EC Tobacco Subsidies (Hansard, 8 July 1993)

Earl Howe
My Lords, the Treaty of Rome provides for tobacco to be eligible for support under the CAP. Expenditure requirements are a consequence of the support mechanisms adopted. The expenditure on the 1992 crop, which largely falls on the 1993 budget, reflects an expected larger harvest. This, however, is the last crop to which the unreformed regime applies.

§ Lord Boyd-Carpenter
My Lords, is it the implication of my noble friend's Answer that for the following year there will be a substantial reduction in this waste of taxpayers' money? While the expenditure for growing tobacco is further subsidised, is the expenditure on propaganda against smoking being similarly increased?

Earl Howe
My Lords, my noble friend is quite correct. The Commission estimates that the annual expenditure on tobacco subsidies as a result of the CAP reform agreed last year will reduce by over 25 per cent. between 1994 and 1997. We shall be pressing for further reductions at the next review. My noble friend is also correct in that the campaign to reduce the prevalence of smoking lies at the centre of the Government's The Health of the Nation initiative.

§ Lord Marsh
My Lords, is the Minister prepared to answer a simple question? Can he spell out to the House what are the main arguments against paying the growers of this exceptionally carcinogenic crop not to produce tobacco?

Earl Howe
My Lords, were the Community to cease its subsidies to tobacco growers completely there would be many hundreds of thousands of people, particularly in southern member states, who could not subsist. Furthermore, the Community would simply import the tobacco which it was no longer growing itself. It is much better to recognise life as it is by trying to reduce the level of smoking and by making sure that the tobacco which is grown in the EC is of the less harmful, milder varieties.

Lord Bruce of Donington
My Lords, is the noble Earl aware that despite the fact that expenditure under this head (Chapter B1-17) has been incurred at the rate of over 1,000 million ecus per annum, there has been no substantial diminution at all in the expense, although it has been widely proved to have been fraudulent from top to bottom and in some cases corrupt? Is the noble Earl further aware that, according to the recent preliminary draft budget, expenditure during the year 1994 onwards is due to be £994 million, of which one-eighth is to be borne by the British taxpayer? On the assumption that we are now really at the centre of Europe, will the noble Earl take 1510 steps to ensure that the preliminary draft budget which will come before the Council is substantially reduced?

Earl Howe
My Lords, the noble Lord's sentiments are not at all out of tune with those of the Government. For many years we have consistently campaigned for reductions in EC subsidies for tobacco, but with limited support from other member states. However, the recent reforms are a very definite step in the right direction. As I said to my noble friend, we shall be looking for further reductions in subsidies in 1996. Perhaps I may pick up on a point made by the noble Lord. As the United Kingdom does not produce or store tobacco and therefore has no receipts, the abatement agreed at Fontainebleau will apply in full and, in effect, our net contribution to the tobacco regime will be around 6 per cent. to 7 per cent. of EC expenditure.

§ Lord Clark of Kempston
My Lords. does my noble friend agree that an increase in subsidy is bound to result in an increase in the import of cheap cigarettes to this country to the detriment of our own tobacco industry, which gives to the Exchequer each year well over £6 billion—the equivalent of over 4p on the standard rate of tax? Can my noble friend tell me the logic of giving taxpayers' money to increase the growing of tobacco and at the same time banning advertising?

Earl Howe
My Lords, I believe that I answered my noble friend's final question a moment or two ago. However, what he says reflects the need for EC subsidies to be spent in a cost effective way, which does not disadvantage unduly those in the Community who grow the crop.

§ Lord Gallacher
My Lords—

§ Lord Wyatt of Weeford
My Lords—

Noble Lords
Lord Wyatt!

§ Lord Gallacher
My Lords, do Her Majesty's Government—

Noble Lords
Cross-Benches!

§ Lord Gallacher
My Lords, do Her Majesty's Government still support discretionary powers to enable member states to give preference to new producers of tobacco when allocating national tobacco quotas? Will not the use of such powers really prolong the problem?

Earl Howe
My Lords, we do not support any measures which result in a net increase in the amount of tobacco produced in the Community.

§ Lord Wyatt of Weeford
My Lords—