EC Tobacco Regime: Costs (Hansard, 5 February 1991)

§ The Earl of Strathmore and Kinghorne
My Lords, total expenditure on the European Community tobacco regime in 1989 was 1,139 million ecu (£746 million). Some 85 per cent. of this was spent on direct support for production; the remainder on intervention and export refunds.
Information on total expenditure by European Community member states on public warnings of the dangers of smoking to health is not available. The United Kingdom Government spend some £3 million per year on the Health Education Authority's programmes on smoking. Health warnings are printed on cigarette packets and advertisements in the United Kingdom at no cost to the taxpayer.

§ Lord Boyd-Carpenter
My Lords, I thank my noble friend for that far from comprehensive reply, inasmuch as he omitted all the European countries' expenditure on warnings against smoking. However, does he not accept that it is an absurd situation that we should be simultaneously financing the production of tobacco and financing the warning to people not to use it?

§ The Earl of Strathmore and Kinghorne
My Lords, my noble friend makes an extremely good point. As I have said on previous occasions at this Dispatch Box, the entire tobacco situation poses a dilemma. However, the Government are concerned to ensure that the tobacco regime does not undermine efforts to reduce the incidence of disease and early death attributable to tobacco.

Lord Bruce of Donington
My Lords, is the noble Earl aware that the reports of the European Court of Auditors in respect of the Commission accounts for the years ending 31st December 1987 and 31st December 1988 have drawn attention to the widespread fraud in the administration of the tobacco 1064 regime? Will he give the House an undertaking that he will take up this matter with his right honourable friend the Chancellor of the Exchequer, who is primarily concerned, rather than with his right honourable friend the Minister of Agriculture, who is more concerned with defending the regime?

§ The Earl of Strathmore and Kinghorne
My Lords, as I have said on previous occasions, fraud is treated extremely seriously by this Government. I shall endeavour to pass on the noble Lord's comments to my right honourable friend. However, in relation to Treasury ministerial attendance at the Agriculture Council when tobacco is discussed, there is well established and satisfactory machinery by which Ministers attending councils of the European Community clear their lines on important matters with their colleagues, including Treasury colleagues.

§ Lord Renton
; My Lords, cannot tobacco growers be persuaded to grow alternative crops of a more beneficial kind?

§ The Earl of Strathmore and Kinghorne
My Lords, because of terrain, soil and climate the problem is that few, if any, alternative crops are available. Almost all alternative crops, such as vines and olives, are already in surplus. Timber growing obviously has a long lead time and thereby produces no income for current tobacco growers.

§ Lord Hatch of Lusby
My Lords, can the noble Earl give the House the latest figures for the export of tobacco from Europe to third world countries, particularly high tar tobacco? Is it still the case that we subsidise tobacco growers to export to third world countries those tobacco products which are on the decline in Europe and push them there despite their high tar content?

§ The Earl of Strathmore and Kinghorne
My Lords, about one third of the European Community's tobacco production is exported outside the Community. Over two thirds of EC exports are sold to developed countries and only one third to developing countries of the third world. So only about 10 per cent. of EC production goes to the third world. Total exports in 1989 were 185,000 tonnes.

§ Lord Campbell of Alloway
My Lords, is my noble friend aware that in the context of this Question the decisions taken by the European Community are not governed by logic or reason, as the Question appears to suppose, but by purely political considerations?

§ The Earl of Strathmore and Kinghorne
My Lords, as I said earlier, the situation poses a complete dilemma.

§ Lord Gallacher
My Lords, can the noble Earl tell the House why his right honourable friend the Minister criticises with such vigour the Community regime for rice while adopting a somewhat passive attitude towards tobacco? Rice is a harmless if costly Community crop which is in surplus because consumers in the Community prefer to purchase rice produced in countries other than Europe. Can he say why the Minister is not more vigorous in his attitude towards the tobacco regime?—because that which is 1065 grown tobacco-wise is generally of poor quality and has little to commend it apart from the growers' acknowledged dependence on it.

§ The Earl of Strathmore and Kinghorne
My Lords, the noble Lord, Lord Gallacher, has made an interesting comparison with rice. However, as I said, because of the terrain, soil and climate few, if any, alternative crops are available to be grown on that ground.

§ Baroness Strange
My Lords, which countries in the European Community grow tobacco?

§ The Earl of Strathmore and Kinghorne
My Lords, mainly Greece and Italy.

§ Lord Boyd-Carpenter
My Lords, do not my noble friend's answers confirm that the Community's agricultural policy is a shambles? Can he assure the House that Her Majesty's Government are determined to remedy the situation, however unpopular they may make themselves in the process?

§ The Earl of Strathmore and Kinghorne
My Lords, I ask my noble friend to be patient. I understand noble Lords' anxieties about the EC tobacco regime. However, prospects for progress will not be clear for a while. First, we must see the outcome of the GATT round and how it will affect the way in which the CAP works at the Community's frontiers. Secondly, we must see what changes to the CAP will be made within the Community. We expect that the proposals from the Commission in this context will cover the tobacco regime. We know that it has been examining that critically. We hope that it will make robust proposals, as we have urged. Once those proposals are published tough negotiations will take place but they will take a good few months.