EUC Report: EU Sugar Regime

Earl of Caithness Excerpts

Monday 3rd June 2013 Grand Committee

[The Earl of Caithness]

My Lords, I, too, thank the noble Lord, Lord Carter, for introducing this debate, which is very timely considering the negotiations that are going on with the reform of the common agricultural policy in Brussels and elsewhere. I have found it a huge privilege to serve on the committee for a number of years. My time is up and I have now moved on, but it has been a great pleasure working under the noble Lord’s chairmanship. His fairness both to us as members of the committee and to those whom we interviewed became one of his hallmarks.

One of the other hallmarks of his chairmanship was the noticeable improvement in Defra’s communication with the committee, which has now come to a grinding halt with this report. It is extraordinary that I received notification that the government reply had finally been received, after numerous requests from our clerk and endless telephone conversations, when I was in Romania last week. It is a wonderful place. It used to be a communist country and grows its own sugar. I managed to ask some of the farmers there what they considered would be an appropriate response, and I can tell my noble friend Lord De Mauley that his officials would all get promoted under the communist regime. The farmers felt that the bureaucratic system that they endured was nothing compared to what we are enduring in this country at the moment.

I really hope that my noble friend will get a grip on his officials. It is treating Parliament and the committee with contempt that we did not get a reply for nine months. Even the European Commission got its reply in during March. Perhaps my noble friend will take the message back to his department and ask his Secretary of State to write to the Leader of the House and apologise for what has happened.

Much that I wanted to say has already been said, which is a great relief and one of the advantages of talking in the House of Lords. I will concentrate on two points. One is paragraph 31 in our report, where we rowed behind the UK Government’s position that quotas must be abolished in 2015 and import tariffs on raw cane sugar eased. However, the game has changed. The Government have already agreed, as I understand it, to support the Commission in relaxing the date for the abolition of quotas from 2015 to 2017. Why did the Government do that? Why did my noble friend’s department move the goalposts in the middle of the CAP negotiations? What did we get for it? There has been a huge protectionist influence on the sugar regime, as was pointed out by the noble Lord, Lord Carter, and my noble friend Lady Byford, and yet we have already given way on this. It seems ludicrous to me; if there is a good explanation perhaps my noble friend could tell us.

On the points raised by the noble Lord, Lord Carter, on consumers, I thought that the Commission’s reply from Vice-President Šefcovic was perhaps a little arrogant, complacent and offhand towards the work of the committee. He was very dismissive of some of the suggestions that we put forward for the Commission. The noble Lord quite rightly highlighted the fact that precious little had been done on working with consumers, who, at the end of the day, are the ones who pay the bills. Have the results that were expected in February 2013 on the EEC study come in yet, and what are they?

In his letter, the vice-president states that the EU will undertake that in future, when the regime continues, the EU sugar growers and the EU sugar undertakings should have mandatory written contracts. I would be grateful if my noble friend could comment on that, on whether the Government find that acceptable and in what form those contracts will be.

The presence of my noble friend Lady Byford was hugely missed on the committee. It is one of the sadnesses of the ways in which some of our rules are interpreted that she could not take part. Her knowledge as a farmer and beet grower would have been immensely useful. She highlighted the briefing that we have received from the UK Industrial Sugar Users Group. I found that particularly interesting because it updates the graph in our report at figure 1 on page 11. It highlights how, since 2006, the EU sugar regime has failed. In July 2006, the EU average price for white sugar was 75% above the world market price in London and for a brief period in 2010 and 2011 they were about level. Then there was a coming and a going, but the work that had been undertaken and the falls that occurred started to work.

Since then, things have gone seriously wrong and the gap between the world sugar price and the EU reference price has increased from 75% to about 90%. That surely underlines the need for comprehensive reform of the sugar market. Unfortunately, it is already clear that that will not happen. The protectionist elements in Europe—other member states—are winning the battle. Employment opportunities in this country that are currently available will be in jeopardy unless significant reforms are undertaken. The industrial sugar market accounts for 70,000 people, with a turnover of about £12.3 billion, and that accounts for 70% of the sugar usage in the UK. It must be to our farmers’ advantage, to our employment advantage and more particularly to the consumer’s advantage that sugar is moved forward. Instead of it being a bitter pill, it should become a sweet pill.