Under the current subsidy arrangementsthere is an existing beef national envelope which is used to support suckler cowproduction in Scotland. Payments are made by way of an additional headage paymenton animals eligible for the Suckler Cow Premium.

A number of other measures requirefurther development and it is not possible to comment at this stage on their likelyimpact. The Executive will liaise with colleagues in HM Treasury and the Officeof the Deputy Prime Minister on the development of any such measures and to ensurethat, where appropriate, they take account of the Scottish context.

The Budget report refers to arecommendation in the report of the review of housing supply carried out for HMTreasury by Kate Barker, in which she proposes the introduction of a planning-gainsupplement to capture some of the development gains that landowners benefit from.While the UK Government agrees in principle with this proposal, it wishes to besure of a number of matters before deciding whether to proceed with such a measure.

The Budget statement announceda consultation on property investment funds If introduced, property investment fundswould be designed to improve the efficiency of property investment and improve supplyin the rented sector.

The Budget statement confirmedthe intention, announced in the 2003 pre-Budget report, to introduce a derelictland tax credit after further consultation to favour the development of brownfieldsites over greenfield sites.

Other fiscal announcements inthe budget relating to housing concern the government’s devolved responsibilitiesfor housing in England. In particular they relate to housing aspects of the2004 spending review for England and have no direct impact on the availability of affordablehousing in Scotland. The Executive’s 2004 spending review will take accountof the current review of affordable housing.

The Council marked itsrespect for the victims of the Madrid bombs with a period of silence.

The main item of fisheriesbusiness was a discussion on the Commission’s proposals for a regulation toreduce the level of small cetacean bycatch. After a long debate, politicalagreement was reached on the regulation, marking an important step forward inCommunity protection of these important species. During the debate, many memberstates expressed concerns about the resource implications of the proposal, bothfor the fishing industry and government. The UK lifted its request forexemptions from mandatory use of acoustic deterrent devices (“pingers”) in the0-6 nautical mile zone while arguing against a wide exemption for under 12metre vessels. We also expressed concerns about an exemption for vessels under15 metres from observer requirements. In the final agreement reached, however,these vessel exemptions were carried. Nevertheless, the UK welcomespolitical agreement on the regulation. Importantly, the debate shaped the regulationso that it now offers increased flexibility for those member states thatalready have robust bycatch data to design appropriate monitoring schemesalongside provisions for mandatory monitoring schemes for those that do not.Pilot projects will now be introduced to study the impact of pinger usage andto assess bycatch on vessels under 15 metres. Such schemes have to be designedto deliver good quality scientific data which will be used to review the regulationafter two years’ experience. Agreement was also reached on phasing in the useof pingers in the Eastern English Channel (ICES sub-area VIId). Finally,the regulation also provides for the progressive phasing out of drift nets inthe Baltic, which will culminate in a total ban on 1 January 2008.

Aregulation was also adopted to provide long-term protection to an area of coldwater coral reefs off the north west of Scotland (known as the Darwin Mounds) from the impact ofdamaging fishing activities. We were pleased that agreement had been reached toset the emergency, temporary measures forprotecting the area, put in place at the UK’s request in August last year, on amore permanent footing.

The only agriculturebusiness was further discussion of the Commission’s proposals for reform of theolive oil, cotton, tobacco and hops regimes, together with some technicalamendment of existing regulations to accommodate the new member states joiningthe EU in May this year. The Presidency acknowledged that several delegationswere not in a position to conclude negotiations at this Council and announcedan additional Council on 19 to 20 April in Luxembourg to deal specifically withthis package. Discussion concentrated on cotton, olive oil and tobacco andlargely re-confirmed existing positions. I stressed the case for theCommission’s proposal of 100% decoupling in the tobacco sector and joined thosearguing for a higher level of decoupling than that proposed for cotton.

Under other business,Commissioner Byrne reported on a recent visit to the USA,Commissioner Fischler reported on progress in EU/Mercosur trade talks and Austriaraised a point on harmonisation of approval procedures for pesticides.

Grazing committees in crofting areas are able to make a single application on behalf of a number of farmers. This allows the annual charges to be divided amongst the members of the committee, thereby significantly reducing the charge payable by individual crofters.

Notes:

*Charges in England and Wales for 2005-06 are not available.

All numbers are rounded.

Cattle keepers must registertheir animals and apply for passports within 27 days of birth. Initially some flexibilityin applying the rules was permitted to allow keepers to become familiar with thenew requirements. This approach could not be sustained indefinitely as it jeopardisedapproval of our system by the EU and had implications for the reputation of ourbeef industry, particularly in relation to export. All keepers were written to inearly October 2003 to advise them of the removal of the initial flexibility andthe importance of complying with existing deadlines.

The deadlines for tagging areincluded in the EC legislation. The Health and Safety Executive (HSE) have providedrecommendations on how to tag safely as we and HSE recognise that handling livestockcan be dangerous. If HSE identify any serious issues from their monitoring, we willconsider raising them at EU level.

Employment is a matter reservedto the UK Government. The Home Office is responsible for running the SAWS schemeand for the registration of other workers.