Trade and Industry Secretary Patricia Hewitt has vowed to fight for reform on EU tax rules which are forcing up prices and are "rigged against the High Street".

The Common Agricultural Policy (Cap) adds £8 or £9 per week to the food bill of a family of four - or £470 a year.

Because Cap subsidies and EU tariffs affect essential items, British families can't escape them and the poorest families are hit worst, she told the Consumers' Association in central London.

She said: "The poorest ten per cent of households spend ten times as much on food as the richest ten per cent. It's rigged against the High Street. It's difficult to see because it's not always transparent. But we pay for it twice.

"First in taxes - the EU gave £75.3 billion in support for agriculture between 1999 and 2001, the US gave £63.3 billion and Japan, £43.3 billion.

"We pay again in the shops through high prices on the High Street,"

Struggling mothers paid more too. Tariffs on baby food could be 20 per cent or even more and could add £12 a month to the cost of feeding a baby.

Ms Hewitt's attack on the tax system comes just three months ahead of the next round of world trade talks in Cancun, Mexico.

She pledged to reform the controversial Cap scheme and to change the European approach to agriculture.

She said: "1.2 billion people in our world live on less than one dollar a day. Yet we pay our dairy cows in Europe twice that under the Cap. It's lose-lose.

"For decades now agricultural subsidies in the US, Europe and Japan have foisted high prices on the High Street while the developing world has been headlocked in poverty."

If tariffs in the developed and developing world were halved the number of people living in poverty would reduce by more than 300 million by 2015 Europe spends the equivalent of Spain's entire GDP on protecting its agriculture and industries from a freer world trade.

Seven per cent of Europe's output is wasted every year propping up these sectors.

Friday June 6, 2003