HC Deb 07 June 1990 vol 173 cc874-90
Mr. Gregory

I beg to move amendment No. 22, in page 7, line 44, after 'value', insert `and other costs, claims, damages and expenses incurred or suffered by the owner directly'.

Mr. Deputy Speaker (Sir Paul Dean)

With this we shall discuss Government amendment No. 10.

Mr. Gregory

The House will recall that new clause 7 was withdrawn after a debate in Committee on 3 April. Its purpose was to extend the compensation to businesses whose goods had been wrongly seized. It was rejected by my hon. Friend the Minister on the grounds that companies could complain to the Local Commissioner for Administration, that they could insure themselves against any loss, that any increase in compensation would deter action by local government enforcement officers arid that it would weaken consumer protection. I have carefully considered the arguments, but I do not think they are valid, which is why I have tabled the amendment.

Complaints to the local commissioner can be made only where there is maladministration or where a local authority has acted ultra vires. The amendment addresses costs arising out of genuine mistakes by authorities that are outwith the local commissioner's competence. Insurance for the sort of trade risk dealt with in the amendment is not obtainable, nor is it likely to be. I have carried out a review, in conjunction with the Food and Drink Federation, of the important matter of insurance. It is a new area of risk, falling between liability and business interruption. Insurance cover is not currently available.

Although such cover would be available in principle, in practice it is not attractive. Accordingly, it is the general view of those consulted that it would be difficult to secure that sort of cover, except at a very high and therefore unattractive premium. It may be possible for very large companies to press their insurers to devise a special policy, but that is unlikely to be the case for smaller companies. That view was clearly expressed in letters from the Association of British Insurers and from the Lloyds broker Willis Wrightson. On the important matter of insurance liability, Willis Wrightson said: We would anticipate that the cost and extent of additional insurance cover is likely to be analogous to the present market for Malicious Product Tamper Cover …since the effect of the two incidents would be similar—adverse publicity, loss of consumer confidence and loss of sales. In the Malicious Product Tamper market premiums are very high in relation to the limited cover available and therefore many companies do not insure this risk. The effect of a Notice being issued, although later withdrawn, could be particularly damaging to the smaller business who may suffer an irrevocable loss of sales and for whom the cost of insuring such as incident is prohibitive. I am sure that many hon. Members have such businesses in their constituencies. The letter continued: In conclusion, if the Bill passes through Parliament in its present form, if a Notice is issued and withdrawn, many businesses may find themselves with inadequate compensation and unable to purchase adequate insurance cover for this risk. The highly respected Association of British Insurers was consulted after the Committee stage of the Bill. Its assistant liability and accident manager wrote to the leading trade association, the Food and Drink Federation, saying: I am not surprised that your members have experienced a lack of enthusiasm from insurers … Whilst we cannot rule out any of our members providing part or all of the cover in question, or that Lloyds or 'fringe' companies may be a little more positive, it is clear from my enquiries that, in general, company insurers would not wish to offer terms. Exceptions could be made, however, to substantial and well regarded policyholders but this would be very much for the individual insurer to decide on a case by case basis and would not be generally applied. Those quotations from a leading Lloyds broker and from the Association of British Insurers show that, having checked the points made in Committee, it is frankly not realistic to insure against that important risk.

Mr. Maxwell-Hyslop

To reinforce what my hon. Friend says, even if the damage was directly due to maladministration by a local authority, the local government commissioner's findings are not binding. That is not merely a theoretical consideration; they are often ignored by the local authority against whom a finding of maladministration lies.

9.15 pm
Mr. Gregory

I am grateful to my hon. Friend who, in his wisdom, makes that additional point.

I do not believe that the additional compensation being sought would act as a deterrent to enforcement officers. I would be concerned if that were to be the case. If the Government believe that it would, they should be prepared to underwrite the cost of any such additional compensation.

My hon. Friend the Minister has argued, and I accept, that there is a price to be paid for ensuring public safety. However, under the Bill as presently drafted that cost will fall randomly and disproportionately on innocent manufacturers who are unfortunate enough to be the victims of mistakes by enforcement authorities.

Amendment No. 22 would not result in a single penny being paid in compensation to the guilty; it would result only in extra compensation going to innocent companies which have suffered loss directly as a result of wrongful seizure of goods.

Dr. David Clark

Amendment No. 22 and Government amendment No. 10 raise some of the ideological and philosophical aspects of the Bill. The hon. Member for York (Mr. Gregory) has clearly thought about the matter. I listened to him speak in Committee, and I listened to him carefully again today as he made a reasoned case.

The Opposition considered amendment No. 22 carefully. It caused much anguish. I listened carefully to the hon. Gentleman's words, spoken in a gentle tone, about deterrents to local authorities. The advice that we are getting from local authorities is that the additional compensation would act as a deterrent. Environmental health officers have written to me asking me to support amendment No. 10, not amendment No. 22.

The point was made pertinently this weekend in my constituency in connection with the shellfish scare off the north-east coast of England, with which the hon. Member for Berwick-upon-Tweed (Mr. Beith) was involved. The local authority, South Tyneside metropolitan council, received notices from the Department of Health that some molluscs were incredibly dangerous and should not be eaten, and the appropriate notices were served. Similarly, the Department of Health was concerned—rightly—about the possible health risks from some crustaceans—lobsters, crabs and prawns—and warned the local authority.

Under the current law, the local authority could not take any action, although it may be able to under the new law. For one week, crabs, lobsters and prawns throughout the north-east were withheld voluntarily by the fishermen at some considerable cost to themselves. I say voluntarily because the environmental health officer in my authority said that he could not officially impose any restriction on the sale of those products for the simple reason that he would then be liable to be sued because there was no evidence that there was any contamination in those particular kinds of shellfish—prawns, lobsters and crabs. There is routine testing of the molluscs, but there is no routine testing of crabs and lobsters. That is an example of where the present law is not right and I hope that the future law will be better.

Mr. Beith

I hope that the hon. Gentleman will note for the sake of clarification that the lobsters never did pose any danger and that the Ministry has now made clear that lobsters hygienically stored after being caught during that period are now regarded by the Ministry as safe to eat.

Dr. Clark

The hon. Gentleman and I have worked on that topic together, and I know that he takes a slightly different view. I think that the Department of Health was right. My feeling is that, if any doubt exists, public health must be the first priority. I personally support the Department of Health in its original decision. The hon. Gentleman is right in his comment about the lobsters, but it is made with the benefit of hindsight. However, I make the point that we have not yet received clarification in respect of crabs. My latest information is that crabs are still banned because there was at least one fairly high reading.

At the same time, I have great sympathy with the fishermen concerned. The hon. Member for Berwick-upon-Tweed will agree that the lesson to be drawn is that the Department of Health was not at fault but the Ministry of Agriculture. Although the Department of Health was responsible for issuing notices and giving advice, the Ministry of Agriculture had the responsibility for making the tests on the shellfish. The confusion that arose between the two Departments was outrageous. I shall indicate the extent of the confusion by quoting verbatim a Department of Health spokesman: The poison levels are very high. If people eat infected shellfish, they could end up in a large box being carried by six people. That is a fairly explicit and graphic warning. On the same day, the Ministry of Agriculture said that it was not treating the outbreak as a serious scare. I merely put those two statements to the House. Need I say more?

The Department of Health warned my local authority on Saturday 26 May that lobsters, crabs and prawns could present a potential health hazard. The Ministry of Agriculture was telling fishermen in my constituency that there was nothing wrong with lobsters, crabs and prawns.

Mr. Dorrell

indicated dissent.

Dr. Clark

That is what was said. The Ministers may deny that, and they may deny the official statements from the two Departments concerned as well. However, if they check, they will be able to confirm my claim. The statement from the Department of Health is even pinned up on the wall of the press office there because they are so proud of it, it was so clear—and I think that it was a particularly good statement.

Although my local authority, through the generosity of the fishermen, had samples of lobsters, crabs and prawns available, it was told by the Ministry of Agriculture that those samples could not be sent to Weymouth to be analysed because it was a bank holiday. They could not be despatched until the 6 o'clock train from Newcastle station by Red Star the following Tuesday. Here we are, talking about a matter of life and death, as the Department of Health acknowledged, yet there was no means of transporting samples from Newcastle to Weymouth because it was a bank holiday. It was farcical. It is about time that the Government got their act together.

Worse still, the Ministry of Agriculture told my local authority that, if the samples were received by Tuesday, as they were, it could have the results the following day and then clarify the position with the local fishermen. However, although the results of the test were given to the press on Thursday night, they were not received by my local authority until 14.18 hours on the Friday. For seven working days, although samples were available, there were no results of tests to be had. The fishermen, who voluntarily withheld their stocks, lost a considerable sum of money.

I accept that the Department of Health's action was right, but when there are mix-ups of the kind I have described, and when two Departments work at odds with each other, there is an incredibly strong argument for ex gratia payments. I hope that the Government will examine that aspect.

I laboured that point, and went through it in some detail because it highlights the sort of difficulty that the hon. Member for York put forward, but there are better ways of tackling the problem than the way that he is suggesting.

I am sometimes accused by the Government and Conservative Members of not always seeing eye to eye with the Government. That is no surprise.

We considered how the new arrangements would operate if there was a serious food scare, such as Chernobyl. It is clear that if clause 14 had been operative in 1986, we would not have had any restricted areas after the Chernobyl incident and that would have been a mistake.

My judgment and that of the Labour party is that, after reflection, the insertion of clause 14 in the other place was a mistake. I say unequivocally that we feel that the Government are right to seek to withdraw the clause. We shall support the Government on amendment 10. It is sensible and it puts the balance where it belongs—on the side of public health—and we support that.

Mr. Gill

In supporting amendment No. 22, 1 must declare an interest in the food industry. My hon. Friend will be aware of the serious concern in the food and farming industries that clause 14 should remain part of the Bill. It was inserted with all-party support in the other place, and has one straightforward principle—when the Government impose emergency restrictions to protect the public from a food or health hazard, any person who can subsequently show that their products were not affected by pollution or contamination should be compensated in respect of losses caused by emergency restrictions.

A recent example is the case of contaminated cattle feed. A number of farmers are likely to have suffered losses as a result of restrictions placed on them by Government emergency orders, yet can show that they were not in receipt of any of the contaminated feed.

I am not saying that the Government should be inhibited in any way from making full use of emergency powers to protect public interest. My concern is to protect the interests of those persons who inevitably get hurt in emergencies, but who subsequently are unable to establish a legal claim to recover their losses.

Clause 14 is all about compensation for producers and processors who may suffer losses as a result of Government emergency action to protect food safety. It would require the Government to pay compensation to a producer who could demonstrate to a justice of the peace that he had been incorrectly included in Government emergency action to protect food safety, and had suffered losses as a result.

Clause 14 is intended to ensure that Government powers are accompanied by Government responsibility in cases in which it is established after the event that action has extended to persons unconnected with any public health risk. For example, the Government may throw down a blanket of emergency action, much wider than sources of health risk, and in the process smother businesses totally unrelated to the risk. Such businesses should be entitled to compensation.

As it stands, the Bill makes provision for compensation for any depreciation in the value of food wrongly seized, but makes no allowance for any additional cost that a company might incur to replace the consignment seized. If food with a long shelf life is wrongly seized, the company may receive no compensation because no depreciation is allowed, but could incur substantial extra costs fulfilling an important order. It could have a major impact on businesses which, due to the seizure of the goods, would be unable to fulfill an export contract which might have been put against specific letters of credit. The company would not only lose the value of that order, but could sustain significant damage to longer term sales development in the fiercely competitive international food market. A similar situation applies in the domestic market, where retail and domestic customers require continuity. In many instances stocks could be replaced in the short term, due to the required incubation period of some products.

I know that my hon. Friend the Minister will argue that the industry could take out insurance cover. My hon. Friend the Member for York (Mr. Gregory) has instanced the evidence of the Association of British Insurers which has pointed out that such insurance would be difficult to arrange and extremely expensive. He compared it, appropriately, with trying to purchase malicious product tamper cover.

In summary, I urge my hon. Friend to state clearly that he accepts that it is inherent in the use of emergency powers that innocent parties may suffer irrecoverable losses, that he is prepared to consider the matter further and does not rule out the possibility of future legislation on the matter and that in the meantime he will look sympathetically at any cases which may arise in the use of emergency powers with a view to making ex gratia payments.

9.30 pm
Mr. Beith

[...] concerned to learn that the Government [...] get rid of clause 14, which was added to the [...]her place. Obviously, there is a case for looking [...] some aspects of clause 14—the specific way in [...] of damage is shown and the scope of the clause would extend the scope to cover the circumstances referred to by the hon. Member for South Shields (Dr. Clark) which arose in the fishing industry during the recent [...] scare, which still continues, although I hope that the stormy nights will clear the algae completely and will end the red tide and the mussel poisoning for quite some time. On that basis, I am prepared to put up with a couple more stormy nights.

The fishermen did not simply withhold stocks from the market; they saw the market drop severely for some time. It is inevitable that such incidents have a considerable effect on the market. The greatest problem was that the traditional ban on mussels, which occurs when the Government become aware of high toxins in mussels and quite rightly give quick notification, was extended much more widely than usual. It was extended by the Department of Health in quite strict and formal terms to crustaceans such as lobsters, crabs and prawns, although the Ministry had no evidence that there were high levels of toxins in any of those crustaceans. It is still not clear that there were high or dangerous toxins in lobsters, crabs or prawns, but fishermen were unable to market those products although there was no danger to human consumption and the levels of toxins which were found were still within the accepted safety levels. Therefore, there is at least a case to be considered that the advice went far wider than was necessary.

Perhaps the terms of the clause would not cover that, as advice was given on some products that were not covered by formal notices. But the effect is the same and the damage to fishermen's interests was considerable.

When the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, who was unfortunately described as one of the Minister's aides when he appeared in a photograph captioned: The Agriculture Minister surrounded by his aides", went to York on Saturday, no doubt he had to answer the question that has been put to me: why is it that, when a Minister makes a statement arid gives a misleading impression of the extent of salmonella in eggs with a disastrous effect [...] market, the Minister resigns and compensation [...] producers, but when advice is given which [...] than appears to have been necessary and [...] suffer damage to their livelihood no [...] whatsover is paid and the Government find [...] inconceivable? I was glad that the clause was raised for discussion tonight because it gives Ministers an opportunity to offer some explanation, as fishermen will look at the Bill and say that we need such provisions and that they should apply in such cases.

Mr. Maxwell-Hyslop

That must manifestly be the case because many producers are one-person businesses or very small groups of fishermen with no capital resources to carry them over a week or two to complete loss of income and having to throw away their catches.

Nobody is saying that the Government should be immune from making mistakes. Of course, they could not be. Nor is anybody saying that the Government should not take action to preserve and safeguard public health for fear of making mistakes.

The proposition is different. It is that, because there is bound to be a certain amount of error in safeguarding the public health, the cost of that should fall on the public purse and not on the private resources of the individuals or small groups of producers who are the victims of error.

In putting clause 14 into the Bill, the House of Lords recognised that such a situation exists and that it cries out for remedy. If there were a Government amendment to prescribe a different form of valuation for loss, we should be prepared to consider it on its merits. However, I cannot find on the amendment paper any substitute, but merely a bald removal of clause 14, and that is not acceptable.

Mr. McCartney

For the past two and a half years, the hon. Member for York (Mr. Gregory) and I have been involved regularly in cross-party matters in relation to consumer safety and to general consumer issues. We have been working with the manufacturers of products in attempting to improve the presentation and quality of materials in products. Where that has not been satisfactory, we have worked with Government Departments to improve the regulation of certain activities to ensure that the consumer is purchasing material that is safe to use.

Amendment No. 22 has been accompanied by a considerable amount of correspondence from those of us who have food producers in our constituencies. One of the biggest food producers in Europe, if not the world—Heinz—has a food processing factory in my constituency. Less than two years ago, the company went through the trauma of malicious tampering with its products. I tend to use the phrase "food terrorism". There was a criminal attempt to extort from that company and others several million pounds. I cannot go into detail about the action taken in case a court case is pending.

The company lost several million pounds of sales. It had to introduce new production techniques and equipment costing millions of pounds. The factory had to provide failsafe measures; it had to introduce new caps for baby food, and new training and security measures for staff in the factory. Even now, all that has not led to a complete restoration of the company's market share for the products involved. Those events led to copycat actions against Heinz and other companies.

I have a great deal of sympathy for those in the industry who argue that when malicious action is taken, whether it is committed for personal gain or through a failure to follow procedures in legislation, there should be some recompense. Such malicious action is light years away from criminal activity and from the activities of professionally trained, well-organised members of staff who are promoting food safety work, such as environmental health officers and members of professional associations. I have sympathy with what the hon. Member for York said about what can happen as a result of criminal activity and about what can happen when a Government have to take emergency action and, in doing so, catch in the net people who were not involved. However, that is dealt with under clause 14.

Amendment No. 22 deals with attempts by local authority officers to maintain the highest possible standards of inspection and, when necessary, to seize food that is suspected of being unfit for human consumption. Local health authority officers will be involved in two types of activities, one of which relates to tinned and non-perishable goods. An officer must prove that there is good cause for the action that he is taking and give positive proof that there is a danger to the public. When there is positive proof, it is important that he tries to obtain the voluntary withholding of goods until further action is taken to prove whether the goods pose a danger to public health.

However, matters are more difficult when it comes to fresh and perishable goods. As the hon. Member for Ludlow (Mr. Gill) said, when action is taken in relation to tinned foods there is not the same loss if a product is found to be safe at a later date, because tinned food is not perishable. With fresh and perishable foods, as the hon. Member for York said, if an officer's decision is proved to be wrong, manufacturers may attempt to seek compensation. I have worries about the way in which that case has been put forward.

I have always been interested in consumer and food safety, from the point of view not only of consuming food but of the good name of the companies concerned and the dramatic effect on companies if they fail to follow proper failsafe procedures. If a local authority must take action, there will be a consequent effect on the company's good name. If there is any doubt, an officer can take some goods for proper checking, with the consent of the company. Only if a company does not voluntarily take its product off the market should an officer use seizure powers.

Seizure powers are not new to this legislation—they have been available since 1956 under the Food and Drugs Act. I have heard no evidence this evening—perhaps hon. Members who support the amendment can provide it—that, since 1955, local authority officers have misused their powers in such a way that seizures have had adverse effects on companies. I know of no major case in which a local authority had acted irresponsibly or unreasonably in relation to its seizure powers under the 1955 Act to protect the public from exposure to food that was unfit for human consumption. It is up to the hon. Member for York and his colleagues to provide evidence of abuse if I am to have sympathy for their case.

It is important also that good professional officers should endeavour to encourage companies voluntarily to impound products pending further investigation. On the very few occasions that such action must be taken, it is important that officials work with companies on a confidential and voluntary basis to ensure that the local authority's action is prudent and in the interests of consumers and is not detrimental to a company's good name or activities.

In my view, only if a company is unreasonable and refuses to co-operate with the local authority officers should those local authority officers take the powers available to them under the current Act to protect the public. It is vital that local authority officers are not encumbered and that public safety measures should put the public and the consumer first.

Therefore, although I am sympathetic to the views expressed by Conservative Members—and some Opposition Members—I believe that the amendment would be detrimental to the work of those professional public safety officers who do not work in the same way as criminals who attempt to attack companies for their own financial gain. Those public safety officers work with companies every day to try to protect the public from any contaminated food reaching the shelves of our shops. That should be a major priority for those who support the consumers and the companies that sustain employment in our constituencies. The best thing for their future development is public confidence in the products that they produce. That is best achieved by a regular, professional working relationship between the companies and the local authority departments. The amendment does nothing to enhance that relationship. It builds a barrier between us and them on the pretext that local authority health workers are in opposition to the food production companies. That is not my experience, and I do not believe that it is the experience of any hon. Member.

9.45 pm
Mr. John Townend (Bridlington)

My only connection with the food industry is as a hotelier, but that gives me a vested interest in safe food.

If this debate had taken place three weeks ago, I should not have had the slightest hesitation supporting the Government's proposals to remove clause 14, which was inserted in the other place. However, unlike the hon. Member for South Shields (Dr. Clark) and in support of the hon. Member for Berwick-upon-Tweed (Mr. Beith) our experience of the way in which the Department of Health and the Ministry of Agriculture, Fisheries and Food have over-reacted with regard to toxins caused by algae in mussels has made me come to the conclusion that provisions such as clause 14 are needed to protect farmers, fishermen, traders and even restaurateurs from the overcautiousness and in some cases the misjudgments not only of the Department of Health, but of any other Ministry or public body. In such circumstances, traders, farmers and fishermen have the right to protection.

In my view, the two Ministries went over the top in this case by giving public health warnings not only for mussels, for which I readily accept that there was ample justification and evidence, but for all shellfish, including prawns, lobsters and crabs. They included other shellfish before they had the slightest shred of evidence that those species were affected by toxic levels that would cause poisoning to the public and before tests had been carried out.

That is a dangerous precedent. If we ban food before we have evidence of any danger, the French could—and have—done the same thing. They could ban our food saying, "We think that there is something wrong with it. We do not have any evidence, but we shall ban it until we have proof."

We have had a problem with algae in the north-east for many years, although until recently it has not come as far down as the Humber. I understand from Professor Edwards, who was, I believe, a scientist with the Ministry of Agriculture, Fisheries and Food before moving to the. Shellfish Association of Great Britain, that there have. never been any cases of such toxic poisoning from lobsters, prawns or crabs.

The problem has been the enormous amount of publicity on food safety. We have had salmonella and mad cow disease. I think that the Ministry panicked and issued warnings about lobsters and prawns which have subsequently been proved to be completely unnecessary. In such cases, Her Majesty's Government have a moral responsibility to compensate fishermen, traders and restaurateurs who have suffered financially from that overreaction.

We are told that traces of the toxins have been found in a few crabs. Last week, because of the problems of fishermen at Bridlington, I rang the Ministry of Health every day for a daily report. I can confirm one thing that the hon. Member for South Shields said: one does not get far on a bank holiday weekend. It perturbed me that after the bank holiday weekend I tried to get through to the Ministry on Tuesday. There was no reply from the private office. Everyone was on holiday, so I rang the duty officer. I could not get through to the duty officer. I got through to the telephonist who said that there were five calls holding. I said that I would leave my number for him to ring back when he was free. She said that she had instructions not to do that and that the officer could not ring people back. I said, "But I am a Member of Parliament." She said that it made no difference.

If the Government had thought that there was a possibility that for the first time ever the toxin would affect lobsters, crabs and prawns in addition to mussels, they should not have made an announcement but should immediately have taken samples and had them analysed within 24 hours. If they had obtained evidence of a public danger, it would have been right and proper to issue a public warning.

We must be careful that we do not become obsessed with food safety. People have stopped eating beef because of mad cow disease, chickens and eggs because of salmonella, soft cheese because of listeria and now we have a public warning about shellfish. On Saturday night I had a dinner party at which I served scallops and good English roast beef and no one was any the worse for it. [HON. MEMBERS: "So far."]

Every day that I rang the Ministry of Health, it was still testing crabs and still had not found toxin levels above the danger limit. It seems that having made a mistake, the Ministry desperately continued testing more crabs to prove that it was right. I was told by Professor Edwards that 400 crabs were tested and only four or five were found to have a level of toxin. If those figures are wrong, I shall be grateful if the Minister will give the right figures to the House.

The two Ministries have not acted satisfactorily on this matter. It will never come out, but I have the feeling that if it had been left to the Ministry of Agriculture, Fisheries and Food there would have been a warning on mussels and nothing else. I believe that the Department of Health went over the top.

I do not see why the mistakes and overreactions of the Government should be at the expense of my constituents, particularly fishermen. Opposition Members who have fishing constituencies know that fishermen on the north-east coast have had a bad year because the quotas have been reduced. This is the last straw. I believe that there should be some compensation in this case. I hope that the Government will consider it. The legislation does not exist to deal with that. I agree with the hon. Member for Berwick-upon-Tweed that the matter would not be covered by the new clause. I shall not support the Government in removing the new clause that was inserted in another place unless they give an undertaking to provide an alternative to it.

Mr. Martlew

I shall be brief. I am always worried when spokesmen on the two Front Benches agree and the Back Benches on the Government side begin to fill up. I can usually smell vested interests and that is the case now. We are having a strange debate. The Government took a decision. I wonder what would have happened if they had decided to say nothing and people had died. I wonder what hon. Members would have said. If one of his constituents had died, I am sure that the hon. Member for Berwick-upon-Tweed (Mr. Beith) would have said exactly the opposite of what he said tonight. That is typical of a Liberal. He wants it both ways.

Mr. Beith

Can the hon. Gentleman give a single case of anyone who died as a result of eating lobsters or crabs which had ingested toxins as a result of algal blooms at any time in history?

Mr. Martlew

It obviously makes the hon. Gentleman very bad-tempered. I can give an example of an alternative scenario involving corned beef. It was in Aberdeen. [Interruption.] The hon. Gentleman is being crabby but we shall have to put up with it. Someone said that there was an outbreak of salmonella, but in fact it was typhoid. About 20 people died and the corned beef industry was destroyed for a generation. If action had not been taken on shellfish and people had died, the crab and lobster fishing industry would not have suffered a hiccup; it would have been destroyed. That would have been a crime.

If there was any neglect on the Government's part in not having the tests carried out, the fishermen affected should be compensated, but we must always err on the side of caution to protect the industry in the long term as well to protect the consumer.

People argue that if a mistake is made in the advice given, the private sector should not be expected to pay; rather the public should. I accept that, but the public already pay for the inspection of factories and the tests that are carried out when things go wrong. I believe that the food industry should pay for the inspections carried out on their factories and any illness suffered by the public from their products. Often those companies do not volunteer to pay money to people who have suffered from food poisoning. The argument always seems to be that if it has anything to do with business the public should pay, but when it comes to social security people are expected to manage on what they receive.

I believe that the Government acted in the best interests of the industry in the long term by being cautious. The day that environmental health departments hold back or Ministries delay in case their decision might cost money will be the day we have a tragedy.

Mr. Richard Alexander (Newark)

I have some difficulty coming down on one side or the other having read all the briefings. I have reached a conclusion, but it has been difficult having heard the arguments on both sides. It is not an easy or simple matter, as one must have already concluded from the speeches of the hon. Member for South Shields (Dr. Clark) and my hon. Friend the Member for Bridlington (Mr. Townend), whose views were diametrically opposed.

On balance, if I were the Minister, I would be seeking to have clause 14 removed from the Bill. In food emergencies the Government are in a no-win situation. The shellfish example demonstrates that. I have a great deal of respect and affection for my hon. Friend the Member for Bridlington, but I profoundly disagree with him in this instance.

The Government are often criticised on food matters for not taking a robust enough line. But some hon. Members, regardless of party, may say that they have taken an unnecessarily robust one. On balance, the Government must be able to introduce emergency food measures uninfluenced by whether compensation may have to be paid if they make a mistake. They must act on the advice of their food scientists uninfluenced by how much it will cost the taxpayer to provide compensation. The Government would be thought to be acting in bad faith if they took no action bearing in mind the fact that compensation might follow. Their critics would argue that they had taken no action, not because of bad advice, but because of the possible financial consequences.

Often the necessary action that is taken immediately might, with hindsight, be proved to be more than absolutely necessary. Recently we have been in dispute with our European partners about beef. Our food exporting industry requires and demands that we take action on food safety grounds alone. If clause 14 was in place, that confidence would be undermined. Sometimes action must be taken which, with hindsight, would be excessive, but we must not leave a Minister feeling that he cannot responsibly take a certain course because of the consequences.

If the Government are found to be acting capriciously, that is a matter of maladministration, a matter for the ombudsman and a matter for ex gratia payment. I hope that when he replies, the Minister will say that, should that be the case, ex gratia payment would follow.

Where I part company with what I believe to be the views of the Minister is in his hope that the matter can be covered by insurance. The NFU rightly says——

It being Ten o'clock, the debate stood adjourned.

Ordered, That, at this day's sitting the Food Safety [Lords] Bill may be proceeded with, though opposed, until any hour.— [Mr. Fallon.]

As amended ( in the Standing Committee), again considered.

Question again proposed, That the amendment be made.

Mr. Alexander

We understand from the NFU that there is no appropriate compensation against losses of the sort contemplated. The insurance industry says that compensation is possible, but that there would be a very heavy premium. If the NFU recognises the Minister's dilemma, will he, in turn, recognise the NFU's and possibly introduce a fund or scheme which may compensate producers who are in the position that would otherwise be dealt with by clause 14? The producers' campaign must be seriously addressed. Discussions must take place with the Country Landowners' Association and the NFU to resolve the problem. In that light, I shall be supporting the removal of clause 14.

Mr. Dorrell

I have seldom agreed with my hon. Friend the Member for Newark (Mr. Alexander) so much as I did when he said that the issues raised by this debate were difficult for the House to decide. The matters which we have been discussing for the past 45 minutes or so raise some difficult and fundamental issues with which I will deal in as orderly a way as possible.

I must at the outset separate the three issues that the House has been addressing in this debate. The first is that raised by the amendment in the name of my hon. Friend the Member for York (Mr. Gregory)—whether the compensation payable under the terms of clause 9 should be restricted in the way proposed by the draft or whether they should be extended in the way proposed by my hon. Friend. The second issue is whether the Government should be liable for compensation for emergency orders issued under clause 13. The third is the handling of the shellfish issues in the past fortnight.

First, on the two compensation issues, the Government have considered carefully the matters that were raised in Committee. Despite the important arguments that were advanced, we have decided to seek the consent of the House to the Bill as originally drafted and that compensation should, therefore, be limited to the amount by which the food depreciates during the time that it is subject to the order issued by the environmental health officer.

The amendment seeks to extend the scale of compensation payable by allowing the owner of food to claim other costs, damages and expenses incurred directly. The first question raised by that concept is what is covered by the definition of "direct cost." Before coming into the House I was employed in business and was present at many theological debates about the nature of direct cost. To include in a statute the provision that the owner of food should be entitled to compensation based on direct cost raises problems and poses more questions than it answers.

The Bill contains important safeguards about the way in which an environmental health officer should use the powers granted to him by the Bill. The most important of those safeguards is that no action that he can take under clause 9 can be made to stick unless he can convince a justice of the peace to support him within 21 days. If he cannot so convince a JP, compensation under the limited terms provided by the Bill becomes payable. That is an important safeguard.

My hon. Friend the Member for York said that he does not think that the risk of the wider definition of cost would be insurable. The Government have taken advice from the insurance industry and our advice is to the contrary. The insurance industry assures us that in principle these risks are insurable and that the industry is willing to listen to any serious and properly backed proposition which the food industry will make for insuring the wider risk that my hon. Friend seeks to cover.

Mr. Maxwell-Hyslop

As a letter read out by my hon. Friend the Member for York (Mr. Gregory) made clear, what may be available to a very large firm which is already insured, as an extension of that insurance, is wholly different from what may be available to a fisherman or a small group of fishermen who have not been insured for risks of this kind before and are trying to do so per de novo. What is the Government's advice about that? I am not talking about finance.

Mr. Dorrell

I accept the force of my hon. Friend's argument. It is, of course, true that an insurance broker will assess the risk of each proposition that is put to him. No broker can accept on the same terms all risks that are put to him. The advice stands that in principle the risk is insurable. That is the key point that the House should bear in mind.

Mr. Michael Stern (Bristol. North-West)

I have an indirect interest in this matter because I am a partner in a firm which has an insurance interest. My hon. Friend says that an insurance broker will quote for a risk. Most insurance brokers can quote for any risk, but they can make sure that no insurance is offered by quoting a premium which makes the risk totally uninsurable. Will my hon. Friend the Minister write to my hon. Friend the Member for York (Mr. Gregory) giving the range of insurance premiums that have been quoted to him?

Mr. Dorrell

I hesitate to set myself up as a sort of poor man's insurance broker, because I am not sure that that is a proper course of employment for a Minister of the Crown. This is not the only basis on which we are seeking to persuade the House to reject my hon. Friend's amendment. The key point is that this is an insurable risk, but that it would be on different terms for different customers.

Mr. Gregory

My hon. Friend lays great stress on the point that this is an insurable risk. Before coming to the House I was careful to check my sources, the Association of British Insurers and a Lloyd's broker. Will my hon. Friend reveal to the House his sources in the insurance market because they are plainly at variance with the leading insurance association and the Lloyd's broker? This is an uninsurable risk. My hon. Friend the Minister spoke about direct costs. Surely that is a matter not for the House but for the interpretation of the courts.

Mr. Dorrell

The source of our advice on the insurability of risk is members of the council of Lloyd's. I take my hon. Friend's point about the definition of direct cost, which has some force, but before putting it on the statute book the House should consider how easy it would be to apply such a proposition.

It is also right to draw the attention of the House to the fact that the Government are committed to setting up an implementation advisory committee which will be asked to advise on the code of practice for enforcement authorities covering the detention of food. Interested parties will be able to comment on the draft code before it is finalised and the code will cover use of the powers contained in clause 9.

The other issue covered in the debate was whether the Government should be liable to compensate for losses arising as a result of the exercise of their powers under clause 13. I am grateful to the hon. Member for South Shields (Dr. Clark) for the support that he offered for the Government's central case on this subject, but he also charged that there was confusion between my Department and the Ministry of Agriculture, Fisheries and Food as a result of the shellfish incident which started over the bank holiday weekend. I was involved in the consultations over that weekend and the following week. There was no confusion between Departments. Those who attack the way the Departments acted on the grounds of confusion often cannot define whether they want to attack us for sloth or for being over-zealous. That charge cannot be levelled against my hon. Friend the Member for Bridlington (Mr. Townend). He is clear as to why he is unhappy about the way in which the powers were used, as was the hon. Member for Berwick-upon-Tweed (Mr. Beith).

It may assist our deliberations on these issues if I announce that we are withdrawing our warning against the eating of crabs caught between the Humber and Montrose. This decision has been taken in the light of further extensive tests by the Ministry of Agriculture, Fisheries and Food on crabs caught off the coastline from the Humber to Montrose, which have shown in the majority of cases that there is no measurable toxin present. In about 10 per cent. of samples where toxin was found in crab meat, it was at levels that posed no risk to human health. The Department of Health's advice on not eating crab is therefore withdrawn.

Further tests on molluscan shellfish have shown that current levels of toxin are such that the public must, until further notice, continue to refrain from eating them. Consequently, the warning about molluscan shellfish such as mussels, winkles, whelks, oysters and scallops caught between the Humber and Montrose remains.

Mrs. Teresa Gorman (Billericay)

What about cockles?

Mr. Dorrell

I think that cockles are covered by the warning. The Department of Health, the Ministry of Agriculture, Fisheries and Food and the Scottish Office are continuing to monitor the situation closely and will lift the warning on molluscan shellfish as soon as it is safe to do so.

Mr. Beith

I am grateful for that welcome announcement. Although the Ministry may have acted in good faith in believing that it was prudent to warn against eating all these species, as it is now clear that it was not at any time dangerous to do so, will the Under-Secretary ask the Ministry to consider again the point that the fishermen are making?

Mr. Dorrell

The hon. Member for Berwick-upon-Tweed misses the point. When the warning was issued we could not reasonably have reached that conclusion. The hon. Gentleman has asked—as did my hon. Friend the Member for Bridlington—why those species were included in the warning. That was because they eat shellfish such as mussels, and could therefore ingest the toxin. We felt that that was the prudent course of action, and was in the interests of the health of the public. Besides, as the hon. Member for Carlisle (Mr. Martlew) pointed out, credibility is in the long-term interest of the industry.

10.15 pm

In the interests of the public, we concluded that it was right to issue warnings covering crustacea, as well as mussels and other shellfish. I ask the House to consider what the attitude of hon. Members and the public would have been if we had later found out that those species contained high toxin levels, and our explanation was that we had not found an example on that bank holiday Saturday. It is well known that crabs and lobsters feed on the species that were the subject of the warning and it would have been irresponsible of the Government not to include those species in the original warning.

Mr. Elliot Morley (Glanford and Scunthorpe)

Our point is not that the Government acted irresponsibly in being cautious about crabs and lobsters. Opposition Members have made it clear that we accept that the precautionary principle should apply when there is an element of doubt. However, nearly two weeks have passed. Can the Minister confirm that at no time have levels of toxin in crabs been over the danger level in that period? Will he futher confirm that there was a delay of seven days in testing samples of crab meat? On that basis, the fishermen deserve an ex gratia payment.

Mr. Dorrell

The hon. Gentleman and my hon. Friend the Member for Bridlington have asked about toxin levels in crabs. As the House knows, the safe level—established over many years—is 400 units. Toxin levels of up to 317 units were found in crabs during the testing period in 10 per cent. of the samples taken. In the case of lobsters, toxin levels of up to 227 units were found in 10 per cent. of the samples taken. Both those figures are under 400, but are levels of toxin that could give some cause for concern. After all, no level of toxin is a particularly nutritious food.

Given the background of risk—that those species feed on other species in which very high levels of toxin were found—I feel that the Government have taken the correct decision.

Mr. John Townend

Can the Minister assure the House that the Government will learn from the experience this year, and that, if next year high levels of toxin in mussels again require a public warning, such a warning will not be given for lobsters, prawns and crabs unless tests have been made that show levels of toxin that are dangerous to the public?

Mr. Dorrell

I am happy to give an assurance that Ministers will always try to learn from their experiences. I cannot give a blanket assurance that we will never again issue a warning in similar circumstances against lobsters and crabs, but we shall seek to learn from the experiences of the past fortnight.

Government amendment No. 10 would remove clause 14 from the Bill. There are several reasons for that. First, I ask the House to consider the position in which the Government would be if the Bill were passed unamended. They would be in an extraordinary position: if they issued an order that was ultra vires, no compensation would be payable. It is well known—and has been for many years—that compensation is not payable in those circumstances. If we issued an order beyond our powers, no compensation would be payable. However, if we issued an order within our powers which was later found to be unjustified, compensation would be payable. It is rather odd to pass legislation that puts the Government in a better position if they act beyond their powers than if they act within their powers.

I take seriously the argument that the Bill, if unamended, would be a serious disincentive to action by Ministers. We must preserve the position of Ministers acting when necessary to protect the consumer. One Opposition Member made the rather telling point that we must deal not only with the substance, but with the appearance. If the Government, in a marginal case, did not issue an order, the suspicion could always be roused—even if it were unfounded—that that decision was reached because of the fear of the cost consequences. We must be clear that no Government would fail to issue an order, which otherwise they should issue, simply because they were concerned about the compensation consequences.

There is a distinction between the obligations of central Government and those of local government in the context of paying compensation. It is already an established precedent under the Consumer Protection Act 1987, where a clear distinction is made. Local authorities are liable to compensation in certain circumstances, but central Government most certainly are not. Furthermore, it is not true to say that there are no existing remedies for innocent parties who suffer loss. It will often be possible to require the person responsible for the [...] threat which was the cause of the action to pay damages. It is for the courts to decide the extent of liability. Of course, where the Government have made an [...] error, ex gratia payments to cover losses [...] those subject to restrictions can be made.

My hon. Friend the Member [...] asked whether we would be prepared to [...] under which ex gratia payments could be [...] ironic that, at that very moment, my right, [...] the Chief Secretary to the Treasury came [...] the door behind Mr. Speaker's Chair. I wonder [...] were he to agree to such a scheme, he might impose a cash limit upon it. I do not think that my hon. Friend's proposal is the right way to deal with ex gratia payments. They need to be dealt with on the merits of each case, without being bound by the rules of a scheme. Government action is also subject both to judicial review and to examination by the Parliamentary Commissioner for Administration when maladministration is [...].

I hope that I have advanced arguments that will persuade the House, that it would be wrong to accept amendment No. 22. I hope that the House will feel it appropriate to support Government amendment No. 10, which would eliminate clause 14.

Amendment negatived.

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