HL Deb 12 July 1993 vol 548 cc12-24

3.9 p.m.

Report received.

Clause 1 [Treaty on European Union]:

Lord Willoughby de Broke moved Amendment No. 1: Page 1, line 9, after ("II") insert ("except Article 3(e)").

The noble Lord said: My Lords, I make no apology for returning to the subject of agriculture and the CAP. The feeling of the Committee seemed to be unanimously in favour of reforming the CAP. I wish to make it clear that I am aware that the CAP as such is not referred to in the treaty, but Article 3(e) of Title II refers to: a common policy in the sphere of agriculture and fisheries". Whether lower case or upper case, I believe that the feeling of the Committee was—I believe that my noble friend Lord Ullswater on the Front Bench shared the view—that the agricultural policy, or a policy common to agriculture, needed reforming. The question is: how?

The point was made in Committee that Her Majesty's Government missed a golden opportunity to insist upon CAP reform in return for accepting EMU. If we accept for the sake of argument that it is now too late to go back over the Maastricht negotiations, it is important to ensure, nonetheless, that the same opportunity is not missed again either when the EC wants the UK to pay more money or when the treaty is next revised, possibly in 1996.

The amendment would ensure that the matter is not left to the discretion of the Executive and that Parliament has some control over what happens. I should have liked to have tabled a different amendment which focused on what I believed was required but I was told that the wording was out of order. However, in order to enlighten your Lordships, perhaps I may read out what it stated. There were only three short clauses. Clause 1 would have stated: Before 31st June 1995 Her Majesty's Government will lay before both Houses of Parliament a Command Paper setting out a draft of proposals to be submitted to the Council pursuant to Article N of the Treaty of European Union". Clause 2 would have stated: The said command paper will include the policy of Her Majesty's Government on matters requiring renegotiation, which will include reform of a common agriculture policy". Clause 3 would have stated: Her Majesty's Government will thereafter make such submission to the Council as either House of Parliament may by resolution direct".

That provision would have given the Government the necessary ammunition or authority to enforce real reform. During Committee the Government stated—

Lord Elton

My Lords, I am not sure whether my noble friend is addressing the amendment which he was told was out of order and therefore could not be tabled (in which case he is probably out of order in speaking to it), or whether he is addressing the amendment on the Marshalled List which we are discussing.

Lord Willoughby de Broke

My Lords, yes, I am; and I am using it by way of illustration to show—

Lord Elton

My Lords, my noble friend said, "Yes, I am", but he did not say what he was doing. Is he addressing the amendment which was out of order or the amendment which is in order?

Lord Willoughby de Broke

My Lords, I am addressing the amendment which is tabled in my name and which deals with the CAP.

There was a belief that reforms had been carried out last year by Mr. MacSharry and that those reforms should be given a chance to operate. However, I suggest that the reforms are like those of a cigarette smoker who decides to reform by taking up cigar smoking; they look like being even more expensive than the original habit. At present, 12 million acres of arable land are subject to set-aside and lie fallow. The beef subsidy system, which has been in operation for only a few months, is already a shambles. We have a control system for agriculture which is of extraordinary complexity and which will add enormously to the huge costs and bureaucracy of the common agriculture policy.

But the CAP is indeed a soft target. I know that the House is well aware of its shortcomings and I shall not go on about them. The question is: what can the Government do about it, if anything? How will we be able to influence decisions taken in the Council of Ministers at the behest of the Commission? We are now but one vote among 12. What other countries share our wish to reduce the excesses of the CAP? I suggest that there are few, if any. Not France, whose contribution has been to hold the GATT talks to ransom by stating that unless set-aside payments to European farmers are increased, it will not sign any GATT agreement. I may say that those increases are not minor; they are up to 50 per cent. And not Spain, Italy or Ireland, all of whom are large net recipients of the CAP billions.

Reform is demanded both outside and inside farming. It was useful and instructive to learn recently that a former president of the National Farmers' Union, Sir Simon Gourlay, has come down firmly in favour of root and branch reform of the CAP. It is a matter which needs to be seriously addressed. If we want genuine reform and if we want to return to a saner system of agriculture support which is sustainable in the light of cold economic reality, we must place the right weapons in the Government's hands to enable them to carry out such reforms and to negotiate effectively in the Council of Ministers on behalf of the farmer, the taxpayer and the consumer.

As one of the three net contributors to the Community budget we are in a strong position to argue for reform of the CAP or of a common policy in the sphere of agriculture. I believe that it would be entirely appropriate and correct for Parliament to give the Government a direction about the negotiating stance that they should take in 1996. I beg to move.

3.15 p.m.

The Earl of Onslow

My Lords, when my noble friend Lord Ullswater replied to this question in Committee, I found his answer completely and utterly unconvincing. I believe that I referred to it as auto-pilot Euro-gunge, which I believed it to be. There seems to be no awareness among Members on the Treasury Bench of the need for reform of the CAP. The British taxpayer is subsidising me to grow wheat. I do not mind being sulbsidised; in fact, I love being subsidised because the more subsidy that people can shovel into my back pocket, the happier I shall be. But. I cannot in all honesty stand and argue the morality of subsidising me to grow weeds. It is a silly thing to do We are subsidising people to grow weeds when there is a £50,000 million public sector debt. Can anyone in their right mind think of anything sillier? I cannot.

Furthermore, we impose an extra £1,000 per year on each family of four or on each person in those four—I cannot remember—as a result of overblown food subsidies. We have to stop that. Furthermore, I have already pointed out my great and good friend Odessa. Once the Russians cease to be grain importers—which they will as night follows day—and become grain exporters, the situation will become worse.

Unless and until that fact is received in the Ministry of Agriculture, Fisheries and Food, in the Treasury and by the bureaucrats in Brussels, there will be a disaster. I am sorry to say that in answering the previous debate, my noble friend Lord Ullswater appeared to have no conception—or, even worse, the Government had no conception—of the horror which is about to overtake us. Anything which can be used to persuade the Government to try to reform and to change this ridiculous policy is to the good. Therefore, I support the amendment.

Lord Stoddart of Swindon

My Lords, I listened to and read with great interest the debate in Committee on this subject, although I did not take part in it. I was interested to note that the Government and everyone else said, "You should not have a vote on this. Indeed, you should not have put this amendment down. We all agree that the common agricultural policy is a mess and a disgrace, and we should all like to do something about it. But you cannot do it in this Bill. You are entitled only to take out the provisions in Article 3a dealing with agriculture; you are not allowed to make propositions which will improve that article and improve agriculture". We were told that we were not entitled to do anything other than take out from the treaty an agricultural policy.

That is senseless. It is unfortunate that Parliament cannot have a point of view and suggest that to the Government without being told that it will mess up the treaty. But the Government could have done that, could they not? When they renegotiated the treaty and when they were dealing with the Maastricht Treaty, they could have said to our partners, "We shall not agree to the treaty unless you give an absolute and firm undertaking that the common agricultural policy will be altered and reformed very radically indeed". When the Government were negotiating the treaty, they had the power to do something radical about the policy and to threaten their partners, as they are so often threatening us, with a failure to agree the treaty unless something radical was done.

The noble Lord, Lord Willoughby, mentioned the article which he saw in The Times last Monday, 5th July, of an interview with Sir Simon Gourlay, the former secretary of the National Farmers' Union. However, the noble Lord was very modest and did not quote from the article. I intend to quote from it because the quotes are very good indeed. For those noble Lords who did not read The Times last Monday, perhaps I may read from that article. The headline is: Farmers' friend condemns insanity of EC subsidies". That is even further than I would go. The article goes on: Europe's farmers must be weaned from their addiction to public handouts if they are to have a secure future, according to Sir Simon Gourlay, former president of the National Farmers' Union.

Those unable to face life without a regular subsidy 'fix' should be encouraged to leave farming by a generously funded redundancy scheme.

Interviewed on his 850-acre cattle, sheep and cereal farm straddling the Powys-Herefordshire border near Knighton, Sir Simon admitted that he had once defended the kind of farm support he now believes must be abolished. The 'terminal insanity' of last year's much-trumpeted reform of the European Community's Common Agriculture Policy, he said, had hardened a growing conviction that nothing would be achieved by tinkering with the existing system". Therefore, Sir Simon is on our side. He said that it is no good tinkering with the system; it should be abolished. Those who criticise us and criticise the noble Lord, Lord Willoughby, for tabling this amendment are quarrelling with an expert.

I hope that we shall hear no more about the futility of our tabling such an amendment for discussion. I am only sorry that we are unable to discuss the matter in fuller depth in an effort to persuade Her Majesty's Government that they should take a much tougher line on this subject which wastes tens of billions of pounds every year and puts up the food costs for the people of this country.

I hope that after the debates, not only in this House but also in another place, when the Government are negotiating further treaties as no doubt they will—I hope that they will not, but no doubt they will do—they will take a much stronger line to ensure that anything which they may wish to give will be conditioned by a severe reform of the common agricultural policy.

Baroness Carnegy of Lour

My Lords, I agree with much of what the noble Lord has just said. He may remember that your Lordships' Sub-Committee D of the European Communities Committee produced a report some months ago which recommended precisely what Sir Simon Gourlay has now said. That is very encouraging. The sub-committee recommended that farmers might receive a bond were they to stop farming. Therefore, that is not news to your Lordships' House.

The point in the context of the debate is that the Maastricht Treaty has nothing to do with the CAP and is unrelated to it. In the context of the Bill, the question is whether the best way to sort out the CAP is by staying in the kitchen or by getting out, which is what we should do were we not to ratify the treaty.

Lord Hamilton of Dalzell

My Lords, I should like to give your Lordships a slightly different view on the common agricultural policy; namely, that it is seen by many people in the land as being a back-door nationalisation of our farming interests. That is against the policies and philosophy of the party on whose side I sit and I warn the party and the Government that they are losing votes at a great rate in the countryside.

Why is it a nationalisation of our farming interests? The reason is that we no longer have control over what we grow, the price that we obtain for it, our incomes or how we manage the land. The loss of labour on the land is being rapidly made up by an increase in civil servants. I believe that the Danes now have the same number of civil servants in their agriculture ministry as they have farmers.

If nothing is done about it, the Conservative support in the country will fail. We have seen the treaty go through. We know how it all operates. We see the negotiations taking place. Why have not the Government used their negotiating position in the treaty to obtain a better situation as regards the common agricultural policy? I feel that if your Lordships were to send a message back to another place, it would put some mettle into the Government and something might at last happen. I support the amendment.

Lord Carter

My Lords, as a number of noble Lords have said, the problem with the amendment is that it removes the words "a common agricultural policy" from the treaty. Of course, if it had said that it would remove the common agricultural policy as presently constituted, I am sure there would be a unanimous vote in its favour. But that cannot be done under the terms and the wording of the treaty.

A number of the arguments on the amendment are recycled from Committee stage. I can agree with all the criticisms of the common agricultural policy. I have spent half my professional life attempting to grapple with its nonsenses. I am always amazed that a group of supposedly intelligent politicians and officials could have produced a policy which fails the farmer, the taxpayer and consumer, damages the environment and harms the third world. We know that its bureaucratic complexities lead to endemic fraud which is estimated at some £6 billion per annum.

In passing I should say on fraud that we know that we have all had to go through the agonies of the integrated administration control system—IACS. We have had to fill in forms noting every animal, and every crop has had to be allocated to two decimal places of a hectare. We are told by the Government that we must do that to control public spending and because of the fear of fraud. However, a number of your Lordships will remember that from the late 1940s until the mid-1970s we had a system of agricultural support in this country. I refer not to the value of the system but to its administration. We had a barley subsidy which was based on acreage and a wheat subsidy which was based on tonnage. There were three kinds of fat stock subsidies—pigs, cattle and sheep. There was a calf subsidy. There was a grassland subsidy, a lime subsidy and a whole range of hill livestock subsidies. That was all managed efficiently, effectively and cheaply with hardly any fraud and with none of the nonsenses to which we have been exposed-under the IACS.

Of course the Government are right to say that we need IACS to prevent fraud. But we are not talking about fraud in the United Kingdom; we are talking about fraud in other member states. Therefore, I agree with all the criticisms made of the CAP.

However, before the Government become too excited about my support, I remind the Minister that during the general election of 1970, when I was a parliamentary candidate, I remember well that the Heath Government, when they were returned to power, were committed to ending the system of deficiency payments and replacing them with import levies, whether or not we entered the common market. That is the system to which we have moved, with all its problems. Therefore, I hope that the Minister will not pretend that all the problems that have arisen through that shift as regards the system were due entirely to the common agricultural policy because that was the policy of the Heath Government, whether or not we entered the common market. I can well remember on a number of visits to Brussels in the 1970s being told that to have a system of deficiency payments to support European agriculture was absolutely impossible and it was completely outside all the terms of the Treaty of Rome. But now, of course, with the MacSharry reforms we have a system of deficiency payments.

However, there is something to be said in favour of the MacSharry reforms. We heard much in Committee, especially from the noble Lord, Lord Tebbit, about the Franco-German conspiracy. The noble Lord fastened on to a remark made by the noble Lord, Lord Cockfield, in the debate about the "Franco-German conspiracy" as he defined it. I know that the noble Lord, Lord Tebbit, in his previous existence would have had nothing to do with conspiracies, but he fastened on to the latter as the central weakness of the common agricultural policy which was effectively the agreement reached in the mid-50s whereby the Germans were prepared to accept high farm prices for the French in order to have a market for their industrial exports. They were correct in that. Nevertheless, the MacSharry reforms will eventually bring all that to an end. Their intention—however ineffective they prove to be—is to bring our farm prices towards world prices and to make up the difference with a system of deficiency payments.

I should like to deal with just a few of the points that have been raised in the debate. We could all multiply examples of the absurdities of the common agricultural policy. The noble Lord who moved the amendment referred to the set-aside system. We all know that, as part of the French agreement to the oilseed deal in GATT, they insisted on a 25 per cent. increase in the compensation for set-aside. Therefore, as a result, every arable farmer who sets land aside in this country will receive something of the order of £24 per acre. That is very welcome news for the farmers, but of course it is completely barmy.

I support my noble friend Lord Stoddart who asked—and it will be interesting to hear the Minister's response—why the Government missed the negotiating chance that they had in Maastricht to try to insist on a fundamental reform of the CAP. I wonder what arguments were put forward that convinced the Government that they should not use that as a bargaining counter. They claim success in all the other negotiations in Maastricht as regards the various opt-outs, so why did they not use their chance during negotiations to insist upon a fundamental reform of the CAP?

Mention was made of the article in The Times by Sir Simon Gourlay, who is a former president of the National Farmers' Union and someone who I know well, and of the arguments produced by Sub-Committee D, of which I was a member. If we intend through a bond or any other system to help the European farmer out of farming we must be clear about the social effects involved. It will mean more and larger farms and fewer people on the land. We must consider most carefully the social effects if we attempt to remove farmers from European farming.

In conclusion, it is essential that a great trading bloc like the European Community operating a single market should have a common policy for agriculture to deal with its responsibilities in the wider world, as regards its trade in agriculture and food products. It must also ensure that there is, to coin a phrase, a level playing field between the European farmers when they compete with one another. There must be a common agricultural policy—and I emphasise that that is spelt with a small "c", a small "a" and a small "p". Unfortunately, the amendment does not deal with the situation. As all speakers have made clear, it is directed at the common agricultural policy (the CAP) that we now have and which, as we all know; is completely unacceptable. Therefore, in those terms, if the noble Lord was minded to divide the House, I would regretfully have to advise my colleagues to reject the amendment.

3.30 p.m.

Lord Bruce of Donington

My Lords, I shall be brief at this stage in order to save time. It has been said in the course of the debate that the common agricultural policy did not feature in the Maastricht Treaty and that, therefore, any reference to it is inappropriate. I am sure the noble Baroness will agree that the effects of the common agricultural policy, especially so far as concerns Britain's net contributions to the Community, present an all-pervasive element that certainly has considerable financial consequences and, indeed, has some effect on the budget, which will be the subject of a later amendment that I hope to introduce.

I hope that the Minister can confirm the following. When a meeting of the agriculture council takes place, is it true that the representative from the Ministry of Agriculture is accompanied by a representative of the Treasury? When the various pricing, intervention pricing and other arrangements are agreed on behalf of the Ministry of Agriculture, with the Minister himself speaking on behalf of the Government, is the Treasury there and is its concurrence required before the British representative arrives at an agreement? The reason I ask those questions is that there are stories which abound in Brussels. Some of them are true, although that is not always the case. However, there is a story, which is not entirely improbable, that when the price provisions of the agriculture council are discussed, the Treasury representative suddenly disappears and returns home in order to avoid the responsibility for any settlement that is reached.

As I said, that story may or may not be true. The Minister will certainly be able to disabuse me. However, the main question has some importance. I say that because the Chancellor of the Exchequer and the Treasury—I believe that Sir John Cope now has the job—carry a responsibility for monitoring very carefully the whole of the European budget, including agricultural expenditure. It would be nice to know whether there is a degree of enthusiasm and interest by the Treasury in the Commission's budget in order to ensure that the budgetary expense is kept within limits that are wholeheartedly agreed to by all sections of Her Majesty's Government.

Lord Harris of High Cross

My Lords, although the amendment appears to be imperfect for our purpose, I am anxious to support it. I do so because I am dissatisfied with a situation where, in every part of the House, there is almost universal agreement that the CAP is a monstrosity and yet we seem to fail to make any significant inroads into it. I take the amendment to be a form of protest; that is, a substitute for perhaps more violent action to indicate displeasure and dissatisfaction.

I am sorry to note that the noble Lord, Lord Peston, is not present in the Chamber today. I always treasure the rare episodes of agreement between us when he speaks as a professional economist rather than as an amateur politician. The other day I heard him denounce the common agricultural policy in terms that rejoiced my heart. Similarly, I found nothing to object to in what the noble Lord, Lord Carter, said—except, that is, in the sense that I should have preferred a touch more indignation in his description of the outrageous system.

The noble Earl, Lord Onslow, repeated the estimate of £1,000 per family of four as being the full cost of the CAP. That implies a cost to the nation in the order of £10 billion, £12 billion or perhaps £15 billion a year. However, it does not capture the full cost; it represents the direct costs and those can be easily measured. Frequently in economics the art is to penetrate beyond the direct, measurable macro cost to see what the longer term consequences of the policy may be.

As the noble Lord said, the guaranteeing of prices raises the cost of basic foodstuffs to all of the people in this land. I should preface this by saying the intention, and the direct visible effect of the CAP system, is to raise the incomes of farmers. It is intended to raise the income of small farmers above all but of course it disproportionately raises the income of large farmers. That is the visible, direct effect of this massive expenditure. The indirect, hidden consequences include, as I have said, the raising of prices for every family in the land. That is the direct effect of the guaranteed prices. The subsidies that we pay to farmers to add to their incomes raise the costs which filter through and become lodged in the production costs of our industry.

Baroness Elles

My Lords, I should be grateful if the noble Lord would allow me to intervene for one minute. He said the fundamental effect of the CAP was to raise the cost of food to the British public. Does he also agree that since we have been members of the European Community there has been no shortage of food whatsoever throughout this country, and indeed throughout the whole of the European Community, and that certainly does not apply to practically any other part of the world?

Lord Harris of High Cross

My Lords, I always admire the spirit with which the noble Baroness, Lady Elles, finds ways to defend even the less defensible aspects of this conspiracy against the public good. To say there is no shortage of food and that that is a bonus of this whole system is preposterous. There is a vast surplus of food that we have difficulty in getting rid of. Indeed we dump it on world markets and thoroughly distort the allocation of resources around the whole world. We undermine the markets for other countries that depend completely on producing foodstuffs and supplying them cheaply. What is meant by no food shortage? I give no marks at all to the common agricultural policy for piling up these surpluses, which are an additional source of cost because we pay dear for them in Europe and we sell them cheap or give them away around the world.

My argument is that the often less obvious consequences of the CAP are far more damaging than we allow. It distorts the use of resources and it burdens our costs. It reduces the competitiveness of our products. We possibly could save on average £1,000 per family of four, as the noble Earl, Lord Onslow, said. That would imply that taxes, or dare I say even wages, might be that much lower without reducing our living standards. Our products would therefore be more attractive around the world. I do not think for a moment it is the least bit fanciful or exaggerated to say that this system is one of the contributory factors to the high level of unemployment which we all deplore. We all disapprove of the system. I am not charging anybody with defending it but I am asking what measures we can take, and the Government can take, to indicate their displeasure, impatience and indignation that this system should continue for diminishing benefit at increasing cost. How does the Minister manage to sleep peacefully in bed at night when she has responsibility for this system continuing one day longer than it needs to?

3.45 p.m.

Baroness Chalker of Wallasey

My Lords, one does not feel after more than 19 years in Parliament that one is about to do something for the first time, except when one's noble friend is indisposed. This is the first agricultural debate I have replied to in more than 19 years in Parliament. I shall seek to answer the questions that have been posed and to put a coherent case as to why I do not believe that my noble friend's amendment is correct for the reasons that have been stated by a number of noble Lords. My noble friend was absolutely right when he said he understood that nothing was being changed in the sphere of agriculture and fisheries by the Maastricht Treaty. But that does not mean that no action is being taken. It is right that I should address that point as well as seeking to answer your Lordships' questions.

The noble Lord, Lord Harris of High Cross, has just commented upon the common agricultural policy and has mentioned his great disapproval of it. I do not disagree with him that there needs to be further reform of the common agricultural policy. However, I do not disagree either with my noble friend Lady Elles, who reminded us that the CAP was formulated in a period following the Second World War. Lest we forget, in those days farming was exceedingly depressed and people were still hungry in this country and in other parts of what is now the European Community. In those terms, the CAP was an attempt by others to try to put right the failure to have sufficient food within the region.

I accept that much needs to be done, and that is why we have sought to gain reforms to the common agricultural policy. I believe it is legitimate for the Community to have a common agricultural policy because all member states, as one noble Lord reminded us, have had support policies for agriculture and therefore a common policy is a prerequisite for free trade in agricultural products. However, it is the detailed provisions of the CAP, not the existence of a common policy itself, which have created the problems in Community agriculture. No one has been more assiduous in pointing out the problems of the common agricultural policy than the noble Lord, Lord Bruce of Donington. I shall return to his comment in just one moment.

It is the detail of the CAP which Her Majesty's Government will continue to work at to reform it still further. However those details are no part of the EC treaty and can be changed, thank goodness, without treaty amendments. Therefore we shall not have to wait several years more to make changes in the CAP should the reforms that we are looking for come about.

My noble friend who proposed this amendment said the MacSharry reforms were insufficient. I agree with him and I hope that what I have just said indicates that we shall not just stop with the CAP reforms of 1992. However, 1 believe they represent a significant shift in direction of the CAP by switching support from the end product to the producer; in other words, creating greater market orientation. Prices will be significantly cut and the CAP will move closer to world prices. I believe, too, that that will ease international trade tensions. That is why we should go along with these reforms.

There is a further good reason for doing so—I know the noble Lord, Lord Bruce of Donington, supports this—and that is that the reforms of 1992 will, when fully implemented, make the agricultural support system more transparent. That is something the noble Lord has long wanted to see. I give way to the noble Lord.

Lord Bruce of Donington

My Lords, I am most grateful to the noble Baroness for giving way. The noble Baroness indicated that the common agricultural policy could be fundamentally changed without amending the Treaty of Rome. Surely that is not the case. The whole character of the common agricultural policy and its fundamentals are laid down in Articles 35 to 47 of the treaty. Surely the noble Baroness will agree that they would need to be changed for there to be any really fundamental shift in the whole of the common agricultural policy.

Baroness Chalker of Wallasey

My Lords, it depends entirely what the noble Lord, Lord Bruce of Donington, means by fundamental shift. I was explaining some moments ago that the details which have been spoken about in this debate, and in the debate in Committee, are no part of the treaty. The details can certainly be changed without treaty amendment. If the whole system of support were to be totally turned on its head—I suspect that is not likely to happen in the way the noble Lord would like—perhaps he is right. However, he is certainly not right in relation to the details of the common agricultural policy.

I have already said that the Government do not believe that the reform yet goes far enough. We know, for instance, that some commodities are not covered by the 1992 reforms. It is important that other commodities such as sugar, wine, olive oil, fruit arid vegetables are also reformed. We are working on that and we shall continue to do so until we have a very much better agricultural policy than we have now.

One consequence of CAP reform will be an increase in the budgetary cost of the CAP, as the noble Lord, Lord Stoddart, mentioned. However, that will be more than offset by the reduced burden on consumers. Overall, the cost of the CAP to consumers and taxpayers will be lower.

Perhaps at this point I may take up the comments made by my noble friend Lord Onslow who claimed that the OECD estimated the cost to the consumer to be £1,000 per person per annum. Perhaps I may point out to my noble friend, and to the noble Lord, Lord Harris of High Cross, that that OECD estimate takes no account of the effect on world prices if the CAP and other support measures did not exist. It is likely that without support policies production would decline and world prices would rise. That is certainly true in many areas.

At the time of the 1992 reforms it was estimated that after full implementation of the package the savings to EC consumers would be of the order of £8 billion. The UK receipts from the CAP are set to increase from 7 per cent. to 9 per cent. That brings it much closer to our share of agricultural production, which is approximately 9.2 per cent. by value.

In the debate my noble friend Lord Willoughby de Broke mentioned the possible complications of the French position in consideration of the GATT agreement. Perhaps I may tell him—and there may be more discussion of the matter later today in connection with the Statement—that the French welcomed the progress reported by the Quad at Tokyo. I believe that when the Geneva negotiations are concluded not only will the Commission bring the results to the Council, but member states will already have had a chance to give their views to one another. Member states will then have to approve a global and balanced conclusion of the round. I believe that under those circumstances it would be exceedingly difficult for any member state to hold out against a deal which offers enormous benefits to the developed and the developing world alike. I sincerely hope that the course on which Sir Leon Brittan has set us to resolve the problems of the GATT will be successfully concluded.

Lord Carter

My Lords, I am extremely grateful to the noble Baroness for giving way. Surely the agreement of the French was in the Council of Agriculture Ministers and related to the problems of the oilseeds deal under the GATT oilseeds panel. It had nothing to do with the deal in Geneva. The French price for agreeing to the oilseeds deal in the GATT panel was a 25 per cent. increase in the compensation for set-aside, which is worth about £24 an acre to every farmer in this country who sets land aside. That is outside the Tokyo and GATT negotiations at present.

Baroness Chalker of Wallasey

My Lords, I agree with the noble Lord that that is outside the Geneva discussions. The noble Lord, Lord Carter, argued that set-aside was wrong. I shall come to that point in a moment. To answer my noble friend Lord Willoughby de Broke, I do not believe that the French will take lightly the agreement which has so far been reached. That was the point that my noble friend made rather than the 25 per cent. increase which the noble Lord, Lord Carter, has just mentioned.

Perhaps I may say to the noble Lord, Lord Carter, that set-aside is not a policy which the UK Government favour, but it is important that surplus EC grain production, which is very expensive to dispose of and disrupts world markets, particularly in the developing world, is reduced. That is why the United Kingdom has always argued that the price mechanism is the most effective way to reduce production and why set-aside is linked to 30 per cent. price cuts for cereals. Obviously, price cuts take time to have an effect on production. In this case set-aside can act more quickly. However, nobody expects set-aside to continue for ever and a day. One hopes that the price mechanism will come into play as quickly as possible.

The noble Lord, Lord Stoddart of Swindon, and another noble Lord mentioned the article in The Times by Sir Simon Gourlay, a past president of the NFU. I have already mentioned that the Government accept that further reform is still needed. That is why we continue to argue for it. But as my noble friend Lady Carnegy of Lour said, Sir Simon's comments are helpful. We shall certainly consider the implications of his remarks in order to make progress on the very reforms which we wish to see achieved.

I understand that the amendment was put down for a very sensible and understandable reason. I do not quibble one iota with my noble friend Lord Willoughby de Broke on that. But I have to say to him that, as the noble Lord, Lord Carter, indicated, it does not do what he seeks to do; namely, to achieve reform of the common agricultural policy. I have to advise your Lordships, as my noble friend Lord Ullswater did in relation to a similar amendment which we discussed during the Committee stage on 24th June, that if my noble friend were to press the amendment I would have to urge your Lordships to reject it.

Lord Willoughby de Broke

My Lords, I thank my noble friend Lady Chalker for her full and detailed reply, particularly since it is 19 years since she last answered questions on agriculture. However, I remain less than impressed by the hope that the present agricultural policy will prove less costly than the one which obtained before the reforms.

I very much hope that the feelings expressed on all sides of this House that reform of agricultural policy is needed will have come across to the Government Benches loud and clear. That cannot be achieved through changing details because I do not believe that tinkering with details will alter agricultural policy significantly. Root and branch reform is needed. I hope that those who have spoken about agricultural policy both in this House and outside the Chamber will have got the message across to the Government that we need some reform, and sooner rather than later.

At this stage I do not propose to press the matter to a Division. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.