Common Agricultural Policy (Hansard, 2 November 1995)

§ 4. Mr. Gordon Prentice
To ask the Minister of Agriculture, Fisheries and Food what further steps he proposes to take to combat fraud in the common agricultural policy. [38924]

§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Tony Baldry)
We are seeking further reforms of the CAP to reduce the scope for fraud—in particular, to reduce dependence on export refunds and intervention. We also fully support Commission initiatives to apply financial penalties to member states where controls are found to be inadequate.

§ Mr. Prentice
I welcome that answer as far as it goes, but what on earth have the Government been doing since 1979, given that the CAP has ballooned by 43 per cent. and that fraud accounts for £6 billion out of a budget of £33 billion? Is it not the case that the CAP is infested with fraudsters and cheats ripping off the rest of us, and that the Government have done far too little, too late?

§ Mr. Baldry
The hon. Gentleman's comments are uncomplimentary and unfair, because the United Kingdom has very much taken the lead in the European Union in tackling fraud. I invite him to cast his mind back to the Essen summit, where my right hon. Friend the Prime Minister ensured far greater use of the European Court of Auditors and of the European Parliament in scrutinising financial management and bearing down on fraud.
The hon. Gentleman's figure for the extent of fraud is without any foundation. The only basis on which one can estimate fraud is the reported number of incidents, and they bear absolutely no relationship to. the hon. Gentleman's figure. In 1994, member states reported irregularities of just over 1 per cent. of the CAP budget— 379 hardly the kind of excesses that the hon. Gentleman suggested. Of course all fraud is serious, and of course we are determined to continue to bear down on it in the European Union.

§ Sir Donald Thompson
Will my hon. Friend accept the congratulations of Conservative Members on the Government's action against fraud? Does he agree that, if the CAP is to be reformed, it is essential to continue to attack fraud?

§ Mr. Baldry
I absolutely agree. Of course it is imperative that fraud is eliminated from the CAP or any other policy. The fight against fraud remains a high priority for us. We will continue to keep pressuring the Commission for action further to reform the CAP and to reduce instances of CAP fraud. The Council is negotiating reforms in the fruit and vegetable sector, and we fully support initiatives such as the black list, which is aimed at penalising those who perpetrate fraud.

§ 5. Mr. Darling
To ask the Minister of Agriculture, Fisheries and Food what will be the total cost of the common agricultural policy in 1995. [38925]

§ Mr. Douglas Hogg
EC budget expenditure on the common agricultural policy in 1995 will be about £28 billion. That is some £2.6 billion below the agricultural guideline.

§ Mr. Darling
Given that the CAP costs families between £15 and £20 a week, is it not time to embark on a radical reform of the CAP? Can the Minister make a commitment that the Government will raise the matter at next year's intergovernmental conference with a view to amending, if necessary, those parts of the treaty of Rome that affect the CAP, so that the system is fairer, more efficient and less likely to lead to fraud, but leads instead to a reduction in expenditure for most people throughout Europe, including in this country?

§ Mr. Hogg
The Government's position in support of their policy of reforming the common agricultural policy is extremely well known, and we take every opportunity to impress on the Council, the Parliament and the Commission the need for substantial reform—especially in the context of enlargement and also because of the ceilings of the general agreement on tariffs and trade. The hon. Gentleman's advocacy of that policy would be more plausible if the Labour party manifesto of 1992 had touched on the subject at all, and if the party had dealt with the question at its party conference in September.

§ Mr. Wilkinson
Is it not a remarkable. state of affairs that the policy should so totally lack credibility as to require satellite imagery to counteract fraud? Would not the best course of action for the Government be to tear up the CAP and to replace it with national efficiency payments for British farmers?

§ Mr. Hogg
I regret having to disagree with my hon. Friend but I do so strongly in respect of his conclusions. Nor do I agree that the policy lacks credibility. The problem with the common agricultural policy is that, although the United Kingdom has serious criticisms to make of the policy, that position is not universally shared by member states. There is no consensus at the moment within the Council or the Community for substantial change.

§ Mr. Tyler
Can the Minister estimate the proportion of the £28 billion that actually reaches farm incomes in the United Kingdom?

§ Mr. Hogg
The figures are available; I would not want to give the hon. Gentleman a specific figure off the cuff, but I would be happy to do so in writing. One particular figure sticks in my mind, however. A study by the Organisation for Economic Co-operation and Development in 1993 measured the total transfers by the taxpayer and the consumer in the context of agriculture, and found that only 50 per cent. of them went to farmers. If the hon. Gentleman wants me to be more precise, I would prefer to write to him, to preclude the possibility of error.

§ Mr. Nicholls
Does my right hon. and learned Friend detect an certain irony in the fact that the most federalist policy in the Community is now being attacked by the most federalist parties among the Opposition? Does he agree that the real problem with fraud is that so many of our European partners seem to think it is perfectly all right to pass legislation without obeying it, whereas our party resists such legislation but then obeys it to the hilt? Surely that is the problem that is endemic in the whole European structure; ultimately, it is the problem with which we will have to grapple.

§ Mr. Hogg
My hon. Friend is right on both counts, and his first point deserves reinforcing. The House will remember that the Leader of the Opposition said on 4 October 1994: Under my leadership, I will never allow this country to be isolated or left behind in Europe. As I have already said in reply to the hon. Member for Edinburgh, Central (Mr. Darling), there is no general agreement in the European Union on the need for change. We will bring about change only by pressing for it vigorously all the while. It is quite plain from what the Leader of the Opposition has said that he will be in no position to do that.

§ Dr. Strang
Does the Minister recall that, while his predecessors were telling the House that the MacSharry CAP reforms gave Britain all it wanted, the Labour party not only argued that they were inadequate but called for an end to state intervention buying of agricultural produce and an end to export subsidies on agricultural commodities? Will the Minister confirm that that is now the position of the British Government?

§ Mr. Hogg
The hon. Gentleman flatters himself. I have the 1992 Labour manifesto in front of me. It contained three paragraphs on the desirability of a ministry for women, and two sentences on the common agricultural policy—neither pointing in the direction to which the hon. Gentleman has just pointed.