Subsidiarity Assessment: Food Distribution (EUC Report)

Lord Williamson of Horton Excerpts

Monday 28th November 2011 Lords Chamber

[Lord Roper]

My Lords, I support the arguments that have been put forward by the noble Lord, Lord Carter, who chairs the European Sub-Committee of the European Union Committee dealing with agriculture, fisheries and the environment and who prepared the report that we are considering today. This is an important issue and one of the occasions on which this House has the opportunity to argue why subsidiarity matters and why some things ought to be done at a national level, not at a European level.

As the noble Lord said, the food distribution programme made sense when there were significant European surpluses. However, in the 24 years since the programme was introduced, probably at the time when the noble Lord, Lord Williamson, was responsible for these matters, things have changed. There are no longer surpluses that it is perfectly legitimate for the European Union to distribute to member states where there are needy people. The argument has therefore changed. That is why, despite the fact that the European Commission, in preparing its proposals for this document, modified them from the document on which this House gave an opinion about a year ago and suggested that there was a reasoned opinion against subsidiarity over the old proposal, in our view there is no longer a satisfactory situation.

We do not believe that any European value-added is produced by producing €500 million on buying things from the open market to give to needy people. Member states should do that—there are lots of reasons why they should—but that is a decision for the 27 member states of the European Union. That is why this report has been produced and why, although the earlier proposal has been withdrawn as a result of a judgment by the Court of Justice of the European Union, we still believe that this is a serious error.

As we say in our report, neither the proposal nor the Commission’s Explanatory Memorandum produces an explicit subsidiarity justification as required by Article 5 of the protocol on the application of the principles of subsidiarity and proportionality. However, it seems clear from the summary of the impact assessment that accompanied the original proposal of three years ago that the Commission sees three reasons for this. These include the view that the programme addresses problems of hunger, deprivation, poverty and social exclusion in the spirit of the treaty and that it supports the objective of strengthening the Union’s social cohesion.

Our report sets out our consideration of those justifications. I will not repeat them at length. The nub of our assessment, this year as last, is that the spirit of the treaties can be respected without the European Union acting in this respect. Moreover, we consider that member states are capable of acting individually to fulfil those objectives if they so wish, and in any case the failure of European member states to act is not in itself a reason why the EU should act. In conclusion, we again take the view that there is no compelling argument to suggest that the Union is better placed than its member states to ensure a food supply to its most deprived citizens.

We know that the Government share our view on this proposal—indeed, I believe that it is also the view of the opposition Front Bench—and in their Explanatory Memorandum they have stated their belief that,

“measures of this type are better and more effectively delivered by individual Member States through their own social programmes”.

The Scottish Parliament has taken a similar view and the Swedish Parliament, the Riksdag, has also issued a reasoned opinion sharing our view. Other member states such as Denmark and the Netherlands share our concerns, though we are not yet sure whether they have issued reasoned opinions.

The Government have told us that, unfortunately, agreement in principle on this measure has been reached following a decision by Germany to accept a time-limited extension of the scheme to the end of 2013. There appears to have been movement at the political level but certainly not, in our eyes, at the level of the underlying policy.

While the European Commission has made changes to the proposal that we considered a year ago, we think that those changes make no difference to our assessment of whether the proposal is in compliance with the principle of subsidiarity. We consider that it is not compliant with that principle and therefore recommend that the House should issue a reasoned opinion on the latest proposal.

[Lord Williamson of Horton]

My Lords, it was of course only in November last year that the House took the view that a proposal from the European Commission on the distribution of food products to the most deprived persons in the Union did not comply with the principle of subsidiarity, and we sent a reasoned opinion to that effect to the Presidents of the European Parliament, the Council and the Commission in accordance with the treaty. As the noble Lord, Lord Roper, stated, on 13 April 2011 the European Court of Justice annulled the provisions of the food distribution plan providing for purchases from the market. In consequence, the Commission has now submitted a new proposal, which we have before us, from 2011, document number 634 final, adding a new treaty base, Article 175(3) of the Treaty on the Functioning of the European Union, which relates to social cohesion. As has been stated, the reason for this is that the Commission wants to make market purchases a permanent source of supply for the scheme when there are no longer the intervention stocks that used to exist in the Union. They have gone and the Commission wants to turn to the market.

The European Union Committee of the House has recommended that the objection on the grounds of subsidiarity that applied to the earlier proposal applies equally to the new one, and that we should issue the revised opinion in paragraphs 5 to 11 of the committee’s report. I agree that we should be consistent and follow the advice of our European Committee. Of course there may be good reasons for supplying food to the most deprived citizens, but today we are concerned only to judge whether this might be done at EU level and on the EU budget. The principle of subsidiarity that is in the treaty on the European Union in Article 5(3) states inter alia that,

“the Union shall act only if and insofar as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level”.

We do not agree that this proposal corresponds to that part of the treaty.

Although the principle of subsidiarity may not have much impact, it is none the less an important provision. It is in line with much of British opinion and we should play our role in seeking to ensure that it is respected. As we seldom see the text of a Commission proposal for legislation in this Chamber, I would add three short comments. First, the Commission proposal, which as usual is clearly drafted and easy to understand, is not a law. Bureaucrats in Brussels cannot and do not make laws on a subject such as this. Substantive laws are made jointly by the Ministers of the member states in the Council and the European Parliament. This may seem self-evident, but in view of the widespread public misunderstanding, I emphasise it in this case.

Secondly, it is interesting to note that the European Court of Justice annulled provisions of the earlier proposal because the legal base was not sufficient, showing the value of the oversight by the court. Thirdly, and lastly, as has already been stated, this case shows clearly the transformation of the agricultural policy of the Union—the old CAP—as market intervention has been removed or drastically reduced and intervention stocks are no longer generally available for this scheme. I support the proposal of the European Union Committee of this House.

[The Earl of Caithness]

My Lords, I am delighted to follow and to support everything that has been said by the noble Lord, Lord Carter of Coles; our committee chairman the noble Lord, Lord Roper; and the noble Lord, Lord Williamson, particularly with his experience of dealing with the situation when it was entirely different. I propose to add nothing to what they say, but to ask a few questions of my noble friend. Does he agree with me that this is a serious matter? As far as I understand it, this is only the third reasoned opinion that this House has given, but it is identical to the one we passed on 3 November. Why are reasoned opinions passed by this House taken so lightly by the Commission? What negotiations has the Minister had with the Commission? What was its reaction to our previous reasoned opinion?

It is all very well for the Commission to make a slight tweak to what it presents to us because the European Court of Justice ruled it out of order, but that does not satisfy me. I want to know what the Commission has done to take on board our concerns. I hope my noble friend will update me on that. If the Commission does not take on board member states’ concerns about reasoned opinion, there is no point in us producing reasoned opinion. If it is as dismissive as it has been to date, it will only intensify the disregard and dislike of the Commission that many in this country have.

May I also ask the Minister about the current state of negotiations? I was appalled to read the letter from his fellow Minister, Mr Paice, of 15 November, in which the Germans seem to have decided with the French in, if no longer smoke-filled rooms, the corridors of power to do some dirty deal and produce a draft joint minute telling the rest of the European Union’s members what they can accept from the Germans and the French. That is pretty unacceptable, too. I hope that he has made strong representation to the Germans about this. Surely it is wrong in principle, as has been well said, for some sort of shady deal in which this matter is done at European level rather than at member-state level to the end of 2013. Let us hope that in negotiations about what will happen after that, when the French will be keen to continue this into the next round, the Germans will be in a weaker position than they would be if they remained firm and principled.

Common Agricultural Policy

Lord Williamson of Horton Excerpts

Thursday 18th November 2010 Lords Chamber

[Lord Williamson of Horton]

My Lords, I declare an interest as I spent many happy years in the Ministry of Agriculture, Fisheries and Food and some years also in the European Commission. Some of what I say will be of historical interest, but it is important to know how we came to where we are if we are to consider what changes and improvements we might seek.

The noble Lord, Lord Greaves, is right to refer to the reform of the CAP because that phrase is widely used. However, I would not wish to assume, as many people do, that there has been no effective reform of the policy. On the contrary, the EU’s agricultural policy bears little resemblance to the policy we adopted when we entered the European Community 37 years ago. To a large degree, the CAP as imagined by its critics is ancient history.

The CAP which became our policy when we entered the Community was designed to keep up and increase production, and to create a single market. With some difficulty, mainly because of currency, the single market was achieved. Where it was not achieved—sheep meat, for example—it was subsequently achieved. The UK is the principal beneficiary of the Common Market for sheep meat; we are a substantial exporter to other member states. It is worth noting that, from the historical survey before we entered the Community, British national policy was to increase production. We had subsidies to take out hedges, convert grassland and so on.

The old CAP was based on market management, through which prices paid by consumers were sufficient to ensure broadly that agricultural producers received the support prices that Ministers had decided. Direct payments for farmers played little or no role in the product market system. When I was in Brussels I once had in front of me practically all the officials responsible for running the CAP. I asked them if they had ever seen a cheque to a farmer. They had not. There were no cheques to farmers. Prices were maintained at the level decided by the Ministers through variable import levies—sometimes high, sometimes zero, depending on world market prices—through export refunds to clear the market and, most importantly, through purchases of a number of major products such as wheat, butter and skimmed milk powder by the intervention agencies.

What really mattered, of course, were the prices set by the Ministers. I believe that I attended about 100 meetings of the Council of Agriculture Ministers and about eight price-fixing marathons. Despite evidence of surplus or incipient surplus, the Governments, through their Ministers of Agriculture, were absolutely and obstinately determined to hold price levels up. I speak from personal experience, as I was present.

Of course, if Ministers had agreed some reduction in prices, there would have remained some disadvantages for consumers—as prices were still perhaps too high—and some distortions of world trade as a result of levies and export and refunds. However, the budget costs would have been substantially reduced because of the elimination of stocks in intervention. In any event, it was clearly the way to go. That was recognised in the European Commission from an early stage.

Then the steps were taken to get us where we are. First, elements of market support were reduced in 1992. Farmers were compensated by direct grants. In subsequent years, support prices were frozen or reduced. Land was taken out of production by set-aside. Agricultural surpluses fell. Farm incomes rose. The important Uruguay round of trade talks was successfully completed, partly because of the reduction in EU export subsidies.

With the arrival of the new member states, the substantial part of their workforce being in agriculture—and for other reasons, too—Heads of State and Governments kicked off again in March 1999. Prices were again cut, with compensation through direct payments for farmers. Support prices for wheat, other cereals and beef were cut by more than 15 per cent. Our then Government estimated that the overall economic benefit to the United Kingdom of the full-price cuts was about £1 billion.

In 2003, of course, we had the single farm payment. This marked a definitive change, away from support linked to the quantity of a product to a system of financial support directly to farmers, with requirements related to the environment, animal health and so on. Whatever problems we have had in England on the payment of the single farm payment, in policy terms this decoupling is a measure that reversed the philosophy and practice of the former CAP. We are now firmly set on this course. Already, by 2008 90 per cent of EU producer support was separate from any decision as to how much to produce. That is the last year for which I have figures; it is probably higher now. Thus the market- distorting element has largely disappeared. This continued with the proposals in 2008 which involved lifting tariffs on imported cereals, abandoning set-aside and scrapping milk quotas as a change in the world market situation influenced decisions.

It remains true that direct payments to farmers may be more expensive than the former system when there is an upward movement in world prices. There is some disadvantage to that degree. However, it is important—this is my final point—to keep in perspective the cost of the agriculture and food policy as it has now developed in the EU. The total budget of the EU in the most recent year represented 2.1 per cent of the public expenditure of the member states and less than 1 per cent of Community gross national income. The agriculture element—what is generally referred to as the CAP—represented slightly less than 1 per cent of public expenditure. I am talking not about GNP but about public expenditure by the member states. That is not bad value, although we should always try to keep unnecessary expenditure down.

As to the future, we should continue broadly on the line on which we are set. We should continue to phase out the things we set out to phase out. There is still some room for greater differentiation in favour of the less favoured areas, some of which are under pressure. Generally, we have set ourselves on quite a good track and we must not go backwards.

Subsidiarity Assessment: Food Distribution (EUC Report)

Lord Williamson of Horton Excerpts

Wednesday 3rd November 2010 Lords Chamber

[Lord Williamson of Horton]

My Lords, I, too, support the Motions of the noble Lord, Lord Roper, on the issue of subsidiarity arising on the amended Commission proposal on the distribution of food products to the most deprived persons in the Union. As in a similar case that we debated on 20 October, I consider that our EU committee has done well to examine the question of subsidiarity and to bring it to the attention of the House. It is worth recalling that subsidiarity did not feature in the original Treaty of Rome, but as the role of the Union developed, the member states decided that in cases of shared competence, a treaty provision was needed to police the division between legislative action by the Union and action by member states themselves. It is now a treaty requirement that in matters of shared competence, the EU can act only if and in so far as the objectives of the proposal cannot be sufficiently achieved by the member states. In the current state of public opinion, not only in the UK but also across the Union as a whole, it is important that the EU institutions should strictly respect this treaty requirement.

In addition, as a result of the Lisbon treaty this Parliament—under Article 5(3) of the Treaty on European Union and under Article 6 of the protocol, which has treaty force, on the application of the principles of subsidiarity and proportionality—can submit a reasoned opinion on Commission proposals to the European Parliament, the Council and the Commission. We are recommended to do so in this case and I agree that we should now make use of this provision.

There has been perhaps some exaggeration about the volume of our secondary legislation deriving from the EU. The figures that I looked at recently in the Library of this House show that the great majority of statutory instruments are of UK origin and that only a small number directly implement EU law. However, every EU legislative proposal which in our view does not comply with subsidiarity should be challenged. In the case before us today, the history, as other noble Lords have already said, is that from 1987 some excess intervention stocks of food were made available to deprived persons in the Union. In the circumstances of 23 years ago, that was sensible, and I am strengthened in my opinion by the fact that I was in the Commission at the time. That gives me a further reason for thinking that it was a good idea, as well as the advantages given to the noble Lord, Lord Teverson, in his role as Father Christmas at some stage.

However, radical reform of the common agricultural policy, which now bears little resemblance to the policy of the past, has removed almost all intervention stocks, and the welfare programme has turned to the market to buy food. The EU committee sees no compelling argument to conclude that the Union is better placed than member states to ensure a food supply to its most deprived citizens, if that is necessary, and accordingly considers that the proposal does not comply with the treaty requirement on subsidiarity. I support the view of the committee and, consequently, the two Motions tabled by the noble Lord, Lord Roper.