HL Deb 23 November 1999 vol 607 cc314-7

2.51 p.m.

Lord Waddington

asked Her Majesty's Government:

What progress is being made towards reform of the EC flax regime.

Lord Carter

My Lords, the European Commission has just published proposals for the reform of the flax and hemp regime and detailed discussions get under way this week in Brussels. UK representatives will be pressing for an outcome which takes account of UK interests and views about CAP reform.

Lord Waddington

My Lords, I thank the Minister for his reply. Does he understand that my interest arises out of a recent visit to St Helena where I discovered that some time ago the flax industry, which was the mainstay of the economy, had completely collapsed because of the lack of any market or use for the product? Against that background, does not one learn with disgust that vast sums of money are being shelled out to farms in Europe to grow unwanted flax which is never processed because it is grown only for the subsidy; and that recently a small fortune was paid to the Spanish estates of the official then managing the EU farm support system? Is it not high time that that scandal was brought to an end?

Lord Carter

My Lords, it is true that there has been serious abuse of the regime in Spain. However, the cost of the regime is high. There is a substantial flat rate per hectare on flax and hemp, and the initial proposals from the European Commission are intended to reduce substantially the budgetary costs. But the matter of fraud is certainly well known and is one reason for the changes proposed by the Commission.

Lord Renton of Mount Harry

My Lords, does the noble Lord recognise that those problems occur not just in Spain but in the United Kingdom as well? Does he recall that two years ago 40 acres of precious grassland were ploughed up on a hill called Mount Harry in Sussex in order to turn beautiful grass into flax—a crop for which there is no market at all and which is impossible to grow because of the chalk and the flint? Surely that deserves rather more robust and quicker action by the Government than we have heard today. The scandal has been known now for some years and it gives the CAP system a bad name.

Lord Carter

My Lords, it is true that before the general election and the change of government there were a few well publicised cases of sensitive land being ploughed to grow flax. However, that happened because the land on which the crop was grown was not restricted. With the co-operation of the industry, MAFF has now introduced a voluntary protocol which excludes growing on sensitive land. I am advised that that has been 100 per cent successful in preventing a recurrence of the problem.

Lord Marsh

My Lords, is there anything particularly surprising about all this? It is the main reason the European Commission exists. People's jobs are at stake in the Commission: they have children and school fees to meet like other people. The Commission, for example, pays massive subsidies to encourage the countries within the European Union to grow tobacco, while at the same time employing large numbers of other people at considerable cost to work their whatsits off trying to persuade people not to smoke the subsidised tobacco. Why pick on flax? It is the nature of the beast.

Lord Carter

My Lords, I am sure that the noble Lord will be delighted to learn that the proposals from the Commission initially would reduce the area aid and the payment for flax from £535 per hectare to the rate for linseed, which is £467 per hectare, and subsequently to the rate for cereals of £241 per hectare. Therefore, obviously some school fees will not be paid.

Lord Haskel

My Lords, is the Minister aware that much research is taking place into the increased use of flax; for example, the wadding inside cars that have to be recycled is now made out of flax because it is much easier to recycle than if other substances are used?

Lord Carter

My Lords, that is very true. In fact, when I was briefed on this subject I was surprised to learn of the uses of linseed and, indeed, hemp. Obviously, I exclude the use of hemp for cannabis. Apparently, they are used for car panels, insulation, geo-textiles for land stabilisation and construction boards. I understand that hemp straw is particularly good for horse bedding.

Baroness Carnegy of Lour

My Lords, flax grows extremely well in Scotland and a great many farmers would be grateful to have an advantageous regime to enable them to grow it to a larger extent. Will the Government ensure that the Scottish Executive is represented in the current discussions about the regime, which the noble Lord mentioned?

Lord Carter

My Lords, the acreage of flax in the UK is 14,000 hectares. Almost all of that is in England. Only a small hectarage is grown in Scotland. However, it is correct that discussions with the various executives are taking place to ensure that there is a united UK approach in the negotiations, in which MAFF is the lead negotiator.

Lord Stoddart of Swindon

My Lords, is it not a fact that, flax apart, the whole of the common agricultural policy is just a great big expensive racket, absorbing over 50 per cent of the European Union's finances and injuring to a large extent British farmers, many of whom are going out of business every day? Under those circumstances, would it not be preferable if the CAP were repatriated to the nation states of the EU, at least for so long as they remain nation states?

Lord Carter

My Lords, if my noble friend intends to leave flax out of a Question about flax, I believe that his question must be wide of the Question on the Order Paper. But, yes, there is room for improvement in the CAP.

Baroness Young

My Lords, if it is the case that there is a real use for flax in this country, will the Government turn their attention to St Helena, which is an overseas territory for which we in this country have responsibility? Will the Government see what can be done to help that population, which has suffered terribly from the general demise of the use of flax?

Lord Carter

My Lords, I understand that that situation occurred because the St Helena industry was not able to compete. Therefore, I am not sure that it would be right to direct funds and a further subsidy towards an industry which is uncompetitive. Perhaps I may return to the proposal of the European Commission. A problem exists in that that proposal is geared towards the support of long-fibre flax and most of the flax in the UK is short-fibre.

Baroness By ford

My Lords, following the Minister's responses to my noble friends Lord Renton and Lady Young, are we not in the ridiculous situation of paying subsidies to grow something which we do not want in this country because it can be grown elsewhere? I understand that the total worth of the subsidy that we pay is four or five times the amount paid in EU cereal subsidy. Is it not time that we got behind this issue and supported Franz Fischler in his proposals to cut the EU subsidies, which will then help countries like St Helena, to which the noble Baroness, Lady Young, has just referred?

Lord Carter

My Lords, there is a demand for the flax that we grow as it is exported to Germany and is used in the car panels for the Mercedes and the Audi. The proposals as they stand would reduce the budgetary cost substantially but there is discrimination at the moment as between the long-fibre flax—the traditional textile flax—which the Commission is trying to support, and the short-fibre flax that we grow, which is put to a number of new and developing uses. Therefore, the whole object of the negotiation will be to reduce this discrimination while maintaining the savings on the budget.

Lord Pearson of Rannoch

My Lords, further to the noble Lord's answer to his noble friend Lord Stoddart of Swindon, does the Minister agree that, in the blissful eventuality that we were to repatriate our agricultural policy from Brussels, the Government just might be able to design something a little less idiotic and damaging to the environment, which costs the average family in this country £1,000 per annum in extra food costs and of which this flax regime is just one of dozens of crazy examples?

Lord Carter

Yes, my Lords, we all know that. We know that the CAP is in urgent need of overhaul. We have the Agenda 2000 proposals. If we did repatriate it, I am not sure what a number of noble Lords would do to ask Questions.