Tobacco-Growing: EC Support (Hansard, 29 June 1990)

§ The Earl of Strathmore and Kinghorne
My Lords, we have long been critical of the Community's tobacco regime. We have consistently argued that support for this crop should be reduced. In 1988 we secured the introduction of measures to reduce expenditure through the stabiliser mechanism. We shall continue to press for more effective control of expenditure in this sector.

§ Lord Boyd-Carpenter
My Lords, I thank my noble friend for that reply. Does he recall that as recently as last week I was told that the total subsidy given to the tobacco industry in Europe was over £700 million a year in value? Is he aware that many taxpayers in this country much resent their money being used to subsidise an industry which can do so much harm to health and life—all the more so because the exports are now being beamed very much to the third world? Is my noble friend aware that there is not only an economic but also a very strong moral question here on which a great many people feel very strongly?

§ The Earl of Strathmore and Kinghorne
My Lords, I thank my noble friend for his remarks. I think I made clear in my Answer to the earlier Question that the figure was nearer £150 million rather than £700 million.

§ Lord Boyd-Carpenter
My Lords, no, in total.

§ The Earl of Strathmore and Kinghorne
My Lords, in answer to my noble friend's other points, we are concerned about the detrimental effect on health that results from tobacco consumption. Therefore, we shall continue to press for reductions in all forms of support to remove the incentive to produce surplus tobacco, particularly the higher tar varieties, and to reduce subsidised exports by whatever route.

§ Lord Renton
My Lords, can my noble friend say how much of the £700 million that has been mentioned is paid by British taxpayers? Have the British Government no power under the constitution of the EC to decline to pay or to exercise any kind of veto that would modify the scheme?

§ The Earl of Strathmore and Kinghorne
My Lords, I do not have with me the figures mentioned by my noble friend. I shall have to write to him on that matter. As regards the second point, the fact remains that as a member of the EC we are only one voice in 12. There is no likelihood of our being able to eliminate all support for this product, which provides a major source of income and employment in the southern member states.

§ Lord Gallacher
My Lords, does the noble Earl recall that when a similar Question was asked and answered just over two weeks ago, I invited the noble Earl to request his right honourable friend to press for a complete review in the Community of the tobacco regime to take account of both the health and financial aspects of the regime? Furthermore, I suggested that it might be useful to employ biotechnology as part of the review to discover whether any alternative use could be found for these areas. Does the noble Earl not agree that part of the problem is that there is no alternative but to grow tobacco because of the soil and climate? Can the noble Earl tell the House whether that request has been looked at and with what result? Furthermore, does the noble Earl not agree that precipitate action of the kind mentioned in the Question may result in social payments being made to the growers which in the long term and in the aggregate would give no relief to Community taxpayers? Does he further agree that a more constructive approach is required to what is a serious problem?

§ The Earl of Strathmore and Kinghorne
My Lords, I think I explained a fortnight ago that because of the inherent limitations of the terrain, soil and climate in the areas concerned, no suitable and remunerative alternative crops are easily available. The idea of alternative crops is not straightforward. Other crops such as olives and vines are in surplus already. There is often not enough water for timber-producing trees. In any case, they do not yield income for many years. We believe that both a stringent approach to future price-fixing negotiations and long-term reform are needed to bring the regime under more effective control.

§ Lord Mellish
My Lords, is the noble Earl aware that in this House, in the other place and among the public generally there are very strong elements that are bitterly opposed to the EC and its membership? Does the noble Earl not agree that it is extraordinary that money we allow to the EC is spent doing the very opposite of what we are doing in this country? Can the noble Earl explain that?

§ The Earl of Strathmore and Kinghorne
My Lords, no, I cannot. We are in a dilemma.

Lord Bruce of Donington
My Lords, is the noble Earl aware of the basic content of the report of the European Court of Auditors on the accounts of the Community for the year 1987? It refers specifically to fraud in this particular area. Will he ensure that at the next meeting of ECOFIN the matter of fraud in the tobacco industry of Europe receives urgent attention? Is the noble Earl further aware that the approximate contribution involved is about 18 to 20 per cent.?

§ The Earl of Strathmore and Kinghorne
My Lords, I believe that we covered this point a fortnight ago. As I said then, this Government take fraud extremely seriously. I shall pass on the noble Lord's other point to my right honourable friend.

§ Lord Boyd-Carpenter
My Lords, will my noble friend clear up the total expenditure figure? If he looks at the reply that he made a fortnight ago he will find that the figure of £150 million was our contribution out of a total from the Community of £700 million. Does my noble friend agree that that is a massive subsidy which is being given to this industry? Is he aware that the argument that the area concerned can only grow tobacco could be the same argument used by Colombia to justify growing cocaine?

§ The Earl of Strathmore and Kinghorne
My Lords, on the matter of figures, my noble friend is correct. I apologise if I misled your Lordships earlier on. The attitude of the United Kingdom is to seek to reduce expenditure on the tobacco regime through re-orientation of production away from the less marketable and high tar varieties.