able to use their own transport.
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There are serious difficulties for manufacturers who are vital long-term partners of farmers, and the interests of both parties are closely linked.
The imposition of conditions on the purchase of milk is known as bundling, and is an offence under competition law. I hope that my hon. Friend the Minister will take note of that, and will not simply say that milk manufacturers should go to court. He must look at the matter closely, and take an active part in unbundling this market. If it is to have a proper future as a free market, it is essential that bundling is undone.
Before leaving transport matters, may I reassure isolated small farmers and milk producers who feel that they may be left out in the cold as a result of the changes that they will not be? No dairy farmer in the country is more than 40 miles away from a processing plant. In south-west England, there is a plant at St. Erth; in west Wales there is a plant at Haverfordwest; in the Lake District there is a plant at Appleby; and in Aberdeen, local manufacturers must compete with dairies in Glasgow to get their milk supplies. There is no way in which any milk producer in this country will be left out in the cold.
Milk is in short supply, and manufacturers and distributors want every drop that is going. It is a home-produced product which cannot satisfy the demand, so a good price is obtainable anywhere. The price is, of course, dependent on transport costs, but that is understandable.
I mentioned that Milk Marque is doing its own balancing. That destroys the free secondary market, which can be a vital fall-back for milk manufacturers. Why should not there be a genuine spot market in milk, as there is in so many other commodities? What currently happens to surplus milk? We have heard today about shortages of milk as farmers cut production to avoid possible fines, but what happens when there is a surplus?
Milk Marque is selling its surplus to Ireland without offering that milk to UK producers, who would have paid more for it than the Irish. Why did not Milk Marque offer it to United Kingdom producers? Why is it so adamant about doing its own balancing?
I also mentioned the different service levels offered by Milk Marque that do not allow for a free spot market and all that goes with it. Why does Milk Marque insist on fixing the price of milk a year in advance with no reference to supply and demand? That is done in Ireland, where manufacture is keyed into supply so that the two are linked. Both parties are then able to take advantage of the least expensive system of production—farmers, because they produce when the grass has grown, and manufacturers because they produce when the milk is available.
I urge my right hon. Friend the Minister to look at Milk Marque's method of operation before the next price round, and to look again at the possibility of having an independent regulator in the market. I do not mean a price regulator, but a regulator who would make sure that the market is operating in a true and fair manner.
There were other matters which I wanted to speak about, including the export of live animals, but in view of the time—I can see that you are fidgeting to get to your feet, Mr. Deputy Speaker—I will stop there.
7.55 pm
Mr. Andrew Welsh: It is with great regret that I notice that not one Scottish Conservative Back-Bench Member has been present in the Chamber throughout the debate, and no Scottish Tories at all are present now. Given the importance of agriculture to Scotland, that explains why the Tories stand at 12 per cent. in Scottish opinion polls, and why that figure is falling. It may be appropriate that the Minister of State, Ministry of Agriculture, Fisheries and Food is here, as it seems that that Ministry is now determining Scottish Office policy. Perhaps the Minister can answer the Scottish points that I hope to raise.
Mr. Garnier: I could make the same point about the hon. Gentleman's Scottish National party colleagues. Where is the remainder of the Scottish National party?
Mr. Welsh: My hon. Friends will be here to vote. The point I am making is that the Scottish National party is represented here, whereas not one Scottish Conservative Member is in the Chamber. It is a valid point, and I would like to have seen a Scottish Office Minister. [Interruption.] I do not wish to digress, but Conservative Members are indicating the Minister of State, who is an English Member of Parliament.
The main objective of agriculture policy must be to maintain supply and demand in balance, while ensuring the economic viability and prosperity of the rural economy. I seek an absolute assurance from the Government that they will not use price pressure or unchecked free market forces as the main determining factors for producing structural change in the agriculture industry. Such a dogmatic policy would decimate the industry, destroy living standards and massively depopulate rural areas in one fell swoop.
Sensible management for change should make use of a sensible mix of supply control measures, environmental improvements and a widened range of income-creating alternatives to supplement straightforward food production. Agriculture is the backbone of Scotland's rural economy, and it must be given every opportunity to retain employment and finance among rural populations. An overall rural area strategy is required to meet the specific needs of agriculture, and that must be combined with the provision of infrastructure designed to raise rural living standards and to keep people in viable and thriving communities. The alternative is continued rural depopulation and poverty of both incomes and opportunities.
What is the Government's commitment to Scotland's rural communities, which dominate the nation's geography? The warnings are clear. If Tory free market dogma is applied in the form of uncompensated price pressure, it has been estimated by the NFU that as many as 40 per cent. of Scottish farmers could be forced out of business.
Mr. Jack rose—
Mr. Welsh: The Minister will probably point out that the Scottish Office Minister has returned, and I am happy to welcome the hon. Gentleman to the debate, most of which he has missed.
If up to 40 per cent. of farmers are forced out of business, with them will go the agriculture supply industries, transportation, vets and others. There would
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also be the inevitable school closures and the exodus of people, and that must not be allowed to happen. I would seek an outright assurance from the Government that uncompensated price pressure will not be the chosen means for agricultural restructuring. Can the Government guarantee that future European Union measures will not simply follow French agri-politics and target support measures towards smaller farms? Scottish farmers have created larger, more efficient production units. They have a right to expect a clear declaration of support and understanding from the United Kingdom Government in their negotiations within Europe. The success of Scottish farmers in creating larger, more efficient units should never be used as an excuse to discriminate against them or for the United Kingdom Government's failure to recognise their needs and fight for Scottish interests.
Will the Minister ensure that Scottish pig producers are not placed at a continuing disadvantage in the face of illegal state aid to their French direct competitors? What is the Minister doing to ensure that the reduction in European Union agricultural output required by the GATT agreement is spread fairly throughout the EU?
What reassurances can the Government give about the effect on Scottish farmers of the entry into the European fray of central and eastern European countries? Past problems, for example, for Scottish raspberry growers, will be as nothing compared with the unfettered effect of those countries' low-priced, less sophisticated agriculture industries on European countries. What strategy do the Government propose to adopt to deal with those exact problems? I hope that the steps taken will raise central and eastern European farm incomes and not lower Scottish and EU levels of income and affect methods of production.
Will the beef special premium scheme, with the ceiling on claims in Scotland, be reassessed to reflect the increased number of cattle eligible for the premium? What steps are the Government taking to reduce the bureaucracy and time wasting inherent in the cattle control documentation system? I know from my constituency that the sheep quota rules pose problems for partnerships. Will the Minister consider attaching the quota to the partnership rather than to the individual, as happens with the Buckler cow quota?
Although, thankfully, farm incomes have risen this year following a series of poor years, major problems nevertheless remain for pig farmers and hill farmers. I ask the Government to end their complacency about the hill livestock compensatory allowance. No change this year must be put in the context of the 29 per cent. cut in HLCA values in the past two years. There is a past income deficit to be made up in a section of the industry that is very vulnerable.
I deeply regret that the Government killed off the marketing boards, which have served both consumer and producer well in past decades. I especially regret the end of the potato marketing board, given the importance of the seed and ware markets to Scotland. Short-termism has replaced long-term thinking. The unique, world-renowned Scottish system of agricultural research is in danger of being broken up and managed from research councils based in the south of England.
Scottish Office Ministers can only sit and watch, as is happening tonight, while the Ministry of Agriculture, Fisheries and Food takes decisions at European level. In European negotiations, I expect the Government to argue

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more strongly for specific Scottish interests, although that could be guaranteed only by independent Scottish representation in Europe in our own right. In addition to ensuring that specific Scottish interests and the distinct structure of the Scottish industry are fully registered, it is important that the strongest possible case be made for the extension of objective 1 status to the whole of Scotland. I wonder whether the Government are prepared to argue for that.
It is clear that Europe now decides the future of agriculture policy. Without independent Scottish representation, our industry is vulnerable. The Minister added injury to insult by ignoring the Scottish Office in the formation of the United Kingdom CAP policy advisory group. In creating a United Kingdom CAP group that does not include anyone who has an active role in the Scottish farming industry, the Government have excluded Scotland from the CAP policy group in spite of the significantly greater importance of agriculture to the Scottish economy.
The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro): The hon. Gentleman will know perfectly well if he reads the press or has heard any of the statements that I have made that decisions on the CAP are made by Ministers, not by any CAP advisory group.
Mr. Welsh: Even the Minister in his complacency cannot ignore the fact that no Scottish farming interest is represented on that advisory group. I presume that it was formed to advise the Government, so its views will be taken into account. It was formed without any Scottish input. That cannot be a sensible way in which to treat the Scottish industry.
Mr. Jack: In view of the hon. Gentleman's interest in submitting his party's views on CAP reform, will he submit a paper to my right hon. Friend's group in due course?
Mr. Welsh: I am sure that that will happen. We shall be happy to let the Minister know our views. The important point is that the Government, acting on behalf of the United Kingdom, formed an advisory committee on CAP reform without including anyone who was active in Scottish agriculture. That is no representation and no way to treat one of Scotland's most important industries. The Under-Secretary of State for Scotland is making noises. I regret that he did not make more noise when the arable acreage in Scotland was settled. The Minister has not explained how the Scottish Office reached its figures or why it took the east Germans and the German industry to reduce the penalty imposed on Scottish cereal farmers. The Minister has a great deal of answering to do. He has not given answers in the House. If policy is determined—
Mr. Deputy Speaker: Order. Time is up.
8.5 pm
Mr. Tony Marlow: I disagree with the hon. Member for Angus, East (Mr. Welsh), who seems to want agricultural policy to be decided at the European level. I feel that the best place to decide it is at home.
I have an interest to declare. I have an interest in land. I am also in receipt of European subsidies. I believe that the vast amount of money that is given by this country to
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Europe makes it almost a patriotic duty for those of us who can claim it back to get as much as we can. Why do I want to repatriate our agricultural policy? It is simple. It is because the common agricultural policy is bad for Britain. It is bad for the consumer. One aspect of the CAP that is mercifully being reduced is the threshold price. That means that if we want to import feed or foodstuff from elsewhere, we have to pay more for it. So the housewife has to pay more than she would otherwise have to pay.
Secondly, the CAP is bad for the British taxpayer. Our net contribution to the European Union will be about £3,000 million a year. About two thirds of European expenditure is on agriculture. Therefore, the CAP costs this country £2 billion a year net. That is money—cash—down the drain into a fraudulent hole somewhere in the centre of Italy.
Thirdly, the CAP is bad for the British farmer because he is probably the most efficient farmer in Europe. Many people would say that the British farmer is the most efficient farmer in Europe. The rules and constraints of the CAP mean that if the British farmer is to receive the same levels of subvention as his European cousin, he has to set aside, thereby not farming more of his land than any other farmer in Europe.
As my right hon. Friend the Minister said, the British farmer is allowed to produce only 85 per cent. of the milk that is required for consumption in the United Kingdom. The most efficient milk producer in Europe is not allowed to produce enough milk even to satisfy his own public. Britain is the most natural environment for producing sheepmeat—lambs, ewes and the rest of it. Yet we are quota-restricted. If we are to compete on level terms, we are restricted by the quota. So we are discriminated against. The best farmers in Europe are the most heavily discriminated against.
The CAP rips off the housewife, plunders the taxpayer and discriminates against the British farmer. Any red-blooded British Government would seek to get out of it and would do so now.
My right hon. Friend the Minister has pointed out that the farmers are hooked on the CAP. They are hooked on milk quotas. It is absurd that that artificial creation is worth more than farmers' land, livestock, house and business put together. Milk quotas are not going to last. They are an agricultural version of the dock labour scheme. They cannot endure. I warn my farming friends that they will not exist for ever.
Secondly, British farmers are hooked on the power of the so-called French peasant. They are sure that if French farmers want more money, they will go on to the streets and stop the traffic and prices will go up. But little by little, the interests of the French peasant will diverge from the interests of the British farmer. Small farmers in France, bigger farmers in Britain. The Union is moving towards giving relatively higher payments to the smaller farmers. The British farmer will again be left on one side.
There is distrust of British agricultural policy controlled by Her Majesty's Treasury. Look what is happening to the European budget at the moment and what is likely to happen to the direction of that budget if Europe enlarges towards the east. I would rather put trust in my Government and the British taxpayer than I would long term in the European taxpayer.

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My right hon. Friend the Minister said that British farmers had done well recently. Since 1979, farm incomes have risen in real terms by 10 per cent. If the income of any other section of society had risen by only 10 per cent. since 1979, would not those people now be on the streets rioting? British farmers have not done as well as the rest of the British community.
All the fear about having our own agricultural policy and coming out of the CAP is misplaced. People say that there would be no subsidies, but if we controlled our own affairs, we would have at least as generous a system of support for agriculture. First, in a free market in Europe, which we would still have, everybody else would have such a policy and it would be politically unacceptable not to support our farmers if everyone else's farmers were being supported. Secondly, for any business to thrive and prosper requires an element of predictability. With agriculture, the climate is an additional element of unpredictability, so unless we have a support mechanism for agriculture, we shall not have sustained output. Thirdly, one of the jewels of Britain—the reason why so many people come here—is the beauty of our countryside. Even the hard-hearted mandarins of Her Majesty's Treasury would want to ensure that our countryside was properly maintained. Without adequate support for agriculture and the villages in our countryside, that could not continue.
Let us look back at the track record and the times before the CAP. British agriculture was more prosperous then than now. We spend £3 billion net a year on the European budget, two thirds of which goes on agriculture. That is £2 billion that the Treasury could retain within the United Kingdom, part of which could be used to subsidise agriculture, on top of the subsidies that we are already getting—if necessary. Instead of going to the Mafia in Italy or low-grade and fraudulent Greek tobacco producers, that money could be used for people in this country.
How do we move to a British agricultural policy within Europe? First, it goes without saying that we believe in free trade, so the raw materials for agriculture could come in without a threshold price. Secondly, we would have a single market within Europe, as we have at present. That allows free trade within Europe and a single price throughout Europe. Thirdly, we would return to the old system of deficiency payments. Cereal is the basic commodity of agriculture. It is used as foodstuff and feedstuff, which is then moved on to the livestock sector. If we keep world market prices low and have a standard quantity for cereals, we can tell farmers that, for that standard quantity, they will get whatever price is necessary to sustain agriculture. If the world price goes down, farmers receive a deficiency payment that makes up the difference, and if they go beyond that standard quantity, the surplus is sold off at world market prices. That has the great advantage that, as British farmers are efficient, they do not have to take land out of production. People are concerned about that great obscenity. Farmers can then produce as much as they efficiently can.
The same applies to milk. We should have a standard quantity of milk with a price attached to it and farmers would receive a guaranteed price for that. But over and above that quantity, the milk could be usefully used by
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our manufacturing industry, so that the output of British agriculture and the British food industry could be increased greatly to the benefit of Britain.
Mr. Jack: Will my hon. Friend give way?
Mr. Marlow: I really have not enough time. I wish that that were not so.
As my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) said, the CAP is absurd. It is European money of which national Governments regulate the expenditure, and it is a recipe for fraud. The only sensible policy for Europe as well as Britain is to repatriate agricultural policy, which would be better for consumers, housewives, taxpayers and British farmers. It can be done. All that is needed is for my right hon. Friend the Minister to have the willpower to do it.
8.14 pm
Mr. George Foulkes: For the past 16 years I have had the privilege of representing in the House Carrick, Cumnock and Doon Valley, a large rural area of 800 square miles.
Mr. Jacques Arnold: Too long.
Mr. Foulkes: The hon. Gentleman was named by Madam Speaker earlier. He would be better advised to keep quiet.
During that time, I have come to understand the importance of farming to the rural economy and the rural environment in general. I have also come to realise the need for a fundamental reform of the common agricultural policy. To take just one example, it is immoral to pay millions of pounds in set-aside to farmers not to produce food while 24 people in the third world die every minute from hunger. That fact alone argues the case for fundamental reform. With enlargement and the entry into the European Union of eastern European countries, we face further problems.
May I tell the hon. Member for Northampton, North (Mr. Marlow) that I am a long-term supporter of the European Union but that does not mean that I support every aspect of it—quite the reverse. I feel much more able to criticise it as a supporter. Criticism that comes from enthusiasts for the European Union is regarded as much more genuine than criticism by people like the hon. Members for Northampton, North and for Wolverhampton, South-West (Mr. Budgen), which always seems to have an underlying motive. I am always suspicious of their motivation as they seem to seek to undermine the European Union as a whole rather than make a genuine point.
There is no point in my repeating the excellent arguments put forward by my hon. Friend the Member for Edinburgh, East (Dr. Strang) and others on the general issues, with which I concur. In the minutes available to me, I shall raise one or two specific issues that have been raised with me by my friends in the executive of Cumnock National Farmers Union, whom I met a week last Monday. I hope that the Minister of State will reply. If he cannot do so when winding up the debate, I shall understand and look forward to a letter subsequently.
The first issue is waste disposal, about which farmers are understandably concerned because of increased requirements from the European Union. In my area, the Clyde river purification board is, understandably,

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imposing those regulations strictly. Yet while those new stricter regulations are being imposed, the Government have removed grants for improved waste handling facilities for farmers. That seems absolutely crazy to me and my constituents.
When I visited Auchincruive agricultural college in my constituency recently, with my hon. Friends the Members for Paisley, South (Mr. McMaster) and for East Lothian (Mr. Home Robertson), who happen to be former students of that distinguished college, it was pointed out to me that agricultural waste is extremely toxic compared with domestic waste. It seems sensible that the Government should help farmers to dispose of such waste and it is crazy to withdraw the grants.
Secondly, I want to deal with a point raised by the hon. Member for Angus, East (Mr. Welsh). I am glad to see that the Under-Secretary of State for Scotland, the hon. Member for Dumfries (Sir H. Monro), is in his place. I have great respect for him as he has the interests of agriculture at heart, even if he cannot always implement them because of pressures from elsewhere. I am concerned about the beef special premium scheme. As the hon. Member for Angus, East said, the regional ceiling on claims in Scotland needs to be reassessed as more cattle are now eligible and there is an overshoot. I understand that Italy and Greece have been granted an extra allocation and I do not see why Scotland should not be granted one, too.
The hon. Member for Ynys Môn (Mr. Jones) raised the question of hill livestock compensation allowance payments. He pointed out that, in the past couple of years, the real value of HLCA payments has gone down by 8 per cent. and this year farm incomes on the high hills are less than £10,000 on average. That is appalling.
As the hon. Member for Ynys Môn said, the idea of HLCA was that, when farming incomes decrease, compensatory allowances should, by definition, increase. I hope that the Ministers will consider that further, especially as that has resulted in changes in environmental conditions that have created special problems on wetter and more exposed land. As the hon. Member for Dumfries will know, in the past few months the south-west of Scotland has been especially exposed and especially wet. I hope that special consideration will be given to that.
Fourthly, I want to discuss milk, not the aspects of marketing that were dealt with earlier, but the milk intervention board, which is in a shambles, as I was told by the Cumnock branch of the National Farmers Union of Scotland. Scottish farmers experience problems—delays—in quota transfers. I hope that the hon. Member for Dumfries might whisper in the ear of the Minister of State, to mention with approval the possibility of a Scottish intervention board, which would deal with Scottish applications. I know that that would find favour with the hon. Member for Angus, East, and that would bring decisions much nearer to the farmer.
Mr. Brian H. Donohoe: The milk marketing board.
Mr. Foulkes: Not the milk marketing board; this is the intervention board. That would bring decisions much nearer to farmers in Scotland.
Fifthly, I want to ask a question about the licensing of heavy goods vehicles. I know that that is perhaps more the responsibility of the Chancellor of the Exchequer or
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the Secretary of State for Transport, but the Agriculture Minister should have a special interest in that. I am worried that the hugely increased costs of licensing HGVs will result in farmers choosing not to license their heavy goods vehicles, and using tractors and trailers instead. As the hon. Member for Dumfries will know, as we both drive on roads in the south-west of Scotland, there are already enough tractors and trailers to hold up all the traffic. It would create special difficulties if there were increasing numbers of them on the roads. I hope that the Minister of Agriculture will make representations in relation to that.
Those were the arguments made to me. An additional matter was mentioned at the end of the meeting, and it has been mentioned subsequently. I know that it is not the direct responsibility of the Minister of Agriculture, Fisheries and Food, but there is great disquiet in Scotland that the BBC has stopped its Scottish farming programme. I notice the Under-Secretary of State for Scotland nodding. I hope that the Government will make representations to the BBC to restore that vital service for farmers, which was very much appreciated.
I greatly respect the Minister of Agriculture, Fisheries and Food, who is probably enjoying his dinner at the moment, but unfortunately he made a gratuitous attack on my hon. Friend the Member for Edinburgh, East earlier. All those of us who are genuinely anxious about the reform of the CAP, the improvement of the countryside and the development of the rural economy look forward to the day when my hon. Friend the Member for Edinburgh, East is installed in Whitehall place. It cannot come too soon, and until it comes I look forward to joining my friends in the Lobby tonight to vote against this discredited Government.
8.22 pm
Mr. Edward Garnier: I shall not insult the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), because he might not buy me a drink again, and that would never do. However, I shall thank my right hon. Friend the Minister of Agriculture, Fisheries and Food and his team for the work that they have done so far in achieving reforms of the CAP in a measured and sensible way. There is no need for hysterics, but there is a need for firm and sensible negotiations in Europe, and I think that we have had evidence of those in the past few years.
I also congratulate my right hon. Friend and his team for the way in which they have persuaded the Treasury to allow the capital taxation regime to be equalised so that let land is dealt with in the same way as land in hand. That, together with the reform of the agricultural tenancy system under the Agricultural Tenancies Bill, on the Committee of which I was sitting a few minutes ago, will do a great deal to ease the letting of land in rural parts of our country.
I want to draw on one or two of the arguments that were made by my hon. Friend the Member for Ryedale (Mr. Greenway). It is a technical subject, but it is worth emphasising the arguments for modulation of agricultural support payments. There has been some discussion of the subject, but I wish to give one or two reasons why the Government should resist any movement towards that type of reform of the CAP.

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It has been suggested that there are good reasons why agricultural support payments should be "modulated", as it is called—adapted—to reduce the amount of support being paid to large farms and to increase the amount of support to small farms. I suggest, however, that there are very good reasons why that policy should not be supported and is certainly not advantageous to farmers in our country. It is important that the issue is closely examined, and I trust that my hon. Friend the Minister of State will do precisely that. I want to suggest one or two reasons why that type of adjustment is not good.
First, owing to the farm structure in our country, any modulation of support payments would fall much more heavily on our country than on any other European Union member state. The average size of farm buildings here is about 69 hectares, that is to say, about four times the European Union average. Any policy of so-called modulation would cause a redistribution of support away from the northern member states, and especially from the United Kingdom, towards the southern member states, such as Greece and Italy, where the farm structure is, as we all know, hardly the same as it is in this country.
Secondly, it is strongly arguable that employment will be affected if modulation were introduced. In our country, large farms employ more labour per hectare than small farms. If we are anxious to sustain rural employment, and I am, and to ensure that providers of labour are properly paid, and I am, the European Union must not discriminate against larger farms. Concentrating resources on smaller farms will serve only to reduce employment opportunities and may also stimulate a demand for off-farm employment, for which there is currently very little supply, as small farm operators seek to supplement their incomes from non-farm sources.
Thirdly, the development of farming enterprises may be hindered by modulation. A farm that becomes aware of the opportunity to expand into a new market may be discouraged from doing so if it means that the farm is no longer eligible for subsidy payments or receives substantially reduced subsidy payments. Any economic gain would therefore be lost. Artificial farm division may also be encouraged, which would undo any economic gains based on past decisions.
Fourthly, small farm businesses do generate lower net farm incomes when compared with larger farms. However, some small farm operators are vulnerable to variability in farm income. When other sources of income are taken into account, their position is greatly improved and can often be at a level comparable to, or greater than, that of larger farmers. I speak as a Member of Parliament whose constituency contains, not only large estates, but some small farms.
However, there is no direct relationship between farm size and efficiency which would support the argument that small farmers could not exploit economies of scale and should therefore have favourable treatment under the CAP. One only has to consider the Danish and Dutch farming position, where there are smaller holdings but high production levels, to realise the force of that suggestion.
Sixthly, there is no evidence to suggest that small farms are more environmentally friendly than larger ones. I suggest that a farm's impact on the environment has much more to do with the objects, style, techniques and outlook
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of the manager than with farm size. As smaller farms tend to have smaller incomes than larger farms, the resources available to smaller farms to produce environmental benefits are much smaller than those available to larger farms, so the introduction of any modulation against larger farms will severely disadvantage them and have a bad effect on their ability to devote resources to environmental management. That is a narrow argument, but it is worth making in the context of the debate.
I ask the Government to lose no time in forcing our opinions on our European counterparts. We have witnessed the expansion of the European Union into the EFTA countries which entered on 1 January 1995, and we shall shortly, in the next 10 or so years, consider applications from the Visegrad four—Poland, Hungary, the Slovakian Republic and the Czech Republic.
The financial impact on the CAP and the cohesion and structural funds will be enormous. The impact upon our funding will be about 50 billion ecu, of which 15 billion ecu will go on the CAP expenditure and 35 billion ecu will go on structural funds and so on. The applications from the Visegrad four and other eastern and central European countries to join the Union will be the source of considerable tension within the United Kingdom among taxpayers and throughout the current member states of the European Union. I do not want that to happen and we should anticipate that by ensuring that the CAP is reformed now to meet the best farming interests of the northern Europeans. We will, of course, meet strong arguments from the southern Europeans, who currently benefit from the cohesion and structural funds—the Portuguese, the Spanish, the Greeks and to some extent the Irish—but we must resist complaints from them. We must make sure that any reform of the CAP takes into account the future difficulties from which we will suffer as a result of the enlargement of the Community to take in the former Soviet Union and its former areas of influence. In that way, the financial strains of enlargement will be anticipated well in advance.
It is argued that the period of transition to encourage those new countries to join the Union is expected to be about 20 years. That is far too long. A negotiating arrangement whereby the Visegrad four have up to 20 years to come to terms with their financial responsibilities is simply too long. I therefore urge my right hon. Friend to produce a policy that takes that into account.
My hon. Friends have already spoken with great feeling and knowledge of the British farming industry. I wish to put on record my support for our farmers. I find it extremely sad that in every debate on rural and agricultural matters in the past few weeks the Labour party has put forward either some fellow from an inner-city area, who knows precisely nothing about the subject, but is prepared to lecture us all about it, or someone who is damaging to the interests of the rural economy.
Mr. Morley: What on earth is the hon. Gentleman talking about?
Mr. Garnier: I urge the Government to play the strongest possible hand in supporting our farmers, who have been the greatest supporters of the Conservative party for many years. [Interruption.] I urge my hon. Friend on the Front Bench to ignore the rather tiresome and silly sedentary remarks from the Opposition. That is typical of the Opposition's stance on the issue. They will

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barrack, complain, whinge and nag, but they fail to produce one positive policy. All they do is complain, whinge and carp. I urge my hon. Friend the Minister to stand up for British farmers.
8.32 pm
Mr. Christopher Gill: In introducing the debate, my right hon. Friend the Minister made an excellent speech from his perspective as a Minister of the Crown. Of course he joins a long list of Ministers who have stood at the Dispatch Box and assured the House that fraud will be dealt with. I do not wish to dwell on that point now, but I hope to speak equally well from my own perspective on agriculture. The House will appreciate that I do so without the benefit of a central office brief.
I shall oppose the Labour party amendment for the very good reason that it is pie in the sky to believe that a Labour Government would be any more successful than a Conservative one in negotiating a better deal for Great Britain within the constraints of the existing CAP.
I am pleased to take part in the debate, which would be an important one if either the arguments deployed or the vote could change anything. The reality is that nothing that is said or done in this Chamber changes the CAP one iota, unless there is a qualified majority of Ministers in the farm Ministers Council. The insanity of the CAP is exceeded only by the absurdity of the situation that we face this evening as a result of which the CAP will be totally unaffected by the outcome of the 10 o'clock vote, yet that same vote is seen to have deep significance for the future of our Government.
Before I proceed further, I should like to declare my interests. First, as a butcher and a farmer, with a lifetime's experience on both sides of the farm gate, I declare an interest in the subject of the debate. Secondly, as a lifelong Conservative, I declare my interest in the substance of the debate and the contradictions that it poses for my right hon. and hon. Friends.
If I was asked whether the CAP has assisted me as a craftsman, the answer would be an emphatic no. If I were asked whether the CAP had helped me as an independent business man, the answer would be, "Most certainly not". If those same questions were put to other craftsmen and other entrepreneurs and elicited the same response, where is the comfort for the Conservative party? If the Conservative party chooses to accord greater importance to the institutions of the European Union than it does to the interests of its natural supporters in the food and farming industries, it will get its just desserts.
I urge my right hon. and hon. Friends on the Front Bench not to dismiss out of hand the terms of the amendment standing in the name of a number my hon. Friends and myself, four of whom are, incidentally, farmers. My right hon. and hon. Friends should recognise that the CAP is unsupportable, unsustainable and incapable of sensible reform.
The failure of the CAP to date is characterised by several features—the incalculable damage that it has done to the pastoral economies of the third world; the damage that it has done even to the agricultural industries of some member states of the European Union; and the massive fraud perpetrated within it, to which several right hon. and hon. Members have already alluded. Nearer to home, anyone with his feet on the ground knows that the average age of our farmers is increasing well beyond 55 years,
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which is not a healthy sign, nor is it indicative of a healthy industry. We have an unprecedented suicide rate among farmers; low incomes in the farming industry; a minefield of rules and regulations; and we are suffering from abattoir closures. Perhaps the House will bear with me if I draw on my own experience.
My company used to slaughter hundreds and thousands of cattle and sheep. We gave that up a few years ago and no longer slaughter any cattle or any sheep because no one in my business was clever enough to best-guess the whims of the intervention board and the other aspects of political interference in cattle and sheep, which suddenly altered the whole buying and selling equation.
Even the pig sector is not entirely immune to such interference. The president of the Federation of Fresh Meat Wholesalers recently wrote to the European Commissioner for Agriculture and said:
"We would be grateful for an explanation of the Pigmeat Management Committee decision … to introduce a private storage aid scheme for pigmeat, with effect from Monday 6 February.
This seems an extraordinary decision to take as pig numbers continue to fall, and as the market is beginning to improve after last year's difficulties.
That the Commission should act in a way that so strongly conflicts with the instincts and experience of industry appears to us as incomprehensible".
A civil servant from the Ministry replied:
"We entirely agree with what you say. The scheme will take supplies off a tightening market and distort the market again in three months time when the meat is released. I pressed your points at the Pigmeat Management Committee on 30 January and voted against the proposal. But all too to no avail."
That is rather like the other report that I read in the briefing paper that we received from the European Commission dated 23 February. In the context of the Agriculture Council meeting that week to discuss animal welfare conditions for the transport of animals, it said:
"After lengthy consultations, however, the meeting ended without agreement".
I am afraid that that is all too typical of what happens when we argue our case at the heart of Europe. In the intervening period, hundreds of abattoirs have closed and we face the prospect of hundreds more closures in the very near future. That fact of life is being accelerated by the plethora of rules and regulations—not all of which have emanated from Brussels; they have been assisted by our own MAFF—which are putting the craftsmen and the master butcher on the scrapheap. The House should ask itself how that helps the welfare of animals, the future of the independent business sector, consumer choice or the risk of cross-contamination, as slaughtering is concentrated in fewer but larger abattoirs.
Conservative Members should ask themselves how that squares with the principles and philosophies of the Conservative party. To avoid any doubt, I remind the House that I am a lifelong Conservative and a capitalist. I believe that capitalism is the most effective means of identifying, supplying and satisfying markets. The House is being asked to support socialism in the form of the common agricultural policy. Any regime which determines centrally what should be produced, in what quantities, to what standards and at what price cannot be described otherwise.
The irony of the present situation would be laughable if it were not so desperately serious. A Conservative Government are apparently prepared to go to the stake for

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a socialist principle. They are prepared to turn their back on their own values and beliefs in order to keep faith with other members of what has become the world's most expensive club. The Government are buying their enemies at the expense of selling their friends.
More and more people are concluding that if they must have socialism they would rather have it from socialists than from Conservatives. That is not to say that there is no market for true Conservatism. I hope that my right hon. Friends will recognise that fact and start to deliver it before it is too late.
Finally, on the question of live exports, will the Minister give the House an unequivocal assurance that mass protests which seek to prevent the industry from going about its lawful business will be met in future with the same response as they would get in other countries—the water cannon?
8.42 pm
Mr. Gary Streeter: I am inclined to say, "Well, follow that." However, I am delighted to make a contribution to the debate. I was heartened by the speech of my right hon. Friend the Minister for Agriculture, Fisheries and Food, who I believe is widely respected in all sectors of agriculture and the food industry. He is doing an outstanding job.
I was deeply disappointed by the contribution of the hon. Member for Edinburgh, East (Dr. Strang). He had his chance to reform the common agricultural policy in the 1970s when he was Minister for Agriculture. He failed miserably then and he wants to have another attempt. Why does he think that he would be more successful now? I think that the House would conclude otherwise.
I was even more disappointed by the contribution of the hon. Member for North Cornwall (Mr. Tyler), who is the king of the cliche in hot pursuit of a soundbite. I intervened during his speech to talk about the countryside management contract. He responded by saying that my remarks were premature and that he would return to that subject. Sadly, he did not do so.
No doubt the hon. Gentleman was wriggling with embarrassment at the thought of imposing a system on our farmers which would be regulated by local authorities and linked to Liberal Democrat proposals for regional government. The farmers of Devon and Cornwall would be dictated to by Liberal Democrat councillors in Bristol. That is not a recipe for attracting the farming vote in the far south-west.
Very few people like the CAP or the common fisheries policy. There are those who would advocate that they be torn up, abolished or abandoned. Many of us might be attracted emotionally to such terminology, which we may find appealing superficially. In this world of tabloid values, I am sure that many people would support that approach.
However, there are at least two fundamental flaws in such an approach. First, the common fisheries policy—I will refer to it only briefly—is largely about conservation. If it did not exist, we would need to introduce some other national policy in order to conserve our fish stocks. If the common agricultural policy did not exist, we would need a national price support mechanism to support our agricultural industry.
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Before Britain joined the European Economic Community in 1972, I remember how my father, who was a dairy farmer, enjoyed what was then called a "Channel islands premium" for breeding and milking Jersey and Guernsey cows and selling their milk, which had a certain cream content. Those sorts of support mechanisms were in place well before we got anywhere near the then European Economic Community.
We need to subsidise and support agriculture for many reasons which have been referred to this evening. If the countries with which we compete continue to support their food industries financially—in the way that America supports its cereal, beef and sheep industries, for example—what chance will our farmers have when low-priced imports flood into this country? Our industry would be wiped out. The only alternative would be to raise tariffs and turn our back on the free single market that we are moving towards gradually.
The second fundamental flaw in the all-too-easy argument for tearing up the CAP and the CFP is that they are part of our treaty obligations. They are part and parcel of our membership of the European Union. If we were to tear up the CAP or the CFP we would be tearing up the treaty of Rome also.
If we are pushed into artificial political integration in Europe faster than we would like or further than we are prepared to go, the time may come when, as a nation, we must consider the issues sensibly. I am mindful of the Bible verse which says:
"How can two walk together unless they be agreed?"
Agreed on what? We should be agreed on the destination, route and pace of change. There are times when we should examine our relationship with our European colleagues and ask ourselves whether we have agreed on the destination for Europe; have we agreed on the route and the pace of change? Perhaps there are occasions when we conclude that that is not the case.
The time may come when we must consider the issues very carefully. However, I argue passionately that that time is not yet here. The argument in relation to the CAP, CFP and Europe generally hangs in the balance. We have the opportunity to shape and to embrace the future of the European Union. We have the opportunity to reform the CAP and the CFP by working from within. Therefore, I believe that it is a pragmatic and sensible policy to continue the drive to reform the CAP.
We have had some success in that regard. It is encouraging to note that intervention stocks are falling. Between December 1993 and December 1994, surplus wheat stocks fell by 57 per cent., surplus beef stocks fell by 80 per cent., and butter stocks fell by 61 per cent. Those figures show that we are heading in the right direction. The overall cost of the CAP has fallen. There have been real savings for our consumers based on reduced support prices. We have taken some very sensible initiatives on fraud which should be welcomed. It is a modest start, but it is an important one. We must recognise that working from within the CAP affords us the best opportunity of entering the longed-for single market in farm goods and agricultural products.
The greatest opportunity to reform the CAP comes from the enlargement of the European Union, particularly the inclusion of the central and eastern European nations, which will drive us inexorably to the conclusion that the CAP must be reformed.

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One of the greatest opponents of CAP reform is France, which is involved in the European Union primarily for reasons of defence. There is no doubt that continual enlargement of the Community helps defence. The day must come when the French must choose between the overwhelming need to create a union of states in which there is security and the decision always to kowtow to the agricultural lobby.
The process of enlargement affords a great opportunity to reform the CAP. We should be in no doubt that if we take on board the central and European nations, the CAP will be unaffordable.
I had lunch recently with a former colleague at one of the largest law firms in the city. He is in charge of its eastern European department and spends much time in the eastern European nations. Those countries are getting their act together to overcome the technical and legal difficulties that they have encountered as a result of being involved in the Soviet Union. They are beginning to work their way through those problems and produce more agricultural foodstuffs.
The basis of intervention policy is that the more one produces, the more one is paid. The cost of more countries coming into the CAP makes it unaffordable, yet the political momentum for enlargement is irresistible. It is the irresistible force meeting the immovable object and something has to give. I suggest that what will give will be the common agricultural policy as we currently know it.
I have no doubt that the changes will be hard fought and in true Community fashion there will be cliffhangers and last-minute decisions, but the momentum is in the right direction for reform and enlargement is the single greatest incentive for change.
There is now an opportunity—the greatest for many years—to see the unwieldy monster that we have created the in past few years reformed in a sensible and welcome manner.
8.52 pm
Mr. Ray Whitney: My hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) asked whether the nations of the European Union have agreed on a route forward for both the common agricultural policy and the future of the European Union. The answer to that important question is no, we have not, and it is not reasonable to expect us to do so, but that is the excitement and the challenge of the European Union of which the CAP is such an important and sensitive part.
One of the sad things about the present state of British politics generally is that we have lost the vision of the creation of the European Union as a totally new structure. It is not the United States of America written on a European scale, nor is it a new-style British or German commonwealth. It resembles nothing that previously existed, so my hon. Friend was certainly right to ask that question. However, we must also understand that there are any number of answers or no answers, but that should be the excitement and the challenge to which Britain responds positively. Sadly, however, not all Members of Parliament on the Government or Opposition Benches respond in that manner.
More often than not, our regular debates on the common agricultural policy turn into a ritualistic moan and carp at the CAP and the European Union. We have
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had at least four or five examples of that from both sides of the House today. It is time we started to throw more light on the subject and certainly to bring more honesty to the problems and the success of the much-reviled common agricultural policy. In particular, we should bring much more honesty to our own attitude and that of all right hon. and hon. Members to our continued membership of the European Union. As those of us who regularly participate in the debates on Europe are painfully aware, we are treated in one speech after another to a litany of criticisms. The Christopher Booker monologue is trotted out time and again—be it the CAP, fisheries policy, or whatever alleged iniquity has been inflicted on us by those wicked gentlemen and ladies from Brussels. The benefits of the European Union—and even the dreaded common agricultural policy—are deliberately obscured.
This is a take note debate. It should not be a great party political battle, but a careful examination of the problems, what has been achieved and what remains to be achieved.
Mr. Budgen: It has been made up to be a great debate because the Conservative Whips have tried to describe it as a test of loyalty. That is how the debate was introduced to the public. As usual, it is a gross distortion.
Mr. Whitney: I am grateful for my hon. Friend's invention. As a former Whip, he will know a great deal more about the ways of the Whips Office than I would claim. I could not rival him in expertise in the ways of Whippery.
No right hon. or hon. Member would deny that there are serious problems to be solved with the common agricultural policy, but I should point up one danger, or pitfall into which we are in danger of falling—and, dare I say it, my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) may be leading the charge to fall into the next pit. It is widely accepted that one of the reasons why we have been wrestling with the problem of the CAP for so many years is that we in Britain denied ourselves the possibility of being in at the beginning to devise and design a sensible structure for agricultural support in the then European Community, and so the CAP emerged as the bane of all our lives thereafter. If we followed the advice of some hon. Members, and of some of my right hon. and hon. Friends, and denied ourselves the opportunity to be in at the beginning of what may or may not be the emergence of a single currency, we would make yet another mistake—and one that we might rue even more bitterly than we have, over many years, rued not having been in at the start of the CAP's construction.
It is important to keep in perspective the origins of the problems and the terrible gloom to which my hon. Friend the Member for Wolverhampton, South-West cheerfully contributes whenever he has the opportunity and which is shed on all things European by a handful of people—reinforced and amplified in geometric proportion by the media's avid attention. We all know the game that is being played, although I am not sure whether the media understand the game that they are playing.
Ever since Britain became a member of the European Community—late, but we finally made it—we have been pressing for reform of the CAP, and progress has been made. I was a diplomat at the Foreign Office for most of the time of the last Labour Government. They tried—feebly and not very successfully, but they tried. I invite the hon. Member for Edinburgh, East (Dr. Strang), in

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view of the remarks that he makes now, to look back on his own record and that of his former ministerial colleagues when they were in office. If he did,0 silence might reign thereafter on the Labour Front Bench.
Times change and things improve. In 1988, the CAP was costing 70 per cent. of the EC budget. Thanks largely to pressures exerted by Conservative Ministers, the cost has reduced to 50 per cent. We should rejoice in that progress, and I am sure that I carry my hon. Friend the Member for Wolverhampton, South-West with me in that.
Mr. Budgen: My hon. Friend is making an amusing, interesting and vastly self-confident speech, but all that happened was that other aspects of the budget were enhanced. That had the effect of reducing the proportion accounted for by the common agricultural policy. My hon. Friend is wrong to make the assertion that he does. He used to be a distinguished commentator. Not only have the Whips tried to hype the debate, but they have introduced my hon. Friend at a time when he is ill prepared.
Mr. Whitney: I am most grateful for my hon. Friend's flattery, but flattery from that quarter makes one rather nervous. I repeat that if anyone knows the ways of the Whips' Office, it is my hon. Friend. Admittedly his sojourn—
Mr. Budgen: The Whips should have given my hon. Friend more time to prepare.
Madam Deputy Speaker (Dame Janet Fookes): Order. The House knows my views on sedentary interventions, and that applies to all hon. Members.
Mr. Whitney: I allowed myself to be distracted from the CAP and I will endeavour to return to the strait and narrow.
As my hon. Friend said, the budget is increasing and we are doing our best to keep it under control. My right hon. Friend the Prime Minister achieved much in that regard at Maastricht. I hope that my hon. Friend the Member for Wolverhampton, South-West and the House acknowledges the achievements of my right hon. Friend the Prime Minister. The cost of the CAP is 50 per cent. of a greater sum, but that overall aggregate is steadily being brought under control—as is CAP spending.
I remind the House that significant progress was made with the 1992 reforms and that much of that success was contributed by British Ministers. There were reductions in support prices and in incentives for overproduction, and much greater transparency in agricultural support payments. We should not allow ourselves to think that no progress was made. Since the Government came to office, considerable progress has been made, not least because of the success of the GATT negotiations. The British Conservative Government can take great credit not only for what they achieved for agriculture but for bringing the whole enterprise, after many long and difficult years, to a successful conclusion. In that successful venture great tribute is due to our friend Sir Leon Brittan, the Commissioner in charge of the negotiations.
The other impact of the GATT agreement was that, for the first time, agriculture was brought within the rules on multilateral trade. I certainly hope that people such as my hon. Friend the Member for Wolverhampton, South-West,
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attached as he is to free trade, would accept that bringing agriculture, difficult though that is, within the realms of normal trading arrangements is a consummation devoutly to be wished.
That excellent record of achievement should be acknowledged. As my hon. Friend the Member for Norfolk, North (Sir R. Howell) said, neither Front Benchers nor anyone else should continue to make these highly exaggerated claims about the cost of the CAP to British families. I would accept the figure that my hon. Friend suggested of about 15 per week per family. As the Minister rightly pointed out, however, world prices also have an impact on this highly complicated equation. It might be argued that it is not even susceptible to serious analysis.
The fact is that, whatever system applies, some sort of agricultural price support would be needed in any country. So the claims and criticisms made by those who continually attack the European Union, to the effect that the CAP is hugely costly to our constituents, are ill founded. Most people agree that there is a need for a CAP of some nature. By all means let us improve its nature, but the alternative would be to break up the world once again into competing and distorting systems of national agricultural subsidies. Anyone who knows what happened in the 1920s and 1930s will know the sort of dangers to which such systems led.
The CAP has been reformed and must be reformed significantly further. Many hon. Members have pointed out that the enlargement of the EU, with the entry of the Visegrad countries, will lead to new opportunities in that regard. I do not say that progress will be easier, but it will perhaps be less difficult to achieve the sort of reforms that most of us want. Let us not fool ourselves, however, that the process can be painless.
I believe that there is a strong case for adopting a much more free-market approach to agriculture. I know a number of farmers in my constituency who are increasingly of that view, so we should be open-minded about it. Instead of spreading more gloom, we should acknowledge that the entry of the Visegrad countries offers fresh opportunities to us all. Certainly, the Germans are as interested as we are in ensuring that change moves in the direction that we want. That, at any rate, is the challenge.
We need an end to the negativism and destructiveness with which we have become so familiar. Often the people who spread these criticisms have no great interest in the CAP as such. They probably also recognise that the burden of agricultural support payments is well nigh inescapable, whatever the means adopted. That type of criticism comes from people who want us out of the European Union but do not have the guts to say so. I offer this challenge to any right hon. or hon. Member on either side of the House: let them for goodness sake nail their colours to that particular mast if that is where they are. It is not, of course, a colour that I personally would strike, because I believe in the future of the United Kingdom and I am sure that this country, our industry and our agriculture can live and survive in a positive and constructive co-operation with our European partners. I believe that those who wish to walk away from that, far from being nationalists or patriots, are little Englanders who do not have the national self-confidence that all the other 14 members of the European Union have.

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I urge the whole House to take a positive and constructive approach to understanding what has been achieved in our reforms of the common agricultural policy, while recognising that we still have a long way to go.
9.10 pm
Mr. Elliot Morley: It has been an interesting debate. Every year, many hon. Members highlight the problems of the CAP, yet depressingly little progress seems to be made with it. Although we have heard some sensible speeches, much nonsense has been spoken, and doubtful figures have been bandied about with regard to the CAP. A quite amazing attempt has been made to blame the excesses of the CAP on Labour Governments of more than 16 years ago. That is going it a bit.
It was somewhat unreasonable and bad mannered for the hon. Member for Harborough (Mr. Garnier) to accuse my hon. Friend the Member for Edinburgh, East (Dr. Strang) of being an inner-city Member of Parliament who has been put up to represent the Labour party. My hon. Friend was born and raised on a farm. He is a distinguished agricultural scientist and was an agriculture Minister serving in Governments when the hon. Member for Harborough was probably throwing bread rolls around at a Young Conservatives' dinner.
The wording of the Government motion is amazingly complacent. It congratulates the Government
"on its robust negotiating stance … since 1979".
That is going it a bit, quite frankly.
The cost of the CAP is still rising and is expected to reach £32.4 billion in 1999—a huge increase, as my hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) quite rightly pointed out. There has not been much evidence of any control in bringing the CAP to heel. There are still fundamental objections to the CAP in its present form. The costs to consumers are still artificially high. The consumers in Europe group estimates that between £16 and £20 per family per week is spent on supporting the CAP.
The CAP puts a block on the future expansion of the European Union to embrace eastern Europe. It is quite clear that we could not possibly expand the European Union and take the eastern European states into the CAP in its current form.
The CAP is still open to massive fraud, and we have seen examples of that. Indeed, the Minister gave some examples. It is fair and reasonable, however, to pay tribute to the European Court of Auditors, which has been astute in identifying and tracking down those frauds. The CAP still distorts world trade and has a negative effect on developing countries. Far too much is still spent on intervention, storage and transport. Again, the more one spends on those aspects, the more scope there is for fraud.
The CAP, by its very nature, its scale and the way in which it operates, is an extremely bureaucratic structure. I have a document here that lists all the publications that have been written on the European Union in the past year. It is a pity that the hon. Member for Hexham (Mr. Atkinson) is not here, as it is the type of document that he likes to read out in debates, particularly during private Members' Bills, as he is so addicted to publications such as telephone directories.
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Even the MacSharry reforms, which were meant to move away from product price support, have not been as successful as we were led to believe. Set-aside and quotas have not been popular and have provided only short-term relief. Milk quotas are traded and leased. Some 70 per cent. of milk quotas are in the hands of people who are no longer producing. A large amount of money is being given to people for nothing. Quotas distort the market. Those who have quotas are in a fortunate position.
Arable payments have inflated land values and assisted the larger farmer at the expense of the smaller farmer.
Mr. Budgen: I am interested to hear what the hon. Gentleman has to say about quotas. Would an incoming Labour Government be in favour of abolishing quotas, presumably without compensation?
Mr. Morley: We certainly favour phasing out quotas. There is no doubt about that.
Mr. Budgen: Without compensation?
Mr. Morley: People within the quota-controlled market know very well that it is likely that the day will come when the quota regime will end. It is not so much a question of compensation but of the need to give adequate notice. The various forms of support and intervention methods cannot simply be switched off; they must be phased out.
Mr. Budgen: I am sure that the hon. Gentleman will understand that for the average dairy farmer, for example, the quota may be worth as much as £200,000. They would very much like to know whether—I am sure that the hon. Gentleman is about to say something very carefully—on taking office a Labour Government would immediately give notice that quotas were to be phased out, say, within two years without compensation. [Interruption.] I do not have any milk quota.
Mr. Morley: I shall certainly not be drawn on such issues, but in the past the Government have cut quotas without compensation.
The levels of various forms of support are enormous. Income from oilseed production is 64 per cent. subsidy. About 40 per cent. of arable farmers' net incomes comes in subsidy. Despite that, about 20,000 farmers are expected to leave farming by the beginning of the next century. Therefore, the CAP is not altogether successful at keeping people on the land.
There is an argument for support for small farmers and for keeping people in farming and it will have to be considered in the future. Some Conservative Members have argued for limits to the amount of subsidy paid to farmers. That is an interesting idea, but it has disadvantages for individuals. However, the argument is worth considering.
Dame Elaine Kellett-Bowman: With respect, in the European context it is dangerous to refer to small farms because what is a small farm in Britain is a large farm on the continent. One must be careful to define what one means by such terms.
Mr. Morley: I am grateful to the hon. Lady. I am aware of the average size of United Kingdom farms compared with European farms. I shall say a word about European farmers later.

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There have been problems with headage payments, which have led to overstocking and distortions within the livestock sector.
It is also hard to justify the fact that some agricultural sectors are heavily subsidised while others are not. That again distorts the market and means that there is no free market in agricultural products. It is hard to justify subsidies for the dairy, beef and sheep sectors while the pig and poultry sectors receive no subsidy.
Such subsidies also influence the debate on the transport of live animals for slaughter. It is a scandal that continental veal producers are often linked to dairy producers. The unnatural liquid diet on which veal calves are force fed comes from generously subsidised milk powder from surplus milk production. Such distortions and abuse should be stopped. I hope that the Minister will argue for such changes within the CAP regime.
Producers such as Welsh sheep farmers who have been so unfairly critical of the NFU in recent months should remember that up to 75 per cent. of the net income of those in the less-favoured areas comes from subsidy.
Some people have called for disruptive action in response to the demonstrations about live exports. They should stop and think about what that would do to their image, and about the support that they receive from taxpayers—some of whom are demonstrating against live exports. They should heed the wiser counsel of organisations such as the NFU, which know the most effective ways of lobbying and putting the farmers' case.
The same applies to the dairy sector, which the CAP supports to the tune of about £230 per year per cow. As has been pointed out, those who have received milk quotas have received a substantial free capital asset. I am not saying that farmers should not have the right to demonstrate and to put their point of view—or, indeed, that fishermen should not have the same right, although I have every sympathy with the Minister.
The unsubsidised pig sector has had a difficult couple of years. It currently faces the cost of phasing out stalls and tethers. The sector should be congratulated on the positive way in which it has approached animal welfare, but it would not be unreasonable to give it some support at this difficult time. Grant aid is being offered to Northern Ireland producers; why cannot that aid be extended to the rest of the United Kingdom?
Why should we not consider 100 per cent. first-year tax allowances for the cost of replacing stalls and tethers? Why should we not consider enabling capital allowances for buildings with a short lifespan to be written off over their useful lives? Why should we not consider allowing losses to be carried for three years for income-tax purposes, in line with the arrangements for corporation tax? I hope that the Minister will raise those points with the Chancellor, and that they will be dealt with in the Finance Bill.
I must comment briefly on the export of live animals for slaughter in the context of CAP reform. CAP regimes distort the livestock sector, as the hon. Member for Ludlow (Mr. Gill) pointed out. I must take issue with the hon. Members for Hexham and for Ryedale (Mr. Greenway): the export of live animals for slaughter exports jobs from the rural economy, quite apart from the attendant welfare problems.
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Of course problems are involved in, for instance, calf production. If we are to restrict the export of calves in veal crates, we must consider supporting the production of rose veal in this country, and providing marketing aids. We must consider the production of lightweight beef, and selective breeding. The Labour party has discussed those issues with the Meat and Livestock Commission, and with the industry.
There is less of a problem with sheep exports. Currently 80 per cent. of the sheep trade is carcase trade, and I am sure that the remaining 20 per cent. could be absorbed by further carcase exports. In its recent report "UK Live Animal Exports: the Implications of a Significant Reduction in the Trade for the UK Meat and Livestock Industry", the Meat and Livestock Commission considers the issue of live exports in some depth, and from the producer's point of view.
The MLC examined the effect on lamb prices of reducing the number of exports, and found that prices at market had generally been rising as a result of reduced lamb slaughtering following this year's reduced lamb crop. There have been some improvements in the French market price, possibly as a result of fewer live sheep imports, and a 3 per cent. fall in the value of sterling. The MLC said that there were
"real opportunities for the expansion of the export market for lamb and there is scope for extending the home market. These will be major challenges for the industry and will require the maximum amount of support from MLC and Government."
Mr. Stevenson: Is my hon. Friend aware that the ability to develop a home market in meat is compromised by the lack of licensed abattoirs? According to the MAFF report there are about 1,400 licensed red-meat abattoirs, approximately 800 of which are on temporary derogations and could close at the end of the year unless they are brought up to structural standards. The Government seem oblivious to the problem
Mr. Morley: My hon. Friend makes an excellent point. The closure of abattoirs is certainly linked to the problem to which he refers. Although, overall, there is spare capacity in abattoirs in this country, the major problem is where they are. A regional policy should certainly be considered. We can and should be adding value and concentrating on the first-class meat export business trade, not on a second-class live animal for slaughter trade.
There seems to be a case for arguing that there should be a European fund to provide capital grants for moving towards high-welfare production systems. That would include the pig and poultry sectors. I recently visited the Agricultural Development and Advisory Service experimental farm at Gleadthorpe, looked at various systems of egg production and talked to United Kingdom egg producers. It is only fair that I put on record the tremendous work that the poultry sector is doing in developing a more welfare-friendly system. It is, of course, concerned that, in Europe, little progress seems to be being made in comparison to this country in the development of welfare-friendly production schemes.
One way to deal with that problem would be to argue for the establishment of a European fund, to which any producer in any member state could bid for capital assistance. I am quite confident that, given their excellent record, British producers would make the majority of applications to that fund. Again, the Minister may care to consider that in any reform of the common agricultural

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policy. A number of budget headings could be diverted to fund such a scheme—scrapping the tobacco regime would certainly be one of them. I am sure that better options for rural employment can be provided than the tobacco scheme.
We in the Labour party believe that much of the support schemes, quota arrangements and intervention buying is expensive and wasteful and is damaging the development of a strong agricultural market. We want to phase those schemes out in an orderly and structured way—not overnight, as the hon. Member for Gloucestershire, West (Mr. Marland) said. It has to be done sensibly and, of course, by negotiation in the European Community.
We also want to ensure that production matches demand. We have already heard examples of the proposed reforms for the sugar regime. It would be quite unacceptable if our quota was cut even though the UK is not self-sufficient in sugar production.
The idea of decoupling support from production and intervention is supported and accepted by most of the main farming organisations such as the National Farmers Union, the Country Landowners Association and other countryside organisations. Indeed, as far as I can remember, every hon. Member who has spoken in the debate supports such reform of the CAP. Questions lie in the form, application and speed of that reform. If we can achieve that decoupling, there is great potential for redirecting the savings towards a more constructive use in the countryside.
We want progressively to increase support for environmental land management schemes, as we progressively reduce support for production. It is quite unacceptable that the agri-environmental package in the CAP accounts for a paltry 1 per cent. of the total UK CAP budget. We need to move towards a more integrated land management policy. We need to support research and development, as my hon. Friend the Member for Edinburgh, East rightly pointed out, especially on non-food crops.
We need to identify socio-economic factors, such as upland and isolated communities. Farming in the rest of Europe, such as that under the cork forests, in eastern Europe, especially in Poland and Czechoslovakia, on the Spanish steppes, which are threatened through ploughing and open irrigation, and in the Greek olive groves are part of a very rich bio-diversity. If we are to have a CAP structure, I for one would much rather that it supported that range of European bio-diversity and the many communities that farm with such methods than the move towards large-scale farming that we seen over recent years.
We need to have basic environmental protection, which should be an obligation on all land users. Important areas should be protected by statute, but where there is a need for management such agreement should be available on a voluntary option basis. There must be co-ordination between European schemes and GATT. Set-aside should have a clearer environmental role, including a forestry role. I have said before that I very much welcome the progress that the Minister has made in negotiating that. We need to ensure that environmental conditions apply to all support payments in all agricultural sectors. The treaty of Rome should, indeed, be amended at the 1996 intergovernmental conference to reflect that.
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Diversification should be encouraged within a rural and land use policy framework, and we need to encourage a sustainable and prosperous rural economy, recognising the important role of agriculture as a principal land user.
There are several ways of achieving those objectives, but repatriation is not really one of them. That would simply distort any agricultural market within the European Union and lead to unfair competition. If the individual elements of CAP contributions were given to member states what control would there be, for example, of France's support for its pig industry and Holland's support for its dairy sector? It would be impossible for there to be any kind of fair agricultural market on that basis.
We could have repatriation only within a strict framework of environmental support agreed through the European Union, so that support for the agricultural sector was based on land management objectives and not used as a production subsidy.
There is widespread recognition of the failures and distortions of the CAP, and our amendment reflects the mood of the House and of the country. I was sorry to hear the arguments of the hon. Member for Wolverhampton, South-West (Mr. Budgen) about why he feels that he must vote for the Government. At least he was honest when he said that this was not the time to attack the Government. According to him, the time to attack them is when they are arrogant and popular—so presumably, according to his argument, when they are arrogant and unpopular it is not the time to attack them.
The hon. Gentleman seems to offer us one of the first cases on record of a rat jumping back on to a sinking ship instead of deserting it. How will he be able to hold his head up again when he talks about the European Union, after voting for a motion that
"congratulates the Government on its robust negotiating stance on the CAP since 1979",
and on
"its leading role in achieving reform of the CAP",
although we know that prices have increased, fraud continues, farmers are still leaving the land and consumers are still paying far too much?
The hon. Gentleman intends to vote for that Government motion and not for our amendment, although our amendment stands not only for what we have argued for but for what he has publicly argued for. He is entitled to his own opinion, but he is not entitled to argue one thing and vote for another, which is not what some of his hon. Friends have said they will do. I do not think that we shall take what he says about Europe very seriously any more.
It is time for a constructive debate on Europe, such as we are trying to have on CAP reform. It is not good enough constantly to attack Europe in a negative and damaging way, as the hon. Gentleman does. The hon. Member for Wycombe (Mr. Whitney) was right to say that the hon. Member for Wolverhampton, South-West should publicly say that we should leave the EU. He should campaign for that instead of constantly sniping and fuelling the civil war in his party, because all that is affecting public perceptions of the EU and of the positive aspects that we in this country should support.
There is a case for criticism and for arguing for reform, and we have been making that case tonight, but there is also a case for recognising the benefits of the EU for the agricultural and food sectors and for the rest of the

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economy, and we should think about that when people embark on xenophobic, irrational and ill-considered attacks. As the hon. Member for Wolverhampton, South-West intends to support the Government tonight, I hope that in future we shall hear less of those attacks and more of his defence of the European Union and of the Government's position.
9.33 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): This has been an interesting debate, and I am grateful for the contributions of my hon. Friends the Members for Hexham (Mr. Atkinson), for Norfolk, North (Sir R. Howell), for Ryedale (Mr. Greenway), for Wolverhampton, South-West (Mr. Budgen), for Gloucestershire, West (Mr. Marland), for Northampton, North (Mr. Marlow), for Harborough (Mr. Garnier), for Ludlow (Mr. Gill), for Plymouth, Sutton (Mr. Streeter) and for Wycombe (Mr. Whitney), who in their own ways all touched on the many dimensions and aspects of the common agricultural policy as seen by Conservative Members.
I shall deal with the remarks of the hon. Members for Edinburgh, East (Dr. Strang) and for Glanford and Scunthorpe (Mr. Morley) in due course, but we also heard some comments from the hon. Members for Stoke-on-Trent, South (Mr. Stevenson), for North Cornwall (Mr. Tyler), for Cardiff, Central (Mr. Jones), for Ynys Môn (Mr. Jones), for Angus, East (Mr. Welsh) and for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I shall have more to say about those hon. Members in a moment.
The problem for some Conservative Members is that there is perhaps a temptation to give some credibility to the amendment tabled in the name of the Leader of the Opposition. Anybody with the type of analytical skills displayed in this debate who reads the thin diet which stands for an Opposition policy on agriculture will see that the Government are truly addressing the issues of reform and modification of the common agricultural policy in the interests of the food industry, consumers and farmers, while the Opposition are out on a fishing trip for some kind of short-term political gain. We have credible policies, as outlined in the excellent speech by my right hon. Friend the Minister of Agriculture, Fisheries and Food.
My hon. Friends the Members for Ludlow, for Northampton, North and for Wolverhampton, South-West have their own way of looking at the debate. My hon. Friend the Member for Ludlow says that the common agriculture policy cannot be reformed, and says that he talks as a craftsman and a farmer. I would say to my hon. Friend that I earned my living in the horticulture industry before coming to the House. I also have first-hand experience of what it is like to operate in a sector that effectively has no direct intervention. I know what it is like to live on my wits to serve the needs of customers. But I also know what it is like to operate within a European market where having, for example, common standards in terms of grading means that I can operate Europewide and worldwide in agri-food products. The reality of the debate is that we cannot instantaneously change the common policy.
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My hon. Friend the Member for Ludlow has a unique view of the matter, and he knows that, at the end of the debate, we will not be able to trigger the type of reform that he seeks. The ideas which we have put forward provide a solid and sensible way of dealing with some of the problems of the common policy, and I hope at least that he will see favour in the line that we are taking. He is right that we must make the common policy more responsive to the needs of the marketplace. He also mentioned the pig meat regime. We voted solidly against that proposal—the regime has now ended—as it was not something with which we could agree.
My hon. Friend also talked on the subject of abattoirs, the problems of which are affecting a number of my hon. Friends. At a time when the consumption of red meat is under pressure, when matters of hygiene and quality are of uppermost concern and when meat is being dominated by the supermarkets which seek the highest standards, some of the enormous investment that has been made to ensure the highest possible standards must be supported by those in the meat trade to safeguard an important industry for our farmers.
I am sorry that the hon. Member for Northampton, North is not in his place. [Interruption.] He has shifted places. I see that he has put his hand up at the back of the class, and I recognise him. Unfortunately, I cannot sustain the same benevolence to him as I did to my hon. Friend the Member for Ludlow for his arguments on the subject of repatriation. His argument would cause significant problems of distortion, and that view is shared by Members on both sides of the House. Nobody seriously supports repatriation because of the potential for distortion and unfairness which could creep in.
In discussions on the common policy, one often hears people seeking reassurance that things will be fair and that the rules will be implemented. Repatriation is a short route against that. I do not understand my hon. Friend for Northampton, North who, on the one hand, was advocating a free market approach, but, on the other, started to talk about standard quantities of milk and some form of intervention system. That did not seem entirely consistent with the freeing up of the market that he wanted.
Many hon. Members have tried to put the matter into perspective. Let us consider the costs of the common policy. If we convert into 1993–94 prices the amount of money that we spent on agricultural support in the financial year 1958–59, the figure is £2.8 billion. We spent £2.7 billion in 1994–95. That is not an excuse not to reform. As my right hon. Friend the Minister said, one of the great drivers of change will be the expansion of the Community and the pressure that enlargement will put on the budget. However, I ask my hon. Friend to keep the amounts in perspective.
Mr. Marlow: My hon. Friend has made various points—
Mr. John Greenway: He is not your hon. Friend.
Mr. Marlow: Of course he is my hon. Friend. He is all right. My hon. Friend said that there had been no great change in agricultural support. May I remind him that we contribute net to the Community budget a further £3 billion, some of which could be spent on agricultural support. My hon. Friend said that what I suggested would be unfair to the British farmer. Is it fair that the British

239
farmer can produce only 80-odd per cent. of the milk required in the United Kingdom, that we cannot produce as much lamb as we possibly could because of quotas and that we have to take more of our land out of production than any other Community country?
Mr. Jack: The Government understand those frustrations. We seek in the long term to remove the barriers to letting the excellence and efficiency of our farming operation have its particular way. As my hon. Friend the Member for Wycombe adduced in his remarks, had we been a member of the Community at the beginning, we could have designed a system that did not have the restrictions to which my hon. Friend refers. Now is the time to back the Government, who take reform seriously in a properly presented way.
The hon. Member for Wolverhampton, South-West, in his own forensic style, intervened in the debate on several occasions. He was right when he talked about the need to make the CAP more market-driven. On that point, we agree with him. I was delighted with his comments because he reflected well on what my right hon. Friend the Minister said about our desire to reform.
The hon. Member for Wolverhampton, South-West asked some specific questions about the implementation of the milk quotas. Spain has now fully implemented milk quotas. There will be a report from the Commission by 31 March on Italy's efforts to implement the quotas. If it has not done so, it will face further penalty. My right hon. Friend will have an opportunity to raise those matters in the Agriculture Council.
My hon. Friend the Member for Ryedale set an example for the House in his speech. He did what the hon. Member for Edinburgh, East singularly failed to do. He worked out a plan of campaign. Opposition Members shake their heads as if they had not heard his sage words. Let me remind the House what my hon. Friend said. The hon. Member for Ynys Môn could perhaps associate himself with it. My hon. Friend said that change needed to be well thought through. He was right. He said that if we were to change from one thing to another we should not tip the baby out with the bathwater. He was right. He said that change should be gradual. He was also right about that.
This morning the hon. Member for Edinburgh, East told the Financial Times what a mess the CAP was. Then, as he sought instantaneous change, he also told us that we needed gradual reform. He is possibly one of the most inconsistent people. My hon. Friend the Member for Ryedale is entirely consistent. My hon. Friend went on to talk about the need to move the CAP closer to the market. On that point again, he was right. He said that the CAP should be non-discriminatory. Absolutely. If there is to be fairness, all the talk of repatriation must be set aside. Otherwise, we shall fall on to a discriminatory track.
My hon. Friend mentioned environmental benefit. Given that in the financial year 1996–97, when our full agri-environment package is up and running, we will spend about £100 million, I agree with him.
One of the areas for reform that must be explored is that to which the hon. Member for Glanford and Scunthorpe alluded in his speech. At least he had some ideas that we can debate. I searched for them in the speech of the hon. Member for Edinburgh, East, but could not find any. Environmental cost compliance is an important area for the future of the CAP. Those prepared to debate
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reform sensibly yearn to see the common policy develop more environmental credentials. That will be an important theme as we develop the debate on reform.
My hon. Friend the Member for Ryedale said that we should have regard for the food and drink industry. I could not agree with him more. One of the great missing elements on the Opposition Benches is a regard for the purpose of the agricultural industry, which is about producing the raw materials for our competitive food industry. If it is to remain competitive, Conservative Members' idea of dispensing with the unnecessary burdens and costs of the social chapter will allow our food industry to triumph in Europe, rather than fail as it would under Labour policies.
Lady Olga Maitland: Does my hon. Friend agree that it is extremely important that we should do everything that we possibly can to export excellent produce from this country? Furthermore, does he agree that the Food From Britain campaign has had tremendous success? Will he tell the House how much he has invested in that programme?
Mr. Jack: We are putting some £6 million into Food From Britain, which is an excellent organisation. For example, I am about to announce an export seminar to encourage tremendous development in horticulture. My hon. Friend is entirely right.
My hon. Friend the Member for Ryedale went on to discuss matters connected with retaining the security of food supply, which is also important to the food industry. His plan was a blueprint that should be listened to by hon. Members across the House—[Interruption.]—despite the carping voices opposite.
My hon. Friend the Member for Gloucestershire, West drew attention, in his unique style, to some of the problems of Milk Marque and invited me to comment on those. The Office of Fair Trading and the European Commission can be used if questions of abuse of competitive position arise. That was made clear during the passage of the Agriculture Bill and subsequently. Milk Marque will have noted carefully what my hon. Friend said, as will others in the milk industry, because commentary at this stage is particularly valuable.
My hon. Friend the Member for Sutton recognised an important point when he said that some form of agricultural support is inevitable. In a perceptive speech to the Oxford Farming conference, my right hon. Friend the Minister reminded the industry that any change would inevitably be gradual and that the rest of the world, with the possible exception of New Zealand, would not easily give up its present support because it knows that it is an important negotiating tool when it comes to further rounds of the general agreement on tariffs and trade. My hon. Friend also pointed his finger at enlargement, which I shall discuss in a moment.
My hon. Friend the Member for Harborough paid tribute to our pioneering work on the inheritance tax changes in the context of the Agricultural Tenancies Bill. It is notable that such a pioneering measure, which is designed to bring new blood into the farming industry, should be so vehemently opposed by the Opposition.
Mr. Foulkes: Will the Minister give way?
Mr. Jack: No, I do not think that I will—not to the hon. Gentleman. I want to talk to my hon. Friend the Member

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for Hexham, who asked what Labour was all about in this debate. We are still searching for the answer. He developed the theme of world competition, and agriculture is a world competitive activity. We have a great deal of good techniques that are much demanded outside the shores of this country, and we support the industry's export activities.
Mr. Foulkes rose—
Madam Deputy Speaker: Order. It is clear that the Minister is not giving way, so the hon. Gentleman must resume his seat.
Mr. Jack: My hon. Friend the Member for Hexham also discussed animal welfare, to which I shall return in a moment.
My hon. Friend the Member for Wycombe provided us with a useful background, giving us the context in which to regard the subject, which is the wider debate on Europe. I think that he is right to try to do so, to place in perspective the important agricultural matters that we are considering.
My hon. Friend the Member for Norfolk, North took us through some important parts of the discussion on the subject of—[Interruption.]
Madam Deputy Speaker: Order. I remind the House again about sedentary interruptions and what I would call running commentaries.
Mr. Jack: My hon. Friend the Member for Norfolk, North takes a considerable interest in the costs and expenditure of the common agricultural policy. However, the latest figure that we have—we have deposited a report in the Library to that effect—is that the cost of agriculture per person in this country is £4 per week. That is the most authoritative and definitive figure that we can have. My hon. Friend was right, however, to caution the House not to place too much weight on some of the figures about relative savings that could result if there were no common agricultural policy, because it is extremely difficult to predict what the shape of world prices would be compared with European prices if there were no common agricultural policy. He did the House a service with his arguments in that respect.
Mr. Welsh rose—
Mr. Jack: I want to comment on the speeches of several hon. Members and, in fairness, I shall comment on the arguments of the hon. Member for Angus, East in due course.
It is quite nice to see the hon. Member for North Cornwall in the Chamber this evening. Your absence was noted, you are quite right, in the debate on the Agricultural Tenancies Bill, and your absence from the—[HON. MEMBERS: "Order."] Your absence from the animal welfare—
Mr. Morley: The hon. Gentleman's absence.
Mr. Jack: The hon. Gentleman's absence. I appreciate that. The absence of the hon. Member for North Cornwall from the Agriculture Tenancies Bill debate and from the animal welfare debate and parliamentary questions was duly noticed. [HON. MEMBERS: "Hear, hear."] Having suffered 31 minutes of him in the debate on hill livestock
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compensatory allowance, only for him to be ruled out of order by the Chairman, I think that he probably did us a service by not being there to give us his opinions.
The hon. Member for North Cornwall agreed with us about repatriation, and I was grateful for that support. He also spoke on the subject of a common rural policy. His is an over-bureaucratic approach to that. Ours is the suggestion of having a rural White Paper. My right hon. Friend the Minister of Agriculture, Fisheries and Food, my noble Friend Earl Howe and I have chaired a series of seminars throughout the country to listen carefully to all those who have an opinion about the development of the rural economy in this land.
The Conservative Government are consulting as widely as possible. We have received about 300 submissions already about that matter. There is overwhelming interest in the way that we are developing a rural approach to policy.
The hon. Member for North Cornwall chastised me on the subject of hill livestock compensatory allowance and the hon. Members for Carrick, Cumnock and Doon Valley and for Angus, East discussed that. I draw their attention to the fact that we do have to take into account the total position of the subsidy incomes that will be paid in terms of hill farmers.
Mr. Tyler: Will the Minister give way?
Mr. Jack: Would the hon. Gentleman allow me to answer the arguments that he made in his speech before he comes back?
In 1994, the total subsidy going to hill farmers was about £550 million. That increased to £600 million. In its third report the Agriculture Select Committee said that it did not see anything sinister in a switch in the source of funding from the United Kingdom Government to the European Community. It noted that we could rightfully take those matters into account. I discussed the hon. Gentleman's other argument in my remarks about non-farming incomes.
Mr. Tyler: Does the Minister now deny the facts that he has laid before the House this evening—that hill farmers had reductions in their income last year and will have a further drop in the current year? If the compensatory allowances are to mean anything, surely he will compensate for those reductions?
Mr. Jack: I am adverting to the fact that there is an increase in moneys going into the hills, not necessarily from the hill livestock compensatory allowance, which my right hon. Friend the Minister of Agriculture, Fisheries and Food held constant against last year. I have told the hon. Gentleman that there are other subsidy increases. He also seeks to ignore the support that we are able to give as a Government through objective 5b status—about £620 million—to help strengthen those difficult parts of the country. We understand the problems of the hills. We will continue to consider those problems carefully and we are trying to strengthen the economy in those areas.
The hon. Member for North Cornwall, in common with other hon. Members, spoke about pigs. The Ministry has held a seminar with leading members of the pig industry to try to find a way forward. The hon. Member for North Cornwall spoke about Northern Ireland. I should say that, under objective 1 status, Northern Ireland has the ability to use some of its moneys for a limited scheme of help

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with investment in sow stalls and tethers, but only for the smaller pig herd. The important point to remember is that 60 per cent. of our pig herd is already in loose accommodation. Those who have made that change may be rather worried about the possibility of funding those who have not already done so.
I was somewhat surprised by the speech of the hon. Member for Edinburgh, East. He took us on a statistical magical trip around the CAP, but all Conservative Members were left desperately searching for some indication of Labour party policy on agriculture. None of us was able to find one iota of Opposition policy.
The hon. Gentleman was continually probed about that by my hon. Friends, but he failed to come up with any suggestion of Opposition policy. Having listened to his remarks, that is not surprising. He has, after all, singularly opposed the sensible changes that we have made. When it came to developing the future of agriculture with the Agricultural Tenancies Bill, the hon. Gentleman led the charge against it. He does not acknowledge the thinking on how to review the CAP, but my right hon. Friend has appointed a group to do that. Where is the Labour party's policy?
The hon. Gentleman has failed to acknowledge the lead that we have given to the reform of the CAP. He fails to understand the dynamics of the enlargement of the CAP. My right hon. Friend was right when he pointed out that it is external pressures on the CAP which are the main driver to change. The hon. Gentleman fails to give any weight to the efforts that the Government made to ensure that the MacSharry proposals have led to a 30 per cent. reduction in cereal support prices; a 15 per cent. reduction in beef support prices and a greater move towards the market driving the CAP. Those are Conservative achievements, but the hon. Gentleman offered us not one iota of similar Opposition policy. In every way he has tried to frustrate sensible debate on change to the CAP.
The hon. Member for Glanford and Scunthorpe had the nerve to start talking about animal welfare. My hon. Friend the Parliamentary Under-Secretary of State has already put before the House a six-point plan on ways in which we are trying to safeguard the meat trade in this country; safeguard a European solution on animal welfare as well as safeguard the veal industry by developing rose beef in this country.
I should point out what the hon. Gentleman said recently about bovine spongiform encephalopathy in the export of animals. His comments were reviewed in Farming News, which said that he made irresponsible remarks and that his contribution represented
"good political point scoring perhaps, but the tempting conclusion has to be that politicians would do better to concern themselves with Britain's agricultural economy than the minuscule threat to the welfare of European consumers."
Because of his remarks, the hon. Gentleman put the meat trade at risk. He has also done a great disservice to the Government's efforts to deal sensibly with issues connected with the welfare of animals.
Mr. Morley rose—
Mr. Jack: No, I will not give way, because every hon. Member should appreciate that it is the Conservative party that takes reform seriously. We have seen from tonight's debate that the Labour party is not the farmer's friend. The Opposition have little understanding of rural life and no clear agenda for the future shape of the CAP, as their
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amendment shows. It is Conservative Members who have the ideas about renegotiating the CAP and who live in the real world of food and farming. We are taking forward new thinking and new ideas about the rural economy. We are moving forward in the fight against fraud in the context of the common agricultural policy, and we are seriously considering the question of enlargement as the key to the much-needed reforms that we advocate. I urge all hon. Members to support us in the Lobby tonight.
Question put, That the amendment be made:—
The House divided: Ayes 278, Noes 305.

Division No. 106]

[10.00 pm

AYES

Abbott, Ms Diane

Cousins, Jim

Adams, Mrs Irene

Cox, Tom

Ainger, Nick

Cunliffe, Lawrence

Ainsworth, Robert (Cov'try NE)

Cunningham, Jim (Covy SE)

Allen, Graham

Cunningham, Rt Hon Dr John

Alton, David

Dafis, Cynog

Anderson, Donald (Swansea E)

Dalyell, Tam

Anderson, Ms Janet (Ros'dale)

Darling, Alistair

Armstrong, Hilary

Davidson, Ian

Ashdown, Rt Hon Paddy

Davies, Bryan (Oldham C'tral)

Ashton, Joe

Davies, Rt Hon Denzil (Llanelli)

Austin-Walker, John

Davies, Ron (Caerphilly)

Banks, Tony (Newham NW)

Davis, Terry (B'ham, H'dge H'I)

Barron, Kevin

Dewar, Donald

Battle, John

Dixon, Don

Bayley, Hugh

Dobson, Frank

Beckett, Rt Hon Margaret

Donohoe, Brian H

Beith, Rt Hon A J

Dowd, Jim

Bell, Stuart

Dunnachie, Jimmy

Benn, Rt Hon Tony

Dunwoody, Mrs Gwyneth

Benton, Joe

Eagle, Ms Angela

Bermingham, Gerald

Eastham, Ken

Berry, Roger

Etherington, Bill

Betts, Clive

Evans, John (St Helens N)

Blair, Rt Hon Tony

Ewing, Mrs Margaret

Blunkett, David

Fatchett, Derek

Boateng, Paul

Field, Frank (Birkenhead)

Bradley, Keith

Fisher, Mark

Bray, Dr Jeremy

Foster, Rt Hon Derek

Brown, Gordon (Dunfermline E)

Foulkes, George

Brown, N (N'c'tle upon Tyne E)

Fraser, John

Bruce, Malcolm (Gordon)

Fyfe, Maria

Burden, Richard

Galbraith, Sam

Byers, Stephen

Galloway, George

Caborn, Richard

Gapes, Mike

Callaghan, Jim

Garrett, John

Campbell, Mrs Anne (C'bridge)

George, Bruce

Campbell, Menzies (Fife NE)

Gerrard, Neil

Campbell, Ronnie (Blyth V)

Godman, Dr Norman A

Campbell-Savours, D N

Godsiff, Roger

Cann, Jamie

Golding, Mrs Llin

Carlile, Alexander (Montgomery)

Gordon, Mildred

Chidgey, David

Graham, Thomas

Chisholm, Malcolm

Grant, Bernie (Tottenham)

Church, Judith

Griffiths, Nigel (Edinburgh S)

Clapham, Michael

Griffiths, Win (Bridgend)

Clark, Dr David (South Shields)

Grocott, Bruce

Clarke, Eric (Midlothian)

Gunnell, John

Clarke, Tom (Monklands W)

Hain, Peter

Clelland, David

Hall, Mike

Clwyd, Mrs Ann

Hannam, Sir John

Coffey, Ann

Hanson, David

Cohen, Harry

Hardy, Peter

Connarty, Michael

Harvey, Nick

Corbett, Robin

Hattersley, Rt Hon Roy

Corbyn, Jeremy

Henderson, Doug

Corston, Jean

Heppell, John

245

Hill, Keith (Streatham)

Morris, Rt Hon Alfred (Wy'nshawe)

Hinchliffe, David

Morris, Estelle (B'ham Yardley)

Hodge, Margaret

Morris, Rt Hon John (Aberavon)

Hoey, Kate

Mowlam, Marjorie

Hogg, Norman (Cumbernauld)

Mudie, George

Hood, Jimmy

Mullin, Chris

Hoon, Geoffrey

Murphy, Paul

Howarth, George (Knowsley North)

Oakes, Rt Hon Gordon

Howells, Dr. Kim (Pontypridd)

O'Brien, Mike (N W'kshire)

Hoyle, Doug

O'Brien, William (Normanton)

Hughes, Kevin (Doncaster N)

O'Hara, Edward

Hughes, Robert (Aberdeen N)

Olner, Bill

Hughes, Roy (Newport E)

O'Neill, Martin

Hughes, Simon (Southwark)

Parry, Robert

Hutton, John

Patchett, Terry

Illsley, Eric

Pearson, Ian

Ingram, Adam

Pendry, Tom

Jackson, Glenda (H'stead)

Pickthall, Colin

Jamieson, David

Pike, Peter L

Janner, Greville

Pope, Greg

Johnston, Sir Russell

Powell, Ray (Ogmore)

Jones, Barry (Alyn and D'side)

Prentice, Bridget (Lew'm E)

Jones, Ieuan Wyn (Ynys Mon)

Prentice, Gordon (Pendle)

Jones, Jon Owen (Cardiff C)

Prescott, Rt Hon John

Jones, Lynne (B'ham S O)

Primarolo, Dawn

Jones, Martyn (Clwyd, SW)

Purchase, Ken

Jones, Nigel (Cheltenham)

Quin, Ms Joyce

Jowell, Tessa

Radice, Giles

Kaufman, Rt Hon Gerald

Randall, Stuart

Keen, Alan

Raynsford, Nick

Kennedy, Charles (Ross,C&S)

Redmond, Martin

Kennedy, Jane (Lpool Brdgn)

Reid, Dr John

Khabra, Piara S

Rendel, David

Kilfoyle, Peter

Robertson, George (Hamilton)

Kirkwood, Archy

Robinson, Geoffrey (Co'try NW)

Lestor, Joan (Eccles)

Robinson, Peter (Belfast E)

Lewis, Terry

Roche, Mrs Barbara

Liddell, Mrs Helen

Rogers, Allan

Litherland, Robert

Rooker, Jeff

Livingstone, Ken

Rooney, Terry

Lloyd, Tony (Stretford)

Ross, Ernie (Dundee W)

Llwyd, Elfyn

Rowlands, Ted

Loyden, Eddie

Ruddock, Joan

Lynne, Ms Liz

Salmond, Alex

McAllion, John

Sedgemore, Brian

McAvoy, Thomas

Sheerman, Barry

McCartney, Ian

Sheldon, Rt Hon Robert

Macdonald, Calum

Short, Clare

McKelvey, William

Simpson, Alan

Mackinlay, Andrew

Skinner, Dennis

McLeish, Henry

Smith, Andrew (Oxford E)

Maclennan, Robert

Smith, Chris (Isl'ton S & F'sbury)

McMaster, Gordon

Smith, Llew (Blaenau Gwent)

MacShane, Denis

Snape, Peter

McWilliam, John

Soley, Clive

Madden, Max

Spearing, Nigel

Maddock, Diana

Spellar, John

Mahon, Alice

Squire, Rachel (Dunfermline W)

Mandelson, Peter

Steinberg, Gerry

Marek, Dr John

Stevenson, George

Marshall, David (Shettleston)

Strang, Dr. Gavin

Marshall, Jim (Leicester, S)

Straw, Jack

Martin, Michael J (Springburn)

Sutcliffe, Gerry

Martlew, Eric

Taylor, Mrs Ann (Dewsbury)

Maxton, John

Taylor, Matthew (Truro)

Meacher, Michael

Thompson, Jack (Wansbeck)

Meale, Alan

Timms, Stephen

Michael, Alun

Tipping, Paddy

Michie, Bill (Sheffield Heeley)

Touhig, Don

Michie, Mrs Ray (Argyll & Bute)

Tyler, Paul

Milburn, Alan

Vaz, Keith

Miller, Andrew

Wallace, James

Mitchell, Austin (Gt Grimsby)

Walley, Joan

Moonie, Dr Lewis

Wardell, Gareth (Gower)

Morgan, Rhodri

Wareing, Robert N

Morley, Elliot

Watson, Mike

246

Welsh, Andrew

Worthington, Tony

Wicks, Malcolm

Wray, Jimmy

Wigley, Dafydd

Wright, Dr Tony

Williams, Rt Hon Alan (Sw'n W)

Young, David (Bolton SE)

Willams, Alan W (Carmarthen)

Tellers for the Ayes:

Wilson, Brian

Mr. John Cummings and

Winnick, David

Mr. Dennis Turner.

Wise, Audrey

NOES

Ainsworth, Peter (East Surrey)

Davies, Quentin (Stamford)

Aitken, Rt Hon Jonathan

Davis, David (Boothferry)

Alexander, Richard

Day, Stephen

Alison, Rt Hon Michael (Selby)

Deva, Nirj Joseph

Allason, Rupert (Torbay)

Delvin, Tim

Amess, David

Dickens, Geoffrey

Ancram, Michael

Dicks, Terry

Arbuthnot, James

Dorrell, Rt Hon Stephen

Arnold, Jacques (Gravesham)

Douglas-Hamilton, Lord James

Arnold, Sir Thomas (Hazel Grv)

Dover, Den

Ashby, David

Duncan, Alan

Atkins, Robert

Duncan Smith, Iain

Atkinson, David (Bour'nmouth E)

Dunn, Bob

Atkinson, Peter (Hexham)

Durant, Sir Anthony

Baker, Rt Hon Kenneth (Mole V)

Eggar, Rt Hon Tim

Baker, Nicholas (North Dorset)

Elletson, Harold

Baldry, Tony

Emery, Rt Hon Sir Peter

Banks, Matthew (Southport)

Evans, David (Welwyn Hatfield)

Banks, Robert (Harrogate)

Evans, Jonathan (Brecon)

Bates, Michael

Evans, Nigel (Ribble Valley)

Batiste, Spencer

Evans, Roger (Monmouth)

Bendall, Vivian

Evennett, David

Beresford, Sir Paul

Faber, David

Body, Sir Richard

Fabricant, Michael

Booth, Hartley

Fenner, Dame Peggy

Boswell, Tim

Field, Barry (Isle of Wight)

Bottomley, Peter (Eltham)

Fishburn, Dudley

Bottomley, Rt Hon Virginia

Forman, Nigel

Bowden, Sir Andrew

Forsyth, Rt Hon Michael (Stirling)

Bowis, John

Forth, Eric

Boyson, Rt Hon Sir Rhodes

Fowler, Rt Hon Sir Norman

Brandreth, Gyles

Fox, Dr Liam (Woodspring)

Brazier, Julian

Fox, Sir Marcus (Shipley)

Bright, Sir Graham

Freeman, Rt Hon Roger

Brooke, Rt Hon Peter

French, Douglas

Brown, M (Brigg & Cl'thorpes)

Fry, Sir Peter

Browning, Mrs Angela

Gale, Roger

Bruce, Ian (Dorset)

Gallie, Phil

Budgen, Nicholas

Gardiner, Sir George

Burns, Simon

Garel-Jones, Rt Hon Tristan

Burt, Alistair

Garnier, Edward

Butcher, John

Gill, Christopher

Butler, Peter

Gillan, Cheryl

Carlisle, John (Luton North)

Goodlad, Rt Hon Alastair

Carlisle, Sir Kenneth (Lincoln)

Goodson-Wickes, Dr Charles

Carrington, Matthew

Gorman, Mrs Teresa

Carttiss, Michael

Gorst, Sir John

Cash, William

Grant, Sir A (SW Cambs)

Channon, Rt Hon Paul

Greenway, Harry (Ealing N)

Churchill, Mr

Greenway, John (Ryedale)

Clappison, James

Griffiths, Peter (Portsmouth, N)

Clark, Dr Michael (Rochford)

Grylls, Sir Michael

Clarke, Rt Hon Kenneth (Ru'clif)

Gummer, Rt Hon John Selwyn

Coe, Sebastian

Hague, William

Colvin, Michael

Hamilton, Rt Hon Sir Archibald

Congdon, David

Hamilton, Neil (Tatton)

Conway, Derek

Hampson, Dr Keith

Coombs, Anthony (Wyre For'st)

Hanley, Rt Hon Jeremy

Coombs, Simon (Swindon)

Hannam, Sir John

Cope, Rt Hon Sir John

Hargreaves, Andrew

Cormack, Sir Patrick

Harris, David

Cran, James

Haselhurst, Alan

Critchley, Julian

Hawkins, Nick

Currie, Mrs Edwina (S D'by'ire)

Hawksley, Warren

Curry, David (Skipton & Ripon)

Heald, Oliver

247

Heath, Rt Hon Sir Edward

Nelson, Anthony

Heathcoat-Amory, David

Neubert, Sir Michael

Hendry, Charles

Newton, Rt Hon Tony

Heseltine, Rt Hon Michael

Nicholls, Patrick

Hicks, Robert

Nicholson, David (Taunton)

Higgins, Rt Hon Sir Terence

Nicholson, Emma (Devon West)

Hill, James (Southampton Test)

Norris, Steve

Hogg, Rt Hon Douglas (G'tham)

Onslow, Rt Hon Sir Cranley

Horam, John

Oppenheim, Phillip

Hordem, Rt Hon Sir Peter

Ottaway, Richard

Howard, Rt Hon Michael

Page, Richard

Howarth, Alan (Strat'rd-on-A)

Paice, James

Howell, Rt Hon David (G'dford)

Patnick, Sir Irvine

Howell, Sir Ralph (N Norfolk)

Patten, Rt Hon John

Hughes, Robert G (Harrow W)

Pattie, Rt Hon Sir Geoffrey

Hunt, Rt Hon David (Wirral W)

Pawsey, James

Hunt, Sir John (Ravensbourne)

Peacock, Mrs Elizabeth

Hunter, Andrew

Pickles, Eric

Jack, Michael

Portillo, Rt Hon Michael

Jackson, Robert (Wantage)

Powell, William (Corby)

Jenkin, Bernard

Rathbone, Tim

Jessel, Toby

Redwood, Rt Hon John

Johnson Smith, Sir Geoffrey

Renton, Rt Hon Tim

Jones, Gwilym (Cardiff N)

Richards, Rod

Jones, Robert B (W Hertfdshr)

Riddick, Graham

Jopling, Rt Hon Michael

Rifkind, Rt Hon Malcolm

Kellett-Bowman, Dame Elaine

Robathan, Andrew

Key, Robert

Roberts, Rt Hon Sir Wyn

Knapman, Roger

Robertson, Raymond (Ab'd'n S)

Knight, Mrs Angela (Erewash)

Robinson, Mark (Somerton)

Knight, Greg (Derby N)

Roe, Mrs Marion (Broxbourne)

Knight, Dame Jill (Bir'm E'st'n)

Rowe, Andrew (Mid Kent)

Knox, Sir David

Rumbold, Rt Hon Dame Angela

Kynoch, George (Kincardine)

Ryder, Rt Hon Richard

Lait, Mrs Jacqui

Sackville, Tom

Lamont, Rt Hon Norman

Sainsbury, Rt Hon Sir Timothy

Lang, Rt Hon Ian

Scott, Rt Hon Sir Nicholas

Lawrence, Sir Ivan

Shaw, David (Dover)

Legg, Barry

Shephard, Rt Hon Gillian

Leigh, Edward

Shepherd, Colin (Hereford)

Lennox-Boyd, Sir Mark

Shepherd, Richard (Aldridge)

Lester, Jim (Broxtowe)

Shersby, Michael

Lidington, David

Sims, Roger

Lightbown, David

Skeet, Sir Trevor

Lilley, Rt Hon Peter

Smith, Sir Dudley (Warwick)

Lloyd, Rt Hon Sir Peter (Fareham)

Smith, Tim (Beaconsfield)

Lord, Michael

Soames, Nicholas

Luff, Peter

Speed, Sir Keith

Lyell, Rt Hon Sir Nicholas

Spencer, Sir Derek

MacGregor, Rt Hon John

Spicer, Sir James (W Dorset)

MacKay, Andrew

Spicer, Michael (S Worcs)

Maclean, David

Spink, Dr Robert

McLoughlin, Patrick

Sproat, Iain

McNair-Wilson, Sir Patrick

Squire, Robin (Hornchurch)

Madel, Sir David

Stanley, Rt Hon Sir John

Maitland, Lady Olga

Steen, Anthony

Major, Rt Hon John

Stern, Michael

Malone, Gerald

Stewart, Allan

Mans, Keith

Streeter, Gary

Marland, Paul

Sumberg, David

Marlow, Tony

Sweeney, Walter

Marshall, John (Hendon S)

Tapsell, Sir Peter

Marshall, Sir Michael (Arundel)

Taylor, Ian (Esher)

Martin, David (Portsmouth S)

Taylor, John M (Solihull)

Mates, Michael

Thompson, Sir Donald (C'er V)

Mawhinney, Rt Hon Dr Brian

Thompson, Patrick (Norwich N)

Mayhew, Rt Hon Sir Patrick

Thornton, Sir Malcolm

Mellor, Rt Hon David

Thurnham, Peter

Merchant, Piers

Townend, John (Bridlington)

Mills, Iain

Townsend, Cyril D (Bexl'yh'th)

Mitchell, Andrew (Gedling)

Tracey, Richard

Moate, Sir Roger

Tredinnick, David

Monro, Sir Hector

Trend, Michael

Montgomery, Sir Fergus

Trotter, Neville

Moss, Malcolm

Twinn, Dr Ian

Needham, Rt Hon Richard

Vaughan, Sir Gerard

248

Viggers, Peter

Widdecombe, Ann

Waldegrave, Rt Hon William

Wiggin, Sir Jerry

Walden, George

Wilkinson, John

Walker, Bill (N Tayside)

Willetts, David

Waller, Gary

Winterton, Mrs Ann (Congleton)

Ward, John

Winterton, Nicholas (Macc'f'ld)

Wardle, Charles (Bexhill)

Wolfson, Mark

Wood, Timothy

Waterson, Nigel

Yeo, Tim

Watts, John

Young, Rt Hon Sir George

Wells, Bowen

Wheeler, Rt Hon Sir John

Tellers for the Noes:

Whitney, Ray

Mr. Sydney Chapman and

Whittingdale, John

Mr. Timothy Kirkhope.

Question accordingly negatived.
It being after Ten o'clock, MADAM SPEAKER put forthwith the main Question, pursuant to Order [17 March].
The House divided: Ayes 298, Noes 277.

Division No. 107]

[10.15 pm

AYES

Ainsworth, Peter (East Surrey)

Coe, Sebastian

Aitken, Rt Hon Jonathan

Colvin, Michael

Alexander, Richard

Congdon, David

Alison, Rt Hon Michael (Selby)

Conway, Derek

Allason, Rupert (Torbay)

Coombs, Anthony (Wyre For'st)

Amess, David

Coombs, Simon (Swindon)

Ancram, Michael

Cope, Rt Hon Sir John

Arbuthnot, James

Cormack, Sir Patrick

Arnold, Jacques (Gravesham)

Cran, James

Arnold, Sir Thomas (Hazel Grv)

Critchley, Julian

Ashby, David

Currie, Mrs Edwina (S D'by'ire)

Atkins, Robert

Curry, David (Skipton & Ripon)

Atkinson, David (Bour'mouth E)

Davies, Quentin (Stamford)

Atkinson, Peter (Hexham)

Davis, David (Boothferry)

Baker, Rt Hon Kenneth (Mole V)

Day, Stephen

Baker, Nicholas (North Dorset)

Deva, Nirj Joseph

Baldry, Tony

Devlin, Tim

Banks, Matthew (Southport)

Dickens, Geoffrey

Banks, Robert (Harrogate)

Dicks, Terry

Bates, Michael

Dorrell, Rt Hon Stephen

Batiste, Spencer

Douglas-Hamilton, Lord James

Bendall, Vivian

Dover, Den

Beresford, Sir Paul

Duncan, Alan

Booth, Hartley

Duncan-Smith, Iain

Boswell, Tim

Dunn, Bob

Bottomley, Peter (Eltham)

Durant, Sir Anthony

Bottomley, Rt Hon Virginia

Eggar, Rt Hon Tim

Bowden, Sir Andrew

Elletson, Harold

Bowis, John

Emery, Rt Hon Sir Peter

Boyson, Rt Hon Sir Rhodes

Evans, David (Welwyn Hatfield)

Brandreth, Gyles

Evans, Jonathan (Brecon)

Brazier, Julian

Evans, Nigel (Ribble Valley)

Bright, Sir Graham

Evans, Roger (Monmouth)

Brooke, Rt Hon Peter

Evennett, David

Brown, M (Brigg & Cl'thorpes)

Faber, David

Browning, Mrs Angela

Fabricant, Michael

Bruce, Ian (Dorset)

Fenner, Dame Peggy

Budgen, Nicholas

Field, Barry (Isle of Wight)

Burns, Simon

Fishburn, Dudley

Burt, Alistair

Forman, Nigel

Butcher, John

Forsyth, Rt Hon Michael (Stirling)

Butler, Peter

Forth, Eric

Carlisle, John (Luton North)

Fowler, Rt Hon Sir Norman

Carlisle, Sir Kenneth (Lincoln)

Fox, Dr Liam (Woodspring)

Carrington, Matthew

Fox, Sir Marcus (Shipley)

Cash, William

Freeman, Rt Hon Roger

Channon, Rt Hon Paul

French, Douglas

Churchill, Mr

Fry, Sir Peter

Clappison, James

Gale, Roger

Clark, Dr Michael (Rochford)

Gallie, Phil

Clarke, Rt Hon Kenneth (Ru'clif)

Gardiner, Sir George

249

Garel-Jones, Rt Hon Tristan

McLoughlin, Patrick

Garnier, Edward

McNair-Wilson, Sir Patrick

Gillan, Cheryl

Madel, Sir David

Goodlad, Rt Hon Alastair

Maitland, Lady Olga

Goodson-Wickes, Dr Charles

Major, Rt Hon John

Gorst, Sir John

Malone, Gerald

Grant, Sir A (SW Cambs)

Mans, Keith

Greenway, Harry (Ealing N)

Marland, Paul

Greenway, John (Ryedale)

Marshall, John (Hendon S)

Griffiths, Peter (Portsmouth, N)

Marshall, Sir Michael (Arundel)

Grylls, Sir Michael

Martin, David (Portsmouth S)

Gummer, Rt Hon John Selwyn

Mates, Michael

Hague, William

Mawhinney, Rt Hon Dr Brian

Hamilton, Rt Hon Sir Archibald

Mayhew, Rt Hon Sir Patrick

Hamilton, Neil (Tatton)

Mellor, Rt Hon David

Hampson, Dr Keith

Merchant, Piers

Hanley, Rt Hon Jeremy

Mills, Iain

Hannam, Sir John

Mitchell, Andrew (Gedling)

Hargreaves, Andrew

Moate, Sir Roger

Harris, David

Monro, Sir Hector

Haselhurst, Alan

Montgomery, Sir Fergus

Hawkins, Nick

Moss, Malcolm

Hawksley, Warren

Needham, Rt Hon Richard

Heald, Oliver

Nelson, Anthony

Heath, Rt Hon Sir Edward

Neubert, Sir Michael

Heathcoat-Amory, David

Newton, Rt Hon Tony

Hendry, Charles

Nicholls, Patrick

Heseltine, Rt Hon Michael

Nicholson, David (Taunton)

Hicks, Robert

Nicholson, Emma (Devon West)

Higgins, Rt Hon Sir Terence

Norris, Steve

Hill, James (Southampton Test)

Onslow, Rt Hon Sir Cranley

Hogg, Rt Hon Douglas (G'tham)

Oppenheim, Phillip

Horam, John

Ottaway, Richard

Hordern, Rt Hon Sir Peter

Page, Richard

Howard, Rt Hon Michael

Paice, James

Howarth, Alan (Strt'rd-on-A)

Patnick, Sir Irvine

Howell, Rt Hon David (G'dford)

Patten, Rt Hon John

Howell, Sir Ralph (N Norfolk)

Pattie, Rt Hon Sir Geoffrey

Hughes, Robert (Harrow West)

Pawsey, James

Hunt, Rt Hon David (Wirral W)

Peacock, Mrs Elizabeth

Hunt, Sir John (Ravensbourne)

Pickles, Eric

Hunter, Andrew

Portillo, Rt Hon Michael

Jack, Michael

Powell, William (Corby)

Jackson, Robert (Wantage)

Rathbone, Tim

Jenkin, Bernard

Redwood, Rt Hon John

Jessel, Toby

Renton, Rt Hon Tim

Johnson Smith, Sir Geoffrey

Richards, Rod

Jones, Gwilym (Cardiff N)

Riddick, Graham

Jones, Robert B (W Hertfdshr)

Rifkind, Rt Hon Malcolm

Jopling, Rt Hon Michael

Robathan, Andrew

Kellett-Bowman, Dame Elaine

Roberts, Rt Hon Sir Wyn

Key, Robert

Robertson, Raymond (Ab'd'n S)

Knapman, Roger

Robinson, Mark (Somerton)

Knight, Mrs Angela (Erewash)

Roe, Mrs Marion (Broxbourne)

Knight, Greg (Derby N)

Rowe, Andrew (Mid Kent)

Knight, Dame Jill (Bir'm E'st'n)

Rumbold, Rt Hon Dame Angela

Knox, Sir David

Ryder, Rt Hon Richard

Kynoch, George (Kincardine)

Sackville, Tom

Lait, Mrs Jacqui

Sainsbury, Rt Hon Sir Timothy

Lamont, Rt Hon Norman

Scott, Rt Hon Sir Nicholas

Lang, Rt Hon Ian

Shaw, David (Dover)

Lawrence, Sir Ivan

Shephard, Rt Hon Gillian

Legg, Barry

Shepherd, Colin (Hereford)

Leigh, Edward

Shersby, Michael

Lennox-Boyd, Sir Mark

Sims, Roger

Lester, Jim (Broxtowe)

Skeet, Sir Trevor

Lidington, David

Smith, Sir Dudley (Warwick)

Lightbown, David

Smith, Tim (Beaconsfield)

Lilley, Rt Hon Peter

Soames, Nicholas

Lloyd, Rt Hon Sir Peter (Fareham)

Speed, Sir Keith

Lord, Michael

Spencer, Sir Derek

Luff, Peter

Spicer, Sir James (W Dorset)

Lyell, Rt Hon Sir Nicholas

Spicer, Michael (S Worcs)

MacGregor, Rt Hon John

Spink, Dr Robert

MacKay, Andrew

Sproat, Iain

Maclean, David

Squire, Robin (Hornchurch)

250

Stanley, Rt Hon Sir John

Walden, George

Steen, Anthony

Walker, Bill (N Tayside)

Stern, Michael

Waller, Gary

Stewart, Allan

Ward, John

Streeter, Gary

Wardle, Charles (Bexhill)

Sumberg, David

Waterson, Nigel

Sweeney, Walter

Watts, John

Tapsell, Sir Peter

Wells, Bowen

Taylor, Ian (Esher)

Wheeler, Rt Hon Sir John

Taylor, John M (Solihull)

Whitney, Ray

Thompson, Sir Donald (C'er V)

Whittingdale, John

Thompson, Patrick (Norwich N)

Widdecombe, Ann

Thornton, Sir Malcolm

Wiggin, Sir Jerry

Thurnham, Peter

Willetts, David

Townend, John (Bridlington)

Winterton, Mrs Ann (Congleton)

Townsend, Cyril D (Bexl'yh'th)

Winterton, Nicholas (Macc'f'ld)

Tracey, Richard

Wolfson, Mark

Tredinnick, David

Wood, Timothy

Trend, Michael

Yeo, Tim

Trotter, Neville

Young, Rt Hon Sir George

Twinn, Dr Ian

Vaughan, Sir Gerard

Tellers for the Ayes:

Viggers, Peter

Mr. Sydney Chapman and

Waldegrave, Rt Hon William

Mr. Timothy Kirkhope

NOES

Abbott, Ms Diane

Clelland, David

Adams, Mrs Irene

Clwyd, Mrs Ann

Ainger, Nick

Coffey, Ann

Ainsworth, Robert (Cov'try NE)

Cohen, Harry

Allen, Graham

Connarty, Michael

Alton, David

Corbett, Robin

Anderson, Donald (Swansea E)

Corbyn, Jeremy

Anderson, Ms Janet (Ros'dale)

Corston, Jean

Armstrong, Hilary

Cousins, Jim

Ashdown, Rt Hon Paddy

Cox, Tom

Ashton, Joe

Cunliffe, Lawrence

Austin-Walker, John

Cunningham, Jim (Covy SE)

Banks, Tony (Newham NW)

Cunningham, Rt Hon Dr John

Barron, Kevin

Dafis, Cynog

Battle, John

Dalyell, Tam

Bayley, Hugh

Darling, Alistair

Beckett, Rt Hon Margaret

Davidson, Ian

Berth, Rt Hon A J

Davies, Bryan (Oldham C'tral)

Bell, Stuart

Davies, Rt Hon Denzil (Llanelli)

Benn, Rt Hon Tony

Davies, Ron (Caerphilly)

Benton, Joe

Davis, Terry (B'ham, H'dge H'I)

Bermingham, Gerald

Dewar, Donald

Berry, Roger

Dixon, Don

Betts, Clive

Dobson, Frank

Blair, Rt Hon Tony

Donohoe, Brian H

Blunkett, David

Dowd, Jim

Boateng, Paul

Dunnachie, Jimmy

Bradley, Keith

Dunwoody, Mrs Gwyneth

Bray, Dr Jeremy

Eagle, Ms Angela

Brown, Gordon (Dunfermline E)

Eastham, Ken

Brown, N (N'c'tle upon Tyne E)

Etherington, Bill

Bruce, Malcolm (Gordon)

Evans, John (St Helens N)

Burden, Richard

Ewing, Mrs Margaret

Byers, Stephen

Fatchett, Derek

Caborn, Richard

Field, Frank (Birkenhead)

Callaghan, Jim

Fisher, Mark

Campbell, Mrs Anne (C'bridge)

Foster, Rt Hon Derek

Campbell, Menzies (Fife NE)

Foulkes, George

Campbell, Ronnie (Blyth V)

Fraser, John

Campbell-Savours, D N

Fyfe, Maria

Cann, Jamie

Galbraith, Sam

Carlile, Alexander (Montgomery)

Galloway, George

Chidgey, David

Gapes, Mike

Chisholm, Malcolm

Garrett, John

Church, Judith

George, Bruce

Clapham, Michael

Gerrard, Neil

Clark, Dr David (South Shields)

Godman, Dr Norman A

Clarke, Eric (Midlothian)

Godsiff, Roger

Clarke, Tom (Monklands W)

Golding, Mrs Llin

251

Gordon, Mildred

Marshall, Jim (Leicester, S)

Graham, Thomas

Martin, Michael J (Springburn)

Grant, Bernie (Tottenham)

Martlew, Eric

Griffiths, Nigel (Edinburgh S)

Maxton, John

Griffiths, Win (Bridgend)

Meacher, Michael

Grocott, Bruce

Meale, Alan

Gunnell, John

Michael, Alun

Hain, Peter

Michie, Bill (Sheffield Heeley)

Hall, Mike

Michie, Mrs Ray (Argyll & Bute)

Hanson, David

Milburn, Alan

Hardy, Peter

Miller, Andrew

Harman, Ms Harriet

Mitchell, Austin (Gt Grimsby)

Harvey, Nick

Moonie, Dr Lewis

Hattersley, Rt Hon Roy

Morgan, Rhodri

Henderson, Doug

Morley, Elliot

Heppell, John

Morris, Rt Hon Alfred (Wy'nshawe)

Hill, Keith (Streatham)

Morris, Estelle (B'ham Yardley)

Hinchliffe, David

Morris, Rt Hon John (Aberavon)

Hodge, Margaret

Mowlam, Marjorie

Hoey, Kate

Mudie, George

Hogg, Norman (Cumbernauld)

Mullin, Chris

Hood, Jimmy

Murphy, Paul

Hoon, Geoffrey

Oakes, Rt Hon Gordon

Howarth, George (Knowsley North)

O'Brien, Mike (N W'kshire)

Howells, Dr. Kim (Pontypridd)

O'Brien, William (Normanton)

Hoyle, Doug

O'Hara, Edward

Hughes, Kevin (Doncaster N)

Olner, Bill

Hughes, Robert (Aberdeen N)

O'Neill, Martin

Hughes, Simon (Southwark)

Parry, Robert

Hutton, John

Patchett, Terry

Illsley, Eric

Pearson, Ian

Ingram, Adam

Pendry, Tom

Jackson, Glenda (H'stead)

Pickthall, Colin

Jamieson, David

Pike, Peter L

Janner, Greville

Pope, Greg

Johnston, Sir Russell

Powell, Ray (Ogmore)

Jones, Barry (Alyn and D'side)

Prentice, Bridget (Lew'm E)

Jones, Ieuan Wyn (Ynys Mon)

Prentice, Gordon (Pendle)

Jones, Jon Owen (Cardiff C)

Prescott, Rt Hon John

Jones, Lynne (B'ham S O)

Primarolo, Dawn

Jones, Martyn (Clwyd, SW)

Purchase, Ken

Jones, Nigel (Cheltenham)

Quin, Ms Joyce

Jowell, Tessa

Radice, Giles

Kaufman, Rt Hon Gerald

Randall, Stuart

Keen, Alan

Raynsford, Nick

Kennedy, Charles (Ross,C&S)

Redmond, Martin

Kennedy, Jane (Lpool Brdgn)

Reid, Dr John

Khabra, Piara S

Rendel, David

Kilfoyle, Peter

Robertson, George (Hamilton)

Kirkwood, Archy

Robinson, Geoffrey (Co'try NW)

Lestor, Joan (Eccles)

Robinson, Peter (Belfast E)

Lewis, Terry

Roche, Mrs Barbara

Liddell, Mrs Helen

Rogers, Allan

Litherland, Robert

Rooker, Jeff

Livingstone, Ken

Rooney, Terry

Lloyd, Tony (Stretford)

Ross, Ernie (Dundee W)

Llwyd, Elfyn

Rowlands, Ted

Loyden, Eddie

Ruddock, Joan

Lynne, Ms Liz

Salmond, Alex

McAllion, John

Sedgemore, Brian

McAvoy, Thomas

Sheerman, Barry

McCartney, Ian

Sheldon, Rt Hon Robert

Macdonald, Calum

Short, Clare

McKelvey, William

Simpson, Alan

Mackinlay, Andrew

Skinner, Dennis

McLeish, Henry

Smith, Andrew (Oxford E)

Maclennan, Robert

Smith, Chris (Isl'ton S & F'sbury)

McMaster, Gordon

Smith, Llew (Blaenau Gwent)

MacShane, Denis

Snape, Peter

McWilliam, John

Soley, Clive

Madden, Max

Spearing, Nigel

Maddock, Diana

Spellar, John

Mahon, Alice

Squire, Rachel (Dunfermline W)

Mandelson, Peter

Steinberg, Gerry

Marek, Dr John

Stevenson, George

Marshall, David (Shettleston)

Strang, Dr. Gavin

252

Straw, Jack

Welsh, Andrew

Sutcliffe, Gerry

Wicks, Malcolm

Taylor, Mrs Ann (Dewsbury)

Wigley, Dafydd

Taylor, Matthew (Truro)

Williams, Rt Hon Alan (Sw'n W)

Thompson, Jack (Wansbeck)

Williams Alan W. (Carmarthen)

Timms, Stephen

Wilson, Brian

Tipping, Paddy

Winnick, David

Wise, Audrey

Touhig, Don

Worthington, Tony

Tyler, Paul

Wray, Jimmy

Vaz, Keith

Wright, Dr Tony

Wallace, James

Young, David (Bolton SE)

Walley, Joan

Wardell, Gareth (Gower)

Tellers for the Noes:

Wareing, Robert N

Mr. Dennis Turner and

Watson, Mike

Mr. John Cummings.

Question accordingly agreed to.
Resolved,
That this House takes note of European Community Document No. 5097/95, relating to agricultural prices for 1995–96 and related measures; congratulates the Government on its robust negotiating stance on the Common Agricultural Policy since 1979, its leading role in achieving reform of the CAP, its continuing pressure for further radical reform and its determination to ensure that EU agricultural spending is effectively restrained; welcomes the Government's key role in the negotiations which secured an effective agreement on agriculture in the GATT Uruguay Round; endorses the Government's drive to spearhead urgent and continuing efforts to combat fraud and illegal state aids throughout the EU; notes that UK farm incomes rose by 6.9 per cent. over the last year and that Government spending on hill livestock compensatory amounts and agricultural research and development has been maintained; and supports the Government's intention to negotiate an outcome on the 1995–96 price proposals which takes account of the interests of the United Kingdom, producers, consumers and taxpayers alike.

PETITION
10.31 pm
Mr. Donald Anderson: It is my pleasure to present a petition from the members of the governing body of Pentrehafod school, the Pentrehafod Association, and staff, parents and friends of Pentrehafod school, Pentremawr road, Hafod, Swansea.
The petition shows that the school opened in 1976, with the promise that the third phase would be built in 1978 or 1979. That plan included the provision of a drama hall, music rooms and other key facilities.

In later years Swansea City Council promised to extend the community provision in partnership with West Glamorgan County Council and the Arts Council. This provision was to include a multi-purpose sports, Drama and Recreation Hall. Neither of these promised and intended necessary extensions have been built—
to the great frustration of the 892 signatories.
In March 1992 the Lower School was destroyed by fire. The Director of Education, other officers and County Councillors promised publicly those who attended the various meetings that the final phases of the school were to be built within eighteen months to two years.
Wherefore your Petitioners pray that your Honourable House will request the Secretary of State for Wales, and the County Councillors for the County and City of Swansea to expedite the necessary proceedings to ensure that this work is undertaken and completed within two years of the establishment of the new Unitary Authorities. And your Petitioners, as in duty bound, will ever pray etc.
To lie upon the Table.

Habitual Residence Test (Newham)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
10.33 pm
Mr. Stephen Timms: I am grateful for this opportunity to bring the habitual residence requirement for income-related benefits before the House. Ten days ago, I received a letter from the Newham docklands citizens advice bureau which expressed its alarm at
"clients who we think have acted in a reasonable way but who are in danger of becoming destitute as a result of the habitual residence test".
I share its alarm. I am deeply concerned that the habitual residence test is lacking a coherent basis at any level, is being implemented in a haphazard and arbitrary way and is in danger of driving into destitution dozens of British citizens living in the London borough of Newham. I think that the test will have to be scrapped, but I urge the Minister at least to give immediate consideration to making available urgent payments to people who are awaiting the outcome of an appeal against failing the test.
There is one far-sighted member of the Government who accurately predicted the impact of such a test and who rejected it in 1986 on the basis of
"all our habits and history".—[Official Report, Standing Committee B, 27 February 1986; c. 537.]
That was the present Prime Minister speaking as a Social Security Minister. It is a tragedy for Britain that the Prime Minister's warnings were not heeded by his Ministers before they introduced the test last year.
The habitual residence test was introduced at the beginning of August. In the first six months of its operation, 15,564 people were refused benefits because of it, 2,599 British citizens were among them and 73 were in the London borough of Newham. Welfare organisations across the country have been making representations about the chaos which has resulted, but it was not until last month that the House had the opportunity to discuss it, other than through questions.
A serious constitutional point must be considered when the Secretary of State can, for the first time, exclude British citizens in this country from access to benefits, without any serious deliberation in the House, until almost seven months after the event, and only then as one of six separate orders which were allocated less than two and a half hours of parliamentary time.
The Government have said that the habitual residence test was introduced to end the mischief of "benefit tourism", but they have failed to provide any evidence that that is a significant problem. The Prime Minister said in his speech in 1986 that the number of people involved was a "tiny minority" and I believe that he was right. Certainly, the Government have conspicuously failed to provide any evidence of the scale of the problem other than on two occasions in Parliament, on which they resorted to quoting from an article which appeared in Time Out magazine. That is no basis for formulating a policy which is driving hundreds of people towards destitution.
In any case, before the test, had young Europeans claimed benefit when they were not economically active, they would have been excluded on the basis of
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existing law. Why was it not possible to proceed on that basis? As the Prime Minister pointed out in 1986, the appropriate remedy was already available. Why not use it and save the distress which is now being caused to thousands of others?
Newham rarely enjoys visits from European tourists. A benefits administrator in my constituency told me rather sadly:
"We do not have benefit tourists in Newham."
Instead, we have people in genuine need who are being refused benefits.
The problem is not only that there is no basis for the introduction of this test, but matters are being made much worse by the chaotic way in which it is being implemented. Consider, for example, successive Department of Social Security estimates of the administrative costs involved. Originally we were informed that the cost would be £368,000 a year. Earlier this month, I was told in a written answer that the costs were now expected to be substantially higher than £800,000 a year.
The result of it all in Newham is that advice agencies are overwhelmed and the Benefits Agency, which in Newham is admirably ready to respond to the problems raised by the advice agencies with which it deals, and which has been getting on top of its previous administrative problems, seems to be losing ground again as habitual residence tests and appeals clog up the system.
Had the Government been willing to listen, they would have anticipated the crisis. The Social Security advisory committee warned that just such a situation was likely. It said about the test:
"The costs of administration and the aggravation and anxiety caused for the many claimants who would be required to face the test, but who were never the target of our proposals, may well turn out to be too high a price to pay in order to provide a solution to a relatively small issue."
Perhaps the clearest evidence of the chaotic reality of the test is provided by the appeals process—and it appears that almost all the failed applicants are lodging appeals. The Minister has not been able to tell my hon. Friends or myself about the results of appeals against the test, but it appears that at least half and perhaps three quarters of all appeals are being upheld. That must be a reflection of the fact that the benefits staff implementing the test in the first place do not know what criteria they are supposed to apply.
The Stratford office of the Benefits Agency tells me that the average length of time between failing the test and the date of the appeal hearing is approximately four months. That is four months during which people, over half of whom are ultimately found to be habitually resident in the United Kingdom, are deprived of all means of subsistence. That is a shambles on a national scale, and I urge upon the Minister the fact that it requires a response from him.
In Newham the burden of a new income maintenance function has fallen on to the council's social services department, which is making payments to needy families under section 17 of the Children Act 1989. Those are families with children, who, because they have failed the habitual residence test, would have no means of subsistence at all, so the local authority has no alternative but to step in so that at least the children can be fed.

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However, the section 17 system is not designed for payments to families over a long period; and social services departments are hard enough pressed already, without having to set up new functions duplicating those of the Benefits Agency. The care of children, which is the proper responsibility of social services departments, will inevitably suffer as a result.
I shall concentrate tonight on the unprecedented plight of British citizens subjected to the habitual residence test. In a debate on the issue in another place, eloquently initiated by Lord Russell, Lord Mackay of Ardbrecknish, on behalf of the Government, conceded that the Government had been forced to broaden the regulations to include British nationals so as to avoid conflict with European legislation. So it seems that it had not been the Government's intention to include British citizens within the scope of the test.
What I find extraordinary, however, is the complacency with which the Government nevertheless embarked on what the Child Poverty Action Group described as the effective downgrading of British citizenship. British citizens are being left destitute in their own country by their own Government. No other European Union country makes its own citizens destitute by excluding them from subsistence benefits in that way. The British Government maintain that they have had to do so in order to avoid breaching European law. How is it, then, that no other European Government have deprived their own citizens of the means of subsistence within their own country?
If the numbers from the first six months of the habitual residence test are projected forwards, more than 5,000 British citizens will be refused income support in the first year of the test. The Government tell us that those people belong in a new category of scrounger—the undeserving British national with little or no contact with this country. Canadian or Australian backpackers were recently cited as examples. However, again the Government have not been able to tell us how many such people there really are. The policy is based on anecdote and prejudice, not on fact.
Let me describe for the Minister the position of a real-life victim of the test who lives in my constituency. Mr. Pierre Bevis, a British citizen whose father was a British service man, went to live in Germany when his father was posted there in the 1970s. Since 1983 Mr. Bevis has had spells working both in Germany and in the United Kingdom, and he obtained a heavy goods vehicle licence in the United Kingdom.
In 1994, after three visits to seek work in the United Kingdom, he moved back to take up permanent residence in London, bringing with him his wife, all his belongings and a letter inviting him for an interview with a London construction company. When that job fell through Mr. Bevis applied for income support in October, and in November, having taken a habitual residence test, he was told that he was not deemed habitually resident in this country. Mr. Bevis was absent from this country for a time because his father was serving in the British forces overseas. Is it really the policy of the Government now to penalise people because their parents served in the forces overseas? How have we come to this?
When Mr. Bevis sought an explanation for the shabby treatment which he received, all he could find were profoundly offensive references on the part of the
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Secretary of State for Social Security to him and others like him as "benefit tourists" or, on 23 January, as "Canadian backpackers". What have the families of British service personnel done to deserve being insulted by their own Government in that way?
Mr. Bevis is not an isolated case. The cases of many British citizens in similar situations—none of whom are Canadian backpackers—have been brought to my attention. There is evidence that British citizens from the ethnic minority communities have been disproportionately affected, and such cases must cause deep concern to all hon. Members. The result is that hon. Members are, for the first time, being faced with constituents who have literally no means of subsistence.
Mr. Bevis has been given food by a reporter on the Newham Recorder who has been covering his plight. Was that the Government's intention in introducing the measure? I understand that Mr. Bevis's appeal was due today, but on arriving at the appeal he was told that a decision had been made by somebody last week that he was habitually resident—some four months after his benefit was stopped—and that his appeal therefore did not need to proceed.
On 12 December the Minister told the House that someone in extreme circumstances had the right to apply to the social fund for a crisis loan, and it appeared to me that that might be an answer. I investigated, but found that crisis loans are available only to those with the capacity to repay them, which someone with no means of subsistence clearly does not have. I have asked the Minister how many people failing the test have been given crisis loans, but he does not know. In Newham, the Stratford Benefits Agency tells me that
"there have only been a handful of crisis loan applications and they have been unsuccessful".
That is why welfare organisations and citizens advice bureaux are in despair. Experienced workers say that no other change has caused so many real cases of hardship. Even people whose appeals were later upheld have been left destitute for months.
Last week, I received another despairing letter from a constituent whose appeal was upheld five weeks ago, but who has still not received a penny in benefit. The Newham Docklands citizens advice bureau has written to me, saying that even if clients get income support as a result of winning appeals, they still have to survive for two to three months without any money after the appeal.
In 1986, the present Prime Minister said:
"What is clear from all our habits and history is that when people are in desperate need it has never been the fashion in this country … not to provide assistance that is sorely needed."
But that provision has not been made. The Prime Minister's implication—made, as he said, on the basis of all of our habits and history—that not even a Conservative Government would be willing to see their own citizens pressed into destitution, has been cast aside by this measure. The Prime Minister's confidence in habits and history has proved valueless.
The Prime Minister—who was then a Social Security Minister—also said:
"A costly administrative system would have to be set up to deal with people who failed to qualify for benefit, yet who were in need, that we would not in practice ignore".

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I am sad to say that that need has, in practice, been ignored.
I hope that the Minister will recognise that the problems which I have raised are real, and that they have been raised with the desire to see positive action taken for those in real need. In particular, I ask him to address two immediate proposals to mitigate the damage being caused by the test.
First, urgent payments should be made available through the Department for those awaiting the outcome of an appeal against failing the habitual residence test. Secondly, the Government should seek thorough information about the impact of the test, and that information should be made public. In future discussions, Members on both sides of the House should not have to rely on anecdotal evidence—as we do now—nor on articles in Time Out, which have been relied upon by Ministers. I believe that in due course the legislation will be scrapped, as other errors in the past have been scrapped. The poll tax and the flaws in the Child Support Act 1991 come to mind.
It is astonishing that all the problems to which I have referred were foreseen by the now Prime Minister in his remarkably prescient speech in 1986. He said that such a test would be too rigid, too cumbersome and perhaps too unfair. He said that it could penalise British citizens returning from abroad, United Kingdom citizens on work contracts returning home and missionaries who had been abroad for a long time. He said that the test would have enormously disproportionate administrative costs and could become an administrative nightmare. He said that it would be contrary to all our habits and history not to provide assistance that was sorely needed. The Prime Minister was absolutely right.
Of course the test that was being debated in 1986 was slightly different from the one which has been introduced now, but the Prime Minister's warning about that test are all being fulfilled now in reality in a remarkable way. I commend the Prime Minister's speech to the Minister and urge that, for all the reasons that he spelt out in 1986, the Government repeal the test now rather than wait for months or years until the damage to thousands of our citizens is beyond repair.
10.50 pm
The Parliamentary Under-Secretary of State for Social Security (Mr. Roger Evans): I congratulate the hon. Member for Newham, North-East (Mr. Timms) on raising important points about what is undoubtedly a most serious issue. It obviously affects the particular constituent whom he mentioned and other constituents and it is an issue of general concern.
I begin by dealing with a theme that ran throughout the hon. Gentleman's speech, that is, the observations made in 1986 by my right hon. Friend the Prime Minister when he was Under-Secretary of State for Social Security. The hon. Gentleman has taken my right hon. Friend's words out of context. The proposal that was rejected in 1986 was that none of the benefits should be paid to anyone who had not been resident for at least 12 months. That is a very different creature from the habitual residence that we now contemplate.
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The hon. Gentleman quoted in his closing remarks the example of people returning from abroad, bringing their families and all their possessions with them. On any basis, such a case is much more likely to become immediately or very shortly a case of habitual residence than that of someone who was subject to an arbitrary ban of 12 months.
The test that we have implemented was introduced because before 1 August last year work seekers from the European economic area could claim income support, housing benefit and council tax benefit for up to six months. Estimates made at the time suggested that about 5,000 EEA nationals did exactly that. I do not wish to swap stories of the type that the hon. Gentleman dismissed, but clearly there was considerable concern about the matter. It must be appreciated how difficult it is to tackle such an issue.
The hon. Gentleman fairly asked why the British Government had taken a course that appeared to be different from the situation that he described in other European countries. Perhaps he has not focused on the unique nature of the benefits system that we have in the United Kingdom, compared with arrangements in other European countries. For example, if a country has a benefits system based on an insurance or contributions principle, the issue does not arise because people have to be resident for some time to make the contributions or pay the insurance.
Mr. Ian McCartney: The Government are abolishing the contributory benefits system.
Mr. Evans: The hon. Member for Makerfield (Mr. McCartney), even from a sedentary position, occasionally causes me to laugh. Whether it be an insurance or contributions-based benefit, which classically the Bismarckian systems on the continent involve, the issue does not arise. The nearest equivalent of income support in the other European countries is locally administered and highly discretionary in character. Income support is a direct descendant of what the Labour Government did in 1966. They made supplementary benefit, now income support, a matter of legal entitlement, provided the conditions were met. That is a unique feature of income support. Prior to 1 August 1994, people coming from the European continent could make a claim and, provided that the conditions were met, they were treated on exactly the same basis as people who had resided in this country all their life.
That problem was unique to Britain. It was not faced by other European countries. The question that faced the British Government then and still faces us—it would face any Government who sought to introduce an alternative proposal—is how, in accordance with European law, we could alter that classic situation. I suppose that we could go down the radical road, which I cannot believe the Opposition would want, of scrapping legal entitlement to income support. One way or another, however, if the measure is to be consistent with article 6 of the treaty of Rome, we must introduce a proposal that does not discriminate on grounds of nationality. At first blush, it would be attractive. It would be powerfully attractive as a matter of rhetoric to say: why not exclude returning British citizens from abroad entirely from the test? One can understand why that question seems so straightforward to constituents faced with that problem.

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They feel that there can be only one answer to that question but, regrettably, the answer is the converse: that cannot be done under European law.
So the point that faced the Government at the time and still faces us is how to introduce a rule that prevents this country from being the honeypot of the world for people who come here and accept our benefits as a matter of legal entitlement, while introducing some moderation to that excess, which most British taxpayers perceive to be excessively generous. The logic of the habitual residence test is that it does not discriminate on grounds of nationality but, to a great measure, meets the question fairly and reasonably. Clearly, returning British citizens, because of their connections with this country, will find it much easier either immediately to establish the links that amount to habitual residence or to establish those links over a much shorter period than somebody arriving from Spain, Canada or Australia with no immediate links with this country.
Mr. Keith Bradley: If the habitual residence test is so soundly based, will the Minister answer the question which he failed to answer when we debated the regulations and which the Secretary of State failed to answer yesterday at Social Security questions: how many people have won their appeals against refusal of benefit for habitual residents, and what were the reasons for winning those appeals?
Mr. Evans: The hon. Gentleman knows the global figures full well as his question has been answered on a number of occasions. We have broken it down into the different categories concerned. As the system is computerised, without a disproportionate manual exercise of checking every appeal, we cannot tell him the reason in each specific case. I appreciate that he wants that information, but it is not possible to produce it by ordinary practices.
This is not a case of downgrading British citizenship. To prevent an unsatisfactory state of affairs, some action had to be taken and we believe that, within the limited constraints of European law, this test is a fair and reasonable way to do it. The hon. Member for Newham, North-East made a powerful appeal to British citizenship, but we have already seen in the Immigration Act 1971, which was not repealed by the Labour Government of 1974–79, that British citizenship does not necessarily involve all the incidents and privileges that people associate with that status, a classic example being the right of abode. We must take the matter issue by issue in a practical way.
Obviously, I accept that British nationals who have failed the test are a matter of concern, but taxpayers generally and the people of Newham would not be content with a system that simply swept away the test, as the hon. Gentleman contended. He has not proposed, and I am not aware of anyone else proposing yet, what might be described as a plausible alternative arrangement.
Mr. Nigel Spearing: The rules as used by the appeal panels.
Mr. Evans: The hon. Gentleman spoke from a sedentary position. I did not hear precisely what he said.
The key is that there must be a principle that can be practically applied. It is true that we know a certain amount, but we do not know a great deal of detail on the
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merits of individual appeal cases. However, it appears that, contrary to the anxieties that were expressed, those people are in general not returning business men coming home after the end of contracts, or students who have done admirable voluntary service overseas, or people returning home who have been nursing elderly relatives. We have simply had to draw the line here and, classically, sadly, some of the people who have turned up on our shores are those who have arrived with their children, who are penniless and who do not appear to have given a thought to their responsibilities, but have expected that the British taxpayer will bail them out.
The hon. Member for Newham, North-East, with his usual courtesy, gave me notice of Mr. Bevis's case. Obviously, a system of deciding benefits claims such as ours puts great reliance on the quantity and expertise of our benefit and adjudicating officers, but it also has a long stop by way of an independent appeal system, which is there to ensure that people obtain what the law passed by Parliament entitles them to. Inevitably, with such a process of adjudication, which we believe generally has the confidence of the country and of the people who run the system as the best way of doing that, an appeal will take some time.
The hon. Member for Newham, North-East made much of the workings of the scheme. That administrative system matches staff to work load, which has led directly to the marked increase in spending from £368,000 to £800,000. That is a result of sensible management planning and of dealing with the matter properly and efficiently.
Obviously, Mr. Bevis was ultimately held under that process to be, as he believes that he is entitled to be, habitually resident. I appreciate that there was anxiety about delay, but the story of Mr. Bevis has at least that satisfactory conclusion.
I am slightly surprised that the hon. Member for Newham, North-East has been worried about the lack of information held by the Department of Social Security. The hon. Member for Manchester, Withington (Mr. Bradley) also mentioned that to me.
I have been asked specifically by the hon. Member for Newham, North-East about the proportion of people who have failed the test who are students or pensioners. He also asked how many of the British nationals who have failed the test have one parent who is a British national and one parent who is a national of another country. He asked many further detailed and perfectly proper questions.
The difficulty is that the system is nowadays computerised, and in order to find the answer, a clerical check would have to be undertaken, because the Benefits Agency collects only information necessary for its purposes. To collect more costs more, and there is no justification in collecting information about a claimant's antecedents or occupation when the test depends on individual circumstances.
I sum up by saying that we believe that there was an abuse. That abuse had to be dealt with; otherwise it would obviously increase. It was a serious problem that we were an attractive place for benefit tourism. I have explained that, although it appeared attractive at first blush to introduce an arrangement that gave British citizens a guarantee that they would pass the test, under the arrangements that we have come up with, we have a system in which the test is passed by the vast majority of

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British citizens because they can demonstrate a commitment to the country. At the same time, it has stopped what was clearly becoming unsustainable.
I end with this. It is attractive to say, when first considering the matter, that there should be special arrangements for urgent payments in those cases, but the Government's opinion is that it would be wrong in
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principle to single out one class of claimants in the benefits system for special status or special treatment. There are a variety of arrangements—
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned accordingly at three minutes past Eleven o'clock.