HL Deb 09 January 2003 vol 642 cc1141-3

3.8 p.m.

Lord Dubs

asked Her Majesty's Government:

Which European Union and accession countries produce tobacco, and what is the present level of common agricultural policy support for the product.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)

My Lords, in the EU accession countries, tobacco is produced only by Cyprus, Hungary, Poland and Slovakia. Current producer members are Italy, Greece, Spain, France, Germany, Portugal, Belgium and Austria. In the financial year ending 15th October 2002, 952 million euros were spent on EU tobacco subsidies. At current exchange rates, that is equivalent to £613 million.

Lord Dubs

My Lords, is it not the height of absurdity that we should subsidise a product that damages public health and the use of which the Government sensibly try to discourage? We should use the CAP support for tobacco to help the tobacco farmers of the EU and the accession countries to produce more worthwhile products.

Lord Whitty

My Lords, I entirely agree. The United Kingdom has advocated the end of the tobacco regime for many years. However, the list of existing producer member states indicates that there is no blocking minority to stop the continuation of that regime. I hope that, in the review of the common agricultural policy to be carried out over the next few years, the tobacco regime will disappear and that any support for that area will be directed towards the ends suggested by my noble friend.

The Earl of Onslow

My Lords, is this not a perfect example of what is wrong with the EU? We spend £600 million a year subsidising tobacco and take £1 million from Bernie Ecclestone, agreeing not to ban advertising. He then gets his bribe back, and advertising is banned. That is totally crazy. It is Cloud-cuckoo-land. We have not been able to change it for 20 years.

Lord Whitty

My Lords, I am not entirely clear of the question. I agree with the first part of the noble Earl's comment. One of the main failings of the common agricultural policy is that it is very difficult to change in the light of developing science and developing public anxiety. Nevertheless, the position of the United Kingdom government throughout those 20 years has been to change the CAP radically and phase it out.

Lord Livsey of Talgarth

My Lords, would the Minister explain why the UK Government representative abstained in a vote on 19th March 2002 which has resulted in the continued subsidisation of tobacco growing in the EU? Was that voting action taken by the UK Government as a result of a trade-off in another sector of the CAP?

Lord Whitty

My Lords, the proposition at that time was the extension of rates of subsidy, not continuation of the regime. The rates were voted on by the majority of that council. Whichever way the United Kingdom voted would not have ended this unfortunate regime.

Lord Williamson of Horton

My Lords, is the Minister aware that before I became—

Lord Bruce of Donington

My Lords—

Noble Lords

Cross Bench!

The Lord Privy Seal (Lord Williams of Mostyn)

My Lords, perhaps we may hear the noble Lord, Lord Williamson, first, immediately followed by the noble Lord, Lord Bruce.

Lord Williamson of Horton

My Lords, is the Minister aware that before I became a respectable Member of this House I was responsible, for some years, for this regime? Therefore, I know quite a lot about it. It is a clearly indefensible regime. However, is the Minister aware that we must decide the best way of correcting it? I ask the Minister whether the best way of correcting it is to differentiate between the areas where there are alternative crops, where it can be simply phased out, and those areas where there are not alternative crops where perhaps some payment of a social kind might be justified?

Lord Whitty

My Lords, I reassure the noble Lord, Lord Williamson, that I have never held him personally responsible for this regime. Unfortunately, he was lumbered with it, as the rest of us are. If we take a rational approach to this, it is certainly true that some form of social or regional subsidy could be directed at areas such as northern Greece which are dependent on tobacco. Other areas could be given over to more beneficial forms of agriculture.

Lord Bruce of Donington

My Lords, are Her Majesty's Government aware of the fact that this entire tobacco scheme presently in force has been fraudulent from the beginning? It has been fraudulent in regard to claims; fraudulent in regard to the areas covered; and fraudulent in amount. When will Her Majesty's Government really put their feet behind a move to boot out this entire fraudulent regime—the existence of which is well known, but well hidden, by the Commission itself?

Lord Whitty

My Lords, the United Kingdom Government are behind any move to phase out this regime. As far as fraud is concerned, historically there has been very substantial fraud in this regime. Much of the fraud was tackled by the reforms introduced in 1992. I am not saying that fraud has been entirely eliminated but it did make a big difference to the level of fraud.

Baroness Hayman

My Lords, will my noble friend say what the Government could do not just to be behind but to be in front of any move to abandon the regime? Is it not true that European taxpayers are spending £613 million a year to subsidise the product that kills half a million European Union taxpayers/ citizens every year? Is there not an opportunity, in the light of the strains that the accession countries' rural economies will put on the CAP, for using that as a way of abandoning and replacing, where necessary with social payments, a regime that does no good to anyone except producers and a lot of harm to many others?

Lord Whitty

My Lords, my noble friend is clearly right in much of what she says. The pressures on the CAP give us another opportunity to try to get rid of this regime. The more immediate opportunity is that there is a review of the whole regime due to report within the next few weeks. That will be the immediate period where we can do what she suggests—namely, take the lead in arguing for its total demise.

Lord Willoughby de Broke

My Lords, will the Minister explain to his noble friend Lady Hayman that we have absolutely no chance? He has explained himself; it is for 20 years now that we have tried to reform the regime. We have had absolutely no success. We continue to be outvoted. What is the answer? Should we not leave the common agricultural policy altogether?

Lord Whitty

My Lords, the noble Lord, Lord Willoughby de Broke, is right if this issue is regarded in isolation from all the other pressures on the CAP. There are huge budgetary pressures, WTO pressures, and public opinion pressures which will draw out some form of very radical reform of the CAP as a whole during the next few years. That is what we are currently engaged in. It is to be hoped that the tobacco regime will be eliminated as a result.