§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Conway.]
12.36 am§ Mr. Peter Fry (Wellingborough)At the commencement of the debate, I declare an interest in that, for some years, I have been the parliamentary adviser to the British Leather Confederation. The industry has been facing several problems—environmental problems and problems involving trade and raw materials. Tonight I shall concentrate on the last category—the deteriorating raw stock quality and the decline in animal welfare.
The United Kingdom tanning industry has an annual turnover of about £400 million, and has consistently exported a higher value of leather than it has imported. Last year, the industry had a balance of trade surplus of about £50 million, with total exports worth about £200 million. However, in order to survive and to enjoy that success the industry, like those in the rest of the European Community, has specialised in quality, performance, fashion and service to customers. To service that top sector of the market it needs a supply of good quality raw material, in the form of cattle hides and sheepskins.
Unfortunately, the quality of raw hides and skins from United Kingdom animals is deteriorating to an alarming extent. That is not unique to the United Kingdom, but I shall mention later a number of specific examples that demonstrate the ways in which hide and skin quality in this country is deteriorating.
The European Tanners Association, COTANCE, has produced a document on the subject, which has been submitted to the European Commission. It makes a number of important points, including the following. First, the leather industry is based on the processing of raw cattle hides and sheepskins, which are by-products of the meat and dairy industries. Secondly, because those are by-products, their quality is too often neglected by those involved in the production process. Thirdly, the quality of raw material for the leather industry is increasingly important. Finally, unnecessary damage to hides and skins causes an estimated loss to the EC economy of more than £500 million annually, of which about £50 million is lost in the United Kingdom.
Although that money is lost in the chain from farmer to tanner, and is therefore eventually reflected in prices paid, the financial impact on the farmer is indirect. That is because the market mechanism is imperfect. There is a market price for the live animal, and a separate market price for the hide or skin at the abattoir gate. Those markets are separately driven, and are linked only indirectly. Furthermore, the economic value of a hide or skin, reflecting the end use for which it is suitable, can be fully assessed only after several stages of the tanning process.
Damage to hides and skins takes place either while the animal is alive, on the farm or in transport, or in the abattoir. The main types of damage occur while the animal is still alive. In general terms, what is good for hide and skin quality is good for animal health and welfare. The major factors which affect the hide and skin quality are husbandry methods on the farm and regulations on animal welfare, animal health and meat hygiene.
480 There is concern in the trade that national regulations are being relaxed and that hide and skin quality is deteriorating and that affects the decline in animal health and welfare.
An important current example is the threefold increase in ectoparasite damage to sheep since the progressive relaxation and finally the abolition last year of compulsory sheep dipping. Not only is the deterioration of sheepskin quality a serious matter for the United Kingdom sheepskin tanning industry; it also provides objective evidence of what many in the industry suspected but could not measure: that there has been a substantial and worrying increase in the infestation of sheep. That in turn has serious animal welfare implications.
It is not overstating the case to stress that this could reach crisis proportions in the near future not only in terms of lost revenue, but also in the unacceptable suffering caused to the sheep population. Investigation by the British Leather Confederation is producing evidence to support that view. It is no wonder that its contentions are supported by organisations such as the Meat and Livestock Commission, the National Farmers Union, the National Sheep Association, the National Office of Animal Health, the Federation of Fresh Meat Wholesalers and the British Wool Marketing Board. The concern of those and other organisations must be taken into account.
The current situation raises the following main issues. The increased number of outbreaks of sheep scab and the higher levels of infestation by other parasites is raising serious animal welfare implications in the national flock. It is a problem not only for the animals but also for the general public, for whom animal welfare is a major issue in their attitude to farming and meat consumption.
The growing animal welfare problem of increased infestation needs to be addressed by effective policing of flocks to ensure consistent implementation of existing regulations for improving animal welfare.
Apart from reducing animal growth rates, infestation also reduces the value of sheepskins causing a major financial loss to the United Kingdom. Throughout the chain from farmer to leather manufacturer, this is estimated to reach up to £20 million a year.
The nature of the markets for sheep and sheepskins is such that there can be no direct incentive to farmers to improve skin quality. The imperfect market mechanism cannot be used as an effective means of persuading farmers to dip sheep as in other countries such as New Zealand, where direct payments are made to farmers for skin quality.
The shortage of good-quality material is putting at serious risk the whole sheepskin tanning industry, which must sell to the quality fashion market if it is to survive. Even at today's relatively depressed prices, that section of the leather industry, with a turnover of £80 million per annum, exports of £70 million and directly employs about 1,000 people. It is the view of all sectors of the trade that the only effective means of addressing the situation is a return to some form of compulsory dipping along with notification of sheep scab outbreaks to give an objective measures.
I am pleased to note that the interested sectors of the sheepskin and leather trade are in discussion with officials of the Minister of Agriculture, Fisheries and Food about practical ways in which this might be achieved and leather industry is in discussions with the Department of Trade and Industry with regard to the threat to their sector.
481 I am only too well aware of the current controversy over organophosphorus dips, and so is the industry. There is no intention on my or the industry's part that farmers and workers should be exposed to undue danger that will affect their health. I understand the feelings of those who feel such dipping should be banned. I understand, and I feel that the whole picture should be made clear.
Effective control of ectoparasites relies upon the availability of suitable products. The OP dips at present have an important role in that. They are widely produced and used and have the benefit of being effective against the widest range of ectoparasites. No comparable alternatives exist. Any move to end the use of such products without the availability of an alternative with equivalent efficiency would further exacerbate the already worrying animal welfare problems.
Dips contain insecticides and need to be treated with respect. It is important that farmers involved in the dipping process follow the correct procedures and wear appropriate protective clothing. Safety trials have been conducted on the effect of dipping in accordance with correct procedures. It is important that any decisions roust be taken on a scientific basis, taking account of the full implications.
That is why the industry has made two suggestions. The first is that compulsory dipping should be reintroduced. Reinstatement of statutory control is considered most appropriate because it will ensure that most producers dipped at least once. However, it is recognised that policing of the dipping programme is a critical feature and neither the Government nor local authorities can provide the necessary resources at present.
Therefore, as a second option, it is suggested that if the Ministry cannot respond to the first suggestion, legislative controls should be introduced based on the phased-in introduction of more acceptable dipping treatments and the mounting of a national campaign to publicise and encourage voluntary control, possibly supported by a code of practice.
I turn briefly to the question of cattle hides. The quality of cattle hides is deteriorating. It is a Europewide problem but it has been particularly noted in the United Kingdom. It should be recorded that, while we have an overall surplus of raw hides, material for the top quality end uses must be imported from, for example, Scandinavia. United Kingdom tanners who sell to the top quality section of the market report that a decreasing proportion of their purchases of hides from United Kingdom sources can be used for the high-value outlets to which they sell. In 1991, only 50 per cent. could be used. A year later, it was reduced to 40 per cent., compared with an average of 65 per cent. of imported hides.
The main types of damage are, first, scratched hides from barbed wire and horn clipping. Scratches are aggravated, by ectoparasite infestations. For both animal welfare and economic reasons, there is a case for a ban on barbed wire as the only means of fencing farm animals, plus the compulsory dehorning of all calves.
Secondly, ectoparasites in cattle are a significant problem for hide quality. The ending of widespread treatment of cattle for such parasites has led to an increase in other parasites, especially lice. That is an animal husbandry and animal welfare issue at the farm level.
482 Thirdly, ringworm affects about five per cent. of cattle in the United Kingdom. It is a significant skin disease because it is transferable to man, so there is a case for making the vaccination of all cattle obligatory.
Fourthly, there is the problem of dung contamination. Dirty hides and skins raise not only quality problems for tanners but health, safety and environmental problems for other trades and industries. This is a problem in both the United Kingdom and the rest of the European Community. It is viewed primarily as an issue of hygiene in abattoirs and proper implementation of the rules for preventing dirty animals from entering the abattoir. There would seem to be a need for a payment method to farmers to be devised, which would ensure that cleaner animals arrive for slaughter.
The final matter to which I shall refer is the export of live animals. This is a further animal welfare issue because it is felt that there is a significant economic impact on the leather industry. At the same time, it affects the way in which animals are sent overseas and the number of them. There has been a rapidly increasing level of exports, especially of live sheep.
There is a feeling that, as we have moved to the single European market, there has also been a move to the lowest common denominator in terms of animal welfare controls as national regulations are relaxed or removed and EC controls are more relaxed or non-existent. This has an effect not only on animal welfare but on other sectors, including the hide, skin and leather trade. The relaxation of rules on transport times for animals has coincided with a rapid increase in the export of live sheep from the United Kingdom, mainly to France. During 1992, the total almost doubled to over 1.4 million. There are reports of further increases during 1993.
Exports on this scale need to be carefully monitored, to ensure that the animals are not subject to unnecessary suffering. I question whether that is taking place. It should be acknowledged that, although there may be some short-term commercial benefits to live sheep exports on this scale, it leads to a loss of added value within the United Kingdom and creates economic problems for downstream industries, including the hide, skin and leather trade.
To conclude, tonight I have attempted to highlight some problems being faced in just one sphere: raw material supply by the British leather industry. I know that discussions and negotiations are taking place with Ministry officials. All I am asking is that there should be a true recognition of the contribution of the industry to the British economy, that the Ministry will look in favour at least at some of its suggestions, and take positive steps to assist it to continue its high level of quality and exports.
§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Nicholas Soames)I congratulate my hon. Friend the Member for Wellingborough (Mr. Fry) on identifying a subject on which he is an expert, as the House knows. It is of considerable importance to this country, and therefore to many hon. Members.
As my hon. Friend and the House will know, for centuries the leather and associated industries have made a substantial contribution to the economic well-being of this country. The leather industry now has a turnover of 483 some £400 million. The industry exports more than half of that to buyers throughout the world, and regularly makes a positive contribution to our balance of payments. Its products are of the highest quality and rightly attract premium prices in sophisticated and discerning markets such as the United States of America, France and Italy as well as the United Kingdom.
Today, tanning is no longer a parochial, craft-oriented business serving the local community, but a capital-intensive, technologically-driven industry trading its products across the world. British tanners face intense competition both at home and overseas. Inevitably, the United Kingdom industry has had to adapt and change to the new environment in which it must operate. The United Kingdom has not been alone in this. Throughout Europe, we have seen in recent years a substantial shrinkage in the tanning industry, both in employment in the sector and in the number of firms. I think that my hon. Friend will agree that probably two main worldwide factors are responsible for this.
The first is the shift of footwear and other leather manufacturing industries from the north to the south and from the west to the east. The transfer of activity has been driven largely by the relative cost of labour, in this as in so many other industries.
The second factor which has speeded the transfer of activity is the building up of considerable tanning capacity in countries which have traditionally been the suppliers of raw material—India, Pakistan, Brazil, the Argentine and others. I regret to say that in many cases—my hon. Friend is right to suggest this—the development of these new industries has been and continues to be supported by export bans on raw material and Government subsidies on investments and exports.
The comparative international disadvantages of high labour costs, and the increasing environmental requirements which European society now insists upon, have forced the leather industry to introduce a high degree of mechanisation into the production process. Another important feature to improve competitiveness has been the training of the work-force and the introduction of increased flexibility in production. However, my hon. Friend has correctly pointed out that the most important strategy has been the shift from the production of standard quality items to products with higher value added—in other words, concentrating on the top quality end of the market.
Clearly, an important element in this drive towards top quality production must be access to top quality raw material—that is the skins and hides. This is where the farming industry plays its part. I am extremely grateful to my honourable Friend for giving us such a clear analysis of the reasons why farmers should treat their sheep in order to control sheep scab and other parasitic conditions.
I should perhaps make it clear that I fully agree with my hon. Friend on the benefits of dipping sheep for scab. They are clear for all to see, and I would encourage all sheep farmers to dip their animals regularly, as well as to apply other appropriate anti-parasitic treatments.
I am equally grateful to the Meat and Livestock Commission, which has recently sent my Department a report that details its concerns about the effect of the removal of sheep scab controls on the quality of skins 484 supplied to the leather industry. The report has been prepared in conjunction with a number of interested bodies, including the British Leather Confederation. It makes many of the same points that have been made tonight, and we shall study it with great care and interest.
However, I have no doubts that simply encouraging farmers to dip and otherwise treat their sheep will not satisfy my hon. Friend, or the authors of the report. they would like the Government to go much further and regulate again for the compulsory dipping of sheep. That is a different matter altogether and one on which I am afraid I cannot agree with my hon. Friend.
The purpose of compulsory national dipping was to control and eradicate sheep scab, particularly on premises where the existence of infestation had not been recognised. Compulsory national dipping, once or twice a year was an important part of the sheep scab controls since 1976.
However, 15 years later, in 1991, scab was still confirmed in 116 flocks, and 28 per cent. of farmers failed to co-operate by returning their dipping forms. This was no golden egg. The policy was not going to eradicate sheep scab. After widespread consultation, it was decided last year to remove the requirement compulsorily to dip.
I have heard nothing tonight that makes me think it was wrong to deregulated the sheep scab controls. As my hon. Friend knows, scab can be cured by the farmer simply and effectively by using a licensed medicinal product in accordance with the manufacturer's recommendations, combined with care in the purchase of replacement animals and management of his flock to prevent reinfestation. To reintroduce controls now would fly in the face of the Governmnent's deregulation policy.
Legislation is now used only as a last resort. I hope that my hon. Friend will agree that there is no reason why diseases of sheep should be treated any differently from other policies, when there is a perfectly acceptable means at hand to control them.
Although I fully understand the concerns of the leather industry about the quality of its raw materials, it is for the marketplace, not Parliament to determine the quality of supply. I am sure that the leather industry would not want the Government to regulate its operations so that it was prevented from making what it saw as the right commercial decisions in the marketplace.
Farming is no different. We are firmly committed to trying to move away from unnecessary controls throughout British industry, and that applies as much to farming as to any other industry, in the land.
We have heard tonight about deterioration in the quality of skins supplied to the leather industry and the need for legislation because of failures in the market. I appreciate that the current structure of the industry makes it difficult for price signals to move back through the chain from the leather industry to the farmer, but that is something that the industry can and must sort out for itself.
The Government should not interfere to force the livestock industry to incur extra costs to improve the quality of skins if the livestock industry itself concludes, on commercial grounds, that the extra costs are not justified by the extra reward for the quality achieved. The remedy must lie in the leather industry improving the price signals that it sends to farmers, combined, if the industry chooses, with the sort of promotional campaign which the M LC told my officials in June that it was considering.
485 I would certainly be happy to consider with the British Leather Confederation, the Meat and Livestock Commission and other interested parties what practical action might be taken to encourage farmers to improve the quality of the raw material reaching the tanning industry. As my hon. Friend mentioned, I am pleased to say that discussions have already been initiated at official level.
My hon. Friend has also raised animal welfare as an area of concern, both because of the increased incidence of sheep scab, and the export of live animals. Although I cannot confirm or deny the number of new outbreaks of sheep scab since the disease is not longer notifiable, I can confirm that the Government take this, and all issues of animal welfare, extremely seriously.
We already have legislation which makes it an offence to cause unnecessary pain or distress to farm livestock. We know that the sheep scab mite causes irritation and distress to affected animals. Prosecution action will be taken by the local authority, or the state veterinary service against any producers who create animal welfare problems by failing to treat infested sheep. But that is no different from the action that we would take for any other welfare problem caused by poor husbandry.
There is, as my hon. Friend rightly says, a strong market demand on the continent for British animals. Live exports alone were worth about £160 million in 1992. The choice between sending live animals or carcase meat is a matter for market forces, subject to the necessary welfare safeguards when live animals are transported. I note the points raised by my hon. Friend about animal transport, which we will, of course, bear in mind.
I am also fully aware of the concerns in some quarters about the possible effects of those dips which contain organophosphorous compounds, on the farmers using them. The House may be aware that, in March, following a request from the previous Minister, the independent Veterinary Products Committee gave careful consideration to whether a moratorium on the use of organophosphorous sheep dips should be introduced. At its meeting, the VPC took into account reports of increased outbreaks of sheep scab in formulating its advice to Ministers. The committee concluded that those dips should continue on the market during the summer period.
It made specific mention of the fact that, if sheep scab and blowfly strike were left untreated, serious welfare problems would follow. The VPC will be returning to the 486 subject of organophosphorous dips again in October, when it wishes to complete the review of products which is currently under way. Comments from the British Leather Confederation have been received, and those are being put to the VPC, along with all the other information that it will consider.
We are doing all we can to try to establish the facts —we want to be able to make an informed decision based on as much scientific evidence as possible. In the meantime, sheep can continue to benefit from proven effective treatment to safeguard against distressing diseases. Sheep are, of course, not the only source of skins to the leather industry. My hon. Friend mentioned cattle, which are also important—their skins can suffer from warble fly infection. In Great Britain, great progress has been made in eliminating warble fly in recent years—it has been eliminated. Unfortunately, recent imports of cattle have shown evidence of warble infestation. We acted swiftly to deal with those outbreaks; and national rules for combating the spread of the fly were speedily and fully implemented.
My hon. Friend will no doubt be pleased to hear that we are seeking additional trade safeguards from the Community to help protect our hard-won disease-free status, and that we shall do all that we can to preserve it. My hon. Friend also mentioned ringworm. I am sure that he is aware that drugs are available to treat ringworm, and it is up to the farmer to ensure that the condition is treated.
In conclusion, I once again congratulate my hon. Friend on the succinct and imaginative way in which he voiced his concerns about the leather industry. In these technologically advanced days, it is all too easy to forget the value and significance of traditional industries such as that one. I hope that I have reassured my hon. Friend that the Government are seized of the need to do all they can to maintain the quality of the raw materials used in the leather industry, without burdening the industry with unnecessary regulations. We shall pay great attention to the issues raised by my hon. Friend, but he will be aware that farmers themselves also have an important and integral part to play in the process. I can assure my hon. Friend that we shall continue to watch the position extremely carefully.
§ Question put and agreed to.
§ Adjourned accordingly at three minutes past One o'clock.