HC Deb 20 June 1996 vol 279 cc981-5
1. Mr. William O'Brien

To ask the Minister of Agriculture, Fisheries and Food what representations he has received from farm workers and other workers in the beef industry in West Yorkshire regarding economic suffering because of the BSE outbreak; and if he will make a statement. [32360]

The Minister of Agriculture, Fisheries and Food (Mr. Douglas Hogg)

I have not received specific representations from West Yorkshire, but my hon. Friend the Parliamentary Secretary met representatives of the rural, agricultural and allied workers group of the Transport and General Workers Union on 15 May to discuss a wide range of BSE-related issues.

Mr. O'Brien

Many people in West Yorkshire have suffered as a result of the BSE outbreak, and there are many reasons for that. What action does the Minister intend to take against the Doncaster firm, Prosper De Mulder, which allegedly produced animal feed in a way that was against the regulations laid down by the Government? The present Minister must be aware of the meetings that took place between the former Conservative Member of Parliament for Dewsbury, Mr. Whitfield, the right hon. Member for Suffolk, Coastal (Mr. Gummer) when Minister of Agriculture, and Mr. De Mulder.

It has been pointed out that financial contributions were made by the De Mulder company to the Dewsbury constituency Conservative party to help Mr. Whitfield in his campaign. Will the Minister join me in calling for a full inquiry into the financing by De Mulder to the Conservative party in Dewsbury? Silence on that matter will mean only further allegations of sleaze about the financing of the Tory party.

Mr. Hogg

Allegations of sleaze do the hon. Gentleman no good at all. It is not an attractive allegation and he should not have made it in this place. As to the more substantive part of his question, if any of the allegations that people were negligent or in breach of their statutory or other duties are backed by evidence, that might well be a reason for those who have or may have suffered loss to consider some legal action, but that depends on being able to establish through credible evidence some cause for action.

Sir Donald Thompson

The West Riding is a large place, and I live, as my right hon. and learned Friend knows, in the Pennines. Many people in the Pennines were encouraged by the Government and the EU to go into suckler herds, and the cattle which are now leaving their mothers are worth considerably less than they were a year or even two years ago. Does my right hon. and learned Friend have any words of hope for those cattle rearers?

Mr. Hogg

The low price that beef producers are currently receiving for their product is, of course, a matter of considerable concern. It is best addressed by a revival in market confidence, but, as the House will know, the Agriculture Council meets next week in Luxembourg and will consider a number of Commission proposals to bring support to beef producers. At the moment, two specific proposals are on the table, the first of which is a top-up to the premiums of 21 ecu and 25 ecu, and the second is an element of money—which to us will be worth about £14 million—that can be focused on beef producers in accordance with national decisions. Those proposals are on the table. They may change, but we shall be able to use those resources to address the problem that my hon. Friend identified.

Mr. Clapham

The Minister will be aware that there has been a dramatic fall in the number of beasts going into some abattoirs, including one in my constituency. That is likely to affect jobs. He will also know that the intervention board has included just 42 abattoirs on the list of those designated to deal with cattle under the 30-month scheme. The abattoir in my constituency is not on that list, and local farmers are having to travel considerable distances to abattoirs that are. Will the Minister ensure that there is a fair geographical spread, and that the list is monitored continuously so that abattoirs such as the one in my constituency, which have spent huge amounts to bring themselves up to European Union standards, are included when that becomes practicable?

Mr. Hogg

It is important to try to define our principal objective. Here we are referring to the slaughter of cattle aged over 30 months. We want to complete the process with all possible speed, because there is a substantial backlog. The intervention board has therefore tried to match renderers with abattoir capacity, and also to ensure a fair geographical spread.

We are now slaughtering up to around 27,000 cattle a week, and we have slaughtered about 150,000 since the policy got going at the beginning of May. We keep the location of abattoirs and renderers under daily review, and that is very much the responsibility of my hon. Friend the Minister of State. I hope that the hon. Gentleman will accept that our objective now is to complete the slaughter of the backlog of cattle with all possible speed.

2. Sir Teddy Taylor

To ask the Minister of Agriculture, Fisheries and Food what amount has been spent to date on measures related to the BSE issue; and what is his latest estimate of future spending. [32362]

Mr. Douglas Hogg

The cost to date has been around £190 million. Over the next three years, the cost will be around £1.5 billion.

Sir Teddy Taylor

The current estimates suggest that every man, woman and child will be required to pay £60—which is £250 for the average family—plus the cost of the selective cull and the cost of intervention. Can the Minister give any assurance to the general public that this massive and costly programme will actually lead to the eradication of BSE within a reasonable period?

Mr. Hogg

I share my hon. Friend's dismay about the fact that it has been necessary to spend such huge sums on the policy. I think that we all regret that. As for eradication, that is an important point. I am glad to say that we are seeing the progressive elimination of the disease. There have been about 160,000 confirmed cases so far; the high point was reached in 1992, when there were about 36,500. The number of cases is falling by 40 per cent. year on year. Last year, there were about 15,000; this year, if we took no action, we would expect about 8,000, and about 2,800 by 1998. As I have said, the disease is being eliminated. That is because of the action that we have taken on feedstuffs, about which I have spoken in the House many times.

Mr. Alex Carlile

Is the Minister aware that the figures that he has given do nothing to allay the despair felt by farmers in my constituency and elsewhere about the muddle that the Government have produced in their terrible, failed attempt to resolve the crisis? Will he now tell farmers in Montgomeryshire and elsewhere when they can expect to know what system will finally be used to resolve it? When will he tell them the health grounds for the proposed increased cull, and when will he tell them what compensation the farmers will receive for the unnecessary destruction of thousands of good cattle?

Mr. Hogg

The hon. and learned Gentleman is less coherent than usual, but let me deal with compensation, which is an important point. Here, I refer to the accelerated slaughter programme. Clearly, any cattle that are slaughtered under an accelerated slaughter programme will attract compensation. The compensation will be significantly higher than that which we pay for cull cows under the 30-month slaughter scheme. We shall clearly have to embark on detailed negotiations with agriculture representatives—

Mr. Carlile


Mr. Hogg

—and quickly, to try to agree a fair basis for compensation.

Sir Jerry Wiggin

Now that the framework agreement is in position, will my right hon. and learned Friend assure the House that the Government have obtained from the European Union firm assurances that, as the steps that we are taking progress, there will be a reciprocal lifting of the various bans by the EU, so that we shall at last be returning to a fair deal?

Mr. Hogg

I do not want to deceive the House about this. Thus far, we have an agreement on the eradication plan. Last night, the Standing Veterinary Committee unanimously approved the United Kingdom eradication plan. Separate from that, although clearly related, is the Commission framework document. That document must be adopted at Florence. There is a good prospect that it will be, but it is fair to say that, as yet, it has not been. The framework document as we now see it will provide a mechanism for an early relaxation of the ban in the way that is set out in the document. That reflects our proposals.

Mr. O'Hara

Is the Minister aware of the moral outrage in the industry not only at the lack of transparency and equity in the way in which abattoirs were selected to participate in the over-30—month cull, but at the price of £87.50 per head that was negotiated—which, I am advised, is three to four times in excess of the market rate that would have been offered by abattoirs that were not allowed to tender? On a throughput of 20,000 cattle a week, that is an extra burden on the taxpayer of £1.5 million a week.

Is he further aware that the scheme's beneficiaries are using that unfair commercial advantage to undercut less favoured rivals in the business, and to negotiate deals directly with farmers, thereby cutting out auctioneers and destroying the meat market for farmers? Why was there no transparent tendering process, how was the figure of £87.50 arrived at, and how does he justify it? Most important, when will he act to correct the chaos that he has caused in the market?

Mr. Hogg

I think that the hon. Gentleman has asked 12 questions and I fancy that you, Madam Speaker, would prefer me to focus on one or so. The one that I shall focus on is the key one: why we chose the abattoirs that we did. That goes back to the point that I made to the hon. Member for Barnsley, West and Penistone (Mr. Clapham). Our purpose is to secure rapid implementation of the 30-month slaughter. We need to do that to clear the backlog. We have tried to choose abattoirs that are most likely most quickly to enable us to eliminate that backlog. The identification of the abattoirs is done by the intervention board, working with others, under the direct supervision of my hon. Friend the Minister of State.

Sir Hector Monro

Will my right hon. and learned Friend accept that the farming industry appreciates the efforts that he and his colleagues have made to resolve the crisis, but that the farmers losing most are probably those selling prime beef under 30 months, due to the loss in market value? Therefore, was it not disappointing that he had to reduce the premium by 10p yesterday for the 30-month cull, because that helped to give some compensation to the beef industry generally?

Mr. Hogg

My right hon. Friend makes an important point, and I shall divide my answer in two. As to the producer selling for consumption beef under the age of 30 months, my points about the announcement at Luxembourg next week will provide some support for my right hon. Friend's constituents. His second point relates to the reduction in the top-up, which was set at 25p over and above the 85p cull cow rate. The problem with that top-up was that we were compensating for destruction at a rate higher than producers were selling for consumption, which was undesirable and created perverse economic incentives. We reduced the top-up for that reason.

Dr. Strang

Will the Minister confirm that, in addition to the 1 million cattle that will be slaughtered under the 30-month scheme, he has agreed to the slaughter and destruction of a further 150,000 cattle—mainly milking dairy cows? The Minister has acknowledged that compensation must be higher than for cull cows, but does he accept that the figure should cover the cost to the farm of losing those animals? What will be the effect on milk production and jobs? Has the Minister made any estimate of the likely cost to the taxpayer? Will he confirm that, in return for all those measures, the UK is not even getting a timetable for lifting the ban?

Mr. Hogg

I am sure that you will forgive me, Madam Speaker, if I again observe that I have been asked about six questions. I will focus on the key question. The eradication programme approved last night by the Standing Veterinary Committee provides for an accelerated slaughter scheme designed to speed the decline of BSE that has two distinct approaches. As to animals born in 1990–91 and the two following years, we will trace the farms of origin to identify animals most at risk of developing BSE, which will be subject to a compulsory cull.

However, there are no mandatory birth records for animals born before October 1990. As it would not be possible to compel farmers to participate, we must adopt a voluntary approach. Compensation rates for farmers who choose to participate will be significantly higher than those applying under the 30-month scheme. We shall consult closely with the farming community and others on the modalities, including compensation rates.

Mr. John Townend

What proportion of the £1.5 billion will be met by European Union compensation, and what proportion of that compensation will be indirectly paid by the British taxpayer because of the reduction in the UK's rebate?

Mr. Hogg

As a result of the reduction in the rebate, the UK will be paying the lion's share.