§ The Minister of Agriculture, Fisheries and Food (Mr. Douglas Hogg)With permission, I should like to make a statement on bovine spongiform encephalopathy.
In my previous statement on 3 April, I stated that there were signs that confidence was returning. I am very pleased to tell that House that matters have continued to improve. The latest reports that I have are that consumption is at roughly 85 per cent. of pre-crisis levels and that cattle throughput in markets is nearing 60 per cent. of previous levels. That is encouraging, since it is only by restoring confidence in beef that the industry's future will be secured for the long term. The measures that I am about to announce are geared to the achievement of that aim.
I have consistently made it clear that the Government are determined to ensure a viable future for the essential sectors in the beef chain—farmers, the slaughterhouse sector, manufacturers and renderers. I shall take farmers first. I announced on 28 March that the European Union calf premium scheme would be opened in the United Kingdom. The scheme will open next week, and will be run by the intervention board. Slightly more than £100 will be paid for each qualifying calf.
The House is aware that animals slaughtered at 30 months of age or more are now excluded from the food chain, and of the expectation that farmers would be compensated by an EC scheme. I can announce today that such a scheme will come into effect in the week beginning 29 April, and will also be run by the intervention board. Depending on the weight of the animals, farmers could receive nearly £500 per animal—effectively the cull cow price. The Government will bear the costs of the slaughter and destruction of the animals.
I recognise that some producers of steers and heifers normally plan to bring their animals to market at over 30 months, and will not have had time to adjust their production systems. Such animals would typically fetch significantly more than cull cows. I am pleased to announce today that the Government will pay a nationally funded supplement to the basic premium in respect of such steers and heifers, at a rate that reflects the historic differences between cow prices and those for steers and heifers.
The supplement will be payable for six months, which will allow producers time to adapt their marketing programmes to the new circumstances. The cost is likely to be up to £80 million. In general, the total return for animals over 30 months should not be greater than the market price of animals below 30 months going for consumption. The market is, however, turbulent at present, and it would be helpful for producers to be clear about the position when the scheme comes into operation. Accordingly, the top-up will be set at no less than 25p a kilo for the first four weeks that the scheme is in operation.
In the longer run, we need arrangements to allow back on the market meat from breeds—specialist breeds, for example—that often do not mature until after 30 months. Many of the animals concerned are in herds with no history of BSE. The case for exempting such animals from the 30-month rule is strong. As a matter of urgency, my officials are working up the technical elements of a scheme that would allow clearly defined exemptions to be made.
514 On 3 April, I reported extensions in the coverage of beef intervention. On 12 April, a further widening of the categories of intervention applicable in the United Kingdom, and the removal of weight limits, were agreed. For the first time, intervention on young bulls will be possible in the United Kingdom.
More generally, I am also pursuing with food retailers and manufacturers ideas for quality assurance schemes to help restore confidence in British beef. As a result, I can announce that we are proceeding as a matter of urgency with arrangements to improve animal identification and traceability. I hope to be in a position to introduce a scheme of mandatory animal passports for that purpose with effect from 1 June. That will make a valuable contribution to the development of marketing strategies by retailers and manufacturers to persuade consumers that our beef is of the highest quality.
I believe that those measures taken together, in addition to those that we have already announced, will provide the essential support that our beef farming sector needs.
As for manufacturers, on 12 April I amended the emergency control order to allow imports of beef from animals over 30 months of age produced in certain third countries that traditionally supply the United Kingdom, in which there is no history of BSE. That was necessary to prevent closures in parts of the meat manufacturing industry which for technical reasons are heavily dependent on imports of older beef. I should emphasise that my decision to lift the ban on imports does not apply to imports from EU countries.
As for the slaughtering sector, in my recent statements I have informed the House of the additional resources that we are giving the Meat Hygiene Service to ensure rigorous enforcement of the rules on hygiene in slaughterhouses, especially in connection with specified bovine offals.
We have now received a report from Coopers and Lybrand, which was appointed on 4 April to quantify the economic difficulties facing the slaughterhouse sector. I have today placed in the Library a copy of that report, with minor excisions for reasons of commercial confidentiality. Coopers and Lybrand concluded that there is a substantial "blockage" in the slaughtering sector, valued at about £132 million at pre-crisis price levels, which is undermining the financial viability of many companies, to the extent that in the absence of action, widespread company failures are likely soon. Against that background, I believe that exceptional assistance is justified.
I can announce today that I propose to introduce an aid scheme which will inject £110 million into the slaughtering sector. It will consist of two elements. The first is that all slaughterhouses that continue to slaughter bovines will receive payment based on their throughput of cattle in 1995–96. The payment will be made in two stages, with 80 per cent. to be paid immediately, and the remaining 20 per cent. to be paid in two months' time. This assistance will replace the proposal to relieve slaughterhouses from Meat Hygiene Service red meat inspection charges to which I referred on 3 April. Assistance will be paid at the rate of around £8.75 for every bovine slaughtered during 1995–96, giving a total of £30 million to be paid under this head.
The second element is that the Government will introduce arrangements for purchasing and disposing of the blockage, which has already been identified and 515 audited under the supervision of Coopers and Lybrand. The intervention board will purchase those stocks at a valuation of 65 per cent. of the pre-crisis market price and will take responsibility for their secure disposal. The board will enter into discussions with the trade associations on the detailed mechanisms. We estimate that the total cost of this second aid will be £80 million, making £110 million of aid overall.
Pending parliamentary approval, which will be sought by way of supplementary estimates, necessary expenditure for the aid and for the top-up payment to producers of animals over 30 months old, to which I referred a few moments ago, will be met by repayable advances from the Contingencies Fund.
The slaughtering sector was recognised, before the latest crisis, to have substantial over-capacity, and Coopers and Lybrand has confirmed that view. Rationalisation is therefore necessary. The substantial package of support I have announced should, however, provide a breathing space during which companies can adjust to the new market circumstances and make rational decisions about their future operations. Without that support, we risked the disorderly collapse of a sector on which a secure and efficient beef supply chain crucially depends.
I am, of course, aware that there may be other sectors that have stocks that they cannot bring to market. The support I have announced today is based on the particular circumstances and the role of the slaughtering sector. The Government therefore do not consider that equivalent assistance should be paid to other sectors. In the interests of public health and market confidence, however, I am asking the Intervention Board to accept responsibility for the disposal of unsaleable stocks currently held in the United Kingdom, at Government expense, if requested to do so.
The waste material, offals and carcase meat resulting from the actions I am announcing today will be treated primarily by rendering, with the resultant material to be disposed of by the best practicable environmental option. The ways and means of this are being discussed urgently with the industries concerned. That indicates the importance of the rendering industry to the beef chain. I announced previously a temporary subsidy for renderers, and first payments will be made this week.
The announcements I have made provide a comprehensive system of support for the essential links in the beef chain. They should enable the industry to plan for the future with confidence. However, there are two other aspects on which the House will wish to know the Government's position. I refer to the EC ban on UK exports and the possibility of selective culling to accelerate the decline in the incidence of BSE.
The Government will make every effort to secure the speedy elimination of the ban by whatever means are most likely to prove effective, including, as my right hon. Friend the Prime Minister said earlier, a legal challenge which will be made shortly in the European Court of Justice.
On selective culling, my experts are looking carefully at whether a cost-effective scheme could be devised. That remains to be seen. However, I should say at once that the picture that some have painted of a mass slaughtering 516 policy involving millions of cattle, in other words affecting a large proportion of the British herd, is wholly unreal.
The Government have no intention of adopting any such measure, which would be unacceptable on many grounds. The models we are considering involve limited numbers of individual animals—in the low tens of thousands, not the hundreds of thousands, far less millions, which is sometimes described—and do not provide for the slaughter of whole herds.
If an acceptable scheme can be devised—that is, one that is likely to reduce the incidence of BSE significantly at acceptable cost—the Government will consult on the details with all those interested before taking matters forward. We would implement the scheme only if we were satisfied that to do so was to the clear benefit of the United Kingdom beef industry—for example, if there were a direct understanding about the lifting of the EC ban.
The past few weeks have been a time of great concern for all those who work in the beef industry. As a Member of the House representing a rural constituency, I share the significant anxiety felt by all those who farm and whose livelihood depends on the beef industry. The extensive package of measures that I have announced today should go a long way to reassure farmers and other essential sectors of the beef industry that they can rely on the full support of the Government in this, their hour of need.
§ Dr. Gavin Strang (Edinburgh, East)I remind the Minister that full confidence in the safety of British beef will return only when all the measures he has announced are in place and properly enforced. In that context, when does he expect all the measures that he has announced since 20 March 1996 to be brought into operation? Will he give the House an assurance that he is satisfied that the appalling breaches in the measures to keep the BSE agent out of our food that were revealed a few months ago will not be repeated?
I welcome many of the support arrangements that the Minister announced for the industry. Obviously, we shall want to examine the figures, but I welcome in principle his decision to accept that compensation for prime quality beef animals over 30 months should in principle be higher than for the lower value cull cows.
I welcome the Minister's announcement about the movement of the large quantities of beef that are now held in our cold stores and throughout the country. Will he give us some assurance that he believes that that will now get the market moving?
On the calf slaughter premium, I believe that the whole House will agree that it is a sad day when dairy farmers are now to be paid slightly more than £100 to slaughter a calf shortly after its birth. I ask the Minister to keep a close eye on this measure and to recognise that a balance should be struck between the interests of the beef industry, which is being hit hard, and those of the dairy sector.
I welcome the measures that the Minister announced about the quality assurance scheme or schemes. They are a far cry from the Prime Minister's initial response to this proposal when we made it. I strongly support the Minister's view that traceability is vital. This creates an opportunity to develop a range of schemes and to build up consumer confidence in beef—and perhaps, in the longer term, in other products—in a way that perhaps we should have done in years gone by. 517 Will the Minister give us an idea how long it will take to move all the beef that is currently in store? I do not mean the beef that is being taken into intervention—I welcome what the Minister said about intervention.
Is the Minister aware that the British Veterinary Association has warned that potentially very serious welfare problems are developing on our farms because large numbers of cattle aged more than 30 months are now being held? They have to be housed and fed, and farmers know that they will not be turned into beef, so the quality of the animal will not affect the level of compensation. I note that the Minister announced that the slaughter of those cattle aged over 30 months will come into operation on 29 April, but that is some time ahead.
Will the Minister look carefully at that issue? In that context, there is a lesson to be learned, not just about the importance of the Meat Hygiene Service—I welcome the additional resources that the Minister announced for it earlier—but about the importance of the state veterinary service and the work it does, on the ground, with the veterinary profession.
Has the Minister reached any conclusions—perhaps provisional—with the Secretary of State for the Environment about the disposal of the huge amount of waste that will be generated by the measures?
Does the Minister recognise that there has been widespread concern about the possibility of an additional selective slaughter programme involving the widespread slaughter of healthy animals? What he said today seems to suggest that he is responding to that concern. Has he consulted the industry about the limited figures that he announced today?
When will we receive the details of the additional slaughter programme? Obviously, as long as it is hanging over the industry, it will involve some uncertainty. The Minister advised the House a few weeks ago that he believed that it would be some years before we had a live test for BSE. In view of the recent discussion on the matter, is that still his view?
It is vital that the ban on the export of British beef and beef products is lifted. Is it true that any legal action is likely to take months to reach the courts? Will the Minister assure the House that such action cannot be a substitute for energetic political and diplomatic action to secure an agreed lifting of that ban?
Following the announcement on 20 March that the new CJD cases were likely to be linked with BSE, the Minister said:
I do not believe that this information should damage consumer confidence and thus the beef market."—[Official Report, 20 March 1996; Vol. 274, c. 387.]Is it not clear that that was a remarkable misjudgment on the Government's part? Does it not explain why the Government seem to have been totally unprepared for the scale of the crisis that hit the beef industry following the announcements on 20 March?While the Government have announced some useful measures, four weeks later there is still a crisis, and thousands of livelihoods are still at stake.
§ Mr. HoggThe hon. Gentleman began by saying that it was important to restore consumer confidence. That is, of course, entirely right, and unless that happens, the health 518 of the British beef industry will not be restored. Part of the responsibility for the damage to consumer confidence lies with comments made not by the hon. Gentleman, but by some of his right hon. and hon. Friends. The hon. Gentleman rebukes me for having said on a previous occasion that there was no reason why consumer confidence should be damaged; there was and is no reason why it should be damaged, because British beef is safe. It is perfectly true that confidence has been damaged, but that is a wholly different point.
The hon. Gentleman referred to the important matter of enforcing the SBO controls in the slaughterhouses—that is important; we have emphasised its importance, and we are putting in more resources. As the hon. Gentleman will know, the latest audit figures on that matter are encouraging.
The hon. Gentleman has asked me to keep an eye on calf slaughter, and I certainly will.
On a small point of clarification, the sum of £103 is payable to the slaughterer rather than the farmer involved.
By purchasing the overhang of beef in the abattoirs, we can achieve at least two things. First, we shall have clear physical space, which is desirable in some slaughterhouses, and, secondly, we shall provide some liquidity for slaughterhouse and abattoir owners so that they can more readily purchase beef in the marketplace.
The hon. Gentleman referred to the quality assurance scheme. I am focusing most on how to devise an exemption scheme for the 30-month-plus beast in respect of herds that may be described as self-contained and are not fed on material that is likely to cause BSE and so on. I am reluctant to look too closely at present at a quality assurance scheme in respect of cattle under the age of 30 months, as the proposition must be that all British beef from cattle under the age of 30 months is safe.
The hon. Gentleman is correct about traceability: it is an important point, and I hope that we shall come up with a passport system around 1 June. The hon. Gentleman made a point about the slaughter of cull cows. We must get on with that with all possible dispatch, and I welcome the hon. Gentleman's support for the measure. He paid tribute to the Meat Hygiene Service and to the state veterinary service, and so do I. The hon. Gentleman asked about the disposal of waste. There is substantial surplus capacity in the rendering industry, and most of the rendering in respect of cull cows will be done by that industry.
The hon. Gentleman expressed concern about a selective cull. I hope that what I have said in my statement today will reassure him and others: any cull that is designed to accelerate the reduction of BSE must be carefully targeted, and justified statistically according to scientific analysis. As to a live test, I regret to say that, so far as we can judge, there is no prospect of the early introduction of such a test. I wish that it were otherwise, but it does not appear to be so.
As to legal action, the hon. Gentleman is clearly correct when he says that substantive action could take a long time. However, it is possible also to seek interim relief, and that is what we shall do. The hon. Gentleman is also correct to say that negotiations are as important as legal action in the process.
§ Sir Hector Monro (Dumfries)Does my right hon. and learned Friend accept that the most pressing point made to 519 me in the past three weeks concerns the disposal of prime cattle aged more than 30 months? Therefore, I am very glad that he has announced a scheme that will effectively provide 111p per live kilo for disposal. Will he go a little further with regard to slow-maturing cattle, such as Highlanders and Galloways, which will almost inevitably be more than 30 months old when they go to market? Will he find some exemption system for those cattle?
§ Mr. HoggI am grateful to my right hon. Friend for those comments. As I have said before, he knows more about the subject than almost anyone else in this place. His support for the top-up figure of 110p per kilo is very welcome, and I acknowledge it with thanks.
My right hon. Friend makes an important point about the slow-maturing herds, of which he has given an example. For that reason, we are looking at the possibility of devising an exemption scheme for cattle aged more than 30 months so as to permit those beasts to enter the food chain. It is an important point. We must make it plain that it is a justified exemption from the 30-month rule that does not prejudice human health in any way. We are working on it urgently.
§ Mr. Paul Tyler (North Cornwall)The Minister knows that the Liberal Democrats have given cross-party support to the twin objectives of restoring consumer confidence and seeking to lift the ban in Europe. We welcome the Minister's statement, but our reaction is: why could it not have been made sooner? It is evident from the Minister's statement that many of the measures proposed in the package fall within United Kingdom Government jurisdiction, and do not depend upon the European Commission's approval.
Having said that, what has the Minister to say on the subject of the further delay for exempted breeds, which is obviously an extremely important point, given that cattle that have not had any potential exposure to contaminated feed must clearly, on the scientific evidence, be removed from any culling scheme? What will he tell those distraught farmers who are still waiting to hear what will happen? The Minister says that he seeks a scheme in the "longer term". What does he mean by that? What statutory powers does the Minister have to order the destruction of a healthy beef animal under animal disease legislation?
What representations has the Minister received from the farming unions on the level of compensation? Surely there should be compensation for the cull cow price before the crisis and before the market collapsed, rather than at the current level. The Minister will be aware that we support his overall objectives, but we shall be watching critically, as will the whole of rural Britain, to see how quickly the measures can be brought to speedy effect.
§ Mr. HoggI am pleased to get support wherever I can, even from the hon. Gentleman. The hon. Gentleman was more than a trifle churlish, but no matter—that was what I expected. He rebuked me for taking time, but, by their nature, some of these matters take time.
For example, it was important first to get the agreement of the Beef Management Committee to the 30-month scheme, as set out in the conclusions of the Agriculture Council. As I am sure the hon. Gentleman knows, the Beef 520 Management Committee did not meet until the end of last week. It was important to get its agreement before going on to the next stage, which in this context is to work at the exemption scheme. I wanted to get the agreement of the Beef Management Committee to the broad proposition before producing proposals to derogate from it, for reasons that I imagine the hon. Gentleman will treat as good.
The hon. Gentleman referred to statutory powers, and I am satisfied that they exist. However, there is a problem regarding the top-up. In principle, it would be difficult to justify paying under the top-up scheme a higher price per kilo for beef going for destruction than the price per kilo for beef going into the market for human consumption. The economic consequences would be perverse, so we should be chary about doing that. That is why, on the top-up scheme and the rate of compensation, I expressed myself as I did.
§ Madam SpeakerOrder. The House has a great deal of business before it today, and I am simply asking for co-operation in brisk questions and brisk answers.
§ Mr. Robert Key (Salisbury)May I thank my right hon. and learned Friend and his ministerial team for providing the answers that we hoped to hear? I congratulate him on that.
Will he kindly consult our right hon. Friend the Chief Secretary and Inland Revenue officials on the knotty and difficult problem of tax? Farmers have a tight tax regime and, as I found when checked this morning, no special instruction has been given to collectors of tax on how to treat farmers, who are still receiving the same tax demands as they would under normal trading conditions. Associated industries are also under tight tax regimes and receive no helpful treatment, even when firms have been closed down directly as a result of the orders that my right hon. and learned Friend had to impose two weeks ago.
§ Mr. HoggI shall ensure that my hon. Friend's observations are brought to the attention of my right hon. Friend the Chief Secretary and my right hon. and learned Friend the Chancellor of the Exchequer.
§ Mr. John Home Robertson (East Lothian)I would like to hope that the Minister is in control of the situation, but I suspect that he is being driven by it. How many people are now out of work or on short time as a result of the Government's woeful handling of the crisis? Does he accept that the principal objective on which we should all agree is that BSE must be eradicated? Is that the Government's policy, and if not, why not?
§ Mr. HoggOn unemployment, yes, people have been put on short time and have lost their jobs. That is a regrettable state of affairs. It has flowed for a variety of reasons, including a lack of consumer confidence. I repeat that the hon. Member for Peckham and others really have to face up to their responsibility for that.
On the eradication of BSE, the steps that we have already taken, in particular with regard to the changes in the constitution of animal feed—as the hon. Gentleman will know, we have excluded mammalian elements from the feed to be fed to all farm animals—will ultimately 521 produce no BSE or a very low incidence of that disease. The figures are reducing dramatically and encouragingly. If it were possible in a highly targeted way substantially and cost-effectively to accelerate the process of eradication, the House might well consider that a desirable course of action.
§ Mr. Robert Jackson (Wantage)Does my right hon. Friend agree that a foolproof system of identification and tracing, including movements from birth to slaughter, and possibly electronic tagging, is an essential element in restoring consumer confidence at home and abroad?
§ Mr. William Ross (East Londonderry)Does the Minister appreciate that farmers will be happy that, after this tortuous month, they now have some idea of their likely financial position? Would it not have been much wiser if the Minister had had a contingency plan prepared from last November in case the situation went wildly wrong, as has happened? Is the Minister aware that the scheme that he has formulated for cattle over 30 months old does not mention bull beef, only steers and heifers? What will happen to that class of animal?
Is the Minister further aware that, as the right hon. Member for Dumfries (Sir H. Monro) pointed out, there must be a large regional difference in the value of cull cows? Can the Minister tell farmers that some cognisance will be taken of that difference in the top-up scheme? Farmers in Northern Ireland will be down by £150 per head on pre-crisis prices.
Will the Minister ask the Leader of the House to arrange a debate on this complex and detailed statement, because it cannot be explored in the time that we have today?
§ Mr. HoggMy right hon. Friend the Leader of the House will have heard what the hon. Gentleman has said. Of course, we have already had one debate on this subject, some two weeks ago.
On the subject of Northern Ireland, I have had great assistance from my noble Friend Lady Denton, and I am grateful for the way that the interests of Northern Ireland have been protected by her and my right hon. and learned Friend Secretary of State for Northern Ireland. In that context, I will listen to my noble Friend's views on the question of bull beef. The valuation of the cull cow is in fact prescribed in the European document.
§ Mr. James Couchman (Gillingham)My right hon. and learned Friend will be aware that his words will be widely welcomed by dairy and beef farmers, and also by the slaughterers. Will he think again about the manufacturers, such as the large pie factory in my constituency? Their businesses have been very substantially hit, and the employment of their employees is now very fragile. Since Mr. Fischler seems to think that British beef is safe, will my right hon. and learned Friend call in the bosses of McDonald's and Burger King and ask them to put their confidence in British beef and put it back into their products?
§ Mr. HoggI am conscious of the situation in my hon. Friend's constituency, and others, with regard to pie 522 making. It was partly representations made by my hon. Friend that persuaded me of the need to lift the prohibition on imports into the United Kingdom from third countries where there was no BSE. My hon. Friend's representations had a considerable part to play in causing me to come to that decision, but I cannot go any further on the question of market support, which was the first point that my hon. Friend made. On the question of McDonald's and others, I and my hon. Friends in the Ministry of Agriculture, Fisheries and Food have, on several occasions, met manufacturers' representatives, including McDonald's.
§ Mr. Dennis Skinner (Bolsover)Is the Minister aware that the Government have come a long way from the heady days of their philosophy of allowing the market to put everything right? In that regard, I remind him about the mining industry. The Government allowed every pit in Derbyshire to be closed, and refused to discuss subsidies.
Now that the Minister has crossed that great divide, will he turn his attention to the many people who have lost and will lose their jobs in this crisis, including those who transport the meat, and those in the food retail business—the workers? Can we have some guarantee that, if the Minister subsidises farmers, those in the slaughterhouses and the manufacturers, he will ensure that every worker who loses a job as a result of this Government crisis gets proper compensation?
§ Mr. HoggI accept that that is the authentic voice of Labour, but I could not commend it to the House or to the country. We are in the business of trying to identify those links in the chain that are essential to the survival of a healthy British beef industry. It is for that reason that we have come to the particular decisions that I have announced today—for example, about renderers and the abattoirs, which satisfy the requirement precisely.
§ Mr. Tony Marlow (Northampton, North)Does my right hon. and learned Friend have the agreement of our European masters that the top-up for the steer aged 30 months plus, which is a state aid, should go ahead? If no such agreement is forthcoming, what will happen? Now that we have a vast plethora of money from the British taxpayer, what will be the net contribution overall from the European Union, which caused this great crisis? Will it be about 10 per cent?
§ Mr. HoggMy hon. Friend is right to say that I have introduced a number of measures which are properly classified as state aids. They need to be notified to the European Union in the ordinary way. Informally they have been, and formally they will be, and I anticipate agreement.
On the second part of his question, on the rebate, my hon. Friend is right. Because of the impact of the rebate, on the margins United Kingdom taxpayers pay a high proportion of additional expenditure in the United Kingdom, albeit that it comes in the first instance from European Union funds. That is not an argument against it, but it is an argument in favour of making the position clear.
§ Mr. Dafydd Wigley (Caernarfon)Will the Minister give some assurance that the historic market supplement prices may be available for longer than six months in order to get long-term confidence? Will the £100 calf 523 premium be available to the producer, or will costs have to be taken out for meat hygiene purposes? Will the Government make a point during the next week of linking up individually with all our colleagues in the European Union ahead of the meeting at the end of April of the Council of Ministers in order to ensure that each individual member state understands our point, which the Commission clearly does not?
§ Mr. HoggWith regard to dairy calves, the hon. Gentleman should know that the £103 is a payment to the slaughterer and there will be deductions from that by the slaughterer so that the farmer will in fact receive less than £103. With regard to the top-up, at the moment we have in mind that the top-up should be payable for some six months. The justification for that is that it is possible in our judgment in respect of beasts under the age of 24 months so to alter the management of the beasts that they can be brought to market for beef purposes under the age of 30 months. I hope that the hon. Gentleman will think that that is a good justification.
With regard to negotiations within the European Union, if I am to be absolutely honest, I believe that the Commissioner has a much clearer view of the problems than the member states. I have found much more sense coming from the Commission than from many of the Ministers at the Agriculture Council.
§ Mr. Tom King (Bridgwater)Is my right hon. and learned Friend aware that there are obviously enormous benefits to come from the lifting of the European ban, but it cannot be at any price; and, since British beef is safe, it would be simply intolerable if we engaged in a massive slaughter of beasts known to be perfectly healthy? Is my right hon. and learned Friend giving any consideration to whether beasts that are aged over 30 months, which for the moment are not to go into the food chain, could be slaughtered and the meat stored against the time when greater scientific knowledge might give the reassurance necessary for its perfectly safe consumption?
§ Mr. HoggI can well understand my right hon. Friend's concern about the impact of a massive —if I might use his word—culling policy, and that is not in our mind. The question is whether it is possible, by a carefully targeted culling policy which would substantially reduce the predicted numbers of confirmed BSE cases, to come forward with a policy that would be acceptable to the industry and the House. That is something that I should like to work away at, because to accelerate the decline in BSE in the British herd is intrinsically worth doing if it can be done in a sustainable and sensible way.
On the suggestion of putting beef into cold storage for long periods, I would prefer the measures that I have outlined.
§ Mr. Tam Dalyell (Linlithgow)What action is being taken on the science of all this? Ministers will know that I have sent them evidence from the New Scientist of experiments such as those at Ames, Iowa, where scrapie was injected into bovines, with the result that, although there was illness, it was not at all related to BSE. What is being done about protein 130 and 131 experiments, and, indeed, prions in feed, and the possible linkage 524 between BSE and the shortage of magnesium—hypomagnacaemia? All these matters are very important. Will the Minister at least put something in the Library to convince us that the root causes really are being pursued?
§ Mr. HoggI certainly hope that the root causes are being addressed. We are spending a great deal of money on research into the condition, and on ways to develop, for example, live tests and other ways to determine whether a beast is affected. The Spongiform Encephalopathy Advisory Committee is the main source of scientific advice, and has proved of enormous importance in this area. I shall explore whether it is possible in a sensible way to summarise in a brief paper the main avenues of scientific investigation at the moment, and shall see whether we can put that in the Library. That is not a commitment to do so, but it is a commitment to see whether it can sensibly be done.
§ Mr. Paul Marland (West Gloucestershire)Is my right hon. and learned Friend aware that the beef industry will give a warm welcome to his statement this afternoon, not only because of the careful way in which he thought it through and the action that he proposes, but because of the way in which he has not allowed his head to be turned in the past few weeks by some of the hysterical comments from elsewhere?
In view of the statement and the steps that will be taken to reassure confidence in British beef, how long does my right hon. and learned Friend think it will be before the European Commission reconsiders the ban on British beef, especially in the light of some of the comments that have been made by European Commissioners and the fact that, the longer the situation has gone on, the more evidence has been produced in this country—I found some myself in Gloucester market last week—that BSE exists in Europe?
§ Mr. HoggI am grateful to my hon. Friend for his kind support. He is right that BSE exists in Europe, and I suspect that it exists in much more substantial quantities than has been formally admitted by the respective Governments in Europe.
I find the remarks made by Commissioner Fischler extremely helpful because they reinforce the points that we wish to make in the legal action. We will press ahead in our attempts to get the ban lifted—and the national bans as well—with all possible dispatch, but I do not think it sensible at the moment for me to express an end date. Therefore, I cannot help my hon. Friend on that point.
§ Mr. D. N. Campbell-Savours (Workington)How will the animal passport system work in the context of the national database, which the hon. Member for Wantage (Mr. Jackson) called for? That is the way in which the Dutch organise their market, and it was also the subject of a Select Committee recommendation. Is it not time that we go down that route, and do so rapidly, as the hon. Gentleman said? What will happen to the beef that the Community has accepted should go into intervention?
§ Mr. HoggOn the latter part of the hon. Gentleman's question, it depends on whether there is a market for the beef. I do not exclude the possibility that ultimately it will be destroyed. That would be lamentable, because in truth that beef is safe, but consumption depends on a willingness to buy, and that in turn depends on consumer confidence. 525 On the first part of the question, the modalities need to be further explored, but the hon. Gentleman is right to emphasise the importance of traceability and passports. We hope to have firm proposals in place by 1 June. We shall consult the industry to ensure that what we have in mind is a sensible scheme.
§ Mr. John Greenway (Ryedale)I thank my right hon. and learned Friend for his statement, and for listening so carefully to the many representations relating to the issues in it which have been made over the past two or three weeks. Is it not clear, however, that what he has said this afternoon involves not just ensuring the recovery of confidence in beef in Britain, but addressing the problem of the European ban? I am sure that farmers will welcome the Government's announcement that they will press a legal challenge against it, but has not the ban itself become the problem? What will other member states do to deal with the problem of BSE in those states, whose existence is recognised by consumers throughout Europe, by implementing the sort of measures that we now have in Britain?
§ Mr. HoggI am grateful to my hon. Friend, who has made some valuable suggestions to me in the past three or four weeks. He is right to focus on the ban: it is a serious problem, and we shall have to work expeditiously and vigorously to try to ensure that it is lifted at an early stage. He is also right to focus on the absence of proper slaughterhouse controls in a number of European Union countries. That concerns us, and it needs to be raised at European Union level.
§ Mr. Malcolm Bruce (Gordon)A number of the measures announced by the Minister are welcome and will be well received, although we have waited some time for them. Does he accept, however, that unemployment in the industry has a disastrous effect not just on the workers in question but on the skills base, which is crucial?
In my constituency in Aberdeenshire, which exports the creme de la creme, the lifting of the ban is a matter of urgency. What would the Minister say to firms such as Donald Russell, in my constituency? Its business is 98 per cent. exports, 80 per cent. beef, and it is one of the best companies in the world; but it now has no market. What practical steps is the Minister taking to ensure that the ban is lifted, and when does he think that he will achieve that?
§ Mr. HoggI am grateful to the hon. Gentleman for his words of support. I entirely understand and share his distress at the unemployment he sees in his constituency, which results from a development that is in no sense the fault of the companies concerned. It is very hard not to be able to export prime beef of the quality that the hon. Gentleman describes.
The schemes that I have outlined today will assist farmers and producers in the hon. Gentleman's constituency. It is obviously desirable for us to secure the lifting of the ban; it is also desirable for us to secure an exemption that would justify allowing certain classes of herd over the age of 30 months to enter the human food chain. That will be of particular value to the producer referred to by the hon. Gentleman, and we are taking such action.
§ Sir Peter Emery (Honiton)The House welcomes all the proposals presented by my right hon. and learned Friend, 526 many of which have been well thought out. Will he tell us the total cost, however—he may have to give an estimate—in order to make it clear that, although this action will cost the nation a great deal, the farming industry and those involved in the meat industry will also lose a great deal? Will he confirm that, in this year's tax returns, farmers can value their stock according to the price of the animals in March and April rather than the price at any other time?
§ Mr. HoggGiven that my right hon. Friend the Chief Secretary to the Treasury is sitting two places away from me, it might be imprudent for me to perform the calculation that my right hon. Friend the Member for Honiton (Sir P. Emery) invites me to perform. I do not exclude the possibility that I will have to talk to my right hon. Friend the Chief Secretary about some other matter on another occasion, so my right hon. Friend the Member for Honiton can do his own sums—but we are talking about a large amount of public money.
As for the tax point, I think that it should be raised with Treasury Ministers. Important tax questions are involved, and I would rather not trespass on them.
§ Mr. Andrew Welsh (Angus, East)Why is there no agreed eradication policy one month after the Minister has admitted the failure of his policy? How much longer will we have to wait for the beef specialist measures that he has promised? Is the Minister aware that the TSB report estimates that 8,000 Scottish jobs would be lost with a 25 per cent. downturn in throughput compared with the 40 per cent. downturn that the Minister has admitted? What steps is he taking to ensure that compensation fairly matches the actual losses sustained by farmers and others?
§ Mr. HoggI tried to do that in my statement. I explained in considerable detail what we are doing to help the beef industry, and I also outlined the broad purpose, which is to keep in being those links in the chain whose existence we regard as absolutely vital. I cannot tell the hon. Gentleman that we are in the business of compensating each and every person who has suffered loss. We cannot do that, because it would involve billions of pounds, and I could not justify that in terms of public expenditure.
§ Sir John Cope (Northavon)My right hon. and learned Friend's statement is welcome. Will he do all he can to speed up the further and better particulars on the long-run scheme for premium beef? It has never been obvious why 30 months was appropriate for much of that beef. My right hon. and learned Friend did not mention the feed merchants. I should be grateful if he could say a word about them.
§ Mr. HoggMy right hon. Friend is right to draw attention to the importance of the exemption scheme in respect of specialist herds that are brought to market when they are over the age of 30 months. We shall make what progress we can as speedily as we can. The 30-months term was used by SEAC, and it was the term around which the industry subsequently rallied. Feed merchants were the subject of one of my previous statements, in which I made it plain that we were prohibiting the use of mammalian protein in feedstuffs for all farm animals.
§ Mr. Harry Barnes (North-East Derbyshire)If there were live tests for BSE, we would begin to crack the 527 problem. As has been asked twice earlier, what urgency and what resources are being put in by the Government to try to get live test details provided?
§ Mr. HoggI recall that the hon. Gentleman was on the Select Committee before which I had the pleasure of appearing.
§ Mr. Barnesindicated dissent.
§ Mr. HoggI am wrong, and I apologise.
The live test is an important instrument of policy. We are striving to get one, and if we can, so much the better. Work is being carried out in various areas, and if we felt that investing more money would lead to a speedier conclusion, in all probability we would do that. However, the advice that I am getting is that progress is being made as rapidly as possible. I am satisfied that that is the case.
§ Rev. Ian Paisley (North Antrim)The Minister will be aware that the great difficulty in Northern Ireland is blockage. He will know that £25 million-worth of beef is being held in store, and that, until that moves, the chain of cattle being slaughtered cannot move.
Can he assure me that the details under paragraph 14 of his statement were identified and audited under the supervision of Coopers and Lybrand? Will the intervention board be prepared to buy this meat, so that the blockage can be cleared and the cattle that are building up on Northern Ireland farms can be slaughtered and the meat used for consumption? Does the Minister agree that, as Commissioner Fischler thinks that English beef is good, so the whole of Europe should think it is good, and should lift the ban which is at the root of the matter?
§ Mr. HoggI agree: where the commissioner has led, I hope that European Ministers will follow. The blockage in Northern Ireland is causing major concern and my right hon. and learned Friend the Secretary of State for Northern Ireland is much preoccupied by it. I hope that we shall get speedy movement on the blockage. The intervention board will look at applications in April and May for the clearance of blockages in the slaughterhouses.
§ Mr. Peter Hardy (Wentworth)Does the Minister accept that such recovery as he has noticed is due more to the collapse in price than to any action that is being taken by his Ministry? [HON. MEMBERS: ""Not true."] It was £1 a pound in Staffordshire last Thursday.
Will the Minister look at the incidence of BSE among animals that have never been fed infected materials? I am aware of herds in my constituency where there has never been a case of BSE in those circumstances, whereas there were cases when infected feed was being used. In view of that, is not the right hon. and learned Gentleman's cautious view on culling entirely justified? When can the House be informed about the definitions that will apply to the culling exercise?
§ Mr. HoggThe hon. Gentleman is right to say that there has been discounting of prices, although prices in the shops are now recovering. I accept that the situation is patchy, but nevertheless there has been a substantial recovery in prices in the shops.
528 The hon. Gentleman is also right about the problems associated with selected cows. If we are to deal with them, it is important to do so in respect of only those beasts that we can reasonably say have been exposed to a higher risk of infection. It is possible to do that, but before I go public on our methodology, I would like to test it—together with a whole range of other people—to ensure that it is right.
§ Dame Elaine Kellett-Bowman (Lancaster)I thank my right hon. and learned Friend for his great efforts in getting the market moving again. If he decides that the collection, weighing and grading of animals may be done only at some centres, will he consider the Lancaster Farmer Auction Mart, which has an out-of-town site, has easy access to the motorway, has the most up-to-date facilities and is next to an abattoir? It is the ideal regional centre for that part of the world.
§ Mr. HoggAs I would expect, my hon. Friend is a powerful advocate for a constituency cause. I will pay careful attention, without commitment, to what she has said.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)Why is the Minister so diffident about raising a legal action at the European Court of Justice? Everyone here knows that Spanish Fisheries Ministers do not share that diffidence. Does he accept that, had he made an early formal statement of his intention to go to the Court in Luxembourg, it would have strengthened his negotiating hand in Brussels and enhanced the British public's confidence in the Government's handling of the issue? If he seeks compensation at the Court, I hope that he will not overlook the plight of those who have already lost their jobs because of this scandalous affair.
§ Mr. HoggDuring the four or five weeks of the course of this matter, this is the first time I have been accused of being diffident. I have not been diffident about legal action—I have said that we intend to take legal action, and that is what we will do.
§ Mr. Robert Hicks (South-East Cornwall)I welcome the measures announced by my right hon. and learned Friend, which are designed to restore confidence not only in the beef market, but in the rural economy as a whole. Is he aware that the most urgent decision we now await is to extend the 30-months slaughter period for the specialist beef producer? Does he realise that, in Devon and Cornwall, it is that major concern that has led to the uncertainty over the past two or three weeks?
§ Mr. HoggI have considerable sympathy for my hon. Friend's point. I remind him of the top-up scheme, which will be of some assistance to the specialist herd producers. However, I agree that we need to work at an exemption with a view to agreeing one as speedily as possible. It is an important point.
§ Mrs. Helen Jackson (Sheffield, Hillsborough)In view of the concern of public and environmental health authorities about the spreading of blood and other animal fragments on agricultural land, will the Minister ensure that the "secure disposal" of the abattoir waste to which he referred will prevent any of it from being spread on 529 agricultural land as fertiliser in a way that would allow it to get into the food chain—or, even worse, the drinking water supply?
§ Mr. HoggThat is an important point, and it is desirable not to confuse two facts. Specified bovine offal—now known as specified bovine material—is not in any circumstances spread on fields; it is destroyed. In the past, blood and gut—which does not contain SBMs—has been spread on fields. So far as we can judge, blood does not retain in it any BSE infectivity. That practice has been discontinued for the moment, and, if there was any desire to recommence it, one would certainly want to take into account the points made by the hon. Lady.
§ Mr. William Cash (Stafford)Will my hon. Friend reflect on the enthusiasm with which he has received Mr. Fischler's remarks in the past few days? Will he bear in mind the fact that he will of course be taking action against the European Commission in this action in the Court of Justice? Is it not therefore extremely unwise to give the impression that we are somehow supporting the European Commission, when the whole matter has been driven not only by them but by the other member states, producing a situation in which we have ended up with an illegal ban being imposed on the beef and dairy farmers of this country?
§ Mr. HoggMy hon. Friend may have misunderstood me, in which case I am sorry; I am sure that the fault is mine. I meant to say that I very much welcomed Commissioner Fischler's statement that British beef is safe. That statement was also made by President Santer, which I welcome. Those statements are wholly right, and have been well made by the Commissioners. We are entitled to rely on those assertions by two leading Commissioners in support of our argument that the action taken by the Commission is illegal, not least because it is disproportionate, having regard to what Commissioner Fischler and President Santer have said.