HC Deb 26 January 1995 vol 253 cc465-8
10. Ms Church

To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to prevent job losses in the dairy industry.

14. Mr. William O'Brien

To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to prevent job losses in the dairy industry.

Mr. Jack

The Government are contributing to that objective through their programme to improve the competitiveness of British industry and the £3.5 million that the Ministry spends annually on research and development in dairying.

Ms Church

I do not know whether the Minister has milk delivered to his doorstep, or whether he pays his own milk bill. If he does, he will be aware of the rising price of milk delivered to the doorstep. Is he aware that Dairy Crest, which has a plant in my constituency, is having to close plants across the country as a direct result—this has been stated by the chief executive—of the Government's deregulation of the dairy industry? What do the Government have to say today about the number of jobs that have been lost in the dairy industry as a direct result of deregulation?

Mr. Jack

On the latter point, I remind the hon. Lady that the number of people employed in the dairying industry has been falling. In 1984 it was 89,500, and by 1991 it was 72,300, which shows that there has been a decline in the consumption of milk and cream products. As for the rise in the price of milk, my local dairyman has benefited to the tune of 1.5p per pint from a reduction in the levy that he paid because there is no milk marketing board to pay, so he is pleased with the changes. Finally, the industry was carrying a great deal of spare capacity; as a result of the removal of the milk marketing board, there is now better utilisation of existing capacity, to the long-term benefit of the industry.

Mr. O'Brien

The Minister must be aware that Milk Marque now has a monopoly of the milk industry, and that, since the abolition of the milk marketing board cheese prices have increased substantially and continue to rise well above the rate of inflation. Is he also aware that the spot market is controlled by Milk Marque, which is exporting cheap milk from mainland Britain to keep prices high? What is he doing to help dairy producers who have to meet high costs for their raw material and whose product is undercut by the abolition of the milk marketing board, thus causing job losses in the milk marketing industry?

Mr. Jack

I am disappointed that, in his enumeration of various problems, the hon. Gentleman did not also point out some of the positive aspects of the changes that were introduced. For instance, many cheese producers used to have an on-off supply under the old arrangement, but now they can have certainty of supply. The hon. Gentleman should check his facts more carefully before accusing Milk Marque of having a monopoly in the milk industry, as companies such as Northern Food Partnership, Nestle and many other purchasers of milk would fundamentally disagree.

Mr. Colvin

Is my hon. Friend aware that last year British dairy farmers were penalised in comparison with their European competitors because of the way in which the butter fat in their milk was measured, which resulted in their being well above their quota? What is he doing to level the playing field?

Mr. Jack

I am glad that my hon. Friend raised that matter, which has also been raised by a number of my local farmers. Work is under way to examine some of the variable results that have been recorded. I stress that the tests which used to be carried out by the milk marketing board and the Agricultural Development Advisory Service are both approved by the Commission.

Mr. Peter Atkinson

Will my hon. Friend press the European Union to allow milk quotas to be traded across national frontiers within the Community so that our efficient dairy farmers can obtain a higher quota and supply the milk that our processors need?

Mr. Jack

My hon. Friend, who speaks with the knowledge gained from a farming constituency, is absolutely right. We have one of the most developed markets for the movement of surplus quota, to the benefit of all our dairy farmers, and we are campaigning for a much more flexible approach to cross-Community transferability of quota. We shall continue to pursue that objective vigorously.

Dr. Strang

Will the Minister acknowledge that, as a direct result of deregulation, creameries have closed at Stranraer, Longridge and Whitland, as well as a number of small niche English cheese makers? How much capacity and how many jobs will be lost before the Government recognise the seriousness of the situation?

Mr. Jack

Sometimes the hon. Gentleman's synthetic rage overwhelms me. If he is truly concerned about the future of jobs in the dairy industry, perhaps he will join me in reviewing the claim for increased wages—above the rate of inflation—made by trade unions representing the dairy trade. They asked for two extra days holiday, a reduction in the working week, increases in weekend premiums and night rate allowances and—believe it or not—the setting up of a pan-European social partnership committee. Is that the way to safeguard jobs in the dairy industry?

11. Sir David Knox

To ask the Minister of Agriculture, Fisheries and Food when he will next meet the President of the National Farmers Union to discuss the dairy sector.

Mr. Jack

My right hon. Friend the Minister regularly meets representatives of all sides of the agriculture industry, including the president of the National Farmers Union, to discuss issues of importance to them.

Sir David Knox

Is my hon. Friend aware that farmers in my constituency—[Interruption.]—are concerned about reports of black market trading in milk? Will he give an assurance that vigourous action will be taken against anyone indulging in such practices?

Mr. Jack

The importance of my hon. Friend's question was clearly acknowledged by cheers from the Labour Benches. I can certainly assure him that the intervention board is taking seriously the information that has come to hand about black market trading in milk. The fraud line which has been established has already received more than 100 calls on the matter. The investigations are complex, but they are being carried out with vigour.

Mr. Clapham

Is the Minister aware that, under the Milk Marque regime, a farmer who leases his quota must have his documents approved by the intervention board before they can be passed on to the quota broker and that that is currently taking two months whereas under the milk marketing boards it used to be done in a week? As it is causing a great deal of hardship for farmers, will the Minister look into the matter and see what can be done to speed up the process?

Mr. Jack

I can do one better than that for the hon. Member: I have already been down to the .intervention board to investigate the situation. It is true that there were delays towards the end of last year. The only remaining documents to be processed are those related to the extension for lease transfers that we gave to the end of the year. All other matters are now up to date, and a good level of service can be expected.